WORLD
EQUITY
BENCHMARK
SHARES
[GRAPHIC OMITTED]
FEBRUARY 28,
[GRAPHIC OMITTED]
1 9 9 8
SEMI-ANNUAL REPORT
WEBS INDEX FUND, INC.
<PAGE>
WEBS INDEX FUND, INC.
================================================================================
Dear Shareholder,
We are pleased to present this semi-annual report for WEBS Index Fund, Inc.
for the period September 1, 1997 through February 28, 1998. It contains
important information about the performance of your investment, a management's
discussion and analysis from the Investment Adviser, Barclays Global Fund
Advisors, and other financial information for your review.
As you are aware, each of the 17 WEBS Index Series seeks to track the
investment performance of a specific country's equity 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.
INCREASED LEVEL OF INVESTOR
ACCEPTANCE
We are very pleased to advise that the use of WEBS as an efficient vehicle
for investing in selected international equity markets is being recognized by an
increasing number of investors. Assets of the seventeen WEBS Index Series, in
the aggregate, have grown to $721.6 million as of February 28, 1998 -- an
increase of 53.01% since August 31, 1997 and 126.6% from the level one year ago.
The total number of shares outstanding for all seventeen WEBS Index Series
has increased by 80.8% in the six month period ended February 28, 1998 (from
35.5 million shares at August 31, 1997 to 64.2 million shares). Similarly, for
the one year period ended February 28, 1998 the number of shares outstanding has
increased by 167.5% (24.0 million shares vs. 64.2 million shares). This increase
in the number of outstanding shares is generally indicative of an enhancement in
market liquidity (i.e., the ability for shareholders to purchase and sell shares
when they desire to do so). The significant growth in assets and shares
outstanding is confirmation that WEBS are rapidly becoming an international
investment vehicle of choice for many investors.
PRICE/VALUE STABILITY
The unique structure of the WEBS Index Series continues to result in share
prices that remain close to their net asset value. While the relationship
between market price and net asset value varies from moment to moment and from
index series to index series, the seventeen WEBS Index Series traded on the AMEX
at an average end-of-day market price of only 5 cents per share over/under their
underlying net asset values for the year ended February 28, 1998. The largest
average end-of-day spread, for the Malaysia (Free) WEBS Index Series, was 1.71%.
PERFORMANCE HIGHLIGHTS
Many Asian markets suffered significant declines during the six month
period ending February 28, 1998 and the performance of the Asian WEBS Index
Series reflected the declines in their respective markets. However, there were a
number of WEBS Index Series that produced very positive total NAV returns, in
U.S. dollar terms, for the six month period ended February 28, 1998. Some
examples:
WEBS Index Series 6 months
----------------- --------
Spain ............................................ 35.7%
Italy ............................................ 34.3%
Switzerland ...................................... 26.3%
United Kingdom ................................... 21.0%
Netherlands ...................................... 18.1%
Germany .......................................... 17.0%
While past performance is not an indication of future performance, one can
see that the past year has been rewarding for many investors who believe in
international diversification.
CONCLUSION
WEBS continue to attract attention from the media and retail and
institutional investors. For many, WEBS represent an easy, relatively
inexpensive way to access any of 17 selected international equity 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.
1
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INTRODUCTION
The Investment Adviser for each WEBS Index Series is Barclays Global Fund
Advisors. Each WEBS Index Series generally 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. Certain WEBS Index Series may also invest to a limited extent in
stocks that are not included in the relevant MSCI Index to permit them
additional flexibility to comply with diversification and other regulatory
requirements. 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 the performance of the WEBS Index Series.
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 ("IRC") and the need
to comply with the Fund's concentration policy), the portfolio composition of
each WEBS Index Series will vary from that of its benchmark MSCI Index. This may
cause performance to vary positively or negatively from that of its
corresponding MSCI Index during any period. For example, each WEBS Index Series
must comply with the asset diversification tests of Subchapter M of the IRC at
the end of each quarter of its taxable year. One of these tests generally
requires that not more than 25% of the value of a WEBS Index Series' total
assets may be invested in the securities of one single issuer (the "Single
Issuer Rule"). Another test generally precludes a WEBS Index Series, with
respect to 50% of the value of its total assets, from having more than 5% of the
value of its total assets invested in the securities of any one issuer (the
"5/50 Rule").
A third factor that causes performance of the WEBS Index Series to differ
from that of their respective MSCI Indices is "revenue differential." The
dividend revenues received by the WEBS Index Series differ from those of the
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 relative 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 the relative performance of the WEBS Index
Series compared to their respective benchmark indices is known as "cash drag".
"Cash drag" refers to the portion of a WEBS Index Series that is not invested in
stocks. Cash and deferred organizational expenses are the principal
"unequitized" assets of the WEBS Index Series. 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.
================================================================================
AUSTRALIA
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
Australia WEBS Index Series was (2.15)%. The corresponding MSCI Index total
return for the period was (1.00)%. The Australia WEBS Index Series
under-performed the MSCI Australia Index total return by 1.15% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRALIA WEBS
INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Australia WEBS Index Series under-performed the MSCI Australia Index
principally due to portfolio sampling. As a result of the Fund's need to comply
with the 5/50 Rule, the Australia WEBS Index Series was underweight in the
broadcasting and publishing sectors, which significantly outperformed the
benchmark with a combined return of approximately 44%. The impact of expenses,
revenue differential, and cash drag had smaller, negative effects on
performance.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRALIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Economic activity in Australia grew moderately in late 1997 and early 1998.
The "Asian flu" has yet to leave its mark fully on the Australian economy.
Consumer spending was strong, due to the current low interest rate environment
and rising consumer confidence. Inflation remained in check, and interest-rate
sensitive sectors, such as housing continued to benefit from favorable monetary
policy developments. Despite the new right-of-center liberal national coalition
elected to power in March of 1996, unemployment remains at 8.6% as growth
remains below the 4% pace needed to cut the jobless rate. Full-time employment
is up sharply. Resource companies that export commodities such as coal, natural
gas, and minerals have suffered due to the weakened Australian dollar, which hit
a 3 1/2-year low against the U.S. dollar in October of 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRALIA WEBS INDEX SERIES VS. THE MSCI AUSTRALIA INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Australia MSCI
WEBS Index Australia
Series 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
11/30/97 9,862 9,750
02/28/98 10,799 10,880
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Australia WEBS Index Series $10,799*
MSCI Australia Index $10,880
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------- ---------
Australia WEBS Index Series (2.26)% 3.98%
MSCI Australia Index (1.58)% 4.37%
- ------------------
* 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.
3
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
AUSTRIA
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
Austria WEBS Index Series was 7.9%. The corresponding MSCI Index total return
for the period was 15.97%. The Austria WEBS Index Series under-performed the
MSCI Austria Index total return by 8.07% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE AUSTRIA WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Austria WEBS Index Series under-performed the MSCI Austria Index for
several reasons, principally portfolio sampling, revenue differential, the
impact of expenses and cash drag. The need to comply with the Single Issuer Rule
caused the Austria WEBS Index Series to be underweight compared to the Index by
7.7% in the Bank of Austria, which posted a 50% return for the six month period.
This difference in portfolio composition was the predominant reason for the
underperformance of the Austria WEBS Index Series.
WHAT MARKET CONDITIONS AFFECTED THE AUSTRIA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Austria experienced a strong export-led recovery that helped offset the
deflationary effects of recent budget cuts, made in large degree to comply with
the Maastricht Treaty. The continued effort to privatize Austrian industry has
also improved Austria's fiscal health. The export sector, strengthened by a
favorable exchange rate and robust growth in both western and central Europe,
stimulated increased business investment and, consequently, boosted consumer
confidence. Accompanied by a stable price climate and a slow tightening of
monetary conditions, the Austrian economy has been given ample room to grow.
Inflation remains low at 1.2%, and the deficit in 1997 was around 3% of gross
domestic product ("GDP"). Recent stability in the tourism and construction
sectors has decreased their drag on the economy but these sectors are expected
to continue, along with private consumption, to lag behind the rest of the
economy.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
AUSTRIA WEBS INDEX SERIES VS. THE MSCI AUSTRIA INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Austria MSCI
WEBS Index Austria
Series 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
11/30/97 9,373 9,713
02/28/98 10,535 11,513
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Austria WEBS Index Series $10,535*
MSCI Austria Index $11,513
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Austria WEBS Index Series 12.06% 2.68%
MSCI Austria Index 16.92% 7.42%
- ------------------
* 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.
4
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
BELGIUM
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
Belgium WEBS Index Series was 14.71%. The corresponding MSCI Belgium Index total
return for the period was 18.05%. The Belgium WEBS Index Series under-performed
the MSCI Belgium Index total return by 3.34% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE BELGIUM WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Belgium WEBS Index Series under-performed the MSCI Belgium Index
principally because of portfolio sampling, revenue differential, and the impact
of expenses. Portfolio sampling had a negative effect on performance as a result
of industry weighting differences between the Belgium WEBS Index Series and the
MSCI Belgium Index. Due to the need to comply with the 5/50 Rule, the Belgium
WEBS Index Series was overweight in two sectors that posted negative returns,
metals which had a return of (10.96%) and miscellaneous materials which returned
(5.58%).
WHAT MARKET CONDITIONS AFFECTED THE BELGIUM WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Belgian economy grew at a rate of 2% during 1997, and the positive trend
in the growth rate is expected to continue throughout 1998. Demand-driven growth
is expected to continue as consumer spending increases, due to increased
investment and a strengthening labor market. Steady economic growth in Germany,
France, and the Netherlands contributed to a rise in Belgian exports of 6.2% in
1997. The budget deficit dropped to 2.4% last year, well within the 3% target
mandated by the Maastricht Treaty. The ratio of debt to GDP, while still high,
is on a steady downward trend. Inflation fell during 1997, reaching a low of
0.40% in January 1998. Unemployment still remains high, as in many other
European Union member countries, at a rate of approximately 13.9% of the
population as of the end of February 1998.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
BELGIUM WEBS INDEX SERIES VS. THE MSCI BELGIUM INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Belgium MSCI
WEBS Index Belgium
Series 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
11/30/97 12,002 12,385
02/28/98 13,161 13,768
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Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Belgium WEBS Index Series $13,161*
MSCI Belgium Index $13,768
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Belgium WEBS Index Series 17.47% 14.96%
MSCI Belgium Index 18.74% 17.62%
- ------------------
* 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.
================================================================================
CANADA
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
Canada WEBS Index Series was 6.45%. The corresponding MSCI Canada Index total
return for the period was 6.79%. The Canada WEBS Index Series under-performed
the MSCI Canada Index total return by 0.34% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE CANADA WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Canada WEBS Index Series under-performed the MSCI Canada Index for
several reasons, principally the impact of expenses and cash drag. Portfolio
sampling and revenue differential had an overall positive effect on performance,
but only partially offset the negative effect of the other factors.
WHAT MARKET CONDITIONS AFFECTED THE CANADA WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Canada's economy grew by 3.8% in 1997, continuing a trend in growth that has
been sustained for five consecutive quarters. Expansion was supported by
favorable monetary policy, healthy employment gains, low inflation, a strong
fiscal position, and increased U.S. demand for exports. Both an increase in
consumer spending and sharply higher business investment led to strong domestic
demand. While the housing sector remained above its year-ago level, the trade
sector showed a decline of 0.5% in the merchandise trade surplus, due to an
increase in imports, restraining overall output growth in the third quarter.
Domestic demand is driving, in large part, the growth in imports. Interest rates
are expected to remain at current levels with tapered levels of growth and low
inflation. Canada is once again in a position for continued economic growth and
a budget surplus is projected for this year.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
CANADA WEBS INDEX SERIES VS. THE MSCI CANADA INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Canada MSCI
WEBS Index Canada
Series 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
11/30/97 13,165 13,438
02/28/98 14,312 14,679
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Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Canada WEBS Index Series $14,312*
MSCI Canada Index $14,679
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Canada WEBS Index Series 13.86% 19.96%
MSCI Canada Index 15.47% 21.51%
- ------------------
* 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.
================================================================================
FRANCE
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
France WEBS Index Series was 21.59%. The corresponding MSCI France Index total
return for the period was 22.46%. The France WEBS Index Series under-performed
the MSCI France Index total return by 0.87% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE FRANCE WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The France WEBS Index Series under-performed the MSCI France Index for
several reasons, principally the impact of expenses, revenue differential and
cash drag. The negative effect of these factors was reduced to a limited extent
by the positive impact of portfolio sampling.
WHAT MARKET CONDITIONS AFFECTED THE FRANCE WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The French GDP grew by 2.5% in 1997, while inflation was 1.2%, the lowest
level seen since the 1950's. The government deficit was 3% of GDP in 1997.
Unemployment, while still high, dropped significantly in December of 1997,
indicating a downward trend. As employment numbers improved, consumer spending
increased, which led to a significant rise in import consumption. However,
foreign demand for French cars stimulated car exports to record levels. Consumer
spending is expected to continue this trend, acting as the main catalyst for the
French recovery. Additionally, corporate investment has increased dramatically.
Due to record low inflation together with significant excess capacity, no change
is anticipated in current monetary policy.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
FRANCE WEBS INDEX SERIES VS. THE MSCI FRANCE INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
France MSCI
WEBS Index France
Series 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
11/30/97 12,878 12,848
02/28/98 14,880 14,933
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
France WEBS Index Series $14,880*
MSCI France Index $14,933
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
France WEBS Index Series 22.19% 22.35%
MSCI France Index 22.30% 22.58%
- ------------------
* 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
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
================================================================================
GERMANY
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the
Germany WEBS Index Series was 16.98%. The corresponding MSCI Germany Index total
return for the period was 18.22%. The Germany WEBS Index Series under-performed
the MSCI Germany Index total return by 1.24% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE GERMANY WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Germany WEBS Index Series under-performed the MSCI Germany Index because
of the impact of expenses, revenue differential, cash drag, and portfolio
sampling .
WHAT MARKET CONDITIONS AFFECTED THE GERMANY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The German economy continued to show signs of strength in 1997 despite
continued labor problems. Unemployment rose to a new record high in January
1998, at 12.8%. There was continued unrest among the trade unions, with protest
marches taking place throughout the country. Employment numbers showed signs of
bottoming in November of 1997 suggesting that the unemployment situation is
starting to respond, albeit slowly, to the economic recovery of 1997. Rising
capacity utilization rates, together with a significant decline in unit labor
costs over the past two years, should produce an increase in employment in 1998
- --the first in six years. Domestic demand, both capital and consumer, is
expected to replace exports as the driving force in Germany's economic recovery.
