WEBS INDEX FUND, INC.
================================================================================
Dear Shareholder,
We are pleased to present this semi-annual report for WEBS Index Fund, Inc.
(formerly named Foreign Fund, Inc.) for the period September 1, 1996 through
February 28, 1997. It contains information about the performance of your
investment, a management discussion and analysis from Barclays Global Fund
Advisors, the Investment Adviser for each WEBS Index Series, and important
financial information.
As you know, each of the 17 WEBS Index Series seeks to track the investment
performance of a specific country's stock market, as measured by a Morgan
Stanley Capital International (MSCI) country index. This report contains
information about the tracking of each WEBS Index Series compared to its
benchmark MSCI country index for the period ended February 28, 1997.
PRICE/VALUE STABILITY CONTINUES
The unique structure of the WEBS Index Series has continued to result in
share prices that are very close to net asset value. While the relationship
between market price and net asset value varies from moment to moment and from
index series to index series, the WEBS Index Series traded on the American Stock
Exchange at an average end-of-day market price only 5 cents per share -- about
one-third of 1% -- over/under their underlying net asset values. The largest
average end-of-day spread, for the Malaysia WEBS Index Series, was only 1.11%.
In contrast, shares in closed-end international funds frequently trade at
substantial discounts or premiums to their net asset values.
GROWTH
The WEBS Index Series were launched on March 12, 1996 with aggregate net
assets of $79 million. As of February 28, 1997, the WEBS Index Series aggregate
net assets had increased by over 300% to $318.5 million. This growth of WEBS
Index Fund, Inc., together with the increasing importance of international
equities to US investors, the attractiveness of index investing, and the ease of
investing in the WEBS Index Series makes us optimistic about the prospects for
continued strong investor interest in WEBS Index Fund, Inc. during the balance
of 1997 and beyond.
The uniqueness and success of WEBS Index Fund, Inc. continues to attract
increasing attention from both institutional and retail investors, as well as
from the financial press. We hope that you have noted this, and will
increasingly utilize the WEBS Index Series in your investment program as you
gain confidence in them and continue to diversify your investment portfolio.
In the meantime, we wish to thank you for your support of and confidence in
WEBS Index Fund, Inc.
Sincerely,
/S/ SIGNATURE /S/ SIGNATURE
Nathan Most Nic Stuchfield
Chairman and President Chief Investment
WEBS Index Fund, Inc. Officer
Index Investments
Barclays Global
Fund Advisors
1
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INTRODUCTION
The Investment Adviser for each WEBS Index Series is Barclays Global Fund
Advisors. Each WEBS Index Series is managed to hold a representative sample of
the securities held in the corresponding MSCI Index (using an analytic technique
known as "portfolio sampling"), in contrast to a full replication of the Index.
Portfolio sampling is a highly disciplined approach to capturing index returns
that involves maximizing float and liquidity, reflecting accurately the market's
size and industry profiles and minimizing cross-ownership. No attempt is made to
manage the WEBS Index Series using economic, financial or market analysis.
There are several factors that should be kept in mind when reviewing the
performance of the Fund's various WEBS Index Series. First, because of the
portfolio sampling approach discussed above, as well as regulatory and other
constraints imposed on its use (such as limits on investing in particular stocks
imposed by the Internal Revenue Code and the need to comply with the Fund's
concentration policy), the resulting performance of a WEBS Index Series may vary
positively or negatively from that of the relevant MSCI Index during any period.
Second, the MSCI Indices are unmanaged and, therefore, do not bear
management, administration, distribution, transaction or other expenses.
However, the WEBS Index Series do incur such expenses, which impacts their
performance.
Another factor to be considered is the method by which dividend income is
reflected in the MSCI Indices. The compiler of the MSCI Indices calculates total
dividends received in a year and allocates that total pro rata over a
twelve-month period (i.e., the dividend payments are "smoothed" throughout the
year) and all dividends received are deemed to be reinvested at the end of each
month. Each WEBS Index Series records dividend income on its portfolio
securities on their specific ex-dividend dates and must wait until the cash is
actually received before the dividends can be invested, which results in uneven
flows of dividend income during the year. Also, due to use of the portfolio
sampling technique described above, a WEBS Index Series will not hold exactly
the same securities, or in the same proportion, as the corresponding MSCI Index.
This causes the performance of a WEBS Index Series to deviate positively or
negatively from the corresponding MSCI Index, depending on individual security
dividend streams.
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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AUSTRALIA
For the period ended February 28, 1997 the total return of the Australia
WEBS Index Series was 6.36%. The corresponding MSCI Index total return for the
period was 6.47%. The Australia WEBS Index Series under-performed the MSCI
Australia Index total return by 0.11% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRALIA WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Australia WEBS Index Series under-performed the MSCI Index for several
reasons, including dividend smoothing and the impact of expenses. Portfolio
sampling had a positive effect on performance due to industry weighting
differences between the Index Series and the benchmark.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRALIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Economic activity in Australia slowed considerably throughout 1996 and early
1997. Consumer spending declined due to falling levels of consumer confidence
and the tightening of fiscal policy by the government. Interest rate sensitive
sectors, such as housing, should benefit from monetary policy developments.
Governmental reforms (which have been implemented since the 1980s) have allowed
Australia to avoid the boom-bust economic cycle it has experienced in the past.
The reform package included unilateral tariff reductions, financial market
deregulation and tax incentives to promote work, savings and investment. A right
of center Liberal-National coalition was elected to power in March of 1996 after
thirteen years of Labour party rule. This new government has focused on fiscal
consolidation with an emphasis on spending restraint rather than raising taxes.
To promote growth, business activities have been largely deregulated and the
stance on foreign investment has been relaxed. Improved performance from the
export sector and greater links to the Asian economies have also contributed to
economic growth.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRALIA WEBS INDEX SERIES VS. THE MSCI AUSTRALIA INDEX
[LINE GRAPH]
AUSTRALIA WEBS INDEX SERIES MSCI AUSTRALIA INDEX
3/12/96 10,000 10,000
3/31/96 10,161 10,171
4/30/96 10,633 10,670
5/31/96 10,523 10,588
6/30/96 10,261 10,238
7/31/96 9,769 9,758
8/31/96 10,388 10,383
9/30/96 10,378 10,393
10/31/96 10,787 10,791
11/30/96 11,238 11,232
12/31/96 11,235 11,200
1/31/97 10,769 10,744
2/28/97 11,048 11,054
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Australia WEBS Index Series $11,048*
MSCI Australia Index $11,054
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Australia WEBS Index Series 10.48%
MSCI Australia Index 10.54%
- --------------------
* The chart assumes a hypothetical $10,000 initial investment in the Australia
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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AUSTRIA
For the period ended February 28, 1997 the total return of the Austria WEBS
Index Series was (2.69)%. The corresponding MSCI Index total return for the
period was (2.23)%. The Austria WEBS Index Series under-performed the MSCI
Austria Index total return by 0.46% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRIA WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Austria WEBS Index Series under-performed the MSCI Index due to
dividend smoothing and the impact of expenses. Subchapter M of the Internal
Revenue Code states that no more than 25% of the index can be made up of one
individual security, which affects the composition of the Index Series. This
resulted in a re-weighting of the remaining securities in the portfolio which
had a positive effect on performance, but only partially offset the negative
impact of expenses and dividend smoothing.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Austria experienced a substantial slowdown in the growth of the economy
during the second half of 1996. Domestic demand has been flat due to continued
government fiscal constraint felt throughout Western Europe. This poor demand
has adversely affected various sectors of the economy including construction
output, traditional consumer goods and building materials. A number of fiscal
consolidation measures, including higher energy taxes, overtime taxes and cuts
in nursing care and unemployment benefits were introduced mid-1996 and
restrained consumer spending overall. The demand for imports has continued to be
low, while export growth has begun to rise due to favorable exchange rate
movements and buoyant growth in East-Central Europe and overseas markets. This
recent increase in exports has positively affected industrial output,
specifically technical manufacturing and the production of semi-finished goods.
These sectors are also the ones planning the largest investments in 1997. In
general, firms have postponed, rather than canceled, their investment projects
in reaction to 1996's cyclical downturn. The realization of these investment
projects may help fuel economic growth in 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRIA WEBS INDEX SERIES VS. THE MSCI AUSTRIA INDEX
Austria WEBS Index Series MSCI Austria Index
3/12/96 10,000 10,000
3/31/96 10,101 10,237
4/30/96 10,009 10,304
5/31/96 10,577 10,866
6/30/96 9,881 10,202
7/31/96 9,698 9,978
8/31/96 9,661 10,073
9/30/96 9,420 9,780
10/31/96 9,457 9,848
11/30/96 9,569 10,080
12/31/96 9,726 10,235
1/31/97 9,420 9,821
2/28/97 9,401 9,848
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Austria WEBS Index Series $9,401*
MSCI Austria Index $9,848
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Austria WEBS Index Series (5.99)%
MSCI Austria Index (1.52)%
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* The chart assumes a hypothetical $10,000 initial investment in the Canada WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available
for investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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BELGIUM
For the period ended February 28, 1997 the total return of the Belgium WEBS
Index Series was 6.69%. The corresponding MSCI Index total return for the period
was 10.47%. The Belgium WEBS Index Series under-performed the MSCI Belgium Index
total return by 3.78% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE BELGIUM WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Belgium WEBS Index Series under-performed the MSCI Index for several
reasons, including dividend smoothing, portfolio sampling and expenses.
Portfolio sampling had a negative effect on performance due to industry
weighting differences between the Index Series and the benchmark. The need for
compliance with Subchapter M of the Internal Revenue Code resulted in a
re-weighting of the remaining securities in the portfolio which negatively
impacted the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE BELGIUM WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Economic growth has been on the rise in Belgium with GDP growth likely to
increase further in 1997, although the strains of trying to comply with the
Maastricht Treaty have slowed an already struggling economy. Efforts to comply
with the Treaty's requirements, which have caused an economic slowdown
throughout Western Europe, have adversely affected export activity to European
trading partners. The intermediate goods sector has suffered particular losses
due to this reduced trading activity. The government continues to work on its
deficit reduction plan. One way the government aims to reduce its debt is the
partial privatization of Credit Communal, the municipally-owned bank, and a
number of other financial institutions. The budget also outlines cuts in federal
spending, including cuts in subsidies to public companies, international aid and
military spending, increased petrol taxes and changes in the tax implications of
certain savings instruments. This emphasis on fiscal restraint should continue
to restrain growth, although a modest recovery is widely expected in 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
BELGIUM WEBS INDEX SERIES VS. THE MSCI BELGIUM INDEX
Belgium WEBS Index Series MSCI Belgium Index
3/12/96 10,000 10,000
3/31/96 9,759 9,823
4/30/96 9,966 10,076
5/31/96 10,288 10,237
6/30/96 10,322 10,284
7/31/96 10,456 10,399
8/31/96 10,501 10,496
9/30/96 10,543 10,630
10/31/96 10,676 10,786
11/30/96 10,915 11,107
12/31/96 10,895 11,152
1/31/97 11,070 11,420
2/28/97 11,204 11,595
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Belgium WEBS Index Series $11,204*
MSCI Belgium Index $11,595
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Belgium WEBS Index Series 12.04%
MSCI Belgium Index 15.95%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Belgium
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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CANADA
For the period ended February 28, 1997 the total return of the Canada WEBS
Index Series was 20.13%. The corresponding MSCI Index total return for the
period was 20.83%. The Canada WEBS Index Series under-performed the MSCI Canada
Index total return by 0.70% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE CANADA WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Canada Index Series under-performed the MSCI Index for several reasons,
including dividend smoothing and the impact of expenses. Portfolio sampling had
an overall positive effect on performance due to industry weighting differences
between the Index Series and the benchmark.
WHAT MARKET CONDITIONS AFFECTED THE CANADA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Canada has experienced another year of healthy economic growth in 1996,
partially due to the government's interest rate cuts during the year. The lower
interest rates have had a positive ripple effect throughout Canada's economy.
Approximately 300,000 new jobs were added during the past year, but the
unemployment rate remained at about 10% for 1996. The Canadian dollar has
strengthened since the beginning of 1996. Improved levels of consumer confidence
have led to increased consumer spending, particularly on housing and durable
goods. Exports have also been strong, due to the strength of the United States'
economy. Canada has seen improved performance in its current account balance
which has shown the first surplus since the early 1980s. With record low
interest rates, a healthy world economy, low and stable inflation and much
improved government finances, Canada is in an excellent position for continued
economic growth.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
CANADA WEBS INDEX SERIES VS. THE MSCI CANADA INDEX
Canada WEBS Index Series MSCI Canada Index
3/12/96 10,000 10,000
3/31/96 10,088 10,100
4/30/96 10,462 10,516
5/31/96 10,639 10,682
6/30/96 10,344 10,389
7/31/96 10,029 10,071
8/31/96 10,463 10,521
9/30/96 10,877 10,938
10/31/96 11,726 11,794
11/30/96 12,546 12,652
12/31/96 12,115 12,215
1/31/97 12,678 12,815
2/28/97 12,569 12,713
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Canada WEBS Index Series $12,569*
MSCI Canada Index $12,713
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Canada WEBS Index Series 25.69%
MSCI Canada Index 27.13%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Canada WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available
for investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
6
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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FRANCE
For the period ended February 28, 1997 the total return of the France WEBS
Index Series was 16.03%. The corresponding MSCI Index total return for the
period was 17.74%. The France WEBS Index Series under-performed the MSCI France
Index total return by 1.71% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE FRANCE WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The France Index Series under-performed the MSCI Index for several reasons,
including dividend smoothing and the impact of expenses. Portfolio sampling had
a positive effect on performance due to industry weighting differences between
the Index Series and the benchmark.
WHAT MARKET CONDITIONS AFFECTED THE FRANCE WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The recent economic growth in France has been due, in part, to lowered
interest rates by the Bank of France. Interest rates were reduced in October
from 3.7% to their current level of 3.2% (as of February 1997). Rates are
expected to remain low with further cuts possible in the future. Another
positive economic factor has been the continued low inflation rate. Inflation
fell from 2.3% in July to 1.6% by September. This decline partly reflects last
year's increase in the VAT rate. The low inflation rate has benefited various
sectors of the economy, including lowered prices for public sector services and
manufactured products and falling prices for fresh food (which fell 10% in late
1996). Unemployment is a continued problem, with the unemployment rate at 12.6%
in late 1996 and expected to continue to rise. The unemployment problem is
partly due to the government down-sizing its employment policy with cuts in the
public sector and reductions in employment subsidies to the private sector. The
government is still trying to comply with budget constraints imposed by the
Maastrict Treaty and plans to offset some of the fiscal measures by implementing
tax cuts aimed at pacifying the unions and enhancing consumer confidence.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
FRANCE WEBS INDEX SERIES VS. THE MSCI FRANCE INDEX
France WEBS Index Series MSCI France Index
3/12/96 10,000 10,000
3/31/96 10,596 10,629
4/30/96 10,765 10,821
5/31/96 10,668 10,701
6/30/96 10,998 10,893
7/31/96 10,757 10,589
8/31/96 10,495 10,371
9/30/96 11,072 10,942
10/31/96 11,278 11,174
11/30/96 11,855 11,766
12/31/96 11,938 11,882
1/31/97 12,160 12,149
2/28/97 12,177 12,210
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
France WEBS Index Series $12,177*
MSCI France Index $12,210
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
France WEBS Index Series 21.77%
MSCI France Index 22.10%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the France WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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GERMANY
For the period ended February 28, 1997 the total return of the Germany WEBS
Index Series was 8.58%. The corresponding MSCI Index total return for the period
was 9.81%. The Germany WEBS Index Series under-performed the MSCI Germany Index
total return by 1.23% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE GERMANY WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Germany WEBS Index Series under-performed the MSCI Index due to dividend
smoothing and the impact of expenses. Although portfolio sampling had a positive
effect on performance, due to industry weighting differences between the Index
Series and the benchmark, it only partially offset the negative impact of
dividend smoothing and expenses.
WHAT MARKET CONDITIONS AFFECTED THE GERMANY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The German economy, long envied by other countries, is experiencing its share
of hardships. High wages, record high levels of unemployment and militant unions
have combined to make a number of German products un-competitive in today's
cost-cutting global business environment. The rigidity of Germany's economic
structure has made it difficult to effect changes to promote economic growth.
The unemployment rate for 1996 was approximately 11% -- the highest level in the
post-War era. Inflation, however, has remained under control, ending the year at
(roughly) 1.5%. The government has tried to help stimulate investment and jobs
by announcing tax reforms, specifically planning future cuts in the solidarity
surcharge added to income and corporate tax rates as well as cutting the top
rate of business tax. While consumer spending, government spending and
construction investment were down for the year, equipment investments and
exports showed strong growth. Fourth quarter GDP data showed positive growth,
compared to a relatively flat GDP figure for the third quarter. The economy will
be strongly affected by world trade, which is expanding as the economic climate
of Germany's trading partners continues to improve.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
GERMANY WEBS INDEX SERIES VS. THE MSCI GERMANY INDEX
Germany WEBS Index Series MSCI Germany Index
3/12/96 10,000 10,000
3/31/96 10,181 10,216
4/30/96 9,781 9,843
5/31/96 9,955 9,984
6/30/96 10,144 10,187
7/31/96 10,197 10,216
8/31/96 10,399 10,451
9/30/96 10,468 10,518
10/31/96 10,560 10,614
11/30/96 10,918 11,034
12/31/96 10,948 11,068
1/31/97 10,880 11,020
2/28/97 11,291 11,476
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Germany WEBS Index Series $11,291*
MSCI Germany Index $11,476
TOTAL RETURN
SINCE
INCEPTION (DAGGER)
----------
Germany WEBS Index Series 12.91%
MSCI Germany Index 14.76%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Germany
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGER) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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HONG KONG
For the period ended February 28, 1997 the total return of the Hong Kong WEBS
Index Series was 14.98%. The corresponding MSCI Index total return for the
period was 17.05%. The Hong Kong WEBS Index Series under-performed the MSCI Hong
Kong Index total return by 2.07% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE HONG KONG WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Hong Kong WEBS Index Series under-performed the MSCI Index due to
portfolio sampling, the impact of expenses and dividend smoothing. In addition,
the need for compliance with Subchapter M of the Internal Revenue Code resulted
in a re-weighting of the remaining securities in the portfolio which negatively
impacted the Index Series performance.
WHAT MARKET CONDITIONS AFFECTED THE HONG KONG WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Growth in Hong Kong has been moderate during 1996 and to date in 1997.
Economic growth, as measured by GDP, was approximately 4.4% for 1996 (down from
4.7% in 1995) due to export weakness and poor domestic demand. Private
consumption is on the rise, as are investment levels. Property values have
continued to increase and will have a beneficial impact on consumer confidence.
Inflation has been subdued, reaching a nine year low of 4.9% in the third
quarter of 1996. The weakness in consumer activity, moderate prices in the
Chinese market, monetary policy and the currency peg (to the U.S. dollar) have
all helped contain inflationary pressures. The issue first and foremost is
China's assumption of control over Hong Kong on July 1, 1997. China has decided
to dissolve the current legislative council and replace it with a hand picked
provisional legislature. In a dramatic move, Beijing has declared current
British Governor Chris Patten's Bill of Rights unconstitutional. This has led to
general uncertainty on China's economic stance, although Hong Kong acts as a
major conduit for foreign direct investment into mainland China (it is estimated
that 60% of foreign direct investment comes from or through Hong Kong). While
Hong Kong's democratic experience may be short-lived and civil rights will
likely be eroded, the Chinese are not expected to do anything which would
threaten the economic vibrancy of the territory.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
HONG KONG WEBS INDEX SERIES VS. THE MSCI HONG KONG INDEX
Hong Kong WEBS Index Series MSCI Hong Kong Index
3/12/96 10,000 10,000
3/31/96 10,429 10,477
4/30/96 10,468 10,501
5/31/96 10,826 10,817
6/30/96 10,569 10,566
7/31/96 10,031 10,085
8/31/96 10,322 10,415
9/30/96 10,979 11,126
10/31/96 11,414 11,594
11/30/96 12,418 12,543
12/31/96 12,315 12,478
1/31/97 11,948 12,210
2/28/97 11,868 12,190
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Hong Kong WEBS Index Series $11,868*
MSCI Hong Kong Index $12,190
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Hong Kong WEBS Index Series 18.68%
MSCI Hong Kong Index 21.90%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Hong Kong
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
9
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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ITALY
For the period ended February 28, 1997 the total return of the Italy WEBS
Index Series was 7.11%. The corresponding MSCI Index total return for the period
was 7.44%. The Italy WEBS Index Series under-performed the MSCI Italy Index
total return by 0.33% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE ITALY WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Italy WEBS Index Series under-performed the MSCI Index for several
reasons, including dividend smoothing and the impact of expenses. Although
portfolio sampling had a positive effect on performance, due to industry
weighting differences between the Index Series and the benchmark, it only
partially offset the negative impact of dividend smoothing and expenses.
