WORLD
EQUITY
BENCHMARK
SHARES
WEBS
[WEBS logo graphic omitted]
1 9 9 7
ANNUAL REPORT
WEBS INDEX FUND, INC.
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WEBS INDEX FUND, INC.
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October 24, 1997
Dear Shareholder,
We are pleased to present the Annual Report for WEBS Index Fund, Inc.
covering the period September 1, 1996 through August 31, 1997. It contains
important information about the performance of your investment, a management
discussion and analysis for each WEBS Index Series from the Fund's investment
adviser, Barclays Global Fund Advisors, and important financial information.
As you are aware, 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 vis-a-vis its benchmark
MSCI country index for the one-year period ended August 31, 1997. Further
details about each WEBS Index Series' performance are contained in the
Investment Adviser's discussion.
GROWTH
We are very pleased to advise that aggregate net assets of the seventeen
WEBS Index Series have grown to $471.6 million as of August 31, 1997 -- a
significant achievement. WEBS are increasingly recognized by investors and their
advisers as an attractive way to invest in selected equity markets around the
world. We look forward to this momentum continuing in the months ahead.
INTERNATIONAL OUTLOOK
The unprecedented performance of the U.S. equity markets in recent times
has over-shadowed the impressive returns that have been realized in certain of
the international equity markets. As you will note throughout the Investment
Adviser's commentary, a number of the WEBS Index Series have produced total
returns, based on net asset value, in excess of 25% for the year ended August
31, 1997. Some examples: WEBS Canada +28.5%, WEBS Mexico +35.2%, WEBS
Netherlands +28.0%, WEBS Spain +39.2% and WEBS Sweden +30.1%. This is excellent
performance by any standard.
Many investors are becoming concerned about the extremely high valuation
levels that now exist in the U.S. equity markets. At times such as this, it is
particularly important for investors to keep in mind the fact that while
international investing involves certain risks, international diversification of
an investment portfolio can reduce overall portfolio risk. The benefits of
international diversification are recognized by professional managers of pension
and other institutional accounts, many of whom have significantly increased
portfolio exposures to international equities in recent years. Diversifying your
investments internationally may reduce the possibility of all of your
investments being negatively impacted by a decline in the U.S. markets.
A number of professional money managers are now recommending that their
customers consider allocating 20% to 30% of their equity portfolios to
international equities. WEBS represent a convenient and relatively low cost way
for investors to achieve these allocation targets.
CONCLUSION
The uniqueness and success of WEBS Index Fund, Inc. continues to attract
attention from the media and institutional and retail investors. Word is rapidly
getting out that indexing works in international markets, just as it does at
home, and that WEBS represent an easy, relatively inexpensive way to access 17
of those markets.
We hope you will continue to use the various WEBS Index Series in your
portfolio and wish to thank you for your continued support and confidence in
WEBS Index Fund, Inc.
Sincerely,
/S/Nathan Most
Nathan Most
Chairman and President
WEBS Index Fund, Inc.
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INTRODUCTION
The Investment Adviser for each WEBS Index Series is Barclays Global Fund
Advisors. Each WEBS Index Series holds a representative sample of the securities
in a corresponding MSCI Index (using an analytic technique known as "portfolio
sampling"), as opposed to a full replication of the corresponding MSCI Index.
Portfolio sampling is a highly disciplined approach to capturing index returns
which 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 or market analysis.
There are several important factors that should be kept in mind when
reviewing the performance of each WEBS Index Series. First, the MSCI Indices are
unmanaged and, therefore, do not bear management, administration, distribution,
transaction or other expenses, while the WEBS Index Series do incur such
expenses, thereby impacting their performance.
Second, because of the portfolio sampling approach discussed above, and the
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 each WEBS
Index Series may vary positively or negatively from that of its corresponding
MSCI Index during any period.
A third factor that causes performance of the WEBS Index Series to differ
from that of their respective benchmarks is "revenue differential." The dividend
revenues received by the WEBS Index Series differ from those of the benchmark
MSCI Indices both in amount (principally as a result of the portfolio sampling
techniques described above) and timing (the WEBS Index Series record dividend
revenues on the "ex" dates of the underlying stocks while the MSCI Indices
allocate annual dividend revenues evenly over a 12-month period). Also, the
Australia, Austria and Germany WEBS Index Series are subject to withholding
taxes at rates that are more favorable than the rates assumed by the benchmark
MSCI Indices, and this factor may affect the performance of such WEBS Index
Series. In addition, while the sole source of revenues for the MSCI Indices is
dividends, the WEBS Index Series receive interest on uninvested cash and, in the
case of most WEBS Index Series, revenues from the lending of portfolio
securities.
Another factor that affects relative performance of the WEBS Index Series
and their benchmark indices is known as "cash drag." This results from the fact
that a portion of the WEBS Index Series is not invested in stocks. Cash and
deferred organizational expenses are the principal "unequitized" assets of the
Funds. In contrast, the MSCI Indices are always invested in underlying stocks
and thus do not reflect any "unequitized" assets.
2
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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AUSTRALIA
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Australia WEBS
Index Series was 6.23%. The corresponding MSCI Index total return for the year
ended August 31, 1997 was 5.85%. The Australia WEBS Index Series outperformed
the MSCI Australia Index total return by 0.38%.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRALIA WEBS
INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Australia WEBS Index Series outperformed the benchmark for several
reasons, principally the impact of portfolio sampling and revenue differentials,
which more than offset the impact of expenses. The primary reason the Index
Series outperformed the benchmark was due to portfolio sampling, which had a
positive effect on performance. The Australia WEBS Index Series had a
significant position invested in the banking industry and the positive
performance of the underlying securities contributed to the Series' positive
performance.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRALIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Economic growth has been strong in 1997 with Australia experiencing its sixth
year of expansion. Reforms, which have been implemented on an ongoing basis
since the 1980s, appear to have removed a number of structural rigidities in the
economy. These reforms include unilateral tariff reductions, financial market
deregulation and tax incentives to promote work, savings and investment.
Business activities have been largely deregulated and foreign investment
policies have been relaxed. Unemployment has remained a problem and is expected
to be about 8% in 1997. The Reserve Bank of Australia has decided to keep
interest rates stable after easing monetary policy on three occasions in the
second half of last year. This stability is due to the fact that headline
inflation has remained subdued and has even declined from 2.6% in 1996.
Inflation is expected to be approximately 1.7% for 1997. The growth of
specialist mining contractors has reduced mining costs and allowed small firms
to develop deposits using these specialists. Two thirds of current mining
exploration spending and 45% of mining contract spending is on gold. However,
gold represents only 22% of capital spending, 20% of material spending and 15%
of the operational workforce in the mining sector. The great bulk of new planned
investment is not gold related but in nickel, gas and oil. Contractors have been
increasing market penetration into other mining sectors as gold provided only
18% of the increase in revenue in the three years ended 1995. Growth prospects
continue to look good for the remainder of 1997 as the Australian dollar
depreciated recently and inflationary pressure has eased.Business investment
remains strong and, as world economic growth picks up, the Australian economy
will continue to benefit.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRALIA WEBS INDEX SERIES VS. THE MSCI AUSTRALIA INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Australia WEBS Index Series MSCI Australia Index
03/12/96 $10,000 $10,000
05/31/96 10,523 10,588
08/31/96 10,388 10,383
11/30/96 11,238 11,232
02/28/97 11,048 11,054
05/31/97 11,545 11,519
08/31/97 11,035 10,990
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Australia WEBS Index Series $11,035*
MSCI Australia Index $10,990
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
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Australia WEBS Index Series 6.23% 6.91%
MSCI Australia Index 5.85% 6.61%
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* 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.
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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AUSTRIA
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Austria WEBS Index
Series was 1.06%. The corresponding MSCI Index total return for the year was
- -1.44%. The Austria WEBS Index Series outperformed the MSCI Austria Index total
return by 2.50% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRIA WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Austria WEBS Index Series outperformed the benchmark as a result of the
impact of portfolio sampling. This technique resulted in holding a large
position in the Bank of Austria, which impacted performance positively, more
than offsetting the effect of the Fund's expenses and cash drag on the Austria
WEBS Index Series' performance.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The primary objective of the Austrian government is to be included in the
first round of the European Monetary Union. As a result, strides have been taken
to reduce the budget deficit to 60% of GDP as required by the Maastricht Treaty
criteria.The government has set a fairly restrictive monetary policy in the
hopes of meeting this goal. It has been successful so far and the federal debt
level was cut to 4.9% in 1996, from 9.9% in 1995. GDP growth, which was 1.8% in
1995 and 1.2% in 1996, is expected to be 1.5% in 1997. The small growth that has
been experienced is due to a pickup in the export sector, resulting from the
strength of Austria's European trading partners as seen in favorable exchange
rates. This export growth has directly benefited the industrial sector, which is
planning business investment 4% higher than last year. Austria has had to come
to terms with a shift in sector growth as tourism has historically been the
strongest contributor to economic growth. This sector has undergone a growth
crisis and has fallen from a high of 75 billion shillings a year in the early
1990s to 17 billion shillings in the first 8 months of 1997. Inflation remains
very low at 1.7% in 1996 and is forecast to be about 1.8% in 1997. Unemployment
has also remained fairly stable and should be about 4% in 1997, the same level
as 1996 and the maximum level set by the Maastricht Treaty. Sweeping reforms of
the civil service, which are currently a drain on the economy and the subject of
intense political debate, must be amended. A major technology and export drive,
rather than a reliance on the tourism industry, is considered by many to be
crucial to economic growth in the long-term.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRIA WEBS INDEX SERIES VS. THE MSCI AUSTRIA INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Austria WEBS Index Series MSCI Austria Index
03/12/96 $10,000 $10,000
05/31/96 10,577 10,866
08/31/96 9,661 10,073
11/30/96 9,569 10,080
02/28/97 9,401 9,848
05/31/97 9,782 10,062
08/31/97 9,764 9,928
Past performance is not predictive of future performance
Value
August 31, 1997
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Austria WEBS Index Series $9,764*
MSCI Austria Index $9,928
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
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Austria WEBS Index Series 1.06% (1.61)%
MSCI Austria Index (1.44)% (0.49)%
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* The chart assumes a hypothetical $10,000 initial investment in the Austria
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.
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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BELGIUM
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Belgium WEBS Index
Series was 9.26%. The corresponding MSCI Index total return for the year was
11.11%. The Belgium WEBS Index Series underperformed the MSCI Belgium Index
total return by 1.85% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE BELGIUM WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Belgium WEBS Index Series underperformed the benchmark during this period
due to the impact of expenses and, to a lesser degree, portfolio sampling.
WHAT MARKET CONDITIONS AFFECTED THE BELGIUM WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Belgian economy is growing steadily, although at a slower rate than most
of Europe. The growth of core European economies has benefited Belgium and
resulted in its outperforming the European average of key manufacturing
indicators. The acceleration of European manufacturing activity has positively
affected Belgium since exports represent 86% of real GDP. GDP, which increased
1.5% in 1996, is forecast to grow 2.2%-2.4% in 1997. The economy has been able
to react quickly to shifts in the European business cycle, thereby capturing
more trade business. As a result of a national agreement signed last year, real
wages have been stable even though productivity is on the rise. Consumer
spending has remained subdued, and the drivers of economic growth are exports,
inventories and business investment. The weakness in consumer spending has made
it hard for retailers to raise prices. The factors affecting growth have been
foreign demand, which is booming, and strong capital goods production. Inflation
has remained under control despite capital capacity constraints and is expected
to be around 2% for 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
BELGIUM WEBS INDEX SERIES VS. THE MSCI BELGIUM INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Belgium WEBS Index Series MSCI Belgium Index
03/12/96 $10,000 $10,000
05/31/96 10,288 10,237
08/31/96 10,501 10,496
11/30/96 10,915 11,107
02/28/97 11,204 11,595
05/31/97 11,877 12,172
08/31/97 11,474 11,662
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Belgium WEBS Index Series $11,474*
MSCI Belgium Index $11,662
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
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Belgium WEBS Index Series 9.26% 9.77%
MSCI Belgium Index 11.11% 11.00%
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* 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.
5
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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CANADA
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Canada WEBS Index
Series was 28.50%. The corresponding MSCI Index total return for the year was
30.65%. The Canada WEBS Index Series underperformed the MSCI Canada Index total
return by 2.15% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE CANADA WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Canada WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses and portfolio
sampling.
WHAT MARKET CONDITIONS AFFECTED THE CANADA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Canada's economy is posting its strongest sustained growth of the 1990's and
is likely to continue to outperform in an environment of low interest rates and
inflation. This growth has been led by increased domestic consumer confidence --
the highest level in eight years. Business confidence is also at its highest
level since 1977. The 4% drop in interest rates over the last three years has
been a major factor behind the economy's continued strength. In reaction to
undesired stimulus from the weaker Canadian dollar, the Bank of Canada raised
interest rates by 0.25% on June 26. Further interest rate hikes are likely in
order to tighten the money supply and keep inflation under control. Although the
unemployment rate remains relatively high (about 9%), job creation has been very
strong and consumer confidence keeps improving. Economic growth, which had been
led by exports, is now being fueled by strong domestic demand. Inflation has
remained fairly stable since the economy has not experienced cost pressures due
to prices and wages remaining fairly stable. Retail sales were slightly lower
during the second quarter due to a drop in sales of motor vehicles, although
retail sales (excluding autos) were up 1.6% for the quarter. Despite the
softening of export growth during the summer months, the economy has strong
momentum and is expected to grow by 4% for the year.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
CANADA WEBS INDEX SERIES VS. THE MSCI CANADA INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Canada WEBS Index Series MSCI Canada Index
03/12/96 $10,000 $10,000
05/31/96 10,639 10,682
08/31/96 10,463 10,521
11/30/96 12,546 12,652
02/28/97 12,569 12,713
05/31/97 13,183 13,389
08/31/97 13,445 13,745
Past performance is not predictive of future performance
Value
August 31, 1997
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Canada WEBS Index Series $13,445*
MSCI Canada Index $13,745
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
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Canada WEBS Index Series 28.50% 22.24%
MSCI Canada Index 30.65% 24.09%
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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.
6
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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FRANCE
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the France WEBS Index
Series was 16.60%. The corresponding MSCI Index total return for the year was
17.58%. The France WEBS Index Series underperformed the MSCI France Index total
return by 0.98% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE FRANCE WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The France WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses. Revenue
differentials and portfolio sampling also contributed to the underperformance.
WHAT MARKET CONDITIONS AFFECTED THE FRANCE WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The problems that plagued France in 1996 (meeting the criteria of the
Maastricht Treaty and high unemployment) continued to slow the growth of the
economy through the first quarter of 1997. It now seems as if the economy has
overcome this sluggishness and experienced growth throughout the second quarter,
led by increased manufacturing exports. Export services account for 6% of the
GDP in France, and these have benefited recently from the strength of the dollar
and the pound. Inflation has also remained fairly subdued, averaging 2% in 1996,
and expected to be slightly lower in 1997. French interest rates have been at
historically low levels and are very close to German rates. French monetary
policy, which is the main tool used by the government to boost growth, has been
very flexible over the last year and the economy is now experiencing positive
effects. Consumer demand has been low due to the high level of unemployment.
Unemployment averaged 12.4% for 1996 and has been between 12%-13% during 1997.
In order to address this problem, socialist leaders have promised to cut weekly
working time without pay cuts. This means that work time would be cut by 10% and
the resulting increase in labor costs would be 8%.
The government has also promised to hire 350,000 workers, which won't cure
the youth unemployment problem and will also create new hurdles to reducing the
budget deficit. A new cabinet was appointed by Socialist Prime Minister Alain
Juppe in June. The new cabinet is expected to have a strong, positive effect on
the economy due to its pro-European policy stance and their willingness to work
to ensure inclusion in the European Monetary Union.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
FRANCE WEBS INDEX SERIES VS. THE MSCI FRANCE INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
France WEBS Index Series MSCI France Index
03/12/96 $10,000 $10,000
05/31/96 10,668 10,701
08/31/96 10,495 10,371
11/30/96 11,855 11,766
02/28/97 12,177 12,210
05/31/97 11,921 11,975
08/31/97 12,237 12,194
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
France WEBS Index Series $12,237*
MSCI France Index $12,194
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
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France WEBS Index Series 16.60% 14.68%
MSCI France Index 17.58% 14.40%
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* 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.
7
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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GERMANY
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Germany WEBS Index
Series was 20.51%. The corresponding MSCI Index total return for the year was
22.28%. The Germany WEBS Index Series underperformed the MSCI Germany Index
total return by 1.77% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE GERMANY WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Germany WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses. Other factors that
adversely affected performance compared to the benchmark were cash drag and
revenue differentials, while portfolio sampling had a slight positive impact on
performance.
WHAT MARKET CONDITIONS AFFECTED THE GERMANY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The stage was set in 1996 for increased growth in 1997, which the Germany
economy has experienced. GDP growth, which was 1.4% for 1996, is expected to be
much stronger in 1997. This growth has been led, in part, by a rebound in the
construction sector. Industrial production and manufacturing orders have also
been on the rise as a result of unusually low interest rates. Business
confidence is up due to higher export and manufacturing output growth. The
Bundesbank is expected to leave monetary policy at its current stance, a 3% repo
rate, until domestic demand accelerates.The low level of interest rates has had
a positive effect on business investment, although the deutschmark has
depreciated. German import prices jumped to an eight year high of 4.2% in June
and there is a concern that these costs will be passed along to consumers. This
has led to higher inflation, which is slightly above 2% (in August) for the
first time in two years. There is still a continuing problem with unemployment
which has been on the rise since 1996. Consumer demand is only expected to pick
up once the labor market has strengthened. Although production and exports have
fueled the growth of the economy, low interest rates and budget deficit concerns
(meeting Maastricht Treaty criteria) may keep the deutschmark weak until
unemployment is on a sustained downtrend.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
GERMANY WEBS INDEX SERIES VS. THE MSCI GERMANY INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Germany WEBS Index Series MSCI Germany Index
03/12/96 $10,000 $10,000
05/31/96 9,955 9,984
08/31/96 10,399 10,451
11/30/96 10,918 11,034
02/28/97 11,291 11,476
05/31/97 12,176 12,376
08/31/97 12,532 12,778
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Germany WEBS Index Series $12,532*
MSCI Germany Index $12,778
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Germany WEBS Index Series 20.51% 16.55%
MSCI Germany Index 22.28% 18.10%
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* 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.
8
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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HONG KONG
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Hong Kong WEBS
Index Series was 17.80%. The corresponding MSCI Index total return for the year
was 21.41%. The Hong Kong WEBS Index Series underperformed the MSCI Hong Kong
Index total return by 3.61% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE HONG KONG WEBS
INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Hong Kong WEBS Index Series underperformed the benchmark during this
period due to several factors, principally portfolio sampling and the impact of
expenses. Revenue differentials and cash drag also adversely affected
performance. Portfolio sampling resulted in an overweight position in the real
estate sector, which performed poorly during the period.In addition, the
constraints of portfolio sampling imposed by the diversification requirements of
the Internal Revenue Code adversely affected performance.
WHAT MARKET CONDITIONS AFFECTED THE HONG KONG WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
China assumed sovereignty of Hong Kong on July 1, 1997. The territory had
been governed by the United Kingdom. Under the Chinese Basic Law, Hong Kong is
now a Special Administrative Region (SAR) and retains a high degree of autonomy
from China. About 60% of foreign direct investment in China comes from or
throughHong Kong and, as a result, the Chinese government is not expected to do
anything to threaten the vibrancy of the territory. Beijing has undertaken to
leave Hong Kong's capitalist system intact for at least fifty years. The
transition has been fairly smooth and has not had a negative effect on the
economy of Hong Kong. The transition has been helped by the fact that the United
States reinstated China's trade status as a Most Favored Nation (MFN). The
growth rate, as measured by GDP, is anticipated to be a healthy 5.5% for the
year. Growth has been driven by intense domestic demand and a rise in export
trade. Although export trade is relatively strong, it has been moderate when
compared to 1996. The Hong Kong dollar has been pegged to the US dollar since
October 1983 and the link has been steadfastly maintained by the monetary
authority. As a result, the relative strength of the US dollar has continued to
weaken the competitiveness of Hong Kong's exports in the world market. Also, the
North American Free Trade Agreement (NAFTA) has diverted some US imports from
Asia to Mexico and Canada. Inflation has remained relatively stable, about 6%
for 1997. Consumer spending has been on the rise due to increased personal
income and improved conditions in the labor market. The unemployment rate has
been declining and is currently about 2.5%. Overall, the economy is in a
position to experience continued, steady growth.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
HONG KONG WEBS INDEX SERIES VS. THE MSCI HONG KONG INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Hong Kong WEBS Index Series MSCI Hong Kong Index
03/12/96 $10,000 $10,000
05/31/96 10,826 10,817
08/31/96 10,322 10,415
11/30/96 12,418 12,543
02/28/97 11,868 12,190
05/31/97 12,609 13,030
08/31/97 12,160 12,645
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Hong Kong WEBS Index Series $12,160*
MSCI Hong Kong Index $12,645
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Hong Kong WEBS Index Series 17.80% 14.19%
MSCI Hong Kong Index 21.41% 17.26%
- ------------------
* 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.
9
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
ITALY
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Italy WEBS Index
Series was 23.37%. The corresponding MSCI Index total return for the year was
24.47%. The Italy WEBS Index Series underperformed the MSCI Italy Index total
return by 1.10% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE ITALY WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Italy WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses, but also including
cash drag. These factors more than offset the positive impact of revenue
differentials and portfolio sampling for the Italy WEBS Index Series.
WHAT MARKET CONDITIONS AFFECTED THE ITALY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Italian economy's lackluster performance in 1996 (with GDP increasing by
only 0.7%), continued with slow growth into the first quarter of 1997. Fiscal
policy was tightened in 1996 in order to ensure the criteria of the Maastricht
Treaty was met and this had a negative effect on economic growth.Weak levels of
activity in the country's core markets also depressed activity. This has been
fueled by high unemployment (about 12%) and slow growth of disposable income. A
recovery began in the second quarter due to a rise in industrial production.
This upturn was caused by increased foreign orders. There has been an increased
demand for bank loans in light of improving business conditions, as well as a
modest decline in average bank lending rates (some 40 basis points between March
and June). The Bank of Italy has been more open to easing monetary policy since
the beginning of 1997 as inflation has remained relatively flat and the lira has
remained strong. The government has been trying to impose fiscal measures aimed
at meeting the budget deficit criteria of the Maastricht Treaty in order to be
included in the European Monetary Union. The "mini-budget" which was announced
in April, outlined a plan to raise 15.5 trillion lira, but failed to receive
approval by parliament. The proposed measures were the delay of expenditures and
the early payment of taxes, and were in addition to an already harsh 1997
budget. As a result, government debt as a percentage of GDP remains very high
with little improvement expected. The Italian economy is expected to continue
its growth trend, although the surge experienced in the second quarter will
moderate and third quarter growth may be more modest.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
ITALY WEBS INDEX SERIES VS. THE MSCI ITALY INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Italy WEBS Index Series MSCI Italy Index
03/12/96 $10,000 $10,000
05/31/96 11,226 11,207
08/31/96 10,411 10,333
11/30/96 11,272 11,205
02/28/97 11,151 11,102
05/31/97 11,438 11,408
08/31/97 12,845 12,862
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Italy WEBS Index Series $12,845*
MSCI Italy Index $12,862
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Italy WEBS Index Series 23.37% 18.51%
MSCI Italy Index 24.47% 18.62%
- ------------------
* 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.