Capital spending has already surged in early 1998 in response to the high rate
of capacity utilization and rising profits. Consumers have been driving a
miniature consumption boom, accelerating purchases of consumer durables before a
value added tax hike goes into effect on April 1, 1998. The Bundesbank clearly
signaled that it would take a proactive role in monetary policy, announcing an
M3 money supply target range of 3% to 6% for 1998. M3 money supply includes the
money consumers use for ordinary purchases of goods and services (M1), time
deposits, money market funds, overnight repurchase agreements (M2) and time
deposits of more than $100,000 and repurchase agreements with terms longer than
one day. It is expected that the Bundesbank will raise rates around the time of
the European Monetary Union ("EMU") participants' meeting in May of 1998.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
GERMANY WEBS INDEX SERIES VS. THE MSCI GERMANY INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Germany MSCI
WEBS Index Germany
Series 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 12,533 12,778
11/30/97 12,948 13,240
02/28/98 14,661 15,107
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Germany WEBS Index Series $14,661*
MSCI Germany Index $15,107
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Germany WEBS Index Series 29.84% 21.44%
MSCI Germany Index 31.64% 23.30%
- ------------------
* 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.
================================================================================
HONG KONG
PERFORMANCE REVIEW
For the six-month period ended February 28, 1998 the total return of the Hong
Kong WEBS Index Series was (24.36)%. The corresponding MSCI Hong Kong Index
total return for the period was (21.94)%. The Hong Kong WEBS Index Series
under-performed the MSCI Hong Kong Index total return by 2.42% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE HONG KONG WEBS
INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Hong Kong WEBS Index Series under-performed the MSCI Hong Kong Index
principally as a result of portfolio sampling. Due to the need to comply with
the 5/50 Rule, the Hong Kong WEBS Index Series was overweight in the real estate
sector, which posted a negative return of 29.72%. The impact of expenses,
revenue differential, and cash drag had smaller, negative effects on
performance.
WHAT MARKET CONDITIONS AFFECTED THE HONG KONG WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Hong Kong made international headlines as China assumed control of the former
British possession in July of 1997. While it is impossible to pinpoint the
economic effects of this political change, the transition appeared to have
little impact on the economy. During 1997, Hong Kong's economy felt the effects
of its neighbors' woes. Tourism is suffering from weakened currencies in
Southeast Asia, Korea, and Japan, which historically have accounted for 35% of
Hong Kong's tourism revenue. Decreased tourism has also negatively affected Hong
Kong's retail and hospitality industries. In November 1997, manufacturers saw a
9% decline in orders from the prior month, with the plastics, electronics and
electrical industries being the hardest hit. At the same time, the printing and
publishing industries recorded an increase in orders of 14%. Climbing
unemployment indicated a slowing economy, edging up to 2.5% in late 1997 and
inflation was also somewhat high at 5.8%. The government raised interest rates
in late 1997 to defend the Hong Kong dollar's peg to the US dollar, as Hong Kong
became a target of currency speculation. While GDP in 1997 grew by 5.5%, the
highest growth since 1993, it is showing signs of slowing down in 1998.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
HONG KONG WEBS INDEX SERIES VS. THE MSCI HONG KONG INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Hong Kong MSCI
WEBS Index Hong Kong
Series 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 12,159 12,645
11/30/97 9,006 9,437
02/28/98 9,197 9,871
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Hong Hong WEBS Index Series $9,197*
MSCI Hong Kong Index $9,871
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
-------- ---------
Hong Kong WEBS Index Series (22.51)% (4.16)%
MSCI Hong Kong Index (19.03)% (0.66)%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Italy WEBS Index Series was 34.29%. The corresponding MSCI Italy Index total
return for the period was 34.48%. The Italy WEBS Index Series under-performed
the MSCI Italy Index total return by 0.19% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE ITALY WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Italy WEBS Index Series slightly under-performed the MSCI Italy Index for
several reasons, principally the impact of expenses, revenue differential and
cash drag. Portfolio sampling had a net positive effect on performance. Due to
the need to comply with the 5/50 Rule, the Italian WEBS Index Series was
overweight in two sectors that posted positive returns, banking which had a
return of 68.46% and automotive which returned 12.2%.
WHAT MARKET CONDITIONS AFFECTED THE ITALY WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
As Italy makes its case to join the EMU, real growth in 1997 was 1.5%, with a
strong fourth quarter rate of 2.8%. However, the growth was narrow, driven by
the government's auto-replacement program, in which 10-year old cars are turned
in for cash. As a result, new car sales were up dramatically, with car
registrations up 75% in September. The budget deficit represented 2.7% of GDP,
well within the Maastricht target. General government debt declined in 1997, due
to significant privatization revenues and unexpected tax revenues. Short-run
growth in the consumer price index ("CPI") has continued at an annual rate of
approximately 2% for the last five months of 1997, with year on year inflation
increasing to 1.6% in December. Industrial production figures showed growth at
the end of 1997, with the year on year growth rate at 8.1%, up from 4.9% in
November. Due to its growth rate being the slowest in the European Union,
Italy's fiscal policy is expected to be less restrictive, with the Bank of Italy
cutting interest rates and stimulating economic growth. The Italian lira is
strong, stimulated by investor demand for high-yielding Italian bonds. Rising
confidence and real wages are expected to boost consumer demand, with increased
capital spending not far behind.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
ITALY WEBS INDEX SERIES VS. THE MSCI ITALY INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Italy MSCI
WEBS Index Italy
Series 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
11/30/97 14,256 14,173
02/28/98 17,250 17,297
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Italy WEBS Index Series $17,250*
MSCI Italy Index $17,297
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Italy WEBS Index Series 54.68% 31.88%
MSCI Italy Index 55.81% 32.07%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Japan WEBS Index Series was (13.63)%. The corresponding MSCI Japan Index total
return for the period was (13.46)%. The Japan WEBS Index Series under-performed
the MSCI Japan Index total return by 0.17% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE JAPAN WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Japan WEBS Index Series slightly under-performed the MSCI Japan Index due
to the impact of expenses. Although portfolio sampling and cash drag had
positive effects on performance, they only partially offset the negative impact
of expenses.
WHAT MARKET CONDITIONS AFFECTED THE JAPAN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
The Japanese economy found no relief in 1997 from the woes it has experienced
for the last seven years. The benchmark Nikkei Stock Average sank 4.2% on
November 7, falling below the 16,000-point level for the first time in more than
two years, and it finished the year at a low not seen since 1985. The decline
wiped out unrealized stock gains in the portfolios of seven of Japan's top 20
banks, fueling a pessimistic outlook on the financial crisis. By the end of
1997, three major financial institutions had collapsed amidst overwhelming debt:
Sanyo Securities, Hokkaido Takushoku Bank, and Yamaichi Securities. The Fund
held shares of Yamaichi, which it subsequently sold upon hearing the news of the
bankruptcy. Yamaichi left behind $23 billion in debt, Japan's largest bankruptcy
ever. Bankruptcies are no longer newsworthy as banks tighten credit and enforce
tougher regulatory requirements. Consumers, anticipating a recession and reeling
from increases in taxes and medical fees, have cut spending considerably. Retail
sales in November of 1997 dropped 4.7% from a year earlier, the largest drop
since 1955. Industrial production has also dropped. While Asia needs an economic
leader to anchor any future recovery, Japan has been unable to take on that
role, actually cutting new investment in Thailand, Malaysia, Indonesia and the
Philippines by 29% over the summer. The economic trials of Japan's neighbors
continue to raise concerns over profit levels for the big Japanese exporters.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
JAPAN WEBS INDEX SERIES VS. THE MSCI JAPAN INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Japan MSCI
WEBS Index Japan
Series 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
11/30/97 7,169 7,206
02/28/98 7,366 7,438
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Japan WEBS Index Series $7,366*
MSCI Japan Index $7,438
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------- ---------
Japan WEBS Index Series (8.60)% (14.37)%
MSCI Japan Index (8.36)% (13.95)%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Malaysia (Free) WEBS Index Series was (21.79)%. The corresponding MSCI Malaysia
(Free) Index total return for the period was (23.42)%. The Malaysia (Free) WEBS
Index Series out-performed the MSCI Malaysia (Free) Index total return by 1.63%
in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MALAYSIA (FREE)
WEBS INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Malaysia (Free) WEBS Index Series out-performed the MSCI Malaysia (Free)
Index due to portfolio sampling, and to a lesser extent because of cash drag and
revenue differential. These factors more than offset the negative impact of
expenses. As a result of the 5/50 Rule, the Malaysia (Free) WEBS Index Series
was under-weighted in the multi-industry sector, which had a negative return of
44.85%.
WHAT MARKET CONDITIONS AFFECTED THE MALAYSIA (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Malaysia found itself squarely in the center of the Asian economic crisis of
1997. The Malaysian ringit suffered tremendously in the wake of the Thai baht
crisis. During the third quarter, the ringit hit an all-time low, falling 28.43%
against the US dollar, and the stock market nearly collapsed, losing (41.62)%
during the same time period. With the banking sector debt at 165% of 1997 GDP,
the Malaysian economy is in need of relief. Interest rates have moved steadily
upward since the third quarter of 1997, and the economy has slowed considerably.
The four factors of high leverage, slowing economic activity, rising interest
rates and a weakening exchange rate have put a strain on the banking system.
During the first quarter of 1998, the Malaysian government approached the
International Monetary Fund for help in stabilizing its volatile economy and
shoring up its weak financial system.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MALAYSIA (FREE) WEBS INDEX SERIES VS. THE MSCI MALAYSIA (FREE) INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Malaysia (Free) MSCI
WEBS Index Malaysia (Free)
Series 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 6,237 6,385
11/30/97 3,713 3,687
02/28/98 4,877 4,890
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Malaysia (Free) WEBS Index Series $4,877*
MSCI Malaysia (Free) Index $4,890
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
-------- ---------
Malaysia (Free) WEBS Index Series (58.79)% (30.55)%
MSCI Malaysia (Free) Index (59.83)% (30.45)%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Mexico (Free) WEBS Index Series was (2.32)%. The corresponding MSCI Mexico
(Free) Index total return for the period was (1.13)%. The Mexico (Free) WEBS
Index Series under-performed the MSCI Mexico Index total return by 1.19% in this
period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE MEXICO (FREE) WEBS
INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Mexico (Free) WEBS Index Series under-performed the MSCI Mexico (Free)
Index principally due to the impact of expenses and portfolio sampling.
WHAT MARKET CONDITIONS AFFECTED THE MEXICO (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Mexico continued on the recovery track it had begun in 1996. After its
economic disaster of 1995, when the economy contracted by 6%, the Mexican
economy is being held up as a model of recovery for those Asian economies now
suffering similar difficulties. 1997 marked Mexico's highest annual growth rate
in 16 years, exceeding 7%. The Mexican peso, depreciating about 6% during
October, has since traded in a tight range to the US dollar. Private consumption
grew 5% in 1997, and inflation fell for the 22nd consecutive month, to an annual
rate of 16%. The current account deficit was at 1.60% last year. Privatization,
which gained momentum in 1996, saw the selling off of the Northeast Railroad.
Other assets targeted for sale include ports, airports and electrical energy,
relieving the Mexican government of responsibility for these infrastructures.
The Institutional Revolutionary Party ("IRP") lost their overall majority in the
Lower House in the July elections, resulting in increased volatility in
Congress. However, given the presidential elections in 2000, the opposition
parties are finding common ground, illustrated by approval of the 1998 budget.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
MEXICO (FREE) WEBS INDEX SERIES VS. THE MSCI MEXICO (FREE) INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Mexico (Free) MSCI
WEBS Index Mexico (Free)
Series 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
11/30/97 15,892 16,774
02/28/98 15,311 16,136
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Mexico (Free) WEBS Index Series $15,311*
MSCI Mexico (Free) Index $16,136
AVERAGE ANNUAL TOTAL RETURN
ONE YEAR SINCE INCEPTION
-------- ---------------
Mexico (Free) WEBS Index Series 19.43% 24.14%
MSCI Mexico (Free) Index 21.74% 27.49%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Netherlands WEBS Index Series was 18.08%. The corresponding MSCI Netherlands
Index total return for the period was 17.66%. The Netherlands WEBS Index Series
out-performed the MSCI Netherlands Index total return by 0.42% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE NETHERLANDS WEBS
INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Netherlands WEBS Index Series out-performed the MSCI Netherlands Index
principally because of differences in industry weightings, specifically in the
energy sector, as a result of the Single Issuer Rule. This positive effect was
partially offset by the impact of expenses, revenue differential, and cash drag.
WHAT MARKET CONDITIONS AFFECTED THE NETHERLANDS WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Continuing the growth trend of the last seven years, the Dutch economy grew
at a rate of 3.25% in 1997. The Netherlands' bid for membership in the EMU is
very likely to be successful, since its economy is admired by its European
counterparts due to its high growth, deficit reduction and low unemployment. The
Netherlands' only significant weakness is its high debt ratio, which was over
60% in 1997, but has been trending down since 1995. The Netherlands' economic
stability is due to the key role of agricultural produce in the export mix,
particularly to Germany. Exports make up almost 55% of the Dutch GDP. However,
1997 saw a sharp increase in demand for imports and a decrease in the export
trade balance due in part to higher domestic consumption and investment
spending. Inflation was about 2.2% for 1997, 0.75% higher than the EU average.