WHAT MARKET CONDITIONS AFFECTED THE ITALY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
A new Italian government was formed in April of 1996 and has proved to be
remarkably stable. The market's reaction has been very positive. The
inflationary environment has improved considerably, with the national inflation
rate falling to 3.4% in the third quarter of 1996. The drop was due to a decline
in food prices, entertainment and transportation costs. This improvement
prompted the Bank of Italy to ease monetary policy and lower the discount rate
to 7.5% in the fourth quarter. The government has put forward an ambitious plan
in an attempt to reach the Maastricht Treaty deficit target of 3%. The fiscal
contraction will introduce an additional "Euro-tax" on households and
businesses, as well as cuts in healthcare and pension expenditures. The relative
political stability and credible fiscal policy has benefited the Italian
currency. The current account surplus has increased as a result of the
competitive position of the currency and is the strongest the surplus has been
in twenty years. The Italian Lira rejoined the European Exchange Rate Mechanism
at the end of November, following a long period of speculation due to the
appreciation of the Lira since the beginning of the year, the improved outlook
for public finances and the stable political environment. Unemployment has
remained fairly stable, although still very high at 12%, due to the large
increase in the labor supply compared to slower creation of employment.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
ITALY WEBS INDEX SERIES VS. THE MSCI ITALY INDEX
Italy WEBS Index Series MSCI Italy Index
3/12/96 10,000 10,000
3/31/96 9,875 9,918
4/30/96 11,197 11,272
5/31/96 11,226 11,207
6/30/96 11,300 11,233
7/31/96 10,514 10,416
8/31/96 10,411 10,333
9/30/96 11,083 10,994
10/31/96 10,479 10,386
11/30/96 11,272 11,205
12/31/96 11,295 11,229
1/31/97 12,450 12,418
2/28/97 11,151 11,102
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Italy WEBS Index Series $11,151*
MSCI Italy Index $11,102
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Italy WEBS Index Series 11.51%
MSCI Italy Index 11.02%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Italy WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
10
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
JAPAN
For the period ended February 28, 1997 the total return of the Japan WEBS
Index Series was (16.82)%. The corresponding MSCI Index total return for the
period was (16.50)%. The Japan WEBS Index Series under-performed the MSCI Japan
Index total return by 0.32% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE JAPAN WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Japan WEBS Index Series under-performed the MSCI Index for several
reasons, including the impact of expenses and dividend smoothing. The overall
poor performance in most industries included in the MSCI Index (particularly in
the banking and financial services sectors which returned -30.33% and -31.45%,
respectively) had a negative effect on the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE JAPAN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The major news in Japan over the last year has been the depreciation of the
yen and the dramatic fall of the Nikkei stock average. Japanese blue-chip stocks
have fallen to half of their all time highs and the yen has plunged 50% against
the U.S. dollar since the Spring of 1995. The Liberal Democratic Party was
re-elected to office in October and announced sweeping reforms in the form of
deregulation of Japan's financial system. The slow pace of financial reform in
Japan has strangled the country's economic recovery and hurt its prospects to
become an international financial center. Tokyo faces strong competition from
Hong Kong and Singapore, both of which are vying to become Asia's main financial
hub and offer a lighter regulatory environment. Japan's economy has a long road
to recovery, with banks still working off bad loans made in the early 1980s and
real estate prices falling. The government does not have many monetary or fiscal
options with the discount rate at a rock bottom 0.5%. As a result, the
government is constraining public spending, imposing an increase in consumption
tax from 3% to 5% (effective April 1997) and letting an income tax rebate
program, started in 1994, expire in April 1997. Other economic indicators are
positive, with unemployment at 3% and inflation at 0.1%. The weakness of the yen
may be the key to economic growth in the future by fueling exports with its
stronger international trading partners.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
JAPAN WEBS INDEX SERIES VS. THE MSCI JAPAN INDEX
Japan WEBS Index Series MSCI Japan Index
3/12/96 10,000 10,000
3/31/96 10,548 10,570
4/30/96 11,116 11,171
5/31/96 10,548 10,596
6/30/96 10,629 10,652
7/31/96 10,149 10,175
8/31/96 9,689 9,720
9/30/96 10,027 10,057
10/31/96 9,344 9,382
11/30/96 9,527 9,561
12/31/96 8,857 8,900
1/31/97 7,890 7,932
2/28/97 8,060 8,117
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Japan WEBS Index Series $8,060*
MSCI Japan Index $8,117
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Japan WEBS Index Series (19.40)%
MSCI Japan Index (18.83)%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Japan WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
11
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
MALAYSIA
For the period ended February 28, 1997 the total return of the Malaysia WEBS
Index Series was 13.48%. The corresponding MSCI Index total return for the
period was 15.79%. The Malaysia WEBS Index Series under-performed the MSCI
Malaysia Index total return by 2.31% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MALAYSIA WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Malaysia WEBS Index Series under-performed the MSCI Index due to the
impact of expenses, dividend smoothing and portfolio sampling. In addition, the
need for compliance with Subchapter M of the Internal Revenue Code resulted in a
re-weighting of the remaining securities in the portfolio which negatively
impacted the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE MALAYSIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Malaysian government has been following a high growth strategy and
maintaining high growth rates will remain a key priority until the end of the
decade. The growth rate is high, even by international standards, at about 8%,
and has been driven mainly by strong investment. The continued progress of the
government's large infrastructure and utilities projects will ensure that public
investment continues to support growth. Employment growth has surpassed growth
of the labor market and has resulted in wage rates increasing over productivity
gains. The unemployment rate has been decreasing in recent years, falling from a
high of 5.1% in 1990 to about 2.8% in 1996. Inflation has remained subdued,
considering the fast pace of growth, declining from 3.4% in 1995 to about 3.3%
in 1996. Monetary policy has been closely maintained by the Bank of Malaysia in
order to keep inflationary pressure at bay. Selective measures, such as credit
card limits and additional financing caps on purchases of investment properties
have been introduced, and similar measures are expected to continue. The most
pressing current economic problem is the position of the current account, which
continues to post a deficit. The deficit was 8.8% of GDP in 1995, but has
narrowed to 6.3% for 1996.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MALAYSIA WEBS INDEX SERIES VS. THE MSCI MALAYSIA INDEX
Malaysia WEBS Index Series MSCI Malaysia Index
3/12/96 10,000 10,000
3/31/96 10,438 10,450
4/30/96 10,899 11,007
5/31/96 10,498 10,562
6/30/96 10,551 10,612
7/31/96 9,894 9,966
8/31/96 10,428 10,512
9/30/96 10,542 10,689
10/31/96 10,783 10,910
11/30/96 11,237 11,365
12/31/96 11,320 11,484
1/31/97 11,418 11,655
2/28/97 11,834 12,172
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Malaysia WEBS Index Series $11,834*
MSCI Malaysia Index $12,172
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Malaysia WEBS Index Series 18.34%
MSCI Malaysia Index 21.72%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Malaysia
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
12
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
MEXICO
For the period ended February 28, 1997 the total return of the Mexico (Free)
WEBS Index Series was 10.59%. The corresponding MSCI Index total return for the
period was 12.94%. The Mexico (Free) WEBS Index Series under-performed the MSCI
Mexico (Free) Index total return by 2.35% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MEXICO (FREE) WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Mexico (Free) WEBS Index Series under-performed the MSCI Index due to the
impact of expenses, dividend smoothing and portfolio sampling. In addition, the
need for compliance with Subchapter M of the Internal Revenue Code resulted in a
re-weighting of the remaining securities in the portfolio which negatively
impacted the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE MEXICO (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
After a few years of economic instability, Mexico is making an economic
recovery. The main objective of economic policy since the devaluation of the
currency has been to restore credibility and regain investor confidence. The
government has been following an austere fiscal policy that is expected to
continue. Expenditure on infrastructure is being increased while tax exemptions
are being provided to businesses to stimulate investment and job creation. A
major area of focus is balancing the budget, which should be feasible based on
higher revenues associated with the increase in international oil prices.
Inflation peaked at 52% back in December of 1995 and the effects of tight fiscal
and monetary policies have reduced inflation to about 27% as of February 1997.
Inflation is expected to continue its decline throughout 1997, although the
current drought has put upward pressure on food prices, and fuel and electricity
prices have increased by about 7%. The government also raised the minimum wage
by 12% in early 1996. These factors have limited progress. The Peso has been
relatively stable as the government has set a target for the currency -- the
target is that the Peso should average 7.7 to one U.S. dollar. The North
American Free Trade Agreement (NAFTA) has boosted Mexico's trade. Almost 80% of
Mexico's trade is with the United States and main exports are petroleum,
vehicles, chemicals and consumer electronics. The strength of the U.S. economy
should sustain the growth of exports and, therefore, help Mexico's economic
growth into 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MEXICO (FREE) WEBS INDEX SERIES VS. THE MSCI MEXICO (FREE) INDEX
Mexico (Free) WEBS Index Series MSCI Mexico (Free) Index
3/12/96 10,000 10,000
3/31/96 10,864 10,913
4/30/96 11,437 11,540
5/31/96 11,618 11,617
6/30/96 11,427 11,486
7/31/96 10,683 10,743
8/31/96 11,592 11,736
9/30/96 11,683 11,719
10/31/96 10,828 11,017
11/30/96 11,311 11,489
12/31/96 11,552 11,783
1/31/97 12,408 12,798
2/28/97 12,820 13,254
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Mexico (Free) WEBS Index Series $12,820*
MSCI Mexico (Free) Index $13,254
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Mexico (Free) WEBS Index Series 28.20%
MSCI Mexico (Free) Index 32.54%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Mexico
(Free) WEBS Index Series and reflects all expenses of the Index Series.
Investors should note that the Index Series is professionally managed while
the relevant MSCI Index is unmanaged, does not incur expenses and is not
available for investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
13
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
NETHERLANDS
For the period ended February 28, 1997 the total return of the Netherlands
WEBS Index Series was 16.33%. The corresponding MSCI Index total return for the
period was 18.00%. The Netherlands WEBS Index Series under-performed the MSCI
Netherlands Index total return by 1.67% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE NETHERLANDS WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Netherlands Index Series under-performed the MSCI Index for several
reasons, including the effect of dividend smoothing and the need for compliance
with Subchapter M of the Internal Revenue Code, which imposes restrictions on
the composition of the Index Series. In keeping with this tax provision,
holdings of Royal Dutch Petroleum have been restricted to 25% which adversely
affected the performance of the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE NETHERLANDS WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
The Netherlands have successfully weathered Europe's economic sluggishness
brought on by the constraints imposed by the Maastricht Treaty. The government
has adopted a moderate fiscal stance and coupled with the economic growth seen
over the last year, should result in the budget deficit being below the
Maastricht Treaty limit of 3%. Unemployment has been decreasing due to the
creation of 110,000 jobs in 1996. Private consumption has been the main driving
force behind the economic expansion. This increased level of consumer spending
may lead to a slight increase in inflation during 1997 although, inflation has
remained restrained and finished 1996 and was about 2% in 1996. The focus of
Dutch monetary policy is the maintenance of currency stability, as determined by
the Guilder's exchange rate against the Deutschmark. The Dutch Central Bank had
raised the repo rate by 10 basis points, but then in reaction to the German
Bundesbank's rate cut of 30 basis points, cut the repo rate by 20 basis points
in the third quarter. Rates will continue to move in tandem with Bundesbank
decisions. Progress in fiscal policy will arise from planned curbs on government
spending, increased efficiency in the public service and robust growth levels.
With unemployment falling, low interest rates and no significant fiscal
tightening, the economic outlook is positive for 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
NETHERLANDS WEBS INDEX SERIES VS. THE MSCI NETHERLANDS INDEX
Netherlands WEBS Index Series MSCI Netherlands Index
3/12/96 10,000 10,000
3/31/96 10,434 10,412
4/30/96 10,471 10,457
5/31/96 11,113 10,941
6/30/96 11,094 10,966
7/31/96 10,911 10,792
8/31/96 11,118 10,974
9/30/96 11,394 11,253
10/31/96 11,548 11,534
11/30/96 12,259 12,255
12/31/96 12,498 12,544
1/31/97 12,421 12,444
2/28/97 12,934 12,949
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Netherlands WEBS Index Series $12,934*
MSCI Netherlands Index $12,949
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Netherlands WEBS Index Series 29.34%
MSCI Netherlands Index 29.49%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Netherlands
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
14
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SINGAPORE
For the period ended February 28, 1997 the total return of the Singapore
(Free) WEBS Index Series was 4.22%. The corresponding MSCI Index total return
for the period was 5.16%. The Singapore (Free) Index Series under-performed the
MSCI Singapore (Free) Index total return by 0.94% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SINGAPORE (FREE)
WEBS INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Singapore (Free) WEBS Index Series under-performed the MSCI Index due to
dividend smoothing and the impact of expenses. Portfolio sampling had a slightly
positive effect on performance, due to industry weighting differences between
the Index Series and the benchmark, which only partially offset the negative
impact of dividend smoothing and expenses.
WHAT MARKET CONDITIONS AFFECTED THE SINGAPORE (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
After enjoying highly successful economic growth for a number of years, GDP
growth has been gradually slowing since the second quarter of 1996 due to an
international downturn in the electronics industry. Singapore has a highly
industrialized economy and sees much of its growth from the large and strong
manufacturing sector. Leading industries include electronics, oil refining,
chemicals and pharmaceuticals. Financial and business services have become more
important in recent years and now contribute almost 30% of the economy's output.
The industrial structure is heavily skewed towards multinationals, with small
and medium-sized companies making a relatively small contribution. Singapore is
heavily dependent on international trade. The government has liberal attitudes
on international trade and offers incentives to local firms that seek to expand
abroad within the Asia-Pacific region. The government follows cautious monetary
and fiscal policies. The budget finances have been in a healthy condition, with
a surplus of about 7% for 1996. The Central Bank uses the exchange rate to
restrain inflationary pressures. Despite the effects of a very tight labor
market and limited land resources, inflation for 1996 was approximately 2%. The
economy's sound structure and an improved global environment should allow
Singapore to continue to experience economic growth, albeit at a slower pace,
during 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SINGAPORE (FREE) WEBS INDEX SERIES VS. THE MSCI SINGAPORE (FREE) INDEX
Singapore (Free) WEBS Index Series MSCI Singapore (Free) Index
3/12/96 10,000 10,000
3/31/96 10,278 10,308
4/30/96 10,302 10,284
5/31/96 9,714 9,692
6/30/96 9,722 9,571
7/31/96 8,979 8,828
8/31/96 9,327 9,196
9/30/96 9,352 9,207
10/31/96 8,934 8,775
11/30/96 9,548 9,358
12/31/96 9,720 9,582
1/31/97 9,999 9,939
2/28/97 9,720 9,670
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Signapore (Free) WEBS Index Series $9,720*
MSCI Signapore (Free) Index $9,670
TOTAL RETURN
SINCE
INCEPTION(DAGGAR)
----------
Singapore (Free) WEBS Index Series (2.80)%
MSCI Singapore (Free) Index (3.30)%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Singapore
(Free) WEBS Index Series and reflects all expenses of the Index Series.
Investors should note that the Index Series is professionally managed while
the relevant MSCI Index is unmanaged, does not incur expenses and is not
available for investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
15
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SPAIN
For the period ended February 28, 1997 the total return of the Spain WEBS
Index Series was 18.88%. The corresponding MSCI Index total return for the
period was 19.69%. The Spain WEBS Index Series under-performed the MSCI Spain
Index total return by 0.81% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SPAIN WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Spain WEBS Index Series under-performed the MSCI Index for several
reasons, including the impact of expenses and dividend smoothing. The need for
compliance with Subchapter M of the Internal Revenue Code resulted in a
re-weighting of the remaining securities in the portfolio which positively
impacted the Index Series.
WHAT MARKET CONDITIONS AFFECTED THE SPAIN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The rate of economic growth in Spain continues to show signs of a moderate
increase due to the strength of foreign consumption and the capital goods
sector. The service sector has seen relative improvement over the last year,
specifically in telecommunications, wholesale and retail trade. Private
consumption rose last year as evidenced by the increase in the level of imported
goods (principally in non-food items). Recovery in economic activity has allowed
job creation to remain strong. The unemployment rate was about 23% for 1996, a
full 6% decrease over 1995's unemployment rate of 29%. This improved labor
market was reflected in the wage increase of 3.8%. Inflation has been kept under
control, ending 1996 at 3.2% -- the lowest rate since 1968. The Bank of Spain
continued to reduce interest rates with further cuts in January 1997, putting
the Bank rate at 6.0%. This cut was the ninth in the downward cycle and has
resulted in a total drop of 3.25 points since December 1995. After recording
spectacular rises in 1996, stock market indices continued their climb and
recorded new all-time highs in the early weeks of January. The downward pressure
on interest rates has had a positive impact on the stock market. Overall
economic results in 1996 were very positive, not only in terms of growth but
also with regard to correction and control of the traditional imbalances in
Spain's economy. In 1997, inflation is expected to remain low with a focus on
reducing the public deficit and continued moderate growth of economic activity.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SPAIN WEBS INDEX SERIES VS. THE MSCI SPAIN INDEX
Spain WEBS Index Series MSCI Spain Index
3/12/96 10,000 10,000
3/31/96 10,399 10,428
4/30/96 10,715 10,824
5/31/96 10,640 10,747
6/30/96 11,069 11,199
7/31/96 10,663 10,688
8/31/96 10,845 10,917
9/30/96 11,130 11,185
10/31/96 11,484 11,535
11/30/96 12,361 12,508
12/31/96 13,571 13,776
1/31/97 13,363 13,545
2/28/97 12,893 13,066
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Spain WEBS Index Series $12,893*
MSCI Spain Index $13,066
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Spain WEBS Index Series 28.93%
MSCI Spain Index 30.66%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Spain WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
16
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SWEDEN
For the period ended February 28, 1997 the total return of the Sweden WEBS
Index Series was 17.04%. The corresponding MSCI Index total return for the
period was 19.15%. The Sweden WEBS Index Series under-performed the MSCI Sweden
Index total return by 2.11% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWEDEN WEBS INDEX
SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Sweden WEBS Index Series under-performed the MSCI Index for several
reasons, including the impact of expenses and dividend smoothing. Industry
weighting differences between the Index Series and the benchmark also had a
slight negative effect on the deviation of returns.
WHAT MARKET CONDITIONS AFFECTED THE SWEDEN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Swedish economy has had a healthy year mainly due to the performance of
the export sector. The economy is showing signs of a broad based recovery and
demand has been rising. Export orders increased in the last half of 1996, while
domestic orders also showed signs of an upswing. After a mostly flat performance
in 1996, retail sales have been rising in recent months fueled by wage growth
and improved consumer confidence. Industrial orders also continue to climb,
ending 1996 up about 10% over the past year. Inflation has been declining
steadily, as the Swedish Krona has continued to appreciate since early 1995, has
restrained import prices. With producer prices remaining subdued and the
government intent on completing a program of significant fiscal tightening,
inflation should remain below 2% in 1997. Measured against the Deutschemark, the
Krona has appreciated by over 20% since April 1995. The move has been driven
mainly by the improved economic outlook, and Germany's economic sluggishness as
reflected in the value of their currency. Since the beginning of 1996, the
Central Bank of Sweden, the Riksbank, has cut interest rates almost every two
weeks and the repo rate which was at 4.85% in late 1996, after having opened the
year at 8.91%. The government has imposed a strict monetary and fiscal policy to
try to lower the budget deficit. Budgetary policy should be sufficient to
prevent dramatic rises in activity levels and therefore, inflationary pressures.
One consequence of this strict budgetary policy has been relatively high
unemployment. Sweden has had a history of very low unemployment rates and is
finding it hard to cope with unemployment levels in excess of 8%.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWEDEN WEBS INDEX SERIES VS. THE MSCI SWEDEN INDEX
Sweden WEBS Index Series MSCI Sweden Index
3/12/96 10,000 10,000
3/31/96 10,424 10,459
4/30/96 10,446 10,345
5/31/96 10,976 10,805
6/30/96 11,127 10,949
7/31/96 10,651 10,499
8/31/96 11,413 11,200
9/30/96 11,856 11,664
10/31/96 12,354 12,172
11/30/96 13,163 12,989
12/31/96 13,233 13,096
1/31/97 13,474 13,400
2/28/97 13,357 13,344
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Sweden WEBS Index Series $13,357*
MSCI Sweden Index $13,344
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Sweden WEBS Index Series 33.57%
MSCI Sweden Index 33.44%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Sweden WEBS
Index Series and reflects all expenses of the Index Series. Investors should
note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
17
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SWITZERLAND
For the period ended February 28, 1997 the total return of the Switzerland
WEBS Index Series was (0.49)%. The corresponding MSCI Index total return for the
period was 0.27%. The Switzerland WEBS Index Series under-performed the MSCI
Switzerland Index total return by 0.76% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWITZERLAND WEBS
INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The Switzerland WEBS Index Series under-performed the MSCI Index due to the
impact of expenses and dividend smoothing. Portfolio sampling had a slightly
positive effect on performance due to industry weighting differences between the
Index Series and the benchmark.
WHAT MARKET CONDITIONS AFFECTED THE SWITZERLAND WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Economic growth in the Swiss economy was very slow throughout 1996. Private
consumption remained fairly stagnant during the year and capital investment has
also slowed. The main driver of this modest economic growth has been exports.
The uncertainty of the Swiss citizens regarding wages and job security has had a
negative effect on consumer expenditure. Wage cuts in the public sector and job
losses as a result of company mergers and cost cutting measures have contributed
to the general uneasiness. Real incomes rose only about 1% in 1996, the benefit
of which was partially eliminated by higher health insurance premiums.
Unemployment is high by historical standards, ending 1996 at about 4%. The Swiss
economy is dominated by small and medium sized companies, which have not been
able to keep up with the multi-national companies in restructuring their
activities to take advantage of the strength of the Swiss Franc. The strength of
the Franc, along with a general slowdown across Europe, have been the main
factors in the slow economic growth experienced by Switzerland. The Franc has
appreciated by 15% over the last three years and has reached record highs
against the United States dollar and other currencies, although interest rates
have remained very low, with the discount rate at 1%. The slow economy has also
had a negative impact on the banking sector. There have been considerable losses
taken on loans in the real estate market, which had expanded aggressively in the
early 1990's.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWITZERLAND WEBS INDEX SERIES VS. THE MSCI SWITZERLAND INDEX
Switzerland WEBS Index Series MSCI Switzerland Index
3/12/96 10,000 10,000
3/31/96 10,298 10,357
4/30/96 10,025 9,951
5/31/96 9,751 9,617
6/30/96 10,207 10,095
7/31/96 9,876 9,891
8/31/96 10,260 10,319
9/30/96 9,959 10,070
10/31/96 9,909 10,040
11/30/96 10,093 10,125
12/31/96 9,951 9,924
1/31/97 10,159 10,220
2/28/97 10,210 10,347
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
Switzerland WEBS Index Series $10,210*
MSCI Switzerland Index $10,347
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
Switzerland WEBS Index Series 2.10%
MSCI Switzerland Index 3.47%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Switzerland
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the relevant
MSCI Index is unmanaged, does not incur expenses and is not available for
investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
18
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM
For the period ended February 28, 1997 the total return of the United Kingdom
WEBS Index Series was 15.64%. The corresponding MSCI Index total return for the
period was 17.31%. The United Kingdom WEBS Index Series under-performed the MSCI
United Kingdom Index total return by 1.67% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE UNITED KINGDOM
WEBS INDEX SERIES' PERFORMANCE FOR THE PERIOD ENDED FEBRUARY 28, 1997?
The United Kingdom WEBS Index Series under-performed the MSCI Index due to
several factors including dividend smoothing and the impact of expenses.
Portfolio sampling had a positive effect on performance due to industry
weighting differences between the Index Series and the benchmark.
WHAT MARKET CONDITIONS AFFECTED THE UNITED KINGDOM WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
The United Kingdom experienced very strong economic growth in 1996. Over
the last four years, Britain has created more jobs than all of the other major
countries of Europe combined. For the first time in five years, job vacancies
for top graduates are increasing at a faster rate than the number of students
graduated. This brought the unemployment rate down to about 7% for 1996. Housing
prices rose dramatically (8.4%) in 1996, but this was more of a recovery than a
boom. This recovery has been led by lower unemployment, growth of real income,
tax cuts and low interest rates. Consumer confidence can, in part, be measured
by the continuing increase in sales of life insurance and pension products--up
41% over 1995. The services industries have seen an upturn in in growth,
specifically in transportation, communications and financial and business
services. Makers of consumer goods have seen the largest rise in orders, while
orders for investment goods, such as machinery and components were more
sluggish. Interest rates reached a historical low, even with the Chancellor
increasing the base rate to 6% in late 1996. The rate increase was intended to
gain control of any upward pressures on prices, although inflation has remained
steady at about 2.5%. The rise of Sterling has had a negative effect on export
trade, although any fall in overseas demand offset by the healthy state of the
domestic markets. The United Kingdom is one of the most successful economies in
Europe and the rapid economic growth, fueled by the decline of unemployment, no
serious inflationary problems and consumer demand growth, should continue into
1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
UNITED KINGDOM WEBS INDEX SERIES VS. THE MSCI UNITED KINGDOM INDEX
United Kingdom WEBS Index Series MSCI United Kingdom Index
3/12/96 10,000 10,000
3/31/96 10,206 10,200
4/30/96 10,371 10,399
5/31/96 10,470 10,521
6/30/96 10,412 10,459
7/31/96 10,478 10,532
8/31/96 11,040 11,078
9/30/96 11,284 11,334
10/31/96 11,788 11,871
11/30/96 12,417 12,548
12/31/96 12,826 12,983
1/31/97 12,413 12,601
2/28/97 12,767 12,996
Past performance is not predictive of future performance
Value
February 28, 1997
-----------------
United Kingdom WEBS Index Series $12,767*
MSCI United Kingdom Index $12,996
TOTAL RETURN
SINCE
INCEPTION (DAGGAR)
----------
United Kingdom WEBS Index Series 27.67%
MSCI United Kingdom Index 29.96%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the United
Kingdom WEBS Index Series and reflects all expenses of the Index Series.