10
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
JAPAN
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Japan WEBS Index
Series was -11.97%. The corresponding MSCI Index total return for the year was
- -11.57%. The Japan WEBS Index Series underperformed the MSCI Japan Index total
return by 0.40% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE JAPAN WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Japan WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses and cash drag. The
Index Series was positively impacted by the effects of security sampling,
although this positive performance was not enough to offset the negative impact
of expenses and cash drag.
WHAT MARKET CONDITIONS AFFECTED THE JAPAN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
An economic recovery in Japan has not materialized this year and growth has
been poor. Economic growth, which was 3.3% in 1996, has been driven mainly by
export demand due to strong overseas sales, particularly in the US with the
strength of the dollar. A consumption tax increase in April (from 3% to 5%) has
had a continuing negative effect on consumer demand. Retail sales were down 5.7%
in July when compared to last year -- the eighth decline in nine months. Lower
wages and higher unemployment (3.55% in July -- a postwar record high) have
negatively contributed to consumer demand. Japanese monetary policy has been
accommodative with the official discount rate at a historically low level of
0.5%, which has stimulated business investment. The currency crisis in Southeast
Asia, which started out as an isolated incident in Thailand, has affected other
Asian currencies. It is estimated that about 40% of the 100 basis point
tightening in Japanese monetary conditions since April has been due to the
weakness of Asian currencies. Inflation remains almost non-existent in Japan and
is currently about 0.03%. Consumer price inflation has been almost flat since
1995, with 0.01% recorded for 1996. The weakness of the yen for most of 1997 may
be a key factor in a sustainable economic recovery as strong yen performance in
the past has led to recession.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
JAPAN WEBS INDEX SERIES VS. THE MSCI JAPAN INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Japan WEBS Index Series MSCI Japan Index
03/12/96 $10,000 $10,000
05/31/96 10,548 10,596
08/31/96 9,689 9,720
11/30/96 9,527 9,561
02/28/97 8,060 8,117
05/31/97 8,959 9,033
08/31/97 8,529 8,596
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Japan WEBS Index Series $8,529*
MSCI Japan Index $8,596
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Japan WEBS Index Series (11.97)% (10.23)%
MSCI Japan Index (11.57)% (9.76)%
- ------------------
* 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.
11
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
MALAYSIA (FREE)
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Malaysia (Free)
WEBS Index Series was -40.20%. The corresponding MSCI Index total return for the
year was -39.26%. The Malaysia (Free) WEBS Index Series underperformed the MSCI
Malaysia (Free) Index total return by 0.94% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MALAYSIA (FREE)
WEBS INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Malaysia (Free) WEBS Index Series underperformed the benchmark during
this period due to several factors, principally the impact of expenses and
portfolio sampling. These factors more than offset the positive impact on
performance of cash drag and revenue differentials.
WHAT MARKET CONDITIONS AFFECTED THE MALAYSIA (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
The Malaysian government has been following a high growth strategy and this
is expected to be a priority until the end of the decade. The strong economic
growth experienced in 1996 (8.6% GDP) has slowed significantly in 1997. There
was a slowdown in export growth in the last half of 1996 which has continued
this year. The sharp depreciation of the ringgit against the dollar has
undermined the export competitiveness of Malaysia. This has been felt especially
hard in the global electronics sector, as Malaysia is a major producer of
electronic chips. As a result, manufacturing growth has been lagging and loan
growth to the manufacturing sector has been low for the last eight months.
Another factor affecting growth has been the large current account deficit
(about 5.8% of GDP) and the loss of comparative advantage based on cheap labor
as wage increases have overtaken productivity growth. The currency crisis in
Southeast Asia has adversely affected Malaysia. Bank Negara, Malaysia's central
bank, recently abandoned its rigid link with the US dollar by allowing more
flexibility in the exchange rate. After the Thailand currency crisis, the
Malaysian ringgit came under selling pressure and Bank Negara implemented a high
interest rate defense. The overnight interbank interest rate rose to 50% from
8%. Inflation has remained relatively stable at about 3.4% as has the
unemployment rate, currently at about 3%. The tight monetary policy has helped
to keep inflation subdued. Strong investment, fueled by the government's large
infrastructure and utilities projects, had been the main driver of the economy,
but has been weakened by the sharp increase in interest rates. Also, the
currency crisis has caused some development projects to be delayed. The
financial situation in Malaysia has adversely affected growth and the rate of
GDP growth is expected to slow to about 6% to 7% for 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MALAYSIA (FREE) WEBS INDEX SERIES VS. THE MSCI MALAYSIA (FREE) INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Malaysia (Free) WEBS Index Series MSCI Malaysia (Free) Index
03/12/96 $10,000 $10,000
05/31/96 10,498 10,562
08/31/96 10,428 10,512
11/30/96 11,237 11,365
02/28/97 11,834 12,172
05/31/97 10,141 10,411
08/31/97 6,236 6,385
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Malaysia WEBS Index Series $6,236*
MSCI Malaysia Index $6,385
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Malaysia (Free) WEBS Index Series (40.20)% (27.41)%
MSCI Malaysia (Free) Index (39.26)% (26.24)%
- ------------------
* The chart assumes a hypothetical $10,000 initial investment in the Malaysia
(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.
12
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
MEXICO (FREE)
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Mexico (Free) WEBS
Index Series was 35.21%. The corresponding MSCI Index total return for the year
was 39.07%. The Mexico (Free) WEBS Index Series underperformed the MSCI Mexico
(Free) Index total return by 3.86% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MEXICO (FREE) WEBS
INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Mexico (Free) WEBS Index Series underperformed the benchmark during this
period principally due to portfolio sampling and the impact of expenses. Cash
drag and revenue differentials also contributed to the underperformance.
Portfolio sampling, which was constrained by the requirements to satisfy the
diversification requirements of Subchapter M of the Internal Revenue Code,
caused the Mexico (Free) WEBS Index Series to underperform the underlying MSCI
Index principally due to a large position in the telecommunications industry,
which performed poorly during the period.
WHAT MARKET CONDITIONS AFFECTED THE MEXICO (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
After a year of healthy economic recovery in 1996 (5.1% GDP), growth to date
in 1997 has surpassed expectations. During the first half of the year private
investment was at a minimum due to nervousness surrounding the July elections.
The main objective of the government has been to restore credibility and regain
investor confidence. The major outcome of the elections was the loss of
political ground in the lower house of the Mexican Congress for the Partido
Revolucion Institucional (PRI), which was the main political party. The PRI lost
it's absolute majority in Congress, but captured the largest number of seats in
the lower house of the Mexican Senate. The left wing Partido Revolucion
Democratica (PRD) emerged as the big winner capturing more seats than the
traditional opposition party, the right wing Partido Accion Nacional (PAN). The
reaction of financial markets after the election has been positive, with the
peso strengthening (from 7.95 pesos/USD to 7.85 pesos/USD) and consumer
confidence soaring. GDP growth in the second quarter was 8.8%, far outpacing
analysts expectations. This growth has taken place despite relatively tight
monetary conditions and an increase in real wages. The Central Bank has focused
on bringing stability to the exchange rate (a target of 7.7 pesos/USD has been
established) in order to lower inflation. Inflation was 27.7% in 1996 and
approximately 20.4%, on an annual basis, in the first eight months of 1997. Real
interest rates are expected to decline as consumer confidence improves and the
US economy continues to grow. There was a strong recovery by the consumer and
capital goods sectors in the second quarter. They grew at annualized rates of
51% and 47%, respectively. Trade reports have also shown higher export growth,
at 16.1% compared to 14.5% in the first quarter. The outlook for the remainder
of the year is positive given the expected decline in interest rates, continued
recovery of employment and real wages, all sustained by economic growth.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MEXICO (FREE) WEBS INDEX SERIES VS. THE MSCI MEXICO (FREE) INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Mexico (Free) WEBS Index Series MSCI Mexico (Free) Index
03/12/96 $10,000 $10,000
05/31/96 11,618 11,617
08/31/96 11,592 11,736
11/30/96 11,311 11,489
02/28/97 12,820 13,254
05/31/97 13,283 13,818
08/31/97 15,675 16,321
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Mexico WEBS Index Series $15,675*
MSCI Mexico Index $16,321
AVERAGE ANNUAL TOTAL RETURN
ONE YEAR SINCE INCEPTION
-------- ---------------
Mexico (Free) WEBS Index Series 35.21% 35.65%
MSCI Mexico (Free) Index 39.07% 39.42%
- ------------------
* 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.
13
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
NETHERLANDS
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Netherlands WEBS
Index Series was 28.04%. The corresponding MSCI Index total return for the year
was 33.77%. The Netherlands WEBS Index Series underperformed the MSCI
Netherlands Index total return by 5.73% for the year. This underperformance was
principally due to an underweighted position in Royal Dutch/Shell, described
below.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE NETHERLANDS WEBS
INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Netherlands WEBS Index Series underperformed the benchmark principally
due to portfolio sampling and the need for compliance with its concentration
policy and the diversification requirements of the Internal Revenue Code which
state that no more than 25% of the portfolio can be made up of one individual
security at the close of each quarter in its taxable year. In keeping with these
provisions, holdings of Royal Dutch/Shell have been restricted to 25%, even
though it has a much higher weighting in the benchmark MSCI Index. This resulted
in a re-weighting of the remaining securities in the portfolio which had a
negative effect on performance since Royal Dutch/Shell had very strong
performance in the period and outperformed the balance of the portfolio. The
impact of expenses, cash drag and revenue differentials also contributed to the
underperformance.
WHAT MARKET CONDITIONS AFFECTED THE NETHERLANDS WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Although growth was relatively slow in 1996, GDP was up 2.7% for the year. In
the first quarter of 1997, GDP growth was at a respectable 2.1% annual rate.
Private consumption has been a major contributor to economic growth this year.
This has been due to rising employment, high consumer confidence and borrowing
which stimulated household expenditures. Unemployment has been on the decline
and was at 5.7% in May compared to 6.5% for 1996. The Central Bank has taken a
pro-active position on monetary policy in order to keep the inflation rate
within targets set by the Maastricht Treaty. Inflation has been at about a 2%
annual rate for the year through August 1997. The Netherlands seems certain to
be a founding member of the European Monetary Union (EMU) as it has been able to
meet budget deficit and inflation criterion. Business investment has been
positive and will continue to grow due to a sound financial situation, low
interest rates and healthy corporate earnings. The economy should receive added
momentum from a competitive exchange rate and increased exports with Germany and
France. Another added boost will come from the fact that the Dutch cabinet
recently decided to increase expenditures and cut taxes in both 1997 and 1998 in
order to fulfill the EMU budget deficit criteria.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
NETHERLANDS WEBS INDEX SERIES VS. THE MSCI NETHERLANDS INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Netherlands WEBS Index Series MSCI Netherlands Index
03/12/96 $10,000 $10,000
05/31/96 11,113 10,941
08/31/96 11,118 10,974
11/30/96 12,259 12,255
02/28/97 12,934 12,949
05/31/97 13,825 13,960
08/31/97 14,236 14,680
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Netherlands WEBS Index Series $14,236*
MSCI Netherlands Index $14,680
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Netherlands WEBS Index Series 28.04% 27.08%
MSCI Netherlands Index 33.77% 29.75%
- ------------------
* 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.
14
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SINGAPORE (FREE)
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Singapore (Free)
WEBS Index Series was -23.48%. The corresponding MSCI Index total return for the
year was -24.30%. The Singapore (Free) WEBS Index Series outperformed the MSCI
Singapore (Free) Index total return by 0.82% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SINGAPORE (FREE)
WEBS INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Singapore (Free) WEBS Index Series outperformed the benchmark for several
reasons, principally the impact of portfolio sampling but also including cash
drag and revenue differentials. These factors more than offset the effect of the
Fund' expenses.
WHAT MARKET CONDITIONS AFFECTED THE SINGAPORE (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
After enjoying strong economic growth for the past three years, GDP growth
has begun to slow and was 6.5% for 1996, compared to 8.5% in 1995. The main
reason for this slowdown has been the drop in export demand. Singapore is highly
dependent on foreign trade. The country has a highly industrialized economy with
a large and vibrant manufacturing sector, which accounts for approximately 24%
of GDP. Financial and business services have steadily become more important in
recent years and now contribute almost 30% of economic growth. Singapore has
faced increasingly tough competition in the electronics industry, its major
sector. Both developing and developed countries understand the importance of
this sector to their manufacturing base and are aggressively seeking to attract
multi-national companies to locate projects there. Many of Singapore's
competitors have the advantage of lower land and labor costs. The government has
set up an Economic Committee comprised of representatives from the private
sector, academia and the public sector to study the issue of Singapore's
long-term competitiveness and recommend changes. The Thai currency crisis has
also negatively effected Singapore. The selling pressure on the Thailand baht
led to selling pressure on the Singapore dollar, and short-term interest rates
recently hit a 31-month low. The exchange rate is the primary instrument of
monetary policy and aims to promote sustainable, non-inflationary growth. The
Singapore dollar depreciated 3.2% in the first quarter of 1997, reversing a
six-year trend of appreciation. The country is benefiting from a recent upswing
in global electronics demand. The impact of the pick-up in US orders of
electronics over the past six months will be felt for the remainder of the year.
The electronics sub-sector grew by about 11.1% in the second quarter. If this
demand continues and the currency crisis comes to a close, Singapore can expect
growth to pick up and GDP is forecast to grow about 7% to 8% in 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SINGAPORE (FREE) WEBS INDEX SERIES VS. THE MSCI SINGAPORE (FREE) INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Singapore (Free) WEBS Index Series MSCI Singapore (Free) Index
03/12/96 $10,000 $10,000
05/31/96 9,714 9,692
08/31/96 9,327 9,196
11/30/96 9,548 9,358
02/28/97 9,720 9,670
05/31/97 9,073 8,986
08/31/97 7,137 6,961
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Singapore (Free) WEBS Index Series $7,137*
MSCI Singapore (Free) Index $6,961
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Singapore (Free) WEBS Index Series (23.48)% (20.45)%
MSCI Singapore (Free) Index (24.30)% (21.79)%
- ------------------
* 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.
15
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SPAIN
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Spain WEBS Index
Series was 39.15%. The corresponding MSCI Index total return for the year was
40.88%. The Spain WEBS Index Series underperformed the MSCI Spain Index total
return by 1.73% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SPAIN WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Spain WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses and cash drag, which
more than offset the positive impact of portfolio sampling and revenue
differentials.
WHAT MARKET CONDITIONS AFFECTED THE SPAIN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The economy of Spain is growing steadily, despite constraints imposed with
meeting the criteria of the Maastricht Treaty. GDP growth was about 2.1% for
1996 and GDP is expected to increase slightly in 1997. This growth has been
helped by strong services output, increased private consumption and industrial
output which has risen strongly, outperforming the European average. Spain has
also seen rising business and consumer confidence, supported by positive
employment prospects. Monetary conditions may remain stimulative as in recent
months due to a rise in the U.S. dollar and the British pound. Fiscal policy
should be moderately restrictive next year with the bulk of deficit reduction
coming from cuts in spending as opposed to tax increases. Looking to the future,
it seems as if Spain will make the first round of the European Monetary Union,
despite the fact that national debt is estimated to be about 70% of GDP. The
markets have become increasingly optimistic of Spain's inclusion and investment
in information technology and capital equipment should be stimulated to take
advantage of greater export opportunities and foreign competition. Inflation has
been kept under control, 3.2% as of 1996 and estimated to decline to about 2.5%
in 1997. The increased credibility of the Bank of Spain (since its independence
in 1994) has helped the inflation outlook. The Bank of Spain has been cautious
and interest rates have gradually been lowered by 75 basis points to 5.50% in
January and by another 50 basis points to 5.00% in May. For now, ongoing growth
in employment (up 3% for the year) should support private consumption spending
and reinforce the current cycle already at work.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SPAIN WEBS INDEX SERIES VS. THE MSCI SPAIN INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Spain WEBS Index Series MSCI Spain Index
03/12/96 $10,000 $10,000
05/31/96 10,640 10,747
08/31/96 10,845 10,917
11/30/96 12,361 12,508
02/28/97 12,893 13,066
05/31/97 15,229 15,497
08/31/97 15,091 15,379
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Spain WEBS Index Series $15,091*
MSCI Spain Index $15,379
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Spain WEBS Index Series 39.15% 32.21%
MSCI Spain Index 40.88% 33.91%
- ------------------
* 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.
16
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SWEDEN
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Sweden WEBS Index
Series was 30.10%. The corresponding MSCI Index total return for the year was
32.64%. The Sweden WEBS Index Series underperformed the MSCI Sweden Index total
return by 2.54% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWEDEN WEBS INDEX
SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The Sweden WEBS Index Series underperformed the benchmark during this period
due to several factors, principally the impact of expenses and cash drag.
Portfolio sampling also had a slight negative effect on performance of the
Sweden WEBS Index Series.
WHAT MARKET CONDITIONS AFFECTED THE SWEDEN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Economic growth in the first quarter of 1997 continued the disappointing
performance of 1996 when GDP was only 1.1% for the year. Continued high levels
of unemployment (about 8% in 1996) currently restrain consumer and business
confidence levels. Sweden has a history of very low unemployment (prior to
recent times the historic peak was 3.5% in the 1980's) and is finding it very
hard to come to terms with unemployment in excess of 8%. Budgetary policy, which
is used to control inflation, has had the undesirable consequence of holding
unemployment at high levels. Inflation has remained under control due to the
strength of the currency and is estimated to be 0.5% for 1997. This is well
below the Central Bank's inflation target of 2%. A turnaround of economic growth
was experienced during the second quarter. GDP growth is estimated to be about
1.9% for the first half of the year. This growth has been supported by both
domestic demand and exports. Domestic demand has been increased by consumption
and investment, which is up 3% for the year. Export growth has been a strong
factor, rising 11% for the year and foreign orders rising 37%. The Central Bank
cut the repo rate aggressively from 8.91% to 4.10% by the end of 1996 due to the
appreciation of the currency, tight budgetary policy and low inflation. Sweden
will not be a founding member of a single currency under the European Monetary
Union as the government has not been able to meet criteria set by the Maastricht
Treaty. The country's fiscal condition continues to improve with the deficit
declining from a high of 12.3% of GDP in 1993 to about 2.5% last year. The
deficit is expected to be about 1.8% of GDP in 1997. The rate of growth is
expected to rise due to the strength of the export sector increasing the demand
for capital goods which, in turn, increases domestic investment in machinery and
equipment.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWEDEN WEBS INDEX SERIES VS. THE MSCI SWEDEN INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Sweden WEBS Index Series MSCI Sweden Index
03/12/96 $10,000 $10,000
05/31/96 10,976 10,805
08/31/96 11,413 11,200
11/30/96 13,163 12,989
02/28/97 13,357 13,344
05/31/97 13,840 13,806
08/31/97 14,848 14,856
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Sweden WEBS Index Series $14,848*
MSCI Sweden Index $14,856
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Sweden WEBS Index Series 30.10% 30.76%
MSCI Sweden Index 32.64% 30.80%
- ------------------
* 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.
17
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
SWITZERLAND
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the Switzerland WEBS
Index Series was 16.69%. The corresponding MSCI Index total return for the year
was 16.27%. The Switzerland WEBS Index Series outperformed the MSCI Switzerland
Index total return by 0.42% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWITZERLAND WEBS
INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED AUGUST 31, 1997?
The primary reason the Switzerland WEBS Index Series outperformed the
benchmark was due to portfolio sampling which had a positive effect on
performance. This technique resulted in the Index Series holding a large
position in the health industry, as well as substantial holdings in two
securities, Novartis and Roche, both of which had good performance during the
period. This fact, along with the re-weighting of the remaining securities in
the portfolio, more than offset the negative impact of expenses and cash drag.
WHAT MARKET CONDITIONS AFFECTED THE SWITZERLAND WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
The minimal economic growth Switzerland has experienced during the last two
years is continuing in 1997. GDP grew by 0.2% in 1996 and is expected to make a
small recovery in 1997 to about 1% growth. First quarter GDP data show that
there has been a stabilization of the economy after seven consecutive quarters
of contraction. Private consumption has been stagnant and capital growth has
slowed. Wage cuts in the public sector and job losses as a result of company
mergers and general cutbacks have added to the decrease in private consumption.
Export growth has been rising given that the business cycle is accelerating all
over Europe. Unemployment is high by historical standards and is estimated to
have increased to 4% in 1996. 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 weakened Swiss franc. The effects of the weakness of the Swiss franc has
been a factor in the performance of the economy. The franc has depreciated
significantly and reached a 32 month low against the U.S. dollar in January. In
an effort to stimulate domestic growth, the Swiss National Bank has been easing
monetary policy. The discount rate was cut to 1% in September of 1996, which
represents a historic low. The Swiss National Bank has stated that it does not
want to raise interest rates until the economy shows clear signs of recovery. A
rebound is expected despite subdued domestic demand, and will be based on
improved export demand, although the economy is currently operating below
potential.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWITZERLAND WEBS INDEX SERIES VS. THE MSCI SWITZERLAND INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
Switzerland WEBS Index Series MSCI Switzerland Index
03/12/96 $10,000 $10,000
05/31/96 9,751 9,617
08/31/96 10,260 10,319
11/30/96 10,093 10,125
02/28/97 10,210 10,347
05/31/97 11,879 12,050
08/31/97 11,972 11,998
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
Switzerland WEBS Index Series $11,972*
MSCI Switzerland Index $11,998
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
Switzerland WEBS Index Series 16.69% 12.99%
MSCI Switzerland Index 16.27% 13.15%
- ------------------
* 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.
18
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM
PERFORMANCE REVIEW
For the year ended August 31, 1997 the total return of the United Kingdom
WEBS Index Series was 30.48%. The corresponding MSCI Index total return for the
year was 31.81%. The United Kingdom WEBS Index Series underperformed the MSCI
United Kingdom Index total return by 1.33% for the year.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE UNITED KINGDOM
WEBS INDEX SERIES' PERFORMANCE OVER THE YEAR ENDED
AUGUST 31, 1997?
The United Kingdom WEBS Index Series underperformed the benchmark during this
period primarily due to the impact of expenses. Revenue differentials and cash
drag had a small negative impact on performance compared to the benchmark.
