SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WORLD INVESTMENT SERIES, INC.
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
JOHN W. MCGONIGLE, ESQUIRE
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copy to:
Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
It is proposed that this filing will become effective on June 22, 1996
pursuant to Rule 488. (Approximate Date of Proposed Public Offering)
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to Rule 24f-2 under The Investment Company
Act of 1940. In reliance upon such Rule, no filing fee is being paid at this
time. A Rule 24f-2 notice for the Registrant for the year ended November 30,
1995 was filed on January 16, 1996.
CROSS REFERENCE SHEET
Pursuant to Item 1(a) of Form N-14 Showing Location in Prospectus of
Information Required by
Form N-14
Item of Part A of Form N-14 and Caption Caption or Location in Prospectus
1. Beginning of Registration Statement
and Outside Front Cover Page of
Prospectus ................ Cross Reference Sheet; Cover Page
2. Beginning and Outside
Back Cover Page of Prospectus Table of Contents
3. Fee Table, Synopsis Information
and Risk Factors .......... Summary; Risk Factors
4. Information About the
Transaction ............... Information About the Reorganization
5. Information About the Registrant Information About Blanchard
Funds, The Virtus Funds, Worldwide Emerging
Markets, and Federated Emerging Markets
6. Information About the Company
Being Acquired ............ Information About Blanchard Funds, The
Virtus Funds, Worldwide Emerging Markets,
and Federated Emerging Markets
7. Voting Information ........ Voting Information
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters ........ Not Applicable
BLANCHARD FUNDS
VERY IMPORTANT
ENCLOSED IS AN IMPORTANT PROXY STATEMENT AND PROXY VOTE CARD
WHICH REQUIRES YOUR SIGNATURE.
THEY RELATE TO THE TRANSFER OF ASSETS OF
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
TO FEDERATED EMERGING MARKETS FUND.
PLEASE REVIEW AND CAST YOUR VOTE TODAY!
Dear Valued Shareholder,
As you may be aware, there have been a number of exciting developments in
regards to the Blanchard Funds in the past year. One of the benefits has been
that the management and Trustees have identified a number of changes which
they feel will either enhance performance, reduce expenses or expand the
services offered to Blanchard mutual fund shareholders.
We're writing you today to inform you of a recommended change which
affects your Blanchard Worldwide Emerging Markets Fund. Namely, the Board of
Trustees has unanimously recommended a tax-free merger of the Blanchard
Worldwide Emerging Markets Fund into the Federated Emerging Markets Fund
(Class A Shares).
SIMILAR INVESTMENT OBJECTIVES
In recommending this merger, the Board of Trustees considered the fact
that the Federated Emerging Markets Fund has an investment objective similar
to that of the Blanchard Worldwide Emerging Markets Fund.
The Federated Emerging Markets Fund seeks to provide long-term growth of
capital, while the Blanchard Worldwide Emerging Markets Fund seeks to provide
capital appreciation and current income.
Each Fund pursues its objective by investing primarily in equity
securities of issuers and companies located in emerging market countries
(generally, including all countries in the world except Australia, Canada,
Japan, New Zealand, the United States, and most western European countries).
POTENTIAL ECONOMIES OF SCALE AND LOWER EXPENSE RATIOS
The Board of Trustees has also concluded that economies of scale and
potentially lower expense ratios are likely to be realized by merging the
assets of the Blanchard Worldwide Emerging Markets Fund into the Federated
Emerging Markets Fund.
Currently, the projected annual expenses of the Federated Emerging
Markets Fund are at X%, which is lower than the X% assessed by the Blanchard
Worldwide Emerging Markets Fund.
NO TAXABLE CONSEQUENCES -- SAME SHAREHOLDER PRIVILEGES
Because this merger of assets is tax-free, there are no taxable
consequences for you. And you'll continue to enjoy all of the same
shareholder privileges that you do now. These include free telephone
exchanges between any Blanchard and Virtus mutual fund, as well as free
telephone redemptions.
A WORD ABOUT FEDERATED
Federated Emerging Markets Fund is advised by Federated Global Research
Corp., a subsidiary of Federated Investors. Federated Investors is one of the
largest investment management and financial services organizations in the
country, with approximately $86 billion in assets under management or
administration. The company sells its products to and through financial
intermediaries under the Federated brand name. No-load products are sold
primarily to and through bank trust departments, insurance companies,
government entities, and corporate and advisory firms. Federated offers a
wide array of pricing options for its load funds which target the bank
broker/dealer and broker/dealer markets. More than 100,000 investment
professionals representing banks, broker/dealers, and other institutional
clients invest in or sell Federated products on behalf of their institutions,
employees or customers.
Federated Investors, through its subsidiaries, is a partner with Virtus
Capital Management. Federated subsidiaries have provided distribution,
administration, transfer agency and portfolio accounting services to the
Virtus Funds since their inception in October 1990. More recently, in July
1995, Federated and the Blanchard Funds entered into an arrangement through
which Federated provides these services to the Blanchard Funds.
PLEASE VOTE TODAY!
For all of the reasons cited in this letter, the Board of Trustees has
unanimously voted to recommend that you vote "FOR" this merger.
Because shareholder approval is required for this Fund reorganization,
your individual vote is of critical importance. This gives you an important
say in the management of your investment.
A voting card is enclosed. It is essential that you mark your card in
the appropriate space and return it in the postage-paid envelope provided.
Once shareholder approval has been received, the reorganization of the
Blanchard Worldwide Emerging Markets Fund into the Federated Emerging Markets
Fund is scheduled to occur on or about August 16, 1996.
If a majority of shareholders do not return their votes, additional proxy
statements must be sent out, costing money as well as valuable time. So
please, take a few moments now to fill out and return the enclosed proxy
voting card, while the material is at hand.
Before voting, please refer to the enclosed prospectus for the Federated
Emerging Markets Fund for more complete details on its investment objectives,
management fees, risks and expenses.
If you have any additional questions on the voting process, or on the
Fund, please call 1-800-829-3863. A friendly and experienced shareholders'
services representative will be standing by between 8:30 a.m. and 5:30 p.m.,
EDT.
Thank you for your continued confidence in the Blanchard Funds.
Sincerely,
The Blanchard Funds
The Blanchard Funds and the Virtus Funds are distributed by Federated
Securities Corp. and are advised by Virtus Capital Management, Inc.
The Blanchard Funds and the Virtus Funds are not deposits, obligations of, or
guaranteed by any bank or other financial institution, and are not insured by
the FDIC or any federal agency. In addition, they involve risk, including
possible loss of principal invested.
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
BLANCHARD FUNDS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF BLANCHARD WORLDWIDE EMERGING MARKETS FUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Blanchard
Worldwide Emerging Markets Fund ("Worldwide Emerging Markets"), a portfolio of
Blanchard Funds, will be held at 2:00 p.m. on August 16, 1996 at Federated
Investors Tower, 19th Floor, Pittsburgh, Pennsylvania 15222-3779 for the
following purposes:
1. To approve or disapprove a proposed agreement pursuant to which
Federated Emerging Markets Fund ("Federated Emerging Markets"), a
portfolio of World Investment Series, Inc., would acquire all of
Worldwide Emerging Markets' assets in exchange for Class A Shares of
Federated Emerging Markets. Worldwide Emerging Markets would then
distribute the shares of Federated Emerging Markets so received pro
rata to its shareholders and would liquidate and terminate its
existence; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
By Order of the Board of Trustees,
John W. McGonigle
Dated: June 22, 1996 Secretary
Shareholders of record at the close of business June 20, 1996 are entitled to
vote at the meeting. Whether or not you plan to attend the meeting, please
sign and return the enclosed proxy card or call 1-800-829-3863. YOUR VOTE IS
IMPORTANT.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN
PERSON IF YOU ATTEND THE MEETING.
PROSPECTUS/PROXY STATEMENT
JUNE 22, 1996
ACQUISITION OF THE ASSETS OF
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
("WORLDWIDE EMERGING MARKETS"),
A PORTFOLIO OF BLANCHARD FUNDS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-829-3863
BY AND IN EXCHANGE FOR CLASS A SHARES OF
FEDERATED EMERGING MARKETS FUND
("FEDERATED EMERGING MARKETS"),
A PORTFOLIO OF WORLD INVESTMENT SERIES, INC.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-723-3863
This Prospectus/Proxy Statement describes the proposed Agreement and Plan
of Reorganization (the "Plan") whereby Federated Emerging Markets would
acquire all of the assets of Worldwide Emerging Markets, in exchange for Class
A Shares of Federated Emerging Markets. These shares would then be distributed
pro rata by Worldwide Emerging Markets to its shareholders, and, as a result,
each Worldwide Emerging Markets shareholder will own Class A Shares of
Federated Emerging Markets having a total net asset value equal to the total
net asset value of his or her holdings in Worldwide Emerging Markets. The Plan
would result in the complete liquidation and the termination of Worldwide
Emerging Markets.
Blanchard Funds is an open-end management investment company which
currently includes nine portfolios, each of which has a distinct investment
objective. The investment objective of Worldwide Emerging Markets is capital
appreciation and current income. The World Investment Series, Inc. is an open-
end management investment company which currently includes six portfolios,
each of which has a distinct investment objective. The investment objective of
Federated Emerging Markets is to provide long-term growth of capital. For a
comparison of the investment policies of the Funds, see "Summary--Investment
Objectives, Policies, and Limitations."
This Prospectus/Proxy Statement should be retained for future reference.
It sets forth concisely the information about World Investment Series, Inc.
and Federated Emerging Markets that a prospective investor should know before
investing in Federated Emerging Markets. This Prospectus/Proxy Statement is
accompanied by the Prospectus of Federated Emerging Markets dated January 31,
1996, which is incorporated herein by reference. The Prospectus of Worldwide
Emerging Markets dated August 7, 1995, and the Statements of Additional
Information for Federated Emerging Markets and Worldwide Emerging Markets,
dated January 31, 1996 and August 7, 1995, respectively (relating to the
Prospectuses of Federated Emerging Markets and Worldwide Emerging Markets,
respectively, of the same date) and June 22, 1996 (relating to this
Prospectus/Proxy Statement) containing additional information have been filed
with the Securities and Exchange Commission and are incorporated herein by
reference. Copies of the Statements of Additional Information may be obtained
without charge by calling the Funds at the telephone numbers shown above.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Summary....................................................................
Risk Factors...............................................................
Information About the Reorganization.......................................
Information About Blanchard Funds, World Investment Series, Inc.,
Worldwide Emerging Markets, and Federated Emerging
Markets...........................................................
Voting Information.........................................................
Exhibit A--Agreement and Plan of Reorganization............................
SUMMARY
ABOUT THE PROPOSED REORGANIZATION
The Board of Trustees of Blanchard Funds has voted to recommend to
shareholders of Worldwide Emerging Markets the approval of a Plan whereby
Federated Emerging Markets would acquire all of the assets of Worldwide
Emerging Markets in exchange for Class A Shares of Federated Emerging Markets.
These shares would thereupon be distributed pro rata by Worldwide Emerging
Markets to its shareholders and, as a result, each shareholder of Worldwide
Emerging Markets will become the owner of Class A Shares of Federated Emerging
Markets having a total net asset value equal to the total net asset value of
his or her holdings in Worldwide Emerging Markets. These transactions
(referred to as the "Reorganization") would result in the complete liquidation
and the termination of Worldwide Emerging Markets.
As a condition to the Reorganization transactions, World Investment
Series, Inc. and Blanchard Funds will receive an opinion of counsel that the
Reorganization will be considered a tax-free "reorganization" under applicable
provisions of the Internal Revenue Code so that no gain or loss will be
recognized by either Federated Emerging Markets or Worldwide Emerging Markets
or their shareholders. The tax basis of the Class A Shares of Federated
Emerging Markets received by Worldwide Emerging Markets shareholders will be
the same as the tax basis of their shares in Worldwide Emerging Markets.
In recommending the Reorganization, the Blanchard Funds' investment
adviser, Virtus Capital Management, Inc., World Investment Series, Inc.'s
investment adviser, Federated Global Research Corp., the Board of Trustees of
Blanchard Funds and the Board of Directors of World Investment Series, Inc.,
considered the cost structure, market presence and performance of Worldwide
Emerging Markets and have concluded that economies of scale, and potentially
lower expense ratios, could be realized by transferring the assets of
Worldwide Emerging Markets into Federated Emerging Markets.
The following discussion compares certain key aspects of Worldwide
Emerging Markets and Federated Emerging Markets (collectively, the "Funds").
FEDERATED EMERGING MARKETS FUND
SUMMARY OF FUND EXPENSES
BLANCHARD WORLDWIDE / FEDERATED EMERGING MARKET CLASS A
SUMMARY OF FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
WORLDWIDE EMERGING MARKETS FEDERATED EMERGING MARKETS
CLASS A SHARES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)(1)...............................None......5.50%
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price)...............None......None
Contingent Deferred Sales Charge (as a percentage of original purchase)
price or redemption proceeds, as applicable) (1)....
..............................None......0.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)
........................................None......None
Exchange Fee........................................ None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets) *
Management Fee (after waiver) (2)................... 0.59%
..............................0.60%
12b-1 Fee (3)..................................... . 0.50% 0.00%
Total Other Expenses ............................... 2.50% 1.37%
Shareholder Services Fee ............ None 0.25%
Total Operating Expenses (4)........................ 3.59% 1.97%
(1) No sales charge is imposed on purchases of Class A Shares of Federated
Emerging Markets through certain financial intermediaries, such as Signet
Financial Services, Inc. Additionally, no sales charge will be imposed on
shares of Federated Emerging Markets distributed to Worldwide Emerging
Markets' shareholders as a result of Federated Emerging Markets' acquisition
of the assets of Worldwide Emerging Markets.
(2) Class A Shares of Federated Emerging Markets purchased with the proceeds
of a redemption of shares of an unaffiliated investment company purchased or
redeemed with a sales charge and not distributed by Federated Securities Corp.
may be charged a contingent deferred sales charge of 0.50% for redemptions
made within one full year of purchase. See "Contingent Deferred Sales
Charge."
(3) The management fee for Worldwide Emerging Markets has been reduced to
reflect the voluntary waiver of a portion of the management fee. The adviser
can terminate this voluntary waiver at any time at its sole discretion. The
maximum management fee is 1.25%. The estimated management fee of Federated
Emerging Markets has been reduced to reflect the anticipated voluntary waiver
of a portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
1.25%.
(4) Federated Emerging Markets Class A Shares has no present intention of
paying or accruing the 12b-1 fee during the fiscal year ending November 30,
1996. If the Class A Shares were paying or accruing the 12b-1, the Class A
Shares would be able to pay up to 0.25% of its average daily net assets for
the 12b-1 fee. See "Fund Information."
(5) The total Worldwide Emerging Markets operating expenses would have been
4.25% absent the voluntary waiver of a portion of the management fee. The
total Federated Emerging Markets Class A Shares operating expenses are
estimated to be 2.62% absent the anticipated voluntary waiver of a portion of
the management fee.
*As a percentage of projected average net assets with respect to Class A
Shares of Federated Emerging Markets. Total Class A Shares operating expenses
in the table above are estimated based on average expenses expected to be
incurred during the period ending Novmeber 30, 1996. During the course of
this period, expenses may be more or less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Worldwide Emerging Markets
and Class A Shares will bear, either directly or indirectly. Wire--
transferred redemptions of less than $5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years 5 years 10 years
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
Worldwide Emerging Markets $36 $110 $186 $385
Federated Emerging Markets Class A Shares $79 $113 - -
You would pay the following expenses on the same
investment, assuming no redemption
Worldwide Emerging Markets $36 $110 $186 $385
Federated Emerging Markets Class A Shares $74 $113 - -
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR CLASS A SHARES' FISCAL YEAR ENDING
NOVEMBER 30, 1996.