With output growth projected to remain strong, there is upward pressure on
inflation. Moderate wage growth has resulted from cooperation between the
government, trade unions, and employers. Unlike many other European countries,
the Dutch labor market is remarkably flexible, using a deregulated labor market
similar to that of the U.S. while still retaining a European-style social safety
net. Current interest rates are low, but as interest rates in Germany are
expected to climb, forecasts show a modest tightening of monetary policy in the
Netherlands as well.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
NETHERLANDS WEBS INDEX SERIES VS. THE MSCI NETHERLANDS INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Netherlands MSCI
WEBS Index Netherlands
Series 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 14,237 14,680
11/30/97 14,728 15,146
02/28/98 16,811 17,273
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Netherlands WEBS Index Series $16,811*
MSCI Netherlands Index $17,273
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Netherlands WEBS Index Series 29.97% 30.17%
MSCI Netherlands Index 33.40% 31.98%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Singapore (Free) WEBS Index Series was (20.32)%. The corresponding MSCI
Singapore (Free) Index total return for the period was (14.12)%. The Singapore
(Free) WEBS Index Series under-performed the MSCI Singapore (Free) Index total
return by 6.20% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SINGAPORE (FREE)
WEBS INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Singapore (Free) WEBS Index Series under-performed the MSCI Singapore
(Free) Index primarily because of portfolio sampling. Due to compliance with the
5/50 Rule, the Singapore (Free) WEBS Index Series was under-weighted, as
compared to the MSCI Singapore (Free) Index, in the telecommunications sector,
which had a total return of 28% for the period. Expenses and revenue
differential contributed to the under-performance to a much lesser extent than
portfolio sampling, while cash drag exerted a modest positive influence on
performance.
WHAT MARKET CONDITIONS AFFECTED THE SINGAPORE (FREE) WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
Surrounded by countries which succumbed to the so-called Asian "flu,"
Singapore held its own, finishing 1997 with a growth rate of 6.2%. While
resistant, Singapore appears not to be totally immune. In the third quarter of
1997, the economy was showing signs of a slowdown, with retail sales falling
three months in a row. Hardest hit were sales of motor vehicles and
textiles/apparel. Since July 1, 1997, the Singapore dollar has fallen 16%, yet
some feel that the Singapore dollar is still overvalued by 10% against the
currencies of its neighbors, which threatens to dampen trade. The stock market
slumped amid concerns about banks in Singapore and their exposure to Indonesia
and Malaysia. More than 17% of Singapore bank loans are in the economies of
Malaysia, Indonesia, Thailand, the Philippines and South Korea. Because
Singapore's economy is so dependent on these other countries in its shipping,
tourism, oil refinement and health care sectors, the economy is showing signs of
stalling. Some 1998 forecasts for private-sector growth are actually at 0%. Even
the finance sector, which accounted for 11% of GDP in 1997, is expected to see
little growth. Singapore's economy is extremely open, with the import content of
domestic expenditure at 60% and non-oil exports at 70%. Singapore is therefore
particularly susceptible to large swings in exchange rates, such as those seen
in late 1997.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SINGAPORE (FREE) WEBS INDEX SERIES VS. THE MSCI SINGAPORE (FREE) INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Singapore MSCI
(Free) WEBS Singapore
Index Series (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
11/30/97 6,066 6,223
02/28/98 5,687 5,978
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Singapore (Free) WEBS Index Series $5,687*
MSCI Singapore (Free) Index $5,978
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
-------- ---------
Singapore (Free) WEBS Index Series (41.50)% (24.92)%
MSCI Singapore (Free) Index (38.18)% (22.99)%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Spain WEBS Index Series was 35.68%. The corresponding MSCI Spain Index total
return for the period was 36.90%. The Spain WEBS Index Series under-performed
the MSCI Spain Index total return by 1.22% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SPAIN WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Spain WEBS Index Series under-performed the MSCI Spain Index because of
the impact of expenses, portfolio sampling and cash drag.
WHAT MARKET CONDITIONS AFFECTED THE SPAIN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Like many of its European neighbors trying to improve themselves for the EMU,
Spain enjoyed a healthy growth rate of 3.4% in 1997, up from 2.3% in 1996. This
strong showing is attributable to the private consumption component of the
economy, with Spain being the first European country to achieve a demand-driven
recovery. The combination of 3% employment growth, rising real disposable
income, and lower interest rates were all factors in the increase in
consumption. Low interest rates drove a spending boom on durable goods, and
mortgage payments have decreased, giving homeowners more disposable income. On a
quarter-by-quarter basis, however, consumption is decelerating, raising
expectations that inflation will continue to be low. Unemployment is still the
highest in Europe at 20%, yet consumer confidence is at its highest in years.
The deficit has been reduced to 2.6% of GDP, down from 6.6% in 1995, due to
economic growth and increased employment. Strong imports drove a negative net
trade balance in the fourth quarter, although exports are still quite strong.
Spain's greatest challenge will be to increase the flexibility of its labor
markets.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SPAIN WEBS INDEX SERIES VS. THE MSCI SPAIN INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Spain MSCI
WEBS Index Spain
Series 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 15,092 15,379
11/30/97 16,471 16,845
02/28/98 20,478 21,053
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Spain WEBS Index Series $20,478*
MSCI Spain Index $21,053
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Spain WEBS Index Series 58.82% 43.88%
MSCI Spain Index 61.14% 45.93%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Sweden WEBS Index Series was 10.15%. The corresponding MSCI Sweden Index total
return for the period was 11.72%. The Sweden WEBS Index Series under-performed
the MSCI Sweden Index total return by 1.57% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWEDEN WEBS INDEX
SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Sweden WEBS Index Series under-performed the MSCI Sweden Index primarily
because of the impact of expenses and revenue differential. Portfolio sampling
and cash drag also had smaller negative impacts on performance.
WHAT MARKET CONDITIONS AFFECTED THE SWEDEN WEBS INDEX SERIES' PERFORMANCE
DURING THE PERIOD?
Sweden is in the midst of a cyclical upturn, with a 1997 GDP growth rate of
2.3%, and a forecast of 3.1% growth in 1998. The 1997 growth was split evenly
between domestic demand and net exports. The deficit, at 1.9% of GDP in 1997, is
expected to revert to a balance in 1998. As the economy continues to improve,
Sweden has seen an improvement in its unemployment rate, which is currently at
8.1%. Unemployment is expected to fall even further by the end of 1998, perhaps
down to around 6.5%. Inflation was 1.9% for 1997, leading to expectations of
tighter monetary policy by the Riksbank in 1998. Long yields are expected to
absorb most of the prospective tightening of monetary policy. Overall, Sweden's
fiscal situation continues to improve, with the deficit ratio equivalent to 1.6%
of GDP in 1997, contrasted to a 1994 ratio of 10.3%.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWEDEN WEBS INDEX SERIES VS. THE MSCI SWEDEN INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Sweden MSCI
WEBS Index Sweden
Series 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 14,847 14,856
11/30/97 15,236 15,310
02/28/98 16,353 16,596
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Sweden WEBS Index Series $16,353*
MSCI Sweden Index $16,596
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Sweden WEBS Index Series 22.43% 28.37%
MSCI Sweden Index 24.37% 29.33%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
Switzerland WEBS Index Series was 26.32%. The corresponding MSCI Switzerland
Index total return for the period was 35.61%. The Switzerland WEBS Index Series
under-performed the MSCI Switzerland Index total return by 9.29% in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE SWITZERLAND WEBS
INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The Switzerland WEBS Index Series under-performed the MSCI Switzerland Index
largely due to portfolio sampling. The Switzerland WEBS Index Series is affected
by many restrictive regulatory constraints on investing. Because of these
restrictions, especially the 5/50 Rule, the Switzerland WEBS Index Series had
substantially different weightings in many industry sectors when compared to the
MSCI Switzerland Index. Some of the largest divergences are in the banking and
the food and household sectors. These sectors were under-weighted compared to
the MSCI Switzerland Index by approximately 7.27% and 8.32%, respectively. The
banking sector returned 47.61% and the food and household sector returned 46.05%
during the six-month period. This accounted for a substantial amount of the
variance in performance to the corresponding MSCI Index. Expenses, revenue
differential, and cash drag had less negative impacts to the performance.
WHAT MARKET CONDITIONS AFFECTED THE SWITZERLAND WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
The falling Swiss franc helped Switzerland post the first real GDP growth
since 1990, at 0.5% for 1997. The growth was driven by a strong demand for
exports, which jumped 8.2% since the second quarter of the prior year period.
This increased demand was due to similar economic recoveries in the rest of
Europe, which consumes 62% of Switzerland's exports. Net exports made a small
positive contribution to growth. Strong export sectors are chemicals,
pharmaceuticals, and watchmakers. Although Asia accounts for 13% of its exports,
Switzerland has not experienced much fallout from the Asian crisis to date. In
contrast, domestic demand remains weak with a growth rate of 0.25%, and consumer
confidence is continuing at low levels. Consumption growth was also slow at 1%
for 1997. Capital investment declined in 1997, falling by 2.75%. Inflationary
pressures remain low, with annual consumer price inflation in January 1998 at
0.1%, the lowest rate since 1986. The inflation rate for 1997 as a whole was
0.5%. The Organization of Economic Cooperation and Development ("OECD"),
estimates that the output gap (i.e. the difference between peak capacity and
actual output) in Switzerland was almost 5% of GDP in 1997, reflecting
significant capacity in Switzerland at present. Nominal short-term interest
rates have fallen to 1.25%. Once growth is established, the Swiss National Bank
is expected to return to a neutral monetary policy. The biggest worry for the
future is the success of monetary union in Europe. If the EMU does not go
smoothly, a panic flight to the Swiss franc could result in significant
appreciation, causing the economy to lapse into a recession.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
SWITZERLAND WEBS INDEX SERIES VS. THE MSCI SWITZERLAND INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
Switzerland MSCI
WEBS Index Switzerland
Series 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
11/30/97 12,927 13,557
02/28/98 15,124 16,271
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
Switzerland WEBS Index Series $15,124*
MSCI Switzerland Index $16,271
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
Switzerland WEBS Index Series 48.13% 23.37%
MSCI Switzerland Index 57.25% 28.03%
- ------------------
* 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 six-month period ended February 28, 1998 the total return of the
United Kingdom WEBS Index Series was 21.01%. The corresponding MSCI United
Kingdom Index total return for the period was 22.25%. The United Kingdom WEBS
Index Series under-performed the MSCI United Kingdom Index total return by 1.24%
in this period.
WHAT WERE THE MOST SIGNIFICANT FACTORS CONTRIBUTING TO THE UNITED KINGDOM
WEBS INDEX SERIES' PERFORMANCE FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998?
The United Kingdom WEBS Index Series under-performed the MSCI United Kingdom
Index as a result of the impact of expenses, portfolio sampling and cash drag.
Revenue differential had a positive effect on performance, but only partially
offset the negative factors.
WHAT MARKET CONDITIONS AFFECTED THE UNITED KINGDOM WEBS INDEX SERIES'
PERFORMANCE DURING THE PERIOD?
With a GDP growth rate of 3.5% for 1997, Britain sustained a fifth straight
year of growth. Fortunately for consumers, the inflation rate was below that of
economic growth. Britain's economy has sparked some fears of inflation, however,
given the tightness of the labor market. The unemployment rate in 1997 was at
5.5%. Accordingly, the Bank of England raised interest rates in five
quarter-point moves between May and November. The specter of inflation continued
into early 1998, creating public debate over the necessity of further rate
hikes. The consensus is that the economy is now slowing. Industrial production
slowed in both November and December of 1997. Consumer spending was less robust
than in 1996 and rising interest rates have increased mortgage payments as most
mortgage-holders pay variable rates. The strength of sterling, which is about
25% higher than in mid-1996, is expected to lead to a surge of imports, which,
along with the Asian crisis, is expected to have a dampening effect on British
exports. Fiscal policy remained unchanged in early 1998, due to these slowdowns,
and manufacturing output continued to fall in early 1998, putting off any
imminent interest rate hikes. Consumer confidence could stimulate the economy
since the aggregate household balance sheet is strong.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
UNITED KINGDOM WEBS INDEX SERIES VS. THE MSCI UNITED KINGDOM INDEX
[GRAPHIC OMITTED]
PLOT POINTS TO FOLLOW:
United Kingdom MSCI
WEBS Index United Kingdom
Series 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
11/30/97 15,051 15,340
02/28/98 17,432 17,851
---------------------------------------------------------
Past performance is not predictive of future performance
---------------------------------------------------------
Value
February 28, 1998
-----------------
United Kingdom WEBS Index Series $17,432*
MSCI United Kingdom Index $17,851
AVERAGE ANNUAL TOTAL RETURN
ONE SINCE
YEAR INCEPTION
------ ---------
United Kingdom WEBS Index Series 36.54% 32.59%
MSCI United Kingdom Index 37.36% 34.20%
- ------------------
* 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>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
AUSTRALIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD
DURABLES 0.64%
119,700 Email Limited $ 269,120
----------
BANKING 20.41%
378,000 National Australia Bank Limited 5,227,887
483,000 Westpac Banking Corporation
Limited 3,349,911
----------
8,577,798
----------
BEVERAGES & TOBACCO 7.77%
216,300 Coca-Cola Amatil Limited 1,864,170
632,100 Foster's Brewing Group
Limited 1,399,612
----------
3,263,782
----------
BROADCASTING & PUBLISHING 11.60%
548,100 News Corporation Limited 3,491,482
252,000 News Corporation
Limited - Preferred 1,382,085
----------
4,873,567
----------
BUILDING MATERIALS &
COMPONENTS 7.43%
350,700 Boral Limited 850,598
289,800 CSR Limited 961,536
136,500 James Hardie Industries Limited 424,068
306,600 Pioneer International Limited 887,768
----------
3,123,970
----------
BUSINESS & PUBLIC SERVICES 3.25%
65,100 Brambles Industries Limited 1,366,061
----------
CHEMICALS 1.40%
86,100 Orica Limited 586,599
----------
CONSTRUCTION & HOUSING 0.35%
37,800 Leighton Holdings Limited 148,081
----------
ENERGY SOURCES 13.72%
519,750 Broken Hill Proprietary Company
Limited 5,134,532
163,800 Santos Limited 629,965
----------
5,764,497
----------
FOOD & HOUSEHOLD PRODUCTS 1.54%
151,200 Burns Philp & Company Limited* 24,723
359,100 Goodman Fielder Limited 621,423
----------
646,146
----------
FOREST PRODUCTS & PAPER 1.81%
174,300 Amcor Limited 761,191
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
GOLD MINES 1.64%
84,000 Newcrest Mining Limited* $ 112,742
378,000 Normandy Mining Limited 375,996
65,100 Plutonic Resources Limited 201,804
----------
690,542
----------
LEISURE & TOURISM 0.23%
199,500 Crown Limited* 95,144
----------
MERCHANDISING 3.94%
319,200 Coles Myer Limited 1,657,129
----------
METALS - NON FERROUS 7.44%
449,400 Mount Isa Mines Holdings Limited 251,064
224,700 North Limited 610,515
58,800 RGC Limited 80,121
90,300 Rio Tinto Limited 1,186,132
294,000 WMC Limited 997,505
----------
3,125,337
----------
METALS - STEEL 0.76%
375,900 Australian National Industries
Limited 320,126
----------
MULTI-INDUSTRY 4.72%
79,800 Howard Smith Limited 653,500
289,800 Pacific Dunlop Limited 513,346
220,500 Southcorp Limited 817,233
----------
1,984,079
----------
REAL ESTATE 8.89%
270,900 General Property Trust** 531,545
69,300 Lend Lease Corporation Limited** 1,744,561
203,700 Stockland Trust Group 520,428
432,600 Westfield Trust** 937,243
----------
3,733,777
----------
TELECOMMUNICATIONS 2.46%
387,744 Telstra Corporation Limited 1,032,905
----------
TOTAL COMMON STOCK - BASKET
(Cost $45,168,633) 42,019,851
----------
COMMON STOCK -
NON-BASKET 0.00%
TELECOMMUNICATIONS 0.00%
12 Telstra Corporation Limited 32
----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $17) 32
----------
TOTAL INVESTMENTS
(COST $45,168,650)(DAGGER) 100.00% $42,019,883
======= ===========
- ----------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $45,274,918. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 3,104,966
Excess of tax cost over value (6,360,001)
-----------
$(3,255,035)
===========
See accompanying notes to financial statements.