Investors should note that the Index Series is professionally managed while
the relevant MSCI Index is unmanaged, does not incur expenses and is not
available for investment.
(DAGGAR) For the period March 12, 1996 (commencement of operations) through
February 28, 1997 (unannualized).
19
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
AUSTRALIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
-------- ----------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 0.86%
34,200 Email Limited $ 108,042
----------
BANKING 19.76%
121,200 National Australia Bank Limited 1,525,904
169,200 Westpac Banking Corporation 958,731
----------
2,484,635
----------
BEVERAGES & TOBACCO 5.97%
40,800 Coca - Cola Amatil Limited 373,694
180,600 Foster's Brewing Group Limited 377,089
----------
750,783
----------
BROADCASTING & PUBLISHING 9.22%
156,600 News Corporation Limited 833,853
72,000 News Corporation Limited - Preferred 325,259
----------
1,159,112
----------
BUILDING MATERIALS & COMPONENTS 5.13%
100,200 Boral Limited 272,213
39,000 James Hardie Industries Limited 112,006
87,600 Pioneer International Limited 260,421
----------
644,640
----------
BUSINESS & PUBLIC SERVICES 2.49%
18,600 Brambles Industries Limited 313,290
----------
CHEMICALS 1.85%
24,600 ICI Australia Limited 232,953
----------
ENERGY SOURCES 17.88%
157,200 Broken Hill Proprietary Company 2,080,418
46,800 Santos Limited 168,553
----------
2,248,971
----------
FOOD & HOUSEHOLD PRODUCTS 1.52%
43,200 Burns Phillip & Company Limited 67,064
102,600 Goodman Fielder Limited 124,235
----------
191,299
----------
FOREST PRODUCTS & PAPER 2.61%
49,800 Amcor Limited 327,792
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
-------- ----------- -----
GOLD MINES 2.50%
24,000 Newcrest Mining Limited $ 91,281
108,000 Normandy Mining Limited 149,217
18,600 Plutonic Resources Limited 73,775
----------
314,273
----------
LEISURE & TOURISM 0.83%
57,000 Crown Limited* 104,016
----------
MERCHANDISING 3.19%
91,200 Coles Myer Limited 401,376
----------
METALS - NON FERROUS 10.88%
25,800 CRA Limited 386,341
128,400 Mount Isa Mines Holdings Limited 178,399
64,200 North Limited 207,800
16,800 Renison Goldfields Consolidated
Limited 66,766
84,000 WMC Limited 529,496
----------
1,368,802
----------
METALS - STEEL 0.95%
107,400 Australia National Industries Limited 119,210
----------
MULTI-INDUSTRY 7.20%
82,800 CSR Limited 292,425
22,800 Howard Smith Limited 191,255
82,800 Pacific Dunlop Limited 199,235
63,000 Southcorp Holdings Limited 222,987
----------
905,902
----------
REAL ESTATE 7.16%
77,400 General Property Trust 150,795
19,800 Lend Lease Corporation Limited 362,088
58,200 Stockland Trust Group 149,529
123,600 Westfield Trust 237,927
----------
900,339
----------
TOTAL COMMON STOCK - BASKET
(Cost $11,782,646) 12,575,435
----------
TOTAL INVESTMENTS
(Cost $11,782,646)(DAGGAR) 100.00% $12,575,435
======= ===========
- -------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $11,866,099.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 1,003,207
Excess of tax cost over value (293,871)
-------------
$ 709,336
=============
See accompanying notes to financial statements.
20
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
AUSTRIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
-------- ----------- -----
COMMON STOCK - BASKET 100.00%
BANKING 26.48%
4,782 Bank Austria AG $ 327,220
2,300 Creditanstalt Bankverein 141,316
1,172 Creditanstalt Bankverein Vorzug 44,873
----------
513,409
----------
BEVERAGES & TOBACCO 4.88%
1,540 Oesterreichische Brau
Beteiligungs AG 94,620
----------
BUILDING MATERIALS & COMPONENTS 4.80%
512 Wienerberger Baustoffindustrie AG 92,952
----------
BUSINESS & PUBLIC SERVICES 4.94%
1,914 Flughafen Wien AG 95,851
----------
CHEMICALS 2.54%
1,022 Lenzing 49,202
----------
CONSTRUCTION & HOUSING 6.77%
1,272 Bau Holdings AG 69,803
762 Bau Holdings AG Vorzug 36,557
628 Universale-Bau 24,843
----------
131,203
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 1.80%
372 Austria Mikro Systeme
International AG 34,973
----------
ENERGY SOURCES 10.10%
1,662 OMV AG 195,839
----------
INSURANCE 4.61%
322 EA-Generali AG 89,435
----------
MACHINERY & ENGINEERING 9.32%
442 BWT 46,316
2,282 Steyr Daimler Puch* 40,334
624 Va Technologie AG 94,121
----------
180,771
----------
- -------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
METALS - STEEL 4.72%
1,324 Boehler-Uddeholm $ 91,434
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 8.35%
1,286 Mayr Melnhof Karton* 65,809
2,648 Radex-Heraklith Industries 96,047
----------
161,856
----------
TRANSPORTATION - AIRLINES 3.77%
490 Austrian Airlines* 72,998
----------
UTILITIES - ELECTRICAL & GAS 6.92%
1,848 Oesterreichische
Elektrizitaetswirtschafts AG -
Class A 134,231
----------
TOTAL COMMON STOCK - BASKET
(Cost $2,033,012) 1,938,774
----------
TOTAL INVESTMENTS
(Cost $2,033,012)(DAGGAR) 100.00% $1,938,774
======= ===========
- ------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 2,033,231.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 78,569
Excess of tax cost over value (173,026)
-----------
$ (94,457)
===========
See accompanying notes to financial statements.
21
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
BELGIUM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
BANKING 12.80%
792 Generale De Banque SA $ 292,799
522 Kredietbank NV 188,859
----------
481,658
----------
BUILDING MATERIALS & COMPONENTS 4.63%
1,842 Cimenteries CBR Cementbedrij 174,278
----------
CHEMICALS 4.60%
282 Solvay SA 173,082
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 4.73%
1,044 Barco NV 178,067
----------
ENERGY SOURCES 11.88%
1,248 Petrofina SA 447,045
----------
INDUSTRIAL COMPONENTS 2.93%
180 Bekaert SA 110,219
----------
INSURANCE 15.66%
2,364 Fortis AG 412,033
762 Royal Belge 177,230
----------
589,263
----------
MERCHANDISING 4.69%
3,006 Delhaize-Le Lion SA 176,514
----------
METALS - NON FERROUS 4.55%
2,316 Union Miniere Group SA* 171,243
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
MISCELLANEOUS MATERIALS &
COMMODITIES 2.09%
666 Glaverbel $ 78,694
---------
MULTI-INDUSTRY 14.05%
2,430 Gevaert NV 175,834
1,278 Groupe Bruxelles Lambert SA 175,777
408 Tractebel 176,902
---------
528,513
---------
UTILITIES - ELECTRICAL & GAS 17.39%
2,838 Electrabel SA 654,371
---------
TOTAL COMMON STOCK - BASKET
(Cost $3,551,728) 3,762,947
---------
TOTAL INVESTMENTS
(Cost $3,551,728)(DAGGAR) 100.00% $3,762,947
======= ==========
- -------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $3,634,379.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 160,673
Excess of tax cost over value (32,105)
-----------
$ 128,568
============
See accompanying notes to financial statements.
22
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
===============================================================================
CANADA WEBS INDEX SERIES
- -------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 99.97%
AEROSPACE & MILITARY TECHNOLOGY 2.58%
30,600 Bombardier Incorporated - Class B $ 587,644
----------
BANKING 14.69%
19,800 Bank Of Montreal 707,608
18,000 Bank Of Nova Scotia 686,078
16,200 Canadian Imperial Bank Of Commerce 785,763
12,600 National Bank Of Canada 145,643
25,200 Royal Bank Of Canada 1,016,739
----------
3,341,831
----------
BEVERAGES & TOBACCO 6.11%
7,200 Molson Company Limited - Class A 125,364
32,400 Seagram Company Limited 1,264,570
----------
1,389,934
----------
BROADCASTING & PUBLISHING 6.08%
5,400 Quebecor Incorporated - Class B 99,159
14,400 Rogers Communications
Incorporated - Class B* 98,500
7,200 Southam Incorporated 111,142
52,200 Thomson Corporation 1,075,009
----------
1,383,810
----------
BUSINESS & PUBLIC SERVICES 3.07%
23,400 Laidlaw Incorporated - Class B 324,406
5,400 Loewen Group Incorporated 174,812
9,000 Moore Corporation Limited 198,844
----------
698,062
----------
CHEMICALS 1.35%
10,800 Agrium Incorporated 148,145
16,200 Methanex Corporation* 158,812
----------
306,957
----------
ELECTRICAL & ELECTRONICS 6.83%
21,600 Northern Telecommunications Limited 1,554,144
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 2.01%
14,400 Newbridge Networks Corporation* 457,737
----------
ENERGY SOURCES 12.74%
9,000 Alberta Energy Company Limited 189,297
9,000 Anderson Exploration Limited* 106,994
7,200 Canadian Natural Resources* 171,717
10,800 Canadian Occidental Petroleum 182,515
18,000 Gulf Canada Resources Limited* 126,417
12,600 Imperial Oil Limited 553,076
3,600 IPL Energy Incorporated 105,216
7,200 Norcen Energy Resources
Incorporated 154,071
23,400 Petro-Canada 338,957
10,800 Poco Petroleum Limited* 100,739
9,000 Ranger Oil Limited* 81,315
9,000 Renaissance Energy Limited* 255,139
5,400 Suncor Incorporated 240,588
9,000 Talisman Energy Incorporated* 292,670
----------
2,898,711
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
FINANCIAL SERVICES 0.67%
7,200 Power Corporation of Canada Limited $ 152,754
----------
FOREST PRODUCTS & PAPER 2.66%
7,200 Abitibi-Price Incorporated 118,780
5,400 Avenor Incorporated 93,035
10,800 Domtar Incorporated 98,369
10,800 Macmillan Bloedel Limited 149,331
9,000 Stone-Consolidated Corporation* 146,499
----------
606,014
----------
GOLD MINES 7.12%
37,800 Barrick Gold Corporation 1,070,203
5,400 Cambior Incorporated 86,517
21,600 Placer Dome Incorporated 463,794
----------
1,620,514
----------
HEALTH & PERSONAL CARE 0.48%
5,400 MDS Incorporated - Class B 109,628
----------
INDUSTRIAL COMPONENTS 1.25%
5,400 Magna International Incorporated -
Class A 284,637
----------
MACHINERY & ENGINEERING 0.43%
3,600 United Dominion Industries Limited 97,315
----------
MERCHANDISING 1.92%
7,200 Canadian Tire Corporation - Class A 131,158
3,600 George Weston Limited 197,264
5,400 Hudson's Bay Company 108,047
----------
436,469
----------
METALS - NON FERROUS 10.11%
18,000 Alcan Aluminium Limited 645,256
5,400 Cameco Corporation 201,280
7,200 Cominco Limited 205,428
14,400 Inco Limited 507,250
21,600 Noranda Incorporated 520,682
9,000 Teck Corporation - Class B 219,914
----------
2,299,810
----------
METALS - STEEL 0.57%
7,200 Dofasco Incorporated 130,368
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.85%
3,600 Potash Corporation of Saskatchewan 283,517
5,400 Rio Algom Limited 137,281
----------
420,798
----------
MULTI-INDUSTRY 6.45%
9,000 Brascan Limited - Class A 215,634
27,000 Canadian Pacific Limited 663,692
7,200 Extendicare Incorporated - Class A* 95,077
18,000 Imasco Limited 493,818
----------
1,468,221
----------
See accompanying notes to financial statements.
23
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
CANADA WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
TELECOMMUNICATIONS 6.22%
25,200 BCE Incorporated $ 1,224,142
12,600 Telus Corporation 190,811
-----------
1,414,953
-----------
UTILITIES - ELECTRICAL & GAS 4.78%
43,200 Nova Corporation 396,635
16,200 Transalta Corporation 192,589
18,000 Transcanada Pipelines Limited 333,821
9,000 Westcoast Energy Incorporated 163,618
-----------
1,086,663
-----------
TOTAL COMMON STOCK - BASKET
(Cost $20,347,638) 22,746,974
-----------
COMMON STOCK - NON-BASKET 0.03%
CHEMICALS 0.03%
450 Agrium Incorporated 6,173
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $5,191) 6,173
-----------
TOTAL INVESTMENTS
(Cost $20,352,829)(DAGGAR) 100.00% $22,753,147
======= ===========
- ----------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $20,363,903.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 2,658,078
Excess of tax cost over value (268,834)
------------
$ 2,389,244
============
See accompanying notes to financial statements.
24
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
AEROSPACE & MILITARY TECHNOLOGY 0.96%
3,508 Thomson CSF $ 111,139
----------
AUTOMOBILES 1.41%
1,476 PSA Peugeot Citroen 163,214
----------
BANKING 9.47%
6,056 Banque National de Paris 274,775
3,640 Cie Financiere de Paribas-Class A 247,829
4,768 Compagnie Financiere de Suez 232,990
424 Credit National 27,908
2,696 Societe Generale de Paris 312,316
----------
1,095,818
----------
BEVERAGES & TOBACCO 6.45%
2,536 LVMH (Moet - Hennessy Louis Vuitton) 593,349
1,684 Pernod Ricard 91,925
1,584 Societe Nationale D'exploration 60,610
----------
745,884
----------
BROADCASTING & PUBLISHING 1.17%
724 Canal Plus SA 135,719
----------
BUILDING MATERIALS & COMPONENTS 1.52%
2,812 Lafarge SA 176,203
----------
BUSINESS & PUBLIC SERVICES 6.59%
3,536 Compagnie Generale des Eaux 492,171
1,872 Havas SA 147,859
220 Sodexho SA 122,409
----------
762,439
----------
CHEMICALS 5.81%
2,148 L'Air Liquide 337,811
9,536 Rhone-Poulenc -Class A 334,755
----------
672,566
----------
CONSTRUCTION & HOUSING 0.59%
716 Bouygues 68,366
----------
ELECTRICAL & ELECTRONICS 7.90%
4,664 Alcatel Alsthom 478,901
844 Legrand SA 148,140
144 Sagem SA 79,364
3,944 Schneider SA 207,747
----------
914,152
----------
ENERGY SOURCES 11.34%
7,876 Elf Acquitaine SA 753,413
6,996 Total SA-Class B 558,103
----------
1,311,516
----------
FINANCIAL SERVICES 1.34%
824 Compagnie Bancaire 99,939
116 Societe Eurafrance SA 54,770
----------
154,709
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
FOOD & HOUSEHOLD PRODUCTS 3.93%
788 Eridania Beghin-Say SA $ 127,385
2,160 Groupe Danone 327,566
----------
454,951
----------
HEALTH & PERSONAL CARE 9.03%
280 Essilor International 76,864
1,964 L'Oreal 665,663
3,048 Sanofi SA 301,734
----------
1,044,261
----------
INDUSTRIAL COMPONENTS 3.12%
3,544 Michelin-Class B 221,947
2,060 Valeo SA 138,845
----------
360,792
----------
INSURANCE 5.04%
8,764 AXA-UAP SA 583,467
----------
LEISURE & TOURISM 1.66%
988 Accor SA 135,958
224 Pathe SA* 56,144
----------
192,102
----------
MACHINERY & ENGINEERING 0.96%
508 Compagnie Francaise d'Etudes de
Construction Technip 51,359
816 Sidel SA 59,725
----------
111,084
----------
MERCHANDISING 11.24%
1,120 Carrefour SA 690,208
1,964 Casino Guichard Perrachon 89,628
160 Comptoirs Modernes 79,167
648 Pinault-Printemps Redoute SA 274,223
564 Promodes 166,805
----------
1,300,031
----------
METALS - NON FERROUS 0.58%
468 Imetal 67,358
----------
METALS - STEEL 0.95%
7,144 Usinor Sacilor 110,346
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 3.23%
2,532 Compagnie de Saint Gobain 373,314
----------
MULTI-INDUSTRY 2.81%
244 Groupe Saint Louis Bouchon 64,070
2,860 Lagardere S.C.A. 84,335
1,732 Lyonnaise des Eaux SA 176,930
----------
325,335
----------
REAL ESTATE 0.92%
592 Sefimeg 48,993
592 Simco SA 57,358
----------
106,351
----------
See accompanying notes to financial statements.
25
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
RECREATION, OTHER CONSUMER
GOODS 1.42%
816 Bic $ 132,341
468 Salomon SA 32,143
----------
164,484
----------
UTILITIES - ELECTRICAL & GAS 0.56%
628 Primagaz CIE 64,483
----------
TOTAL COMMON STOCK - BASKET
(Cost $10,148,330) 11,570,084
----------
TOTAL INVESTMENTS
(Cost $10,148,330)(DAGGAR) 100.00% $11,570,084
======= ===========
- --------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $10,164,009.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 1,476,775
Excess of tax cost over value (70,700)
-----------
$ 1,406,075
===========
See accompanying notes to financial statements.
26
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
===============================================================================
GERMANY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 11.14%
19,000 Daimler-Benz AG* $ 1,378,126
1,000 Volkswagen AG 484,540
200 Volkswagen AG Preferred 76,176
----------
1,938,842
----------
BANKING 12.28%
10,000 Bayer Hypothenken-Und
Wechsel Bank AG 295,581
10,200 Bayerische Vereinsbank AG 374,298
16,400 Deutsche Bank AG 850,989
18,600 Dresdner Bank AG 616,988
----------
2,137,856
----------
BUILDING MATERIALS & COMPONENTS 1.38%
200 Buderus AG 91,221
1,800 Heidelberger Zement AG 148,205
----------
239,426
----------
BUSINESS & PUBLIC SERVICES 3.71%
2,400 SAP AG 368,914
1,800 SAP AG-Preferred 277,751
----------
646,665
----------
CHEMICALS 11.05%
22,400 BASF AG 825,968
26,000 Bayer AG 1,097,323
----------
1,923,291
----------
CONSTRUCTION & HOUSING 0.97%
1,600 Bilfinger & Berger AG 64,447
2,400 Hochtief AG 104,490
----------
168,937
----------
ELECTRICAL & ELECTRONICS 6.10%
21,000 Siemens AG 1,061,693
----------
FOREST PRODUCTS & PAPER 0.17%
200 PWA-Papierwerke Waldhof-
Aschaffenburg AG 28,907
----------
HEALTH & PERSONAL CARE 3.70%
3,200 Beiersdorf AG 174,008
6,600 Merck KGAA 252,553
2,400 Schering AG 217,652
----------
644,213
----------
INDUSTRIAL COMPONENTS 0.42%
3,800 Continental AG 74,055
----------
INSURANCE 13.13%
800 Allianz AG Holdings 1,556,688
200 AMB Aachener & Muench
Beteiligungs AG 137,424
1,000 CKAG Colonia Konzern 90,629
200 Muenchener Rueckversicherung AG 501,125
----------
2,285,866
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
MACHINERY & ENGINEERING 5.96%
400 Linde AG $ 260,633
400 MAN AG 102,239
200 MAN AG Vorzug 42,590
1,600 Mannesmann AG 631,679
----------
1,037,141
----------
MERCHANDISING 2.60%
1,200 Douglas Holding AG 42,294
400 Karstadt AG 130,790
3,200 Metro AG* 280,535
----------
453,619
----------
METALS - STEEL 1.46%
1,200 Thyssen AG 254,543
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.98%
400 Degussa 170,596
----------
MULTI-INDUSTRY 3.42%
600 Preussag AG 154,069
1,000 Viag AG 441,595
----------
595,664
----------
RECREATION, OTHER CONSUMER
GOODS 1.10%
2,000 Adidas AG 191,328
----------
TELECOMMUNICATIONS 8.73%
79,000 Deutsche Telecom* 1,520,851
----------
TRANSPORTATION - AIRLINES 1.17%
15,400 Deutsche Lufthansa 204,336
----------
TRANSPORTATION - ROAD & RAIL 0.63%
800 SGL Carbon 108,992
----------
UTILITIES - ELECTRICAL & GAS 9.90%
11,400 Rwe AG 511,183
4,400 Rwe AG-Preferred 159,898
18,400 Veba AG 1,052,861
----------
1,723,942
----------
TOTAL COMMON STOCK - BASKET
(Cost $16,301,343) 17,410,763
----------
TOTAL INVESTMENTS
(Cost $16,301,343)(DAGGAR) 100.00% $17,410,763
======= ===========
- -------------------------------------------------------------------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $16,322,942.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 1,236,272
Excess of tax cost over value (148,451)
------------
$ 1,087,821
============
See accompanying notes to financial statements.
27
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
HONG KONG WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
BANKING 11.74%
168,000 Bank Of East Asia Limited $ 612,862
105,000 Hang Seng Bank Limited 1,213,520
----------
1,826,382
----------
BROADCASTING & PUBLISHING 2.07%
224,000 South China Morning Post 202,479
28,000 Television Broadcast Limited 119,318
----------
321,797
----------
ELECTRICAL & ELECTRONICS 0.25%
14,000 Johnson Electric Holdings 38,688
----------
FINANCIAL SERVICES 1.58%
134,400 Peregrine Investment Holdings 245,579
----------
LEISURE & TOURISM 5.07%
203,000 Hong Kong & Shanghai Hotels
Limited 357,819
308,000 Regal Hotels International 91,477
260,400 Shangri-La Asia Limited 339,623
----------
788,919
----------
MERCHANDISING 0.66%
28,000 Dickson Concepts International 102,325
----------
MULTI-INDUSTRY 16.97%
252,000 Hutchison Whampoa Limited 1,919,938
84,000 Swire Pacific Limited 'A' 721,333
----------
2,641,271
----------
REAL ESTATE 39.49%
126,000 Cheung Kong Holdings Limited 1,204,029
224,000 Chinese Estates Holdings 238,636
280,000 Hang Lung Development Company 564,050
420,000 Hopewell Holdings Limited 250,839
140,000 Hysan Development Company Limited 482,696
98,000 Miramar Hotel & Investment 185,395
112,000 New World Development Company
Limited 694,215
154,000 Sun Hung Kai Properties Limited 1,779,830
168,000 Wharf Holdings Limited 746,281
----------
6,145,971
----------
- -------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
TELECOMMUNICATIONS 8.93%
806,400 Hong Kong Telecommunications Limited $ 1,390,165
----------
TRANSPORTATION - AIRLINES 2.80%
280,000 Cathay Pacific Airways Limited 435,692
----------
TRANSPORTATION - SHIPPING 1.39%
308,000 Shun Tak Holdings 216,761
----------
UTILITIES - ELECTRICAL & GAS 9.05%
161,000 China Light & Power Company
Limited 744,292
350,000 Hong Kong & China Gas Company
Limited 664,385
----------
1,408,677
----------
TOTAL COMMON STOCK - BASKET
(Cost $14,958,837) 15,562,227
----------
TOTAL INVESTMENTS
(Cost $14,958,837)(DAGGAR) 100.00% $15,562,227
======= ===========
- -------------
(DAGGAR) Aggregate cost for Federal income tax purposes is $15,030,851.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 727,760
Excess of tax cost over value (196,384)
-------------
$ 531,376
=============
See accompanying notes to financial statements.