INVESTMENT OBJECTIVES, POLICIES, AND LIMITATIONS
The investment objectives of Worldwide Emerging Markets and Federated
Emerging Markets are substantially identical. Worldwide Emerging Markets seeks
to provide capital appreciation and current income. Federated Emerging Markets
seeks to provide long-term growth of capital.
Federated Emerging Markets pursues its investment objective by investing
primarily (i.e., at least 65% of its assets under normal conditions) in equity
securities of issuers and companies located in countries having emerging
markets, and may also invest in preferred stocks (either convertible or non-
convertible), sponsored or unsponsored depository receipts or shares,
warrants, and corporate and government fixed income securities denominated in
currencies other than U.S. dollars. Federated Emerging Markets may also enter
into forward commitments, repurchase agreements and foreign currency
transactions; maintain reserves in foreign or U.S. money market instruments
and cash; and purchase options and financial futures contracts. Worldwide
Emerging Markets pursues its investment objective by investing, under normal
circumstances, a minimum of 65% in equity and equity-related securities which
include common and preferred stock (including convertible preferred stock),
convertible bonds and notes, warrants and rights, interests in trusts and
partnerships and American, European, Global or any other types of Depository
Receipts. Additionally, Worldwide Emerging Markets may invest in emerging
market fixed income securities, which include fixed income securities of both
governmental and corporate issuers (other than convertibles) of any quality or
maturity. Worldwide Emerging Markets may invest up to 15% of its total assets
in repurchase agreements, borrow money, and enter into forward foreign
currency exchange contracts and foreign currency futures contracts, as well as
purchase put or call options on foreign currency.
Both funds consider emerging markets to be those countries considered by
the International Bank for Reconstruction and Development (commonly known as
the World Bank) as developing. Generally included in emerging markets are all
countries in the world except Australia, Canada, Japan, New Zealand, the
United States, and most western European countries.
Both funds invest primarily in securities (i) of issuers for which the
principal securities trading market is an emerging market country; (ii) of
issuers organized under the laws of, or with a principal office in, an
emerging market country; or (iii) traded in any market, which derive (directly
or indirectly through subsidiaries) at least 50% of their total assets,
capitalization, gross revenue or profit from its most current year from goods
produced, services performed, or sales made in such emerging market countries.
Federated Emerging Markets is a diversified management investment
company. It is not permitted, therefore, with respect to securities
comprising 75% of the value of its total assets, to purchase securities issued
by any one issuer if, as a result, more than 5% of the value of its total
assets would be invested in the securities of that issuer, and it will not
acquire more than 10% of the outstanding voting securities of any one issuer.
Worldwide Emerging Markets is a non-diversified management investment company.
As such, it is not limited in the proportion of assets that may be invested in
the securities of a single issuer. Since Worldwide Emerging Markets may
invest in a smaller number of issuers than a diversified investment company,
an investment in Worldwide Emerging Markets may, under certain circumstances,
present greater risks to an investor than would an investment in a diversified
company.
Both funds may invest in other investment companies, enter into
repurchase agreements, foreign currency transactions, forward foreign currency
exchange contracts, options on foreign currencies, securities, and securities
indices, and on futures contracts involving these items. Federated Emerging
Markets may also enter into interest rate swaps, currency swaps, and other
types of swap agreements.
Federated Emerging Markets and Worldwide Emerging Markets are subject to
certain investment limitations. The investment limitations of the two funds
are substantially identical. These limitations include provisions that, in
effect, prohibit either fund from: selling any securities short or purchasing
securities on margin; issuing senior securities, except that the funds may
borrow up to one-third of the value of their total assets; mortgaging,
pledging, or hypothecating any assets except to secure permitted borrowings;
lending any of their respective assets, except, in the case of Federated
Emerging Markets, portfolio securities up to one-third of the value of its
total assets; or investing more than 15% of their respective assets in
illiquid securities.
Reference is hereby made to the Prospectus and Statement of Additional
Information of Worldwide Emerging Markets, dated August 7, 1995, and the
Prospectus and Statement of Additional Information of Federated Emerging
Markets, dated January 31, 1996, which set forth in full the investment
objectives, policies and investment limitations of both funds and which are
incorporated by reference herein.
DISTRIBUTION ARRANGEMENTS
Federated Securities Corp. is the principal distributor for shares of
Blanchard Funds and World Investment Series, Inc. Under distribution plans
adopted in accordance with Investment Company Act Rule 12b-1 (the "12b-1
Plan"), Federated Emerging Markets (with respect to Class A Shares) and
Worldwide Emerging Markets may pay to Federated Securities Corp. an amount
computed at an annual rate of 0.25 of 1% and 0.50 of 1% of each respective
fund's average daily net assets to finance any activity which is principally
intended to result in the sale of shares subject to the 12b-1 Plan. Currently,
Federated Emerging Markets (with respect to Class A Shares) is not paying or
accruing fees under the 12b-1 Plan. Worldwide Emerging Markets incurs fees
under its 12b-1 Plan at an annual rate of 0.50 of 1% of average daily net
assets.
ADVISORY AND OTHER FEES
Federated Global Research Corp., a Delaware corporation and a subsidiary
of Federated Investors ("Fed Global"), serves as investment adviser to
Federated Emerging Markets. Fed Global is entitled to receive an annual
investment advisory fee equal to 1.25% of Federated Emerging Markets' average
daily net assets. Under its investment advisory contract, which provides for
the voluntary waiver of the advisory fee by Fed Global, Fed Global may
voluntarily waive some or all of its fee. Fed Global can terminate this
voluntary waiver at any time in its sole discretion. Fed Global has also
undertaken to reimburse Federated Emerging Markets for operating expenses in
excess of limitations established by certain states.
Virtus Capital Management, Inc. ("VCM"), a Maryland corporation and a
wholly-owned subsidiary of Signet Banking Corporation, provides overall
management services for Blanchard funds. VCM is entitled to receive an annual
management fee equal to 1.25% of Worldwide Emerging Markets' average net
assets, of which such fund's equity sector portfolio adviser, Martin Currie
Inc., is entitled to receive an annual subadvisory fee of 0.50% of the first
$150 million of such fund's equity sector's average daily net assets; and
0.40% of the sector's average daily net assets in excess of $150 million.
Worldwide Emerging Markets' fixed income securities sector portfolio adviser,
OFFITBANK, is entitled to receive an annual subadvisory fee of 0.45% of the
first $150 million of such fund's fixed income sector's average daily net
assets and 0.35% of the sector's average daily net assets in excess of $150
million. Worldwide Emerging Markets has not invested in fixed income
securities during its current fiscal year and has no present intention of
investing in fixed income securities. Worldwide Emerging Markets has,
therefore, incurred no fees payable to OFFITBANK and has no intent to do so.
See also the "Summary of Portfolio Expenses." VCM has undertaken to reimburse
Worldwide Emerging Markets, up to the amount of its management fee, for
operating expenses in excess of limitations established by certain states. VCM
may further voluntarily waive a portion of its fee or reimburse Worldwide
Emerging Markets for certain operating expenses. This agreement to waive fees
or reimburse expenses may be terminated by VCM at any time in its discretion.
Federated Administrative Services, a subsidiary of Federated Investors,
provides the funds with certain administrative personnel and services
necessary to operate the funds. The rate charged to Blanchard Funds for such
administrative services is 0.15 of 1% of the first $250 million of average
aggregate daily net assets of The Virtus Funds, which are advised by VCM, and
Blanchard Funds combined, 0.125 of 1% on the next $250 million, 0.10 of 1% on
the next $250 million and 0.075 of 1% of assets in excess of $750 million. The
administrative fee received during any fiscal year shall be at least $75,000
per fund. The rate charged to Federated Emerging Markets for such
administrative services is 0.15 of 1% of the first $250 million of average
aggregate daily net assets of all Federated Funds, 0.125 of 1% on the next
$250 million, 0.10 of 1% on the next $250 million and 0.075 of 1% of assets in
excess of $750 million. The administrative fee received during any fiscal
year shall be at least $125,000 per portfolio and $30,000 per each additional
class of shares. Worldwide Emerging Markets estimates that its administrative
fee expense for the current fiscal year will be 0.27 of 1% of its average
aggregate daily net assets. Federated Emerging Markets estimates that its
administrative fee expense for the current fiscal year will be 0.66 of 1% of
its average aggregate daily net assets.
The total annual operating expenses for Worldwide Emerging Markets are
expected to be 4.25% of average daily net assets, and would be 3.59% absent
the voluntary waivers of management fees and 12b-1 fees. The total annual
operating expenses for Federated Emerging Markets Class A Shares are expected
to be 2.62% of average daily net assets and would be 1.97% of average daily
net assets absent the voluntary waivers of management fees and 12b-1 fees.
PURCHASE AND REDEMPTION PROCEDURES
Procedures for the purchase and redemption of Class A Shares of Federated
Emerging Markets are similar to procedures applicable to the purchase and
redemption of Worldwide Emerging Markets shares. For a complete description of
the purchase and redemption procedures applicable to purchases and redemptions
of shares, refer to the Prospectus of Blanchard Funds dated August 7, 1995,
and the Prospectus of the Federated Emerging Markets dated January 31, 1996,
which are incorporated herein by reference. Any questions about such
procedures may be directed to, and assistance in effecting purchases,
redemptions, or exchanges of shares may be obtained by calling 1-800-829-3863.
Class A Shares of Federated Emerging Markets are sold on all business
days except on days on which the New York Stock Exchange is closed. Shares are
sold at their net asset value next determined after an order is received, plus
a maximum sales charge of 5.50%. No sales charge will be imposed on the
receipt by current Worldwide Emerging Markets shareholders of Class A Shares
of Federated Emerging Markets pursuant to the reorganization, moreover, no
sales charge is imposed on Class A Shares of Federated Emerging Markets
purchased by current Worldwide Emerging Market Fund shareholders or others,
through Signet Financial Services, Inc.
The net asset value is calculated as of the close of the New York Stock
Exchange (normally 4:00 p.m., Eastern time) on days shares are sold. Purchases
of shares of either Fund may be made by wire, by ACH or by check. Orders are
considered received after payment is converted into federal funds. The minimum
initial investment in Class A Shares of Federated Emerging Markets is $500.
Redemption requests cannot be executed on days which the New York Stock
Exchange is closed and federal or state holidays restricting wire transfers.
Class A Shares of Worldwide Emerging Markets are redeemed at their net asset
value next determined after the redemption request is received. Proceeds will
be distributed by wire or check. Requests for redemption can be made by
telephone or by mail as more particularly described in the above-referenced
Prospectuses.
EXCHANGE PRIVILEGES
Shareholders of Class A Shares of Federated Emerging Markets may exchange
Class A Shares of Federated Emerging Markets for Class A Shares of certain
other Federated Funds at net asset value. Shareholders must exchange Shares
having a net asset value equal to the minimum investment requirements of the
fund into which the exchange is being made.
Shareholders of Worldwide Emerging Markets may exchange shares of
Worldwide Emerging Markets for shares of another Blanchard Fund or for
Investment Shares of any Virtus Fund at net asset value. No fees are charged
in connection with any such exchange. The dollar amount of an exchange into a
Blanchard Fund must meet the initial investment requirement of the Fund into
which the exchange is being made. All subsequent exchanges into that fund must
be at least $1,000. The dollar amount of any exchanges into a Virtus Fund must
be at least $1,000.
TAX CONSEQUENCES
As a condition to the Reorganization transactions, Blanchard Funds and
World Investment Series, Inc. will receive an opinion of counsel that the
Reorganization will be considered a tax-free "reorganization" under applicable
provisions of the Internal Revenue Code so that no gain or loss will be
recognized by either Federated Emerging Markets or Worldwide Emerging Markets
or their respective shareholders. The tax basis of Federated Emerging Markets
shares received by Worldwide Emerging Markets shareholders will be the same as
the tax basis of their shares in Worldwide Emerging Markets.
RISK FACTORS
Investment in Federated Emerging Markets is subject to certain risks that
are set forth in its Prospectus and Statement of Additional Information dated
January 31, 1996 which are incorporated herein by reference thereto. Briefly,
these risks include, but are not limited to, fluctuation of the value of
shares of Federated Emerging Markets; with respect to foreign securities, the
risks of currency fluctuation and imposition of currency exchange control
regulation, the lack of information available concerning foreign issuers, the
fact that foreign issuers are not subject to financial reporting standards
comparable to those in the U.S. and the possibility of expropriation of assets
and political instability; uncertainty that a secondary market for options or
for positions in futures contracts will exist at all times; imperfect
correlation between the prices of financial futures and options on financial
futures, on the one hand, and prices of the securities subject to the options
and futures contracts, on the other hand, which could cause a futures contract
and any related options to react differently than the underlying portfolio
securities to market changes; and, greater market fluctuations and greater
risk of loss of income and principal due to default of an issuer of lower-
rated bonds. Investing in securities of issuers in emerging market countries
involves exposure to significantly higher risk than investing in countries
with developed markets. Emerging market countries may have economic
structures that are generally less diverse and mature and political systems
that can be expected to be less stable than those of developed countries.
Securities prices in emerging market countries can be significantly more
volatile than in developed countries, reflecting the greater uncertainties of
investing in lesser developed markets and economies. In particular, emerging
market countries may have relatively unstable governments, and may present the
risk of nationalization of businesses, expropriation, confiscatory taxation
or, in certain instances, reversion to closed market, centrally planned
economies. Such countries may also have restrictions on foreign ownership or
prohibitions on the repatriation of assets, and may have less protection of
property rights than developed countries. The economies of emerging market
countries may be predominantly based on only a few industries or dependent on
revenues from particular commodities or on international aid or development
assistance, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. In addition, securities markets in emerging market countries may trade
a small number of securities and may be unable to respond effectively to
increases in trading volume, potentially resulting in a lack of liquidity and
in volatility in the price of securities traded on those markets. Also,
securities markets in emerging market countries typically offer less
regulatory protection for investors. Investment in Worldwide Emerging Markets
carries risks of a substantially similar nature, as more fully described in
its Prospectus and its Statement of Additional Information dated August 7,
1995.
INFORMATION ABOUT THE REORGANIZATION
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION
On July 12, 1995, VCM acquired the assets and business of Sheffield
Management Co. ("Sheffield"), which was, until that time, manager of the
Blanchard Funds. Upon succeeding Sheffield as manager, VCM conducted a review
and evaluation of the cost structure, market presence and performance of
Worldwide Emerging Markets. VCM concluded that Worlwide Emerging Markets'
performance was unsatisfactory in light of its low level of assets and high
level of expenses. As a consequence, VCM and the Board of Worldwide Emerging
Markets considered many initiatives to reduce the Worlwide Emerging Markets'
expenses, to improve its performance and to attract additional assets to
Worldwide Emerging Markets. As a result of this review, VCM and the Board
concluded that economies of scale, and potentially lower expense ratios, could
(but will not necessarily) be realized by transferring the assets of Worldwide
Emerging Markets into Federated Emerging Markets. Additionally, VCM and the
Board concluded that Fed Global's investment style might produce better
overall investment returns for Worldwide Emerging Markets' shareholders.