20
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
AUSTRIA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 17.67%
14,500 Bank Austria AG $ 982,323
----------
BEVERAGES & TOBACCO 4.12%
3,905 Oesterreichische Brau
Beteiligungs AG 228,767
----------
BUILDING MATERIALS &
COMPONENTS 4.34%
1,250 Wienerberger Baustoffindustrie
AG 241,322
----------
BUSINESS & PUBLIC SERVICES 3.63%
5,000 Flughafen Wien AG 201,673
----------
CHEMICALS 2.65%
2,250 Lenzing AG* 147,143
----------
CONSTRUCTION & HOUSING 6.87%
2,500 Bau Holding AG 147,241
2,000 Bau Holding AG Vorzug 95,237
4,000 Universale-Bau AG 139,409
----------
381,887
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 2.38%
2,000 Austria Mikro Systeme
International AG 132,360
----------
ENERGY SOURCES 11.20%
5,140 OMV AG 622,764
----------
INSURANCE 5.86%
850 EA-Generali AG 278,403
250 EA-Generali AG Vorzug* 47,383
----------
325,786
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 11.59%
1,500 BWT AG $ 269,615
5,000 Steyr Daimler Puch AG 133,143
1,750 VA Technologie AG 241,635
----------
644,393
----------
METALS - STEEL 4.60%
4,000 Boehler-Uddeholm AG 255,917
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 8.28%
4,125 Mayr Melnhof Karton AG 239,071
5,500 RHI AG 220,979
----------
460,050
----------
TRANSPORTATION - AIRLINES 4.52%
10,000 Austrian Airlines AG* 251,406
----------
UTILITIES - ELECTRICAL & GAS 12.29%
6,500 Oesterreichische
Elektrizitaetswirtschafts AG -
Class A 683,436
----------
TOTAL COMMON STOCK - BASKET
(Cost $5,239,352) 5,559,227
----------
TOTAL INVESTMENTS
(COST $5,239,352)(DAGGER) 100.00% $5,559,227
======= ==========
- ---------------
* Non-income producing security.
(DAGGER) Aggregate cost for Federal income tax purposes is $5,268,438. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 463,554
Excess of tax cost over value (172,765)
---------
$ 290,789
=========
See accompanying notes to financial statements.
21
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
BELGIUM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 8.96%
1,950 Generale de Banque SA $ 922,684
2,160 Kredietbank NV** 997,544
----------
1,920,228
----------
BUILDING MATERIALS &
COMPONENTS 4.00%
9,750 Cimenteries CBR
Cementbedrijven 856,313
----------
CHEMICALS 4.39%
15,000 Solvay SA 941,004
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 4.62%
4,650 Barco NV 990,577
----------
ENERGY SOURCES 9.36%
5,880 Petrofina SA 2,005,259
----------
HEALTH & PERSONAL CARE 3.38%
180 UCB SA 723,171
----------
INDUSTRIAL COMPONENTS 3.98%
1,260 Bekaert NV 852,670
----------
INSURANCE 17.20%
10,500 Fortis AG 2,685,264
3,150 Royale Belge** 998,565
----------
3,683,829
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MERCHANDISING 6.21%
540 Colruyt NV $ 343,086
16,200 Delhaize-Le Lion SA 986,012
----------
1,329,098
----------
METALS - NON FERROUS 4.40%
12,750 Union Miniere SA* 942,806
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 3.99%
6,300 Glaverbel SA 854,351
----------
MULTI-INDUSTRY 4.61%
6,300 Groupe Bruxelles Lambert SA** 987,213
----------
TRANSPORTATION - SHIPPING 0.66%
1,800 Compagnie Maritime Belge
SA 141,511
----------
UTILITIES - ELECTRICAL & GAS 24.24%
12,450 Electrabel SA 3,021,102
21,150 Tractebel 2,170,896
----------
5,191,998
----------
TOTAL COMMON STOCK - BASKET
(Cost $19,652,366) 21,420,028
----------
TOTAL INVESTMENTS
(COST $19,652,366)(DAGGER) 100.00% $21,420,028
======= ===========
- ----------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $19,740,451. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $2,031,884
Excess of tax cost over value (352,307)
----------
$1,679,577
==========
See accompanying notes to financial statements.
22
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
CANADA WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.18%
AEROSPACE & MILITARY TECHNOLOGY 2.60%
27,200 Bombardier Incorporated -
Class B $ 584,823
----------
BANKING 18.41%
17,600 Bank of Montreal 939,854
32,000 Bank of Nova Scotia 789,207
28,800 Canadian Imperial Bank of
Commerce 916,695
11,200 National Bank of Canada 186,509
22,400 Royal Bank of Canada 1,311,074
----------
4,143,339
----------
BEVERAGES & TOBACCO 5.10%
6,400 Molson Company Limited -
Class A 114,896
27,200 Seagram Company Limited 1,032,041
----------
1,146,937
----------
BROADCASTING & PUBLISHING 5.92%
4,800 Quebecor Incorporated - Class B 93,086
12,800 Rogers Communications
Incorporated - Class B* 55,762
6,400 Southam Incorporated 129,286
35,200 Thomson Corporation 1,053,626
----------
1,331,760
----------
BUSINESS & PUBLIC SERVICES 3.04%
6,400 Extendicare Incorporated -
Class A* 68,803
25,600 Laidlaw Incorporated 373,243
4,800 Loewen Group Incorporated 118,044
8,000 Moore Corporation Limited 124,789
----------
684,879
----------
CHEMICALS 2.36%
9,600 Agrium Incorporated 126,813
14,400 Methanex Corporation* 117,369
3,200 Potash Corporation of
Saskatchewan Incorporated 286,116
----------
530,298
----------
ELECTRICAL & ELECTRONICS 9.66%
12,800 Newbridge Networks Corporation* 299,944
35,200 Northern Telecom Limited 1,874,761
----------
2,174,705
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ENERGY SOURCES 12.43%
8,000 Alberta Energy Company Limited $ 195,616
8,000 Anderson Exploration Limited* 94,435
6,400 Canadian Natural Resources
Limited* 128,162
9,600 Canadian Occidental Petroleum
Limited 191,568
16,000 Gulf Canada Resources
Limited* 93,873
11,200 Imperial Oil Limited 660,652
3,200 IPL Energy Incorporated 144,238
20,800 Petro-Canada 385,835
9,600 Poco Petroleum Limited* 100,169
8,000 Ranger Oil Limited 51,433
8,000 Renaissance Energy Limited* 163,013
9,600 Suncor Energy Incorporated 352,445
8,000 Talisman Energy Incorporated* 236,931
----------
2,798,370
----------
FINANCIAL SERVICES 1.05%
6,400 Power Corporation of Canada 237,437
----------
FOREST PRODUCTS & PAPER 2.23%
14,400 Abitibi Consolidated Incorporated 205,396
4,800 Avenor Incorporated 101,686
9,600 Domtar Incorporated 73,187
9,600 MacMillan Bloedel Limited 121,079
----------
501,348
----------
GOLD MINES 4.08%
33,600 Barrick Gold Corporation 644,519
4,800 Cambior Incorporated 30,185
19,200 Placer Dome Incorporated 243,508
----------
918,212
----------
HEALTH & PERSONAL CARE 0.46%
4,800 MDS Incorporated - Class B 104,553
----------
INDUSTRIAL COMPONENTS 1.28%
4,800 Magna International Incorporated -
Class A 289,207
----------
MACHINERY & ENGINEERING 0.41%
3,200 United Dominion Industries
Limited 91,737
----------
MERCHANDISING 2.29%
6,400 Canadian Tire Corporation -
Class A 153,120
3,200 George Weston Limited 269,815
4,800 Hudson's Bay Company 92,749
----------
515,684
----------
See accompanying notes to financial statements.
23
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
CANADA WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - NON FERROUS 6.84%
16,000 Alcan Aluminium Limited $ 495,222
4,800 Cameco Corporation 141,484
6,400 Cominco Limited 107,926
12,800 Inco Limited 222,597
19,200 Noranda Incorporated 367,622
4,800 Rio Algom Limited 89,207
8,000 Teck Corporation - Class B 114,952
----------
1,539,010
----------
METALS - STEEL 0.50%
6,400 Dofasco Incorporated 112,198
----------
MULTI-INDUSTRY 6.76%
24,000 Canadian Pacific Limited 685,497
12,000 Edperbrascan Corporation -
Class A 226,813
16,000 Imasco Limited 608,769
----------
1,521,079
----------
TELECOMMUNICATIONS 8.31%
44,800 BCE Incorporated 1,589,657
11,200 Telus Corporation 281,731
----------
1,871,388
----------
UTILITIES - ELECTRICAL & GAS 5.45%
38,400 Nova Corporation 423,609
14,400 Transalta Corporation 242,327
16,000 Transcanada Pipelines Limited 359,191
8,000 Westcoast Energy Incorporated 202,361
----------
1,227,488
----------
TOTAL COMMON STOCK - BASKET
(Cost $17,835,325) 22,324,452
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK -
NON-BASKET 0.82%
CHEMICALS 0.03%
450 Agrium Incorporated $ 5,944
----------
ENERGY SOURCES 0.79%
12,800 Norcen Energy Resources
Limited 177,628
----------
FOREST PRODUCTS & PAPER 0.00%
56 Abitibi Consolidated Incorporated 799
----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $131,861) 184,371
----------
TOTAL INVESTMENTS
(COST $17,967,186)(DAGGER) 100.00% $22,508,823
======= ===========
- ---------------
* Non-income producing security.
(DAGGER) Aggregate cost for Federal income tax purposes is $17,982,242. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 6,047,906
Excess of tax cost over value (1,521,325)
-----------
$ 4,526,581
===========
See accompanying notes to financial statements.
24
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.88%
AEROSPACE & MILITARY TECHNOLOGY 0.88%
5,298 Thomson CSF $ 182,711
----------
APPLIANCES & HOUSEHOLD
DURABLES 0.22%
1,800 Moulinex* 45,079
----------
AUTOMOBILES 1.47%
2,136 PSA Peugeot Citroen 304,126
----------
BANKING 8.47%
8,946 Banque Nationale de Paris 540,641
6,642 Compagnie Financiere de
Paribas - Class A 631,553
660 Natexis 40,103
3,600 Societe Generale 542,723
----------
1,755,020
----------
BEVERAGES & TOBACCO 1.40%
2,754 Pernod Ricard 180,003
2,502 Societe Nationale D'Exploitation 109,295
----------
289,298
----------
BROADCASTING & PUBLISHING 1.39%
1,368 Canal Plus SA 288,234
----------
BUILDING MATERIALS &
COMPONENTS 3.95%
3,600 Compagnie de Saint Gobain 504,294
4,254 Lafarge SA 313,882
----------
818,176
----------
BUSINESS & PUBLIC SERVICES 9.69%
5,484 Compagnie Generale des Eaux 862,771
3,426 Havas SA 267,191
318 Sodexho Alliance SA 204,922
5,100 Suez Lyonnaise des Eaux SA 672,540
----------
2,007,424
----------
CHEMICALS 2.22%
2,850 L'Air Liquide 460,546
----------
CONSTRUCTION & HOUSING 0.99%
1,110 Bouygues SA 155,673
750 Groupe GTM 48,651
----------
204,324
----------
ELECTRICAL & ELECTRONICS 7.43%
5,850 Alcatel Alsthom 760,876
1,194 Legrand SA 275,691
210 Sagem SA 128,636
5,988 Schneider SA 372,695
----------
1,537,898
----------
ENERGY EQUIPMENT & SERVICES 0.13%
240 Compagnie Generale de
Geophysique SA* 26,446
----------
ENERGY SOURCES 9.72%
9,600 Elf Acquitaine SA 1,092,539
8,400 Total SA - Class B 921,485
----------
2,014,024
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FINANCIAL SERVICES 0.64%
666 CPR $ 51,842
174 Societe Eurafrance SA** 81,009
----------
132,851
----------
FOOD & HOUSEHOLD PRODUCTS 3.76%
1,140 Eridania Beghin-Say SA 203,314
2,850 Groupe Danone 575,682
----------
778,996
----------
HEALTH & PERSONAL CARE 11.66%
462 Essilor International SA 141,803
2,640 L'Oreal 1,188,787
13,200 Rhone-Poulenc - Class A 608,267
4,200 Sanofi SA 475,917
----------
2,414,774
----------
INDUSTRIAL COMPONENTS 3.08%
5,400 Michelin - Class B 334,324
3,546 Valeo SA 303,395
----------
637,719
----------
INSURANCE 5.53%
11,850 Axa-UAP SA 1,146,216
----------
LEISURE & TOURISM 2.40%
1,650 Accor SA 380,980
618 Club Mediterranee SA* 45,873
360 Pathe SA 69,171
----------
496,024
----------
MACHINERY & ENGINEERING 0.90%
798 Compagnie Francaise d'Etudes de
Construction Technip 90,162
1,380 Sidel SA 95,637
----------
185,799
----------
MERCHANDISING 9.70%
1,500 Carrefour SA 900,103
288 Comptoirs Modernes 156,550
870 Pinault-Printemps Redoute SA 570,351
858 Promodes 382,551
----------
2,009,555
----------
METALS - STEEL 0.81%
11,250 Usinor SA 168,769
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.44%
726 Imetal SA 90,373
----------
MULTI-INDUSTRY 0.81%
4,614 Lagardere S.C.A. 167,457
----------
REAL ESTATE 0.60%
810 Simco SA** 64,382
558 Union du Credit-Bail Immobilier** 60,846
----------
125,228
----------
RECREATION - OTHER CONSUMER
GOODS 4.20%
3,300 LVMH (Moet - Hennessy
Louis Vuitton) 663,328
2,616 Societe Bic SA 207,328
----------
870,656
----------
See accompanying notes to financial statements.