28
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
ITALY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 4.75%
442,000 Fiat SPA $ 1,356,077
----------
BANKING 17.99%
305,500 Banca Commerciale Italiana 621,846
91,000 Banca Popolare di Milano 501,308
100,100 Banco Ambrosiano Veneto SPA 256,825
152,100 Banco Ambrosiano Veneto SPA Rnc 280,890
375,700 Credito Italiano 515,087
201,500 Istituto Bancario San Paolo de Torino 1,422,065
117,000 Istituto Mobiliare Italiano 1,013,331
80,600 Mediobanca 525,331
----------
5,136,683
----------
BROADCASTING & PUBLISHING 3.73%
31,200 Arnoldo Mondadori Editore 205,274
204,100 Mediaset SPA* 859,394
----------
1,064,668
----------
CONSTRUCTION & HOUSING 1.09%
50,700 Sitri SPA 312,450
----------
DATA PROCESSING & REPRODUCTION 0.82%
635,700 Olivetti Group* 232,802
----------
ENERGY SOURCES 20.92%
1,211,600 Ente Nazionale Idrocarburi SPA 5,974,120
----------
FOOD & HOUSEHOLD PRODUCTS 1.51%
314,600 Parmalat Finanziaria SPA 430,760
----------
INDUSTRIAL COMPONENTS 3.28%
474,500 Pirelli SPA 938,050
----------
INSURANCE 11.73%
23,400 Assicurazioni Generali 422,917
977,600 Istituto Nazionale delle Assicurazioni 1,278,978
92,300 Riunione Adriatica di Sicurta SPA 829,444
72,800 Riunione Adriatica di Sicurta SPA Rnc 394,283
50,700 Societa Assicuratrice Industriale 425,100
----------
3,350,722
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
MERCHANDISING 1.26%
71,500 Rinascente $ 359,108
----------
METALS - STEEL 0.60%
39,000 Falck Acciaierie & Ferriere Lombarde 172,915
----------
MULTI-INDUSTRY 2.92%
843,700 Montedison SPA* 611,558
328,900 Montedison SPA Rnc* 222,640
----------
834,198
----------
RECREATION - OTHER CONSUMER
GOODS 1.09%
18,200 Bulgari SPA 310,466
----------
TELECOMMUNICATIONS 20.96%
1,069,900 Telecom Italia Mobile SPA 2,793,768
231,400 Telecom Italia Mobile SPA Rnc 351,345
1,032,200 Telecom Italia SPA 2,416,203
210,600 Telecom Italia SPA Rnc 424,315
----------
5,985,631
----------
TEXTILES & APPAREL 2.33%
36,400 Benetton Group SPA 415,822
32,500 Marzotto & Figli SPA 249,865
----------
665,687
----------
UTILITIES - ELECTRICAL & GAS 5.02%
145,600 Edison SPA 800,455
178,100 Italgas 634,626
----------
1,435,081
----------
TOTAL COMMON STOCK - BASKET
(Cost $27,584,773) 28,559,418
----------
TOTAL INVESTMENTS
(Cost $27,584,773)(DAGGAR) 100.00% $28,559,418
======= ===========
- --------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $27,819,426.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 1,503,395
Excess of tax cost over value (763,403)
------------
$ 739,992
============
See accompanying notes to financial statements.
29
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 5.66%
135,000 Matsushita Electric Industrial $ 2,080,538
15,000 Pioneer Electronic Corporation 289,585
135,000 Sanyo Electric 562,640
75,000 Sharp Corporation 938,354
30,000 Sony Corporation 2,165,051
----------
6,036,168
----------
AUTOMOBILES 8.42%
60,000 Honda Motor Company 1,854,338
165,000 Nissan Motor Corporation 973,403
240,000 Toyota Motor Corporation 6,144,668
----------
8,972,409
----------
BANKING 17.61%
150,000 Asahi Bank Limited 1,098,683
45,000 Ashikaga Bank Limited 150,261
300,000 Bank Of Tokyo-Mitsubishi 4,921,700
75,000 Bank Of Yokohama Limited 359,185
45,000 Chiba Bank Limited 266,219
180,000 Fuji Bank 2,102,908
15,000 Gunma Bank Limited 116,083
45,000 Hokuriku Bank 154,735
150,000 Industrial Bank Of Japan 1,789,709
45,000 Joyo Bank 224,086
90,000 Mitsubishi Trust & Banking 991,797
75,000 Mitsui Trust & Banking 463,584
225,000 Sakura Bank 1,437,360
30,000 Seventy-Seven Bank 244,842
60,000 Shizuoka Bank 512,056
195,000 Sumitomo Bank Limited 2,455,879
135,000 Tokai Bank 1,091,723
15,000 Yamaguchi Bank 183,942
75,000 Yasuda Trust & Banking 203,828
----------
18,768,580
----------
BEVERAGES & TOBACCO 1.08%
30,000 Asahi Breweries Limited 290,828
75,000 Kirin Brewery Company Limited 640,070
30,000 Sapporo Breweries Limited 221,974
----------
1,152,872
----------
BUILDING MATERIALS & COMPONENTS 1.68%
45,000 Chichibu Onoda Cement Corporation 158,091
30,000 Inax Corporation 197,614
30,000 Nihon Cement 142,928
45,000 Sekisui Chemical 466,070
15,000 Sumitomo Forestry Company 171,514
15,000 Tostem Company 347,999
30,000 Toto Limited 305,742
----------
1,789,958
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
BUSINESS & PUBLIC SERVICES 2.92%
60,000 Dai Nippon Printing Limited $ 999,254
15,000 Kamigumi Company 79,045
15,000 Kokuyo Company 320,656
15,000 Mitsubishi Logistics Corporation 173,999
15,000 Secom Company 845,140
60,000 Toppan Printing Company 691,027
----------
3,109,121
----------
CHEMICALS 3.95%
105,000 Asahi Chemical Industries Company
Limited 568,108
90,000 Dai Nippon Ink & Chemical Corporation 284,116
15,000 Kuraray Company Limited 124,285
180,000 Mitsubishi Chemical Corporation 499,627
45,000 Mitsubishi Rayon Company 163,311
75,000 Mitsui Toatsu Chemicals Incorporated 201,342
30,000 Shin-Etsu Chemical 579,170
105,000 Showa Denko K.K.* 230,549
135,000 Sumitomo Chemical Company Limited 514,541
75,000 Teijin Limited 298,285
105,000 Toray Industries 607,258
45,000 Tosoh Corporation* 138,702
----------
4,209,294
----------
CONSTRUCTION & HOUSING 3.53%
45,000 Daiwa House Industry Company
Limited 499,627
75,000 Fujita Corporation 133,607
75,000 Kajima Corporation 410,142
15,000 Kandenko Company Limited 126,771
30,000 Kinden Corporation 390,256
75,000 Kumagai Gumi Company Limited 118,071
15,000 Nishimatsu Construction Company
Limited 111,857
75,000 Obayashi Corporation 462,963
30,000 Penta-Ocean Construction 107,134
60,000 Sekisui House 556,798
75,000 Shimizu Corporation 452,399
90,000 Taisei Corporation 387,770
----------
3,757,395
----------
DATA PROCESSING & REPRODUCTION 2.29%
60,000 Canon Incorporated 1,252,796
120,000 Fujitsu Limited 1,183,197
----------
2,435,993
----------
ELECTRICAL & ELECTRONICS 3.97%
210,000 Hitachi Limited 1,809,595
15,000 Makita Corportion 206,314
135,000 Mitsubishi Electric Corporation 758,389
105,000 NEC Corporation 1,217,997
15,000 Omron Corporation 236,142
----------
4,228,437
----------
See accompanying notes to financial statements.
30
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONTINUED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
ELECTRONIC COMPONENTS,
INSTRUMENTS 2.78%
15,000 Fanuc Company Limited $ 466,070
15,000 Kyocera Corporation 888,640
15,000 Murata Manufacturing Company 525,727
30,000 Nikon Corporation 439,970
15,000 Tokyo Electron 524,484
15,000 Yokogwa Wokushin Electric
Corporation 114,964
----------
2,959,855
----------
ENERGY SOURCES 0.84%
45,000 Cosmo Oil Company Limited 175,242
90,000 Japan Energy Corporation 211,782
30,000 Mitsubishi Oil Company Limited 124,782
90,000 Nippon Oil Company Limited 379,567
----------
891,373
----------
FINANCIAL SERVICES 3.49%
15,000 Acom Company Limited 584,141
15,000 Credit Saison Company 319,413
90,000 Daiwa Securities Company 706,935
135,000 Nomura Securities Company 1,800,895
90,000 Yamaichi Securities Company 311,708
----------
3,723,092
----------
FOOD & HOUSEHOLD PRODUCTS 1.67%
45,000 Ajinomoto Company Incorporated 406,413
45,000 Kao Corporation 492,170
45,000 Meiji Seika Kaisha 217,002
15,000 Nippon Meat Packers Incorporated 150,385
15,000 Nissin Food Products Company 287,099
15,000 Yamazaki Baking Company Limited 224,956
----------
1,778,025
----------
FOREST PRODUCTS & PAPER 0.50%
45,000 New Oji Paper Company Limited 250,559
60,000 Nippon Paper Industries Company 281,382
----------
531,941
----------
HEALTH & PERSONAL CARE 3.97%
15,000 Daiichi Pharmaceutical 244,842
15,000 Eisai Company Limited 280,885
45,000 Kyowa Hakko Kogyo Company Limited 298,658
30,000 Sankyo Company Limited 835,198
30,000 Shionogi & Company 186,677
15,000 Shiseido Company Limited 175,242
30,000 Taisho Pharmaceutical 691,027
60,000 Takeda Chemical Industries 1,203,082
15,000 Yamanouchi Pharmaceutical 313,199
----------
4,228,810
----------
- -------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
INDUSTRIAL COMPONENTS 4.19%
45,000 Bridgestone Corporation $ 805,369
30,000 Fujikura Limited 235,148
60,000 Furukawa Electric Company 278,896
30,000 Minebea Company Limited 248,074
30,000 NGK Insulators Limited 273,428
15,000 NGK Spark Plug Company 154,114
60,000 Nippondenso Company Limited 1,153,368
60,000 NSK Limited 344,022
30,000 NTN Corporation 147,154
60,000 Sumitomo Electric Industries 830,226
----------
4,469,799
----------
INSURANCE 2.11%
60,000 Mitsui Marine & Fire Insurance 318,171
30,000 Nichido Marine & Fire Insurance 167,040
30,000 Nippon Fire & Marine Insurance 127,517
60,000 Sumitomo Marine & Fire Insurance 347,005
135,000 Tokio Marine & Fire Insurance 1,286,353
----------
2,246,086
----------
LEISURE & TOURISM 0.35%
15,000 Fujita Kanko 165,300
15,000 Tokyo Dome Corporation 206,314
----------
371,614
----------
MACHINERY & ENGINEERING 4.79%
30,000 Amada Company Limited 218,991
30,000 Daikin Kogyo Industries 235,148
30,000 Ebara Corporation 377,827
90,000 Hitachi Zosen Corporation 360,179
90,000 Kawasaki Heavy Industries 372,856
60,000 Komatsu Limited 447,427
105,000 Kubota Corporation 477,629
15,000 Kurita Water Industries 316,928
105,000 Mitsui Engineering & Shipping* 197,489
225,000 Mitsubishi Heavy Industries 1,620,060
75,000 Sumitomo Heavy Industries 226,199
15,000 Toyoda Automatic Loom Works 259,756
----------
5,110,489
----------
MERCHANDISING 4.10%
45,000 Daiei, Incorporated 297,539
15,000 Hankyu Department Stores 134,228
15,000 Isetan Company 164,057
30,000 Ito Yokado Company 1,362,168
30,000 Jusco Company Limited 850,112
30,000 Marui Company 430,027
30,000 Mitsukoshi 183,445
30,000 Mycal Corporation 385,285
15,000 Seiyu 129,257
15,000 Takashimaya Company 165,300
15,000 Uny Company Limited 264,728
----------
4,366,146
----------
See accompanying notes to financial statements.
31
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
METALS - NON FERROUS 0.85%
90,000 Mitsubishi Materials Corporation $ 334,079
45,000 Nippon Light Metal Company 159,955
60,000 Sumitomo Metal Mining 415,113
----------
909,147
----------
METALS - STEEL 3.22%
225,000 Kawasaki Steel Corporation 602,163
570,000 Nippon Steel Corporation 1,516,033
285,000 NKK Corporation* 611,608
225,000 Sumitomo Metal Industries 536,913
15,000 Tokyo Steel Manufacturing Company 165,300
----------
3,432,017
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.30%
75,000 Asahi Glass Company Limited 664,927
15,000 Nitto Denko Corporation 200,099
15,000 Toyo Seikan Kaisha Limited 351,728
60,000 Ube Industries Limited 167,537
----------
1,384,291
----------
REAL ESTATE 1.28%
75,000 Mitsubishi Estate Company 882,426
45,000 Mitsui Fudosan Company 488,441
----------
1,370,867
----------
RECREATION, OTHER CONSUMER
GOODS 2.16%
30,000 Casio Computer Company Limited 231,171
30,000 Citizen Watch Company 213,771
30,000 Fuji Photo Film Limited 1,004,226
30,000 Konica Corporation 180,462
15,000 Olympus Optical Corporation 125,528
15,000 Shimano Corporation 258,514
15,000 Yahama Corporation 285,856
----------
2,299,528
----------
TEXTILES & APPAREL 0.38%
30,000 Nisshinbo Industries 216,257
75,000 Toyobo Company Limited 188,292
----------
404,549
----------
TRANSPORTATION - AIRLINES 0.47%
120,000 Japan Air Lines* 498,136
----------
- -------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
TRANSPORTATION - ROAD & RAIL 3.43%
75,000 Hankyu Corporation $ 359,806
30,000 Keihin Electric Express 129,505
105,000 Kinki Nippon Railway Company 630,748
90,000 Nagoya Railroad 332,588
45,000 Nankai Electric Railway Company 219,985
75,000 Nippon Express Company 482,849
45,000 Odakyu Electric Railway Company 231,544
15,000 Seino Transportation Company 149,142
75,000 Tobu Railway Company 335,570
105,000 Tokyu Corporation 491,549
30,000 Yamato Transport Company 295,799
----------
3,659,085
----------
TRANSPORTATION - SHIPPING 0.52%
105,000 Mitsui Osk Lines* 208,799
90,000 Nippon Yusen K.K. 350,485
----------
559,284
----------
UTILITIES - ELECTRICAL & GAS 3.50%
45,000 Kansai Electric Power Incorporated 816,555
210,000 Osaka Gas Company 516,779
30,000 Tohoku Electric Power Company 514,541
75,000 Tokyo Electric Power Company
Incorporated 1,391,996
195,000 Tokyo Gas Limited 496,023
----------
3,735,894
----------
WHOLESALE & INTERNATIONAL TRADE 2.99%
105,000 Itochu Corporation 516,779
90,000 Marubeni Corporation 351,976
105,000 Mitsubishi Corporation 974,397
105,000 Mitsui & Company 777,778
75,000 Sumitomo Corporation 563,634
----------
3,184,564
----------
TOTAL COMMON STOCK - BASKET
(Cost $128,614,540) 106,574,819
----------
TOTAL INVESTMENTS
(Cost $128,614,540)(DAGGAR) 100.00% $106,574,819
======= ============
- -----------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $128,616,917.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 1,484,916
Excess of tax cost over value (23,527,014)
-------------
$ (22,042,098)
=============
See accompanying notes to financial statements.
32
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
MALAYSIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 99.89%
AUTOMOBILES 5.23%
38,000 Edaran Otomobil Nasional BHD $ 390,254
76,000 Perusahaan Otomobil Nasional BHD 501,973
133,000 Tan Chong Motor Holdings BHD 270,499
----------
1,162,726
----------
BANKING 13.29%
38,000 Commerce Asset Holdings BHD 292,308
114,000 DCB Holdings BHD 456,826
152,000 Malayan Banking BHD 1,805,880
171,000 Public Bank BHD (Foreign) 399,436
----------
2,954,450
----------
BEVERAGES & TOBACCO 3.76%
95,000 Guinness Anchor BHD 244,865
57,000 Rothmans Of Pall Mall BHD 591,120
----------
835,985
----------
BROADCASTING & PUBLISHING 1.09%
38,000 New Straits Times Press BHD 241,804
----------
BUILDING MATERIALS & COMPONENTS 3.43%
57,000 Hume Industries - Malaysia BHD 360,411
76,000 Malayan Cement BHD 198,953
171,000 Pan Malaysia Cement Works BHD 203,850
----------
763,214
----------
CONSTRUCTION & HOUSING 2.71%
76,000 Ekran BHD 272,412
57,000 YTL Corporation BHD 330,568
----------
602,980
----------
ELECTRICAL & ELECTRONICS 0.77%
76,000 Time Engineering BHD 171,406
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 1.06%
57,000 Malaysian Pacific Industries BHD 236,448
----------
ENERGY SOURCES 0.83%
57,000 Shell Refining Company BHD 183,649
----------
FINANCIAL SERVICES 7.57%
76,000 AMMB Holdings BHD 716,230
171,000 MBF Capital BHD 351,228
76,000 Rashid Hussain BHD 615,224
----------
1,682,682
----------
FOOD & HOUSEHOLD PRODUCTS 1.30%
38,000 Nestle (Malaysia) BHD 289,247
----------
INDUSTRIAL COMPONENTS 0.73%
76,000 Leader Universal Holdings BHD 162,223
----------
INSURANCE 0.92%
133,000 Idris Hydraulic (Malaysia) BHD* 204,615
----------
LEISURE & TOURISM 5.90%
247,000 Magnum Corporation BHD 512,304
171,000 Resorts World BHD 798,872
----------
1,311,176
----------
MACHINERY & ENGINEERING 5.75%
76,000 UMW Holdings BHD 400,967
95,000 United Engineers (Malaysia) Limited 876,158
----------
1,277,125
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
METALS - NON FERROUS 0.95%
152,000 Malaysian Mining Corporation BHD $ 210,584
----------
METALS - STEEL 0.99%
247,000 Amsteel Corporation BHD 218,848
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 5.25%
190,000 Golden Hope Plantations BHD 342,811
133,000 Highlands & Lowlands BHD 237,825
38,000 Kian Joo Can Factory BHD 179,058
76,000 Kuala Lumpur Kepong BHD 229,561
57,000 Perlis Plantations BHD 176,762
----------
1,166,017
----------
MULTI-INDUSTRY 9.40%
285,000 Berjaya Group BHD 397,141
76,000 Land And General Holdings BHD 154,571
133,000 Multi-Purpose Holdings BHD 316,029
323,000 Sime Darby BHD 1,222,795
----------
2,090,536
----------
REAL ESTATE 2.87%
171,000 Hong Leong Properties BHD 316,794
76,000 Malaysian Resource Corporation BHD 321,385
----------
638,179
----------
TELECOMMUNICATIONS 12.87%
171,000 Technology Resources Industries
BHD 399,436
304,000 Telekom Malaysia BHD 2,460,894
----------
2,860,330
----------
TRANSPORTATION - AIRLINES 1.36%
114,000 Malaysian Airlines System BHD 303,021
----------
TRANSPORTATION - SHIPPING 2.03%
171,000 Malaysia International Shipping
BHD (Foreign) 451,087
----------
UTILITIES - ELECTRICAL & GAS 9.83%
456,000 Tenaga Nasional BHD 2,185,421
----------
TOTAL COMMON STOCK - BASKET
(Cost $20,237,271) 22,203,753
----------
COMMON STOCK - NON-BASKET 0.11%
BANKING 0.03%
2,333 Public Bank BHD (Foreign) 5,449
----------
METALS - NON FERROUS 0.01%
1,600 Malaysian Mining Corporation BHD 2,217
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.07%
5,250 Perlis Plantations BHD 16,281
----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $22,815) 23,947
----------
TOTAL INVESTMENTS
(Cost $20,260,086)(DAGGAR) 100.00% $22,227,700
======= ===========
- -------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 20,365,769.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 2,427,364
Excess of tax cost over value (565,433)
------------
$ 1,861,931
=============
See accompanying notes to financial statements.
33
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
MEXICO (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 4.48%
84,000 Grupo Financiero Banamex - Series B* $ 197,909
35,000 Grupo Financiero Banamex - Series L* 73,889
315,000 Grupo Financiero Bancomer - Series B* 122,898
----------
394,696
----------
BEVERAGES & TOBACCO 14.25%
56,000 Empresas La Moderna - Series A 293,788
63,000 Fomento Economico Mexicano -
Series B 269,659
14,000 Grupo Continental S.A. - Series CP 77,778
98,000 Grupo Modelo S.A. - Series C 613,737
----------
1,254,962
----------
BROADCASTING & PUBLISHING 3.86%
28,000 Grupo Televisa S.A. - Series CPO* 339,747
----------
BUILDING MATERIALS & COMPONENTS 7.23%
35,000 Apasco S.A. 254,987
49,000 Cemex S.A. - Series A 197,361
42,000 Cemex S.A. - Series B 184,280
----------
636,628
----------
CHEMICALS 0.40%
14,000 Cydsa S.A. - Series A 35,000
----------
CONSTRUCTION & HOUSING 2.64%
14,000 Empresas ICA S.A.* 232,096
----------
ENERGY EQUIPMENT & SERVICES 1.31%
7,000 Tubos de Acero de Mexico S.A.* 115,341
----------
FINANCIAL SERVICES 0.73%
1,162,000 Grupo Financiero BBV - Probursa* 64,556
----------
FOOD & HOUSEHOLD PRODUCTS 4.46%
42,000 Grupo Industrial Bimbo - Series A 257,197
112,000 Grupo Industrial Maseca - Series B 135,192
----------
392,389
----------
HEALTH & PERSONAL CARE 8.59%
35,000 Kimberly-Clark de Mexico - Series A 756,566
----------
MACHINERY & ENGINEERING 0.33%
35,000 Consorcio G Grupo Dina S.A.* 28,990
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MERCHANDISING 7.73%
266,000 Cifra S.A. de C.V. - Series B* $ 413,106
126,000 Controladora Comercial Mexicana -
Series UC* 105,000
140,000 El Puerto de Liverpool SA de C.V. -
Series 1* 137,879
28,000 El Puerto de Liverpool SA de CV -
Series C1* 24,747
----------
680,732
----------
METALS - NON FERROUS 5.45%
77,000 Grupo Mexico S.A. - Series B* 254,722
49,000 Industrias Penoles S.A. - Series CP 225,511
----------
480,233
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.63%
42,000 Empaques Ponderosa S.A. - Series B* 26,515
42,000 Vitro S.A. 117,197
----------
143,712
----------
MULTI-INDUSTRY 14.32%
70,000 Alfa S.A. - Series A 399,495
35,000 Desc S.A. - Series B* 224,053
112,000 Grupo Carso S.A. - Series A1 637,778
----------
1,261,326
----------
TELECOMMUNICATIONS 22.59%
280,000 Telefonos de Mexico - Series A 546,566
742,000 Telefonos de Mexico - Series L 1,442,778
----------
1,989,344
----------
TOTAL COMMON STOCK - BASKET
(Cost $7,629,463) 8,806,318
---------
TOTAL INVESTMENTS
(Cost $7,629,463)(DAGGAR) 100.00% $8,806,318
======= ==========
- --------------------------------------------------------------------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 7,629,463.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $1,300,831
Excess of tax cost over value (123,976)
----------
$1,176,855
==========
See accompanying notes to financial statements.