The Trustees of Blanchard Funds and the Directors of World Investment
Series, Inc., including the independent Trustees and Directors, have
unanimously concluded that consummation of the Reorganization is in the best
interests of Blanchard Funds and World Investment Series, Inc. and the
shareholders of Worldwide Emerging Markets and Federated Emerging Markets and
that the interests of Worldwide Emerging Markets and Federated Emerging
Markets shareholders would not be diluted as a result of effecting the
Reorganization and have unanimously approved the Plan. The Trustees and
Directors also noted that the shareholders of Worldwide Emerging Markets would
receive the same quality investment management services from Fed Global as
shareholders of Federated Emerging Markets.
DESCRIPTION OF THE PLAN OF REORGANIZATION
The Plan provides that on or about August 16, 1996 (the "Closing Date")
Federated Emerging Markets will acquire all of the assets of Worldwide
Emerging Markets in exchange for Class A Shares of Federated Emerging Markets
to be distributed pro rata by Worldwide Emerging Markets to its shareholders
in complete liquidation and termination of Worldwide Emerging Markets.
Shareholders of Worldwide Emerging Markets will become shareholders of
Federated Emerging Markets as of 4:00 p.m. (Eastern time) on the Closing Date
and will begin accruing dividends on the next day. Shares of Federated
Emerging Markets received by Worldwide Emerging Markets shareholders in
connection with the acquisition of the assets of Worldwide Emerging Markets
will not be subject to a sales load. Shareholders of Worldwide Emerging
Markets will earn their last dividend from Worldwide Emerging Markets on the
Closing Date.
Consummation of the Reorganization is subject to the conditions set forth
in the Plan, including receipt of an opinion in form and substance
satisfactory to Blanchard Funds and World Investment Series, Inc., as
described under the caption "Federal Income Tax Consequences" below. The Plan
may be terminated and the Reorganization may be abandoned at any time before
or after approval by shareholders of Worldwide Emerging Markets prior to the
Closing Date by Blanchard Funds or World Investment Series, Inc. if it
believes that consummation of the Reorganization would not be in the best
interests of the shareholders of either Worldwide Emerging Markets or
Federated Emerging Markets.
Fed Global is responsible for the payment of all expenses of the
Reorganization incurred by either Fund, whether or not the Reorganization is
consummated. Such expenses include, but are not limited to, legal fees,
registration fees, transfer taxes (if any), the fees of banks and transfer
agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to shareholders of Worldwide Emerging Markets and the
costs of holding the Special Meeting of Shareholders.
The foregoing brief summary of the Plan entered into between Worldwide
Emerging Markets and Federated Emerging Markets is qualified in its entirety
by the terms and provisions of the Plan, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference.
DESCRIPTION OF CLASS A SHARES OF FEDERATED EMERGING MARKETS
Class A Shares of Federated Emerging Markets to be issued to shareholders
of Worldwide Emerging Markets under the Plan will be fully paid and non
assessable when issued and transferable without restriction and will have no
preemptive or conversion rights. Federated Emerging Markets offers three
classes of shares. Class B Shares are sold primarily to customers of financial
institutions, subject to a maximum contingent deferred sales charge of 5.50%.
The fund has also adopted a Distribution Plan whereby the distributor is paid
a fee of up to 0.75 of 1% and a Shareholder Services fee of up to 0.25 of 1%
of the Class B Shares' average daily net assets with respect to Class B
Shares. Investments in Class B Shares are subject to a minimum initial
investment of $1,500, unless the investment is in a retirement account, in
which case the minimum investment is $50.
Class C Shares are sold primarily to customers of financial institutions
at net asset value with no initial sales charge. Class C Shares are
distributed pursuant to a Distribution Plan adopted by the fund whereby the
distributor is paid a fee of up to 0.75 of 1%, in addition to a Shareholder
Services fee of 0.25 of 1% of the Class C Shares' average daily net assets.
In addition, Class C Shares may be subject to certain contingent deferred
sales charges. Investments in Class C Shares are subject to a minimum initial
investment of $1,500, unless the investment is in a retirement account, in
which case the minimum investment is $50.
Class A Shares, Class B Shares, and Class C Shares are subject to certain
of the same expenses. Expense differences, however, among Class A Shares,
Class B Shares, and Class C Shares may affect the performance of each class.
The stated advisory fee is the same for all three classes of shares. Reference
is hereby made to the Prospectus of Federated Emerging Markets dated January
31, 1996 provided herewith for additional information about Class A Shares of
Federated Emerging Markets.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, Blanchard Funds and World
Investment Series, Inc. will receive an opinion from Dickstein, Shapiro &
Morin, L.L.P., counsel to Blanchard Funds and World Investment Series, Inc.,
to the effect that, on the basis of the existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), current administrative rules
and court decisions, for federal income tax purposes: (1) the Reorganization
as set forth in the Plan will constitute a tax-free reorganization under
section 368(a)(1)(C) of the Code; (2) no gain or loss will be recognized by
Federated Emerging Markets upon its receipt of Worldwide Emerging Markets'
assets solely in exchange for Class A Shares of Federated Emerging Markets;
(3) no gain or loss will be recognized by Worldwide Emerging Markets upon the
transfer of its assets to Federated Emerging Markets in exchange for Class A
Shares of Federated Emerging Markets or upon the distribution (whether actual
or constructive) of Class A Shares of Federated Emerging Markets to Worldwide
Emerging Markets shareholders in exchange for their shares of Worldwide
Emerging Markets; (4) no gain or loss will be recognized by shareholders of
Worldwide Emerging Markets upon the exchange of their Worldwide Emerging
Markets shares for Class A Shares of Federated Emerging Markets; (5) the tax
basis of Worldwide Emerging Markets' assets acquired by Federated Emerging
Markets will be the same as the tax basis of such assets to Worldwide Emerging
Markets immediately prior to the Reorganization; (6) the tax basis of Class A
Shares of Federated Emerging Markets received by each shareholder of Worldwide
Emerging Markets pursuant to the Plan will be the same as the tax basis of
Worldwide Emerging Markets shares held by such shareholder immediately prior
to the Reorganization; (7) the holding period of the assets of Worldwide
Emerging Markets in the hands of Federated Emerging Markets will include the
period during which those assets were held by Worldwide Emerging Markets; and
(8) the holding period of Class A Shares of Federated Emerging Markets
received by each shareholder of Worldwide Emerging Markets will include the
period during which the Worldwide Emerging Markets shares exchanged therefor
were held by such shareholder, provided the Worldwide Emerging Markets shares
were held as capital assets on the date of the Reorganization.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
Blanchard Funds is organized as a business trust pursuant to a
Declaration of Trust under the laws of the Commonwealth of Massachusetts.
World Investment Series, Inc. is established as a corporation pursuant to
Articles of Incorporation under the laws of the State of Maryland. The rights
of shareholders of Worldwide Emerging Markets and Federated Emerging Markets
as set forth in their respective Declaration of Trust or Articles of
Incorporation are substantially identical. Set forth below is a brief summary
of the significant rights of shareholders of Worldwide Emerging Markets and
Federated Emerging Markets.
Neither fund is required to hold annual meetings of shareholders.
Shareholder approval is necessary only for certain changes in operations or
the election of trustees or directors under certain circumstances. A special
meeting of shareholders of either fund for any permissible purpose is required
to be called by the Trustees or Directors upon the written request of the
holders of at least 10% of the outstanding shares of the relevant fund.
Under certain circumstances, shareholders of Worldwide Emerging Markets,
or any other portfolio of Blanchard Funds may be held personally liable as
partners under Massachusetts law for obligations of Blanchard Funds. To
protect shareholders of all portfolios of Blanchard Funds, Blanchard Funds
has filed legal documents with the Commonwealth of Massachusetts that
expressly disclaim the liability of shareholders of portfolios of Blanchard
Funds for such acts or obligations of Blanchard Funds. These documents require
that notice of this disclaimer be given in each agreement, obligation or
instrument that Blanchard Funds or their trustees enter into or sign on behalf
of Blanchard Funds.
In the unlikely event a shareholder of a portfolio of Blanchard Funds is
held personally liable for obligations of Blanchard Funds, Blanchard Funds are
required to use their property to protect or compensate the shareholder. On
request, Blanchard Funds will defend any claims made and pay any judgment
against a shareholder of a portfolio of Blanchard Funds for any act or
obligation of Blanchard Funds. Therefore, financial loss resulting from
liability as a shareholder of a portfolio of Blanchard Funds will occur only
if Blanchard Funds cannot meet its obligation to indemnify shareholders and
pay judgments against them from the assets of Blanchard Funds.
CAPITALIZATION
The following table sets forth the capitalization of Worldwide Emerging
Markets and Federated Emerging Markets as of March 31, 1996 and on a pro forma
basis as of that date:
Worldwide Federated
Emerging EmergingPro Forma
Markets Markets Combined*
Net Assets............................... 7,975,839 5,011,788
12,987,627
Shares Outstanding............... 1,265,547 501,760 1,299,852
Price Per Share....................... 6.30 9.99 9.99
*Adjustment to reflect share balance as a result of the combination based on
exchange ratio of 0.63063063 (the net asset value of $6.30 divided by the
net asset value of $9.99).
INFORMATION ABOUT BLANCHARD FUNDS, WORLD INVESTMENT SERIES, INC.,
WORLDWIDE EMERGING MARKETS, AND FEDERATED EMERGING MARKETS
Information about Blanchard Funds, World Investment Series, Inc.,
Worldwide Emerging Markets, and Federated Emerging Markets is contained in
their respective Prospectuses dated (in the case of Blanchard Funds and
Worldwide Emerging Markets) August 7, 1995 and (in the case of World
Investment Series, Inc. and Federated Emerging Markets) January 31, 1996,
which are incorporated by reference herein. A copy of the Prospectus for
Federated Emerging Markets is included herewith. Additional information about
World Investment Series, Inc. and Federated Emerging Markets is included in
the Statement of Additional Information of Federated Emerging Markets dated
January 31, 1996 (relating to the Prospectus of Federated Emerging Markets of
the same date), and June 22, 1996 (relating to this Prospectus/Proxy
Statement) which are incorporated herein by reference. Additional information
about Worldwide Emerging Markets is included in the Statement of Additional
Information of Worldwide Emerging Markets dated August 7,1995, and June 22,
1996 (relating to this Prospectus/Proxy Statement) which are incorporated
herein by reference. Copies of the Statements of Additional Information of
Worldwide Emerging Markets and Federated Emerging Markets, which have been
filed with the Securities and Exchange Commission (the "SEC"), may be obtained
without charge by contacting Blanchard Funds at 1-800-829-3863 or by writing
to Signet Financial Services, Inc., 41 Madison Avenue, 24th Floor, New York,
NY 10010 or by contacting Federated Emerging Markets at 1-800-235-4669.
Blanchard Funds and World Investment Series, Inc., on behalf of the
funds, are subject to the informational requirements of the Securities Act of
1933 (the "1933 Act"), the Securities Exchange Act of 1934 (the "1934 Act")
and the Investment Company Act of 1940 (the "1940 Act") and in accordance
therewith file reports and other information with the SEC. Reports, proxy and
information statements and other information filed by Blanchard Funds and
World Investment Series, Inc., on behalf of the funds, can be obtained by
calling or writing to Blanchard Funds or World Investment Series, Inc. and can
also be inspected and copied by the public at the public reference facilities
maintained by the SEC in Washington, D.C. located at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at certain of its regional offices
located at Suite 1400, Northwestern Atrium Center, 500 West Madison Street,
Chicago, IL 60621 and 13th Floor, Seven World Trade Center, New York, NY
10048. Copies of such material also may be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus/Proxy Statement and the related Statement of Additional
Information do not contain all of the information set forth in the
registration statement that World Investment Series, Inc. has filed with the
SEC under the 1933 Act to which reference is hereby made. Statements contained
herein concerning the provisions of documents are necessarily summaries of
such documents, and each such statement is qualified in its entirety by
reference to the copy of the applicable documents filed with the SEC. The SEC
file number for Blanchard Funds' prospectuses and related Statements of
Additional Information which are incorporated by reference herein is
Registration No. 33-3165. The SEC file number for World Investment Series,
Inc's. prospectuses and related Statements of Additional Information which are
incorporated by reference herein is Registration No. 33-52149.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of Worldwide Emerging Markets of proxies
for use at the Special Meeting of Shareholders (the "Meeting") to be held on
August 16, 1996 and at any adjournment thereof. The proxy confers
discretionary authority on the persons designated therein to vote on other
business not currently contemplated which may properly come before the
Meeting. A proxy, if properly executed, duly returned and not revoked, will be
voted in accordance with the specifications thereon; if no instructions are
given, such proxy will be voted in favor of the Plan. A shareholder may revoke
a proxy at any time prior to use by filing with the Secretary of Blanchard
Funds an instrument revoking the proxy, by submitting a proxy bearing a later
date or by attending and voting at the Meeting.
The cost of the solicitation, including the printing and mailing of proxy
materials, will be borne by Fed Global. In addition to solicitations through
the mails, proxies may be solicited by officers, employees and agents of
Blanchard Funds and Federated Securities Corp. at no additional cost to
Blanchard Funds. Such solicitations may be made by telephone. Federated
Securities Corp. will reimburse custodians, nominees and fiduciaries for the
reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on June 20, 1996 as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the Special Meeting of Shareholders and any adjournment
thereof. As of the record date, there were shares of Worldwide
-----------
Emerging Markets outstanding. Each Worldwide Emerging Markets share is
entitled to one vote and fractional shares have proportionate voting rights.
On the record date, no shareholder or other person owned of record, or to the
knowledge of VCM, beneficially owned, 5% or more of Worldwide Emerging
Markets' outstanding shares. On the record date, the trustees and officers of
Blanchard Funds as a group owned less than 1% of the outstanding shares of
Worldwide Emerging Markets.
The votes of the shareholders of Federated Emerging Markets are not being
solicited, since their approval or consent is not necessary for approval of
the Reorganization. As of the record date, there were Class A
----------
Shares, Class B Shares and Class C Shares of Federated
---------- --------
Emerging Markets outstanding. On the record date, , owned
---------------------
of record approximately ( %)of the outstanding Class A Shares
---------- -----
of Federated Emerging Markets, owned of record approximately
----------
( %) of the outstanding Class B Shares of Federated Emerging
- ----------- ----
Markets, and owned of record approximately ( %) of
------------ ---------- -----
the outstanding Class C Shares. On such date, no other person owned of record,
or to the knowledge of Fed Global, beneficially owned, 5% or more of Federated
Emerging Markets' outstanding Class A, Class B or Class C Shares.
Approval of the Plan requires the affirmative vote of the majority of
Worldwide Emerging Markets' outstanding shares. The votes of shareholders of
Federated Emerging Markets are not being solicited since their approval is not
required in order to effect the Reorganization.
A majority of the outstanding shares of Worldwide Emerging Markets,
represented in person or by proxy, will be required to constitute a quorum at
the Special Meeting for the purpose of voting on the proposed Reorganization.
For purposes of determining the presence of a quorum, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as
votes cast, at the Special Meeting. Under the Declaration of Trust, the
approval of any action submitted to shareholders is determined on the basis of
a majority of votes entitled to be cast at the Special Meeting.
If at the time any session of the Special Meeting is called to order, a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the Special Meeting to
a later date. In the event that a quorum is present but sufficient votes in
favor of one or more of the proposals have not been received, the persons
named as proxies may propose one or more adjournments of the Special Meeting
to permit further solicitation of proxies with respect to any such proposal.