25
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
FRANCE WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
TELECOMMUNICATIONS 7.01%
29,952 France Telecom SA* $ 1,451,536
-----------
UTILITIES - ELECTRICAL & GAS 0.38%
912 Primagaz Cie 78,180
-----------
TOTAL COMMON STOCK - BASKET
(Cost $16,067,661) 20,687,439
-----------
COMMON STOCK -
NON-BASKET 0.12%
BANKING 0.00%
3 Compagnie Financiere de
Paribas - Class A 285
-----------
LEISURE & TOURISM 0.00%
618 Club Mediterranee SA Rights
(Expiration Date 03/11/98)* 898
-----------
REAL ESTATE 0.12%
390 Sefimeg 23,992
-----------
TELECOMMUNICATIONS 0.00%
1 France Telecom SA* 49
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $28,809) 25,224
-----------
TOTAL INVESTMENTS
(COST $16,096,470)(DAGGER) 100.00% $20,712,663
======= ===========
- ----------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $16,100,809. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $4,716,698
Excess of tax cost over value (104,844)
----------
$4,611,854
==========
See accompanying notes to financial statements.
26
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
GERMANY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AUTOMOBILES 10.21%
28,500 Daimler-Benz AG $ 2,333,646
1,500 Volkswagen AG 987,299
300 Volkswagen AG Vorzug 146,297
-----------
3,467,242
-----------
BANKING 13.60%
15,000 Bayerische Hypotheken-Und
Wechsel Bank AG 710,822
15,300 Bayerische Vereinsbank AG 954,353
24,600 Deutsche Bank AG 1,689,657
27,900 Dresdner Bank AG 1,265,247
-----------
4,620,079
-----------
BUILDING MATERIALS &
COMPONENTS 1.05%
300 Buderus AG 135,221
2,970 Heidelberger Zement AG 220,115
-----------
355,336
-----------
BUSINESS & PUBLIC SERVICES 7.31%
3,600 SAP AG 1,368,746
2,700 SAP AG Vorzug 1,112,850
-----------
2,481,596
-----------
CHEMICALS 9.35%
33,600 BASF AG 1,222,879
39,000 Bayer AG 1,643,983
6,000 Degussa AG 310,778
-----------
3,177,640
-----------
CONSTRUCTION & HOUSING 0.56%
2,400 Bilfinger & Berger Bau AG 64,536
3,600 Hochtief AG 124,972
-----------
189,508
-----------
ELECTRICAL & ELECTRONICS 5.71%
31,500 Siemens AG 1,937,941
-----------
HEALTH & PERSONAL CARE 2.93%
4,800 Beiersdorf AG 226,934
9,900 Merck KGAA 365,495
3,600 Schering AG 404,474
-----------
996,903
-----------
INDUSTRIAL COMPONENTS 0.40%
5,700 Continental AG 136,941
-----------
INSURANCE 16.65%
12,000 Allianz AG 3,778,929
3,000 Amb Aachener & Muenchener
Beteiligungs AG 334,748
1,500 Axa Colonia Konzern AG 182,665
3,000 Muenchener Rueckversicherung
AG 1,360,480
-----------
5,656,822
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 1.91%
600 Linde AG $ 397,068
600 MAN AG 180,516
300 MAN AG Vorzug 70,223
----------
647,807
----------
MERCHANDISING 2.36%
1,800 Douglas Holding AG 63,776
600 Karstadt AG 213,908
11,520 Metro AG 523,694
----------
801,378
----------
METALS - STEEL 1.17%
1,800 Thyssen AG 396,242
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.42%
1,200 SGL Carbon AG 142,164
----------
MULTI-INDUSTRY 0.86%
900 Preussag AG 291,850
----------
RECREATION - OTHER CONSUMER
GOODS 1.38%
3,000 Adidas-Salomon AG 469,473
----------
TELECOMMUNICATIONS 11.29%
118,500 Deutsche Telekom AG 2,393,115
2,400 Mannesmann AG 1,441,481
----------
3,834,596
----------
TRANSPORTATION - AIRLINES 1.31%
23,100 Deutsche Lufthansa AG 444,867
----------
UTILITIES - ELECTRICAL & GAS 11.53%
17,100 Rwe AG 945,550
6,600 Rwe AG-Preferred 308,943
27,600 Veba AG 1,851,609
1,500 Viag AG 811,660
----------
3,917,762
----------
TOTAL COMMON STOCK - BASKET
(Cost $26,463,161) 33,966,147
----------
TOTAL INVESTMENTS
(COST $26,463,161)(DAGGER) 100.00% $33,966,147
======= ===========
- ---------------
(DAGGER) Aggregate cost for Federal income tax purposes is $26,492,524. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $7,585,862
Excess of tax cost over value (112,239)
----------
$7,473,623
==========
See accompanying notes to financial statements.
27
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
HONG KONG WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.97%
AEROSPACE & MILITARY
TECHNOLOGY 0.21%
57,600 Hong Kong Aircraft Engineering
Company Limited $ 123,123
----------
BANKING 9.11%
950,400 Bank Of East Asia Limited 1,994,705
302,400 Hang Seng Bank Limited 2,860,936
129,600 Wing Lung Bank 569,119
----------
5,424,760
----------
BROADCASTING & PUBLISHING 2.53%
576,000 Oriental Press Group 148,789
1,008,000 South China Morning Post
Holdings Limited 729,067
216,000 Television Broadcasts Limited 627,704
----------
1,505,560
----------
CONSTRUCTION & HOUSING 0.24%
216,000 Kumagai Gumi Limited 145,070
----------
ELECTRICAL & ELECTRONICS 1.72%
288,000 Johnson Electric Holdings Limited 1,022,925
----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.17%
360,000 Elec & Eltek International
Holdings Limited 103,455
----------
LEISURE & TOURISM 3.43%
864,000 Hong Kong & Shanghai Hotels
Limited 742,086
1,728,000 Regal Hotels International 270,052
1,152,000 Shangri-La Asia Limited 1,034,085
----------
2,046,223
----------
MERCHANDISING 1.01%
216,000 Dickson Concepts International
Limited 373,833
720,000 Giordano International Limited 227,833
----------
601,666
----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.51%
144,000 Varitronix International Limited 302,228
----------
MULTI-INDUSTRY 20.55%
2,160,000 Hopewell Holdings Limited 477,055
1,296,000 Hutchison Whampoa Limited 9,164,482
432,000 Swire Pacific Limited - Class A 2,600,090
----------
12,241,627
----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
REAL ESTATE 34.25%
648,000 Cheung Kong Holdings Limited $ 4,540,394
864,000 Chinese Estates Holdings** 295,719
1,008,000 Hang Lung Development Company
Limited** 1,477,662
648,000 Hysan Development Company
Limited 1,234,485
576,000 Miramar Hotel & Investment
Limited 792,302
720,000 New World Development Company
Limited 2,654,956
1,728,000 Sino Land Company 825,780
792,000 Sun Hung Kai Properties Limited 5,932,967
288,000 Tai Cheung Holdings Limited 97,643
1,224,000 Wharf Holdings Limited 2,553,129
----------
20,405,037
----------
TELECOMMUNICATIONS 14.45%
4,089,600 Hong Kong Telecommunications
Limited 8,609,684
----------
TRANSPORTATION - AIRLINES 2.59%
1,800,000 Cathay Pacific Airways Limited 1,546,012
----------
TRANSPORTATION - SHIPPING 0.47%
1,152,000 Shun Tak Holdings Limited 279,724
----------
UTILITIES - ELECTRICAL & GAS 8.73%
504,000 CLP Holdings Limited 2,616,829
1,440,000 Hong Kong & China Gas Company
Limited 2,585,212
----------
5,202,041
----------
TOTAL COMMON STOCK - BASKET
(Cost $64,312,577) 59,559,135
----------
COMMON STOCK -
NON-BASKET 0.03%
BANKING 0.03%
7,200 Bank of East Asia Limited 15,111
----------
FINANCIAL SERVICES 0.00%
276,000 Peregrine Investment Holdings
Limited*** 0
----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $416,476) 15,111
----------
TOTAL INVESTMENTS
(COST $64,729,053)(DAGGER) 100.00% $59,574,246
======= ===========
- ---------------
** Passive foreign investment company.
*** Fair valued security.
(DAGGER) Aggregate cost for Federal income tax purposes is $65,403,938. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 447,444
Excess of tax cost over value (6,277,136)
-----------
$(5,829,692)
===========
See accompanying notes to financial statements.
28
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
ITALY WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.78%
AUTOMOBILES 3.93%
710,600 Fiat SpA $ 2,498,586
-----------
BANKING 20.77%
446,500 Banca Commerciale Italiana SpA 2,045,050
133,000 Banca Popolare di Milano SpA 1,140,658
146,300 Banco Intesa SpA 667,954
222,300 Banco Intesa SpA Rnc 507,720
549,100 Credito Italiano SpA** 2,115,452
266,000 Istituto Bancario San Paolo de
Torino SpA 3,113,900
171,000 Istituto Mobiliare Italiano SpA** 2,387,187
117,800 Mediobanca SpA*,** 1,215,688
-----------
13,193,609
-----------
BROADCASTING & PUBLISHING 3.41%
45,600 Arnoldo Mondadori Editore SpA 489,573
298,300 Mediaset SpA 1,678,328
-----------
2,167,901
-----------
CONSTRUCTION & HOUSING 0.68%
74,100 Sirti SpA 431,237
-----------
DATA PROCESSING &
REPRODUCTION 0.92%
594,624 Olivetti Group SpA* 586,499
-----------
ENERGY SOURCES 15.92%
1,729,000 ENI SpA 10,115,343
-----------
FOOD & HOUSEHOLD PRODUCTS 1.20%
459,800 Parmalat Finanziaria SpA 760,573
-----------
INDUSTRIAL COMPONENTS 3.04%
693,500 Pirelli SpA 1,928,833
-----------
INSURANCE 14.01%
95,000 Assicurazioni Generali SpA 2,712,048
950,000 Istituto Nazionale delle
Assicurazioni SpA 2,580,122
134,900 Riunione Adriatica di Sicurta SpA 1,580,775
106,400 Riunione Adriatica di Sicurta
SpA Rnc 962,651
74,100 Societa Assicuratrice Industriale
SpA 1,067,534
-----------
8,903,130
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MERCHANDISING 1.51%
104,500 La Rinascente SpA $ 960,236
-----------
METALS - STEEL 0.63%
57,000 Falck Acciaierie & Ferriere
Lombarde SpA 401,671
-----------
MULTI-INDUSTRY 2.58%
1,233,100 Montedison SpA 1,276,892
480,700 Montedison SpA Rnc 362,113
-----------
1,639,005
-----------
RECREATION - OTHER CONSUMER
GOODS 0.97%
106,400 Bulgari SpA 616,002
-----------
TELECOMMUNICATIONS 23.76%
1,615,000 Telecom Italia Mobile SpA 7,434,893
380,000 Telecom Italia Mobile SpA Rnc 1,124,848
798,000 Telecom Italia SpA 5,430,298
228,000 Telecom Italia SpA Rnc 1,103,146
-----------
15,093,185
-----------
TEXTILES & APPAREL 2.60%
55,328 Benetton Group SpA 1,030,345
47,500 Marzotto & Figli SpA 621,353
-----------
1,651,698
-----------
UTILITIES - ELECTRICAL & GAS 3.85%
212,800 Edison SpA 1,449,388
260,300 Italgas SpA 995,844
-----------
2,445,232
-----------
TOTAL COMMON STOCK - BASKET
(Cost $45,672,382) 63,392,740
-----------
COMMON STOCK -
NON-BASKET 0.22%
INSURANCE 0.22%
66,500 Assicurazioni Generali SpA Rights
(Expiration date 03/10/98) * 136,609
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $109,313) 136,609
-----------
TOTAL INVESTMENTS
(COST $45,781,695)(DAGGER) 100.00% $63,529,349
======= ===========
- ------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $46,558,339. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $16,992,035
Excess of tax cost over value (21,025)
-----------
$16,971,010
===========
See accompanying notes to financial statements.