Portfolio sampling resulted in a modest positive contribution to performance.
WHAT MARKET CONDITIONS AFFECTED THE UNITED KINGDOM WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Consumer spending has been the engine of the United Kingdom's economic
upturn. In addition to strong employment, consumption has been boosted from
larger than expected cash payouts due to the conversion of mutually owned
building societies into private companies. These "windfall" gains, estimated to
total around $56 billion dollars so far, are contributing to near record
consumer confidence levels. Retail spending has risen by 8.7% through the second
quarter, which is the strongest increase seen since 1987. The housing market has
benefited from the boom with property transactions expected to post their best
outcome since the late 1980s. The unemployment rate fell to a seven year low of
5.7% during the second quarter, although the tightness in the labor market may
begin to exert upward pressure on wages. The Bank of England reacted to this
positive growth by increasing the base rate 25 basis points on August 7 to 7%.
The equity market should remain fairly priced with earnings-per-share (EPS)
accurately reflecting the continued growth experienced in the domestic economy.
Export orders have been declining in response to the pound's 20% plus
appreciation against the US dollar (on a trade weighted basis) since last year.
Inflation has remained in check, coming in at 2.4% for 1996 and expected to be
only 3% for 1997. The Bank of England is expected to keep a close watch on
consumer price inflation before making any further rate moves. For now, the
economy is growing strongly (GDP growth is expected to be 3.5% for the year),
with unemployment and inflation under control.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
UNITED KINGDOM WEBS INDEX SERIES VS. THE MSCI UNITED KINGDOM INDEX
[LINE GRAPH OMITTED-PLOT POINTS AS FOLLOWS]
United Kingdom WEBS Index Series MSCI United Kingdom Index
03/12/96 $10,000 $10,000
05/31/96 10,470 10,521
08/31/96 11,040 11,078
11/30/96 12,417 12,548
02/28/97 12,767 12,996
05/31/97 13,805 13,986
08/31/97 14,405 14,601
Past performance is not predictive of future performance
Value
August 31, 1997
---------------
United Kingdom WEBS Index Series $14,405*
MSCI United Kingdom Index $14,601
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
---------- ---------
United Kingdom WEBS Index Series 30.48% 28.10%
MSCI United Kingdom Index 31.81% 29.28%
- ------------------
* 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.
19
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
AUSTRALIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 0.85%
114,000 Email Limited $ 350,841
-----------
BANKING 19.50%
380,000 National Australia Bank Limited 5,275,179
480,000 Westpac Banking Corporation
Limited 2,781,698
-----------
8,056,877
-----------
BEVERAGES & TOBACCO 7.83%
206,000 Coca-Cola Amatil Limited 2,100,141
602,000 Foster's Brewing Group Limited 1,136,374
-----------
3,236,515
-----------
BROADCASTING & PUBLISHING 7.90%
522,000 News Corporation Limited 2,351,064
240,000 News Corporation Limited - Preferred 914,893
-----------
3,265,957
-----------
BUILDING MATERIALS & COMPONENTS 8.17%
334,000 Boral Limited 973,932
276,000 CSR Limited 977,120
130,000 James Hardie Industries Limited 442,096
292,000 Pioneer International Limited 982,291
-----------
3,375,439
-----------
BUSINESS & PUBLIC SERVICES 2.95%
62,000 Brambles Industries Limited 1,220,445
-----------
CHEMICALS 1.85%
82,000 ICI Australia Limited 764,908
-----------
CONSTRUCTION & HOUSING 0.43%
36,000 Leighton Holdings Limited 176,712
-----------
ENERGY SOURCES 16.82%
495,000 Broken Hill Proprietary Company 6,209,904
156,000 Santos Limited 741,346
-----------
6,951,250
-----------
FOOD & HOUSEHOLD PRODUCTS 1.80%
144,000 Burns Philp & Company Limited 252,786
342,000 Goodman Fielder Limited 489,838
-----------
742,624
-----------
FOREST PRODUCTS & PAPER 2.43%
166,000 Amcor Limited 1,004,678
-----------
GOLD MINES 1.86%
80,000 Newcrest Mining Limited 155,126
360,000 Normandy Mining Limited 436,293
62,000 Plutonic Resources Limited 176,691
-----------
768,110
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
LEISURE & TOURISM 0.56%
190,000 Crown Limited* $ 233,057
-----------
MERCHANDISING 3.43%
304,000 Coles Myer Limited 1,415,423
-----------
METALS - NON FERROUS 9.87%
428,000 Mount Isa Mines Holdings
Limited 512,417
214,000 North Limited 720,370
56,000 RGC Limited 158,358
86,000 Rio Tinto Limited 1,270,288
280,000 WMC Limited 1,419,054
-----------
4,080,487
-----------
METALS - STEEL 0.99%
358,000 Australian National Industries
Limited 410,204
-----------
MULTI-INDUSTRY 5.15%
76,000 Howard Smith Limited 695,040
276,000 Pacific Dunlop Limited 709,527
210,000 Southcorp Holdings Limited 724,952
-----------
2,129,519
-----------
REAL ESTATE 7.61%
258,000 General Property Trust 464,277
66,000 Lend Lease Corporation Limited 1,422,897
194,000 Stockland Trust Group 484,476
412,000 Westfield Trust 771,666
-----------
3,143,316
-----------
TOTAL COMMON STOCK - BASKET
(Cost $42,887,880) 41,326,362
-----------
TOTAL INVESTMENTS
(COST $42,887,880)+ 100.00% $41,326,362
======= ===========
- --------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $43,069,312.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $ 937,013
Excess of tax cost over value (2,679,963)
-----------
$(1,742,950)
===========
See accompanying notes to financial statements.
20
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
AUSTRIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 24.90%
10,240 Bank Austria AG $ 509,232
6,092 Creditanstalt Bankverein AG 374,123
2,792 Creditanstalt Bankverein AG
Vorzug 136,619
-----------
1,019,974
-----------
BEVERAGES & TOBACCO 4.03%
3,124 Oesterreichische Brau
Beteiligungs AG 165,219
-----------
BUILDING MATERIALS & COMPONENTS 4.36%
920 Wienerberger Baustoffindustrie
AG 178,648
-----------
BUSINESS & PUBLIC SERVICES 3.09%
3,276 Flughafen Wien AG 126,711
-----------
CHEMICALS 2.19%
1,428 Lenzing AG* 89,500
-----------
CONSTRUCTION & HOUSING 5.68%
1,200 Bau Holding AG 73,884
1,400 Bau Holding AG Vorzug 68,074
2,800 Universale-Bau AG 90,618
-----------
232,576
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 1.40%
736 Austria Mikro Systeme
International AG 57,516
-----------
ENERGY SOURCES 13.26%
4,112 OMV AG 543,355
-----------
INSURANCE 4.37%
760 EA-Generali AG 179,074
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 14.39%
628 BWT AG $ 106,431
3,324 Steyr Daimler Puch AG 98,656
2,096 VA Technologie AG 384,588
-----------
589,675
-----------
METALS - STEEL 4.44%
2,320 Boehler-Uddeholm AG 182,033
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 8.61%
3,300 Mayr Melnhof Karton AG 190,417
4,200 Radex-Heraklith Industries AG 162,119
-----------
352,536
-----------
TRANSPORTATION - AIRLINES 4.84%
8,400 Austrian Airlines AG* 198,255
-----------
UTILITIES - ELECTRICAL & GAS 4.44%
2,676 Oesterreichische
Elektrizitaetswirtschafts
AG - Class A 182,040
-----------
TOTAL COMMON STOCK - BASKET
(Cost $4,118,228) 4,097,112
-----------
TOTAL INVESTMENTS
(COST $4,118,228)+ 100.00% $ 4,097,112
======= ===========
- -------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $4,138,149.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $351,828
Excess of tax cost over value (392,865)
--------
$(41,037)
========
See accompanying notes to financial statements.
21
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
BELGIUM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 12.80%
7,176 Generale de Banque SA $ 2,689,069
3,900 Kredietbank NV 1,450,955
-----------
4,140,024
-----------
BUILDING MATERIALS & COMPONENTS 4.61%
18,408 Cimenteries CBR 1,488,591
-----------
CHEMICALS 5.04%
29,120 Solvay SA 1,629,968
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 4.73%
7,800 Barco NV 1,530,194
-----------
ENERGY SOURCES 11.89%
10,764 Petrofina SA 3,845,320
-----------
INDUSTRIAL COMPONENTS 2.34%
1,196 Bekaert NV 756,351
-----------
INSURANCE 17.57%
20,748 Fortis AG 4,075,899
5,824 Royale Belge 1,606,459
-----------
5,682,358
-----------
MERCHANDISING 4.52%
31,772 Delhaize-Le Lion SA 1,462,059
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - NON FERROUS 4.50%
17,524 Union Miniere SA* $ 1,454,831
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 2.15%
4,940 Glaverbel SA 695,269
-----------
MULTI-INDUSTRY 9.77%
17,784 Gevaert 1,598,454
10,452 Groupe Bruxelles Lambert SA 1,561,049
-----------
3,159,503
-----------
UTILITIES - ELECTRICAL & GAS 20.08%
24,908 Electrabel SA 4,899,825
4,004 Tractebel 1,594,704
-----------
6,494,529
-----------
TOTAL COMMON STOCK - BASKET
(Cost $32,926,072) 32,338,997
-----------
TOTAL INVESTMENTS
(COST $32,926,072)+ 100.00% $32,338,997
======= ===========
- -------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $33,386,037.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $ 605,928
Excess of tax cost over value (1,652,968)
-----------
$(1,047,040)
===========
See accompanying notes to financial statements.
22
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
CANADA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.97%
AEROSPACE & MILITARY TECHNOLOGY 2.44%
30,600 Bombardier Incorporated -
Class B $ 593,929
-----------
BANKING 15.28%
19,800 Bank of Montreal 755,780
18,000 Bank of Nova Scotia 777,170
32,400 Canadian Imperial Bank of
Commerce 838,877
12,600 National Bank of Canada 162,434
25,200 Royal Bank of Canada 1,182,413
-----------
3,716,674
-----------
BEVERAGES & TOBACCO 5.20%
7,200 Molson Company Limited -
Class A 132,229
32,400 Seagram Company Limited 1,131,725
-----------
1,263,954
-----------
BROADCASTING & PUBLISHING 6.26%
5,400 Quebecor Incorporated -
Class B 100,727
14,400 Rogers Communications
Incorporated - Class B* 100,079
7,200 Southam Incorporated 132,229
52,200 Thomson Corporation 1,189,867
-----------
1,522,902
-----------
BUSINESS & PUBLIC SERVICES 3.33%
7,200 Extendicare Incorporated -
Class A* 115,376
23,400 Laidlaw Incorporated 342,110
5,400 Loewen Group Incorporated 171,120
9,000 Moore Corporation Limited 180,843
-----------
809,449
-----------
CHEMICALS 2.19%
10,800 Agrium Incorporated 130,673
16,200 Methanex Corporation* 135,924
3,600 Potash Corporation of
Saskatchewan
Incorporated 266,662
-----------
533,259
-----------
ELECTRICAL & ELECTRONICS 11.51%
14,400 Newbridge Networks
Corporation 655,960
21,600 Northern Telecom Limited 2,142,888
-----------
2,798,848
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ENERGY SOURCES 13.86%
9,000 Alberta Energy Company
Limited $ 199,316
9,000 Anderson Exploration Limited* 112,135
7,200 Canadian Natural Resources
Limited* 185,380
10,800 Canadian Occidental
Petroleum Limited 266,792
18,000 Gulf Canada Resources
Limited* 147,137
12,600 Imperial Oil Limited 694,202
3,600 IPL Energy Incorporated 128,599
7,200 Norcen Energy Resources
Limited 173,453
23,400 Petro-Canada 404,465
10,800 Poco Petroleum Limited* 106,561
9,000 Ranger Oil Limited 86,532
9,000 Renaissance Energy Limited* 231,725
10,800 Suncor Energy Incorporated 338,740
9,000 Talisman Energy Incorporated* 294,599
-----------
3,369,636
-----------
FINANCIAL SERVICES 0.81%
7,200 Power Corporation of Canada 197,825
-----------
FOREST PRODUCTS & PAPER 2.51%
16,200 Abitibi Consolidated
Incorporated 283,515
5,400 Avenor Incorporated 101,116
10,800 Domtar Incorporated 89,449
10,800 MacMillan Bloedel Limited 135,340
-----------
609,420
-----------
GOLD MINES 5.24%
37,800 Barrick Gold Corporation 854,822
5,400 Cambior Incorporated 57,753
21,600 Placer Dome Incorporated 360,908
-----------
1,273,483
-----------
HEALTH & PERSONAL CARE 0.46%
5,400 MDS Incorporated - Class B 112,784
-----------
INDUSTRIAL COMPONENTS 1.47%
5,400 Magna International
Incorporated - Class A 357,796
-----------
MACHINERY & ENGINEERING 0.40%
3,600 United Dominion Industries
Limited 97,875
-----------
MERCHANDISING 2.12%
7,200 Canadian Tire Corporation -
Class A 135,081
3,600 George Weston Limited 243,327
5,400 Hudson's Bay Company 136,118
-----------
514,526
-----------
See accompanying notes to financial statements.
23
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
CANADA WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - NON FERROUS 8.67%
18,000 Alcan Aluminium Limited $ 628,736
5,400 Cameco Corporation 187,260
7,200 Cominco Limited 186,676
14,400 Inco Limited 389,427
21,600 Noranda Incorporated 422,355
5,400 Rio Algom Limited 125,423
9,000 Teck Corporation - Class B 168,527
-----------
2,108,404
-----------
METALS - STEEL 0.60%
7,200 Dofasco Incorporated 146,748
-----------
MULTI-INDUSTRY 6.29%
27,000 Canadian Pacific Limited 787,541
13,500 Edperbrascan Corporation -
Class A 229,456
18,000 Imasco Limited 511,415
-----------
1,528,412
-----------
TELECOMMUNICATIONS 6.90%
50,400 BCE Incorporated 1,428,333
12,600 Telus Corporation 250,457
-----------
1,678,790
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
UTILITIES - ELECTRICAL & GAS 4.43%
43,200 Nova Corporation $ 365,574
16,200 Transalta Corporation 201,844
18,000 Transcanada Pipelines Limited 337,054
9,000 Westcoast Energy Incorporated 172,092
-----------
1,076,564
-----------
TOTAL COMMON STOCK - BASKET
(Cost $20,346,865) 24,311,278
-----------
COMMON STOCK - NON-BASKET 0.03%
CHEMICALS 0.02%
450 Agrium Incorporated 5,445
-----------
FOREST PRODUCTS & PAPER 0.01%
56 Abitibi Consolidated
Incorporated 980
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $5,964) 6,425
-----------
TOTAL INVESTMENTS
(COST $20,352,829)+ 100.00% $24,317,703
======= ===========
- ------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $20,367,885.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $4,856,837
Excess of tax cost over value (907,019)
----------
$3,949,818
==========-
See accompanying notes to financial statements.
24
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AEROSPACE & MILITARY TECHNOLOGY 0.84%
4,415 Thomson CSF $ 118,718
-----------
APPLIANCES & HOUSEHOLD DURABLES 0.26%
1,500 Moulinex* 36,353
-----------
AUTOMOBILES 1.41%
1,780 PSA Peugeot Citroen 199,848
-----------
BANKING 7.58%
7,455 Banque Nationale de Paris 318,332
4,575 Compagnie Financiere de
Paribas - Class A 315,585
550 Credit National/Natexis 32,644
3,300 Societe Generale 410,222
-----------
1,076,783
-----------
BEVERAGES & TOBACCO 1.21%
2,295 Pernod Ricard 107,268
2,085 Societe Nationale D'Exploitation 64,281
-----------
171,549
-----------
BROADCASTING & PUBLISHING 1.30%
1,140 Canal Plus SA 184,001
-----------
BUILDING MATERIALS & COMPONENTS 4.86%
3,350 Compagnie de Saint Gobain 460,622
3,545 Lafarge SA 229,106
-----------
689,728
-----------
BUSINESS & PUBLIC SERVICES 9.23%
4,570 Compagnie Generale des Eaux 510,833
2,855 Havas SA 174,581
265 Sodexho Alliance SA 119,928
5,015 Suez Lyonnaise des Eaux SA 505,179
-----------
1,310,521
-----------
CHEMICALS 3.07%
2,845 L'Air Liquide 435,744
-----------
CONSTRUCTION & HOUSING 0.77%
925 Bouygues 74,116
625 GTM Entrepose SA 34,725
-----------
108,841
-----------
ELECTRICAL & ELECTRONICS 7.93%
4,875 Alcatel Alsthom 597,972
995 Legrand SA 176,182
175 Sagem SA 85,603
4,990 Schneider SA 265,974
-----------
1,125,731
-----------
ENERGY EQUIPMENT & SERVICES 0.17%
200 Compagnie Generale de
Geophysique SA* 24,664
-----------
ENERGY SOURCES 12.39%
9,270 Elf Acquitaine SA 1,031,613
7,750 Total SA-Class B 727,022
-----------
1,758,635
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FINANCIAL SERVICES 1.48%
1,025 Compagnie Bancaire SA $ 113,053
555 CPR 41,633
145 Societe Eurafrance SA 54,983
-----------
209,669
-----------
FOOD & HOUSEHOLD PRODUCTS 3.74%
950 Eridania Beghin-Say SA 123,733
2,730 Groupe Danone 406,878
-----------
530,611
-----------
HEALTH & PERSONAL CARE 11.99%
385 Essilor International 95,338
2,240 L'Oreal 800,277
11,840 Rhone-Poulenc - Class A 434,911
3,875 Sanofi SA 372,455
-----------
1,702,981
-----------
INDUSTRIAL COMPONENTS 3.28%
5,125 Michelin - Class B 288,125
2,955 Valeo SA 177,821
-----------
465,946
-----------
INSURANCE 4.44%
9,875 Axa - UAP SA 630,059
-----------
LEISURE & TOURISM 2.14%
1,375 Accor SA 206,290
515 Club Mediterranee SA* 41,307
300 Pathe SA 56,088
-----------
303,685
-----------
MACHINERY & ENGINEERING 1.15%
665 Compagnie Francaise d'Etudes
de Construction Technip 80,473
1,150 Sidel SA 83,423
-----------
163,896
-----------
MERCHANDISING 11.57%
1,325 Carrefour SA 799,740
2,505 Casino Guichard Perrachon SA 124,723
240 Comptoirs Modernes 107,981
825 Pinault-Printemps Redoute SA 352,551
715 Promodes 258,039
-----------
1,643,034
-----------
METALS - STEEL 1.15%
9,375 Usinor Sacilor 162,755
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.59%
605 Imetal SA 84,583
-----------
MULTI-INDUSTRY 0.72%
3,845 Lagardere S.C.A. 103,011
-----------
REAL ESTATE 0.82%
325 Sefimeg 21,540
675 Simco SA 50,635
465 Union du Credit-Bail Immobilier 44,618
-----------
116,793
-----------
See accompanying notes to financial statements.
25
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
RECREATION - OTHER CONSUMER
GOODS 5.46%
2,750 LVMH (Moet - Hennessy
Louis Vuitton) $ 572,624
640 Salomon SA 44,844
2,180 Societe Bic SA 157,781
-----------
775,249
-----------
UTILITIES - ELECTRICAL & GAS 0.45%
760 Primagaz Cie 64,529
-----------
TOTAL COMMON STOCK - BASKET
(Cost $13,015,756) 14,197,917
-----------
TOTAL INVESTMENTS
(COST $13,015,756)+ 100.00% $14,197,917
======= ===========
- -------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $13,016,521.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $1,522,200
Excess of tax cost over value (340,804)
----------
$1,181,396
==========
See accompanying notes to financial statements.
26
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
GERMANY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 11.68%
23,750 Daimler-Benz AG $ 1,781,052
1,250 Volkswagen AG 899,206
250 Volkswagen AG Vorzug 134,707
-----------
2,814,965
-----------
BANKING 13.48%
12,500 Bayerische Hypotheken-Und
Wechsel Bank AG 458,282
12,750 Bayerische Vereinsbank AG 663,635
20,500 Deutsche Bank AG 1,201,394
23,250 Dresdner Bank AG 926,022
-----------
3,249,333
-----------
BUILDING MATERIALS & COMPONENTS 1.27%
250 Buderus AG 122,209
2,475 Heidelberger Zement AG 184,917
-----------
307,126
-----------
BUSINESS & PUBLIC SERVICES 4.89%
3,000 SAP AG 663,260
2,250 SAP AG Vorzug 516,193
-----------
1,179,453
-----------
CHEMICALS 8.97%
28,000 BASF AG 962,782
32,500 Bayer AG 1,198,936
-----------
2,161,718
-----------
CONSTRUCTION & HOUSING 0.93%
2,000 Bilfinger & Berger Bau AG 83,213
3,000 Hochtief AG 141,651
-----------
224,864
-----------
ELECTRICAL & ELECTRONICS 6.70%
26,250 Siemens AG 1,614,196
-----------
FOREST PRODUCTS & PAPER 0.19%
250 PWA-Papierwerke Waldhof-
Aschaffenburg AG 46,106
-----------
HEALTH & PERSONAL CARE 3.20%
4,000 Beiersdorf AG 161,982
8,250 Merck KGAA 316,215
3,000 Schering AG 292,801
-----------
770,998
-----------
INDUSTRIAL COMPONENTS 0.48%
4,750 Continental AG 115,570
-----------
INSURANCE 13.60%
10,000 Allianz AG 2,217,531
250 AMB Aachener & Muenchener
Beteiligungs AG 204,144
1,250 Axa Colonia Konzern AG 114,571
2,500 Muenchener Rueckversicherung
AG 742,973
-----------
3,279,219
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 2.20%
500 Linde AG $ 337,462
500 MAN AG 137,485
250 MAN AG Vorzug 56,452
-----------
531,399
-----------
MERCHANDISING 2.76%
1,500 Douglas Holding AG 52,411
500 Karstadt AG 173,036
9,600 Metro AG 439,951
-----------
665,398
-----------
METALS - STEEL 1.43%
1,500 Thyssen AG 345,795
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.53%
5,000 Degussa AG 244,417
1,000 SGL Carbon AG 124,431
-----------
368,848
-----------
MULTI-INDUSTRY 0.88%
750 Preussag AG 211,018
-----------
RECREATION - OTHER CONSUMER
GOODS 1.25%
2,500 Adidas AG 302,050
-----------
TELECOMMUNICATIONS 12.04%
98,750 Deutsche Telekom AG 1,974,780
2,000 Mannesmann AG 928,786
-----------
2,903,566
-----------
TRANSPORTATION - AIRLINES 1.61%
19,250 Deutsche Lufthansa AG 387,096
-----------
UTILITIES - ELECTRICAL & GAS 10.91%
14,250 Rwe AG 645,137
5,500 Rwe AG-Preferred 212,337
23,000 Veba AG 1,252,083
1,250 Viag AG 520,428
-----------
2,629,985
-----------
TOTAL COMMON STOCK - BASKET
(Cost $21,481,231) 24,108,703
-----------
TOTAL INVESTMENTS
(COST $21,481,231)+ 100.00% $24,108,703
======= ===========
- --------------------------------------------------------------------------------
+ Aggregate cost for Federal income tax purposes is $21,510,593.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $2,799,351
Excess of tax cost over value (201,241)
----------
$2,598,110
==========
See accompanying notes to financial statements.
