<PAGE> 1
SUPPLEMENT DATED JUNE 30, 1997
TO
WEBS INDEX FUND, INC.
PROSPECTUS
DATED JANUARY 15, 1997
This Supplement supersedes the Supplement dated May 22, 1997 to the
Prospectus of WEBS Index Fund, Inc. (the "Fund") dated January 15, 1997 and
should be read in conjunction with such Prospectus.
1. The following sentence is added after the fifth sentence of the
eighth paragraph on the cover page of the Prospectus:
The Statement of Additional Information, material incorporated by
reference herein and other information regarding the Fund is
available at the SEC's Web site (http://www.sec.gov).
2. On June 2, 1997, the Malaysia WEBS Index Series of the Fund
commenced using the Morgan Stanley Capital International ("MSCI")
Malaysia (Free) Index as its benchmark index and changed its name
accordingly. All references to the "Malaysia WEBS Index Series" in the
Prospectus, except those references to historical information concerning
the Malaysia WEBS Index Series, should be read as references to the
"Malaysia (Free) WEBS Index Series".
In connection with the Fund's use of the MSCI Malaysia (Free)
Index, MSCI's creation of an Indonesia (Free) Index and Thailand (Free)
Index and the inception of a new calculation methodology which allows
the use of foreign prices for certain constituent stocks of the MSCI
Indonesia (Free) Index, MSCI Malaysia (Free) Index, MSCI Thailand (Free)
Index and the existing MSCI Singapore (Free) Index to reflect the
investment conditions prevailing for international investors in those
respective countries, the following changes were made to the Prospectus
effective June 2, 1997:
a. The second sentence under "THE BENCHMARK MSCI INDICES UTILIZED
BY THE WEBS INDEX SERIES" on page 21 was deleted and the third
sentence of the second paragraph under "THE BENCHMARK MSCI
INDICES UTILIZED BY THE WEBS INDEX SERIES - Weighting" on page
22 was amended and restated as follows:
Free indices are currently calculated for Malaysia, Mexico,
Singapore, Indonesia, the Philippines and Thailand, and for
those regional and international indices which include such
markets.
<PAGE> 2
b. The following paragraph was added after the second paragraph
under "THE BENCHMARK MSCI INDICES UTILIZED BY THE WEBS INDEX
SERIES - Weighting" on page 22:
Indonesia, Malaysia, Singapore and Thailand currently impose
foreign ownership limits on domestic stock, and when the
foreign ownership limit is reached, foreigners may only trade
with other foreigners, frequently at a price that is higher
than the price available to domestic investors. The Free
Indices for such countries are designed to reflect the actual
investment conditions for international investors by using the
foreign prices for stocks where relevant. The Free Indices for
Indonesia, Malaysia, Singapore and Thailand will use foreign
prices only when a foreign ownership limit is reached on a
constituent stock and a determination is made that there is
sufficient long-term liquidity at the foreign price. To
compensate for the distorting inflation of a company's weight
that may occur as a result of using the higher foreign prices
for its shares, a compensating factor called a Free Market
Capitalization Factor ("FMCF") is applied to the total number
of shares of a "foreign priced" constituent stock in the
respective Index. A FMCF is the approximate ratio of domestic
price to foreign price and is applied in an effort to align the
free market capitalization weight with the domestic market
capitalization weight.
3. The historical performance charts for the MSCI Australia Index
and MSCI Canada Index found on pages 27 and 28, respectively, are
amended so that the bar graph for the 1988 total return figure of 36.40%
for the MSCI Australia Index indicates positive performance and the bar
graph for the 1994 total return figure of (3.04%) for the MSCI Canada
Index indicates negative performance.
4. On June 17, 1997 the Board of Directors of the Fund approved a
revised administrative and fund accounting services fee arrangement
between the Fund and PFPC Inc. (the "Administrator"). The revised fee
arrangement, which is effective July 1, 1997, involves: 1) revision of
the Administrator's sliding fee schedule; 2) elimination of the minimum
fees currently provided for; and 3) waiver by the Administrator of all
deferred fees.