34
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
NETHERLANDS WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 4.72%
8,200 Philips Electronics Nv $ 370,097
----------
BANKING 4.76%
5,200 ABN Amro Holdings Nv 373,267
----------
BEVERAGES & TOBACCO 2.90%
1,280 Heineken Nv 226,905
----------
BROADCASTING & PUBLISHING 8.09%
18,800 Elsevier Nv 300,990
2,600 Wolters Kluwer - CVA 333,558
----------
634,548
----------
CHEMICALS 4.56%
2,480 AKZO Nobel 357,215
----------
CONSTRUCTION & HOUSING 4.11%
672 Hollandsche Beton Groep Nv 147,863
3,136 IHC Caland Nv 174,406
----------
322,269
----------
DATA PROCESSING & REPRODUCTION 3.77%
4,224 Getronics Nv 137,923
1,264 Oce Van Der Grinten Nv 157,834
----------
295,757
----------
ENERGY SOURCES 23.31%
10,560 Royal Dutch Petroleum Company 1,827,478
----------
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
------ -------- -----
FINANCIAL SERVICES 12.93%
26,200 Ing Groep Nv $1,014,167
----------
FOOD & HOUSEHOLD PRODUCTS 13.12%
5,400 Unilever Nv - CVA 1,028,924
----------
FOREST PRODUCTS & PAPER 1.21%
4,144 Koninklijke KNP Bt Nv 94,717
----------
INSURANCE 4.67%
8,400 Stad Rotterdam 365,852
----------
MERCHANDISING 4.48%
5,440 Koninklijke Ahold Nv 351,531
----------
METALS - STEEL 1.15%
2,008 Koninklijke Nederlandsche
Hoogovens Nv 90,523
----------
TELECOMMUNICATIONS 3.73%
8,160 Koninklijke Ptt Nederland Nv 292,227
----------
TRANSPORTATION - AIRLINES 2.49%
6,376 KLM - Konin Luchvaart Mij Nv 195,430
----------
TOTAL COMMON STOCK - BASKET
(Cost $6,338,515) 7,840,907
----------
TOTAL INVESTMENTS
(Cost $6,338,515)(DAGGAR) 100.00% $7,840,907
======= ==========
- --------------------------------------------------------------------------------
(DAGGAR) Aggregate cost for Federal income tax purposes is $6,340,982.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $1,577,981
Excess of tax cost over value (78,056)
==========
$1,499,925
==========
See accompanying notes to financial statements.
35
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SINGAPORE (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 2.68%
39,000 Cycle And Carriage $ 410,239
----------
BANKING 27.69%
91,000 Developmental Bank Singapore
(Foreign) 1,206,101
117,000 Oversea-Chinese Banking
Corporation Limited 1,550,701
130,000 United Overseas Bank Limited
(Foreign) 1,476,858
----------
4,233,660
----------
BEVERAGES & TOBACCO 3.82%
65,000 Fraser & Neave Limited 583,450
----------
BROADCASTING & PUBLISHING 3.32%
26,000 Singapore Press Holdings Limited
(Foreign) 506,872
----------
DATA PROCESSING & REPRODUCTION 0.72%
299,000 IPC Corporation Limited 110,081
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 2.21%
13,650 Creative Technology Limited* 175,172
234,000 Goldtron Limited 163,275
----------
338,447
----------
LEISURE & TOURISM 3.58%
156,000 Hotel Properties 275,680
13,000 Overseas Union Enterprises Limited 66,094
65,000 Shangri-La Hotel 205,119
----------
546,893
----------
MACHINERY & ENGINEERING 1.51%
26,000 Jurong Shipyard Limited 123,983
26,000 Van Der Horst Limited 107,574
----------
231,557
----------
MERCHANDISING 0.83%
39,000 Metro Holdings Limited 127,447
----------
METALS - NON FERROUS 1.47%
91,000 Straits Trading Company Limited 224,628
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - STEEL 1.46%
91,000 Natsteel Limited $ 223,352
---------
MULTI-INDUSTRY 10.78%
104,000 Haw Par Brothers International 242,132
65,000 Inchcape Berhad 226,999
91,000 Keppel Corporation 657,293
195,000 Singapore Technologies 522,370
---------
1,648,794
---------
REAL ESTATE 17.95%
65,000 City Developments 642,707
182,000 DBS Land 708,345
91,000 First Capital Corporation Limited 273,128
52,000 Parkway Holdings 218,794
442,000 United Industrial Corporation Limited 381,248
325,000 United Overseas Land 519,635
---------
2,743,857
---------
TELECOMMUNICATIONS 9.56%
624,000 Singapore Telecommunications 1,461,543
---------
TRANSPORTATION - AIRLINES 9.77%
169,000 Singapore Airlines Limited (Foreign) 1,493,268
---------
TRANSPORTATION - ROAD & RAIL 1.11%
195,000 Comfort Group Limited 169,565
---------
TRANSPORTATION - SHIPPING 1.54%
273,000 Neptune Orient Lines Limited 235,477
---------
TOTAL COMMON STOCK - BASKET
(Cost $15,282,258) 15,289,130
---------
COMMON STOCK - NON-BASKET 0.00%
APPLIANCES & HOUSEHOLD DURABLES 0.00%
35,000 Amcol Holdings** 246
---------
TOTAL COMMON STOCK - NON-BASKET
(Cost $95,756) 246
---------
TOTAL INVESTMENTS
(Cost $15,378,014)(DAGGAR) 100.00% $15,289,376
======= ===========
- ----------------------
* Non-Income producing security.
** Fair valued security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 15,499,554.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 508,033
Excess of tax cost over value (718,211)
============
$ (210,178)
============
See accompanying notes to financial statements.
36
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SPAIN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 29.27%
6,522 Banco Bilbao Vizcaya $ 384,450
6,807 Banco Central Hispanoamer SA 180,444
4,782 Banco Santander SA 323,581
4,440 Corporacion Bancaria de Espana SA 177,786
-------------
1,066,261
-------------
BEVERAGES & TOBACCO 1.91%
2,214 El Aguila SA* 10,039
1,314 Tabacalera SA-A 59,490
-------------
69,529
-------------
BUSINESS & PUBLIC SERVICES 6.23%
9,669 Autopistas Concesionaria ESP 107,920
2,208 General de Aguas D' Barcelona 84,716
3,195 Prosegur Comp Seguridad 34,324
-------------
226,960
-------------
CHEMICALS 0.44%
24,876 Ercros SA* 16,139
-------------
CONSTRUCTION & HOUSING 2.41%
2,148 Dragados y Construcciones SA 32,516
639 Fomento de Construcion &
Contratas SA 55,230
-------------
87,746
-------------
ENERGY SOURCES 4.72%
4,527 Repsol SA 172,111
-------------
FOOD & HOUSEHOLD PRODUCTS 1.59%
3,306 Ebro Agricolas 57,887
-------------
FOREST PRODUCTS & PAPER 0.69%
6,876 Sarrio SA 24,990
-------------
INSURANCE 2.10%
1,446 Corporacion Mapfre 76,461
-------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 1.62%
564 Zardoya-Otis SA $ 59,056
---------
METALS - STEEL 1.30%
342 Acerinox SA 47,548
---------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.42%
876 Viscofan Industria Navarra De
Envolturas Celulosicas SA 15,277
---------
MULTI-INDUSTRY 1.65%
627 Corporacion Financiera Alba 60,141
---------
REAL ESTATE 4.13%
1,893 Inmobilaria Metropolitana Vasco
Central SA 63,650
5,004 Inmobilaria Urbis SA* 23,737
3,009 Vallehermoso SA 62,972
---------
150,359
---------
TELECOMMUNICATIONS 14.24%
22,542 Telefonica de Espana 518,930
---------
UTILITIES - ELECTRICAL & GAS 27.28%
8,694 Empresa Nacional de Electridad
SA (Endesa) 530,677
774 Gas Natural SDG-E 167,434
15,645 Iberdrola SA 170,802
15,780 Union Electrica Fenosa SA 124,941
---------
993,854
---------
TOTAL COMMON STOCK - BASKET
(Cost $3,094,210) 3,643,249
---------
TOTAL INVESTMENTS
(Cost $3,094,210)(DAGGAR) 100.00% $3,643,249
======= ==========
- --------------------------------------------------------------------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 3,100,712.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 551,273
Excess of tax cost over value (8,736)
---------
$ 542,537
==========
See accompanying notes to financial statements.
37
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SWEDEN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 3.54%
2,800 Electrolux AB-B $ 175,138
----------
AUTOMOBILES 4.05%
2,400 Volvo AB-A 59,695
5,600 Volvo AB-B 140,409
----------
200,104
----------
BANKING 8.94%
19,600 Skandinaviska Enskilda Banken-A 206,506
8,400 Svenska Handelsbanken-A 235,260
----------
441,766
----------
BEVERAGES & TOBACCO 0.81%
11,284 Swedish Match* 40,181
----------
BUILDING MATERIALS & COMPONENTS 1.81%
2,400 Scancem AB-A 89,303
----------
BUSINESS & PUBLIC SERVICES 3.42%
2,144 Esselte AB-A 51,898
1,992 Esselte AB-B 48,351
2,400 Securitas AB-B 68,817
----------
169,066
----------
CHEMICALS 3.04%
5,660 Aga AB-A 83,034
4,656 Aga AB-B 67,063
----------
150,097
----------
CONSTRUCTION & HOUSING 4.29%
4,800 Skanska AB-B 211,894
----------
ELECTRICAL & ELECTRONICS 28.14%
2,080 ABB AB-A 234,406
1,120 ABB AB-B 125,322
32,400 Ericsson LM-B 1,030,581
----------
1,390,309
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FOREST PRODUCTS & PAPER 5.73%
8,400 Stora Kopparbergs-A $ 114,829
1,936 Stora Kopparbergs-B 26,207
6,400 Svenska Cellulosa AB-B 142,116
----------
283,152
----------
HEALTH & PERSONAL CARE 19.26%
16,400 Astra AB-A 787,399
3,504 Astra AB-B 164,029
----------
951,428
----------
INDUSTRIAL COMPONENTS 4.62%
2,388 Autoliv AB 108,602
2,244 S. K. F. AB-A 52,972
2,800 S. K. F. AB-B 66,844
----------
228,418
----------
INSURANCE 2.31%
3,756 Skandia Forsakring AB 114,211
----------
MACHINERY & ENGINEERING 4.18%
6,400 Atlas Copco AB-A 148,091
2,520 Atlas Copco AB-B 58,479
----------
206,570
----------
MERCHANDISING 4.41%
1,532 Hennes & Mauritz AB-B 217,803
----------
MULTI-INDUSTRY 1.45%
4,580 Trelleborg AB-B 71,772
----------
TOTAL COMMON STOCK - BASKET
(Cost $3,909,266) 4,941,212
----------
TOTAL INVESTMENTS
(Cost $3,909,266)(DAGGAR) 100.00% $4,941,212
======= ==========
- --------------------------------------------------------------------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 3,913,206.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $1,030,142
Excess of tax cost over value (2,136)
-----------
$1,028,006
==========
See accompanying notes to financial statements.
38
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SWITZERLAND WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 98.69%
BANKING 14.58%
3,415 CS Holding - Registered $ 364,074
415 Schweiz Bankgesellscraft - Bearer 373,078
1,875 Schweizerischer Bankverein - Bearer 355,932
----------
1,093,084
----------
BUILDING MATERIALS & COMPONENTS 6.85%
365 Forbo Holding AG 147,732
2,445 Holderbank Finance Glaris -
Registered 366,336
----------
514,068
----------
BUSINESS & PUBLIC SERVICES 3.28%
445 Adecco SA 144,210
95 Danzas Namen 101,763
----------
245,973
----------
ELECTRICAL & ELECTRONICS 4.17%
275 ABB AG - Bearer 312,474
----------
FOOD & HOUSEHOLD PRODUCTS 4.72%
325 Nestle SA - Registered 353,864
----------
HEALTH & PERSONAL CARE 46.31%
1,550 Novartis Namen 1,771,729
30 Roche Holding AG - Inhaber 354,915
160 Roche Holding AG - Genussein 1,346,712
----------
3,473,356
----------
INSURANCE 9.68%
350 Schweizerische Rueckversicherungs -
Gesellschaft 358,068
1,235 Zuerich Versicherungs - Registered 367,569
----------
725,637
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
LEISURE & TOURISM 1.05%
30 Kuoni Reisen Holding AG
Namen - Series B $ 78,915
---------
MACHINERY & ENGINEERING 4.42%
120 Georg Fischer - Bearer 122,441
110 Schindler Namen 117,085
60 Sulzer AG - Bearer 35,797
90 Sulzer AG - Registered 56,136
---------
331,459
---------
MERCHANDISING 0.91%
325 Valora Holding AG - Registered 68,525
---------
RECREATION, OTHER CONSUMER
GOODS 1.70%
495 S.M.H. AG - Bearer 65,189
110 S.M.H. AG - Registered 62,644
---------
127,833
---------
TRANSPORTATION - AIRLINES 1.02%
90 Swissair - Registered 76,698
---------
TOTAL COMMON STOCK - BASKET
(Cost $7,178,600) 7,401,886
---------
COMMON STOCK - NON-BASKET 1.31%
HEALTH & PERSONAL CARE 1.31%
1,550 Novartis Rights (Expiration date
3/12/97)* 98,097
---------
TOTAL COMMON STOCK - NON-BASKET
(Cost $95,148) 98,097
---------
TOTAL INVESTMENTS
(Cost $7,273,748)(DAGGAR) 100.00% $7,499,983
======= ==========
- ------------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 7,310,929.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 304,071
Excess of tax cost over value (115,017)
-----------
$ 189,054
===========
See accompanying notes to financial statements.
39
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.36%
AEROSPACE & MILITARY TECHNOLOGY 1.51%
10,440 British Aerospace Plc $ 217,595
37,680 Rolls-Royce Plc 143,237
----------
360,832
----------
BANKING 15.41%
29,920 Abbey National Plc 368,793
34,040 Barclays Plc 615,897
41,120 HSBC Holdings Plc ($HK10) 1,029,454
20,560 HSBC Holdings Plc (75p) 530,660
119,160 Lloyds Bank TSB Group Plc 988,573
16,200 Royal Bank of Scotland Plc 152,635
----------
3,686,012
----------
BEVERAGES & TOBACCO 2.31%
50,880 Guinness Plc 380,604
15,560 Scottish & Newcastle Plc 172,118
----------
552,722
----------
BROADCASTING & PUBLISHING 3.45%
36,080 British Sky Broadcasting Plc 351,715
15,000 Pearson Plc 188,194
15,360 Reed International Plc 286,559
----------
826,468
----------
BUILDING MATERIALS & COMPONENTS 2.50%
21,680 Blue Circle Industries Plc 140,599
12,080 BPB Industries Plc 67,305
6,360 Hepworth Plc 26,927
12,960 Redland Plc 74,005
6,760 RMC Group Plc 104,830
15,800 Williams Holdings Plc 82,360
13,320 Wolseley British Plc 102,682
----------
598,708
----------
BUSINESS & PUBLIC SERVICES 3.38%
7,360 Anglian Water Plc 78,231
4,480 De La Rue Plc 45,572
38,720 Reuters Holdings Plc 415,038
10,800 Thames Water Plc 121,227
13,720 United Utilities Plc 149,414
----------
809,482
----------
CHEMICALS 1.95%
10,960 BOC Group Plc 176,845
14,480 Courtaulds Plc 86,346
16,360 Imperial Chemical Industries Plc 202,187
----------
465,378
----------
CONSTRUCTION & HOUSING 0.16%
12,440 Taylor Woodrow Plc 39,070
----------
ELECTRICAL & ELECTRONICS 1.60%
63,040 General Electric Company Plc 383,115
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.16%
6,200 Bowthorpe Plc $ 38,084
---------
ENERGY SOURCES 6.64%
125,720 British Petroleum Company Plc 1,393,737
5,160 Burmah Castrol Plc 87,006
27,040 LASMO Plc 106,540
---------
1,587,283
---------
FINANCIAL SERVICES 0.98%
4,560 Mercury Asset Management
Group Plc 99,952
4,880 Schroder Plc 134,513
---------
234,465
---------
FOOD & HOUSEHOLD PRODUCTS 5.58%
25,960 Associated British Foods Plc 206,263
23,360 Cadbury Schweppes Plc 193,608
52,840 Grand Metropolitan Plc 390,955
19,520 Unilever Plc 502,066
10,600 United Biscuits Holdings Plc 41,678
---------
1,334,570
---------
FOREST PRODUCTS & PAPER 0.50%
19,600 Arjo Wiggins Appleton Plc 52,283
12,640 Rexam Plc 67,538
---------
119,821
---------
HEALTH & PERSONAL CARE 12.00%
78,560 Glaxo Wellcome Plc 1,332,975
60,888 SmithKline Beecham Plc 912,923
21,240 Zeneca Plc 625,488
---------
2,871,386
---------
INDUSTRIAL COMPONENTS 0.91%
14,440 BBA Group Plc 81,160
13,720 BICC Plc 62,116
22,480 Lucasvarity Plc 74,819
---------
218,095
---------
INSURANCE 3.80%
20,080 Commercial Union Plc 223,754
28,296 Legal & General Group Plc 180,736
52,080 Prudential Corporation Plc 482,621
11,080 Sedgwick Group Plc 22,958
---------
910,069
---------
LEISURE & TOURISM 3.56%
23,520 Bass 328,088
6,600 Carlton Communications Plc 56,478
13,600 Granada Group Plc 201,637
29,920 Ladbroke Group Plc 113,250
22,280 Rank Organisation Plc 152,306
---------
851,759
---------
See accompanying notes to financial statements.
40
<PAGE>
FEBRUARY 28, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 0.88%
13,680 GKN Plc $ 209,463
----------
MERCHANDISING 8.61%
22,680 Boots Company Plc 251,061
24,440 Great Universal Stores Plc 260,576
17,400 Kingfisher Plc 192,187
69,400 Marks & Spencer Plc 561,601
12,360 Next Plc 119,984
28,480 Safeway Plc 168,668
43,320 Sainsbury Plc 217,684
52,120 Tesco Plc 288,265
----------
2,060,026
----------
METALS - NON FERROUS 1.50%
23,520 RTZ Corporation Plc 359,746
----------
METALS - STEEL 0.43%
42,080 British Steel Plc 103,324
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.56%
15,240 Caradon Plc 67,879
28,320 Pilkington Plc 66,534
----------
134,413
----------
MULTI-INDUSTRY 5.22%
72,200 B.A.T. Industries Plc 632,555
91,680 BTR Plc 356,739
15,672 Hanson Plc 70,698
18,200 Lonrho Plc 42,610
16,880 TI Group Plc 145,823
----------
1,248,425
----------
REAL ESTATE 1.69%
14,520 British Land Corporation Plc 126,146
15,320 Land Securities Plc 197,457
10,520 MEPC Plc 79,896
----------
403,499
----------
RECREATION, OTHER CONSUMER
GOODS 0.96%
10,440 EMI Group Plc 196,559
10,440 Thorn Plc 32,448
----------
229,007
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
TELECOMMUNICATIONS 7.38%
140,200 British Telecommunications Plc $ 973,273
53,800 Cable & Wireless Plc 437,557
74,360 Vodafone Group Plc 353,643
----------
1,764,473
----------
TEXTILES & APPAREL 0.23%
25,560 Coats Viyella Plc 54,211
----------
TRANSPORTATION - AIRLINES 1.04%
24,240 British Airways Plc 249,347
----------
TRANSPORTATION - SHIPPING 0.69%
15,120 Peninsular & Oriental Steam Plc 164,537
----------
UTILITIES - ELECTRICAL & GAS 3.77%
95,960 BG Plc 266,933
95,960 Centrica Plc* 102,937
39,080 National Grid Plc 132,300
26,520 National Power Group Plc 211,577
19,760 Scottish Power Plc 113,157
5,760 Southern Electricity Plc 74,569
----------
901,473
----------
TOTAL COMMON STOCK - BASKET
(Cost $21,105,516) 23,769,263
----------
COMMON STOCK - NON-BASKET 0.64%
ENERGY SOURCES 0.45%
12,540 Energy Group Plc 107,103
----------
HEALTH & PERSONAL CARE 0.00%
13 SmithKline Beecham Plc 195
----------
INSURANCE 0.00%
3 Legal & General Group Plc 19
----------
MULTI-INDUSTRY 0.00%
3 Hanson Plc 13
----------
UTILITIES - ELECTRICAL & GAS 0.19%
4,200 East Midlands Electric Plc 45,910
----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $160,984) 153,240
----------
TOTAL INVESTMENTS
(Cost $21,266,500)(DAGGAR) 100.00% $23,922,503
======= ===========
- ----------------
* Non-Income producing security.
(DAGGAR) Aggregate cost for Federal income tax purposes is $ 21,349,010.
The aggregate gross unrealized appreciation (depreciation) for all securities is
as follows:
Excess of value over tax cost $ 2,930,098
Excess of tax cost over value (356,605)
------------
$ 2,573,493
============
See accompanying notes to financial statements.
41
<PAGE>
FEBRUARY 28, 1997
STATEMENT OF ASSETS AND LIABILITIES (Unaudited) WEBS INDEX FUNDS, INC.