All such adjournments will require the affirmative vote of a majority of the
shares present in person or by proxy at the session of the Special Meeting to
be adjourned. The persons named as proxies will vote those proxies which they
are entitled to vote in favor of the proposal, in favor of such an
adjournment, and will vote those proxies required to be voted against the
proposal, against any such adjournment. A vote may be taken on one or more of
the proposals in this proxy statement prior to any such adjournment if
sufficient votes for its approval have been received and it is otherwise
appropriate.
DISSENTER'S RIGHT OF APPRAISAL
Shareholders of Worldwide Emerging Markets objecting to the
Reorganization have no appraisal or dissenter's rights under the Declaration
of Trust or Massachusetts law. Under the Plan, if approved by Worldwide
Emerging Markets' shareholders, each Worldwide Emerging Markets shareholder
will become the owner of Class A Shares of Federated Emerging Markets having a
total net asset value equal to the total net asset value of his or her
holdings in Worldwide Emerging Markets at the Closing Date.
OTHER MATTERS
Management of Worldwide Emerging Markets knows of no other matters that
may properly be, or which are likely to be, brought before the meeting.
However, if any other business shall properly come before the meeting, the
persons named in the proxy intend to vote thereon in accordance with their
best judgment.
So far as management is presently informed, there is no litigation
pending or threatened against Blanchard Funds or World Investment Series, Inc.
Whether or not shareholders expect to attend the meeting, all
shareholders are urged to sign, fill in and return the enclosed proxy form
promptly.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated May 22, 1996 (the "Agreement"),
between WORLD INVESTMENT SERIES, INC., a Maryland corporation ("World"), on
behalf of its portfolio, Federated Emerging Markets Fund (hereinafter called
the "Acquiring Fund"), and BLANCHARD FUNDS, a Massachusetts business trust
("Blanchard"), on behalf of its portfolio Blanchard Worldwide Emerging Markets
Fund (hereinafter called the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C) of
the United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of
the assets of the Acquired Fund in exchange solely for Class A Shares of the
Acquiring Fund (the "Acquiring Fund Shares") and the distribution, after the
Closing Date hereinafter referred to, of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, World and Blanchard are registered open-end management
investment companies and the Acquired Fund owns securities in which the
Acquiring Fund is permitted to invest;
WHEREAS, both the Acquired Fund and the Acquiring Fund are authorized to
issue their shares of beneficial interest;
WHEREAS, the Board of Directors, including a majority of the Directors
who are not "interested persons" (as defined under the Investment Company Act
of 1940, as amended (the "1940 Act")), of World has determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares
is in the best interests of the Acquiring Fund shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the 1940 Act), of Blanchard has
determined that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares is in the best interests of the Acquired Fund
shareholders and that the interests of the existing shareholders of the
Acquired Fund would not be diluted as a result of this transaction;
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the
Acquired Fund agrees to assign, transfer and convey to the Acquiring
Fund all of the assets of the Acquired Fund, including all securities
and cash other than cash in an amount necessary to pay any unpaid
dividends and distributions as provided in paragraph 1.5, and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the Acquired
Fund the number of Acquiring Fund Shares, including fractional Acquiring
Fund Shares, determined as set forth in paragraph 2.3. Such transaction
shall take place at the closing (the "Closing") on the closing date (the
"Closing Date") provided for in paragraph 3.1. In lieu of delivering
certificates for the Acquiring Fund Shares, the Acquiring Fund shall
credit the Acquiring Fund Shares to the Acquired Fund's account on the
stock record books of the Acquiring Fund and shall deliver a
confirmation thereof to the Acquired Fund.
1.2 The Acquired Fund will discharge all of its liabilities and
obligations prior to the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred
shall be made on the Closing Date and shall be delivered to State Street
Bank and Trust Company, Boston, Massachusetts, the Acquiring Fund's
custodian (the "Custodian"), for the account of the Acquiring Fund,
together with proper instructions and all necessary documents to transfer
to the account of the Acquiring Fund, free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall
be in the form of currency and immediately available funds payable to the
order of the Custodian for the account of the Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring
Fund any dividends or interest received on or after the Closing Date with
respect to assets transferred to the Acquiring Fund hereunder. The
Acquired Fund will transfer to the Acquiring Fund any distributions,
rights or other assets received by the Acquired Fund after the Closing
Date as distributions on or with respect to the securities transferred.
Such assets shall be deemed included in assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately valued.
1.5 As soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's shareholders of record,
determined as of the close of business on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to paragraph 1.1. In addition, each shareholder of
record of the Acquired Fund shall have the right to receive any unpaid
dividends or other distributions which were declared before the Valuation
Date with respect to the shares of the Acquired Fund that are held by
the shareholder on the Valuation Date. Such liquidation and distribution
will be accomplished by the transfer of the Acquiring Fund Shares then
credited to the account of the Acquired Fund on the books of the
Acquiring Fund to open accounts on the share record books of the
Acquiring Fund in the names of the Acquired Fund Shareholders and
representing the respective pro rata number of the Acquiring Fund Shares
due such shareholders. All issued and outstanding shares of the Acquired
Fund will simultaneously be canceled on the books of the Acquired Fund.
Share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as
determined in accordance with Section 2.3. The Acquiring Fund shall not
issue certificates representing the Acquiring Fund Shares in connection
with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be
issued in the manner described in the Acquiring Fund's current prospectus
and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund
shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the
Closing Date and such later dates, with respect to liquidation and
termination of the Acquired Fund, on which the Acquired Fund is
liquidated and terminated.
2. VALUATION.
2.1 The value of the Acquired Fund's net assets to be acquired by
the Acquiring Fund hereunder shall be the value of such assets computed
as of the close of the New York Stock Exchange (normally 4:00 p.m.,
Eastern time) on the Closing Date (such time and date being hereinafter
called the "Valuation Date"), using the valuation procedures set forth in
the Acquiring Fund's then-current prospectus or statement of additional
information.
2.2 The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of the close of the New York Stock
Exchange (normally 4:00 p.m., Eastern time) on the Valuation Date, using
the valuation procedures set forth in the Acquiring Fund's then-current
prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net assets
shall be determined by dividing the value of the net assets of the
Acquired Fund determined using the same valuation procedures referred to
in paragraph 2.1 by the net asset value of one Acquiring Fund Share
determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be August 16, 1996 or such later date as
the parties may mutually agree. All acts taking place at the Closing
Date shall be deemed to take place simultaneously as of the close of
business on the Closing Date unless otherwise provided. The Closing shall
be held at 4:00 p.m. (Eastern time) at the offices of the Acquiring Fund,
Federated Investors Tower, Pittsburgh, PA 15222-3779, or such other time
and/or place as the parties may mutually agree.
3.2 If on the Valuation Date (a) the primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereon shall be restricted; or (b) trading
or the reporting of trading shall be disrupted so that accurate appraisal
of the value of the net assets of the Acquiring Fund or the Acquired Fund
is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
3.3 Federated Shareholder Services Company of Boston, as transfer
agent for the Acquired Fund, shall deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and
deliver a confirmation evidencing the Acquiring Fund Shares to be
credited on the Closing Date to the Secretary of the Acquired Fund, or
provide evidence satisfactory to the Acquired Fund that such Acquiring
Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, assumption agreements,
share certificates, if any, receipts or other documents as such other
party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Blanchard represents and warrants to World as follows:
(a) Blanchard is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has power to own all of its properties and assets
and to carry out this Agreement.
(b) Blanchard is registered under the 1940 Act, as an open-end,
management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) Blanchard is not, and the execution, delivery and
performance of this Agreement will not result, in material violation
of its Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which
the Acquired Fund is a party or by which it is bound.
(d) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will
result in liability to it after the Closing Date.
(e) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending or
to its knowledge threatened against the Acquired Fund or any of its
properties or assets which, if adversely determined, would
materially and adversely affect its financial condition or the
conduct of its business. The Acquired Fund knows of no facts which
might form the basis for the institution of such proceedings, and is
not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the
transactions herein contemplated.
(f) The current prospectus and statement of additional
information of the Acquired Fund conform in all material respects to
the applicable requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act and the rules and
regulations of the Securities and Exchange Commission (the
"Commission") thereunder and do not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein as necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(g) The Statement of Assets and Liabilities of the Acquired
Fund at April 30, 1995 and April 30, 1994 have been audited by Price
Waterhouse LLP, independent accountants, and have been prepared in
accordance with generally accepted accounting principles,
consistently applied, and such statement (copies of which have
been furnished to the Acquiring Fund) fairly reflects the financial
condition of the Acquired Fund as of such dates, and there are no
known contingent liabilities of the Acquired Fund as of such date
not disclosed therein.
(h) The unaudited Statements of Assets and Liabilities of the
Acquired Fund at October 31, 1995 and October 31, 1994 have been
prepared in accordance with the generally accepted accounting
principles, consistently applied, and such statements (copies of
which have been supplied to the Acquiring Fund) fairly reflect the
financial condition of the Acquired Fund as of such dates.
(i) Since October 31, 1995, there has not been any material
adverse change in the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by the Acquired Fund of
indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund.
(j) At the Closing Date, all Federal and other tax returns and
reports of the Acquired Fund required by law to have been filed by
such date shall have been filed, and all Federal and other taxes
shall have been paid so far as due, or provision shall have been
made for the payment thereof, and to the best of the Acquired Fund's
knowledge no such return is currently under audit and no assessment
has been asserted with respect to such returns.
(k) For each fiscal year of its operation, the Acquired Fund
has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(l) All issued and outstanding shares of the Acquired Fund are,
and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of the issued and
outstanding shares of the Acquired Fund will, at the time of the
Closing, be held by the persons and in the amounts set forth in the
records of the transfer agent as provided in paragraph 3.3. The
Acquired Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any of the Acquired Fund
shares, nor is there outstanding any security convertible into any
of the Acquired Fund shares.
(m) On the Closing Date, the Acquired Fund will have full
right, power and authority to sell, assign, transfer and deliver the
assets to be transferred by it hereunder.
(n) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of
Blanchard's Trustees and, subject to the approval of the Acquired
Fund Shareholders, this Agreement constitutes the valid and legally
binding obligation of the Acquired Fund enforceable in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally and court
decisions with respect thereto, and to general principles of equity
and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(o) The prospectus/proxy statement of the Acquired Fund (the
"Prospectus/Proxy Statement") to be included in the Registration
Statement referred to in paragraph 5.5 (other than information
therein that relates to the Acquiring Fund) will, on the effective
date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not misleading.
(p) The Acquired Fund has entered into an agreement under which
Federated Global Research Corp. will assume the expenses of the
reorganization including accountants' fees, legal fees, registration
fees, transfer taxes (if any), the fees of banks and transfer agents
and the costs of preparing, printing, copying and mailing proxy
solicitation materials to the Acquired Fund's shareholders and the
costs of holding the Special Meeting of Shareholders.
4.2 World represents and warrants to Blanchard as follows:
(a) World is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland and has the
power to carry on its business as it is now being conducted and to
carry out this Agreement.
(b) World is registered under the 1940 Act as an open-end,
management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and
the rules and regulations of the Commission thereunder and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(d) World is not, and the execution, delivery and performance
of this Agreement will not result, in material violation of its
Articles of Incorporation or By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the
Acquiring Fund is a party or by which it is bound.
(e) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending or
to its knowledge threatened against the Acquiring Fund or any of its
properties or assets which, if adversely determined, would
materially and adversely affect its financial condition or the
conduct of its business. The Acquiring Fund knows of no facts which
might form the basis for the institution of such proceedings, and is
not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the
transactions contemplated herein.
(f) The Statement of Assets and Liabilities of the Acquiring
Fund at March 31, 1996, has been prepared in accordance with
generally accepted accounting principles, consistently applied, and
such statement (copies of which have been furnished to the Acquired
Fund) fairly reflects the financial condition of the Acquiring Fund
as of such date.
(g) Since March 31, 1996, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by the Acquiring Fund of any
indebtedness, except as otherwise disclosed to and accepted by the
Acquired Fund.
(h) At the Closing Date, all Federal and other tax returns and
reports of the Acquiring Fund required by law then to be filed shall
have been filed, and all Federal and other taxes shown as due on
said returns and reports shall have been paid or provision shall
have been made for the payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund
has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does
not have outstanding any options, warrants or other right to
subscribe for or purchase any of the Acquiring Fund Shares, nor is
there outstanding any security convertible into any Acquiring Fund
Shares.
(k) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action, if any, on the
part of World's Directors, and this Agreement constitutes the valid
and legally binding obligation of the Acquiring Fund enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of
whether the enforceability is considered in a proceeding in equity
or at law).
(l) The Prospectus/Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the Acquiring
Fund) will, on the effective date of the Registration Statement and
on the Closing Date, not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
(m) The Acquiring Fund has entered into an agreement under
which Federated Global Research Corp. will assume the expenses of
the reorganization including accountants' fees, legal fees,
registration fees, transfer taxes (if any), the fees of banks and
transfer agents and the costs of preparing, printing, copying and
mailing proxy solicitation materials to the Acquired Fund's
shareholders and the costs of holding the Special Meeting of
Shareholders.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will
include customary dividends and distributions.
5.2 The Acquired Fund will call a meeting of the Acquired Fund
Shareholders to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated
by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring
Fund, in such form as is reasonably satisfactory to the Acquiring Fund, a
statement of the earnings and profits of the Acquired Fund for Federal
income tax purposes which will be carried over to the Acquiring Fund as a
result of Section 381 of the Code and which will be certified by the
Acquired Fund's President and its Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement, referred to in
paragraph 4.1(n), all to be included in a Registration Statement on Form
N-14 of the Acquiring Fund (the "Registration Statement"), in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and
the 1940 Act in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
5.7 Prior to the Valuation Date, the Acquired Fund shall have
declared a dividend or dividends, with a record date and ex-dividend date
prior to the Valuation Date, which, together with all previous dividends,
shall have the effect of distributing to its shareholders all of its
investment company taxable income, if any, plus the excess of its
interest income, if any, excludable from gross income under Code section
103(a) over its deductions disallowed under Code sections 265 and
171(a)(2) for the taxable periods or years ended on or before April 30,
1996 and for the period from said date to and including the Closing Date
(computed without regard to any deduction for dividends paid), and all of
its net capital gain, if any, realized in taxable periods or years ended
on or before April 30, 1996 and in the period from said date to and
including the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance
by the Acquired Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the
following conditions:
6.1 All representations and warranties of Blanchard contained in
this Agreement shall be true and correct in all material respects as of
the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
6.2 Blanchard shall have delivered to the Acquiring Fund a statement
of the Acquired Fund's assets, together with a list of the Acquired
Fund's portfolio securities showing the tax costs of such securities by
lot and the holding periods of such securities, as of the Closing Date,
certified by the Treasurer of Blanchard.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by Blanchard's
President or Vice President and Blanchard's Treasurer or Assistant
Treasurer, in form and substance satisfactory to Blanchard, to the effect
that the representations and warranties of Blanchard made in this
Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Acquiring Fund shall reasonably
request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided herein shall be subject, at its election, to the performance by
the Acquiring Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of World contained in this
Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund on
the Closing Date a certificate executed in its name by World's President
or Vice President and World's Treasurer or Assistant Treasurer, in form
and substance reasonably satisfactory to the Acquired Fund, to the effect
that the representations and warranties of World made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to
such other matters as the Acquired Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before
the Closing Date with respect to the Acquired Fund or the Acquiring Fund,
the other party to this Agreement shall, at its option, not be required
to consummate the transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the
outstanding shares of the Acquired Fund in accordance with the provisions
of the Acquired Fund's Declaration of Trust.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities
authorities) deemed necessary by the Acquiring Fund or the Acquired Fund
to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund
or the Acquired Fund, provided that either party hereto may for itself
waive any of such conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted
or be pending, threatened or contemplated under the 1933 Act.