In connection with the revised fee arrangement between the Fund
and the Administrator, the following changes are made to the Prospectus
effective July 1, 1997:
a. The line items "Other Expenses, after fee deferrals*" and "Total
Operating Expenses, after fee deferrals" contained in the
"SUMMARY OF FUND EXPENSES" tables on pages 7 and 8 are revised so
that the words "after fee deferrals" are deleted from both line
items.
<PAGE> 3
b. Note "B." under "SUMMARY OF FUND EXPENSES - EXPLANATION OF
TABLES" on page 10 is revised so that:
1) The words "and the administration fee deferral arrangements"
are deleted from the second sentence.
2) The fifth sentence is amended by: (i) deleting the first word
and substituting "`Other Expenses,' which include fees" and
(ii) deleting "are included in `Other Expenses,' and" and
substituting a comma.
3) The seventh, eighth and tenth sentences are deleted.
c. The section "MANAGEMENT OF THE FUND - Administrator" on page 31
is revised so that:
1) The third sentence of the first paragraph is amended by
deleting ".10% per annum of the aggregate net assets of the
Fund less than", which is replaced with ".17% per annum of the
aggregate net assets of the Fund which total less than $1.5
billion; plus .10% per annum of the aggregate net assets of
the Fund between $1.5 billion and".
2) The fifth, sixth, seventh, eighth, ninth and tenth sentences
of the first paragraph and the second sentence of the second
paragraph, are deleted.
3) The first sentence of the second paragraph is revised so that
the words "and the Administrator will recoup 100% of any fees
waived in the first year of operations" are deleted.
5. The following changes are made to the second paragraph under
"IMPLEMENTATION OF POLICIES" on page 18:
a. The third sentence is amended by substituting "plus or minus 5%"
for "between 95% and 105%".
b. The fifth sentence is amended by adding "the existence of
uninvested assets in the portfolios (including cash and
deferred organizational expenses)," after "Internal Revenue
Code,".
6. It is expected that the Board of Directors of the Fund will
authorize a special meeting of the shareholders of the France WEBS Index
Series to be held in August 1997, for the purpose of requesting
shareholder approval for changing the sub-classification of the France
WEBS Index Series from diversified to non-diversified.
<PAGE> 4
SUPPLEMENT DATED JUNE 30, 1997
TO
WEBS INDEX FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 15, 1997
This Supplement supersedes the Supplement dated May 22, 1997 to the
Statement of Additional Information of WEBS Index Fund, Inc. (the "Fund") dated
January 15, 1997 and should be read in conjunction with such Statement of
Additional Information.
1. On June 2, 1997, the Malaysia WEBS Index Series of the Fund commenced
using the Morgan Stanley Capital International ("MSCI") Malaysia (Free)
Index as its benchmark index and changed its name accordingly. All
references to the "Malaysia WEBS Index Series" in the Statement of
Additional Information, except those references to historical information
concerning the Malaysia WEBS Index Series, should be read as references to
the "Malaysia (Free) WEBS Index Series".
In connection with the Fund's use of the MSCI Malaysia (Free) Index,
MSCI's creation of an Indonesia (Free) Index and Thailand (Free) Index and
the inception of a new calculation methodology which allows the use of
foreign prices for certain constituent stocks of the MSCI Indonesia (Free)
Index, MSCI Malaysia (Free) Index, MSCI Thailand (Free) Index and the
existing MSCI Singapore (Free) Index to reflect the investment conditions
prevailing for international investors in those respective countries, the
following changes were made to the Statement of Additional Information
effective June 2, 1997:
a. The third sentence of the second paragraph under "THE MSCI INDICES -
WEIGHTING" on page 27 was amended and restated as follows:
Free indices are currently calculated for Malaysia, Mexico,
Singapore, Indonesia, the Philippines and Thailand, and for those
regional and international indices which include such markets.