<TABLE>
<CAPTION>
====================================================================================================================================
AUSTRALIA AUSTRIA BELGIUM CANADA FRANCE GERMANY
WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES
------- ------- ------- ------ ------ -------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments, at value $12,575,435 $1,938,774 $3,762,947 $22,753,147 $11,570,084 $17,410,763
Cash and foreign currency 115,306 63,530 39,110 24,488 11,800 196,073
Collateral for securities loaned, at value 3,926,419 -- 859,554 -- 2,985,689 5,557,125
Dividends receivable 28,703 926 3,584 33,778 68,633 5,687
Interest receivable 669 96 254 61 724 1,045
Receivable for securities sold -- -- 2,776 -- -- --
Receivable for shares sold -- -- -- -- -- --
Deferred organization cost 99,722 74,125 32,419 70,465 193,157 183,498
Prepaid expenses 4,943 859 1,452 8,762 4,680 6,809
----------- ---------- ---------- ----------- ----------- ----------
Total assets 16,751,197 2,078,310 4,702,096 22,890,701 14,834,767 23,361,000
----------- ---------- ---------- ----------- ----------- ----------
LIABILITIES
Payable for securities purchased -- -- -- -- -- --
Liability for in-kind subscriptions -- -- -- -- -- --
Payable upon return of securities loaned 3,926,419 -- 859,554 -- 2,985,689 5,557,125
Advisory fee payable 2,453 419 783 4,736 2,452 3,625
Administration fee payable 1,545 264 493 2,982 1,544 2,282
Distribution fee payable 2,272 388 725 4,386 2,271 3,356
Accrued expenses 3,872 2,716 4,268 2,917 8,017 9,721
Deferred organization cost payable 1,249 50,183 846 1,074 1,862 1,808
----------- ---------- ---------- ----------- ----------- ----------
Total liabilities 3,937,810 53,970 866,669 16,095 3,001,835 5,577,917
----------- ---------- ---------- ----------- ----------- ----------
NET ASSETS
Capital stock, $0.001 par value 1,200 200 240 1,800 801 1,201
Paid-in capital 12,055,978 3,355,113 3,635,747 19,822,897 10,050,411 15,978,421
Accumulated net investment income/(loss) (11,427) (15,031) (29,058) 18,757 (61,950) (42,192)
Accumulated net realized gain/(loss) on investments (25,332) (1,221,603) 17,672 630,978 428,866 740,687
Net unrealized appreciation/(depreciation) on investments
and translation of other assets and liabilities
denominated in foreign currencies 792,968 (94,339) 210,826 2,400,174 1,414,804 1,104,966
----------- ---------- ---------- ----------- ----------- ----------
Net Assets $12,813,387 $2,024,340 $3,835,427 $22,874,606 $11,832,932 $17,783,083
=========== ========== ========== =========== =========== ===========
Shares of common stock issued and outstanding 1,200,030 200,030 240,030 1,800,030 801,000 1,201,000
=========== ========== ========== =========== =========== ===========
Net Asset Value Per Share $10.68 $10.12 $15.98 $12.71 $14.77 $14.81
=========== ========== ========== =========== =========== ===========
MEXICO
HONG KONG ITALY JAPAN MALAYSIA (FREE) NETHERLANDS
WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES
------- ------ ------ ------ ------ -------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments, at value $15,562,227 $28,559,418 $106,574,819 $22,227,700 $8,806,318 $7,840,907
Cash and foreign currency 48,028 153,767 342,117 45,257 64,392 207,165
Collateral for securities loaned, at value 3,599,438 10,549,283 20,037,812 6,327,950 1,244,700 2,541,820
Dividends receivable 14,990 -- 30,039 10,803 -- 931
Interest receivable 459 2,185 2,532 3,067 573 732
Receivable for securities sold -- -- -- -- -- --
Receivable for shares sold -- -- 7,229,805 -- -- --
Deferred organization cost 51,229 97,318 404,889 54,312 54,868 45,971
Prepaid expenses 5,526 13,065 32,746 7,560 3,482 3,091
------------ ----------- ------------ ----------- ---------- ----------
Total assets 19,281,897 39,375,036 134,654,759 28,676,649 10,174,333 10,640,617
------------ ----------- ------------ ----------- ---------- ----------
LIABILITIES
Payable for securities purchased -- -- -- -- -- --
Liability for in-kind subscriptions -- -- 7,170,760 -- -- --
Payable upon return of securities loaned 3,599,438 10,549,283 20,037,812 6,327,950 1,244,700 2,541,820
Advisory fee payable 2,987 6,494 15,829 3,937 1,848 1,654
Administration fee payable 1,881 4,089 9,966 2,479 1,163 1,042
Distribution fee payable 2,766 6,013 14,656 3,645 1,711 1,532
Accrued expenses 15,773 -- 70,436 15,850 5,377 553
Deferred organization cost payable 964 1,266 2,856 973 1,034 989
------------ ----------- ------------ ----------- ---------- ----------
Total liabilities 3,623,809 10,567,145 27,322,315 6,354,834 1,255,833 2,547,590
------------ ----------- ------------ ----------- ---------- ----------
NET ASSETS
Capital stock, $0.001 par value 1,051 1,950 9,001 1,425 700 401
Paid-in capital 14,863,286 28,900,868 130,361,935 20,365,421 7,441,000 6,594,813
Accumulated net investment income/(loss) (31,016) (197,777) (265,441) (14,765) (26,487) (9,423)
Accumulated net realized gain/(loss) on investments 221,375 (857,705) (733,054) 2,105 326,525 13,249
Net unrealized appreciation/(depreciation) on
investments and translation of other assets
and liabilities denominated in foreign currencies 603,392 960,555 (22,039,997) 1,967,629 1,176,762 1,493,987
------------ ----------- ------------ ----------- ---------- ----------
Net Assets $15,658,088 $28,807,891 $107,332,444 $22,321,815 $8,918,500 $8,093,027
============ =========== ============ =========== ========== ==========
Shares of common stock issued and outstanding 1,051,000 1,950,030 9,001,000 1,425,030 700,030 401,000
============ =========== ============ =========== ========== ==========
Net Asset Value Per Share $14.90 $14.77 $11.92 $15.66 $12.74 $20.18
============ =========== ============ =========== ========== ==========
SINGAPORE UNITED
(FREE) SPAIN SWEDEN SWITZERLAND KINGDOM
WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES
------- ------ ------ ------ ------
ASSETS
<S> <C> <C> <C> <C> <C>
Investments, at value $15,289,376 $3,643,249 $4,941,212 $7,499,983 $23,922,503
Cash and foreign currency 102,593 475,195 152,195 35,739 106,298
Collateral for securities loaned, at value 2,021,350 785,844 1,314,625 1,388,754 --
Dividends receivable -- 1,675 -- 12,255 94,866
Interest receivable 717 255 413 270 298
Receivable for securities sold -- 7,281 -- -- --
Receivable for shares sold -- -- -- -- --
Deferred organization cost 64,489 80,469 52,416 119,564 115,252
Prepaid expenses 5,153 1,563 2,650 3,062 9,236
----------- ---------- ---------- ---------- -----------
Total assets 17,483,678 4,995,531 6,463,511 9,059,627 24,248,453
----------- ---------- ---------- ---------- -----------
LIABILITIES
Payable for securities purchased -- 435,296 -- -- --
Liability for in-kind subscriptions -- -- -- -- --
Payable upon return of securities loaned 2,021,350 785,844 1,314,625 1,388,754 --
Advisory fee payable 2,770 803 1,070 1,592 4,973
Administration fee payable 1,744 506 674 1,003 3,131
Distribution fee payable 2,565 744 991 1,474 4,605
Accrued expenses 38,480 9,775 -- 11,701 7,647
Deferred organization cost payable 2,920 1,158 981 1,405 --
----------- ---------- ---------- ---------- -----------
Total liabilities 2,069,829 1,234,126 1,318,341 1,405,929 20,356
----------- ---------- ---------- ---------- -----------
NET ASSETS
Capital stock, $0.001 par value 1,300 225 300 626 1,601
Paid-in capital 15,667,287 2,886,265 4,125,250 7,565,062 21,205,973
Accumulated net investment income/(loss) (43,816) 24,550 (53,344) (37,958) (9,134)
Accumulated net realized gain/(loss) on investments (122,132) 297,211 41,541 (98,032) 373,265
Net unrealized appreciation/(depreciation) on investments
and translation of other assets and liabilities
denominated in foreign currencies (88,790) 553,154 1,031,423 224,000 2,656,392
----------- ---------- ---------- ---------- -----------
Net Assets $15,413,849 $3,761,405 $5,145,170 $7,653,698 $24,228,097
=========== ========== ========== ========== ===========
Shares of common stock issued and outstanding 1,300,030 225,030 300,030 626,000 1,601,000
=========== ========== ========== ========== ===========
Net Asset Value Per Share $11.86 $16.72 $17.15 $12.23 $15.13
=========== ========== ========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
42 & 43
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTH PERIOD ENDING FEBRUARY 28, 1997
STATEMENTS OF OPERATIONS (Unaudited) WEBS INDEX FUND, INC.
====================================================================================================================================
AUSTRALIA AUSTRIA BELGIUM CANADA FRANCE GERMANY
WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES
--------- ------- ------- ------ ------- -------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C>
Dividends (net of foreign withholding taxes) $209,579 $ 1,890 $ 1,258 $ 186,296 $ 15,425 $ 47,047
Interest 6,281 974 850 1,369 3,897 10,614
-------- -------- ------- ---------- ---------- ---------
Total investment income 215,860 2,864 2,108 187,665 19,322 57,661
-------- -------- ------- ---------- ---------- ---------
EXPENSES:
Advisory fees 14,680 3,818 3,489 26,722 15,515 21,379
Administration fees (1) 9,243 2,404 2,197 16,825 9,769 13,461
Distribution fees 13,592 3,536 3,231 24,742 14,366 19,795
Custodian fees and expenses 5,497 4,774 3,852 10,108 9,667 10,858
Transfer agent fees 3,160 3,160 3,160 3,160 3,160 3,160
Directors' fees 4,078 1,050 968 7,443 4,286 5,903
Legal fees 7,356 1,653 1,900 14,015 7,663 10,083
Audit fees 6,117 625 1,452 11,164 6,429 8,855
Federal and state registration fees (331) (4,020) 521 1,510 (4,751) (4,754)
Amortization of deferred organization costs 3,524 2,619 1,146 2,490 6,826 6,485
Insurance 3,432 2,471 972 2,311 7,269 6,838
Printing 2,549 (294) 605 4,652 2,679 3,690
Licensing fees 1,631 424 388 2,969 1,724 2,375
Amex listing fee 367 95 87 670 386 531
Miscellaneous expenses 3,551 893 964 6,626 4,067 5,018
-------- -------- ------- ---------- ---------- ---------
Total expenses before waiver 78,446 23,208 24,932 135,407 89,055 113,677
Less: Fees waived (247) (73) (50) (433) (261) (371)
-------- -------- ------- ---------- ---------- ---------
Total expenses after waiver 78,199 23,135 24,882 134,974 88,794 113,306
-------- -------- ------- ---------- ---------- ---------
Net investment income/(loss) 137,661 (20,271) (22,774) 52,691 (69,472) (55,645)
-------- -------- ------- ---------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS AND TRANSLATION OF
OTHER ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES:
Net realized gain/(loss) on investments (12,351) (42,355) 23,260 236,904 63,790 70,225
Net realized gain/(loss) on investments on
in-kind redemptions (11,300) (1,170,090) -- 394,403 369,184 674,889
Net realized gain/(loss) on foreign currency
related transactions (1,681) (2,971) (3,125) (329) (4,108) (4,427)
-------- -------- ------- ---------- ---------- ---------
(25,332) (1,215,416) 20,135 630,978 428,866 740,687
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies 514,357 1,082,733 179,859 2,374,193 1,530,963 811,819
-------- -------- ------- ---------- ---------- ---------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies 489,025 (132,683) 199,994 3,005,171 1,959,829 1,552,506
-------- -------- ------- ---------- ---------- ---------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $626,686 $(152,954) $177,220 $3,057,862 $1,890,357 $1,496,861
======== ========== ======== ========== ========== ==========
- ------------------------
(1) Without the administration fee deferral the administration
fees for the six months ended February 28, 1997 would
have been as follows: $17,328 $4,497 $4,112 $31,609 $18,284 $25,135
======= ====== ====== ======= ======= =======
MEXICO
HONG KONG ITALY JAPAN MALAYSIA (FREE) NETHERLANDS
WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES
-------- ------- ------- -------- ------- -----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C>
Dividends (net of foreign withholding taxes) $121,507 $ 13,866 $ 276,348 $ 77,846 $ 31,049 $ 41,719
Interest 3,266 21,653 25,527 7,256 3,835 4,227
-------- --------- ---------- --------- -------- ---------
Total investment income 124,773 35,519 301,875 85,102 34,884 45,946
-------- --------- ---------- --------- -------- ---------
EXPENSES:
Advisory fees 13,895 39,474 120,004 19,428 10,429 10,048
Administration fees (1) 8,749 24,854 75,558 12,233 6,566 6,327
Distribution fees 12,866 36,550 111,115 17,989 9,656 9,181
Custodian fees and expenses 9,056 15,438 26,758 8,635 12,936 3,882
Transfer agent fees 3,160 3,160 3,160 3,160 3,160 3,160
Directors' fees 3,858 10,971 33,372 5,410 2,903 2,797
Legal fees 7,496 19,852 56,064 10,704 5,391 5,071
Audit fees 5,788 16,457 50,057 8,115 4,355 4,195
Federal and state registration fees 1,906 (3,612) 1,984 3,162 556 (187)
Amortization of deferred organization costs 1,810 3,439 14,308 1,919 1,939 1,624
Insurance 1,712 3,312 15,627 1,745 1,803 1,390
Printing 2,411 6,857 20,857 3,381 1,815 1,748
Licensing fees 1,544 4,386 13,334 2,159 1,159 1,240
Amex listing fee 347 988 3,004 487 261 252
Miscellaneous expenses 3,280 9,326 28,365 4,598 2,468 2,377
-------- --------- ---------- --------- -------- ---------
Total expenses before waiver 77,878 191,452 573,567 103,125 65,397 53,105
Less: Fees waived (205) (651) (2,204) (288) (168) (168)
-------- --------- ---------- --------- -------- ---------
Total expenses after waiver 77,673 190,801 571,363 102,837 65,229 52,937
-------- --------- ---------- --------- -------- ---------
Net investment income/(loss) 47,100 (155,282) (269,488) (17,735) (30,345) (6,991)
-------- --------- ---------- --------- -------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS AND TRANSLATION OF
OTHER ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES:
Net realized gain/(loss) on investments 221,412 (306,693) (73,711) 1,977 326,660 16,974
Net realized gain/(loss) on investments on
in-kind redemptions -- (549,069) (645,583) -- -- --
Net realized gain/(loss) on foreign currency
related transactions (37) 1,403 (13,760) 128 (135) (1,258)
-------- --------- ---------- --------- -------- ---------
221,375 (854,359) (733,054) 2,105 326,525 15,716
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies 651,753 2,629,792 (13,291,031) 1,882,654 620,549 1,128,097
-------- --------- ---------- --------- -------- ---------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies 873,128 1,775,433 (14,024,085) 1,884,759 947,074 1,143,813
-------- --------- ---------- --------- -------- ---------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $920,228 $1,620,151 $(14,293,573) $1,867,024 $916,729 $1,136,822
======== ========== ============= ========== ======== ==========
- ---------------------
(1) Without the administration fee deferral the
administration fees for the six months ended
February 28, 1997 would have been as follows: $16,388 $46,640 $141,803 $22,975 $12,322 $11,876
======= ======= ======== ======= ======= =======
SINGAPORE UNITED
(FREE) SPAIN SWEDEN SWITZERLAND KINGDOM
WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES
--------- ------- ------ ----------- -------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Dividends (net of foreign withholding taxes) $ 26,333 $ 50,855 $ -- $ 3,912 $ 198,190
Interest 2,018 2,997 2,320 1,739 1,724
-------- -------- ------ ------- ----------
Total investment income 28,351 53,852 2,320 5,651 199,914
-------- -------- ------ ------- ----------
EXPENSES:
Advisory fees 13,805 5,487 6,558 8,154 24,123
Administration fees (1) 8,692 3,455 4,129 5,134 15,189
Distribution fees 12,783 5,080 6,072 7,550 22,336
Custodian fees and expenses 7,273 4,272 2,829 5,260 6,374
Transfer agent fees 3,160 3,160 3,160 3,160 3,160
Directors' fees 3,835 1,027 1,826 1,459 6,692
Legal fees 7,339 2,651 3,316 4,095 12,715
Audit fees 5,752 1,790 2,739 3,389 10,038
Federal and state registration fees 1,523 (473) (111) 259 1,492
Amortization of deferred organization costs 2,279 2,844 1,852 4,225 4,073
Insurance 2,118 2,876 2,355 4,366 5,490
Printing 2,397 954 1,141 1,212 4,182
Licensing fees 1,534 610 729 906 2,680
Amex listing fee 345 137 164 203 602
Miscellaneous expenses 3,260 1,298 1,722 1,919 6,245
-------- -------- ------ ------- ----------
Total expenses before waiver 76,095 35,168 38,481 51,291 125,391
Less: Fees waived (212) (95) (109) (130) (353)
-------- -------- ------ ------- ----------
Total expenses after waiver 75,883 35,073 38,372 51,161 125,038
-------- -------- ------ ------- ----------
Net investment income/(loss) (47,532) 18,779 (36,052) (45,510) 74,876
-------- -------- ------ ------- ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS AND TRANSLATION OF
OTHER ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES:
Net realized gain/(loss) on investments 74,208 105,231 45,963 (43,895) (8,079)
Net realized gain/(loss) on investments on
in-kind redemptions (117,575) 205,282 -- (13,406) 381,027
Net realized gain/(loss) on foreign currency
related transactions (794) (6,800) (613) (4,622) 8,467
-------- -------- ------ ------- ----------
(44,161) 303,713 45,350 (61,923) 381,415
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies 434,520 408,945 741,599 137,264 1,792,127
-------- -------- ------ ------- ----------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies 390,359 712,658 786,949 75,341 2,173,542
-------- -------- ------ ------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $342,827 $731,437 $750,897 $29,831 $2,248,418
======== ======== ======== ======= ==========
- ---------------------
(1) Without the administration fee deferral the
administration fees for the six months ended
February 28, 1997 would have been as follows: $16,286 $6,483 $7,754 $9,597 $28,417
======= ====== ====== ====== =======
</TABLE>
See accompanying notes to financial statements.
44 & 45
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC.
====================================================================================================================================
AUSTRALIA AUSTRIA BELGIUM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
--------------- -------------- ----------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ 137,661 $ 83,647 $ (20,271) $ 31,488 $ (22,774) $ 42,944
Net realized gain/(loss) on investments and
foreign currency related transactions (25,332) 23,767 (1,215,416) 85,287 20,135 18,047
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies 514,357 278,611 1,082,733 (1,177,072) 179,859 30,967
----------- ----------- ---------- ----------- ---------- ----------
Net increase/(decrease) in net assets resulting
from operations 626,686 386,025 (152,954) (1,060,297) 177,220 91,958
----------- ----------- ---------- ----------- ---------- ----------
DISTRIBUTIONS:
Net investment income. (115,003) (83,647) -- (26,054) (400) (42,944)
In excess of net investment income -- (47,153) -- (7,923) -- (7,116)
Net realized gains -- (21,359) -- (33,980) (1,520) (5,241)
In excess of net realized gains -- -- -- -- -- --
Return of capital -- (34,847) -- (100,047) -- --
----------- ----------- ---------- ----------- ---------- ----------
Net decrease in net assets from distributions (115,003) (187,006) -- (168,004) (1,920) (55,301)
----------- ----------- ---------- ----------- ---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares 2,092,041 11,977,456 -- 19,180,869 1,860,340 2,982,750
Cost of shares redeemed (1,967,117) -- (11,342,765) (4,432,844) -- (1,220,075)
----------- ----------- ---------- ----------- ---------- ----------
Net increase/(decrease) in net assets derived from
capital share transactions 124,924 11,977,456 (11,342,765) 14,748,025 1,860,340 1,762,675
----------- ----------- ---------- ----------- ---------- ----------
Total increase/(decrease) in net assets 636,607 12,176,475 (11,495,719) 13,519,724 2,035,640 1,799,332
NET ASSETS:
Beginning of period 12,176,780 305 13,520,059 335 1,799,787 455
----------- ----------- ---------- ----------- ---------- ----------
End of period $12,813,387 $12,176,780 $2,024,340 $13,520,059 $3,835,427 $1,799,787
=========== =========== ========== =========== ========== ==========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold 200,000 1,200,000 -- 1,700,000 120,000 200,000
Shares redeemed (200,000) -- (1,100,000) (400,000) -- (80,000)
----------- ----------- ---------- ----------- ---------- ----------
Net increase/(decrease) in shares -- 1,200,000 (1,100,000) 1,300,000 120,000 120,000
=========== =========== ========== =========== ========== ==========
CANADA FRANCE GERMANY
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------- ---------------- --------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- ----------- --------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ 52,691 $ 40,304 $ (69,472) $ 146,220 $ (55,645) $ 60,634
Net realized gain/(loss) on investments and
foreign currency related transactions 630,978 71,510 428,866 583,565 740,687 (40,272)
Net change in unrealized appreciation/
(depreciation)on investments and translation
of other assets and liabilities denominated
in foreign currencies 2,374,193 25,981 1,530,963 (116,159) 811,819 293,147
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations 3,057,862 137,795 1,890,357 613,626 1,496,861 313,509
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. (39,101) (35,145) -- (140,840) -- (48,171)
In excess of net investment income -- (7,532) -- (20,645) -- (19,615)
Net realized gains -- (3,392) -- (8,421) -- --
In excess of net realized gains -- -- -- -- -- (14,044)
Return of capital -- (3,132) -- (329,606) -- (132,489)
----------- ----------- ----------- ----------- ----------- -----------
Net decrease in net assets from distributions (39,101) (49,201) -- (499,512) -- (214,319)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares 9,629,688 15,788,335 2,736,516 30,831,940 8,444,727 32,463,206
Cost of shares redeemed (3,550,242) (2,100,833) (15,723,875) (8,028,940) (20,822,544) (3,911,977)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived
from capital share transactions 6,079,446 13,687,502 (12,987,359) 22,803,000 (12,377,817) 28,551,229
----------- ----------- ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets 9,098,207 13,776,096 (11,097,002) 22,917,114 (10,880,956) 28,650,419
NET ASSETS:
Beginning of period 13,776,399 303 22,929,934 12,820 28,664,039 13,620
----------- ----------- ----------- ----------- ----------- -----------
End of period $22,874,606 $13,776,399 $11,832,932 $22,929,934 $17,783,083 $28,664,039
=========== =========== =========== =========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold 800,000 1,500,000 200,000 2,400,000 600,000 2,400,000
Shares redeemed (300,000) (200,000) (1,200,000) (600,000) (1,500,000) (300,000)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares 500,000 1,300,000 (1,000,000) 1,800,000 (900,000) 2,100,000
=========== =========== =========== =========== =========== ===========
HONG KONG ITALY
WEBS WEBS
INDEX INDEX
SERIES SERIES
-------------- ---------------
For the six For the For the six For the
months period months period
ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited)
--------- --------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income/(loss) $ 47,100 $ 66,748 $ (155,282) $ 346,291
Net realized gain/(loss) on investments and
foreign currency related transactions 221,375 43,430 (854,359) 411,113
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies 651,753 (48,361) 2,629,792 (1,669,237)
----------- ---------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations 920,228 61,817 1,620,151 (911,833)
----------- ---------- ----------- -----------
DISTRIBUTIONS:
Net investment income. (73,684) (66,748) -- (346,291)
In excess of net investment income -- (9,901) -- (78,413)
Net realized gains -- (3,153) -- (325,362)
In excess of net realized gains -- -- -- --
Return of capital -- (24,346) -- (195,546)
----------- ---------- ----------- -----------
Net decrease in net assets from distributions (73,684) (104,148) -- (945,612)
----------- ---------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares 6,966,086 8,886,964 4,356,097 39,202,785
Cost of shares redeemed -- (1,012,585) (12,338,066) (2,176,057)
----------- ---------- ----------- -----------
Net increase/(decrease) in net assets derived from
capital share transactions 6,966,086 7,874,379 (7,981,969) 37,026,728
----------- ---------- ----------- -----------
Total increase/(decrease) in net assets 7,812,630 7,832,048 (6,361,818) 35,169,283
NET ASSETS:
Beginning of period 7,845,458 13,410 35,169,709 426
----------- ---------- ----------- -----------
End of period $15,658,088 $7,845,458 $28,807,891 $35,169,709
=========== ========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold 450,000 675,000 300,000 2,700,000
Shares redeemed -- (75,000) (900,000) (150,000)
----------- ---------- ----------- -----------
Net increase/(decrease) in shares 450,000 600,000 (600,000) 2,550,000
=========== ========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
46 & 47
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC.