8.5 Blanchard and World shall have received an opinion of Dickstein,
Shapiro & Morin, L.L.P. substantially to the effect that for Federal
income tax purposes:
(a) The transfer of all of the Acquired Fund assets in exchange
for the Acquiring Fund Shares and the distribution of the Acquiring
Fund Shares to the Acquired Fund Shareholders in liquidation of the
Acquired Fund will constitute a "reorganization" within the meaning
of Section 368(a)(1)(C) of the Code; (b) No gain or loss will be
recognized by the Acquiring Fund upon the receipt of the assets of
the Acquired Fund solely in exchange for the Acquiring Fund Shares;
(c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund assets to the Acquiring Fund in
exchange for the Acquiring Fund Shares or upon the distribution
(whether actual or constructive) of the Acquiring Fund Shares to
Acquired Fund Shareholders in exchange for their shares of the
Acquired Fund; (d) No gain or loss will be recognized by the
Acquired Fund Shareholders upon the exchange of their Acquired Fund
shares for the Acquiring Fund Shares; (e) The tax basis of the
Acquired Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Acquired Fund immediately
prior to the Reorganization; (f) The tax basis of the Acquiring Fund
Shares received by each of the Acquired Fund Shareholders pursuant
to the Reorganization will be the same as the tax basis of the
Acquired Fund shares held by such shareholder immediately prior to
the Reorganization; (g) The holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will include the
period during which those assets were held by the Acquired Fund; and
(h) The holding period of the Acquiring Fund Shares to be received
by each Acquired Fund Shareholder will include the period during
which the Acquired Fund shares exchanged therefor were held by such
shareholder (provided the Acquired Fund shares were held as capital
assets on the date of the Reorganization).
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the
Acquired Fund or the Board of Directors of the Acquiring Fund at any time
prior to the Closing Date (and notwithstanding any vote of the Board of
Trustees of the Acquired Fund) if circumstances should develop that, in
the opinion of either of the parties' Board of Trustees or Directors,
make proceeding with the Agreement inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the directors, trustees, officers or
shareholders of the Acquiring Fund or of the Acquired Fund, in respect of
this Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of Directors of the Acquiring Fund
or the Board of Trustees of the Acquired Fund, if, in the judgment of
either, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the shareholders of the
Acquiring Fund or of the Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided
for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof, and
merges and supersedes all prior discussions, agreements, and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be set forth in a later writing
signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance
with the internal laws of the COMMONWEALTH OF MASSACHUSETTS, without
giving effect to principles of conflict of laws.
11.4 This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be deemed to be an
original.
11.5 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof of any rights or obligations hereunder
shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation, other
than the parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
11.6 The Acquiring Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration of
Trust of the Acquired Fund and agrees that the obligations assumed by the
Acquired Fund pursuant to this Agreement shall be limited in any case to
the Acquired Fund and its assets and the Acquiring Fund shall not seek
satisfaction of any such obligation from the shareholders of the Acquired
Fund, the trustees, officers, employees or agents of the Acquired Fund or
any of them.
IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have caused
this Agreement and Plan of Reorganization to be executed and attested on its
behalf by its duly authorized representatives as of the date first above
written.
Acquired Fund:
BLANCHARD FUNDS,
on behalf of its Portfolio, BLANCHARD
WORLDWIDE EMERGING MARKETS FUND
Attest:
/s/ C. Grant Anderson By: /s/ Joseph A. Machi
Assistant Secretary
Name: Joseph A. Machi
Title: Vice President
Acquiring Fund:
WORLD INVESTMENT SERIES, INC.
on behalf of its Portfolio,
FEDERATED EMERGING
MARKETS FUND
Attest:
/s/ John McGonigle By: /s/ J. Christopher Donahue
Assistant Secretary
Name: J. Christoper Donahue
Title: Executive Vice President
Cusip 09321501G01479-03 (12/95)
Acquisition of the Assets of
BLANCHARD WORLDWIDE EMERGING MARKETS FUND,
a Portfolio of BLANCHARD FUNDS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number 1-800-3863
By and in exchange for Class A Shares of
FEDERATED EMERGING MARKETS FUND,
a Portfolio of WORLD INVESTMENT SERIES, INC.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number 1-800-235-4669
Statement of Additional Information
This Statement of Additional Information dated June 22, 1996 is not a
prospectus. A Prospectus/Proxy Statement dated June 22, 1996 related to the
above-referenced matter may be obtained from World Investment Series, Inc. on
behalf of its portfolio, Federated Emerging Markets Fund, at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779. This Statement of
Additional Information should be read in conjunction with such
Prospectus/Proxy Statement.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated June 22, 1996
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
G01479-04
TABLE OF CONTENTS
1. Statement of Additional Information of Federated Emerging Markets Fund,
dated January 31, 1996
2. Statement of Additional Information of Blanchard Worldwide Emerging
Markets Fund, dated August 7, 1995
3. Financial Statements of Federated Emerging Markets Fund, dated March 31,
1996
4. Financial Statements of Blanchard Worldwide Emerging Markets Fund, dated
April 30, 1995
5. Pro Forma Financial Statements
The Statement of Additional Information of Federated Emerging Markets Fund
dated January 31, 1996 is incorporated herein by reference to Post-Effective
Amendment No 4 to the World Investment Series, Inc.'s Registration Statement
on Form N-1A (File No. 33-52149) which was filed with the Securities and
Exchange Commission on or about December 1, 1995. A copy may be obtained from
World Investment Series, Inc. at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. Telephone Number: 1-800-235-4669.
The Statement of Additional Information of Blanchard Worldwide Emerging
Markets Fund dated August 7, 1995 is incorporated herein by reference to Post-
Effective Amendment No 29 to the Virtus Funds' Registration Statement on Form
N-1A (File No. 33-3165) which was filed with the Securities and Exchange
Commission on or about August 7, 1995. A copy may be obtained from Signet
Financial Services, Inc. at 41 Madison Avenue, 24th Floor, New York, New York,
10010. Telephone Number: 1-800-829-3863.
The financial statements of Federated Emerging Markets Fund dated March 31,
1996 are presented in this Statement of Additional Information.
The audited financial statements of Blanchard Worldwide Emerging Markets Fund
dated April 30, 1995 are incorporated herein by reference to the Statement of
Additional Information dated August 7, 1995, and filed with the Securities and
Exchange Commission on or about August 7, 1995.
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED)
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BLANCHARD BLANCHARD
FEDERATED WORLDWIDE FEDERATED WORLDWIDE
EMERGING EMERGING PRO FORMA EMERGING EMERGING PRO FORMA
MARKETS MARKETS COMBINED MARKETS MARKETS COMBINED
FUND FUND FUND FUND
VALUE VALUE VALUE
IN U.S. IN U.S. IN U.S.
SHARES SHARES SHARES DOLLARS DOLLARS DOLLARS
EMERGING MARKETS SECURITIES--88.4%
ARGENTINA--3.5%
BANKING--0.2%
3,000 -------- 3,000 (a)Bansud S.A. $26,250 $------- $26,250
BEVERAGE & TOBACCO--0.2%
7,500 -------- 7,500 Nobleza Piccardo S.A.I.C. y F. 24,900 -------- 24,900
CONSUMER GOODS & RELATED--0.7%
-------- 4,900 4,900 Quilmes Industrial S.A. -------- 58,800 58,800
-------- 2,450 2,450 Quilmes Industrial (Quinsa) S.A., ADR -------- 26,337 26,337
Total -------- 85,137 85,137
METALS - STEEL--0.2%
50,000 -------- 50,000 (a)Acindar Industria 29,250 -------- 29,250
MULTI-INDUSTRY--1.6%
6,000 24,996 30,996 Compania Naviera Perez Companc S.A., Class B 33,960 141,477 175,437
21,700 -------- 21,700 Ledesma Agricola S.A. 27,559 -------- 27,559
Total 61,519 141,477 202,996
TELECOMMUNICATIONS--0.2%
11,000 -------- 11,000 Telefonica de Argentina S.A., Class B 28,270 -------- 28,270
TRANSPORTATION--0.2%
2,400 -------- 2,400 Transportadora de Gas de Sur S.A., Class B, 28,800 -------- 28,800
ADR
UTILITIES - ELECTRICAL & GAS--0.2%
8,000 -------- 8,000 Central Puerto S.A., Class B 25,600 -------- 25,600
TOTAL ARGENTINA 224,589 226,614 451,203
BRAZIL--10.2%
BANKING--0.4%
2,700,000 -------- 2,700,000 Banco Bradesco S.A., Preference 28,287 -------- 28,287
80,000 -------- 80,000 Banco Itau S.A., Preference 28,424 -------- 28,424
Total $56,711 $------- $56,711
BASIC INDUSTRY--2.2%
-------- 9,920 9,920 Cia Acos Especiais Itabira-Acesita., ADR -------- 114,080 114,080
-------- 4,000 4,000 Companhia Vale Do Rio Doce, ADR -------- 156,932 156,932
-------- 1,995,000 1,995,000 Cia Acos Especiais Itabira-Acesita., Pfd. -------- 11,814 11,814
Total -------- 282,826 282,826
BEVERAGE & TOBACCO--0.2%
50,000 -------- 50,000 Cia Cervejaria Brahma, Preference 24,142 -------- 24,142
CAPITAL GOODS--0.5%
-------- 7,087 7,087 Rhodia-Ster S.A., GDR -------- 64,577 64,577
ENERGY SOURCES--0.2%
270,000 -------- 270,000 Petroleo Brasileiro S.A., Preference 32,250 -------- 32,250
ENERGY RELATED--1.0%
100,000 -------- 100,000 Centrais Eletricas Brasileiras, Preference, 27,331 -------- 27,331
Series B
-------- 3,641 3,641 (a)Companhia Energetica de Minas Gerais, ADR -------- 101,948 101,948
Total 27,331 101,948 129,279
IRON/STEEL--0.9%
-------- 8,100 8,100 Usinas Uni Sd Mg., ADR -------- 85,779 85,779
27,000,000 -------- 27,000,000 Usinas Siderurgicas De Minas Gerais, Pfd. 29,790 -------- 29,790
Total 29,790 85,779 115,569
MANUFACTURING--0.1%
-------- 1,700 1,700 (a)Usiminas USI Sd Mg, ADR -------- 18,190 18,190
RETAIL--0.9%
1,200,000 9,000,000 10,200,000 (a)Lojas Americanas S.A., Preference 28,909 84,725 113,634
TELECOMMUNICATIONS--2.6%
-------- 6,220 6,220 Telecomunicacoes Brasileras, ADR -------- 309,445 309,445
180,000 -------- 180,000 Telecomunicacoes de Sao Paulo S.A., 30,610 -------- 30,610
Preference
Total 30,610 309,445 340,055
UTILITIES - ELECTRICAL & GAS--1.2%
-------- 573,000 573,000 Eletrobras -------- 149,645 149,645
TOTAL BRAZIL 229,743 1,097,135 1,326,878
CHILE--3.1%
BANKING--0.2%
1,200 -------- 1,200 Banco O'Higgins, ADR 29,550 -------- 29,550
BASIC INDUSTRY--0.7%
-------- 17,500 17,500 Antofagasta Holdings PLC -------- 95,887 95,887
BEVERAGE & TOBACCO--0.4%
1,400 -------- 1,400 Compania Cervecerias Unidas S.A., ADR 29,750 -------- 29,750
800 -------- 800 Embotelladora Andina S.A., ADR 27,600 -------- 27,600
Total $57,350 $------- $57,350
CAPITAL GOODS--0.2%
1,000 -------- 1,000 Madeco S.A., ADR 25,000 -------- 25,000
METALS - NON FERROUS--0.3%
600 -------- 600 Sociedad Quimica Y Minera De Chile, ADR 31,350 -------- 31,350
PHARMACEUTICALS--0.3%
2,400 -------- 2,400 Laboratorio Chile, ADR 33,300 -------- 33,300
RETAIL--0.6%
-------- 2,800 2,800 (a)Santa Isabel S.A., ADR -------- 71,050 71,050
TELECOMMUNICATIONS--0.2%
3,200 -------- 3,200 Telex-Chile S.A., ADR 30,400 -------- 30,400
UTILITIES - ELECTRICAL & GAS--0.2%
1,100 -------- 1,100 Enersis S.A., ADR 31,075 -------- 31,075
TOTAL CHILE 238,025 166,937 404,962
CHINA--0.9%
FINANCIAL SERVICES--0.9%
-------- 150,000 150,000 (a)China North Industries Investment, Ltd. -------- 116,250 116,250
COLOMBIA--0.9%
BASIC INDUSTRY--0.4%
-------- 4,000 4,000 Cementos Diamante S.A., GDR -------- 60,000 60,000
FINANCIAL SERVICES--0.5%
-------- 3,400 3,400 Banco Industrial Colombiano, ADR -------- 62,900 62,900
TOTAL COLOMBIA -------- 122,900 122,900
CZECHOSLOVAKIA--1.9%
INSURANCE--0.3%
200 -------- 200 (a)Ceska Pojistovna 33,580 -------- 33,580