b. The following paragraph was added after the second paragraph under
the "THE MSCI INDICES: WEIGHTING" on page 27:
Indonesia, Malaysia, Singapore and Thailand currently impose foreign
ownership limits on domestic stock, and when the foreign ownership
limit is reached, foreigners may only trade with other foreigners,
frequently at a price
<PAGE> 5
that is higher than the price available to domestic investors. The
Free Indices for such countries are designed to reflect the actual
investment conditions for international investors by using the
foreign prices for stocks where relevant. The Free Indices for
Indonesia, Malaysia, Singapore and Thailand will use foreign prices
only when a foreign ownership limit is reached on a constituent
stock and a determination is made that there is sufficient long-term
liquidity at the foreign price. To compensate for the distorting
inflation of a company's weight that may occur as a result of using
the higher foreign prices for its shares, a compensating factor
called a Free Market Capitalization Factor ("FMCF") is applied to
the total number of shares of a "foreign priced" constituent stock
in the respective Index. A FMCF is the approximate ratio of domestic
price to foreign price and is applied in an effort to align the free
market capitalization weight with the domestic market capitalization
weight.
2. On June 17, 1997 the Board of Directors of the Fund approved a revised
administrative and fund accounting services fee arrangement between the
Fund and PFPC Inc. (the "Administrator"). The revised fee arrangement,
which is effective July 1, 1997, involves: 1) revision of the
Administrator's sliding fee schedule; 2) elimination of the minimum fees
currently provided for; and 3) waiver by the Administrator of all deferred
fees.
In connection with the revised fee arrangement between the Fund and
the Administrator, the following changes are made to the Statement of
Additional Information effective July 1, 1997:
a. The section "INVESTMENT ADVISORY, MANAGEMENT, ADMINISTRATIVE AND
DISTRIBUTION SERVICES - THE ADMINISTRATOR" on pages 51 and 52 is
revised so that:
1) The first sentence of the second paragraph is amended by
deleting ".10% per annum of the aggregate net assets of the
Fund less than", which is replaced with ".17% per annum of the
aggregate net assets of the Fund which total less than $1.5
billion; plus .10% per annum of the aggregate net assets of
the Fund between $1.5 billion and".
2) The third, fourth, fifth, sixth, seventh, eighth, ninth and
tenth sentences of the second paragraph are deleted.
3) The first sentence of the third paragraph is revised so that
the words "and the Administrator will recoup 100% of any fees
waived during the first year of operations" are deleted.
4) The second sentence of the third paragraph is deleted.
3. The second sentence of the second paragraph under "INVESTMENT ADVISORY,
MANAGEMENT, ADMINISTRATIVE AND DISTRIBUTION SERVICES - THE DISTRIBUTOR" on
page 52 is amended so that the number "25%" is replaced
by ".25%".
4. The following disclosure is added after the last paragraph under
"PERFORMANCE INFORMATION" on page 68:
A comparison of the quoted non-standard performance offered
for various investments is valid only if performance is calculated
in the same manner. Since there are different methods for
calculating performance, investors should consider the effects of
the methods used to calculate performance when comparing performance
of the Fund with performance quoted with respect to other investment
companies or types of investments.
Because some or all of the Fund's investments are denominated
in foreign currencies, the strength or weakness of the U.S. dollar
as against these currencies may account for part of the Fund's
investment performance. Historical information on the value of the
dollar versus foreign currencies may be used from time to time in
advertisements concerning the Fund. Such historical information is
not indicative of future fluctuations in the value of the U.S.
dollar against these currencies. In addition, marketing materials
may cite country and economic statistics and historical stock market
performance information for any of the countries in which the Fund
invests, including, but not limited to, the following: population
growth, gross domestic product, inflation rate, average stock market
price-earnings ratios and the total value of stock markets. Sources
for such statistics may include official publications of various
foreign governments and exchanges.
From time to time, in advertising and marketing literature,
the Fund's performance may be compared to the performance of broad
groups of open-end and closed-end investment companies with similar
investment goals, as tracked
<PAGE> 6
by independent organizations such as Investment Company Data, Inc.,
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., Value Line Mutual Fund Survey and other
independent organizations. When these organizations' tracking
results are used, the Fund will be compared to the appropriate fund
category, that is, by fund objective and portfolio holdings, or to
the appropriate volatility grouping, where volatility is a measure
of a fund's risk.