29
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.99%
APPLIANCES & HOUSEHOLD
DURABLES 6.03%
225,000 Matsushita Electric Industrial
Company Limited $ 3,277,131
25,000 Pioneer Electronic Corporation 441,305
225,000 Sanyo Electric Company Limited 605,557
125,000 Sharp Corporation 977,598
50,000 Sony Corporation 4,511,992
-----------
9,813,583
-----------
AUTOMOBILES 9.22%
100,000 Honda Motor Company Limited 3,459,194
275,000 Nissan Motor Company Limited 1,195,084
375,000 Toyota Motor Corporation 10,359,772
-----------
15,014,050
-----------
BANKING 15.15%
225,000 Asahi Bank Limited 1,186,179
125,000 Ashikaga Bank Limited 244,400
450,000 Bank of Tokyo-Mitsubishi Limited 6,376,158
125,000 Bank of Yokohama Limited 387,873
100,000 Chiba Bank Limited 372,041
275,000 Fuji Bank Limited 2,131,125
50,000 Gunma Bank Limited 376,395
75,000 Hokuriku Bank Limited 135,360
275,000 Industrial Bank of Japan Limited 2,263,912
100,000 Joyo Bank 432,993
150,000 Mitsubishi Trust & Banking
Corporation 1,769,176
125,000 Mitsui Trust & Banking Company
Limited 416,568
350,000 Sakura Bank Limited 1,462,835
50,000 Seventy-Seven Bank Limited 455,157
100,000 Shizuoka Bank Limited 1,116,124
300,000 Sumitomo Bank Limited 3,562,099
200,000 Tokai Bank Limited 1,415,341
25,000 Yamaguchi Bank Limited 308,715
125,000 Yasuda Trust & Banking 252,315
-----------
24,664,766
-----------
BEVERAGES & TOBACCO 1.22%
50,000 Asahi Breweries Limited 668,883
125,000 Kirin Brewery Company Limited 1,088,419
50,000 Sapporo Breweries Limited 225,600
-----------
1,982,902
-----------
BUILDING MATERIALS &
COMPONENTS 1.03%
125,000 Chichibu Onoda Cement
Corporation 271,115
50,000 Inax Corporation 209,768
50,000 Sekisui Chemical Company Limited 317,818
25,000 Sumitomo Forestry Company Limited 146,046
25,000 Tostem Corporation 348,294
50,000 Toto Limited 375,999
-----------
1,669,040
-----------
BUSINESS & PUBLIC SERVICES 1.91%
75,000 Dai Nippon Printing Company
Limited 1,276,419
50,000 Kamigumi Company Limited 228,370
25,000 Kokuyo Company Limited 437,347
25,000 Mitsubishi Logistics Corporation 282,989
75,000 Toppan Printing Company Limited 884,588
-----------
3,109,713
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
CHEMICALS 2.86%
150,000 Asahi Chemical Industry Company
Limited $ 669,675
100,000 Dainippon Ink & Chemicals
Incorporated 300,799
50,000 Kuraray Company Limited 439,326
250,000 Mitsubishi Chemical Corporation 467,031
75,000 Mitsubishi Rayon Company Limited 227,974
25,000 Shin-Etsu Chemical Company
Limited 550,146
125,000 Showa Denko K.K. 168,210
175,000 Sumitomo Chemical Company
Limited 541,637
100,000 Teijin Limited 306,341
150,000 Toray Industries Incorporated 807,409
75,000 Tosoh Corporation* 169,200
-----------
4,647,748
-----------
CONSTRUCTION & HOUSING 2.38%
50,000 Daiwa House Industry Company
Limited 391,039
175,000 Kajima Corporation 644,146
25,000 Kandenko Company Limited 174,147
25,000 Kinden Corporation 334,442
175,000 Kumagai Gumi Company Limited 193,937
50,000 Nishimatsu Construction Company
Limited 257,659
75,000 Obayashi Corporation 407,860
75,000 Sekisui House Limited 590,715
125,000 Shimizu Corporation 496,715
125,000 Taisei Corporation 375,999
-----------
3,866,659
-----------
DATA PROCESSING & REPRODUCTION 2.61%
100,000 Canon Incorporated 2,287,659
175,000 Fujitsu Limited 1,967,070
-----------
4,254,729
-----------
ELECTRICAL & ELECTRONICS 3.49%
350,000 Hitachi Limited 2,626,455
25,000 Makita Corportion 288,926
225,000 Mitsubishi Electric Corporation 683,923
150,000 NEC Corporation 1,674,187
25,000 Omron Corporation 403,705
-----------
5,677,196
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 3.06%
25,000 Fanuc Limited 910,314
25,000 Kyocera Corporation 1,345,682
25,000 Murata Manufacturing Company
Limited 793,557
50,000 Nikon Corporation 486,820
50,000 Olympus Optical Company Limited 393,414
25,000 Tokyo Electron Limited 898,441
25,000 Yokogawa Electric Corporation 157,326
-----------
4,985,554
-----------
ENERGY SOURCES 0.64%
75,000 Cosmo Oil Company Limited 172,168
125,000 Japan Energy Corporation 173,158
75,000 Mitsubishi Oil Company Limited 155,545
150,000 Nippon Oil Company Limited 541,439
-----------
1,042,310
-----------
See accompanying notes to financial statements.
30
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONTINUED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FINANCIAL SERVICES 3.36%
25,000 Acom Company Limited** $ 1,397,134
25,000 Credit Saison Company Limited** 583,789
150,000 Daiwa Securities Company Limited 739,729
200,000 Nomura Securities Company
Limited 2,754,690
-----------
5,475,342
-----------
FOOD & HOUSEHOLD PRODUCTS 1.68%
75,000 Ajinomoto Company Incorporated 742,104
50,000 Kao Corporation 676,799
50,000 Meiji Seika 191,958
25,000 Nippon Meat Packers Incorporated 328,505
25,000 Nissin Food Products Company
Limited 520,462
25,000 Yamazaki Baking Company
Limited 281,010
-----------
2,740,838
-----------
FOREST PRODUCTS & PAPER 0.73%
100,000 Nippon Paper Industries Company 508,984
125,000 Oji Paper Company Limited 672,841
-----------
1,181,825
-----------
HEALTH & PERSONAL CARE 4.44%
25,000 Daiichi Pharmaceutical 342,357
25,000 Eisai Company Limited 437,347
50,000 Kyowa Hakko Kogyo Company
Limited 244,993
50,000 Sankyo Company Limited 1,341,724
50,000 Shionogi & Company Limited 258,846
50,000 Shiseido Company Limited 629,304
25,000 Taisho Pharmaceutical Company
Limited 587,746
100,000 Takeda Chemical Industries 2,770,522
25,000 Yamanouchi Pharmaceutical
Company Limited 607,536
-----------
7,220,375
-----------
INDUSTRIAL COMPONENTS 4.70%
75,000 Bridgestone Corporation 1,727,618
100,000 Denso Corporation 2,042,270
50,000 Fujikura Limited 351,856
75,000 Furukawa Electric Company
Limited 331,275
50,000 Minebea Company Limited 554,104
50,000 NGK Insulators Limited 474,947
25,000 NGK Spark Plug Company
Limited 180,678
75,000 NSK Limited 293,873
75,000 NTN Corporation 238,067
100,000 Sumitomo Electric Industries 1,456,503
-----------
7,651,191
-----------
INSURANCE 2.49%
100,000 Mitsui Marine & Fire Insurance
Company Limited 557,271
50,000 Nichido Marine & Fire Insurance
Company 305,153
75,000 Nippon Fire & Marine Insurance
Company 296,842
100,000 Sumitomo Marine & Fire Insurance
Company 629,304
200,000 Tokio Marine & Fire Insurance
Company 2,263,912
-----------
4,052,482
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
LEISURE & TOURISM 0.13%
25,000 Tokyo Dome Corporation $ 203,831
-----------
MACHINERY & ENGINEERING 3.33%
50,000 Amada Company Limited 234,307
50,000 Daikin Industries Limited 251,326
25,000 Ebara Corporation 290,905
125,000 Hitachi Zosen Corporation 284,968
150,000 Kawasaki Heavy Industries Limited 389,456
125,000 Komatsu Limited 596,652
175,000 Kubota Corporation 504,235
25,000 Kurita Water Industries Limited 364,126
350,000 Mitsubishi Heavy Industries Limited 1,523,787
150,000 Mitsui Engineering & Shipbuilding
Company Limited* 153,170
100,000 Sumitomo Heavy Industries
Limited 356,210
25,000 Toyoda Automatic Loom Works
Limited 465,052
-----------
5,414,194
-----------
MERCHANDISING 3.51%
75,000 Daiei, Incorporated 353,242
25,000 Hankyu Department Stores 168,210
25,000 Isetan Company Limited 188,000
50,000 Ito Yokado Company Limited 2,730,943
25,000 Jusco Company Limited 405,684
50,000 Marui Company Limited 819,283
50,000 Mitsukoshi Limited 180,084
25,000 Mycal Corporation 193,739
25,000 Seiyu Limited 87,271
25,000 Takashimaya Company Limited 213,726
25,000 Uny Company Limited 381,936
-----------
5,722,118
-----------
METALS - NON FERROUS 0.41%
125,000 Mitsubishi Materials Corporation 284,968
100,000 Nippon Light Metal Company
Limited 159,899
50,000 Sumitomo Metal Mining Company 217,288
-----------
662,155
-----------
METALS - STEEL 1.66%
225,000 Kawasaki Steel Corporation 377,583
650,000 Nippon Steel Corporation 1,219,425
350,000 NKK Corporation 412,808
325,000 Sumitomo Metal Industries 576,269
25,000 Tokyo Steel Manufacturing
Company Limited 114,779
-----------
2,700,864
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.07%
125,000 Asahi Glass Company Limited 751,009
25,000 Nitto Denko Corporation 395,789
25,000 Toyo Seikan Kaisha Limited 409,641
100,000 Ube Industries Limited 178,897
-----------
1,735,336
-----------
REAL ESTATE 1.52%
150,000 Mitsubishi Estate Company Limited 1,674,187
75,000 Mitsui Fudosan Company Limited 807,409
-----------
2,481,596
-----------
See accompanying notes to financial statements.
31
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
JAPAN WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
RECREATION - OTHER CONSUMER
GOODS 2.33%
50,000 Casio Computer Company Limited $ 411,620
50,000 Citizen Watch Company 362,147
50,000 Fuji Photo Film Company 1,959,155
50,000 Konica Corporation 261,616
25,000 Shimano Incorporated 514,525
25,000 Yamaha Corporation 277,052
-----------
3,786,115
-----------
TELECOMMUNICATIONS 7.19%
1,275 Nippon Telegraph & Telephone
Corporation 11,707,433
-----------
TEXTILES & APPAREL 0.27%
25,000 Nisshinbo Industries Incorporated 145,452
175,000 Toyobo Limited 293,675
-----------
439,127
-----------
TRANSPORTATION - AIRLINES 0.47%
200,000 Japan Airlines Company Limited* 772,580
-----------
TRANSPORTATION - ROAD & RAIL 4.17%
400 East Japan Railway Company 1,890,287
125,000 Hankyu Corporation 582,799
50,000 Keihin Electric Express Railway
Company Limited 178,105
150,000 Kinki Nippon Railway Company
Limited 825,220
100,000 Nagoya Railroad Company Limited 351,460
75,000 Nankai Electric Railway Company 338,399
100,000 Nippon Express Company Limited 624,555
75,000 Odakyu Electric Railway Company 323,557
25,000 Seino Transportation Company 149,212
100,000 Tobu Railway Company Limited 353,044
125,000 Tokyu Corporation 550,146
50,000 Yamato Transport Company
Limited 629,304
-----------
6,796,088
-----------
TRANSPORTATION - SHIPPING 0.47%
150,000 Mitsui O.S.K. Lines Limited* 276,656
150,000 Nippon Yusen Kabushiki Kaisha 485,633
-----------
762,289
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
UTILITIES - ELECTRICAL & GAS 4.02%
100,000 Kansai Electric Power Company
Incorporated $ 1,717,723
275,000 Osaka Gas Company Limited 611,692
50,000 Tohoku Electric Power Company
Incorporated 728,251
150,000 Tokyo Electric Power Company 2,825,932
300,000 Tokyo Gas Company Limited 660,176
-----------
6,543,774
-----------
WHOLESALE & INTERNATIONAL TRADE 2.44%
150,000 Itochu Corporation 445,262
150,000 Marubeni Corporation 414,391
150,000 Mitsubishi Corporation 1,141,059
200,000 Mitsui & Company 1,283,939
100,000 Sumitomo Corporation 695,005
-----------
3,979,656
-----------
TOTAL COMMON STOCK - BASKET
(Cost $195,363,737) 162,757,459
-----------
COMMON STOCK -
NON-BASKET 0.01%
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.01%
352 Tokyo Electron Limited 12,650
-----------
FINANCIAL SERVICES 0.00%
400 Credit Saison Company Limited 9,341
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $19,139) 21,991
-----------
TOTAL INVESTMENTS
(COST $195,382,876)(DAGGER) 100.00% $162,779,450
======= ============
- ---------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $197,612,497. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $3,179,613
Excess of tax cost over value (38,012,660)
------------
$(34,833,047)
============
See accompanying notes to financial statements.