27
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
HONG KONG WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 99.01%
AEROSPACE & MILITARY TECHNOLOGY 0.24%
18,400 Hong Kong Aircraft Engineering
Company Limited $ 60,550
-----------
BANKING 9.66%
317,400 Bank Of East Asia Limited 1,132,547
96,600 Hang Seng Bank Limited 1,165,583
25,300 Wing Lung Bank 155,084
-----------
2,453,214
-----------
BROADCASTING & PUBLISHING 1.98%
322,000 South China Morning Post
Holdings Limited 259,711
69,000 Television Broadcasts Limited 243,980
-----------
503,691
-----------
ELECTRICAL & ELECTRONICS 0.41%
46,000 Johnson Electric Holdings
Limited 103,291
-----------
FINANCIAL SERVICES 1.01%
138,000 Peregrine Investment Holdings
Limited 256,446
-----------
LEISURE & TOURISM 3.23%
276,000 Hong Kong & Shanghai Hotels
Limited 338,366
552,000 Regal Hotels International 151,374
322,000 Shangri-La Asia Limited 330,352
-----------
820,092
-----------
MERCHANDISING 1.67%
69,000 Dickson Concepts International
Limited 261,789
230,000 Giordano International Limited 163,247
-----------
425,036
-----------
MULTI-INDUSTRY 19.34%
690,000 Hopewell Holdings Limited 411,827
414,000 Hutchison Whampoa Limited 3,445,993
138,000 Swire Pacific Limited - Class A 1,055,168
-----------
4,912,988
-----------
REAL ESTATE 38.09%
253,000 Cheung Kong Holdings Limited 2,677,249
276,000 Chinese Estates Holdings 245,761
322,000 Hang Lung Development
Company 581,752
138,000 Hysan Development Company
Limited 400,697
184,000 Miramar Hotel & Investment
Limited 403,665
184,000 New World Development
Company Limited 1,146,883
276,000 Sino Land Company 261,789
253,000 Sun Hung Kai Properties
Limited 2,873,145
299,000 Wharf Holdings Limited 1,082,327
-----------
9,673,268
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
TELECOMMUNICATIONS 10.82%
1,306,400 Hong Kong Telecommunications
Limited $ 2,748,009
-----------
TRANSPORTATION - AIRLINES 2.96%
460,000 Cathay Pacific Airways Limited 750,936
-----------
TRANSPORTATION - SHIPPING 0.82%
368,000 Shun Tak Holdings Limited 207,769
-----------
UTILITIES - ELECTRICAL & GAS 8.78%
241,500 China Light & Power Company
Limited 1,118,835
598,000 Hong Kong & China Gas
Company Limited 1,111,266
-----------
2,230,101
-----------
TOTAL COMMON STOCK - BASKET
(Cost $25,404,625) 25,145,391
-----------
COMMON STOCK - NON-BASKET 0.99%
AEROSPACE & MILITARY TECHNOLOGY 0.06%
4,600 Hong Kong Aircraft Engineering
Company Limited 15,137
-----------
MULTI-INDUSTRY 0.38%
11,500 Hutchison Whampoa Limited 95,722
-----------
REAL ESTATE 0.51%
11,500 Sun Hung Kai Properties
Limited 130,597
-----------
TELECOMMUNICATIONS 0.04%
4,600 Hong Kong Telecommunications
Limited 9,676
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $249,627) 251,132
-----------
TOTAL INVESTMENTS
(COST $25,654,252)+ 100.00% $25,396,523
======= ===========
- ------------------
+ Aggregate cost for Federal income tax purposes is $25,677,191.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $ 735,208
Excess of tax cost over value (1,015,876)
-----------
$ (280,668)
===========
See accompanying notes to financial statements.
28
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
ITALY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 4.60%
486,200 Fiat SPA $ 1,495,847
-----------
BANKING 18.38%
305,500 Banca Commerciale Italiana SPA 762,750
91,000 Banca Popolare di Milano SPA 483,709
100,100 Banco Ambrosiano Veneto SPA 595,868
152,100 Banco Ambrosiano Veneto SPA
Rnc 332,931
375,700 Credito Italiano SPA 773,717
201,500 Istituto Bancario San Paolo de
Torino SPA 1,399,864
117,000 Istituto Mobiliare Italiano SPA 1,086,402
80,600 Mediobanca SPA 537,240
-----------
5,972,481
-----------
BROADCASTING & PUBLISHING 3.32%
31,200 Arnoldo Mondadori Editore SPA 184,892
204,100 Mediaset SPA 895,130
-----------
1,080,022
-----------
CONSTRUCTION & HOUSING 0.83%
50,700 Sirti SPA 271,050
-----------
DATA PROCESSING & REPRODUCTION 0.51%
406,848 Olivetti Group SPA* 164,107
-----------
ENERGY SOURCES 20.69%
1,211,600 ENI SPA 6,721,687
-----------
FOOD & HOUSEHOLD PRODUCTS 1.50%
314,600 Parmalat Finanziaria SPA 487,971
-----------
INDUSTRIAL COMPONENTS 3.71%
474,500 Pirelli SPA 1,203,831
-----------
INSURANCE 10.79%
23,400 Assigurazioni Generali SPA 494,606
977,600 Istituto Nazionale delle
Assicurazioni SPA 1,425,836
92,300 Riunione Adriatica di Sicurta SPA 782,296
72,800 Riunione Adriatica di Sicurta SPA
Rnc 361,456
50,700 Societa Assicuratrice Industriale
SPA 440,222
-----------
3,504,416
-----------
MERCHANDISING 1.35%
71,500 La Rinascente SPA 438,250
-----------
METALS - STEEL 0.47%
39,000 Falck Acciaierie & Ferriere
Lombarde SPA 152,837
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MULTI-INDUSTRY 2.07%
843,700 Montedison SPA $ 510,809
328,900 Montedison SPA Rnc 162,778
-----------
673,587
-----------
RECREATION - OTHER CONSUMER
GOODS 1.33%
72,800 Bulgari SPA 433,483
-----------
TELECOMMUNICATIONS 24.01%
1,069,900 Telecom Italia Mobile SPA 3,621,620
231,400 Telecom Italia Mobile SPA Rnc 390,200
573,443 Telecom Italia SPA 3,360,138
122,434 Telecom Italia SPA Rnc 430,364
-----------
7,802,322
-----------
TEXTILES & APPAREL 2.67%
37,856 Benetton Group SPA 549,337
32,500 Marzotto & Figli SPA 316,490
-----------
865,827
-----------
UTILITIES - ELECTRICAL & GAS 3.77%
145,600 Edison SPA 677,430
178,100 Italgas SPA 546,730
-----------
1,224,160
-----------
TOTAL COMMON STOCK - BASKET
(Cost $28,249,728) 32,491,878
-----------
COMMON STOCK - NON-BASKET 0.00%
TELECOMMUNICATIONS 0.00%
1 Telecom Italia SPA 6
7 Telecom Italia SPA Rnc 25
-----------
31
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $0) 31
-----------
TOTAL INVESTMENTS
(COST $28,249,728)+ 100.00% $32,491,909
======= ===========
- --------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $28,760,108.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $4,359,926
Excess of tax cost over value (628,125)
----------
$3,731,801
==========
See accompanying notes to financial statements.
29
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.98%
APPLIANCES & HOUSEHOLD DURABLES 5.88%
189,000 Matsushita Electric Industrial
Company Limited $ 3,488,071
21,000 Pioneer Electronic Corporation 418,987
189,000 Sanyo Electric Company Limited 675,617
105,000 Sharp Corporation 1,056,198
42,000 Sony Corporation 3,666,140
-----------
9,305,013
-----------
AUTOMOBILES 7.80%
84,000 Honda Motor Company Limited 2,597,722
231,000 Nissan Motor Company Limited 1,494,039
315,000 Toyota Motor Corporation 8,248,815
-----------
12,340,576
-----------
BANKING 17.57%
189,000 Asahi Bank Limited 1,373,231
105,000 Ashikaga Bank Limited 309,003
378,000 Bank of Tokyo-Mitsubishi Limited 6,881,869
105,000 Bank of Yokohama Limited 446,920
84,000 Chiba Bank Limited 439,937
231,000 Fuji Bank Limited 2,822,928
42,000 Gunma Bank Limited 366,614
63,000 Hokuriku Bank 194,829
231,000 Industrial Bank of Japan Limited 3,187,796
84,000 Joyo Bank 474,852
126,000 Mitsubishi Trust & Banking
Corporation 1,770,222
105,000 Mitsui Trust & Banking Company
Limited 604,913
294,000 Sakura Bank Limited 1,735,306
42,000 Seventy-Seven Bank 439,937
84,000 Shizuoka Bank 872,891
252,000 Sumitomo Bank Limited 3,728,988
168,000 Tokai Bank 1,466,456
21,000 Yamaguchi Bank 295,037
105,000 Yasuda Trust & Banking 392,801
-----------
27,804,530
-----------
BEVERAGES & TOBACCO 1.12%
42,000 Asahi Breweries Limited 624,990
105,000 Kirin Brewery Company Limited 852,814
42,000 Sapporo Breweries Limited 298,878
-----------
1,776,682
-----------
BUILDING MATERIALS & COMPONENTS 1.24%
105,000 Chichibu Onoda Cement
Corporation 313,368
42,000 Inax Corporation 206,002
42,000 Sekisui Chemical Company Limited 356,139
21,000 Sumitomo Forestry Company
Limited 202,511
21,000 Tostem Corporation 438,191
42,000 Toto Limited 443,428
-----------
1,959,639
-----------
BUSINESS & PUBLIC SERVICES 2.00%
63,000 Dai Nippon Printing Company
Limited 1,319,810
42,000 Kamigumi Company Limited 193,782
21,000 Kokuyo Company 501,039
21,000 Mitsubishi Logistics Corporation 244,409
63,000 Toppan Printing Company Limited 906,060
-----------
3,165,100
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
CHEMICALS 3.25%
126,000 Asahi Chemical Industry
Company Limited $ 657,810
84,000 Dainippon Ink & Chemicals
Incorporated 310,051
42,000 Kuraray Company Limited 373,597
210,000 Mitsubishi Chemical Corporation 549,921
63,000 Mitsubishi Rayon Company Limited 239,870
84,000 Mitsui Toatsu Chemicals
Incorporated 161,310
21,000 Shin-Etsu Chemical Company
Limited 537,701
105,000 Showa Denko K.K.* 204,256
147,000 Sumitomo Chemical Company
Limited 576,806
84,000 Teijin Limited 341,475
126,000 Toray Industries Incorporated 837,975
63,000 Tosoh Corporation* 160,786
84,000 Ube Industries Limited 188,544
-----------
5,140,102
-----------
CONSTRUCTION & HOUSING 2.56%
42,000 Daiwa House Industry Company
Limited 485,327
147,000 Kajima Corporation 774,778
21,000 Kandenko Company Limited 144,027
21,000 Kinden Corporation 291,545
147,000 Kumagai Gumi Company Limited 162,532
42,000 Nishimatsu Construction Company
Limited 247,901
63,000 Obayashi Corporation 381,279
63,000 Sekisui House Limited 597,057
105,000 Shimizu Corporation 552,540
105,000 Taisei Corporation 413,750
-----------
4,050,736
-----------
DATA PROCESSING & REPRODUCTION 2.58%
84,000 Canon Incorporated 2,325,380
147,000 Fujitsu Limited 1,759,747
-----------
4,085,127
-----------
ELECTRICAL & ELECTRONICS 3.59%
294,000 Hitachi Limited 2,712,944
21,000 Makita Corportion 288,054
189,000 Mitsubishi Electric Corporation 868,875
126,000 NEC Corporation 1,414,083
21,000 Omron Corporation 391,055
-----------
5,675,011
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 3.33%
21,000 Fanuc Limited 806,551
21,000 Kyocera Corporation 1,326,794
21,000 Murata Manufacturing Company
Limited 857,179
42,000 Nikon Corporation 694,821
42,000 Olympus Optical Company Limited 299,576
21,000 Tokyo Electron Limited 1,143,487
21,000 Yokogawa Electric Corporation 138,615
-----------
5,267,023
-----------
See accompanying notes to financial statements.
30
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONTINUED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ENERGY SOURCES 0.74%
63,000 Cosmo Oil Company Limited $ 204,256
105,000 Japan Energy Corporation 185,926
63,000 Mitsubishi Oil Company Limited 219,968
126,000 Nippon Oil Company Limited 564,586
-----------
1,174,736
-----------
FINANCIAL SERVICES 3.04%
21,000 Acom Company Limited 993,349
21,000 Credit Saison Company Limited 542,938
126,000 Daiwa Securities Company
Limited 796,076
168,000 Nomura Securities Company
Limited 2,234,600
126,000 Yamaichi Securities Company 247,203
-----------
4,814,166
-----------
FOOD & HOUSEHOLD PRODUCTS 1.53%
63,000 Ajinomoto Company Incorporated 576,108
42,000 Kao Corporation 621,498
42,000 Meiji Seika 190,988
21,000 Nippon Meat Packers Incorporated 253,138
21,000 Nissin Food Products Company
Limited 488,819
21,000 Yamazaki Baking Company
Limited 289,800
-----------
2,420,351
-----------
FOREST PRODUCTS & PAPER 0.64%
84,000 Nippon Paper Industries Company 487,422
105,000 Oji Paper Company Limited 532,463
-----------
1,019,885
-----------
HEALTH & PERSONAL CARE 4.12%
21,000 Daiichi Pharmaceutical 357,885
21,000 Eisai Company Limited 399,784
42,000 Kyowa Hakko Kogyo Company
Limited 246,155
42,000 Sankyo Company Limited 1,277,912
42,000 Shionogi & Company Limited 283,166
42,000 Shiseido Company Limited 687,838
21,000 Taisho Pharmaceutical Company 515,005
84,000 Takeda Chemical Industries 2,241,583
21,000 Yamanouchi Pharmaceutical
Company Limited 502,785
-----------
6,512,113
-----------
INDUSTRIAL COMPONENTS 4.30%
63,000 Bridgestone Corporation 1,398,371
84,000 Denso Corporation 1,815,612
42,000 Fujikura Limited 352,648
63,000 Furukawa Electric Company
Limited 356,139
42,000 Minebea Company Limited 418,987
42,000 NGK Insulators Limited 401,530
21,000 NGK Spark Plug Company
Limited 179,815
63,000 NSK Limited 326,286
63,000 NTN Corporation 293,291
84,000 Sumitomo Electric Industries 1,270,929
-----------
6,813,608
-----------
<PAGE>
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
INSURANCE 2.23%
84,000 Mitsui Marine & Fire Insurance
Company Limited $ 489,517
42,000 Nichido Marine & Fire Insurance 278,976
63,000 Nippon Fire & Marine Insurance 272,342
84,000 Sumitomo Marine & Fire Insurance 564,236
168,000 Tokio Marine & Fire Insurance
Company 1,927,342
-----------
3,532,413
-----------
LEISURE & TOURISM 0.14%
21,000 Tokyo Dome Corporation 214,731
-----------
MACHINERY & ENGINEERING 3.99%
42,000 Amada Company Limited 284,911
42,000 Daikin Industries Limited 304,464
21,000 Ebara Corporation 270,596
105,000 Hitachi Zosen Corporation 336,936
126,000 Kawasaki Heavy Industries Limited 493,358
105,000 Komatsu Limited 652,049
147,000 Kubota Corporation 593,915
21,000 Kurita Water Industries Limited 555,158
294,000 Mitsubishi Heavy Industries
Limited 1,952,831
126,000 Mitsui Engineering & Shipbuilding
Company Limited* 207,399
84,000 Sumitomo Heavy Industries
Limited 265,359
21,000 Toyoda Automatic Loom Works
Limited 399,784
-----------
6,316,760
-----------
MERCHANDISING 3.49%
63,000 Daiei, Incorporated 431,557
21,000 Hankyu Department Stores 171,959
21,000 Isetan Company Limited 206,002
42,000 Ito Yokado Company Limited 2,269,515
21,000 Jusco Company Limited 562,142
42,000 Marui Company Limited 666,888
42,000 Mitsukoshi Limited 238,823
21,000 Mycal Corporation 239,172
21,000 Seiyu Limited 120,110
21,000 Takashimaya Company Limited 233,935
21,000 Uny Company Limited 385,818
-----------
5,525,921
-----------
METALS - NON FERROUS 0.51%
105,000 Mitsubishi Materials Corporation 334,317
84,000 Nippon Light Metal Company
Limited 224,857
42,000 Sumitomo Metal Mining Company 250,694
-----------
809,868
-----------
METALS - STEEL 1.98%
189,000 Kawasaki Steel Corporation 469,790
546,000 Nippon Steel Corporation 1,388,943
294,000 NKK Corporation 469,266
273,000 Sumitomo Metal Industries 635,464
21,000 Tokyo Steel Manufacturing
Company Limited 171,261
-----------
3,134,724
-----------
See accompanying notes to financial statements.
31
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MISCELLANEOUS MATERIALS &
COMMODITIES 0.97%
105,000 Asahi Glass Company Limited $ 800,441
21,000 Nitto Denko Corporation 364,868
21,000 Toyo Seikan Kaisha Limited 363,122
-----------
1,528,431
-----------
REAL ESTATE 1.58%
126,000 Mitsubishi Estate Company
Limited 1,770,222
63,000 Mitsui Fudosan Company
Limited 733,228
-----------
2,503,450
-----------
RECREATION - OTHER CONSUMER
GOODS 2.10%
42,000 Casio Computer Company
Limited 366,614
42,000 Citizen Watch Company 324,366
42,000 Fuji Photo Film Company 1,620,085
42,000 Konica Corporation 242,314
21,000 Shimano Incorporated 452,157
21,000 Yamaha Corporation 324,715
-----------
3,330,251
-----------
TELECOMMUNICATIONS 6.36%
1,071 Nippon Telegraph & Telephone
Corporation 10,060,936
-----------
TEXTILES & APPAREL 0.27%
21,000 Nisshinbo Industries Incorporated 136,171
147,000 Toyobo Limited 290,847
-----------
427,018
-----------
TRANSPORTATION - AIRLINES 0.44%
168,000 Japan Airlines* 702,502
-----------
TRANSPORTATION - ROAD & RAIL 3.82%
336 East Japan Railway Company 1,536,287
105,000 Hankyu Corporation 521,989
42,000 Keihin Electric Express Railway 173,880
126,000 Kinki Nippon Railway Company 711,231
84,000 Nagoya Railroad Company Limited 310,749
63,000 Nankai Electric Railway Company 303,766
84,000 Nippon Express Company Limited 554,460
63,000 Odakyu Electric Railway Company 318,954
21,000 Seino Transportation Company 209,494
84,000 Tobu Railway Company Limited 341,475
105,000 Tokyu Corporation 554,286
42,000 Yamato Transport Company
Limited 506,277
-----------
6,042,848
-----------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
TRANSPORTATION - SHIPPING 0.43%
126,000 Mitsui O.s.k. Lines Limited* $ 222,063
126,000 Nippon Yusen Kabushiki Kaisha 455,649
------------
677,712
------------
UTILITIES - ELECTRICAL & GAS 3.67%
84,000 Kansai Electric Power Company
Incorporated 1,571,203
231,000 Osaka Gas Company Limited 530,019
42,000 Tohoku Electric Power Company 684,346
126,000 Tokyo Electric Power Company 2,409,178
252,000 Tokyo Gas Company Limited 607,532
------------
5,802,278
------------
WHOLESALE & INTERNATIONAL TRADE 2.71%
126,000 Itochu Corporation 520,592
126,000 Marubeni Corporation 457,744
126,000 Mitsubishi Corporation 1,246,488
168,000 Mitsui & Company 1,374,279
84,000 Sumitomo Corporation 698,312
------------
4,297,415
------------
TOTAL COMMON STOCK - BASKET
(Cost $172,970,800) 158,231,656
------------
COMMON STOCK - NON-BASKET 0.02%
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.01%
352 Tokyo Electron Limited 19,167
------------
FINANCIAL SERVICES 0.01%
400 Credit Saison Company Limited 10,342
------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $19,139) 29,509
------------
TOTAL INVESTMENTS
(COST $172,989,939)+ 100.00% $158,261,165
======= ============
- ---------------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $175,093,436. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 4,776,605
Excess of tax cost over value (21,608,876)
------------
$(16,832,271)
============
See accompanying notes to financial statements.