MACHINERY & ENGINEERING--0.3%
5,400 -------- 5,400 (a)CKD Praha Holding A.S. 40,561 -------- 40,561
MULTI-INDUSTRY--0.3%
1,200 -------- 1,200 (a)Skoda Koncern Plzen A.S. 35,347 -------- 35,347
TELECOMMUNICATIONS--0.3%
300 -------- 300 (a) SPT Telekom A.S. 34,408 -------- 34,408
UNASSIGNED--0.3%
500 -------- 500 Vodni Stavby Praha A.S. 37,649 -------- 37,649
UTILITIES - ELECTRICAL & GAS--0.4%
800 -------- 800 (a)CEZ A.S. 30,193 -------- 30,193
900 -------- 900 (a)Prvni Severozapadni 33,801 -------- 33,801
Total 63,994 -------- 63,994
TOTAL CZECHOSLOVAKIA $245,539 $------- $245,539
ECUADOR--0.3%
CONSTRUCTION--0.3%
-------- 256 256 (a)LA Cemento Nacional C.A., GDR -------- 43,520 43,520
GREECE--1.4%
BANKING--0.3%
500 -------- 500 Alpha Credit Bank 35,940 -------- 35,940
BEVERAGE & TOBACCO--0.2%
800 -------- 800 Hellenic Bottling Co., S.A. 29,882 -------- 29,882
BUILDING MATERIALS & COMPONENTS--0.2%
600 -------- 600 Titan Cement Co. 28,744 -------- 28,744
ENGINEERING--0.2%
2,900 -------- 2,900 Ergas 28,075 -------- 28,075
METALS - NON FERROUS--0.2%
700 -------- 700 Aluminum of Greece S.A. 29,957 -------- 29,957
MISCELLANEOUS MATERIALS & COMMODITIES--0.3%
1,400 -------- 1,400 Hellas Can Packaging Manufacturers, S.A. 31,731 -------- 31,731
TOTAL GREECE 184,329 -------- 184,329
HONG KONG--0.7%
ENGINEERING--0.7%
-------- 45,000 45,000 (a)New World Infrastructure -------- 96,005 96,005
MANUFACTURING--0.0%
-------- 40,000 40,000 (a)Star Paging International Holding, Ltd., -------- 729 729
Warrants
TOTAL HONG KONG -------- 96,734 96,734
HUNGARY--1.7%
CONSUMER GOODS & RELATED--0.1%
-------- 2,800 2,800 (a)Kekut Asvanyiz, GDR -------- 18,462 18,462
ENERGY SOURCES--0.2%
2,600 -------- 2,600 (a)MOL Magyar Olaj-es Gazipari RT 27,655 -------- 27,655
FINANCIAL SERVICES--0.0%
-------- 3,100 3,100 (a)Konzum Ker ES Ipari RT -------- 7,479 7,479
FOOD PROCESSING--0.3%
700 -------- 700 (a)Pick Szeged RT 33,224 -------- 33,224
LEISURE & TOURISM--0.3%
2,800 -------- 2,800 (a)Danubius Hotels RT 34,176 -------- 34,176
MANUFACTURING--0.2%
900 -------- 900 (a)Zalakeramia RT 31,700 -------- 31,700
PHARMACEUTICALS--0.6%
900 -------- 900 (a)EGIS $39,139 $------- $39,139
900 -------- 900 Gedeon Richter RT 32,956 -------- 32,956
Total 72,095 -------- 72,095
TOTAL HUNGARY 198,850 25,941 224,791
INDIA--6.5%
AUTOMOBILE--0.7%
1,100 -------- 1,100 (a)Bajaj Auto, Ltd., GDR 34,375 -------- 34,375
3,500 -------- 3,500 (a)Mahindra and Mahindra , GDR 33,250 -------- 33,250
2,000 -------- 2,000 Tata Eng & Loco Co., GDR 32,000 -------- 32,000
Total 99,625 -------- 99,625
BASIC INDUSTRY--0.8%
-------- 5,880 5,880 (a)Gujarat Ambuja Cements, GDR, Conv. Bond, -------- 71,266 71,266
3.50%, 6/30/1999
800 -------- 800 (a)Hindalco Industries, Ltd., GDR 29,400 -------- 29,400
Total 29,400 71,266 100,666
CHEMICALS--0.4%
18,200 -------- 18,200 (b)Indo Gulf Fetrilizer & Chemical 144-A, GDR 30,030 -------- 30,030
2,000 -------- 2,000 Reliance Industries, GDR 28,750 -------- 28,750
Total 58,780 -------- 58,780
CONSUMER--0.8%
-------- 4,800 4,800 (a)DCW, Ltd., GDR -------- 22,800 22,800
-------- 10,000 10,000 (a)Dr. Reddy's Laboratories, GDR -------- 81,250 81,250
Total -------- 104,050 104,050
INVESTMENT COMPANIES--2.9%
-------- 7,803 7,803 (a)IS Himalayan Fund N.V. -------- 110,802 110,802
-------- 1,180 1,180 (a)IS Himalayan Fund N.V., Warrants -------- 425 425
-------- 27,307 27,307 (a)Indian Opportunities Fund, Ltd. -------- 273,074 273,074
Total -------- 384,301 384,301
PHARMACEUTICALS--0.2%
1,100 -------- 1,100 (b)Ranbaxy Laboratories, GDR 144-A, GDR 24,640 -------- 24,640
TEXTILES & APPAREL--0.2%
2,100 -------- 2,100 (a)Indian Rayon & Industries, Ltd., GDR 32,298 -------- 32,298
TOBACCO--0.2%
3,000 -------- 3,000 (a)Itc, GDR 22,140 -------- 22,140
UTILITIES - ELECTRICAL & GAS--0.2%
7,000 -------- 7,000 (a)Cesc Limited-Sponsored, GDR 25,550 -------- 25,550
TOTAL INDIA 292,433 559,617 852,050
INDONESIA--5.2%
AUTOMOBILE--0.2%
14,000 -------- 14,000 PT United Tractors 28,144 -------- 28,144
BANKING--2.4%
-------- 105,000 105,000 PT Bank Dagang Nasional $------- $90,943 $90,943
7,000 41,000 48,000 PT Bank International Indonesia 29,491 172,733 202,224
24,000 -------- 24,000 PT Bank Tiara Asia 27,716 -------- 27,716
Total 57,207 263,676 320,883
BEVERAGE & TOBACCO--0.2%
2,500 -------- 2,500 PT Hanjaya Mandala Sampoerna 26,117 -------- 26,117
BUILDING MATERIALS & COMPONENTS--0.2%
8,000 -------- 8,000 PT Semen Gresik 28,315 -------- 28,315
CHEMICALS--0.1%
-------- 41,000 41,000 Keramika Indonesia Associates -------- 21,482 21,482
CONSUMER GOODS & RELATED--0.9%
-------- 68,000 68,000 PT Andayani Megah -------- 48,717 48,717
-------- 39,000 39,000 PT Concord Benefit Textile -------- 12,511 12,511
-------- 84,000 84,000 PT Gadjah Tunggal -------- 51,198 51,198
Total -------- 112,426 112,426
ENGINEERING & CONSTRUCTION--0.6%
-------- 55,000 55,000 (a)PT Bukaka Teknik Utam -------- 82,335 82,335
HEALTH & PERSONAL CARE--0.2%
13,000 -------- 13,000 (a)PT Darya Varia Laboratoria 28,358 -------- 28,358
TELECOMMUNICATIONS--0.2%
18,000 -------- 18,000 Telekomunikasi Ind 28,293 -------- 28,293
TOTAL INDONESIA 196,434 479,919 676,353
ISRAEL--0.3%
FINANCIAL SERVICES--0.3%
-------- 2,200 2,200 (a)Ampal-American Israel Corp., Class A -------- 12,650 12,650
-------- 1,000 1,000 (a)Koor Industries, Ltd. -------- 19,375 19,375
Total -------- 32,025 32,025
TOTAL ISRAEL -------- 32,025 32,025
KOREA --3.7%
BASIC INDUSTRY--0.3%
-------- 8,000 8,000 (a)Kumho Construction & Engineering Co., Pfd. -------- 44,998 44,998
CAPITAL GOODS--0.7%
-------- 5,092 5,092 (a)Anam Industrial Co., Ltd., Pfd. -------- 50,774 50,774
-------- 6,000 6,000 (a)Daewoo Heavy Industries, Pfd. -------- 35,283 35,283
Total -------- 86,057 86,057
CONSUMER GOODS & RELATED--0.0%
-------- 2 2 (a)Samsung Electronics Co., Pfd. -------- 144 144
TRANSPORTATION--0.3%
-------- 1,342 1,342 (a)Dong Bang Forwarding Co. $------- $34,826 $34,826
UTILITIES & RELATED--2.4%
-------- 6,000 6,000 (a)Korea Electric Power Corp. -------- 233,941 233,941
-------- 2,239 2,239 (a)Yukong, Ltd. -------- 74,991 74,991
Total -------- 308,932 308,932
TOTAL KOREA -------- 474,957 474,957
MALAYSIA--7.8%
BUILDING MATERIALS & COMPONENTS--0.3%
8,000 -------- 8,000 Sungei Way Hldgs 34,783 -------- 34,783
CONSUMER GOODS & RELATED--0.8%
-------- 11,000 11,000 Edaran Otomobil Nasional -------- 98,696 98,696
ENGINEERING--1.2%
-------- 22,000 22,000 United Engineers, Ltd. -------- 152,174 152,174
FINANCIAL SERVICES--3.4%
5,000 31,000 36,000 Commerce Asset Holdings Bhd 28,656 177,668 206,324
9,000 -------- 9,000 Rashid Hussain Bhd 28,636 -------- 28,636
-------- 55,000 55,000 Renong Berhad -------- 89,565 89,565
-------- 6,875 6,875 (a)Renong Berhad, Warrants -------- 1,820 1,820
-------- 50,000 50,000 Westmont Berhad -------- 106,719 106,719
-------- 10,000 10,000 (a)Westmont Berhad, Right -------- 4,150 4,150
Total 57,292 379,922 437,214
MACHINERY & ENGINEERING--0.3%
20,000 -------- 20,000 Tractors Malaysia Holdings Bhd 37,312 -------- 37,312
RETAIL--1.6%
-------- 133,000 133,000 LARUT Consolidated Berhad -------- 208,174 208,174
TRANSPORTATION - SHIPPING--0.2%
12,000 -------- 12,000 Kelang Container Terminal 30,119 -------- 30,119
TOTAL MALAYSIA 159,506 838,966 998,472
MEXICO--8.2%
AUTO PARTS--1.0%
-------- 20,000 20,000 Corporacion Industrial Sanluis, S.A. de C.V., -------- 107,896 107,896
CPO
-------- 500 500 (a)Corporacion Industrial Sanluis, S.A. de -------- 15,935 15,935
C.V., ADR
Total -------- 123,831 123,831
BANKING--1.0%
15,900 43,000 58,900 Grupo Financiero Banamex, Class B 33,973 91,878 125,851
BEVERAGE & TOBACCO--0.3%
13,500 -------- 13,500 Fomento Economico Mexicano, S.A. de C.V., 38,162 -------- 38,162
Class B
BROADCASTING & PUBLISHING--0.2%
2,300 -------- 2,300 Grupo Televisa S.A. 28,845 -------- 28,845
BUILDING MATERIALS--0.7%
-------- 11,900 11,900 Apasco S.A. de CV $------- $60,013 $60,013
8,000 -------- 8,000 Cemex S.A., Class B 30,630 -------- 30,630
Total 30,630 60,013 90,643
ENGINEERING--0.7%
2,300 4,700 7,000 Empresas ICA Sociedad Controladora S.A., ADR 30,097 61,100 91,197
FINANCIAL SERVICES--0.9%
4,500 5,600 10,100 (a)Grupo Carso S.A. de CV, ADR 35,116 87,039 122,155
FOREST PRODUCTS--0.6%
-------- 11,400 11,400 (a)Grupo Industrial Durango S.A. de CV, ADR -------- 78,375 78,375
HEALTH & PERSONAL CARE--0.3%
1,800 -------- 1,800 Kimberly-Clark de Mexico 34,399 -------- 34,399
HOME APPLIANCES--1.0%
-------- 3,200 3,200 Ceteco Holdings N.V., ADR -------- 132,644 132,644
MINING--0.6%
-------- 18,000 18,000 Industrial Penoles, S.A. -------- 77,877 77,877
MULTI-INDUSTRY--0.6%
2,400 4,000 6,400 Alfa, S.A. de C.V., Class A 31,851 53,086 84,937
TRANSPORTATION - SHIPPING--0.3%
4,000 -------- 4,000 (a)Transportacion Maritima Mexicana S.A. , 32,913 -------- 32,913
Class A
TOTAL MEXICO 295,986 765,843 1,061,829
PERU--3.7%
BANKING--0.2%
16,100 -------- 16,100 (a)Banco Wiese 28,613 -------- 28,613
BEVERAGE & TOBACCO--0.2%
20,000 -------- 20,000 Cervecer Backus & Johnson, Class T 26,276 -------- 26,276
FOOD PROCESSING--0.2%
65,000 -------- 65,000 D'Onofrino S.A. 26,531 -------- 26,531
METALS - NON FERROUS--0.2%
4,025 -------- 4,025 CIA DE Minas Buenaventura 30,290 -------- 30,290
MINING--0.0%
2 2 Peruvian Nouveau Sol -------- 1 1
REAL ESTATE--1.0%
-------- 345,000 345,000 (a)Peru Real Estate S.A. -------- 127,650 127,650
TELECOMMUNICATIONS--1.7%
14,000 43,874 57,874 Telefonica Del Peru, CPT, Class B 28,869 90,471 119,340
-------- 1,500 1,500 Perusahaan Per Ind Sat -------- 51,188 51,188
27,000 -------- 27,000 (a)Tele 2000 S.A.- La Nueva Com de Telefonos 42,934 -------- 42,934
Total 71,803 141,659 213,462
WHOLESALE & INTERNATIONAL TRADE--0.2%
20,800 -------- 20,800 Enrique Ferreyros S.A. $26,088 $------- $26,088
TOTAL PERU 209,601 269,310 478,911
PHILIPPINES--3.2%
BANKING--1.0%
-------- 3,800 3,800 Metro Bank and Trust Co. -------- 94,347 94,347
2,200 -------- 2,200 (a)Philippine National Bank 28,782 -------- 28,782
Total 28,782 94,347 123,129
BUILDING MATERIALS & COMPONENTS--0.0%
10,000 -------- 10,000 Sanitary Wares Mfg 3,323 -------- 3,323
ELECTRICAL & ELECTRONICS--0.2%
400,000 -------- 400,000 EEI Corp. 28,418 -------- 28,418
MULTI-INDUSTRY--0.2%
16,000 -------- 16,000 First Philippine Holdings Corp., Class B 29,641 -------- 29,641
OIL GAS/EXPLORATION--0.8%
-------- 750,000 750,000 (a)Belle Corporation -------- 97,403 97,403
REAL ESTATE--0.8%
22,000 -------- 22,000 Ayala Land, Inc., Class B 35,714 -------- 35,714
200,000 -------- 200,000 Guoco Holdings 33,613 -------- 33,613
172,000 -------- 172,000 (a)Robinson's Land Corp., Class B 30,550 -------- 30,550
Total 99,877 -------- 99,877
UTILITIES - ELECTRICAL & GAS--0.2%
3,400 -------- 3,400 Manila Electric Co., Class B 30,000 -------- 30,000
TOTAL PHILIPPINES 220,041 191,750 411,791
POLAND--4.9%
CAPITAL GOODS--1.3%
-------- 3,000 3,000 (a)Bydgoska Fabryka Kabli S.A. -------- 73,038 73,038
-------- 4,000 4,000 (a)Debica S.A. -------- 97,384 97,384
Total -------- 170,422 170,422
CONSUMER GOODS & RELATED--1.2%
-------- 1,400 1,400 (a)Huta Szkla Gospodarczego Irena -------- 15,257 15,257
-------- 18,550 18,550 (a)Mostostal Export -------- 54,481 54,481
-------- 1,019 1,019 (a)Zyweic Powowarskiew PLZ -------- 83,876 83,876
Total -------- 153,614 153,614
FINANCIAL SERVICES--2.4%
-------- 7,200 7,200 (a)Bank Rozwoju Eksportu S.A. -------- 153,032 153,032
-------- 895 895 (a)Bank Slaski S.A. -------- 63,294 63,294
-------- 15,760 15,760 (a)Elektrim Towarzystwo Handlowe S.A. -------- 93,182 93,182
Total -------- 309,508 309,508
TOTAL POLAND $------- $633,544 $633,544
PORTUGAL--1.7%
AUTOMOBILE--0.3%
2,800 -------- 2,800 Salvador Caetano Industrias Metalurgicas e
Veiculos de Transporte S.A. 33,045 -------- 33,045
BANKING--0.5%
2,200 -------- 2,200 Banco Commerical Portugues, Class R 30,219 -------- 30,219
1,500 -------- 1,500 Banco Totta & Acores Nationalisiert, Class B 29,209 -------- 29,209
Total 59,428 -------- 59,428
CHEMICALS--0.2%
1,200 -------- 1,200 CIN-Corparacao Industrial do Norte S.A. 30,291 -------- 30,291
CONSTRUCTION & HOUSING--0.2%
6,000 -------- 6,000 Somague-Sgps 31,314 -------- 31,314
FOOD & HOUSEHOLD PRODUCTS--0.3%
500 -------- 500 Estabelecimentos Jeronimo Martins & Filho 37,113 -------- 37,113
SGPS, S.A.