32
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
MALAYSIA (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.57%
AUTOMOBILES 3.52%
390,000 Edaran Otomobil Nasional BHD $ 848,980
780,000 Perusahaan Otomobil Nasional BHD 1,475,102
1,365,000 Tan Chong Motor Holdings BHD 969,429
-----------
3,293,511
-----------
BANKING 10.61%
975,000 Commerce Asset Holdings BHD 843,674
1,560,000 Malayan Banking BHD 6,070,204
1,950,000 Public Bank BHD (Foreign) 1,167,347
1,950,000 RHB Capital BHD 1,846,531
-----------
9,927,756
-----------
BEVERAGES & TOBACCO 7.21%
975,000 Guinness Anchor BHD 1,538,776
585,000 Rothmans of Pall Mall BHD 5,213,265
-----------
6,752,041
-----------
BROADCASTING & PUBLISHING 0.65%
390,000 New Straits Times Press BHD 604,898
-----------
BUILDING MATERIALS &
COMPONENTS 2.02%
585,000 Hume Industries (Malaysia) BHD 678,123
975,000 Malayan Cement BHD 570,408
1,755,000 Pan Malaysia Cement Works BHD 639,918
-----------
1,888,449
-----------
CONSTRUCTION & HOUSING 1.16%
195,000 Ekran BHD* 78,000
585,000 YTL Corporation BHD 1,010,816
-----------
1,088,816
-----------
ELECTRICAL & ELECTRONICS 0.48%
780,000 Time Engineering BHD 445,714
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 1.87%
585,000 Malaysian Pacific Industries BHD 1,751,020
-----------
ENERGY SOURCES 1.12%
585,000 Shell Refining Company BHD 1,050,612
-----------
FINANCIAL SERVICES 3.76%
780,000 AMMB Holdings BHD 963,592
1,365,000 Idris Hydraulic (Malaysia) BHD*,** 486,571
1,755,000 MBF Capital BHD 835,714
780,000 Rashid Hussain BHD 1,231,020
-----------
3,516,897
-----------
FOOD & HOUSEHOLD PRODUCTS 3.28%
390,000 Nestle (Malaysia) BHD 2,101,225
585,000 Perlis Plantations BHD 971,020
-----------
3,072,245
-----------
INDUSTRIAL COMPONENTS 0.52%
780,000 Leader Universal Holdings BHD 490,286
-----------
LEISURE & TOURISM 6.36%
2,535,000 Magnum Corporation BHD 2,138,367
1,755,000 Resorts World BHD 3,820,408
-----------
5,958,775
-----------
MACHINERY & ENGINEERING 1.09%
780,000 UMW Holdings BHD 1,018,776
-----------
METALS - STEEL 0.70%
2,535,000 Amsteel Corporation BHD 655,306
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 7.65%
1,950,000 Golden Hope Plantations BHD 2,600,000
1,365,000 Highlands & Lowlands BHD 1,508,000
390,000 Kian Joo Can Factory BHD 679,184
975,000 Kuala Lumpur Kepong BHD 2,374,490
-----------
7,161,674
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MULTI-INDUSTRY 9.16%
2,925,000 Berjaya Group BHD $ 1,098,367
780,000 Land and General BHD 318,367
1,560,000 Malaysia Mining Corporation BHD 976,327
1,365,000 Multi-Purpose Holdings BHD** 668,572
3,315,000 Sime Darby BHD 4,329,796
975,000 United Engineers (Malaysia)
Limited BHD 1,183,265
-----------
8,574,694
-----------
REAL ESTATE 1.36%
1,755,000 Hong Leong Properties BHD 616,041
975,000 Malaysian Resources Corporation BHD 660,612
-----------
1,276,653
-----------
TELECOMMUNICATIONS 18.95%
1,755,000 Technology Resources Industries BHD 1,824,245
4,680,000 Telekom Malaysia BHD 15,918,367
-----------
17,742,612
-----------
TRANSPORTATION - AIRLINES 1.44%
1,170,000 Malaysian Airline System BHD 1,349,878
-----------
TRANSPORTATION - SHIPPING 3.47%
1,755,000 Malaysia International Shipping
BHD (Foreign) 3,247,347
-----------
UTILITIES - ELECTRICAL & GAS 13.19%
4,680,000 Tenaga Nasional BHD 12,352,653
-----------
TOTAL COMMON STOCK - BASKET
($85,841,306) 93,220,613
-----------
COMMON STOCK - NON-BASKET 0.43%
BANKING 0.27%
109,000 Commerce Asset Holdings BHD 94,319
60,399 Public Bank BHD (Foreign) 36,157
132,000 RHB Capital BHD 124,996
-----------
255,472
-----------
CONSTRUCTION & HOUSING 0.04%
62,000 Ekran BHD* 24,800
6,000 YTL Corporation BHD 10,367
-----------
35,167
-----------
FOOD & HOUSEHOLD PRODUCTS 0.01%
5,250 Perlis Plantations BHD 8,714
-----------
METALS - STEEL 0.00%
35,944 Silverstone BHD* 0
-----------
MULTI-INDUSTRY 0.00%
1,600 Malaysia Mining Corporation BHD 1,001
-----------
REAL ESTATE 0.11%
156,666 Malaysian Resources Corporation BHD 106,149
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $437,664) 406,503
-----------
TOTAL INVESTMENTS
(COST $86,278,970)(DAGGER) 100.00% $93,627,116
======= ===========
- -------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $86,451,922. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 9,793,070
Excess of tax cost over value (2,617,876)
-----------
$ 7,175,194
===========
See accompanying notes to financial statements.
33
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
MEXICO (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 4.58%
108,000 Grupo Financiero Banamex
Accival SA de CV - Series B* $ 272,535
45,000 Grupo Financiero Banamex
Accival SA de CV - Series L* 96,655
405,000 Grupo Financiero Bancomer SA
de CV - Series B* 233,873
-----------
603,063
-----------
BEVERAGES & TOBACCO 17.56%
99,000 Empresas La Moderna
SA de CV - Series A* 497,324
81,000 Fomento Economico Mexicano
SA de CV - Series B 603,697
54,000 Grupo Continental SA 173,662
126,000 Grupo Modelo SA de CV - Series C 1,035,211
-----------
2,309,894
-----------
BROADCASTING & PUBLISHING 3.60%
27,000 Grupo Televisa SA - Series CPO* 473,768
-----------
BUILDING MATERIALS &
COMPONENTS 5.88%
45,000 Apasco SA de CV 267,782
63,000 Cemex SA de CV - Series A* 247,711
54,000 Cemex SA de CV - Series B* 257,958
-----------
773,451
-----------
CHEMICALS 0.44%
27,000 Cydsa SA - Series A 57,613
-----------
CONSTRUCTION & HOUSING 1.63%
108,000 Empresas ICA Sociedad
Controladora SA de CV 214,732
-----------
ENERGY EQUIPMENT & SERVICES 1.19%
9,000 Tubos de Acero de Mexico SA* 156,972
-----------
FINANCIAL SERVICES 0.56%
333,000 Grupo Financiero Probursa SA de
CV - Series B* 73,870
-----------
FOOD & HOUSEHOLD PRODUCTS 4.67%
54,000 Grupo Industrial Bimbo SA de
CV - Series A 497,535
144,000 Grupo Industrial Maseca SA de
CV - Series B 116,620
-----------
614,155
-----------
HEALTH & PERSONAL CARE 7.77%
225,000 Kimberly-Clark de Mexico SA de
CV - Series A 1,022,007
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
MACHINERY & ENGINEERING 0.44%
45,000 Consorcio Grupo Dina SA* $ 58,099
-----------
MERCHANDISING 8.25%
315,000 Cifra SA de CV - Series V 608,556
162,000 Controladora Comercial Mexicana
SA de CV - Series UBC 186,718
180,000 El Puerto de Liverpool SA de
CV - Series 1 247,183
36,000 El Puerto de Liverpool SA de
CV - Series C1 42,254
-----------
1,084,711
-----------
METALS - NON FERROUS 4.58%
99,000 Grupo Mexico SA - Series B 336,972
63,000 Industrias Penoles SA - Series CP* 266,197
-----------
603,169
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 1.98%
72,000 Empaques Ponderosa SA de
CV - Series B* 56,113
54,000 Vitro SA 204,084
-----------
260,197
-----------
MULTI-INDUSTRY 14.49%
90,000 Alfa SA de CV - Series A 512,324
72,000 Desc SA de CV - Series B 515,493
144,000 Grupo Carso SA de CV -
Series A1 878,873
-----------
1,906,690
-----------
TELECOMMUNICATIONS 22.38%
360,000 Telefonos de Mexico SA -
Series A 910,563
810,000 Telefonos de Mexico SA -
Series L 2,034,507
-----------
2,945,070
-----------
TOTAL COMMON STOCK - BASKET
(Cost $11,916,397) 13,157,461
-----------
TOTAL INVESTMENTS
(COST $11,916,397)(DAGGER) 100.00% $13,157,461
======= ===========
- -------------
* Non-income producing security.
(DAGGER) Aggregate cost for Federal income tax purposes is $11,916,397. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $1,613,718
Excess of tax cost over value (372,654)
----------
$1,241,064
==========
See accompanying notes to financial statements.
34
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
NETHERLANDS WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD
DURABLES 4.19%
8,100 Philips Electronics NV $ 629,195
-----------
BANKING 4.08%
27,600 ABN Amro Holding NV 612,165
-----------
BEVERAGES & TOBACCO 4.08%
3,300 Heineken NV 612,311
-----------
BROADCASTING & PUBLISHING 8.36%
34,704 Elsevier NV 652,745
3,900 Wolters Kluwer NV 602,272
-----------
1,255,017
-----------
BUSINESS & PUBLIC SERVICES 1.58%
5,964 Getronics NV 236,882
-----------
CHEMICALS 4.62%
3,420 Akzo Nobel NV 693,891
-----------
CONSTRUCTION & HOUSING 2.54%
7,560 Hollandsche Beton Groep NV 153,645
3,924 IHC Caland NV 227,553
-----------
381,198
-----------
DATA PROCESSING &
REPRODUCTION 1.67%
1,860 Oce NV 250,526
-----------
ENERGY EQUIPMENT & SERVICES 1.04%
4,680 Koninklijke Pakhoed NV 155,931
-----------
ENERGY SOURCES 21.14%
58,032 Royal Dutch/Shell Group 3,172,495
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
FINANCIAL SERVICES 12.69%
36,000 Ing Groep NV $ 1,904,734
-----------
FOOD & HOUSEHOLD PRODUCTS 12.76%
29,760 Unilever NV - CVA 1,914,794
-----------
FOREST PRODUCTS & PAPER 1.49%
8,400 Koninklijke KNP BT NV 224,066
-----------
INSURANCE 4.56%
9,600 ASR Verzekeringsgroep NV 684,743
-----------
MACHINERY & ENGINEERING 1.22%
4,668 Stork NV 182,442
-----------
MERCHANDISING 4.64%
22,800 Koninklijke Ahold NV 697,289
-----------
METALS - STEEL 1.17%
3,600 Koninklijke Hoogovens NV 175,348
-----------
TELECOMMUNICATIONS 4.83%
14,400 Royal PTT Nederland NV 724,608
-----------
TRANSPORTATION - AIRLINES 2.60%
10,800 KLM - Konin Luchvaart Mij NV 390,972
-----------
TRANSPORTATION - ROAD & RAIL 0.74%
4,800 Koninklijke Nedlloyd Groep NV 111,857
-----------
TOTAL COMMON STOCK - BASKET
(Cost $11,439,060) 15,010,464
-----------
TOTAL INVESTMENTS
(COST $11,439,060)(DAGGER) 100.00% $15,010,464
======= ===========
- -----------------
(DAGGER) Aggregate cost for Federal income tax purposes is $11,441,527. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $3,618,105
Excess of tax cost over value (49,168)
----------
$3,568,937
==========
See accompanying notes to financial statements.
35
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SINGAPORE (FREE) WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 99.98%
AUTOMOBILES 4.96%
558,000 Cycle And Carriage Limited $ 2,478,470
465,000 Inchcape Motors Limited 702,807
-----------
3,181,277
-----------
BANKING 25.82%
558,000 Development Bank of Singapore
Limited (Foreign) 4,371,746
1,116,000 Oversea-Chinese Banking
Corporation Limited 6,643,677
1,023,000 United Overseas Bank Limited
(Foreign) 5,553,609
-----------
16,569,032
-----------
BEVERAGES & TOBACCO 3.81%
558,000 Fraser & Neave Limited 2,444,047
-----------
BROADCASTING & PUBLISHING 4.15%
186,000 Singapore Press Holdings Limited
(Foreign) 2,662,060
-----------
BUSINESS & PUBLIC SERVICES 0.75%
372,000 Sembawang Marine and Logistics
Limited 479,630
-----------
DATA PROCESSING &
REPRODUCTION 0.44%
2,139,000 IPC Corporation Limited 283,705
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 3.99%
93,000 Creative Technology Limited* 2,214,559
1,674,000 Goldtron Limited 345,953
-----------
2,560,512
-----------
LEISURE & TOURISM 2.68%
1,116,000 Hotel Properties Limited 722,887
93,000 Overseas Union Enterprise Limited 227,193
465,000 Shangi-La Hotel 768,785
-----------
1,718,865
-----------
MACHINERY & ENGINEERING 0.14%
186,000 Van Der Horst Limited 92,369
-----------
MERCHANDISING 0.59%
279,000 Metro Holdings Limited 382,097
-----------
METALS - NON FERROUS 1.11%
651,000 Straits Trading Company Limited 714,855
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - STEEL 1.40%
651,000 Natsteel Limited $ 899,593
-----------
MULTI-INDUSTRY 7.83%
744,000 Haw Par Corporation Limited** 853,695
1,023,000 Keppel Corporation Limited 2,940,888
1,395,000 Singapore Technologies Industrial
Corporation** 1,230,629
-----------
5,025,212
-----------
REAL ESTATE 18.97%
465,000 City Developments Limited 2,108,421
2,046,000 DBS Land Limited 3,168,081
651,000 First Capital Corporation Limited 658,630
1,209,000 Parkway Holdings Limited 2,595,509
3,906,000 United Industrial Corporation
Limited 1,578,304
2,325,000 United Overseas Land Limited 2,065,392
-----------
12,174,337
-----------
TELECOMMUNICATIONS 13.35%
4,185,000 Singapore Telecommunications
Limited 8,571,376
-----------
TRANSPORTATION - AIRLINES 7.51%
651,000 Singapore Airlines Limited
(Foreign) 4,819,247
-----------
TRANSPORTATION - ROAD & RAIL 1.05%
1,395,000 Comfort Group Limited 675,555
-----------
TRANSPORTATION - SHIPPING 1.43%
1,953,000 Neptune Orient Lines Limited 915,657
-----------
TOTAL COMMON STOCK - BASKET
(Cost $64,229,437) 64,169,426
-----------
COMMON STOCK -
NON-BASKET 0.02%
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.02%
650 Creative Technology Limited* 15,478
-----------
TOTAL COMMON STOCK - NON-BASKET
(Cost $8,489) 15,478
-----------
TOTAL INVESTMENTS
(COST $64,237,926)(DAGGER) 100.00% $64,184,904
======= ===========
- ----------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $65,720,691. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 1,580,056
Excess of tax cost over value (3,115,843)
-----------
$(1,535,787)
===========
See accompanying notes to financial statements.
36
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SPAIN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 31.48%
49,194 Banco Bilbao Vizcaya SA $ 2,245,455
24,300 Banco Central Hispanoamericano
SA 754,962
33,300 Banco Santander SA 1,539,434
9,900 Corporacion Bancaria de Espana
SA 736,643
-----------
5,276,494
-----------
BEVERAGES & TOBACCO 2.76%
10,026 El Aguila SA* 72,909
3,852 Tabacalera SA - Class A 388,914
-----------
461,823
-----------
BUSINESS & PUBLIC SERVICES 5.00%
27,000 Autopistas Concesionaria
Espanola SA 404,961
7,632 Prosegur Cia de Seguridad SA 84,984
7,560 Sociedade General de Aguas de
Barcelona SA 348,512
-----------
838,457
-----------
CHEMICALS 0.45%
60,147 Ercros SA* 75,372
-----------
CONSTRUCTION & HOUSING 3.31%
7,623 Dragados y Construcciones SA 207,880
8,100 Fomento de Construcciones y
Contratas SA 347,109
-----------
554,989
-----------
ENERGY SOURCES 4.31%
16,200 Repsol SA 721,566
-----------
FOOD & HOUSEHOLD PRODUCTS 1.40%
11,601 Ebro Agricolas SA 235,387
-----------
FOREST PRODUCTS & PAPER 0.86%
3,600 Empresa Nacional de Celulosas
SA 50,255
21,816 Sarrio SA 94,196
-----------
144,451
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
INSURANCE 1.74%
10,008 Mapfre (Corporacion) $ 291,763
-----------
MACHINERY & ENGINEERING 2.03%
12,240 Zardoya Otis 339,349
-----------
METALS - STEEL 1.41%
1,575 Acerinox SA 236,534
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.61%
3,150 Viscofan Industria Navarra De
Envolturas Celulosicas SA 101,854
-----------
MULTI-INDUSTRY 1.51%
1,953 Corporacion Financiera Alba SA 253,612
-----------
REAL ESTATE 4.72%
7,011 Inmobiliaria Metropolitana Vasco
Central SA 338,680
10,971 Inmobiliaria Urbis SA* 141,398
9,828 Vallehermoso SA 311,402
-----------
791,480
-----------
TELECOMMUNICATIONS 14.20%
69,300 Telefonica de Espana 2,380,268
-----------
UTILITIES - ELECTRICAL & GAS 24.21%
87,336 Endesa SA 1,928,010
13,500 Gas Natural SDG SA 599,552
49,500 Iberdrola SA 715,109
65,700 Union Electrica Fenosa SA 814,771
-----------
4,057,442
-----------
TOTAL COMMON STOCK - BASKET
(Cost $12,514,159) 16,760,841
-----------
TOTAL INVESTMENTS
(COST $12,514,159)(DAGGER) 100.00% $16,760,841
======= ===========
- ---------------
* Non-income producing security.