32
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
MALAYSIA (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 99.82%
AUTOMOBILES 4.29%
40,000 Edaran Otomobil Nasional BHD $ 144,058
80,000 Perusahaan Otomobil Nasional BHD 233,236
140,000 Tan Chong Motor Holdings BHD 147,899
------------
525,193
------------
BANKING 12.57%
80,000 Commerce Asset Holdings BHD 99,880
160,000 Malayan Banking BHD 1,064,654
180,000 Public Bank BHD (Foreign) 169,165
120,000 RHB Capital BHD 205,797
------------
1,539,496
------------
BEVERAGES & TOBACCO 5.35%
100,000 Guinness Anchor BHD 171,497
60,000 Rothmans of Pall Mall BHD 483,622
------------
655,119
------------
BROADCASTING & PUBLISHING 1.46%
40,000 New Straits Times Press BHD 178,357
------------
BUILDING MATERIALS & COMPONENTS 3.30%
60,000 Hume Industries - Malaysia BHD 127,594
100,000 Malayan Cement BHD 122,106
180,000 Pan Malaysia Cement Works BHD 154,965
------------
404,665
------------
CONSTRUCTION & HOUSING 1.55%
80,000 Ekran BHD 93,843
60,000 YTL Corporation BHD 95,901
------------
189,744
------------
ELECTRICAL & ELECTRONICS 0.48%
80,000 Time Engineering BHD 58,721
------------
ELECTRONIC COMPONENTS,
INSTRUMENTS 1.34%
60,000 Malaysian Pacific Industries BHD 163,608
------------
ENERGY SOURCES 1.11%
60,000 Shell Refining Company BHD 135,826
------------
FINANCIAL SERVICES 6.05%
80,000 AMMB Holdings BHD 285,371
140,000 Idris Hydraulic (Malaysia) BHD* 93,637
180,000 MBF Capital BHD 169,165
80,000 Rashid Hussain BHD 193,449
------------
741,622
------------
FOOD & HOUSEHOLD PRODUCTS 2.07%
40,000 Nestle (Malaysia) BHD 253,816
------------
INDUSTRIAL COMPONENTS 0.63%
80,000 Leader Universal Holdings BHD 77,105
------------
LEISURE & TOURISM 4.79%
260,000 Magnum Corporation BHD 241,674
180,000 Resorts World BHD 345,738
------------
587,412
------------
MACHINERY & ENGINEERING 1.76%
80,000 UMW Holdings BHD 215,400
------------
METALS - NON FERROUS 1.12%
160,000 Malaysia Mining Corporation BHD 137,198
------------
METALS - STEEL 0.95%
260,000 Amsteel Corporation BHD 115,932
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MISCELLANEOUS MATERIALS &
COMMODITIES 6.80%
200,000 Golden Hope Plantations BHD $ 263,420
140,000 Highlands & Lowlands BHD 138,775
40,000 Kian Joo Can Factory BHD 119,362
80,000 Kuala Lumpur Kepong BHD 163,265
60,000 Perlis Plantations BHD 148,174
------------
832,996
------------
MULTI-INDUSTRY 12.70%
300,000 Berjaya Group BHD 173,898
80,000 Land And General BHD 60,093
140,000 Multi-Purpose Holdings BHD 109,003
340,000 Sime Darby BHD 804,665
100,000 United Engineers (Malaysia) Limited 408,163
------------
1,555,822
------------
REAL ESTATE 1.73%
180,000 Hong Leong Properties BHD 130,887
100,000 Malaysian Resources Corporation
BHD 80,604
------------
211,491
------------
TELECOMMUNICATIONS 13.20%
180,000 Technology Resources Industries
BHD 151,878
480,000 Telekom Malaysia BHD 1,465,272
------------
1,617,150
------------
TRANSPORTATION - AIRLINES 1.86%
120,000 Malaysian Airline System BHD 228,434
------------
TRANSPORTATION - SHIPPING 3.02%
180,000 Malaysia International Shipping
BHD (Foreign) 370,434
------------
UTILITIES - ELECTRICAL & GAS 11.69%
480,000 Tenaga Nasional BHD 1,432,344
------------
TOTAL COMMON STOCK - BASKET
(Cost $21,090,378) 12,227,885
------------
COMMON STOCK - NON-BASKET 0.18%
BANKING 0.02%
2,333 Public Bank BHD (Foreign) 2,193
------------
METALS - NON FERROUS 0.01%
1,600 Malaysia Mining Corporation BHD 1,372
------------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.11%
5,250 Perlis Plantations BHD 12,965
------------
REAL ESTATE 0.04%
6,666 Malaysian Resources Corporation
BHD 5,373
------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $38,812) 21,903
------------
TOTAL INVESTMENTS
(COST $21,129,190)+ 100.00% $ 12,249,788
======= ============
- --------------------------------------------------------------------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $21,130,193. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 0
Excess of tax cost over value (8,880,405)
-----------
$(8,880,405)
===========
See accompanying notes to financial statements.
33
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
MEXICO (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 4.72%
132,000 Grupo Financiero Banamex Accival
SA de CV - Series B* $ 352,056
55,000 Grupo Financiero Banamex Accival
SA de CV - Series L* 135,433
495,000 Grupo Financiero Bancomer SA
de CV - Series B* 300,768
------------
788,257
------------
BEVERAGES & TOBACCO 15.72%
88,000 Empresas La Moderna SA de
CV - Series A* 463,780
99,000 Fomento Economico Mexicano
SA de CV - Series B 682,584
66,000 Grupo Continental SA 164,631
154,000 Grupo Modelo SA de CV -
Series C 1,313,949
------------
2,624,944
------------
BROADCASTING & PUBLISHING 4.43%
44,000 Grupo Televisa SA - Series CPO* 739,571
------------
BUILDING MATERIALS & COMPONENTS 6.86%
55,000 Apasco SA de CV 408,059
77,000 Cemex SA de CV - Series A 374,288
66,000 Cemex SA de CV - Series B 363,876
------------
1,146,223
------------
CHEMICALS 0.59%
33,000 Cydsa SA - Series A 99,201
------------
CONSTRUCTION & HOUSING 2.10%
132,000 Empresas ICA Sociedad Controladora
SA de CV 350,368
------------
ENERGY EQUIPMENT & SERVICES 1.19%
11,000 Tubos de Acero de Mexico SA* 198,682
------------
FINANCIAL SERVICES 0.80%
407,000 Grupo Financiero Probursa SA
de CV - Series B* 133,280
------------
FOOD & HOUSEHOLD PRODUCTS 4.38%
66,000 Grupo Industrial Bimbo SA de CV -
Series A 532,728
176,000 Grupo Industrial Maseca SA de CV -
Series B 198,120
------------
730,848
------------
HEALTH & PERSONAL CARE 7.33%
275,000 Kimberly-Clark de Mexico SA
de CV - Series A 1,224,177
------------
MACHINERY & ENGINEERING 0.38%
55,000 Consorcio Grupo Dina SA* 63,742
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MERCHANDISING 7.85%
407,000 Cifra SA de CV - Series B $ 773,651
198,000 Controladora Comercial Mexicana
SA de CV - Series UBC 198,063
220,000 El Puerto de Liverpool SA de CV -
Series 1 288,174
44,000 El Puerto de Liverpool SA de CV -
Series C1 51,894
------------
1,311,782
------------
METALS - NON FERROUS 4.90%
121,000 Grupo Mexico SA - Series B 473,630
77,000 Industrias Penoles SA - Series CP 344,247
------------
817,877
------------
MISCELLANEOUS MATERIALS &
COMMODITIES 2.11%
88,000 Empaques Ponderosa SA
de CV - Series B* 66,415
66,000 Vitro SA 286,204
------------
352,619
------------
MULTI-INDUSTRY 14.15%
88,000 Alfa SA de CV - Series A 683,287
55,000 Desc SA de CV - Series B 459,418
176,000 Grupo Carso SA de CV -
Series A1 1,220,237
------------
2,362,942
------------
TELECOMMUNICATIONS 22.49%
440,000 Telefonos de Mexico SA -
Series A 1,093,035
1,166,000 Telefonos de Mexico SA -
Series L 2,663,864
------------
3,756,899
------------
TOTAL COMMON STOCK - BASKET
(Cost $14,088,579) 16,701,412
------------
TOTAL INVESTMENTS
(COST $14,088,579)+ 100.00% $ 16,701,412
======= ============
- ----------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $14,088,579. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $2,615,535
Excess of tax cost over value (2,702)
----------
$2,612,833
==========
See accompanying notes to financial statements.
34
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
NETHERLANDS WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 4.45%
6,075 Philips Electronics NV $ 433,779
------------
BANKING 4.18%
20,700 ABN Amro Holding NV 407,565
------------
BEVERAGES & TOBACCO 3.65%
2,250 Heineken NV 355,847
------------
BROADCASTING & PUBLISHING 7.54%
26,028 Elsevier NV 395,590
2,862 Wolters Kluwer NV 339,796
------------
735,386
------------
BUSINESS & PUBLIC SERVICES 1.39%
4,473 Getronics NV 135,746
------------
CHEMICALS 4.59%
2,880 Akzo Nobel NV 447,953
------------
CONSTRUCTION & HOUSING 3.02%
5,670 Hollandsche Beton Groep NV 125,907
2,943 IHC Caland NV 169,188
------------
295,095
------------
DATA PROCESSING & REPRODUCTION 1.69%
1,395 Oce NV 164,591
------------
ENERGY EQUIPMENT & SERVICES 1.23%
3,510 Koninklijke Pakhoed NV 120,377
------------
ENERGY SOURCES 23.49%
45,000 Royal Dutch/Shell group 2,291,636
------------
FINANCIAL SERVICES 12.02%
26,856 Ing Groep NV 1,172,838
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FOOD & HOUSEHOLD PRODUCTS 11.94%
5,742 Unilever NV - CVA $ 1,164,551
------------
FOREST PRODUCTS & PAPER 1.39%
6,300 Koninklijke KNP BT NV 135,855
------------
INSURANCE 4.31%
8,757 ASR Verzekeringsgroep NV 420,457
------------
MACHINERY & ENGINEERING 1.47%
3,501 Stork NV 143,910
------------
MERCHANDISING 4.34%
17,100 Koninklijke Ahold NV 423,597
------------
METALS - STEEL 1.56%
2,700 Koninklijke Hoogovens NV 152,554
------------
TELECOMMUNICATIONS 4.27%
11,700 Royal PTT Nederland NV 416,269
------------
TRANSPORTATION - AIRLINES 2.65%
8,100 KLM - Konin Luchvaart Mij NV 259,008
------------
TRANSPORTATION - ROAD & RAIL 0.82%
2,700 Koninklijke Nedlloyd Groep NV 80,207
------------
TOTAL COMMON STOCK - BASKET
(Cost $7,831,581) 9,757,221
------------
TOTAL INVESTMENTS
(COST $7,831,581)+ 100.00% $ 9,757,221
======= ============
- --------------------------------------------------------------------------------
+ Aggregate cost for Federal income tax purposes is $7,834,047. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $2,078,597
Excess of tax cost over value (155,423)
----------
$1,923,174
==========
See accompanying notes to financial statements.
35
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
SINGAPORE (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 98.14%
AUTOMOBILES 2.03%
51,000 Cycle And Carriage Limited $ 293,355
------------
BANKING 26.94%
119,000 Developmental Bank of Singapore
Limited (Foreign) 1,258,843
170,000 Oversea-Chinese Banking
Corporation Limited 1,326,281
170,000 United Overseas Bank Limited
(Foreign) 1,315,041
------------
3,900,165
------------
BEVERAGES & TOBACCO 3.11%
85,000 Fraser & Neave Limited 449,587
------------
BROADCASTING & PUBLISHING 2.96%
34,000 Singapore Press Holdings
Limited (Foreign) 429,355
------------
DATA PROCESSING & REPRODUCTION 0.75%
391,000 IPC Corporation Limited 108,575
------------
ELECTRONIC COMPONENTS,
INSTRUMENTS 3.42%
17,000 Creative Technology Limited* 341,686
306,000 Goldtron Limited 153,759
------------
495,445
------------
LEISURE & TOURISM 3.89%
204,000 Hotel Properties Limited 284,588
17,000 Overseas Union Enterprise
Limited 70,248
85,000 Shangri-La Hotel Limited 207,934
------------
562,770
------------
MACHINERY & ENGINEERING 0.34%
34,000 Van Der Horst Limited 48,780
------------
MERCHANDISING 1.00%
51,000 Metro Holdings Limited 144,992
------------
METALS - NON FERROUS 1.52%
119,000 Straits Trading Company Limited 220,298
------------
METALS - STEEL 2.24%
119,000 Natsteel Limited 324,152
------------
MULTI-INDUSTRY 9.82%
136,000 Haw Par Brothers International
Limited 260,760
85,000 Inchcape Berhad 283,802
136,000 Keppel Corporation Limited 485,554
255,000 Singapore Technologies Industrial
Corporation 391,140
------------
1,421,256
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
REAL ESTATE 17.65%
85,000 City Developments Limited $ 536,694
238,000 DBS Land Limited 610,539
119,000 First Capital Corporation Limited 265,931
68,000 Parkway Holdings Limited 256,264
578,000 United Industrial Corporation
Limited 393,613
425,000 United Overseas Land Limited 491,736
------------
2,554,777
------------
TELECOMMUNICATIONS 8.23%
816,000 Singapore Telecommunications
Limited 1,192,304
------------
TRANSPORTATION - AIRLINES 11.10%
221,000 Singapore Airlines Limited
(Foreign) 1,607,273
------------
TRANSPORTATION - ROAD & RAIL 1.28%
255,000 Comfort Group Limited* 185,455
------------
TRANSPORTATION - SHIPPING 1.86%
357,000 Neptune Orient Lines Limited 269,078
------------
TOTAL COMMON STOCK - BASKET
(Cost $19,113,038) 14,207,617
------------
COMMON STOCK - NON-BASKET 1.86%
BANKING 0.56%
10,400 Oversea-Chinese Banking
Corporation Limited 81,137
------------
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.09%
650 Creative Technology Limited* 13,064
------------
MACHINERY & ENGINEERING 1.04%
34,000 Jurong Shipyard Limited 150,612
------------
MULTI-INDUSTRY 0.17%
6,750 Keppel Corporation Limited 24,099
------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $331,427) 268,912
------------
TOTAL INVESTMENTS
(COST $19,444,465)+ 100.00% $ 14,476,529
======= ============
- --------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $19,536,274. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 145,660
Excess of tax cost over value (5,205,405)
-----------
$(5,059,745)
===========
See accompanying notes to financial statements.
36
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
SPAIN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 27.32%
32,796 Banco Bilbao Vizcaya SA $ 863,961
10,200 Banco Central Hispanoamericano
SA 377,728
24,000 Banco Santander SA 669,342
7,500 Corporacion Bancaria de
Espana SA 373,446
------------
2,284,477
------------
BEVERAGES & TOBACCO 2.01%
6,684 El Aguila SA* 30,600
2,568 Tabacalera SA - Class A 137,158
------------
167,758
------------
BUSINESS & PUBLIC SERVICES 5.86%
21,000 Autopistas Concesionaria
Espanola SA 250,016
5,088 Prosegur Cia de Seguridad
SA 56,559
5,040 Sociedade General de Aguas
de Barcelona SA 183,327
------------
489,902
------------
CHEMICALS 0.51%
40,098 Ercros SA* 42,728
------------
CONSTRUCTION & HOUSING 2.91%
5,082 Dragados y Construcciones SA 95,436
1,236 Fomento de Construcciones y
Contratas SA 147,722
------------
243,158
------------
ENERGY SOURCES 4.55%
9,600 Repsol SA 380,135
------------
FOOD & HOUSEHOLD PRODUCTS 1.64%
7,734 Ebro Agricolas SA 137,099
------------
FOREST PRODUCTS & PAPER 1.16%
2,400 Empresa Nacional de Celulosas
SA 42,781
14,544 Sarrio SA 53,955
------------
96,736
------------
INSURANCE 2.20%
3,336 Corporacion Mapfre 184,322
------------
MACHINERY & ENGINEERING 2.19%
1,488 Zardoya Otis SA 183,321
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - STEEL 1.66%
840 Acerinox SA $ 138,517
------------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.56%
2,100 Viscofan Industria Navarra De
Envolturas Celulosicas SA 46,964
------------
MULTI-INDUSTRY 1.72%
1,302 Corporacion Financiera Alba SA 143,877
------------
REAL ESTATE 4.54%
4,674 Inmobilaria Metropolitana Vasco
Central SA 165,710
7,314 Inmobilaria Urbis SA* 61,579
6,552 Vallehermoso SA 152,347
------------
379,636
------------
TELECOMMUNICATIONS 14.35%
46,200 Telefonica de Espana 1,200,355
------------
UTILITIES - ELECTRICAL & GAS 26.82%
58,224 Empresa Nacional de
Electricidad SA 1,175,740
8,088 Gas Natural SDG SA 364,420
31,800 Iberdrola SA 357,679
44,400 Union Electrica Fenosa SA 344,616
------------
2,242,455
------------
TOTAL COMMON STOCK - BASKET
(Cost $7,756,417) 8,361,440
------------
TOTAL INVESTMENTS
(COST $7,756,417)+ 100.00% $ 8,361,440
======= ============
- -----------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $7,776,977. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $656,232
Excess of tax cost over value (71,769)
--------
$584,463
========
See accompanying notes to financial statements.
37
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
SWEDEN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD DURABLES 3.57%
4,200 Electrolux AB-B $ 299,580
------------
AUTOMOBILES 4.22%
6,000 Volvo AB-A 153,229
7,800 Volvo AB-B 200,688
------------
353,917
------------
BANKING 8.56%
32,400 Skandinaviska Enskilda Banken-A 348,720
12,000 Svenska Handelsbanken-A 369,889
------------
718,609
------------
BEVERAGES & TOBACCO 1.96%
54,000 Swedish Match AB 164,387
------------
BUILDING MATERIALS & COMPONENTS 1.50%
3,600 Scancem AB-A 125,640
------------
BUSINESS & PUBLIC SERVICES 3.53%
4,200 Esselte AB-A 104,318
3,600 Esselte AB-B 93,084
4,200 Securitas AB-B 98,968
------------
296,370
------------
CHEMICALS 2.70%
8,400 AGA AB-A 123,041
7,200 AGA AB-B 103,630
------------
226,671
------------
CONSTRUCTION & HOUSING 4.41%
9,300 Skanska AB-B 370,176
------------
ELECTRICAL & ELECTRONICS 29.79%
31,800 ABB AB - A 463,775
10,800 ABB AB - B 157,509
45,000 Ericsson LM-B 1,880,015
------------
2,501,299
------------
FOREST PRODUCTS & PAPER 6.24%
13,800 Stora Kopparbergs-A 219,717
2,400 Stora Kopparbergs-B 37,600
12,000 Svenska Cellulosa AB-B 266,718
------------
524,035
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
HEALTH & PERSONAL CARE 15.70%
68,796 Astra AB-A $ 1,099,719
14,400 Astra AB-B 218,265
------------
1,317,984
------------
INDUSTRIAL COMPONENTS 3.76%
6,000 SKF AB-A 153,229
6,000 SKF AB-B 162,782
------------
316,011
------------
INSURANCE 3.89%
8,400 Skandia Forsakrings AB 326,328
------------
MACHINERY & ENGINEERING 4.53%
7,800 Atlas Copco AB-A 235,957
4,800 Atlas Copco AB-B 144,287
------------
380,244
------------
MERCHANDISING 4.32%
9,600 Hennes & Mauritz AB-B 363,164
------------
MULTI-INDUSTRY 1.32%
7,200 Trelleborg AB-B 110,967
------------
TOTAL COMMON STOCK - BASKET
(Cost $7,193,178) 8,395,382
------------
TOTAL INVESTMENTS
(COST $7,193,178)+ 100.00% $ 8,395,382
======= ============
- --------------------
+ Aggregate cost for Federal income tax purposes is $7,197,118. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $1,305,364
Excess of tax cost over value (107,100)
----------
$1,198,264
==========
See accompanying notes to financial statements.
38
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
SWITZERLAND WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- ----------- -----
COMMON STOCK - BASKET 100.00%
BANKING 12.80%
4,960 Credit Suisse Group $ 597,399
2,400 Schweizerischer Bankverein
(Swiss Bank)* 579,745
608 Union Bank of Switzerland 604,272
------------
1,781,416
------------
BUILDING MATERIALS & COMPONENTS 6.72%
640 Forbo Holding AG 266,074
3,760 Holderbank Financiere Glarus AG 668,850
------------
934,924
------------
BUSINESS & PUBLIC SERVICES 4.01%
848 Adecco SA 289,695
1,360 Danzas Holding AG 267,583
------------
557,278
------------
ELECTRICAL & ELECTRONICS 4.59%
432 Abb AG - Bearer 638,350
------------
FOOD & HOUSEHOLD PRODUCTS 4.36%
520 Nestle SA 606,159
------------
HEALTH & PERSONAL CARE 46.02%
2,160 Novartis AG 3,068,041
280 Roche Holding AG -
Genusschein 2,367,765
64 Roche Holding AG - Inhaber 967,051
------------
6,402,857
------------
INSURANCE 8.39%
440 Schweizerische Rueckversicherungs
(Swiss Re) 585,837
1,600 Zuerich Versicherungs 582,171
------------
1,168,008
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
LEISURE & TOURISM 2.85%
96 Kuoni Reisen AG $ 396,200
------------
MACHINERY & ENGINEERING 7.11%
304 Georg Fischer AG 421,556
360 Schindler Holding AG 460,885
152 Sulzer AG 106,823
------------
989,264
------------
MERCHANDISING 0.72%
480 Valora Holding AG 100,263
------------
RECREATION - OTHER CONSUMER
GOODS 0.72%
248 SMH AG - Bearer 32,669
120 SMH AG- Registered 67,192
------------
99,861
------------
TRANSPORTATION - AIRLINES 1.71%
200 Sairgroup* 237,585
------------
TOTAL COMMON STOCK - BASKET
(Cost $12,913,528) 13,912,165
------------
TOTAL INVESTMENTS
(COST $12,913,528)+ 100.00% $ 13,912,165
======= ============
- -------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $12,942,723. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $1,085,694
Excess of tax cost over value (116,252)
----------
$ 969,442
==========
See accompanying notes to financial statements.
39
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AEROSPACE & MILITARY TECHNOLOGY 1.49%
11,745 British Aerospace Plc $ 275,054
42,390 Rolls-Royce Plc 160,871
------------
435,925
------------
APPLIANCES & HOUSEHOLD DURABLES 0.09%
10,062 Thorn Plc 26,681
------------
BANKING 14.82%
38,295 Barclays Plc 877,259
43,200 HSBC Holdings Plc ($HK10) 1,285,633
21,600 HSBC Holdings Plc (75p) 672,593
112,500 Lloyds TSB Group Plc 1,319,132
18,225 Royal Bank of Scotland Group
Plc 173,206
------------
4,327,823
------------
BEVERAGES & TOBACCO 2.57%
26,280 Cadbury Schweppes Plc 243,792
57,240 Guinness Plc 507,326
------------
751,118
------------
BROADCASTING & PUBLISHING 2.71%
40,590 British Sky Broadcasting Plc 287,014
16,875 Pearson Plc 198,417
34,560 Reed International Plc 306,030
------------
791,461
------------
BUILDING MATERIALS & COMPONENTS 2.33%
24,390 Blue Circle Industries Plc 152,883
13,590 BPB Plc 74,937
13,221 Caradon Plc 43,956
17,631 Hanson Plc 84,638
7,155 Hepworth Plc 23,962
14,580 Redland Plc 68,573
7,605 RMC Group Plc 123,831
14,985 Wolseley Plc 108,268
------------
681,048
------------
BUSINESS & PUBLIC SERVICES 3.92%
8,280 Anglian Water Plc 104,407
5,040 De La Rue Plc 32,164
10,800 Railtrack Group Plc 135,307
43,560 Reuters Holdings Plc 442,241
12,150 Thames Water Plc 156,161
15,435 United Utilities Plc 172,724
17,775 Williams Plc 100,464
------------
1,143,468
------------
CHEMICALS 2.03%
12,330 BOC Group Plc 212,866
16,290 Courtaulds Plc 83,088
18,405 Imperial Chemical Industries Plc 298,045
------------
593,999
------------
CONSTRUCTION & HOUSING 0.15%
13,995 Taylor Woodrow Plc 42,217
------------
ELECTRICAL & ELECTRONICS 1.50%
70,920 General Electric Company Plc 438,794
------------
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.14%
6,975 Bowthorpe Plc 40,723
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ENERGY SOURCES 7.54%
141,435 British Petroleum Company Plc $ 1,978,396
5,805 Burmah Castrol Plc 96,923
30,420 LASMO Plc 127,778
------------
2,203,097
------------
FINANCIAL SERVICES 2.51%
33,660 Abbey National Plc 453,095
5,130 Mercury Asset Management
Group Plc 111,070
5,490 Schroders Plc 168,502
------------
732,667
------------
FOOD & HOUSEHOLD PRODUCTS 4.93%
29,205 Associated British Foods Plc 245,823
59,445 Grand Metropolitan Plc 546,151
21,960 Unilever Plc 608,478
11,925 United Biscuits Holdings Plc 39,937
------------
1,440,389
------------
FOREST PRODUCTS & PAPER 0.22%
22,050 Arjo Wiggins Appleton Plc 62,760
------------
HEALTH & PERSONAL CARE 12.73%
88,380 Glaxo Wellcome Plc 1,770,183
136,998 Smithkline Beecham Plc 1,189,792
23,895 Zeneca Group Plc 758,007
------------
3,717,982
------------
INDUSTRIAL COMPONENTS 0.77%
16,245 BBA Group Plc 101,960
15,435 BICC Plc 42,180
25,290 Lucasvarity Plc 80,800
------------
224,940
------------
INSURANCE 4.41%
22,590 Commercial Union Plc 271,843
31,833 Legal & General Group Plc 233,611
45,000 Prudential Corporation Plc 444,454
38,700 Royal & Sun Alliance Insurance
Group Plc 313,818
12,465 Sedgwick Group Plc 24,360
------------
1,288,086
------------
LEISURE & TOURISM 2.87%
26,460 Bass Plc 354,889
7,425 Carlton Communications Plc 59,126
18,000 Ladbroke Group Plc 75,608
25,065 Rank Group Plc 143,699
17,505 Scottish & Newcastle Plc 205,541
------------
838,863
------------
MACHINERY & ENGINEERING 0.53%
8,100 GKN Plc 155,537
------------
MERCHANDISING 8.85%
25,515 Boots Company Plc 330,421
27,495 Great Universal Stores Plc 279,588
19,575 Kingfisher Plc 230,164
78,075 Marks & Spencer Plc 741,372
13,905 Next Plc 167,329
32,040 Safeway Plc 194,859
36,000 Sainsbury Plc 251,930
58,635 Tesco Plc 388,935
------------
2,584,598
------------
See accompanying notes to financial statements.