In addition, in connection with the communication of its
performance to current or prospective shareholders, the Fund also
may compare those figures to the performance of certain unmanaged
indices which may assume the reinvestment of dividends or interest
but generally do not reflect deductions for administrative and
management costs. Examples of such indices include, but are not
limited to the following:
Dow Jones Industrial Average
Consumer Price Index
Standard & Poor's 500 Composite Stock Price Index (S&P 500)
NASDAQ OTC Composite Index
NASDAQ Industrials Index
International Finance Corporation's (Global) Composite and
(Investable) Composite Indices
Morgan Stanley Capital International Indices
NASDAQ Composite Index
Wilshire 5000 Stock Index
For examples of how these sources of information have been
used, please see Appendix C to this Statement of Additional
Information, "Supplemental Educational Information on WEBS."
In addition, the Fund from time to time may compare the
results of each WEBS Index Series to the following national
benchmarks:
COUNTRY NATIONAL INDEX
Australia All Ordinares
Austria Vienna Stock Exchange
Belgium Brussels Stock Exchange
Canada Toronto 300
France CAC40
Germany DAX
Hong Kong Hang Seng
Italy BCI
Japan Nikkei 225
Malaysia KLSE
Mexico IPC
<PAGE> 7
Netherlands CBS All Share
Singapore SES All
Spain Madrid Stock Exchange
Sweden Aff. General
Switzerland Swiss Bank
U.K. FTSE100
From time to time, the Fund may use in marketing materials a
graph entitled "The Efficient Frontier," which illustrates the
historical risks and returns of selected unmanaged indices which
track the performance of various combinations of United States and
international securities for a certain time period, such as twenty
years. A twenty year graph, for example, shall use twenty year
annualized international returns represented by the Morgan Stanley
Capital International Europe, Australasia and Far East (EAFE) Index
and twenty year annualized United States returns represented by the
S&P 500 Index. Risk is measured by the standard deviation in overall
performance within each index. Data presented in the graph shall be
provided by Ibbotson Associates, Inc. Performance of an index is
historical and does not represent performance of the Fund, and is
not a guarantee of future results. For an example of the use of an
"Efficient Frontier" graph, please see "The Case for International
Index Investing" at Appendix C of this Statement of Additional
Information.
Evaluation of Fund performance or other relevant statistical
information made by independent sources may also be used in
advertisements and sales literature concerning the Fund, including
reprints of, or selections from, editorials or articles about the
Fund. Sources for Fund performance information and articles about
the Fund include, but are not limited to, the following:
American Association of Individual Investors' Journal, a monthly
publication of the AAII that includes articles on investment
analysis techniques.
Barron's, a Dow Jones and Company, Inc. business and financial
weekly that periodically reviews investment company performance
data.
Business Week, a national business weekly that periodically reports
the performance rankings and ratings of a variety of investment
companies investing abroad.
CDA Investment Technologies, an organization that provides
performance and ranking information through examining the dollar
results of hypothetical mutual fund investments and comparing these
results against appropriate indices.
<PAGE> 8
Forbes, a national business publication that from time to time
reports the performance of specific investment companies.
Fortune, a national business publication that periodically rates the
performance of a variety of investment companies.
The Frank Russell Company, a West-Coast investment management firm
that periodically evaluates international stock markets and compares
foreign equity market performance to U.S. stock market performance.
Ibbotson Associates, Inc., a company specializing in investment
research and data.
Investment Company Data, Inc., an independent organization that
provides performance ranking information for broad classes of mutual
funds.
Investor's Business Daily, a daily newspaper that features
financial, economic, and business news.
Kiplinger's Personal Finance Magazine, a monthly investment advisory
publication that periodically features the performance of a variety
of securities.
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis, a weekly publication of industry-wide mutual fund
averages by type of fund.
Money, a monthly magazine that from time to time features both
specific funds and the mutual fund industry as a whole.