TELECOMMUNICATIONS--0.2%
1,200 -------- 1,200 (a)Portugal Telecom S.A. 27,105 -------- 27,105
TOTAL PORTUGAL 218,296 -------- 218,296
RUSSIA--1.7%
TELECOMMUNICATIONS--0.8%
20,000 -------- 20,000 Nizhnyu Novgordo Svyazinfor 30,000 -------- 30,000
-------- 11,000 11,000 (a)Petersburg Long Distance, Inc. -------- 54,312 54,312
30,000 -------- 30,000 (a)Rostelekom 27,900 -------- 27,900
Total 57,900 54,312 112,212
UTILITIES - ELECTRICAL & GAS--0.6%
10,000 -------- 10,000 Irkutsk Entergo 46,300 -------- 46,300
4,300 -------- 4,300 (a)Mosenergo, ADR 31,175 -------- 31,175
Total 77,475 -------- 77,475
UTILITIES - OIL & GAS--0.3%
1,800 -------- 1,800 (a)Lukoil Oil Co., ADR 34,650 -------- 34,650
TOTAL RUSSIA 170,025 54,312 224,337
SLOVENIA--0.4%
BANKING--0.4%
-------- 210 210 Slovenia Kredit Bank -------- 50,106 50,106
SOUTH AFRICA--5.8%
BASIC INDUSTRY--0.8%
-------- 10,000 10,000 Sasol, Ltd. -------- 97,578 97,578
CONSUMER GOODS & RELATED--0.5%
-------- 11,242 11,242 (a)JD Group, Ltd. $------- $65,380 $65,380
ENTERTAINMENT--0.7%
-------- 66,000 66,000 Sun International, Ltd. -------- 89,631 89,631
FINANCIAL SERVICES--1.0%
-------- 6,500 6,500 Barlow Limited -------- 83,369 83,369
-------- 7,000 7,000 (a)Malbak Limited -------- 41,370 41,370
Total -------- 124,739 124,739
INDUSTRIAL--0.4%
-------- 1,000 1,000 Anglo American Industrial Corp., Ltd. -------- 48,035 48,035
INVESTMENT COMPANIES--0.8%
-------- 27,000 27,000 Liberty Life Strategic Investments, Ltd. -------- 103,551 103,551
METALS & MINING--0.4%
-------- 5,500 5,500 Free State Consolidated Gold Mines, Ltd. -------- 53,599 53,599
MINING--0.2%
-------- 500 500 Anglo American Coal Corp. -------- 30,807 30,807
PHARMACEUTICALS--0.4%
-------- 5,500 5,500 South African Druggists, Ltd. -------- 53,253 53,253
RETAIL--0.6%
-------- 6,300 6,300 Q Data, Ltd. -------- 82,388 82,388
TOTAL SOUTH AFRICA -------- 748,961 748,961
TAIWAN --0.1%
BASIC INDUSTRY--0.1%
-------- 1,700 1,700 (a)Tuntex Distinct Corp., GDR -------- 10,625 10,625
THAILAND--6.4%
CAPITAL GOODS--1.6%
5,400 12,000 17,400 (a)Hana Microelectronics Co., Ltd. 30,371 67,490 97,861
-------- 21,000 21,000 TPI Polene Co., Ltd. -------- 113,950 113,950
Total 30,371 181,440 211,811
FINANCIAL SERVICES--1.9%
8,400 -------- 8,400 (a)Industrial Finance Corporation of Thailand 30,608 -------- 30,608
6,700 21,000 27,700 Krung Thai Bank PLC 31,579 98,978 130,557
-------- 31,500 31,500 MDX Co., Ltd. - Foreign -------- 46,162 46,162
2,900 -------- 2,900 Thai Farmers Bank Co. 33,999 -------- 33,999
Total 96,186 145,140 241,326
HOUSEHOLD APPLIANCES--0.2%
3,100 -------- 3,100 Singer Thailand 24,802 -------- 24,802
INDUSTRIAL--1.2%
-------- 180,000 180,000 Siam Sindhorn, Conv. Bond, Series WW, 2.00%, -------- 160,200 160,200
7/31/2000
MINING--0.2%
1,200 -------- 1,200 Banpu Public Company, Ltd. $30,228 $------- $30,228
TELECOMMUNICATIONS--0.2%
1,500 -------- 1,500 Advanced Information Services 28,161 -------- 28,161
TRANSPORTATION--1.1%
-------- 24,000 24,000 Precious Shipping, Ltd. -------- 140,684 140,684
TOTAL THAILAND 209,748 627,464 837,212
TURKEY--3.7%
BANKING--0.3%
900,000 -------- 900,000 Demirbank T.A.S. 34,734 -------- 34,734
BEVERAGE & TOBACCO--0.2%
45,000 -------- 45,000 Erciyas Biracilik Ve Malt Sanayii 27,156 -------- 27,156
CHEMICALS--0.4%
73,000 -------- 73,000 Aksa Akrilik Kimya Sanayii A.S. 26,637 -------- 26,637
32,000 -------- 32,000 (a)Petkim Petrokimya Holding A.S. 23,353 -------- 23,353
Total 49,990 -------- 49,990
CONSUMER GOODS & RELATED--1.2%
28,000 122,400 150,400 (a)Migros Turk 29,865 130,551 160,416
ELECTRICAL & ELECTRONICS--0.2%
85,000 -------- 85,000 Netas Telekomunik 26,244 -------- 26,244
FOREST PRODUCTS & PAPER--0.2%
80,000 -------- 80,000 Kartonsan Karton Sanayi Ve Ticaret A.S. 30,314 -------- 30,314
IRON/STEEL--0.8%
860,000 860,000 Eregli Demir Ve Celik Fabrikalari T.A.S. -------- 100,175 100,175
MULTI-INDUSTRY--0.4%
120,000 -------- 120,000 (a)Koc Yatirim Ve Sanayi Mamulleri Pazarlama 33,682 -------- 33,682
S.A.
90,000 -------- 90,000 (a)EnkaHolding Yatirim 23,683 -------- 23,683
Total 57,365 -------- 57,365
TOTAL TURKEY 255,668 230,726 486,394
URUGUAY--0.5%
FINANCIAL SERVICES--0.5%
-------- 4,700 4,700 Banco Comerical S.A., GDR -------- 71,675 71,675
TOTAL EMERGING MARKETS SECURITIES
(IDENTIFIED COST $12,252,344) 3,548,813 7,935,831 11,484,644
(C)REPURCHASE AGREEMENT--11.1%
$1,435,000 -------- $1,435,000 BT Securities Corporation, 5.43%, dated
3/29/1996, due 4/1/1996 $1,435,000 $------- $1,435,000
(AT AMORTIZED COST)
TOTAL INVESTMENTS (IDENTIFIED COST $4,983,813 $7,935,831 $12,919,644
$13,687,344)(D)
</TABLE>
(a) Non-income producing security.
(b) Denotes a restricted security which is subject to restrictions on resales
under Federal Securities laws. At the end of the period, these
securities amounted to $54,670 which represents 0.4% of net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at
the date of the portfolio. The investment in the repurchase agreement
is through participation in a joint account with
other Federated Funds.
(d) The cost of investments for federal tax purposes amounts to $13,687,344.
The net unrealized depreciation of investments on a federal tax basis
amounts to $767,700 which is comprised of $1,217,058 depreciation and
$449,358 appreciation at March 31, 1996.
The following acronyms are used throughout this portfolio:
ADR --American Depository Receipt
GDR --Global Depository Receipts
PLC --Public Limited Company
SA --Support Agreement
Note: The categories of investments are shown as a percentage of net assets
($12,987,627) at March 31, 1996.
(See Notes which are an integral part of the Financial Statements)
FEDERATED EMERGING MARKETS FUND
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
FEDERATED BLANCHARD
EMERGING WORLDWIDE PRO FORMA PRO FORMA
EMERGING
MARKETS FUND MARKETS FUND ADJUSTMENT COMBINED
ASSETS:
<S> <C> <C> <C>
Investments in repurchase agreements, at amotized cost and $ 1,435,000 $ --- $ 1,435,000
value
Investments in securities, at value 3,548,813 7,935,830 --- 11,484,643
Total investments, at amortized cost and value 4,983,813 7,935,830 --- 12,919,643
(identified cost, $ 13,687,344)
Cash 183 --- --- 183
Cash denominated in foreign currencies (at cost, $1,473) --- 1,483 --- 1,483
Income receivable 6,256 22,022 --- 28,278
Receivable for investments sold --- 13,744 --- 13,744
Prepaid expenses 15,002 93,594 --- 108,596
Receivable for shares sold 6,890 --- --- 6,890
Total assets 5,012,144 8,066,673 --- 13,078,817
LIABILITIES:
Payable to Bank --- 17,971 --- 17,971
Payable for taxes withheld 356 2,334 --- 2,690
Payable for investments purchased --- 18,338 --- 18,338
Payable for foreign currency purchased --- 236 --- 236
Payable for shares redeemed --- 997 --- 997
Accrued expenses --- 50,958 --- 50,958
Total liabilities 356 90,834 --- 91,190
NET ASSETS $ 5,011,788 $ 7,975,839 --- $ 12,987,627
NET ASSETS CONSISTS OF:
Paid in capital $ 5,017,478 $ 12,250,432 --- 17,267,910
Net unrealized depreciation of investments and translation of (10,937) (756,966) --- (767,903)
assets and liabilities in foreign currency
Accumulated net realized loss on investments and foreign --- (3,085,092) --- (3,085,092)
currency transactions
Distributions in excess of net investment income --- (432,535) --- (432,535)
Undistributed net investment income 5,247 --- --- 5,247
Total Net Assets $ 5,011,788 $ 7,975,839 --- $ 12,987,627
NET ASSETS:
Class A Shares $ 4,921,068 $ 7,975,839 $ --- $ 12,896,907
Class B Shares $ 76,024 $ --- $ --- $ 76,024
Class C Shares $ 14,696 $ --- $ --- $ 14,696
SHARES OUTSTANDING:
Class A Shares 492,676 1,265,547 (467,455) (a 1,290,768
)
Class B Shares 7,613 --- --- 7,613
Class C Shares 1,471 --- --- 1,471
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER
SHARE:
CLASS A SHARES:
Net Asset Value Per Share $ 9.99 --- --- $ 9.99
CLASS B SHARES:
Net Asset Value Per Share $ 9.99 --- --- $ 9.99
CLASS C SHARES:
Net Asset Value Per Share $ 9.99 --- --- $ 9.99
BLANCHARD WORLDWIDE EMERGING MARKETS SHARES
Net Asset Value Per Share $ --- $ 6.30 --- $ 9.99
(a) Adjustment to reflect share balance as a result of the combination, based on an exchange ratio of 0.63063063 ($6.30/$9.99).
(See Notes to Pro Forma Financial Statements)
FEDERATED EMERGING MARKETS FUND
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 31, 1996 TO MARCH 31,
1996 (UNAUDITED)
BLANCHARD
FEDERATED WORLDWIDE
EMERGING EMERGING PRO FORMA PRO FORMA
MARKETS MARKETS ADJUSTMENT NOTE COMBINED
FUND FUND S S
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $ $ 6,880 $ 64,935 $ --- $ 71,815
47,441)
Interest 7,437 --- --- 7,437
Total income 14,317 64,935 --- 79,252
EXPENSES:
Investment advisory fee 5,727 18,727 --- 24,454
Administrative personnel and services fee 30,833 12,500 (12,500) (a) 30,833
Custodian fees 8,624 4,160 (2,285) (c) 10,499
Transfer agent and dividend disbursing agent fees 6,473 17,416 --- 23,889
and expenses
Directors'/Trustees' fees --- 391 (391) (f) ---
Auditing fees --- 5,069 (5,069) (f) ---
Legal fees 1,066 3,733 (799) (e) 4,000
Portfolio accounting fees 9,250 10,213 (10,213) (b) 9,250
Distribution services fee --- 7,491 (7,491) (g) ---
Share registration costs 924 1,933 --- 2,857
Printing and postage 1,882 3,848 (1,730) (d) 4,000
Insurance premiums 627 --- 627
Miscellaneous 668 5,103 (1,030) (g) 4,741
Total expenses 66,074 90,584 (41,508) 115,150
Waivers and reimbursements-
Waiver of investment advisory fee (5,727) (18,727) 2,468 (h) (21,986)
Waiver of administrative personnel and services --- (11,090) 11,090 (a) ---
fee
Reimbursement of other operating expenses (52,406) (6,983) --- (59,389)
Total waivers and reimbursements (58,133) (36,800) 13,558 (81,375)
Net expenses 7,941 53,784 (27,950) 33,775
Net investment income 6,376 11,151 27,950 45,477
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized loss on investments and foreign --- (532,720) --- (532,720)
currency transactions
Net change in unrealized depreciation of investments
and translation of assets and liabilities in foreign (10,937) (190,952) --- (201,889)
currency
Net realized and unrealized loss on investments (10,937) (723,672) --- (734,609)
and foreign currency
Change in net assets resulting from $ (4,561) $ (712,521) $ 27,950 $ (689,132)
operations
</TABLE>
(See legend to the Statement of Operations)
(See Notes to Pro Forma Financial Statements)
FEDERATED EMERGING MARKETS FUND
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 31, 1996 THROUGH MARCH 31, 1996
(a) Administrative personnel services for the combined fund would be charged
an annual rate of 0.15 of 1% on the first $250 million of average aggregate
daily net assets of the Federated Funds; 0.125 of 1% on the next $250
million; 0.10 of 1% on the next $250 million; and 0.075 of 1% on the average
aggregate daily net assets of the Federated Funds in excess of $750 million,
subject to a $125,000 per portfolio and $30,000 per each additional class of
shares.
(b) Federated Services Company maintains the Fund accounting records for
which it receives a fee. The fee is based on the level of Fund's average
daily net assets, for the period plus out-of-pocket expenses.
(c) State Street Bank and Trust Company is custodian for the securities and
cash of the Fund. The custodian fee is based on a percentage of assets,
plus out-of-pocket expenses.
(d) Printing and postage expenses are adjusted to reflect estimated savings
to be realized by combining two portfolios into a single portfolio.
(e) Legal expenses are adjusted to reflect estimated savings to be realized
by combining two portfolios into a single portfolio.
(f) These costs for the first year are deferred.
(g) Other expenses are adjusted to reflect estimated savings to be realized
by combining two portfolios into a single portfolio.
(h) Federated Global Research Corp. is entitled to receive for its services
an annual investment advisory fee equal to 1.25% of the fund's average daily
net assets. The advisor may voluntarily choose to waive its fee and
reimburse a portion of certain other operating expenses. The advisor can
modify or terminate this voluntary waiver and/or reimbursement at any time
at its sole discretion.
Federated Emerging Markets Fund
Blanchard Worldwide Emerging Markets Fund
Notes to Pro Forma Financial Statements (unaudited)
1. Basis of Combination
The unaudited Pro Forma Combining Portfolio of Investments, Statement of
Operations, and the Statement of Assets and Liabilities ("Pro Forma
Financial Statements") reflect the accounts of Federated Emerging Markets
Fund, and Blanchard Worldwide Emerging Markets Fund, (collectively, the
"Funds") for the period from January 31, 1996 to March 31, 1996, and as
of March 31, 1996, with the regard to the Statement of Assets and
Liabilities. These statements have been derived from the books and
records utilized in calculating daily net asset values at March 31,
1996.
The Pro Forma Combining Portfolio of Investments, Statement of Assets and
Liabilities and Statement of Operations should be read in conjunction
with the historical financial statements of the Funds incorporated by
reference in the Statement of Additional Information. The Funds follow
generally accepted accounting principles applicable to management
investment companies which are disclosed in the historical financial
statements of each Fund.