40
<PAGE>
AUGUST 31, 1997
PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - NON FERROUS 1.43%
26,460 Rio Tinto Plc $ 417,542
------------
METALS - STEEL 0.45%
47,340 British Steel Plc 132,822
------------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.49%
31,860 Pilkington Plc 75,181
14,220 Rexam Plc 68,609
------------
143,790
------------
MULTI-INDUSTRY 5.03%
81,225 B.A.T. Industries Plc 680,389
103,140 BTR Plc 364,654
15,300 Granada Group Plc 201,362
20,475 Lonrho Plc 41,010
18,990 TI Group Plc 181,400
------------
1,468,815
------------
REAL ESTATE 1.69%
16,335 British Land Company Plc 151,932
17,235 Land Securities Plc 251,006
11,835 MEPC Plc 89,924
------------
492,862
------------
RECREATION - OTHER CONSUMER
GOODS 0.65%
21,141 Emi Group Plc 190,633
------------
TELECOMMUNICATIONS 6.79%
157,725 British Telecommunications Plc 1,021,915
60,525 Cable & Wireless Plc 530,552
83,655 Vodafone Group Plc 430,079
------------
1,982,546
------------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
TEXTILES & APPAREL 0.19%
28,755 Coats Viyella Plc $ 55,262
------------
TRANSPORTATION - AIRLINES 0.97%
27,270 British Airways Plc 284,376
------------
TRANSPORTATION - SHIPPING 0.61%
17,010 Peninsular & Oriental Steam Plc 179,314
------------
UTILITIES - ELECTRICAL & GAS 4.59%
107,955 BG Plc 472,720
107,955 Centrica Plc* 155,385
43,965 National Grid Group Plc 189,664
29,835 National Power Plc 274,835
22,230 Scottish Power Plc 156,829
11,961 Southern Electric Plc 90,105
------------
1,339,538
------------
TOTAL COMMON STOCK - BASKET
(Cost $25,911,874) 29,209,676
------------
TOTAL INVESTMENTS
(COST $25,911,874)+ 100.00% $ 29,209,676
======= ============
- ------------------
* Non-Income producing security.
+ Aggregate cost for Federal income tax purposes is $25,998,189. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $3,690,981
Excess of tax cost over value (479,494)
----------
$3,211,487
==========
See accompanying notes to financial statements.
41
<PAGE>
AUGUST 31, 1997
STATEMENTS OF ASSETS AND LIABILITIES WEBS INDEX FUND, INC.
================================================================================
<TABLE>
<CAPTION>
AUSTRALIA AUSTRIA BELGIUM CANADA FRANCE GERMANY HONG KONG
WEBS WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
----------- ---------- ----------- ----------- ----------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at value ................ $41,326,362 $4,097,112 $32,338,997 $24,317,703 $14,197,917 $24,108,703 $25,396,523
Cash and foreign currency ............ 27,167 37,164 115,750 28,461 22,049 195,870 --
Collateral for securities loaned ..... 8,262,617 811,663 3,247,381 3,429,000 851,068 6,879,172 2,511,783
Dividends receivable ................. 87,191 3,912 89,196 31,574 160,936 26,955 35,251
Interest receivable .................. 1,721 363 538 196 458 1,432 1,607
Receivable for securities sold ....... -- -- -- -- -- 3,616 127,585
Deferred organization costs .......... 93,767 69,730 30,458 66,234 181,791 172,710 48,141
Prepaid expenses ..................... 2,526 480 742 4,395 2,478 3,524 2,779
----------- ---------- ----------- ----------- ----------- ----------- -----------
Total assets ..................... 49,801,351 5,020,424 35,823,062 27,877,563 15,416,697 31,391,982 28,123,669
----------- ---------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Payable for securities loaned ........ 8,262,617 811,663 3,247,381 3,429,000 851,068 6,879,172 2,511,783
Advisory fee payable ................. 10,102 986 7,854 5,777 3,520 5,970 5,914
Administration fee payable ........... 6,361 621 4,945 3,637 2,216 3,759 3,724
Distribution fee payable ............. 9,354 913 7,273 5,349 3,259 5,528 5,476
Due to custodian ..................... 3,972 843 6,032 1,478 1,744 2,213 109,694
Accrued expenses ..................... 23,214 609 21,916 14,502 6,166 9,475 15,464
Advances under loan arrangement ...... 80,000 -- -- 250,000 30,000 -- 55,000
----------- ---------- ----------- ----------- ----------- ----------- -----------
Total liabilities ................ 8,395,620 815,635 3,295,401 3,709,743 897,973 6,906,117 2,707,055
----------- ---------- ----------- ----------- ----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ...... 4,000 400 2,080 1,800 1,001 1,501 1,726
Paid-in capital ...................... 43,134,123 4,245,917 33,565,500 20,205,364 13,329,797 21,878,391 25,688,391
Accumulated net investment income/(loss) (170,227) 10,687 (402,053) 10,812 20,569 16,602 4,293
Accumulated net realized gain/(loss) on
investments ........................ -- (30,857) (45,166) (15,057) -- (29,363) (19,913)
Net unrealized appreciation/(depreciation)
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................. (1,562,165) (21,358) (592,700) 3,964,901 1,167,357 2,618,734 (257,883)
----------- ---------- ----------- ----------- ----------- ----------- -----------
Net Assets ........................... $41,405,731 $4,204,789 $32,527,661 $24,167,820 $14,518,724 $24,485,865 $25,416,614
=========== ========== =========== =========== =========== =========== ===========
Shares of common stock issued and
outstanding ........................ 4,000,030 400,030 2,080,030 1,800,030 1,001,000 1,501,000 1,726,000
=========== ========== =========== =========== =========== =========== ===========
Net Asset Value Per Share ............ $ 10.35 $ 10.51 $ 15.64 $ 13.43 $ 14.50 $ 16.31 $ 14.73
=========== ========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MALAYSIA MEXICO SINGAPORE
ITALY JAPAN (FREE) (FREE) NETHERLANDS (FREE)
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 ................ $32,491,909 $158,261,165 $12,249,788 $16,701,412 $9,757,221 $14,476,529
Cash and foreign currency ............ 28,852 461,052 20,833 15,535 14,266 186,181
Collateral for securities loaned ..... 4,926,896 31,889,727 3,156,680 2,202,975 2,274,624 2,572,153
Dividends receivable ................. 751 32,332 34,313 -- 8,932 17,667
Interest receivable .................. 1,294 10,668 1,958 1,156 518 1,405
Receivable for securities sold ....... -- -- 1,698 -- -- --
Deferred organization costs .......... 91,545 381,133 51,026 51,550 43,172 61,271
Prepaid expenses ..................... 5,825 16,576 3,786 1,648 1,562 2,601
----------- ------------ ----------- ----------- ---------- -----------
Total assets ..................... 37,547,072 191,052,653 15,520,082 18,974,276 12,100,295 17,317,807
----------- ------------ ----------- ----------- ---------- -----------
LIABILITIES
Payable for securities loaned ........ 4,926,896 31,889,727 3,156,680 2,202,975 2,274,624 2,572,153
Advisory fee payable ................. 7,625 40,130 3,481 4,206 2,414 3,704
Administration fee payable ........... 4,801 25,267 2,192 2,649 1,520 2,332
Distribution fee payable ............. 7,060 37,157 3,223 3,895 2,236 3,429
Due to custodian ..................... 2,557 17,783 1,681 4,143 1,775 3,452
Accrued expenses ..................... 13,461 85,773 13,845 9,900 6,592 11,175
Advances under loan arrangement ...... 90,000 -- -- 120,000 150,000 --
----------- ------------ ----------- ----------- ---------- -----------
Total liabilities ................ 5,052,400 32,095,837 3,181,102 2,347,768 2,439,161 2,596,245
----------- ------------ ----------- ----------- ---------- -----------
NET ASSETS
Capital stock, $0.001 par value ...... 1,950 12,601 1,500 1,100 451 1,700
Paid-in capital ...................... 29,068,365 175,715,355 21,231,445 14,002,544 7,746,137 19,776,404
Accumulated net investment income/(loss) (499,690) (160,294) 3,556 10,040 (8,564) 9,586
Accumulated net realized gain/(loss) on
investments ........................ (318,066) (1,860,820) (13,921) -- (2,467) (91,423)
Net unrealized appreciation/(depreciation)
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................. 4,242,113 (14,750,026) (8,883,600) 2,612,824 1,925,577 (4,974,705)
----------- ------------ ----------- ----------- ---------- -----------
Net Assets ........................... $32,494,672 $158,956,816 $12,338,980 $16,626,508 $9,661,134 $14,721,562
=========== ============ =========== =========== ========== ===========
Shares of common stock issued and
outstanding ........................ 1,950,030 12,601,000 1,500,030 1,100,030 451,000 1,700,030
=========== ============ =========== =========== ========== ===========
Net Asset Value Per Share ............ $ 16.66 $ 12.61 $ 8.23 $ 15.11 $ 21.42 $ 8.66
=========== ============ =========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
UNITED
SPAIN SWEDEN SWITZERLAND KINGDOM
WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES
---------- ---------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C>
Investments, at value ................ $8,361,440 $8,395,382 $13,912,165 $29,209,676
Cash and foreign currency ............ 11,419 12,670 67,061 66,022
Collateral for securities loaned ..... 1,725,044 368,954 805,603 --
Dividends receivable ................. 8,798 -- 17,858 344,488
Interest receivable .................. 565 234 782 221
Receivable for securities sold ....... -- -- -- 23,810
Deferred organization costs .......... 75,694 49,278 116,346 109,837
Prepaid expenses ..................... 836 1,059 1,612 4,700
---------- ---------- ----------- -----------
Total assets ..................... 10,183,796 8,827,577 14,921,427 29,758,754
---------- ---------- ----------- -----------
LIABILITIES
Payable for securities loaned ........ 1,725,044 368,954 805,603 --
Advisory fee payable ................. 2,005 1,987 3,427 7,074
Administration fee payable ........... 1,262 1,251 2,157 4,454
Distribution fee payable ............. 1,856 1,839 3,173 6,550
Due to custodian ..................... 1,697 4,629 2,405 2,467
Accrued expenses ..................... 5,564 5,505 9,598 16,855
Advances under loan arrangement ...... 125,000 200,000 290,000 --
---------- ---------- ----------- -----------
Total liabilities ................ 1,862,428 584,165 1,116,363 37,400
---------- ---------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ...... 450 450 1,001 1,801
Paid-in capital ...................... 7,709,950 7,053,407 12,815,527 26,481,956
Accumulated net investment income/(loss) 12,805 (8,712) 20,353 (65,142)
Accumulated net realized gain/(loss) on
investments ........................ (6,503) (3,941) (29,194) --
Net unrealized appreciation/(depreciation)
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................. 604,666 1,202,208 997,377 3,302,739
---------- ---------- ----------- -----------
Net Assets ........................... $8,321,368 $8,243,412 $13,805,064 $29,721,354
========== ========== =========== ===========
Shares of common stock issued and
outstanding ........................ 450,030 450,030 1,001,000 1,801,000
========== ========== =========== ===========
Net Asset Value Per Share ............ $ 18.49 $ 18.32 $ 13.79 $ 16.50
========== ========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
42 & 43
<PAGE>
FOR THE YEAR ENDED AUGUST 31, 1997
STATEMENTS OF OPERATIONS WEBS INDEX FUND, 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
----------- ------------ --------- ---------- ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C>
Dividends (net of foreign withholding taxes) .......... $ 512,869 $ 43,519 $ 835,120 $ 379,113 $ 346,742 $ 268,984
Interest .............................................. 17,984 2,398 12,573 3,810 7,445 23,132
----------- ----------- --------- ---------- ---------- ----------
Total investment income ............................... 530,853 45,917 847,693 382,923 354,187 292,116
----------- ----------- --------- ---------- ---------- ----------
EXPENSES:
Advisory fees ......................................... 49,326 8,459 38,995 59,093 35,574 49,546
Administration fees ................................... 31,057 5,326 24,552 37,207 22,398 31,196
Distribution fees ..................................... 45,672 7,833 36,106 54,716 32,938 45,876
Custodian fees and expenses ........................... 22,006 8,583 22,653 18,800 22,465 22,590
Transfer agent fees ................................... 6,440 5,890 5,890 6,140 6,490 6,890
Directors' fees ....................................... 8,816 432 5,711 15,489 6,280 9,986
Legal fees ............................................ 22,740 2,127 11,826 33,832 18,198 23,204
Audit fees ............................................ 12,386 1,424 6,016 25,321 9,370 13,355
Federal and state registration fees ................... 9,781 (2,964) 10,303 1,903 (3,522) (2,732)
Amortization of deferred organization costs ........... 10,645 7,918 3,458 7,519 20,645 19,614
Insurance ............................................. 5,849 2,850 1,682 6,678 9,471 10,123
Printing .............................................. 6,604 824 3,102 11,702 5,559 8,236
Licensing fees ........................................ 5,481 940 4,333 6,566 3,953 5,505
Amex listing fee ...................................... 671 153 151 1,247 711 883
Miscellaneous expenses ................................ 6,203 3,050 4,085 10,763 9,433 6,831
----------- ----------- --------- ---------- ---------- ----------
Total expenses before waiver ........................ 243,677 52,845 178,863 296,976 199,963 251,103
Less: Fees waived ................................... (247) (73) (50) (433) (261) (371)
----------- ----------- --------- ---------- ---------- ----------
Total expenses after waiver ......................... 243,430 52,772 178,813 296,543 199,702 250,732
----------- ----------- --------- ---------- ---------- ----------
Net investment income/(loss) .......................... 287,423 (6,855) 668,880 86,380 154,485 41,384
----------- ----------- --------- ---------- ---------- ----------
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 ............... 187,118 (24,670) 360,599 236,904 217,815 69,915
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 ................................ (7,026) (2,841) (3,077) (1,685) (15,464) (17,123)
----------- ----------- --------- ---------- ---------- ----------
168,792 (1,197,601) 357,522 629,622 571,535 727,681
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... (1,840,776) 1,155,714 (623,667) 3,938,920 1,283,516 2,325,587
----------- ----------- --------- ---------- ---------- ----------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies ................... (1,671,984) (41,887) (266,145) 4,568,542 1,855,051 3,053,268
----------- ----------- --------- ---------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $(1,384,561) $ (48,742) $ 402,735 $4,654,922 $2,009,536 $3,094,652
=========== =========== ========= ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MALAYSIA MEXICO
HONG KONG ITALY JAPAN (FREE) (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) .......... $462,953 $ 563,519 $ 756,630 $ 226,065 $ 165,009 $ 159,063
Interest .............................................. 10,950 45,491 78,721 23,543 8,090 7,763
-------- ---------- ------------ ---------- ---------- ----------
Total investment income ............................... 473,903 609,010 835,351 249,608 173,099 166,826
-------- ---------- ------------ ---------- ---------- ----------
EXPENSES:
Advisory fees ......................................... 40,743 78,513 318,796 44,814 26,482 22,577
Administration fees ................................... 25,653 49,434 200,723 28,216 16,674 14,215
Distribution fees ..................................... 37,724 72,698 295,181 41,495 24,521 20,904
Custodian fees and expenses ........................... 26,218 28,251 76,899 21,017 29,581 11,762
Transfer agent fees ................................... 6,690 7,040 9,340 7,490 6,540 6,140
Directors' fees ....................................... 9,210 20,063 71,829 12,124 5,752 5,430
Legal fees ............................................ 20,484 44,154 133,389 28,056 14,132 12,414
Audit fees ............................................ 16,264 37,569 89,292 20,936 9,979 9,120
Federal and state registration fees ................... 5,807 (3,250) 15,777 4,092 3,223 741
Amortization of deferred organization costs ........... 5,465 10,394 43,286 5,792 5,851 4,899
Insurance ............................................. 4,459 9,090 31,798 5,519 3,637 2,919
Printing .............................................. 6,808 16,398 48,553 9,646 4,736 4,495
Licensing fees ........................................ 4,527 8,724 35,422 4,979 2,942 2,508
Amex listing fee ...................................... 623 1,793 5,239 990 482 471
Miscellaneous expenses ................................ 4,750 7,022 28,873 8,190 5,491 3,544
-------- ---------- ------------ ---------- ---------- ----------
Total expenses before waiver ........................ 215,425 387,893 1,404,397 243,356 160,023 122,139
Less: Fees waived ................................... (205) (651) (2,204) (288) (168) (168)
-------- ---------- ------------ ---------- ---------- ----------
Total expenses after waiver ......................... 215,220 387,242 1,402,193 243,068 159,855 121,971
-------- ---------- ------------ ---------- ---------- ----------
Net investment income/(loss) .......................... 258,683 221,768 (566,842) 6,540 13,244 44,855
-------- ---------- ------------ ---------- ---------- ----------
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 ............... 571,172 (309,005) (1,796,229) (12,023) 480,040 320,639
Net realized gain/(loss) on investments on
in-kind redemptions ................................. 250,388 (229,391) (1,922,263) -- 235,858 --
Net realized gain/(loss) on foreign currency
related transactions ................................ (168) (32,162) 22,963 (5,429) 1,324 (17,039)
-------- ---------- ------------ ---------- ---------- ----------
821,392 (570,558) (3,695,529) (17,452) 717,222 303,600
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... (209,522) 5,911,350 (6,001,060) (8,968,575) 2,056,611 1,559,687
-------- ---------- ------------ ---------- ---------- ----------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies ................... 611,870 5,340,792 (9,696,589) (8,986,027) 2,773,833 1,863,287
-------- ---------- ------------ ---------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $870,553 $5,562,560 $(10,263,431) $(8,979,487) $2,787,077 $1,908,142
======== ========== ============ =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
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) .......... $ 175,903 $ 135,210 $ 76,085 $ 104,816 $ 811,670
Interest .............................................. 8,546 5,719 5,004 5,618 6,384
----------- ---------- --------- ---------- ----------
Total investment income ............................... 184,449 140,929 81,089 110,434 818,054
----------- ---------- --------- ---------- ----------
EXPENSES:
Advisory fees ......................................... 34,141 14,044 15,088 24,197 57,283
Administration fees ................................... 21,496 8,842 9,500 15,235 36,067
Distribution fees ..................................... 31,612 13,003 13,971 22,405 53,040
Custodian fees and expenses ........................... 15,625 11,191 11,348 15,972 17,561
Transfer agent fees ................................... 7,290 5,990 5,890 6,240 6,140
Directors' fees ....................................... 7,593 2,514 3,159 4,012 12,452
Legal fees ............................................ 18,826 6,328 7,867 10,946 29,290
Audit fees ............................................ 13,890 3,020 4,889 6,118 24,578
Federal and state registration fees ................... 3,341 1,494 1,332 2,459 3,141
Amortization of deferred organization costs ........... 6,979 8,594 5,595 13,349 12,523
Insurance ............................................. 4,670 3,603 3,330 5,816 10,025
Printing .............................................. 6,235 1,624 2,632 2,741 9,365
Licensing fees ........................................ 3,794 1,560 1,676 2,688 6,365
Amex listing fee ...................................... 634 250 308 314 978
Miscellaneous expenses ................................ 4,854 4,667 5,094 4,189 14,661
----------- ---------- --------- ---------- ----------
Total expenses before waiver ........................ 180,980 86,724 91,679 136,681 293,469
Less: Fees waived ................................... (212) (95) (109) (130) (353)
----------- ---------- --------- ---------- ----------
Total expenses after waiver ......................... 180,768 86,629 91,570 136,551 293,116
----------- ---------- --------- ---------- ----------
Net investment income/(loss) .......................... 3,681 54,300 (10,481) (26,117) 524,938
----------- ---------- --------- ---------- ----------
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 ............... 29,184 379,743 343,190 577,114 304,957
Net realized gain/(loss) on investments on
in-kind redemptions ................................. (117,574) 205,282 -- (13,406) 1,632,777
Net realized gain/(loss) on foreign currency
related transactions ................................ (1,787) (1,872) (2,632) (1,824) 11,954
----------- ---------- --------- ---------- ----------
(90,177) 583,153 340,558 561,884 1,949,688
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... (4,451,395) 460,457 912,384 910,641 2,438,474
----------- ---------- --------- ---------- ----------
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies ................... (4,541,572) 1,043,610 1,252,942 1,472,525 4,388,162
----------- ---------- --------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $(4,537,891) $1,097,910 $1,242,461 $1,446,408 $4,913,100
=========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
44 & 45
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC.