Morgan Stanley International, an integrated investment banking firm
that compiles statistical information.
The New York Times, a nationally distributed newspaper that
regularly covers financial news.
Smart Money, a national personal finance magazine published monthly
by Dow Jones & Company, Inc. and The Hearst Corporation that focuses
on ideas for investing, spending and saving.
Value Line Mutual Fund Survey, an independent organization that
provides biweekly performance and other information on mutual funds.
The Wall Street Journal, a Dow Jones and Company, Inc. newspaper
that regularly covers financial news.
<PAGE> 9
Wiesenberger Investment Companies Services, an annual compendium of
information about mutual funds and other investment companies,
including comparative data on funds' backgrounds, management
policies, salient features, management results, income and dividend
records and price ranges.
Worth, a national publication distributed ten times per year by
Capital Publishing Company, a subsidiary of Fidelity Investments
that focuses on personal financial journalism.
5. On May 22, 1997, all references to ING as the IOPV symbol for the
Germany WEBS Index Series were changed to "WDG".
6. The fourth sentence of the third paragraph under "REDEMPTION OF WEBS IN
CREATION UNITS" on page 61 is amended so that the words "or New Zealand"
are added after the word "Australian" and the first sentence of the
twelfth paragraph under "REDEMPTION OF WEBS IN CREATION UNITS" on page 62
is amended so that the words "and New Zealand" are added after the word
"Australian".
7. The following charts, "Average Annual Performance of MSCI Indices and
the S&P 500 - periods ending 3/31/97," and "Annual Market Performance and
Ranking for 17 MSCI Indices and S&P 500 - periods ending 12/31," replace
the charts, "Average Annual Performance of MSCI Indices - periods ending
9/30/96," and "Annual Market Performance and Ranking for 17 MSCI Indices
and S&P 500," contained in Appendix C to the Statement of Additional
Information:
<PAGE> 10
[WEBS LOGO] Average Annual Performance of MSCI Indices and the S&P 500 -
periods ending 3/31/97
In US Dollars - (Reinvestment of Net Dividends, except for
Mexico (Free) and S&P 500.)*
World
Equity
Benchmark
Shares
<TABLE>
<CAPTION>
Total Cumulative Return
$10,000 Investment
YID 1 Yr 3 Yr 5 Yr 10 Yr 3/31/87-3/31/97
------ ----- ----- ----- ----- ---------------
<S> <C> <C> <C> <C> <C> <C>
Australia -1.65 8.30 11.31 10.43 8.74 $23,107
Austria -2.73 -2.75 -2.03 0.06 8.18 $21,945
Belgium 5.49 19.77 16.25 14.87 12.77 $33,253
Canada -1.15 19.54 14.65 9.65 6.31 $18,442
France 5.94 18.43 12.61 10.86 8.98 $23,631
Germany 11.29 20.57 16.04 13.18 10.20 $26,416
Hong Kong -8.79 8.64 11.22 20.70 19.69 $60,332
Italy 1.33 14.72 0.57 6.16 0.43 $10,433
Japan -11.81 -25.74 -7.80 2.88 -0.63 $9,392
Malaysia 0.12 10.02 12.29 18.89 19.00** $51,347**
Mexico (Free) 10.23 19.02 -10.72 -2.21 32.84** $138,308**
Netherlands 5.71 27.36 24.69 21.98 15.78 $43,294
Singapore (Free) -6.67 -17.08 3.93 12.35 11.90 $30,771
Spain -1.32 30.36 18.72 11.96 10.69 $27,613
Sweden 6.70 33.60 30.16 21.61 15.93 $43,850
Switzerland 10.32 5.71 18.36 23.60 14.05 $37,230
United Kingdom 1.16 28.75 18.38 14.82 12.11 $31,372
- -----------------------------------------------------------------------------------------------------------------
EAFE -1.57 1.45 6.53 10.57 6.01 $17,923
- -----------------------------------------------------------------------------------------------------------------
EAFE EX Japan 3.33 19.44 15.95 14.98 11.30 $29,183
- -----------------------------------------------------------------------------------------------------------------
Europe 4.88 22.45 17.05 14.98 11.15 $28,775
- -----------------------------------------------------------------------------------------------------------------
S&P 500 2.68 19.83 22.30 16.42 13.38 $35,102
</TABLE>
MSCI: Morgan Stanley Capital International
EAFE: Europe, Australasia and Far East.
*Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P
500 Indices. Net dividends means dividends after reduction for taxes withheld at
source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since
Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend
withholding rate used by MSCI is that relevant for residents of Luxembourg, and
such rate is higher than the rate applicable to U.S. residents in the case of
the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%)
and Germany (15% vs. 10%).
**Return calculated since 12/31/87 (inception of indices). On June 2 1997 the
Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as
its benchmark index.
Past performance is no guarantee of future results, nor do index results
represent any past or expected future performance of WEBS. It is not possible to
invest in an index. Indices are unmanaged, and do not bear expenses, unlike
WEBS. Foreign markets may be volatile and performance is subject to market
fluctuations, political risks and currency risks.
Funds Distributor Inc., Distributor.
For more information on WEBS, including a prospectus which details charges and
expenses, please call 800-810-WEBS.
Source: Morgan Stanley Capital International and Standard and Poor's Corporation
Please read the prospectus carefully before you invest.
06/97
<PAGE> 11
[WEBS LOGO] Annual Market Performance and Ranking for 17 MSCI Indices and
S&P 500-periods ending 12/31
In US Dollars - (Reinvestment of Net Dividends, except for
Mexico (Free) and S&P 500.)*
World
Equity
Benchmark
Shares
<TABLE>
<CAPTION>
Ranking 1996 1995 1994 1993
-------------------------- --------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Spain 40.05% Switzerland 44.12% Japan 21.44% Hong Kong 116.70%
2. Sweden 37.21% S&P 500 37.58% Sweden 18.34% Malaysia 110.00%
3. Hong Kong 33.08% Sweden 33.36% Netherlands 11.70% Singapore (Free) 67.97%
4. Canada 28.54% Spain 29.83% Italy 11.56% Mexico (Free) 49.35%
5. Netherlands 27.51% Netherlands 27.71% Belgium 8.24% Switzerland 45.79%
6. United Kingdom 27.42% Belgium 25.88% Singapore (Free) 6.68% Sweden 36.99%
7. Malaysia 25.89% Hong Kong 22.57% Australia 5.40% Germany 35.64%
8. S&P 500 22.96% United Kingdom 21.27% Germany 4.66% Netherlands 35.28%
9. France 21.20% Canada 18.31% Switzerland 3.54% Australia 35.17%
10. Mexico (Free) 18.70% Germany 16.41% S&P 500 1.32% Spain 29.78%
11. Australia 16.49% France 14.12% United Kingdom -1.63% Italy 28.53%
12. Germany 13.58% Australia 11.19% Canada -3.04% Austria 28.09%
13. Italy 12.59% Singapore (Free) 6.45% Spain -4.80% Japan 25.48%
14. Belgium 12.03% Malaysia 5.16% France -5.18% United Kingdom 24.44%
15. Austria 4.51% Italy 1.05% Austria -6.28% Belgium 23.51%
16. Switzerland 2.28% Japan 0.69% Malaysia -19.90% France 20.91%
17. Singapore (Free) -6.86% Austria -4.72% Hong Kong -28.90% Canada 17.58%
18. Japan -15.50% Mexico (Free) -20.37% Mexico (Free) -40.55% S&P 500 10.08%
</TABLE>
<TABLE>
<CAPTION>
Ranking 1992 1991 1990
-------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Hong Kong 32.29% Mexico (Free) 126.05% Mexico (Free) 62.65%
2. Mexico (Free) 24.98% Hong Kong 49.52% United Kingdom 10.29%
3. Malaysia 17.76% Australia 33.64% Hong Kong 9.17%
4. Switzerland 17.23% S&P 500 30.47% Austria 6.33%
5. S&P 500 7.62% Singapore (Free) 24.96% S&P 500 -3.10%
6. Singapore (Free) 6.28% France 17.83% Netherlands -3.19%
7. France 2.81% Netherlands 17.80% Switzerland -6.23%
8. Netherlands 2.30% United Kingdom 16.02% Malaysia -7.91%
9. Belgium -1.47% Switzerland 15.77% Germany -9.36%
10. United Kingdom -3.65% Spain 15.63% Belgium -10.98%
11. Germany -10.27% Sweden 14.42% Singapore (Free) -11.66%
12. Austria -10.65% Belgium 13.77% Canada -13.00%
13. Australia -10.82% Canada 11.08% France -13.83%