====================================================================================================================================
JAPAN MALAYSIA MEXICO (FREE)
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
----------- ---------- ----------- ---------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ (269,488) $ (395,549) $ (17,735) $ (9,877) $ (30,345) $ 162
Net realized gain/(loss) on investments and
foreign currency related transactions (733,054) 167,831 2,105 3,867 326,525 (165)
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies (13,291,031) (8,748,966) 1,882,654 84,975 620,549 556,213
------------ ------------ ----------- ---------- ---------- ----------
Net increase/(decrease) in net assets resulting
from operations (14,293,573) (8,976,684) 1,867,024 78,965 916,729 556,210
------------ ------------ ----------- ---------- ---------- ----------
DISTRIBUTIONS:
Net investment income. -- -- -- -- -- --
In excess of net investment income -- -- -- -- -- (2,004)
Net realized gains -- -- -- -- -- --
In excess of net realized gains -- -- -- -- -- --
Return of capital -- -- -- (4,200) -- (5,496)
------------ ------------ ----------- ---------- ---------- ----------
Net decrease in net assets from distributions -- -- -- (4,200) -- (7,500)
------------ ------------ ----------- ---------- ---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares 35,642,215 112,125,708 11,136,871 9,242,755 2,243,037 5,209,737
Cost of shares redeemed (17,180,142) -- -- -- -- --
------------ ------------ ----------- ---------- ---------- ----------
Net increase/(decrease) in net assets derived from
capital share transactions 18,462,073 112,125,708 11,136,871 9,242,755 2,243,037 5,209,737
------------ ------------ ----------- ---------- ---------- ----------
Total increase/(decrease) in net assets 4,168,500 103,149,024 13,003,895 9,317,520 3,159,766 5,758,447
NET ASSETS:
Beginning of period 103,163,944 14,920 9,317,920 400 5,758,734 287
------------ ------------ ----------- ---------- ---------- ----------
End of period $107,332,444 $103,163,944 $22,321,815 $9,317,920 $8,918,500 $5,758,734
============ ============ =========== ========== ========== ==========
*Commencement of operations.
Capital Share Transactions:
Shares sold 3,000,000 7,200,000 750,000 675,000 200,000 500,000
Shares redeemed (1,200,000) -- -- -- -- --
----------- ---------- ---------- --------- ---------- --------
Net increase/(decrease) in shares 1,800,000 7,200,000 750,000 675,000 200,000 500,000
============ ============ =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
NETHERLANDS SINGAPORE (FREE) SPAIN
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------- ---------------------- ---------------------- -
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
----------- ---------- ----------- ---------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ (6,991) $ 59,698 $ (47,532) $ 21,999 $ 18,779 $ 46,585
Net realized gain/(loss) on investments and
foreign currency related transactions 15,716 31,842 (44,161) (120,662) 303,713 238,394
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies 1,128,097 365,890 434,520 (523,310) 408,945 144,209
---------- ---------- ----------- ---------- ---------- ----------
Net increase/(decrease) in net assets resulting
from operations 1,136,822 457,430 342,827 (621,973) 731,437 429,188
---------- ---------- ----------- ---------- ---------- ----------
DISTRIBUTIONS:
Net investment income. (5,614) (56,328) -- (19,081) (318) (41,405)
In excess of net investment income -- (4,914) -- (6,120) -- --
Net realized gains -- (31,842) -- -- (6,658) (29,254)
In excess of net realized gains -- (2,655) -- -- -- --
Return of capital -- (37,393) -- -- -- --
---------- ---------- ----------- ---------- ---------- ----------
Net decrease in net assets from distributions (5,614) (133,132) -- (25,201) (6,976) (70,659)
---------- ---------- ----------- ---------- ---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares -- 6,621,571 7,071,212 10,940,175 -- 7,091,661
Cost of shares redeemed -- -- (1,107,208)(1,186,369) (1,190,432) (3,223,243)
---------- ---------- ----------- ---------- ---------- ----------
Net increase/(decrease) in net assets derived from
capital share transactions -- 6,621,571 5,964,004 9,753,806 (1,190,432) 3,868,418
---------- ---------- ----------- ---------- ---------- ----------
Total increase/(decrease) in net assets 1,131,208 6,945,869 6,306,831 9,106,632 (465,971) 4,226,947
NET ASSETS:
Beginning of period 6,961,819 15,950 9,107,018 386 4,227,376 429
---------- ---------- ----------- ---------- ---------- ----------
End of period $8,093,027 $6,961,819 $15,413,849 $9,107,018 $3,761,405 $4,227,376
========== ========== =========== ========== ========== ==========
*Commencement of operations.
Capital Share Transactions:
Shares sold -- 400,000 600,000 900,000 -- 525,000
Shares redeemed -- -- (100,000) (100,000) (75,000) (225,000)
---------- ---------- ----------- ---------- ---------- ----------
Net increase/(decrease) in shares -- 400,000 500,000 800,000 (75,000) 300,000
========== ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
SWEDEN SWITZERLAND UNITED KINGDOM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
----------- ---------- ----------- ---------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ (36,052) $ 51,107 $ (45,510) $ 43,339 $ 74,876 $ 195,730
Net realized gain/(loss) on investments and
foreign currency related transactions 45,350 94,837 (61,923) (107,039) 381,415 106,646
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies 741,599 289,824 137,264 86,736 1,792,127 864,265
---------- ---------- ----------- ---------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations 750,897 435,768 29,831 23,036 2,248,418 1,166,641
---------- ---------- ----------- ---------- ----------- -----------
DISTRIBUTIONS:
Net investment income. (1,892) (51,107) -- (35,720) (66,925) (195,730)
In excess of net investment income -- (16,685) -- -- -- (31,721)
Net realized gains (3,809) (26,271) -- -- (8,150) (987)
In excess of net realized gains -- -- -- -- -- --
Return of capital -- -- -- -- -- (26,817)
---------- ---------- ----------- ---------- ----------- -----------
Net decrease in net assets from distributions (5,701) (94,063) -- (35,720) (75,075) (255,255)
---------- ---------- ----------- ---------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares -- 5,130,382 2,957,942 10,622,671 9,068,672 17,417,928
Cost of shares redeemed -- (1,072,542) (1,492,280) (4,464,972) (2,804,160) (2,551,512)
---------- ---------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived from
capital share transactions -- 4,057,840 1,465,662 6,157,699 6,264,512 14,866,416
---------- ---------- ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets 745,196 4,399,545 1,495,493 6,145,015 8,437,855 15,777,802
NET ASSETS:
Beginning of period 4,399,974 429 6,158,205 13,190 15,790,242 12,440
---------- ---------- ----------- ----------- ----------- -----------
End of period $5,145,170 $4,399,974 $7,653,698 $ 6,158,205 $24,228,097 $15,790,242
========== ========== =========== =========== =========== ===========
*Commencement of operations.
Capital Share Transactions:
Shares sold -- 375,000 250,000 875,000 600,000 1,400,000
Shares redeemed -- (75,000) (125,000) (375,000) (200,000) (200,000)
---------- ---------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares -- 300,000 125,000 500,000 400,000 1,200,000
========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
48 &49
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS WEBS INDEX FUND, INC.
====================================================================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
AUSTRALIA AUSTRIA BELGIUM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.15 $9.95(1) $10.40 $10.91(1) $14.99 $14.92(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss) (DAGGAR) 0.13 0.10 (0.07) 0.04 (0.13) 0.40
Net realized and unrealized gain/(loss)
on investments, foreign currency related transactions,
and translation of other assets
and liabilities denominated in foreign currencies 0.52 0.29 (0.21) (0.41) 1.13 0.36
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting from
operations 0.65 0.39 (0.28) (0.37) 1.00 0.76
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.12) (0.08) -- (0.02) 0.00** (0.54)
Dividends in excess of net investment income -- (0.05) -- (0.01) -- (0.09)
Distributions from net realized gains -- (0.02) -- (0.03) (0.01) (0.06)
Distributions in excess of net realized gains -- -- -- -- -- --
Return of capital -- (0.04) -- (0.08) -- --
------- ------- ------- ------- ------- -------
Total dividends and distributions (0.12) (0.19) -- (0.14) (0.01) (0.69)
------- ------- ------- ------- ------- -------
Net asset value, end of period $10.68 $10.15 $10.12 $10.40 $15.98 $14.99
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN (2) (4) 6.36% 3.88% (2.69)% (3.39)% 6.69% 5.01%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $12,813 $12,177 $2,024 $13,520 $3,835 $1,800
Ratios of expenses to average net assets (3) (5) 1.44% 1.59% 1.64% 1.56% 1.93% 2.29%
Ratios of net investment income/(loss) to average
net assets (3) (5) 2.53% 2.18% (1.43)% 0.87% (1.76)% 5.67%
Portfolio turnover (4)(6) 0.00% 8.84% 14.50% 9.60% 10.47% 6.25%
Average commission rate paid $0.0034 $0.0085 $0.1857 $0.2986 $0.3494 $0.4327
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.44% 1.60% 1.64% 1.57% 1.93% 2.30%
Ratios of net investment income/(loss)
to average net assets before waivers (3) 2.53% 2.17% (1.44%) 0.86% (1.77%) 5.66%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
</TABLE>
<TABLE>
<CAPTION>
CANADA FRANCE GERMANY
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.60 $10.17(1) $12.73 $12.42(1) $13.64 $13.23(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss) (DAGGAR) 0.03 0.04 (0.05) 0.17 (0.05) 0.06
Net realized and unrealized gain/(loss)
on investments, foreign currency related transactions,
and translation of other assets
and liabilities denominated in foreign currencies 2.10 0.43 2.09 0.45 1.22 0.47
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting from
operations 2.13 0.47 2.04 0.62 1.17 0.53
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) (0.03) -- (0.09) -- (0.03)
Dividends in excess of net investment income -- (0.01) -- (0.01) -- (0.01)
Distributions from net realized gains -- -- -- 0.00** -- --
Distributions in excess of net realized gains -- 0.00** -- -- -- (0.01)
Return of capital -- 0.00** -- (0.21) -- (0.07)
------- ------- ------- ------- ------- -------
Total dividends and distributions (0.02) (0.04) -- (0.31) -- (0.12)
------- ------- ------- ------- ------- -------
Net asset value, end of period $12.71 $10.60 $14.77 $12.73 $14.81 $13.64
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN (2) (4) 20.13% 4.63% 16.03% 4.95% 8.58% 4.00%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $22,875 $13,776 $11,833 $22,930 $17,783 $28,664
Ratios of expenses to average net assets (3) (5) 1.36% 1.44% 1.55% 1.84% 1.43% 1.68%
Ratios of net investment income/(loss) to average
net assets (3) (5) 0.53% 0.79% (1.21)% 2.72% (0.70)% 1.00%
Portfolio turnover (4)(6) 12.00% 0.00% 2.07% 0.00% 9.92% 0.00%
Average commission rate paid $0.0217 -- $0.0126 $0.3956 $0.0236 --
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.37% 1.45% 1.55% 1.85% 1.44% 1.69%
Ratios of net investment income/(loss)
to average net assets before waivers (3) 0.53% 0.78% (1.21%) 2.71% (0.71)% 0.99%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
</TABLE>
<TABLE>
<CAPTION>
HONG KONG ITALY
WEBS WEBS
INDEX INDEX
SERIES SERIES
---------------------- ----------------------
For the six For the For the six For the
months period months period
ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited)
--------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.05 $12.83(1) $13.79 $13.62(1)
------- ------- ------- -------
Net investment income/(loss) (DAGGAR) 0.09 0.15 (0.08) 0.25
Net realized and unrealized gain/(loss)
on investments, foreign currency related transactions,
and translation of other assets
and liabilities denominated in foreign currencies 1.87 0.27 1.06 0.31
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from
operations 1.96 0.42 0.98 0.56
------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.13) -- (0.14)
Dividends in excess of net investment income -- (0.02) -- (0.03)
Distributions from net realized gains -- (0.01) -- (0.14)
Distributions in excess of net realized gains -- -- -- --
Return of capital -- (0.04) -- (0.08)
------- ------- ------- -------
Total dividends and distributions (0.11) (0.20) -- (0.39)
------- ------- ------- -------
Net asset value, end of period $14.90 $13.05 $14.77 $13.79
------- ------- ------- -------
TOTAL INVESTMENT RETURN (2) (4) 14.98% 3.22% 7.11% 4.11%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $15,658 $7,845 $28,808 $35,170
Ratios of expenses to average net assets (3) (5) 1.51% 1.52% 1.31% 1.43%
Ratios of net investment income/(loss) to average
net assets (3) (5) 0.92% 2.37% (1.06)% 3.69%
Portfolio turnover (4)(6) 14.58% 0.00% 13.46% 19.80%
Average commission rate paid $0.0048 $0.0007 $0.0045 $0.0046
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.51% 1.53% 1.31% 1.44%
Ratios of net investment income/(loss)
to average net assets before waivers (3) 0.91% 2.36% (1.07%) 3.86%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
See accompanying notes to financial statements.
50 & 51
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS WEBS INDEX FUND,INC.
===================================================================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
JAPAN MALAYSIA MEXICO (FREE)
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.33 $14.79(1) $13.80 $13.24(1) $11.52 $9.95(1)
-------- -------- ------- ------ ------ -----
Net investment income/(loss) (DAGGAR) (0.04) (0.07) (0.01) (0.02) (0.05) 0.00**
Net realized and unrealized gain/(loss)
on investments, foreign
currency related transactions,
and translation of other assets
and liabilities denominated in
foreign currencies (2.37) (0.39) 1.87 0.59 1.27 1.59
-------- -------- ------- ------ ------ -----
Net increase/(decrease) in net
assets resulting from operations (2.41) (0.46) 1.86 0.57 1.22 1.59
-------- -------- ------- ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- -- --
Dividends in excess of net investment income -- -- -- -- -- (0.01)
Distributions from net realized gains -- -- -- -- -- --
Distributions in excess of net realized gains -- -- -- -- -- --
Return of capital -- -- -- (0.01) -- (0.01)
-------- -------- ------- ------ ------ -----
Total dividends and distributions -- -- -- (0.01) -- (0.02)
-------- -------- ------- ------ ------ -----
Net asset value, end of period $11.92 $14.33 $15.66 $13.80 $12.74 $11.52
-------- -------- ------- ------ ------ -----
TOTAL INVESTMENT RETURN (2) (4) (16.82)% (3.11)% 13.48% 4.28% 10.59% 15.93%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $107,332 $103,164 $22,322 $9,318 $8,919 $5,759
Ratios of expenses to average net assets (3) (5) 1.29% 1.37% 1.43% 1.58% 1.69% 1.75%
Ratios of net investment income/(loss) to average
net assets (3) (5) (0.61)% (1.01)% (0.25)% (0.35)% (0.79)% 0.01%
Portfolio turnover (4) (6) 0.00% 21.54% 0.00% 0.00% 26.39% 0.00%
Average commission rate paid $0.0252 $0.0152 -- -- $0.0063 --
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.29% 1.38% 1.43% 1.59% 1.69% 1.76%
Ratios of net investment income/(loss)
to average net assets before waivers (3) (0.61)% (1.02)% (0.25%) (0.36)% (0.79)% 0.00%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
</TABLE>
<TABLE>
<CAPTION>
NETHERLANDS SINGAPORE (FREE) SPAIN
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.36 $15.91(1) $11.38 $12.24(1) $14.09 $13.28(1)
-------- -------- ------- ------ ------ -----
Net investment income/(loss) (DAGGAR) (0.02) 0.24 (0.05) 0.04 0.09 0.14
Net realized and unrealized gain/(loss)
on investments, foreign
currency related transactions,
and translation of other assets
and liabilities denominated in
foreign currencies 2.85 1.54 0.53 (0.86) 2.57 0.98
-------- -------- ------- ------ ------ -----
Net increase/(decrease) in net
assets resulting from operations 2.83 1.78 0.48 (0.82) 2.66 1.12
-------- -------- ------- ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.14) -- (0.03) 0.00** (0.18)
Dividends in excess of net investment income -- (0.01) -- (0.01) -- --
Distributions from net realized gains -- (0.08) -- -- (0.03) (0.13)
Distributions in excess of net realized gains -- (0.01) -- -- -- --
Return of capital -- (0.09) -- -- -- --
-------- -------- ------- ------ ------ -----
Total dividends and distributions (0.01) (0.33) -- (0.04) (0.03) (0.31)
-------- -------- ------- ------ ------ -----
Net asset value, end of period $20.18 $17.36 $11.86 $11.38 $16.72 $14.09
-------- -------- ------- ------ ------ -----
TOTAL INVESTMENT RETURN (2) (4) 16.33% 11.19% 4.22% (6.73)% 18.88% 8.45%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $8,093 $6,962 $15,414 $9,107 $3,761 $4,227
Ratios of expenses to average net assets (3) (5) 1.42% 1.63% 1.48% 1.56% 1.73% 1.76%
Ratios of net investment income/(loss) to average
net assets (3) (5) (0.19)% 2.93% (0.93)% 0.69% 0.92% 2.04%
Portfolio turnover (4) (6) 0.00% 4.32% 15.21% 26.29% 11.15% 4.73%
Average commission rate paid $0.0362 $0.0651 $0.0078 $0.0118 $0.0279 $0.0723
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.43% 1.64% 1.49% 1.57% 1.73% 1.77%
Ratios of net investment income/(loss)
to average net assets before waivers (3) (0.19)% 2.92% (0.93%) 0.68% 0.92% 2.03%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
</TABLE>
<TABLE>
<CAPTION>
SWEDEN SWITZERLAND UNITED KINGDOM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- ----------------------
For the six For the For the six For the For the six For the
months period months period months period
ending 03/12/96*- ending 03/12/96*- ending 03/12/96*-
02/28/97 08/31/96 02/28/97 08/31/96 02/28/97 08/31/96
(Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.67 $13.22(1) $12.29 $12.07(1) $13.15 $12.14(1)
-------- -------- ------- ------ ------ -----
Net investment income/(loss) (DAGGAR) (0.12) 0.20 (0.09) 0.08 0.07 0.21
Net realized and unrealized gain/(loss)
on investments, foreign
currency related transactions,
and translation of other assets
and liabilities denominated in
foreign currencies 2.62 1.67 0.03 0.24 1.99 1.06
-------- -------- ------- ------ ------ -----
Net increase/(decrease) in net
assets resulting from operations 2.50 1.87 (0.06) 0.32 2.06 1.27
-------- -------- ------- ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.23) -- (0.10) (0.07) (0.20)
Dividends in excess of net investment income -- (0.07) -- -- -- (0.03)
Distributions from net realized gains (0.01) (0.12) -- -- (0.01) 0.00**
Distributions in excess of net realized gains -- -- -- -- -- --
Return of capital -- -- -- -- -- (0.03)
-------- -------- ------- ------ ------ -----
Total dividends and distributions (0.02) (0.42) -- (0.10) (0.08) (0.26)
-------- -------- ------- ------ ------ -----
Net asset value, end of period $17.15 $14.67 $12.23 $12.29 $15.13 $13.15
-------- -------- ------- ------ ------ -----
TOTAL INVESTMENT RETURN (2) (4) 17.04% 14.13% (0.49)% 2.60% 15.64% 10.41%
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $5,145 $4,400 $7,654 $6,158 $24,228 $15,790
Ratios of expenses to average net assets (3) (5) 1.58% 1.75% 1.69% 1.82% 1.40% 1.61%
Ratios of net investment income/(loss) to average
net assets (3) (5) (1.48)% 3.05% (1.51)% 1.39% 0.84% 3.62%
Portfolio turnover (4) (6) 0.00% 5.87% 24.13% 17.06% 0.00% 0.00%
Average commission rate paid $0.0544 $0.0561 $0.7702 $0.7852 $0.0091 --
*Commencement of operations.
**Less than one cent per share.
(DAGGAR) Based on average shares outstanding throughout the period.
(1)Net asset value per share on march 12, 1996 (commencement
of operations.
(2)Total investment return is calculated assuming a purchase
of capital stock at net asset value per share on the
first day and a sale at the net asset
value per share on the last day of the
period reported. Dividends and distributions, if any,
are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on
the ex-dividend date.
(3)Annualized
(4)Not Annualized
(5)Includes voluntary waivers by the American Stock Exchange.
If such waivers had not been made the ratios of expenses to
average net assets and ratios of net investment
income/(loss) to average net assets would have
been as follows:
Ratios of expenses to average net assets before waivers (3) 1.58% 1.76% 1.70% 1.83% 1.40% 1.62%
Ratios of net investment income/(loss)
to average net assets before waivers (3) (1.49)% 3.04% (1.51%) 1.38% 0.83% 3.61%
(6)Excludes portfolio securities received or delivered as a
result of processing capital share transactions in Creation
Unit(s).
</TABLE>
See accompanying notes to financial statements.
52 & 53
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
================================================================================
GENERAL
WEBS Index Fund, Inc. (the "Fund") was incorporated under the laws of the
State of Maryland on September 1, 1994, and commenced operations on March 12,
1996. The Fund is registered under the Investment Company Act of 1940, as
amended, (the "Act") as an open end management investment company. On January 2,
1997, the name of the Fund was changed from Foreign Fund, Inc. to WEBS Index
Fund, Inc.
The shares of common stock of each WEBS Index Series are referred to as
"World Equity Benchmark Shares" or "WEBS" and are traded on the American Stock
Exchange, Inc. (the "AMEX") under the following symbols:
WEBS INDEX SERIES SYMBOL
---------------------- --------
Australia WEBS Index Series EWA
Austria WEBS Index Series EWO
Belgium WEBS Index Series EWK
Canada WEBS Index Series EWC
France WEBS Index Series EWQ
Germany WEBS Index Series EWG
Hong Kong WEBS Index Series EWH
Italy WEBS Index Series EWI
Japan WEBS Index Series EWJ
Malaysia WEBS Index Series EWM
Mexico (Free) WEBS Index Series EWW
Netherlands WEBS Index Series EWN
Singapore (Free) WEBS Index Series EWS
Spain WEBS Index Series EWP
Sweden WEBS Index Series EWD
Switzerland WEBS Index Series EWL
United Kingdom WEBS Index Series EWU
The investment objective of each of the WEBS Index Series is to seek to
provide investment results that correspond generally to the price and yield
performance of publicly traded securities in the aggregate in particular
markets, as represented by a particular foreign equity securities index compiled
by Morgan Stanley Capital International ("MSCI"). The MSCI Indices utilized by
the Fund reflect the reinvestment of net dividends (except for the MSCI Mexico
(Free) Index utilized by the Mexico (Free) WEBS Index Series, which reflects the
reinvestment of gross dividends). Effective June 2, 1997 the Malaysia WEBS Index
Series will be renamed the Malaysia (Free) Webs Index Series and will seek to
track the performance of the MSCI Malaysia (Free) Index, which becomes available
on that date.
Each WEBS Index Series of the Fund utilizes a "passive" or indexing
investment approach in an effort to approximate the investment performance of
its benchmark index through the use of quantitative analytical procedures.
The Fund issues and redeems WEBS of each WEBS Index Series only in
aggregations of a specified number of shares (each, a "Creation Unit") at net
asset value. Except when aggregated in Creation Units, WEBS are not redeemable
securities of a WEBS Index Series. It is expected that the non-redeemable WEBS
will trade on the AMEX during the day at prices that differ to some degree from
their net asset value.
The Depository Trust Company ("DTC") acts as the securities depository for
the WEBS. WEBS are represented by global securities, registered in the name of
DTC or its nominee and deposited with, or on behalf of, DTC.