================================================================================
<TABLE>
<CAPTION>
AUSTRALIA AUSTRIA
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------ ------------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income/(loss) ......................... $ 287,423 $ 83,647 $ (6,855) $ 31,488
Net realized gain/(loss) on investments and
foreign currency related transactions .............. 168,792 23,767 (1,197,601) 85,287
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ...... (1,840,776) 278,611 1,155,714 (1,177,072)
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations .................................... (1,384,561) 386,025 (48,742) (1,060,297)
----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ............................... (287,423) (83,647) -- (26,054)
In excess of net investment income ................... (160,198) (47,153) -- (7,923)
Net realized gains ................................... (187,118) (21,359) -- (33,980)
In excess of net realized gains ...................... -- -- -- --
Return of capital .................................... (796,674) (34,847) -- (100,047)
----------- ----------- ----------- -----------
Net decrease in net assets from distributions ........ (1,431,413) (187,006) -- (168,004)
----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ................. 34,012,042 11,977,456 2,076,237 19,180,869
Cost of shares redeemed .............................. (1,967,117) -- (11,342,765) (4,432,844)
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived from
capital share transactions ......................... 32,044,925 11,977,456 (9,266,528) 14,748,025
----------- ----------- ----------- -----------
Total increase/(decrease) in net assets .............. 29,228,951 12,176,475 (9,315,270) 13,519,724
NET ASSETS:
Beginning of period .................................. 12,176,780 305 13,520,059 335
----------- ----------- ----------- -----------
End of period ........................................ $41,405,731 $12,176,780 $ 4,204,789 $13,520,059
=========== =========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold .......................................... 3,000,000 1,200,000 200,000 1,700,000
Shares redeemed ...................................... (200,000) -- (1,100,000) (400,000)
----------- ----------- ----------- -----------
Net increase/(decrease) in shares ................ 2,800,000 1,200,000 (900,000) 1,300,000
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
BELGIUM CANADA
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------ ------------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
----------- ----------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income/(loss) ......................... $ 668,880 $ 42,944 $ 86,380 $ 40,304
Net realized gain/(loss) on investments and
foreign currency related transactions .............. 357,522 18,047 629,622 71,510
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ...... (623,667) 30,967 3,938,920 25,981
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations .................................... 402,735 91,958 4,654,922 137,795
----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ............................... (668,880) (42,944) (86,380) (35,145)
In excess of net investment income ................... (587,754) (7,116) (4,605) (7,532)
Net realized gains ................................... (230,479) (5,241) (251,961) (3,392)
In excess of net realized gains ...................... -- -- -- --
Return of capital .................................... (24,077) -- -- (3,132)
----------- ----------- ----------- -----------
Net decrease in net assets from distributions ........ (1,511,190) (55,301) (342,946) (49,201)
----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ................. 31,836,329 2,982,750 9,629,687 15,788,335
Cost of shares redeemed .............................. -- (1,220,075) (3,550,242) (2,100,833)
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived from
capital share transactions ......................... 31,836,329 1,762,675 6,079,445 13,687,502
----------- ----------- ----------- -----------
Total increase/(decrease) in net assets .............. 30,727,874 1,799,332 10,391,421 13,776,096
NET ASSETS:
Beginning of period .................................. 1,799,787 455 13,776,399 303
----------- ----------- ----------- -----------
End of period ........................................ $32,527,661 $ 1,799,787 $24,167,820 $13,776,399
=========== =========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold .......................................... 1,960,000 200,000 800,000 1,500,000
Shares redeemed ...................................... -- (80,000) (300,000) (200,000)
----------- ----------- ----------- -----------
Net increase/(decrease) in shares ................ 1,960,000 120,000 500,000 1,300,000
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FRANCE GERMANY
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------ -----------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
----------- ----------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income/(loss) ......................... $ 154,485 $ 146,220 $ 41,384 $ 60,634
Net realized gain/(loss) on investments and
foreign currency related transactions .............. 571,535 583,565 727,681 (40,272)
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ...... 1,283,516 (116,159) 2,325,587 293,147
------------ ----------- ------------ -----------
Net increase/(decrease) in net assets resulting
from operations .................................... 2,009,536 613,626 3,094,652 313,509
------------ ----------- ------------ -----------
DISTRIBUTIONS:
Net investment income. ............................... (154,485) (140,840) (41,384) (48,171)
In excess of net investment income ................... -- (20,645) (19,425) (19,615)
Net realized gains ................................... (198,868) (8,421) (99,278) --
In excess of net realized gains ...................... -- -- -- (14,044)
Return of capital .................................... -- (329,606) (37,144) (132,489)
------------ ----------- ------------ -----------
Net decrease in net assets from distributions ........ (353,353) (499,512) (197,231) (214,319)
------------ ----------- ------------ -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ................. 5,656,482 30,831,940 13,746,949 32,463,206
Cost of shares redeemed .............................. (15,723,875) (8,028,940) (20,822,544) (3,911,977)
------------ ----------- ------------ -----------
Net increase/(decrease) in net assets derived from
capital share transactions ......................... (10,067,393) 22,803,000 (7,075,595) 28,551,229
------------ ----------- ------------ -----------
Total increase/(decrease) in net assets .............. (8,411,210) 22,917,114 (4,178,174) 28,650,419
NET ASSETS:
Beginning of period .................................. 22,929,934 12,820 28,664,039 13,620
------------ ----------- ------------ -----------
End of period ........................................ $ 14,518,724 $22,929,934 $ 24,485,865 $28,664,039
============ =========== ============ ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold .......................................... 400,000 2,400,000 900,000 2,400,000
Shares redeemed ...................................... (1,200,000) (600,000) (1,500,000) (300,000)
------------ ----------- ------------ -----------
Net increase/(decrease) in shares ................ (800,000) 1,800,000 (600,000) 2,100,000
============ =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
HONG KONG ITALY
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------- -----------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
----------- ----------- ----------- ----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income/(loss) ......................... $ 258,683 $ 66,748 $ 221,768 $ 346,291
Net realized gain/(loss) on investments and
foreign currency related transactions .............. 821,392 43,430 (570,558) 411,113
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ...... (209,522) (48,361) 5,911,350 (1,669,237)
----------- ----------- ------------ -----------
Net increase/(decrease) in net assets resulting
from operations .................................... 870,553 61,817 5,562,560 (911,833)
----------- ----------- ------------ -----------
DISTRIBUTIONS:
Net investment income. ............................... (258,683) (66,748) (221,768) (346,291)
In excess of net investment income ................... (12,817) (9,901) (469,323) (78,413)
Net realized gains ................................... (581,360) (3,153) -- (325,362)
In excess of net realized gains ...................... (3,851) -- -- --
Return of capital .................................... (236,349) (24,346) -- (195,546)
----------- ----------- ------------ -----------
Net decrease in net assets from distributions ........ (1,093,060) (104,148) (691,091) (945,612)
----------- ----------- ------------ -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ................. 19,035,945 8,886,964 11,652,066 39,202,785
Cost of shares redeemed .............................. (1,242,282) (1,012,585) (19,198,572) (2,176,057)
----------- ----------- ------------ -----------
Net increase/(decrease) in net assets derived from
capital share transactions ......................... 17,793,663 7,874,379 (7,546,506) 37,026,728
----------- ----------- ------------ -----------
Total increase/(decrease) in net assets .............. 17,571,156 7,832,048 (2,675,037) 35,169,283
NET ASSETS:
Beginning of period .................................. 7,845,458 13,410 35,169,709 426
----------- ----------- ------------ -----------
End of period ........................................ $25,416,614 $ 7,845,458 $ 32,494,672 $35,169,709
=========== =========== ============ ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold .......................................... 1,200,000 675,000 750,000 2,700,000
Shares redeemed ...................................... (75,000) (75,000) (1,350,000) (150,000)
----------- ----------- ------------ -----------
Net increase/(decrease) in shares ................ 1,125,000 600,000 (600,000) 2,550,000
=========== =========== ============ ===========
</TABLE>
See accompanying notes to financial statements.
46 & 47
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC.
================================================================================
<TABLE>
<CAPTION>
JAPAN MALAYSIA (FREE) MEXICO (FREE)
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------- --------------------- --------------------
For the For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
----------- ----------- --------- ---------- --------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) ......................... $ (566,842) $ (395,549) $ 6,540 $ (9,877) $ 13,244 $ 162
Net realized gain/(loss) on investments and
foreign currency related transactions .............. (3,695,529) 167,831 (17,452) 3,867 717,222 (165)
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ...... (6,001,060) (8,748,966) (8,968,575) 84,975 2,056,611 556,213
------------ ------------ ----------- ---------- ----------- ----------
Net increase/(decrease) in net assets resulting
from operations .................................... (10,263,431) (8,976,684) (8,979,487) 78,965 2,787,077 556,210
------------ ------------ ----------- ---------- ----------- ----------
DISTRIBUTIONS:
Net investment income. ............................... -- -- (6,540) -- (13,244) --
In excess of net investment income ................... -- -- (7,611) -- (6,992) (2,004)
Net realized gains ................................... -- -- -- -- (480,039) --
In excess of net realized gains ...................... (59,225) -- -- -- -- --
Return of capital .................................... -- -- (25,600) (4,200) (50,400) (5,496)
------------ ------------ ----------- ---------- ----------- ----------
Net decrease in net assets from distributions ........ (59,225) -- (39,751) (4,200) (550,675) (7,500)
------------ ------------ ----------- ---------- ----------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ................. 91,183,410 112,125,708 12,040,298 9,242,755 9,898,729 5,209,737
Cost of shares redeemed .............................. (25,067,882) -- -- -- (1,267,357) --
------------ ------------ ----------- ---------- ----------- ----------
Net increase/(decrease) in net assets derived from
capital share transactions ......................... 66,115,528 112,125,708 12,040,298 9,242,755 8,631,372 5,209,737
------------ ------------ ----------- ---------- ----------- ----------
Total increase/(decrease) in net assets .............. 55,792,872 103,149,024 3,021,060 9,317,520 10,867,774 5,758,447
NET ASSETS:
Beginning of period .................................. 103,163,944 14,920 9,317,920 400 5,758,734 287
------------ ------------ ----------- ---------- ----------- ----------
End of period ........................................$158,956,816 $103,163,944 $12,338,980 $9,317,920 $16,626,508 $5,758,734
============ ============ =========== ========== =========== ==========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold .......................................... 7,200,000 7,200,000 825,000 675,000 700,000 500,000
Shares redeemed ...................................... (1,800,000) -- -- -- (100,000) --
------------ ------------ ----------- ---------- ----------- ----------
Net increase/(decrease) in shares .................... 5,400,000 7,200,000 825,000 675,000 600,000 500,000
============ ============ =========== ========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
NETHERLANDS SINGAPORE (FREE) SPAIN
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
--------------------- ------------------- ----------------------
For the For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
--------- ---------- --------- --------- --------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .......................... $ 44,855 $ 59,698 $ 3,681 $ 21,999 $ 54,300 $ 46,585
Net realized gain/(loss) on investments and
foreign currency related transactions ............... 303,600 31,842 (90,177) (120,662) 583,153 238,394
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ....... 1,559,687 365,890 (4,451,395) (523,310) 460,457 144,209
---------- ---------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations ..................................... 1,908,142 457,430 (4,537,891) (621,973) 1,097,910 429,188
---------- ---------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ................................ (44,855) (56,328) (3,681) (19,081) (54,300) (41,405)
In excess of net investment income .................... (4,630) (4,914) (13,239) (6,120) (24,069) --
Net realized gains .................................... (320,639) (31,842) (37,220) -- (379,744) (29,254)
In excess of net realized gains ....................... -- (2,655) -- -- -- --
Return of capital ..................................... (8,873) (37,393) (37,832) -- (39,171) --
---------- ---------- ----------- ----------- ----------- -----------
Net decrease in net assets from distributions ......... (378,997) (133,132) (91,972) (25,201) (497,284) (70,659)
---------- ---------- ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares .................. 1,170,170 6,621,571 11,351,615 10,940,175 4,683,798 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 .......................... 1,170,170 6,621,571 10,244,407 9,753,806 3,493,366 3,868,418
---------- ---------- ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets ............... 2,699,315 6,945,869 5,614,544 9,106,632 4,093,992 4,226,947
NET ASSETS:
Beginning of period ................................... 6,961,819 15,950 9,107,018 386 4,227,376 429
---------- ---------- ----------- ----------- ----------- -----------
End of period ......................................... $9,661,134 $6,961,819 $14,721,562 $ 9,107,018 $ 8,321,368 $ 4,227,376
========== ========== =========== =========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold ........................................... 50,000 400,000 1,000,000 900,000 225,000 525,000
Shares redeemed ....................................... -- -- (100,000) (100,000) (75,000) (225,000)
---------- ---------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares ..................... 50,000 400,000 900,000 800,000 150,000 300,000
========== ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
SWEDEN SWITZERLAND UNITED KINGDOM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------- ---------------------- -----------------------
For the For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
--------- ----------- --------- ---------- -------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .......................... $ (10,481)$ 51,107 $ (26,117)$ 43,339 $ 524,938 $ 195,730
Net realized gain/(loss) on investments and
foreign currency related transactions ............... 340,558 94,837 561,884 (107,039) 1,949,688 106,646
Net change in unrealized appreciation/(depreciation)
on investments and translation of other assets and
liabilities denominated in foreign currencies ....... 912,384 289,824 910,641 86,736 2,438,474 864,265
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations ..................................... 1,242,461 435,768 1,446,408 23,036 4,913,100 1,166,641
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ................................ -- (51,107) -- (35,720) (524,938) (195,730)
In excess of net investment income .................... -- (16,685) -- -- (102,415) (31,721)
Net realized gains .................................... (345,698) (26,271) (568,979) -- (304,957) (987)
In excess of net realized gains ....................... -- -- -- -- -- --
Return of capital ..................................... -- -- (1,191) -- (176,359) (26,817)
----------- ----------- ----------- ----------- ----------- -----------
Net decrease in net assets from distributions ......... (345,698) (94,063) (570,170) (35,720) (1,108,669) (255,255)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares .................. 2,946,675 5,130,382 8,262,901 10,622,671 19,063,646 17,417,928
Cost of shares redeemed ............................... -- (1,072,542) (1,492,280) (4,464,972) (8,936,965) (2,551,512)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived from
capital share transactions .......................... 2,946,675 4,057,840 6,770,621 6,157,699 10,126,681 14,866,416
----------- ----------- ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets ............... 3,843,438 4,399,545 7,646,859 6,145,015 13,931,112 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 ......................................... $ 8,243,412 $ 4,399,974 $13,805,064 $ 6,158,205 $29,721,354 $15,790,242
=========== =========== =========== =========== =========== ===========
- --------
*Commencement of operations.
Capital Share Transactions:
Shares sold ........................................... 150,000 375,000 625,000 875,000 1,200,000 1,400,000
Shares redeemed ....................................... -- (75,000) (125,000) (375,000) (600,000) (200,000)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares ..................... 150,000 300,000 500,000 500,000 600,000 1,200,000
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
48 & 49
<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 For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
--------- --------- --------- --------- --------- ---------
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) (+) ........................ 0.17 0.10 (0.02) 0.04 0.77 0.40
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and translation
of other assets and liabilities denominated in
foreign currencies ...................................... 0.47 0.29 0.13 (0.41) 0.62 0.36
-------- -------- -------- -------- -------- ---------
Net increase/(decrease) in net assets resulting from
operations ........................................ 0.64 0.39 0.11 (0.37) 1.39 0.76
-------- -------- -------- -------- -------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income .................... (0.16) (0.08) -- (0.02) (0.33) (0.54)
Dividends in excess of net investment income ............ (0.04) (0.05) -- (0.01) (0.28) (0.09)
Distributions from net realized gains ................... (0.04) (0.02) -- (0.03) (0.12) (0.06)
Distributions in excess of net realized gains ........... -- -- -- -- -- --
Return of capital ....................................... (0.20) (0.04) -- (0.08) (0.01) --
-------- -------- -------- -------- -------- ---------
Total dividends and distributions ................... (0.44) (0.19) -- (0.14) (0.74) (0.69)
-------- -------- -------- -------- -------- ---------
Net asset value, end of period .......................... $ 10.35 $ 10.15 $ 10.51 $10.40 $ 15.64 $ 14.99
======== ======== ======== ======== ======== =========
TOTAL INVESTMENT RETURN (2) ............................... 6.23% 3.88%(4) 1.06% (3.39)%(4) 9.26% 5.01%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .................... $41,406 $12,177 $ 4,205 $13,520 $32,528 $ 1,800
Ratios of expenses to average net assets (5) ............ 1.33% 1.59%(3) 1.68% 1.56%(3) 1.24% 2.29%(3)
Ratios of net investment income/(loss) to average
net assets (5) ........................................ 1.57% 2.18%(3) (0.22%) 0.87%(3) 4.63% 5.67%(3)
Portfolio turnover (6) .................................. 5.30% 8.84%(4) 28.47% 9.60%(4) 16.83% 6.25%(4)
Average commission rate paid ............................ $0.0182 $0.0085 $0.1719 $0.2986 $0.3379 $0.4327
* Commencement of operations.
** Less than one cent per share.
+ 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 1.33% 1.60%(3) 1.69% 1.57%(3) 1.24% 2.30%(3)
Ratios of net investment income/(loss) to average
net assets before waivers 1.57% 2.17%(3) (0.22)% 0.86%(3) 4.63% 5.66%(3)
(6) Excludes portfolio securities received or delivered as
a result of processing capital share transactions in
Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
CANADA FRANCE
WEBS WEBS
INDEX INDEX
SERIES SERIES
---------------------- ----------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
-------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $ 10.60 $10.17(1) $ 12.73 $12.42(1)
-------- -------- -------- --------
Net investment income/(loss) (+) ......................... 0.05 0.04 0.17 0.17
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and translation
of other assets and liabilities denominated in
foreign currencies ....................................... 2.97 0.43 1.95 0.45
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting from
operations ......................................... 3.02 0.47 2.12 0.62
-------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income ..................... (0.05) (0.03) (0.15) (0.09)
Dividends in excess of net investment income ............. (0.00)** (0.01) -- (0.01)
Distributions from net realized gains .................... (0.14) -- (0.20) 0.00**
Distributions in excess of net realized gains ............ -- 0.00** -- --
Return of capital ........................................ -- 0.00** -- (0.21)
-------- -------- -------- --------
Total dividends and distributions .................... (0.19) (0.04) (0.35) (0.31)
-------- -------- -------- --------
Net asset value, end of period ........................... $13.43 $10.60 $ 14.50 $12.73
======== ======== ======== ========
TOTAL INVESTMENT RETURN (2) ................................ 28.50% 4.63%(4) 16.60% 4.95%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ..................... $24,168 $13,776 $14,519 $22,930
Ratios of expenses to average net assets (5) ............. 1.35% 1.44%(3) 1.52% 1.84%(3)
Ratios of net investment income/(loss) to average
net assets (5) ......................................... 0.39% 0.79%(3) 1.17% 2.72%(3)
Portfolio turnover (6) ................................... 11.02% 0.00%(4) 7.13% 0.00%(4)
Average commission rate paid ............................. $0.0217 -- $0.0137 $0.3956
* Commencement of operations.
** Less than one cent per share.
+ 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 1.36% 1.45%(3) 1.52% 1.85%(3)
Ratios of net investment income/(loss) to average
net assets before waivers 0.39% 0.78%(3) 1.17% 2.71%(3)
(6) Excludes portfolio securities received or delivered as
a result of processing capital share transactions in
Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
GERMANY HONG KONG ITALY
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
----------------------- ---------------------- ----------------------
For the For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
-------- --------- -------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 13.64 $13.23(1) $ 13.05 $12.83(1) $ 13.79 $13.62(1)
-------- -------- -------- -------- ------- --------
Net investment income/(loss) (+) ..................... 0.03 0.06 0.26 0.15 0.12 0.25
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions and translation
of other assets and liabilities
denominated in foreign currencies .................... 2.77 0.47 2.12 0.27 3.10 0.31
-------- -------- -------- -------- ------- --------
Net increase/(decrease) in net
assets resulting from operations ................ 2.80 0.53 2.38 0.42 3.22 0.56
-------- -------- -------- -------- ------- --------
LESS DISTRIBUTIONS
Dividends from net investment income ................. (0.03) (0.03) (0.21) (0.13) (0.11) (0.14)
Dividends in excess of net investment income ......... (0.01) (0.01) (0.01) (0.02) (0.24) (0.03)
Distributions from net realized gains ................ (0.07) -- (0.34) (0.01) -- (0.14)
Distributions in excess of net realized gains ........ -- (0.01) 0.00** -- -- --
Return of capital .................................... (0.02) (0.07) (0.14) (0.04) -- (0.08)
-------- -------- -------- -------- ------- --------
Total dividends and distributions ................ (0.13) (0.12) (0.70) (0.20) (0.35) (0.39)
-------- -------- -------- -------- ------- --------
Net asset value, end of period ....................... $ 16.31 $13.64 $ 14.73 $13.05 $ 16.66 $ 13.79
======== ======== ======== ======== ======= ========
TOTAL INVESTMENT RETURN (2) ............................ 20.51% 4.00%(4) 17.80% 3.22%(4) 23.37% 4.11%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ................. $24,486 $28,664 $25,417 $ 7,845 $32,495 $35,170
Ratios of expenses to average net assets (5) ......... 1.37% 1.68%(3) 1.43% 1.52%(3) 1.33% 1.43%(3)
Ratios of net investment income/(loss) to
average net assets (5) ............................... 0.23% 1.00%(3) 1.71% 2.37%(3) 0.76% 3.69%(3)
Portfolio turnover (6) ............................... 9.04% 0.00%(4) 22.90% 0.00%(4) 13.70% 19.80%(4)
Average commission rate paid ......................... $0.0236 -- $0.0058 $0.0007 $0.0045 $0.0046
* Commencement of operations.
** Less than one cent per share.
+ 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 ................................... 1.37% 1.69%(3) 1.43% 1.53%(3) 1.33% 1.44%(3)
Ratios of net investment income/(loss) to
average net assets before waivers ................ 0.22% 0.99%(3) 1.71% 2.36%(3) 0.76% 3.68%(3)
(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.
</TABLE>
50 & 51
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS WEBS INDEX FUNDS, INC.