14. Canada -12.15% Japan 8.92% Spain -13.85%
15. Sweden -14.41% Germany 8.16% Australia -17.54%
16. Japan -21.45% Malaysia 4.95% Italy -19.19%
17. Spain -21.87% Italy -1.82% Sweden -20.99%
18. Italy -22.22% Austria -12.23% Japan -36.10%
</TABLE>
MSCI: Morgan Stanley Capital International
*Assumes reinvestment of net dividends except for the Mexico (Free)
and the S&P 500 Indices. Net dividends means dividends after reduction for taxes
withheld at source. The Mexico (Free) and S&P 500 Indices reflect gross
dividends since Mexican and U.S. companies do not withhold tax from U.S.
investors. U.S. Market represented by the S&P 500 Index. The dividend
withholding rate used by MSCI is that relevant for residents of Luxembourg, and
such rate is higher than the rate applicable to U.S. residents in the case of
the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%)
and Germany (15% vs. 10%).
Past performance is no guarantee of future results, nor do index results
represent any past or expected future performance of WEBS. It is not possible to
invest in an index. Indices are unmanaged, and do not bear expenses, unlike
WEBS. Foreign markets may be volatile and performance is subject to market
fluctuations, political risks and currency risks.
Annual total return in U.S. $ for each country index is based on the change for
the period of 1/1 through 12/31 in the market and currency value of the
individual stocks comprising each index, assuming reinvestment of any dividends.
On June 2, 1997 the Malaysia WEBS Index Series will commence using the MSCI
Malaysia (Free) Index as its benchmark index.
Funds Distributor Inc., Distributor.
For more information on WEBS, including a prospectus which details charges and
expenses, please call 800-810-WEBS.
Sources: Lipper Analytical Services, Morgan Stanley Capital International, and
Standard and Poor's Corporation
Please read the prospectus carefully before you invest.
06/97
<PAGE> 12
8. The following chart, "MSCI Indices vs. S&P 500 - periods ending
3/31/97," and graph, "MSCI Indices and S&P 500 Total Cumulative Return -
$10,000 Investment," are added to Appendix C to the Statement of
Additional Information:
<PAGE> 13
MSCI Indices vs. S&P 500 - periods ending 3/31/97
In US Dollars - (Reinvestment of Net Dividends except for Mexico (Free) and the
S&P 500)*
World
Equity
Benchmark Ten Year Growth of $10,000
Shares 3/31/87 - 3/31/97
<TABLE>
<S> <C>
Mexico (Free)** $138,308
Hong Kong $ 60,332
Malaysia** $ 51,347
Sweden $ 43,850
Netherlands $ 43,294
Switzerland $ 37,230
- --------------------------------------------------------------------------------
S&P 500 $ 35,102
- --------------------------------------------------------------------------------
Belgium $ 33,253
United Kingdom $ 31,372
Singapore (Free) $ 30,771
Spain $ 27,613
Germany $ 26,416
France $ 23,631
Australia $ 23,107
Austria $ 21,945
Canada $ 18,442
Italy $ 10,433
Japan $ 9,392
</TABLE>
Seven Year Growth of $10,000
3/31/90 - 3/31/97
<TABLE>
<S> <C>
Hong Kong $46,149
Mexico (Free) $36,565
Switzerland $32,431
Netherlands $31,127
- --------------------------------------------------------------------------------
S&P 500 $27,174
- --------------------------------------------------------------------------------
Sweden $26,828
United Kingdom $24,804
Malaysia $24,717
Belgium $20,849
Spain $20,596
Australia $19,804
Singapore (Free) $18,953
France $17,803
Germany $16,617
Canada $15,862
Italy $10,342
Japan $ 9,203
Austria $ 6,655
</TABLE>
Five Year Growth of $10,000
3/31/92 - 3/31/97
<TABLE>
<S> <C>
Switzerland $28,843
Malaysia $27,753
Netherlands $27,001
Sweden $26,596
Hong Kong $25,617
- --------------------------------------------------------------------------------
S&P 500 $21,390