The Pro Forma Financial Statements give effect to the proposed transfer
of the assets of Blanchard Worlwide Emerging Markets Fund in exchange
for Class A Shares of Federated Emerging Markets Fund. Under generally
accepted accounting principles, Federated Emerging Markets Fund, will be
the surviving entity for accounting purposes with its historical cost of
investment securities and results of operations being carried forward.
The Pro Forma Financial Statements have been adjusted to reflect the
anticipated advisory and administration fee arrangements for the
surviving entity. Certain other operating costs have also been adjusted
to reflect anticipated expenses of the combined entity. Other costs
which may change as a result of the reorganization are currently
undeterminable.
For the period ended March 31, 1996, the Federated Emerging Markets
Fund and Blanchard Worldwide Emerging Markets Fund. paid investment
advisory fees computed at the annual rate of 1.25% of the Fund's average
net assets, respectively.
The advisor and administrator may voluntarily choose to waive a portion
of their fees and reimburse certain operating expenses of Federated
Emerging Markets Fund and Blanchard Worldwide Emerging Markets Fund.
2. Shares of Beneficial Interest
The Pro Forma net asset value per share assumes the issuance of 798,092
shares of the Federated Emerging Markets Fund's Class A Shares in
exchange for 1,265,547 shares from the Blanchard Worldwide Emerging
Markets Fund which would have been issued at March 31, 1996, in
connection with the proposed reorganization.
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
SPECIAL MEETING OF SHAREHOLDERS AUGUST 16, 1996
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of
Blanchard Worldwide Emerging Markets Fund hereby appoint C. Grant Anderson,
Patricia F. Conner, Colleen Conley, Suzanne W. Land, and Gia C. Albanowski or
any of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of Blanchard Worldwide Emerging Markets Fund which
the undersigned is entitled to vote, at the Special Meeting of Shareholders to
be held on August 16, 1996, at Federated Investors Tower, Pittsburgh,
Pennsylvania, at 2:00 p.m. (Eastern Time), and at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The attorneys
named will vote the shares represented by this proxy in accordance with the
choices made on this ballot. IF NO CHOICE IS INDICATED AS TO ANY ITEM, THIS
PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
BLANCHARD WORLDWIDE KEEP THIS PORTION FOR YOUR RECORDS
EMERGING MARKETS FUNDDETACH AND RETURN THIS PORTION ONLY
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN 1. TO APPROVE OR DISAPPROVE AN AGREEMENT
- -- -- -- AND PLAN OF REORGANIZATION PROVIDING FOR THE TRANSFER
OF THE ASSETS OF BLANCHARD WORLDWIDE EMERGING MARKETS
FUND TO THE CLASS A SHARES OF FEDERATED EMERGING
MARKETS FUND, A PORTFOLIO OF WORLD INVESTMENT SERIES,
INC.
Please sign EXACTLY as your name(s) appear above. When signing as attorney,
executor, administrator, guardian, trustee, custodian, etc., please give full
title as such. If a corporation or partnership, please sign the full name by
an authorized officer or partner. If stock is owned jointly, all parties
should sign.
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
Item 16.Exhibits
1.1 Copy of Articles of Incorporation of the Registrant (1)
2. Copy of Bylaws of the Registrant (2)
3. Not Applicable
4. Agreement and Plan of Reorganization is included as Appendix A to the
Combined Proxy Statement and Prospectus of this Registration Statement *
5. Not Applicable
6.1 Conformed Copy of Investment Advisory Contract of the Registrant through
and including Exhibit F thereto (3)
6.2 Conformed Copy of Assignment of Investment Advisory Contract (3)
7. Conformed Copy of Distributor's Contract of the Registrant through and
including Exhibit S thereto (3)
8. Not Applicable
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed February 4, 1994. (File Nos. 33-52149 and
811-7141).
(2) Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 to its Regstration Statement on Form N-1A filed March 24,
1994. (File Nos. 33-52149 and 811-7141).
(3) Response is incorporated by reference to the Registrant's Post-Effective
Amendment No. 6 to its Registration Statement on Form N-1A filed on
January 26, 1996. (File Nos. 33-52149 and 811-7141).
(4) Response is incorporated by reference to the Registrant's Post-Effective
Amendment No. 1 to its Registration Statement on Form N-1A filed July 25,
1994. (File Nos. 33-52149 and 811-7141).
(5) Response is incorporated by reference to Cash Trust Series II's Post-
Effective Amendment No. 6 to its Registration Statement on Form N-1A filed
July 24, 1995. (File Nos. 33-38550 and 811-6269).
(6) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 to its Registration Statement on Form N-1A filed December
1, 1995. (File Nos. 33-52149 and 811-7141).
9.1 Conformed Copy of Custodian Agreement of the Registrant (4)
9.2 Conformed Copy of Fund Accounting, Shareholder Recordkeeping and Custody
Services Procurement Agreement of the Registrant (3)
10.1 Conformed Copy of the Distribution Plan of the Registrant through and
including Exhibit R thereto (3)
10.2 Conformed Copy of the Specimen Mutual Funds Sales and Service Agreement;
Mutual Funds Service Agreement; and Plan Trustee/Mutual Funds Service
Agreement (5)
11. Opinion regarding legality of shares being issued *
12. Opinion regarding tax consequences of Reorganization (to be filed by
Amendment)
13.1 Conformed Copy of Administrative Services Agreement of the Registrant (4)
13.2 Conformed Copy of Shareholder Services Agreement of the Registrant (4)
14. Conformed Copy of Consent of Price Waterhouse LLP, Independent Public
Accountant *
15. Not Applicable
16. Conformed Copy of Power of Attorney (6)
17.1 Copy of Declaration under Rule 24f-2 *
17.2 Form of Proxy *
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed February 4, 1994. (File Nos. 33-52149 and
811-7141).
(2) Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 to its Regstration Statement on Form N-1A filed March 24,
1994. (File Nos. 33-52149 and 811-7141).
(3) Response is incorporated by reference to the Registrant's Post-Effective
Amendment No. 6 to its Registration Statement on Form N-1A filed on
January 26, 1996. (File Nos. 33-52149 and 811-7141).
(4) Response is incorporated by reference to the Registrant's Post-Effective
Amendment No. 1 to its Registration Statement on Form N-1A filed July 25,
1994. (File Nos. 33-52149 and 811-7141).
(5) Response is incorporated by reference to Cash Trust Series II's Post-
Effective Amendment No. 6 to its Registration Statement on Form N-1A filed
July 24, 1995. (File Nos. 33-38550 and 811-6269).
(6) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 to its Registration Statement on Form N-1A filed December
1, 1995. (File Nos. 33-52149 and 811-7141).
Item 17.Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which
is a part of this Registration Statement by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c) of the Securities Act
of 1933, the reoffering prospectus will contain the information called for by
the applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a new Registration Statement
for the securities offered therein, and the offering of the securities at that
time shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees that the opinion of Dickstein,
Shapiro & Morin, L.L.P. with respect to the federal income tax consequences
of the reorganization will be filed by Post-Effective Amendment to this
Exhibit 11
FEDERATED ADMINISTRATIVE SERVICES
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
(412) 288-1900
May 23, 1996
The Board of Trustees of
Blanchard Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Federated Emerging Markets Fund, a portfolio of World Investment Series,
Inc., a Maryland corporation (the "Corporation"), proposes to acquire all of
the assets of Blanchard Worldwide Emerging Markets Fund, a portfolio of
Blanchard Funds, in exchange for Class A Shares of Federated Emerging Markets
Fund ("Shares"), pursuant to the Agreement and Plan of Reorganization dated
May 22, 1996 ("Agreement"), included as an exhibit to the registration
statement of the Corporation filed on Form N-14 (Securities Act of 1933 No.
to be assigned) under the Securities Act of 1933, as amended ("N-14
Registration").
As counsel I have participated in the organization of the Corporation,
its registration under the Investment Company Act of 1940, the registration
of its securities on Form N-1A under the Securities Act of 1933 and its N-14
Registration. I have examined and am familiar with the written Articles of
Incorporation of the Corporation dated January 26, 1994, as amended (the
"Articles of Incorporation"), the Bylaws of the Corporation, and such other
documents and records deemed relevant. I have also reviewed questions of law
and consulted with counsel thereon as deemed necessary or appropriate by me
for the purposes of this opinion.
Based upon the foregoing, it is my opinion that:
1. The Corporation is duly organized and validly existing pursuant to
the Articles of Incorporation.
2. The Shares which are currently being registered by the N-14
Registration may be legally and validly issued in accordance with the
Agreement and the Articles of Incorporation upon receipt of consideration
sufficient to comply the provisions of the Articles of Incorporation
and subject to compliance with the Investment Company Act of 1940, as
amended, and applicable state laws regulating the sale of securities. Such
Shares, when so issued, will be fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the N-14
Registration referred to above and to any application or registration
statement filed under the securities laws of any of the States of the United
States.
Very truly yours,
FEDERATED ADMINISTRATIVE
SERVICES
By: /s/ S. Elliott Cohan
Exhibit 14
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
the use in the Statement of Additional Information of the Blanchard
Worldwide Emerging Markets Fund (one of the portfolios of the Blanchard
Group of Funds, hereafter referred to as the "Fund") dated August 7, 1995,
which Prospectus and Statement of Additional Information are incorporated by
reference in the Combined Proxy Statement/Prospectus and related Statement
of Additional Information constituting parts of this registration statement
on Form N-14 (the "Registration Statement"), of our report dated June 20,
1995, relating to the financial statements and financial highlights
appearing in the April 30, 1995 Annual Report to Shareholders of the Fund,
which are also incorporated by reference into the Registration Statement. We
also consent to the references to us under the heading "Financial
Highlights" and "Independent Accountants" in the Prospectus dated August 7,
1995.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
New York, New York
Exhibit 17.1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 24F-2
ANNUAL NOTICE OF SECURITIES SOLD
PURSUANT TO RULE 24F-2
Read instructions at end of Form before preparing Form.
Please print or type.
1. Name and address of issuer:
World Investment Series, Inc.
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
2. Name of each series or class of funds for which this
notice is filed:
World Utility Fund
3. Investment Company Act File Number:
811-7141
Securities Act File Number:
33-52149
4. Last day of fiscal year for which this notice is filed:
November 30, 1995
5. Check box if this notice is being filed more than 180
days after the close of the issuer's fiscal year for
purposes of reporting securities sold after the close
of the fiscal year but before termination of the
issuer's 24f-2 declaration:
[ ]
6. Date of termination of issuer's declaration under rule
24f-2(a)(1), if applicable:
7. Number and amount of securities of the same class or
series which had been registered under the Securities
Act of 1933 other than pursuant to rule 24f-2 in a
prior fiscal year, but which remained unsold at the
beginning of the fiscal year:
-0-
8. Number and amount of securities registered during the
fiscal year other than pursuant to rule 24f-2:
-0-
9. Number and aggregate sale price of securities sold
during the fiscal year (includes DRIP shares):
622,144; $ 6,685,677
10. Number and aggregate sale price of securities sold
during the fiscal year in reliance upon registration
pursuant to rule 24f-2:
622,144; $ 6,685,677
11. Number and aggregate sale price of securities issued
during the fiscal year in connection with dividend
reinvestment plans, if applicable:
12. Calculation of registration fees:
(i) Aggregate sale price of securities sold during the
fiscal
year in reliance on rule 24f-2 (from Item 10):$
6,685,677
(ii) Aggregate price of shares issued in connection
with
dividend reimbursement plans
(from Item 11, if applicable) +
(iii) Aggregate
price of shares redeemed or repurchased
during the fiscal year (if applicable)-
1,442,701
(iv) Aggregate price of shares redeemed or repurchased
and previously applied as a reduction to filing
fees
pursuant to rule 24e-2 (if applicable) +
(v) Net aggregate price of securities sold and issued
during
the fiscal year in reliance on rule 24f-2 [line
(i), plus
line (ii), less line (iii), plus line (iv)] (if
applicable): $ 5,242,976
(vi) Multiplier prescribed by Section 6(b) of the
Securities
Act of 1933 or other applicable law or regulation
(see Instruction C.6): x 1/29 of
1%
(vii) Fee due
[line (i) or line (v) multiplied by line (vi)]:
$ 1,808
Instruction: Issuers
should complete lines (ii), (iii), (iv), and (v)
only if the form in being filed within 60 days
after the close of the issuer's fiscal year.
13. Check box if fees are being remitted to the
Commission's lockbox depository as described in section
3a of the Commission's Rules of Informal and Other
Procedures
(17 CFR 202.3a).
[ u ]
Date of mailing or wire transfer of filing fees to the
Commission's lockbox depository:
January 16, 1996
SIGNATURES
This report has been signed below by the following persons
on behalf of the issuer and in the capacities and on the
dates indicated.
By (Signature and Title)*
J. Crilley Kelly
Assistant
Secretary
Date: January 16,
1996
* Please print the name and title of the signing officer
FEDERATED ADMINISTRATIVE
SERVICES
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
412-288-1900
January 16, 1996
World Investment Series, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
You have requested my opinion for use in conjunction with a Rule 24f-2
Notice for World Investment Series, Inc. ("Corporation") to be filed in respect
of shares of the Corporation ("Shares") sold for the fiscal year ended November
30, 1995, pursuant to the Corporation's registration statement filed with the
Securities and Exchange Commission ("SEC") under the Securities Act of 1933
(File No. 33-52149) ("Registration Statement").
In its Registration Statement, the Corporation elected to register an
indefinite number of shares pursuant to the provisions of Investment Company Act
Rule 24f-2.
As counsel I have participated in the preparation and filing of the
Corporation's amended Registration Statement under the Securities Act of 1933.
Further, I have examined and am familiar with the provisions of the Articles of
Incorporation dated January 26, 1994, the Bylaws of the Corporation and such
other documents and records deemed relevant. I have also reviewed questions of
law and consulted with counsel thereon as deemed necessary or appropriate by me
for the purposes of this opinion.
On the basis of the foregoing, it is my opinion the Shares sold for the
fiscal year ended November 30, 1995, registration of which the Rule 24f-2 Notice
makes definite in number, were legally issued, fully paid and non-assessable by
the Corporation.
I hereby consent to the filing of this opinion as an exhibit to the Rule
24f-2 Notice referred to above, the Registration Statement of the Corporation
and to any application or registration statement filed under the securities laws
of any of the States of the United States.
The foregoing opinion is limited to the Federal laws of the United States
and the laws of the State of Maryland, and I am expressing no opinion as to the
effect of the laws of any other jurisdiction.
Very truly yours,
/s/ J. Crilley Kelly
J. Crilley Kelly
WORLD INVESTMENT SERIES, INC.
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
January 16, 1996
EDGAR Operations Branch
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, Northwest
Washington, DC 20549
RE: Rule 24f-2 Notice for WORLD INVESTMENT SERIES, INC.
1933 Act File No. 33-52149
1940 Act File No. 811-7141
Dear Sir or Madam:
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act of
1940, I enclose the Rule 24f-2 Notice for World Investment Series, Inc.
Since the aggregate sales price of securities sold by the fund during the
period for which the Rule 24f-2 Notice is filed exceeded the aggregate
redemption price of securities redeemed, an additional filing fee in the amount
of $1,808 pursuant to Rule 24f-2(c) has been remitted to the U.S. Treasury
Lockbox at Mellon Bank in Pittsburgh.
As required by Rule 24f-2(b)(1)(v), a conformed opinion of counsel has been
electronically filed herewith which indicates whether the securities, the
registration of which this Notice makes definite in number, were legally issued,
fully paid and non-assessable.
Very truly yours,
/s/ J. Crilley Kelly
J. Crilley Kelly
Assistant Secretary
Enclosures
cc: Charles H. Morin, Esquire