Each of the Canada WEBS Index Series, the France WEBS Index Series, the
Japan WEBS Index Series and the United Kingdom WEBS Index Series is classified
as a "diversified" investment company under the Act. Each of the other WEBS
Index Series is classified as a "non-diversified" investment company under the
Act.
The WEBS Index Series had no operations prior to their commencement of
operations on March 12, 1996, other than the sale of the following WEBS Index
Series shares to Funds Distributor, Inc. (the "Distributor") for the noted
amounts: Australia WEBS Index Series - 30 shares for proceeds of $305; Austria
WEBS Index Series - 30 shares for proceeds of $335; Belgium WEBS Index Series -
30 shares for proceeds of $455; Canada WEBS Index Series - 30 shares for
proceeds of $303; France WEBS Index Series - 1,000 shares for proceeds of
$12,820; Germany WEBS Index Series - 1,000 shares for proceeds of $13,620; Hong
Kong WEBS Index Series - 1,000 shares for proceeds of $13,410; Italy WEBS Index
Series - 30 shares for proceeds of $426; Japan WEBS Index Series - 1,000 shares
for proceeds of $14,920; Malaysia WEBS Index Series - 30 shares for proceeds of
$400; Mexico (Free) WEBS Index Series - 30 shares for proceeds of $287;
Netherlands WEBS Index Series - 1,000 shares for proceeds of $15,950; Singapore
(Free) WEBS Index Series - 30 shares for proceeds of $386; Spain WEBS Index
Series - 30 shares for proceeds of $429; Sweden WEBS Index Series - 30 shares
for proceeds of $429; Switzerland WEBS Index Series - 1,000 shares for proceeds
of $13,190 and United Kingdom WEBS Index Series - 1,000 shares for proceeds of
$12,440.
54
<PAGE>
WEBS INDEX FUNDS, INC.
================================================================================
SIGNIFICANT ACCOUNTING POLICIES
Each WEBS Index Series' financial statements are prepared in accordance
with generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
PORTFOLIO VALUATION
Investments are stated at value. All securities for which market quotations
are readily available are valued at (i) the last sales price prior to the time
of determination, if there was a sale on the date of determination, (ii) at the
mean between the last current bid and asked prices if there was no sales price
on such date and bid and asked quotations are available, or (iii) at the bid
price if there was no sales price on such date and only bid quotations are
available. Securities that are traded over-the-counter are valued at the last
quoted bid price. Securities for which market values are not readily available
are carried at fair value as determined in good faith by the Adviser in
accordance with procedures adopted by the Fund's Board of Directors.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes. Interest income is recorded on
the accrual basis; dividend income is recorded on the ex-dividend date.
TAX STATUS
No provision is made for U.S. Federal income or excise taxes as it is each
WEBS Index Series' intention to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all Federal income and excise taxes.
Each WEBS Index Series' realized net foreign exchange losses and realized
net capital losses incurred since the commencement of operations through August
31, 1996 will be deemed to arise on the first business day of Fiscal 1997. Each
WEBS Index Series incurred and will elect to defer such losses as follows:
<TABLE>
<CAPTION>
FOREIGN EXCHANGE NET REALIZED CAPITAL
INDEX SERIES LOSSES LOSSES
------------ ------------------ --------------------
<S> <C> <C>
Australia WEBS Index Series $1,056 --
Austria WEBS Index Series $ 194 --
Belgium WEBS Index Series -- --
Canada WEBS Index Series -- --
France WEBS Index Series -- --
Germany WEBS Index Series -- --
Hong Kong WEBS Index Series $ 8 --
Italy WEBS Index Series -- --
Japan WEBS Index Series $6,564 --
Malaysia WEBS Index Series $ 7 --
Mexico (Free) WEBS Index Series $ 165 --
Netherlands WEBS Index Series $ 188 --
Singapore (Free) WEBS Index Series -- $11,989
Spain WEBS Index Series -- --
Sweden WEBS Index Series -- --
Switzerland WEBS Index Series $ 67 $15,017
United Kingdom WEBS Index Series -- --
</TABLE>
If any WEBS Index Series owns shares in certain foreign investment
entities, referred to, under U.S. tax law principles, as "passive foreign
investment companies", the WEBS Index Series may elect to mark-to-market
annually the shares of the passive foreign investment company, and would be
required to distribute to shareholders any such mark-to-market gains.
FOREIGN CURRENCY TRANSLATION
The books and records of the WEBS Index Series are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars on the
following basis:
(i) Market value of investment securities, assets and liabilities at
the prevailing rates of exchange on the valuation date; and
(ii) Purchases and sales of investment securities and investment
income at the relevant rates of exchange prevailing on the respective dates
of such transactions.
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
================================================================================
Foreign currency and assets and liabilities denominated in foreign currency
are converted into U.S. dollars using the same exchange rates utilized by MSCI
in the calculation of the relevant MSCI Indices (currently, exchange rates as of
4:00 p.m. London time, except that the exchange rate for the MSCI Mexico (Free)
WEBS Index is that as of 3:00 p.m. New York City time).
The WEBS Index Series generally do not isolate the effect of fluctuations
in foreign exchange rates from the effect of fluctuations in the market prices
of securities. The WEBS Index Series report certain foreign exchange realized
gains and losses on foreign currency related transactions as components of
realized gains and losses for financial reporting purposes, whereas such
components are treated as ordinary income for Federal income tax purposes.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the level of governmental supervision and
regulation of foreign securities markets and the possibility of political or
economic instability, and the fact that foreign securities markets may be
smaller, less developed and have less reliable settlement and share registration
procedures.
DISTRIBUTION OF INCOME AND GAINS
Each WEBS Index Series intends to distribute, at least annually, to
shareholders, substantially all of its net investment income, including net
foreign currency gains, if any, and any realized net capital gains after the
utilization of available capital loss carryovers. An additional distribution may
be made to the extent necessary to avoid payment of a 4% Federal excise tax.
In addition, each WEBS Index Series intends to distribute at least annually
amounts representing the dividend yield on the underlying portfolio securities
of each WEBS Index Series, net of expenses, as if such WEBS Index Series owned
such underlying portfolio securities for the entire dividend period. As a
result, some portion of each distribution may result in a return of capital.
Dividends and distributions are paid in U.S. dollars and cannot be automatically
reinvested in additional WEBS.
Distributions to shareholders are recorded on the ex-dividend date. The
amount of dividends and distributions from net investment income and net
realized gains are determined in accordance with U.S. tax law principles, which
may differ from generally accepted accounting principles. These book/tax
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within each WEBS Index Series' capital accounts based on their Federal tax
treatment. Dividends and distributions which exceed net investment income and
realized net capital gains for financial reporting purposes but not for tax
purposes are reported as distributions in excess of net investment income and
realized net capital gains. To the extent they exceed net investment income and
net realized gains for tax purposes, they are reported as return of capital
distributions.
ORGANIZATION COSTS
A portion of the costs of organizing the Fund and registering its shares
were paid by Morgan Stanley & Co. Incorporated ("Morgan Stanley") and will be
reimbursed by each WEBS Index Series. These organization costs were allocated to
each WEBS Index Series based on the net assets of each WEBS Index Series. Such
organization costs have been deferred and are amortized ratably on the reverse
sum of the years digits method over a period of sixty months from the
commencement of operations. The amounts of deferred organization costs payable
to Morgan Stanley at February 28, 1997 are as follows:
INDEX SERIES
-------------
Austria WEBS Index Series $49,058
If any of the shares initially issued to the Distributor are redeemed
before the end of the amortization period, the proceeds of the redemption will
be reduced by their pro rata share of the unamortized organization costs. The
pro rata share by which the proceeds are reduced is derived by dividing the
number of original shares redeemed by the total number of original shares
outstanding at the time of redemption.
FEE ARRANGEMENTS
The Fund has an Investment Management Agreement (the "Management
Agreement") with Barclays Global Fund Advisors (the "Adviser"). The Adviser
manages the investments of each of the WEBS Index Series. For its services to
each WEBS Index Series, the Adviser receives fees based on the Fund's aggregate
average daily net assets equal to .27% per annum up to aggregate net assets of
$1.7 billion; plus .15% per annum of the aggregate net assets between $1.7
billion and $7 billion; plus .12% per annum of the aggregate net assets between
$7 billion and $10 billion; plus .08% per annum of the aggregate net assets in
excess of $10 billion.
The Fund has an Administration and Accounting Services Agreement with PFPC
Inc. ("PFPC" or the "Administrator"). Under the Administration and Accounting
Services Agreement, PFPC assists in supervising the operations of each WEBS
Index Series. For its administrative services and Fund accounting services, PFPC
is paid aggregate fees equal to each WEBS Index Series' allocable portion of:
.10% per annum of the aggregate average daily net assets less than $3 billion,
plus .09% per annum of the aggregate net assets between $3 billion and $5
billion, plus .08% per annum of the aggregate net assets between $5 billion and
$7.5 billion, plus .065% per annum of the aggregate net assets between $7.5
billion and $10 billion, plus .05% per annum of the aggregate net assets in
excess of $10 billion ("Standard Fee Schedule").
56
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WEBS INDEX FUNDS, INC.
================================================================================
Pursuant to a revised fee schedule with the Fund, PFPC will charge an
annual minimum fee of $850,000 for year one, $1,275,000 for year two, and
$1,700,000 for year three and thereafter (based on an annual minimum of $50,000,
$75,000 and $100,000 per WEBS Index Series, respectively). PFPC caps its minimum
fees at the annual rate of .17% of average daily net assets. Any resulting
shortfall between the above required minimums and the asset based fee of .17%
will be recouped as the WEBS Index Series' asset levels reach the threshold to
permit such recovery of fees. Once the aggregate minimum fees are recouped, the
Standard Fee Schedule, including minimum fee rates, would apply, subject to the
maximum charge of .17% of average daily net assets and future recoupment of any
future deferred minimum fees. For the period from March 12, 1996 through
February 28, 1997, the deferred PFPC administration fee amounted to $429,749.
Such amount is a contingent liability of the Fund, which will be accrued as an
expense of the Fund at such time (if ever) when net assets reach such a level
that repayment of the deferred amount or a portion there of is both probable and
reasonably estimatable.
PNC Bank, N.A., an affiliate of the Administrator, serves as each WEBS
Index Series' Transfer Agent and Dividend Disbursement Agent.
The Fund has a Licensing Agreement with MSCI for the use of the relevant
MSCI Indices. Each WEBS Index Series pays a license fee equal to .03% per annum
of the aggregate net assets of each of such WEBS Index Series.
The Fund has adopted a Distribution Plan, pursuant to Rule 12b-1 under the
Act ("Rule 12b-1 Plan") with respect to each WEBS Index Series. Under the Rule
12b-1 Plan, the Distributor is paid an annual fee as compensation in connection
with the offering and sale of shares of each WEBS Index Series. The fee paid to
the Distributor under the Rule 12b-1 Plan is accrued daily and paid monthly with
respect to each WEBS Index Series at an annual rate of up to .25% of the average
daily net assets of such WEBS Index Series. From time to time the Distributor
may waive all or a portion of the fee.
Morgan Stanley Trust Company ("MSTC") serves as custodian as well as the
Securities Lending Agent to each of the WEBS Index Series. For its custody
services to each WEBS Index Series, MSTC is paid per annum fees based on the
aggregate net assets of the WEBS Index Series as follows: Australia WEBS Index
Series (.10%); Austria WEBS Index Series (.10%); Belgium WEBS Index Series
(.10%); Canada WEBS Index Series (.07%); France WEBS Index Series (.11%);
Germany WEBS Index Series (.10%); Hong Kong WEBS Index Series (.12%); Italy WEBS
Index Series (.09%); Japan WEBS Index Series (.07%); Malaysia WEBS Index Series
(.13%); Mexico (Free) WEBS Index Series (.25%); Netherlands WEBS Index Series
(.10%); Singapore (Free) WEBS Index Series (.10%); Spain WEBS Index Series
(.10%); Sweden WEBS Index Series (.10%); Switzerland WEBS Index Series (.10%);
and United Kingdom WEBS Index Series (.08%).
MSTC also receives certain fees for each transaction of the WEBS Index
Series.
The AMEX has agreed to voluntarily waive its annual listing fee through
December 31,1996.
The Fund pays each director who is not a director, officer or employee of
the Adviser, Administrator, Distributor or any affiliate thereof, an annual fee
of $20,000 plus $5,000 for each Board of Directors meeting attended. In
addition, the Fund reimburses the directors for travel and out-of-pocket
expenses incurred in connection with the Board of Directors meetings.
FOREIGN CURRENCY
At February 28, 1997, each WEBS Index Series' cash balance included the
following amount of foreign currency:
VALUE COST
------ ------
Australia WEBS Index Series $ 69,383 $ 69,297
Austria WEBS Index Series $ 1,177 $ 1,177
Belgium WEBS Index Series $ 5,576 $ 5,572
Canada WEBS Index Series $ 17,496 $ 17,600
France WEBS Index Series $ 655 $ 661
Germany WEBS Index Series $117,836 $122,041
Hong Kong WEBS Index Series $ 5,352 $ 5,352
Italy WEBS Index Series $134,748 $148,838
Japan WEBS Index Series $ 2,283 $ 2,331
Malaysia WEBS Index Series $ 12,988 $ 12,987
Mexico (Free) WEBS Index Series $ 7,704 $ 7,797
Netherlands WEBS Index Series $121,440 $129,717
Singapore (Free) WEBS Index Series $ 9,702 $ 9,854
Spain WEBS Index Series $447,671 $447,671
Sweden WEBS Index Series $140,004 $140,527
Switzerland WEBS Index Series $ 313 $ 312
United Kingdom WEBS Index Series $ 69,965 $ 70,429
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
================================================================================
STOCK LOAN
Each WEBS Index Series may lend securities from its portfolio to brokers,
dealers and other financial institutions. Because the collateral pledged to each
WEBS Index Series in connection with these loans generates income, securities
lending enables a WEBS Index Series to earn income that may partially offset the
expenses of the WEBS Index Series. Each WEBS Index Series receives collateral
equal to at least 100% of the current market value of the loaned securities. The
WEBS Index Series invests collateral in short-term investments, and bears the
risk of loss of the invested collateral. In addition, a WEBS Index Series is
exposed to the risk of loss should a borrower default on its obligation to
return the borrowed securities. For its services as the securities lending
agent, the Fund pays MSTC, in respect of each WEBS Index Series, 50% of the net
investment income earned on the collateral for securities loaned.
The market values of securities on loan to broker/dealers at February 28,
1997, and the collateral received with respect to such loans were as follows:
MARKET VALUE OF COLLATERAL
WEBS INDEX SERIES LOANED SECURITIES RECEIVED
------------------ ------------------ -------------
Australia WEBS Index Series $ 3,686,064 $ 3,926,419
Austria WEBS Index Series $ -- $ --
Belgium WEBS Index Series $ 815,436 $ 859,554
Canada WEBS Index Series $ -- $ --
France WEBS Index Series $ 2,816,729 $ 2,985,689
Germany WEBS Index Series $ 5,251,041 $ 5,557,125
Hong Kong WEBS Index Series $ 3,160,233 $ 3,599,438
Italy WEBS Index Series $ 9,520,151 $10,549,283
Japan WEBS Index Series $18,767,860 $20,037,812
Malaysia WEBS Index Series $ 5,842,876 $ 6,327,950
Mexico (Free) WEBS Index Series $ 1,153,250 $ 1,244,700
Netherlands WEBS Index Series $ 2,393,999 $ 2,541,820
Singapore (Free) WEBS Index Series $ 1,805,621 $ 2,021,350
Spain WEBS Index Series $ 739,602 $ 785,844
Sweden WEBS Index Series $ 1,244,699 $ 1,314,625
Switzerland WEBS Index Series $ 1,315,107 $ 1,388,754
United Kingdom WEBS Index Series $ -- $ --
CAPITAL SHARES
The Fund currently is authorized to issue 6 billion shares of common stock,
with the following number of shares allocated to each Index Series: Australia
WEBS Index Series (127.8 million shares); Austria WEBS Index Series (19.8
million shares); Belgium WEBS Index Series (136.2 million shares); Canada WEBS
Index Series (340.2 million shares); France WEBS Index Series (340.2 million
shares); Germany WEBS Index Series (382.2 million shares); Hong Kong WEBS Index
Series (191.4 million shares); Italy WEBS Index Series (63.6 million shares);
Japan WEBS Index Series (2,124.6 million shares); Malaysia WEBS Index Series
(127.8 million shares); Mexico (Free) WEBS Index Series (255 million shares);
Netherlands WEBS Index Series (255 million shares); Singapore (Free) WEBS Index
Series (191.4 million shares); Spain WEBS Index Series (127.8 million shares);
Sweden WEBS Index Series (63.6 million shares); Switzerland WEBS Index Series
(318.625 million shares); and United Kingdom WEBS Index Series (943.2 million
shares). The shares will not be issued or redeemed individually, but only in
specified aggregations of shares.
The consideration for purchase of a Creation Unit of a WEBS Index Series is
the in-kind deposit of a designated portfolio of equity securities constituting
an optimized representation of the corresponding MSCI Index (the "Basket
Securities") and an amount of cash (the "Cash Component"). Such in-kind deposit
is designated as the "liability for in-kind subscriptions" on the Statements of
Assets and Liabilities. Non-Basket Securities may be held by an Index Series as
a result of corporate actions, odd share lots, or as a result of rebalancing of
the Basket Securities.
Shares of each WEBS Index Series are offered in Creation Units at net asset
value without an initial sales load, in exchange for an in-kind deposit of a
designated portfolio of securities specified by the Distributor each day, plus a
specified amount of cash and a purchase transaction fee. Shares of each WEBS
Index Series may also be issued in the specified aggregations for cash in the
sole discretion of the Fund. Redemptions of the shares of each WEBS Index Series
in the specified aggregations are made in portfolio securities, plus or minus a
specified amount of cash, and minus a specified redemption transaction fee.
Shares of each WEBS Index Series may also be redeemed in the specified
aggregations for cash in the sole discretion of the Fund.
58
<PAGE>
WEBS INDEX FUNDS, INC.
================================================================================
LOAN AGREEMENT
Effective August 26, 1996, each of the WEBS Index Series has entered into a
Line of Credit Agreement ("Agreement") with PNC Bank, N.A., an affiliate of the
Administrator. Under the terms of the Agreement, any of the WEBS Index Series
may request an advance of the full amount of the $5,000,000 line of credit;
provided, however, that:
(i) Total outstanding advances to all WEBS Index Series under the line of
credit may not exceed $5,000,000 and
(ii) The aggregate amount outstanding under the line of credit to any one
WEBS Index Series may not exceed the lowest of (a) $5,000,000 (b) one-quarter of
that WEBS Index Series' net assets, (c) any lower leverage limit set forth in
the Fund's prospectus or (d) the maximum amount permitted to be borrowed by such
WEBS Index Series under the Act. Each WEBS Index Series shall be severally, and
not jointly, liable for its particular advances under the line. Advances made
under the line of credit are due and payable on demand and will bear interest at
a rate per annum equal to the sum of the Federal Funds Rate plus 1%. The WEBS
Index Series had no amount outstanding under the Agreement at February 28, 1997.
Average borrowings under the line of credit did not exceed 10% of net
assets of any of the above WEBS Index Series during the period ended February
28, 1997.
PORTFOLIO ACTIVITY
The WEBS Index Series' purchases and sales of securities (excluding in-kind
transactions), other than short-term obligations, were as follows, for the
period ended February 28, 1997:
PURCHASES OF SALES OF
WEBS INDEX SERIES SECURITIES SECURITIES
-------------------- ------------- ----------
Australia WEBS Index Series $ -- $ 106,645
Austria WEBS Index Series $ 585,240 $ 674,613
Belgium WEBS Index Series $ 274,552 $ 373,672
Canada WEBS Index Series $2,433,980 $2,372,526
France WEBS Index Series $ 250,733 $ 496,892
Germany WEBS Index Series $1,716,629 $2,022,777
Hong Kong WEBS Index Series $1,532,715 $1,603,249
Italy WEBS Index Series $3,959,792 $4,092,756
Japan WEBS Index Series $ -- $ 404,757
Malaysia WEBS Index Series $ -- $ 1,977
Mexico (Free) WEBS Index Series $2,058,689 $1,940,255
Netherlands WEBS Index Series $ -- $ 48,286
Singapore (Free) WEBS Index Series $1,732,752 $1,613,496
Spain WEBS Index Series $ 439,636 $ 470,555
Sweden WEBS Index Series $ -- $ 304,462
Switzerland WEBS Index Series $1,494,215 $1,606,306
United Kingdom WEBS Index Series $ -- $ 184,831
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONCLUDED)
================================================================================
FOREIGN INCOME TAXES
For the period ended February 28, 1997, each WEBS Index Series' net foreign
withholding taxes deducted from foreign dividends received were as follows:
FOREIGN
WITHOLDING
INDEX SERIES TAX
------------- ------------
Australia WEBS Index Series $ 7,464
Austria WEBS Index Series $ 270
Belgium WEBS Index Series $ 222
Canada WEBS Index Series $34,223
France WEBS Index Series $ 2,722
Germany WEBS Index Series $ 5,227
Hong Kong WEBS Index Series $ --
Italy WEBS Index Series $ 2,447
Japan WEBS Index Series $48,767
Malaysia WEBS Index Series $31,361
Mexico (Free) WEBS Index Series $ --
Netherlands WEBS Index Series $ 7,544
Singapore (Free) WEBS Index Series $ --
Spain WEBS Index Series $ 8,974
Sweden WEBS Index Series $ --
Switzerland WEBS Index Series $ 690
United Kingdom WEBS Index Series $32,376
MARKET AND PORTFOLIO RISKS
An investment in the WEBS of a WEBS Index Series involves risks similar to
those of investing in a broadly-based portfolio of equity securities traded on
exchanges in the relevant foreign securities market, such as market fluctuations
caused by such factors as economic and political developments, changes in
interest rates and perceived trends in stock prices. Investing in WEBS generally
involves certain risks and considerations not typically associated with
investing in a fund that invests in the securities of U.S. issuers. These risks
could include less liquid and less efficient securities markets; greater price
volatility; exchange rate fluctuations and exchange controls; less publicly
available information about issuers; the imposition of withholding or other
taxes; restrictions on the expatriation of funds or other assets of a WEBS Index
Series; higher transaction and custody costs; delays in settlement; difficulties
in enforcing contractual obligations; less liquidity and smaller market
capitalization of most non-U.S. securities markets; lower levels of regulation
of the securities markets; different accounting, disclosure and reporting
requirements; more substantial government involvement in the economy; higher
rates of inflation; greater social, economic, and political uncertainty and the
risk of nationalization or expropriation of assets and risk of war.
Each WEBS Index Series has a policy to concentrate its investments in an
industry or industries if, and to the extent that, its benchmark index
concentrates in such industry or industries, except where the concentration of
the relevant index is the result of a single stock. As a result of this policy,
a WEBS Index Series will maintain at least 25% of the value of its assets in
securities of issuers in each industry for which its benchmark index has a
concentration of more than 25% (except where the concentration of the index is
the result of a single stock).
The stocks of particular issuers, or of issuers in particular industries,
may dominate the benchmark indices of certain WEBS Index Series and,
consequently, the investment portfolios of such WEBS Index Series may adversely
affect the peformance of such WEBS Index Series or subject such WEBS Index
Series to greater price volatility than that experienced by more diversified
investment companies.