- --------------------------------------------------------------------------------
Belgium $19,998
United Kingdom $19,960
Germany $18,575
Singapore(Free) $17,897
Spain $17,593
France $16,747
Australia $16,423
Canada $15,853
Italy $13,483
Japan $11,525
Austria $10,032
Mexico (Free) $ 8,943
</TABLE>
MSCI: Morgan Stanley Capital International
*Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P
500 Indices. Net dividends means dividends after reduction for taxes withheld at
source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since
Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend
withholding rate used by MSCI is that relevant for residents of Luxembourg, and
such rate is higher than the rate applicable to U.S. residents in the case of
the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%)
and Germany (15% vs. 10%).
**Return calculated since 12/31/87 (inception of indices). On June 2, 1997 the
Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as
its benchmark index. Past performance is no guarantee of future results, nor do
index results represent any past or expected future performance of WEBS. It is
not possible to invest in an index. Indices are unmanaged and do not bear
expenses, unlike WEBS. Foreign markets may be volatile and performance is
subject to market fluctuations, political risks and currency risks.
Funds Distributor Inc., Distributor.
For more information on WEBS, including a prospectus which details charges and
expenses, please call 800-810-WEBS.
Sources: Morgan Stanley Capital International and Standard and Poor's
Corporation.
Please read the prospectus carefully before you invest.
04/97
<PAGE> 14
MSCI Indices and S&P 500 Total Cumulative Return -- $10,000 Investment for the
ten years ended 3/31/97
In US Dollars (Reinvestment of Net Dividends except for Mexico (Free)
and the S&P 500)*
World
Equity
Benchmark
Shares
<TABLE>
<CAPTION>
Average
Annual
Return Total Cumulative Return
<S> <C> <C>
Mexico (Free)** 32.84% $138,308
Hong Kong 19.69% $ 60,332
Malaysia** 19.00% $ 51,347
Sweden 15.93% $ 43,850
Netherlands 15.78% $ 43,294
Switzerland 14.05% $ 37,230
S&P 500 13.38% $ 35,102
Belgium 12.77% $ 33,253
United Kingdom 12.11% $ 31,372
Singapore (Free) 11.90% $ 30,771
Spain 10.69% $ 27,613
Germany 10.20% $ 26,416
France 8.98% $ 23,631
Australia 8.74% $ 23,107
Austria 8.18% $ 21,945
Canada 6.31% $ 18,442
Italy 0.43% $ 10,433
Japan -0.63% $ 9,392
</TABLE>
MSCI: Morgan Stanley Capital International
*Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P
500 Indices. Net dividends means dividends after reduction for taxes withheld at
source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since
Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend
withholding rate used by MSCI is that relevant for residents of Luxembourg, and
such rate is higher than the rate applicable to U.S. residents in the case of
the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%)
and Germany (15% vs. 10%).
**Return calculated since 12/31/87 (inception of indices). On June 2, 1997 the
Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as
its benchmark index.
Past performance is no guarantee of future results, nor do index results
represent any past or expected future performance of WEBS. It is not possible to
invest in an index. Indices are unmanaged and do not bear expenses, unlike WEBS.
Foreign markets may be volatile and performance is subject to market
fluctuations, political risks and currency risks.
Funds Distributor Inc., Distributor.
For more information on WEBS, including a prospectus which details charges and
expenses, please call 800-810-WEBS.
Sources: Morgan Stanley Capital International and Standard and Poor's
Corporation.
Please read the prospectus carefully before you invest.
04/97