====================================================================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
JAPAN MALAYSIA (FREE) MEXICO (FREE) NETHERLANDS
WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES
------------------- -------------------- ------------------- --------------------
For the For the For the For the For the For the For the For the
year period year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
-------- --------- -------- --------- -------- --------- -------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <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) $ 17.36 $ 15.91(1)
-------- ---------- -------- -------- -------- --------- -------- --------
Net investment income/(loss) (+) ..... (0.06) (0.07) 0.01 (0.02) 0.02 0.00** 0.11 0.24
Net realized and unrealized gain/(loss)
on investments and foreign
currency related transactions
and translation of other assets
and liabilities denominated
in foreign currencies .............. (1.65) (0.39) (5.55) 0.59 4.07 1.59 4.79 1.54
-------- ---------- -------- -------- -------- -------- -------- --------
Net increase/(decrease) in net
assets resulting from operations (1.71) (0.46) (5.54) 0.57 4.09 1.59 4.90 1.78
-------- ---------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income . -- -- 0.00** -- (0.01) -- (0.10) (0.14)
Dividends in excess of net
investment income .................. -- -- (0.01) -- 0.01 (0.01) (0.01) (0.01)
Distributions from net realized gains -- -- -- -- (0.44) -- (0.71) (0.08)
Distributions in excess of net
realized gains ..................... (0.01) -- -- -- -- -- -- (0.01)
Return of capital .................... -- -- (0.02) (0.01) (0.04) (0.01) (0.02) (0.09)
-------- ---------- -------- -------- -------- -------- -------- --------
Total dividends and distributions (0.01) -- (0.03) (0.01) (0.50) (0.02) (0.84) (0.33)
-------- ---------- -------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 12.61 $ 14.33 $ 8.23 $13.80 $ 15.11 $ 11.52 $ 21.42 $ 17.36
======== ========== ======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN (2) ............ (11.97)% (3.11)%(4)(40.20)% 4.28%(4) 35.21% 15.93%(4) 28.04% 11.19%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .$158,957 $103,164 $12,339 $9,318 $16,627 $ 5,759 $ 9,661 $ 6,962
Ratios of expenses to average
net assets (5) ..................... 1.19% 1.37%(3) 1.46% 1.58%(3) 1.63% 1.75%(3) 1.46% 1.63%(3)
Ratios of net investment
income/(loss) to average
net assets (5) ..................... (0.48)% (1.01)%(3) 0.04% (0.35)%(3) 0.14% 0.01%(3) 0.54% 2.93%(3)
Portfolio turnover (6) ............... 12.90% 21.54%(4) 0.00% 0.00%(4) 22.80% 0.00%(4) 12.68% 4.32%(4)
Average commission rate paid .........$ 0.0162 $ 0.0152 $ -- $ -- $0.0066 $ -- $0.0354 $0.0651
* Commencement of operations.
** Less than one cent per share.
+ 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 ............ 1.19% 1.38%(3) 1.47% 1.59%(3) 1.63% 1.76%(3) 1.46% 1.64%(3)
Ratios of net investment
income/(loss) to average
net assets before waivers ...... (0.48)% (1.02)%(3) 0.04% (0.36)%(3) 0.13% 0.00%(3) 0.53% 2.92%(3)
(6) Excludes portfolio securities
received or delivered as a result
of processing capital share
transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
SINGAPORE (FREE) SPAIN SWEDEN
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------- ------------------- --------------------
For the For the For the For the For the For the
year period year period year period
ended 03/12/96*- ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96 08/31/97 08/31/96
-------- --------- -------- --------- -------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . $ 11.38 $ 12.24(1) $ 14.09 $ 13.28(1) $ 14.67 $ 13.22(1)
-------- -------- -------- -------- -------- ---------
Net investment income/(loss) (+) ..... 0.00** 0.04 0.19 0.14 (0.03) 0.20
Net realized and unrealized gain/(loss)
on investments and foreign
currency related transactions
and translation of other assets
and liabilities denominated
in foreign currencies .............. (2.67) (0.86) 5.33 0.98 4.45 1.67
-------- -------- -------- -------- -------- --------
Net increase/(decrease) in net
assets resulting from operations (2.67) (0.82) 5.52 1.12 4.42 1.87
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income . 0.00** (0.03) (0.12) (0.18) -- (0.23)
Dividends in excess of net
investment income .................. (0.01) (0.01) (0.05) -- -- (0.07)
Distributions from net realized gains (0.02) -- (0.86) (0.13) (0.77) (0.12)
Distributions in excess of net
realized gains ..................... -- -- -- -- -- --
Return of capital .................... (0.02) -- (0.09) -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions (0.05) (0.04) (1.12) (0.31) (0.77) (0.42)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 8.66 $ 11.38 $ 18.49 $ 14.09 $ 18.32 $ 14.67
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN (2) ............ (23.48)% (6.73)%(4) 39.15% 8.45%(4) 30.10% 14.13%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) . $14,722 $ 9,107 $ 8,321 $ 4,227 $ 8,243 $ 4,400
Ratios of expenses to average
net assets (5) ..................... 1.43% 1.56%(3) 1.67% 1.76%(3) 1.64% 1.75%(3)
Ratios of net investment
income/(loss) to average
net assets (5) ..................... 0.03% 0.69%(3) 1.04% 2.04%(3) (0.19)% 3.05%(3)
Portfolio turnover (6) ............... 13.40% 26.29%(4) 19.21% 4.73%(4) 13.71% 5.87%(4
Average commission rate paid ......... $0.0076 $0.0118 $0.0344 $0.0723 $0.0229 $0.0561
* Commencement of operations.
** Less than one cent per share.
+ 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 ............ 1.43% 1.57%(3) 1.67% 1.77%(3) 1.64% 1.76%(3)
Ratios of net investment
income/(loss) to average
net assets before waivers ...... 0.03% 0.68%(3) 1.04% 2.03%(3) (0.19)% 3.04%(3)
(6) Excludes portfolio securities
received or delivered as a result
of processing capital share
transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
SWITZERLAND UNITED KINGDOM
WEBS WEBS
INDEX INDEX
SERIES SERIES
-------------------- -------------------
For the For the For the For the
year period year period
ended 03/12/96*- ended 03/12/96*-
08/31/97 08/31/96 08/31/97 08/31/96
-------- --------- -------- ---------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C>
Net asset value, beginning of period .. $ 12.29 $ 12.07(1) $ 13.15 $ 12.14(1)
-------- -------- -------- --------
Net investment income/(loss) (+) ...... (0.04) 0.08 0.38 0.21
Net realized and unrealized gain/(loss)
on investments and foreign
currency related transactions
and translation of other assets
and liabilities denominated
in foreign currencies ............... 2.11 0.24 3.62 1.06
-------- -------- -------- --------
Net increase/(decrease) in net
assets resulting from operations 2.07 0.32 4.00 1.27
-------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income .. -- (0.10) (0.32) (0.20)
Dividends in excess of net
investment income ................... -- -- (0.06) (0.03)
Distributions from net realized gains . (0.57) -- (0.17) 0.00**
Distributions in excess of net
realized gains ...................... -- -- -- --
Return of capital ..................... 0.00** -- (0.10) (0.03)
-------- -------- -------- --------
Total dividends and distributions . (0.57) (0.10) (0.65) (0.26)
-------- -------- -------- --------
Net asset value, end of period ........ $ 13.79 $ 12.29 $ 16.50 $ 13.15
======== ======== ======== ========
TOTAL INVESTMENT RETURN (2) ............. 16.69% 2.60%(4) 30.48% 10.41%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .. $13,805 $ 6,158 $29,721 $15,790
Ratios of expenses to average
net assets (5) ...................... 1.52% 1.82%(3) 1.38% 1.61%(3)
Ratios of net investment
income/(loss) to average
net assets (5) ...................... (0.29)% 1.39%(3) 2.47% 3.62%(3)
Portfolio turnover (6) ................ 48.05% 17.06%(4) 1.84% 0.00%(4)
Average commission rate paid .......... $0.8788 $0.7852 $0.0314 $ --
* Commencement of operations.
** Less than one cent per share.
+ 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 ............. 1.53% 1.83%(3) 1.38% 1.62%(3)
Ratios of net investment
income/(loss) to average
net assets before waivers ....... (0.29)% 1.38%(3) 2.47% 3.61%(3)
(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
================================================================================
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 (Free) 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). On June 2, 1997 the Malaysia WEBS Index Series
commenced using the MSCI Malaysia (Free) Index as its benchmark and changed its
name to the Malaysia (Free) WEBS Index Series.
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 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. On September 12, 1997 the
shareholders voted to approve a change in the France WEBS Index Series status
from a diversified to a non-diversified investment company, which change will be
effective on October 29, 1997.
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 (Free) 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
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WEBS INDEX FUND, INC.
================================================================================
SIGNIFICANT ACCOUNTING POLICIES
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 Barclays Global Fund
Advisors (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 continue 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.
If so elected, each WEBS Index Series' realized net foreign exchange losses
and realized net capital losses incurred since October 31, 1996 will be treated
for tax purposes as arising on September 1, 1997. Each WEBS Index Series
incurred and will elect to defer such losses as follows:
FOREIGN EXCHANGE NET REALIZED CAPITAL
WEBS INDEX SERIES LOSSES LOSSES
- ------------------- ---------------- --------------------
Australia WEBS Index Series $ 7,013 $ --
Austria WEBS Index Series $ 2,857 $ 10,937
Belgium WEBS Index Series $ 3,025 $ --
Canada WEBS Index Series $ 2,060 $ --
France WEBS Index Series $13,967 $ --
Germany WEBS Index Series $16,934 $ --
Hong Kong WEBS Index Series $ 169 $ --
Italy WEBS Index Series $35,296 $309,363
Japan WEBS Index Series $ -- $ --
Malaysia (Free) WEBS Index Series $ 5,358 $ 13,921
Mexico (Free) WEBS Index Series $ -- $ --
Netherlands WEBS Index Series $16,958 $ --
Singapore (Free) WEBS Index Series $ 1,858 $ --
Spain WEBS Index Series $ 1,901 $ --
Sweden WEBS Index Series $ 2,374 $ --
Switzerland WEBS Index Series $ 1,804 $ --
United Kingdom WEBS Index Series $ -- $ --
In addition, the Italy WEBS Index Series had a $5,714 capital loss
carryover which will expire in 2005.
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 each 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 (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.
For the year ended August 31, 1997, each Index Series reclassified certain
amounts from accumulated net realized gain (loss) on investments and foreign
currency transactions and accumulated net investment income (loss),
respectively, as a result of permanent book and tax differences primarily
attributed to net investment loss, return of capital, realized foreign currency
gains and losses and gains and losses on in-kind redemptions.
ORGANIZATION COSTS
Organization costs were originally allocated to each WEBS Index Series
based on the expected future 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.
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 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. Prior to June 30, 1997 for its administrative services and Fund
accounting services, PFPC was 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.
56
<PAGE>
WEBS INDEX FUND, INC.
================================================================================
PFPC charged the Fund 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 capped 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% were to be recouped as the WEBS Index
Series' asset levels reach the threshold to permit such recovery of fees.For the
period March 12, 1996 through June 30, 1997, the deferred administration fee
amounted to $648,802. On July 1, 1997, PFPC waived all deferred fees.
Effective July 1, 1997 PFPC amended its Administration and Accounting
Services Agreement. PFPC is paid aggregate fees equal to each WEBS Index Series'
allocable portion of .17% per annum of the aggregate average daily net assets
less than $1.5 billion, plus .10% per annum of the aggregate net assets between
$1.5 billion and $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.
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 (.10%);
Germany WEBS Index Series (.10%); Hong Kong WEBS Index Series (.12%); Italy WEBS
Index Series (.09%); Japan WEBS Index Series (.06%); Malaysia (Free) WEBS Index
Series (.12%); 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 (.07%).
MSTC also receives certain fees for each transaction of the WEBS Index
Series.
The AMEX 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 August 31, 1997, each WEBS Index Series' cash balance included the
following amount of foreign currency:
VALUE COST
---------- ----------
Australia WEBS Index Series $ 6,738 $ 6,799
Austria WEBS Index Series $ 419 $ 419
Belgium WEBS Index Series $ 218 $ 219
Canada WEBS Index Series $ 7,459 $ 7,451
France WEBS Index Series $ 8,122 $ 8,086
Germany WEBS Index Series $ 154,070 $161,428
Hong Kong WEBS Index Series $ -- $ --
Italy WEBS Index Series $ 7,596 $ 7,637
Japan WEBS Index Series $ 401,719 $421,834
Malaysia (Free) WEBS Index Series $ 9,722 $ 10,336
Mexico (Free) WEBS Index Series $ 989 $ 997
Netherlands WEBS Index Series $ 1,765 $ 1,757
Singapore (Free) WEBS Index Series $ 134,165 $140,857
Spain WEBS Index Series $ 3,469 $ 3,462
Sweden WEBS Index Series $ 206 $ 203
Switzerland WEBS Index Series $ 5,844 $ 5,681
United Kingdom WEBS Index Series $ 24,289 $ 24,135
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (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 August 31,
1997, and the collateral received with respect to such loans were as follows:
CASH
MARKET VALUE OF COLLATERAL
WEBS INDEX SERIES LOANED SECURITIES RECEIVED
- ------------------ ----------------- ------------
Australia WEBS Index Series $ 7,770,430 $ 8,262,617
Austria WEBS Index Series $ 777,503 $ 811,663
Belgium WEBS Index Series $ 3,088,402 $ 3,247,381
Canada WEBS Index Series $ 3,224,449 $ 3,429,000
France WEBS Index Series $ 810,144 $ 851,068
Germany WEBS Index Series $ 6,545,738 $ 6,879,172
Hong Kong WEBS Index Series $ 1,993,386 $ 2,511,783
Italy WEBS Index Series $ 4,380,821 $ 4,926,896
Japan WEBS Index Series $30,030,911 $31,889,727
Malaysia (Free) WEBS Index Series $ 2,798,372 $ 3,156,680
Mexico (Free) WEBS Index Series $ 2,014,126 $ 2,202,975
Netherlands WEBS Index Series $ 2,164,384 $ 2,274,624
Singapore (Free) WEBS Index Series $ 2,251,485 $ 2,572,153
Spain WEBS Index Series $ 1,641,686 $ 1,725,044
Sweden WEBS Index Series $ 349,935 $ 368,954
Switzerland WEBS Index Series $ 767,229 $ 805,603
United Kingdom WEBS Index Series $ -- $ --
The following WEBS Index Series had outstanding commitments to deliver
securities under security lending transactions as of August 31, 1997:
WEBS INDEX SERIES AMOUNTS
-------------------- -----------
Hong Kong WEBS Index Series $1,127,423
Italy WEBS Index Series $ 670,867
Japan WEBS Index Series $2,832,239
Spain WEBS Index Series $ 49,793
CAPITAL SHARES
The Fund currently is authorized to issue 6 billion shares of common stock,
with the following number of shares allocated to each WEBS 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 (Free) 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"). Non-Basket Securities
may be held by a WEBS Index Series as a result of corporate actions, odd share
lots, or as a result of rebalancing of the Basket Securities.
58
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WEBS INDEX FUND, INC.
================================================================================
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 at 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 at the sole discretion of the Fund.
LOAN AGREEMENT
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 bear interest at a rate per annum equal to the sum
of the Federal Funds Rate plus 1%. The interest rate at August
31, 1997 is 6.11%. The following WEBS Index Series had advances
on the line of credit outstanding at August 31, 1997.
WEBS INDEX SERIES ADVANCES
-------------------- -----------
Australia WEBS Index Series $ 80,000
Canada WEBS Index Series $250,000
France WEBS Index Series $ 30,000
Hong Kong WEBS Index Series $ 55,000
Italy WEBS Index Series $ 90,000
Mexico (Free) WEBS Index Series $120,000
Netherlands WEBS Index Series $150,000
Spain WEBS Index Series $125,000
Sweden WEBS Index Series $200,000
Switzerland WEBS Index Series $290,000
Average borrowings under the line of credit did not exceed 10% of net
assets of any WEBS Index Series during the year ended August 31, 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 year
ended August 31, 1997:
PURCHASES OF SALES OF
WEBS INDEX SERIES SECURITIES SECURITIES
- -------------------- ------------- ------------
Australia WEBS Index Series $ 1,026,118 $ 1,323,136
Austria WEBS Index Series $ 1,091,678 $ 1,115,190
Belgium WEBS Index Series $ 2,475,823 $ 3,047,186
Canada WEBS Index Series $ 2,433,980 $ 2,372,526
France WEBS Index Series $ 950,197 $ 1,345,582
Germany WEBS Index Series $ 1,716,629 $ 2,028,936
Hong Kong WEBS Index Series $ 3,438,220 $ 4,007,320
Italy WEBS Index Series $ 3,959,792 $ 4,104,645
Japan WEBS Index Series $15,179,666 $15,498,124
Malaysia (Free) WEBS Index Series $ -- $ 15,609
Mexico (Free) WEBS Index Series $ 2,161,619 $ 2,302,064
Netherlands WEBS Index Series $ 1,033,368 $ 1,039,632
Singapore (Free) WEBS Index Series $ 1,732,752 $ 1,664,228
Spain WEBS Index Series $ 1,002,231 $ 1,246,890
Sweden WEBS Index Series $ 758,069 $ 963,687
Switzerland WEBS Index Series $ 4,209,102 $ 4,439,085
United Kingdom WEBS Index Series $ 381,801 $ 1,238,223
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
FOREIGN INCOME TAXES
For the year ended August 31, 1997, each WEBS Index Series' net foreign
withholding taxes deducted from foreign dividends received were as follows:
FOREIGN
WITHOLDING
WEBS INDEX SERIES TAX
--------------------- -----------
Australia WEBS Index Series $ 14,251
Austria WEBS Index Series $ 6,217
Belgium WEBS Index Series $147,374
Canada WEBS Index Series $ 68,249
France WEBS Index Series $ 61,399
Germany WEBS Index Series $ 29,700
Hong Kong WEBS Index Series $ --
Italy WEBS Index Series $ 94,336
Japan WEBS Index Series $133,523
Malaysia (Free) WEBS Index Series $ 86,827
Mexico (Free) WEBS Index Series $ --
Netherlands WEBS Index Series $ 28,252
Singapore (Free) WEBS Index Series $ --
Spain WEBS Index Series $ 23,861
Sweden WEBS Index Series $ 13,427
Switzerland WEBS Index Series $ 18,497
United Kingdom WEBS Index Series $132,386
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 performance of such WEBS Index Series or subject such WEBS Index
Series to greater price volatility than that experienced by more diversified
investment companies.
SUBSEQUENT EVENTS
On September 15, 1997 the Board of Directors approved the following changes
to the fee arrangements of the Fund which will be effective October 29, 1997.
60
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WEBS INDEX FUNDS, INC.
================================================================================
The Administrators fee will be amended so that PFPC will be paid aggregate
fees equal to each WEBS Index Series' allocable portion of: .22% per annum of
the aggregate average daily net assets of the Fund up to $1.5 billion; plus .15%
per annum of the aggregate average daily net assets of the Fund between $1.5
billion and $3 billion, plus .14% per annum of the aggregate average daily net
assets of the Fund between $3 billion and $5 billion, plus .13% per annum of the
aggregate average daily net assets of the Fund between $5 billion and $7.5
billion, plus .115% per annum of the aggregate average daily net assets of the
Fund between $7.5 billion and $10 billion, plus .10% per annum of the aggregate
average daily net assets of the Fund in excess of $10 billion.
Effective October 29, 1997, MSTC will provide certain sub-administrative
services relating to the Fund pursuant to a Sub-Administration Agreement and
will receive a fee from the Administrator equal to .05% of the Fund's average
daily net assets for providing such services.
In addition, the Board of Directors has determined, effective October 29,
1997, to limit the annual fee payable under the Rule 12b-1 plan with respect to
each WEBS Index Series so as not to exceed .20% of the average daily net assets
of each WEBS Index Series until further notice.
Effective September 1, 1997 the annual Director fees paid to the Chairman
of the Board have been increased by $20,000.
FEDERAL TAXATION NOTICE (UNAUDITED)
The WEBS Index Series paid the following foreign taxes during the year
ended August 31, 1997 which they intend to pass through to their shareholders
pursuant to Section 853 of the Internal Revenue Code. In addition, each of the
WEBS Index Series earned the following foreign source income and is designating
the following distributions as long-term capital gain distributions:
<TABLE>
<CAPTION>
FOREIGN SOURCE LONG-TERM
WEBS INDEX SERIES INCOME FOREIGN TAXES CAPITAL GAINS DISTRIBUTIONS
- -------------------- -------------- ------------- ---------------------------
<S> <C> <C> <C>
Australia WEBS Index Series $ 672,202 $ 14,251 $187,118
Austria WEBS Index Series $ 49,687 $ 6,217 $ --
Belgium WEBS Index Series $1,561,917 $147,374 $ 86,363
Canada WEBS Index Series $ 447,739 $ 68,249 $ --
France WEBS Index Series $ 416,052 $ 61,399 $ --
Germany WEBS Index Series $ 300,013 $ 29,700 $ --
Hong Kong WEBS Index Series $ 474,611 $ -- $324,715
Italy WEBS Index Series $1,129,789 $ 94,336 $ --
Japan WEBS Index Series $1,110,825 $133,523 $ 67,607
Malaysia (Free) WEBS Index Series $ 313,325 $ 86,827 $ --
Mexico (Free) WEBS Index Series $ 165,009 $ -- $139,389
Netherlands WEBS Index Series $ 187,992 $ 28,252 $303,665
Singapore (Free) WEBS Index Series $ 181,712 $ -- $ --
Spain WEBS Index Series $ 178,245 $ 23,861 $236,221
Sweden WEBS Index Series $ 90,395 $ 13,427 $268,001
Switzerland WEBS Index Series $1,023,322 $ 18,497 $472,674
United Kingdom WEBS Index Series $1,008,337 $132,386 $304,957
<FN>
Shareholders will receive more detailed information along with Form 1099-DIV in January 1998.
</FN>
</TABLE>
61
<PAGE>
REPORT OF INDEPENDENT AUDITORS WEBS INDEX FUND, INC.
================================================================================
Shareholders and Board of Directors
WEBS Index Fund, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of WEBS Index Fund, Inc. (comprised of
the Australia WEBS Index Series, the Austria WEBS Index Series, the Belgium WEBS
Index Series, the Canada WEBS Index Series, the France WEBS Index Series, the
Germany WEBS Index Series, the Hong Kong WEBS Index Series, the Italy WEBS Index
Series, the Japan WEBS Index Series, the Malaysia (Free) WEBS Index Series, the
Mexico (Free) WEBS Index Series,the Netherlands WEBS Index Series, the Singapore
(Free) WEBS Index Series, the Spain WEBS Index Series, the Sweden WEBS Index
Series, the Switzerland WEBS Index Series, and the United Kingdom WEBS Index
Series) (collectively, the "Fund") as of August 31, 1997, and the related
statements of operations for the year then ended, and the statements of changes
in net assets and financial highlights for the year ended August 31, 1997 and
for the period from March 12, 1996 (commencement of operations) to August 31,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights.Our procedures included confirmation of
securities owned as of August 31, 1997 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the WEBS Index Series comprising WEBS Index Fund, Inc. at August 31,
1997, and the results of their operations for the year then ended, and the
changes in their net assets and the financial highlights for the periods
indicated above, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
/S/ SIGNATURE
New York, New York
October 24, 1997
<PAGE>
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<PAGE>
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<PAGE>
<PAGE>
WEBS INDEX FUND, INC.
INVESTMENT ADVISER
BARCLAYS GLOBAL FUND ADVISORS
ADMINISTRATOR
PFPC INC.
DISTRIBUTOR
FUNDS DISTRIBUTOR INC.
TRANSFER AGENT
PNC BANK, N.A.
CUSTODIAN AND SECURITIES LENDING AGENT
MORGAN STANLEY TRUST COMPANY
400 BELLEVUE PARKWAY
WILMINGTON, DE 19809