(DAGGER) Aggregate cost for Federal income tax purposes is $12,520,661. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $4,342,921
Excess of tax cost over value (102,741)
----------
$4,240,180
==========
See accompanying notes to financial statements.
37
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SWEDEN WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
APPLIANCES & HOUSEHOLD
DURABLES 3.56%
5,600 Electrolux AB-B $ 426,659
-----------
AUTOMOBILES 4.48%
9,600 Volvo AB-A 255,396
10,400 Volvo AB-B 281,225
-----------
536,621
-----------
BANKING 9.15%
38,400 Skandinaviska Enskilda Banken-A 549,161
12,800 Svenska Handelsbanken-A 547,562
-----------
1,096,723
-----------
BEVERAGES & TOBACCO 1.93%
72,000 Swedish Match AB 231,115
-----------
BUSINESS & PUBLIC SERVICES 3.11%
5,600 Esselte AB-A 105,615
4,800 Esselte AB-B 98,022
5,600 Securitas AB-B 169,614
-----------
373,251
-----------
CHEMICALS 2.29%
11,200 AGA AB-A 153,877
9,600 AGA AB-B 121,103
-----------
274,980
-----------
CONSTRUCTION & HOUSING 3.32%
8,800 Skanska AB-B 397,882
-----------
ELECTRICAL & ELECTRONICS 27.74%
42,400 ABB AB - A 532,224
20,000 ABB AB - B 248,551
56,000 Ericsson LM-B 2,545,963
-----------
3,326,738
-----------
FINANCIAL SERVICES 0.90%
2,400 Om Gruppen AB 108,513
-----------
FOREST PRODUCTS & PAPER 5.65%
18,400 Stora Kopparbergs-A 267,736
3,200 Stora Kopparbergs-B 46,163
16,000 Svenska Cellulosa AB-B 363,709
-----------
677,608
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
HEALTH & PERSONAL CARE 18.56%
91,728 Astra AB-A $ 1,850,279
19,200 Astra AB-B 375,300
-----------
2,225,579
-----------
INDUSTRIAL COMPONENTS 2.69%
8,000 SKF AB-A 156,874
8,000 SKF AB-B 165,368
-----------
322,242
-----------
INSURANCE 4.52%
9,600 Skandia Forsakrings AB 541,966
-----------
MACHINERY & ENGINEERING 3.90%
10,400 Atlas Copco AB-A 289,668
6,400 Atlas Copco AB-B 177,858
-----------
467,526
-----------
MERCHANDISING 4.09%
10,400 Hennes & Mauritz AB - B 491,007
-----------
METALS - NON FERROUS 0.57%
4,000 Granges AB 68,945
-----------
METALS - STEEL 1.62%
6,400 Svenskt Stal AB(SSAB) - A 119,904
4,000 Svenskt Stal AB(SSAB) - B 74,940
-----------
194,844
-----------
MULTI-INDUSTRY 1.13%
9,600 Trelleborg AB-B 135,492
-----------
REAL ESTATE 0.79%
6,400 Diligentia AB 94,724
-----------
TOTAL COMMON STOCK - BASKET
(Cost $10,347,885) 11,992,415
-----------
TOTAL INVESTMENTS
(COST $10,347,885)(DAGGER) 100.00% $11,992,415
======= ===========
- ------------------
(DAGGER) Aggregate cost for Federal income tax purposes is $10,351,825. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $1,824,074
Excess of tax cost over value (183,484)
----------
$1,640,590
==========
See accompanying notes to financial statements.
38
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
SWITZERLAND WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
BANKING 16.63%
6,050 Credit Suisse Group $ 1,092,430
3,190 Schweizerischer Bankverein
(Swiss Bank)* 1,067,246
1,144 UBS-Union Bank of Switzerland 1,781,946
-----------
3,941,622
-----------
BUILDING MATERIALS &
COMPONENTS 4.66%
1,133 Forbo Holding AG 514,158
1,210 Holderbank Financiere Glarus AG 236,624
363 Holderbank Financiere Glarus
AG - Bearer 353,700
-----------
1,104,482
-----------
BUSINESS & PUBLIC SERVICES 2.66%
1,122 Adecco SA 362,762
308 SGS Societe Generale de
Surveillance Holding SA 107,032
88 SGS Societe Generale de
Surveillance Holding
SA - Bearer 161,897
-----------
631,691
-----------
CHEMICALS 3.04%
110 EMS-Chemie Holding AG*,** 554,647
484 Sika Finanz AG 166,214
-----------
720,861
-----------
ELECTRICAL & ELECTRONICS 2.21%
385 Abb AG - Bearer 524,666
-----------
FINANCIAL SERVICES 2.89%
297 Julius Baer Holding AG** 685,027
-----------
FOOD & HOUSEHOLD PRODUCTS 9.59%
1,298 Nestle SA 2,273,004
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
HEALTH & PERSONAL CARE 33.41%
330 Ares Serono Group** $ 494,685
2,376 Novartis AG 4,333,982
264 Roche Holding AG - Genussein 3,090,433
-----------
7,919,100
-----------
INSURANCE 12.37%
594 Helvetia Patria Holding** 779,129
495 Schweizerische
Rueckversicherungs (Swiss Re) 1,043,224
2,035 Zuerich Versicherungs 1,109,294
-----------
2,931,647
-----------
LEISURE & TOURISM 0.52%
319 Mowenpick Holdings - Bearer 123,896
-----------
MACHINERY & ENGINEERING 2.38%
440 Schindler Holding AG 563,641
-----------
MERCHANDISING 0.67%
693 Valora Holding AG 158,895
-----------
MULTI-INDUSTRY 3.54%
726 Alusuisse-Lonza Holdings 838,491
-----------
RECREATION - OTHER CONSUMER
GOODS 2.64%
6,127 Tag Heuer International SA*,** 626,227
-----------
TRANSPORTATION - AIRLINES 2.79%
495 Sairgroup* 661,079
-----------
TOTAL COMMON STOCK - BASKET
(Cost $19,311,734) 23,704,329
-----------
TOTAL INVESTMENTS
(COST $19,311,734)(DAGGER) 100.00% $23,704,329
======= ===========
- ----------------
* Non-income producing security.
** Non index security.
(DAGGER) Aggregate cost for Federal income tax purposes is $19,335,732. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $4,418,104
Excess of tax cost over value (49,507)
----------
$4,368,597
==========
See accompanying notes to financial statements.
39
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
COMMON STOCK - BASKET 100.00%
AEROSPACE & MILITARY TECHNOLOGY 1.51%
15,660 British Aerospace Plc $ 491,962
56,520 Rolls-Royce Plc 216,365
-----------
708,327
-----------
APPLIANCES & HOUSEHOLD
DURABLES 0.07%
13,416 Thorn Plc 33,465
-----------
BANKING 15.23%
51,060 Barclays Plc 1,516,628
57,600 HSBC Holdings Plc ($HK10) 1,660,620
28,800 HSBC Holdings Plc (75p) 884,842
180,000 Lloyds TSB Group Plc 2,708,822
24,300 Royal Bank of Scotland Group Plc 376,094
-----------
7,147,006
-----------
BEVERAGES & TOBACCO 3.88%
35,040 Cadbury Schweppes Plc 445,681
134,412 Diageo Plc 1,375,438
-----------
1,821,119
-----------
BROADCASTING & PUBLISHING 2.62%
54,120 British Sky Broadcasting Group Plc 350,197
22,500 Pearson Plc 335,269
46,080 Reed International Plc 542,096
-----------
1,227,562
-----------
BUILDING MATERIALS &
COMPONENTS 1.75%
32,520 Blue Circle Industries Plc 190,216
18,120 BPB Plc 98,007
17,628 Caradon Plc 58,049
23,508 Hanson Plc 118,634
9,540 Hepworth Plc 35,342
10,140 RMC Group Plc 154,600
19,980 Wolseley Plc 164,485
-----------
819,333
-----------
BUSINESS & PUBLIC SERVICES 3.33%
11,040 Anglian Water Plc 153,053
6,720 De La Rue Plc 32,142
14,400 Railtrack Group Plc 219,314
50,328 Reuters Group Plc 506,720
16,200 Thames Water Plc 235,792
20,580 United Utilities Plc 276,501
23,700 Williams Plc 137,358
-----------
1,560,880
-----------
CHEMICALS 1.77%
16,440 BOC Group Plc 257,150
21,720 Courtaulds Plc 125,703
24,540 Imperial Chemical Industries Plc 447,891
-----------
830,744
-----------
CONSTRUCTION & HOUSING 0.13%
18,660 Taylor Woodrow Plc 62,676
-----------
ELECTRICAL & ELECTRONICS 1.32%
94,560 General Electric Company Plc 618,101
-----------
ELECTRONIC COMPONENTS,
INSTRUMENTS 0.13%
9,300 Bowthorpe Plc 61,326
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
ENERGY SOURCES 6.22%
188,580 British Petroleum Company Plc $ 2,601,965
7,740 Burmah Castrol Plc 133,556
40,560 LASMO Plc 184,485
-----------
2,920,006
-----------
FINANCIAL SERVICES 2.55%
44,880 Abbey National Plc 921,470
7,320 Schroders Plc** 276,602
-----------
1,198,072
-----------
FOOD & HOUSEHOLD PRODUCTS 3.28%
38,940 Associated British Foods Plc 406,487
117,120 Unilever Plc 1,060,609
15,900 United Biscuits Holdings Plc 70,881
-----------
1,537,977
-----------
FOREST PRODUCTS & PAPER 0.17%
29,400 Arjo Wiggins Appleton Plc 80,114
-----------
HEALTH & PERSONAL CARE 14.46%
117,840 Glaxo Wellcome Plc 3,298,401
168,000 Smithkline Beecham Plc 2,102,251
31,860 Zeneca Group Plc 1,384,878
-----------
6,785,530
-----------
INDUSTRIAL COMPONENTS 0.70%
21,660 BBA Group Plc 154,422
20,580 BICC Plc 44,220
33,720 Lucasvarity Plc 129,917
-----------
328,559
-----------
INSURANCE 6.34%
30,120 Commercial Union Plc 544,527
48,000 Guardian Royal Exchange Plc 360,781
42,444 Legal & General Group Plc 475,910
60,000 Prudential Corporation Plc 896,519
51,600 Royal & Sun Alliance Insurance
Group Plc 657,161
16,620 Sedgwick Group Plc 40,774
-----------
2,975,672
-----------
LEISURE & TOURISM 2.64%
31,500 Bass Plc 527,983
9,900 Carlton Communications Plc 69,602
24,000 Ladbroke Group Plc 120,919
33,420 Rank Group Plc 183,237
23,340 Scottish & Newcastle Plc 335,872
-----------
1,237,613
-----------
MACHINERY & ENGINEERING 0.94%
10,800 GKN Plc 261,220
12,000 Smith Industries Plc 179,600
-----------
440,820
-----------
MERCHANDISING 8.45%
34,020 Boots Company Plc 511,127
36,660 Great Universal Stores Plc 467,795
26,100 Kingfisher Plc 450,149
104,100 Marks & Spencer Plc 994,981
18,540 Next Plc 252,909
42,720 Safeway Plc 251,812
48,000 Sainsbury Plc 372,241
78,180 Tesco Plc 664,856
-----------
3,965,870
-----------
See accompanying notes to financial statements.
40
<PAGE>
FEBRUARY 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
UNITED KINGDOM WEBS INDEX SERIES (CONCLUDED)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
METALS - NON FERROUS 1.01%
35,280 Rio Tinto Plc $ 476,326
-----------
METALS - STEEL 0.32%
63,120 British Steel Plc 151,474
-----------
MISCELLANEOUS MATERIALS &
COMMODITIES 0.36%
42,480 Pilkington Plc 80,435
18,960 Rexam Plc 86,629
-----------
167,064
-----------
MULTI-INDUSTRY 4.32%
108,300 B.A.T. Industries Plc 1,080,595
137,520 BTR Plc 365,113
20,400 Granada Group Plc 318,756
27,300 Lonrho Plc 42,028
25,320 TI Group Plc 221,996
-----------
2,028,488
-----------
REAL ESTATE 1.81%
21,780 British Land Company Plc 263,577
22,980 Land Securities Plc** 430,391
15,780 MEPC Plc 155,891
-----------
849,859
-----------
RECREATION - OTHER CONSUMER
GOODS 0.51%
28,188 EMI Group Plc 240,412
-----------
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----
TELECOMMUNICATIONS 8.52%
210,300 British Telecommunications Plc $ 2,124,299
80,700 Cable & Wireless Plc 882,274
111,540 Vodafone Group Plc 991,713
-----------
3,998,286
-----------
TEXTILES & APPAREL 0.11%
38,340 Coats Viyella Plc 53,342
-----------
TRANSPORTATION - AIRLINES 0.73%
36,360 British Airways Plc 341,240
-----------
TRANSPORTATION - SHIPPING 0.62%
22,680 Peninsular & Oriental Steam Plc 292,206
-----------
UTILITIES - ELECTRICAL & GAS 4.20%
126,996 BG Plc 637,229
143,940 Centrica Plc* 255,957
49,824 National Grid Holdings Plc 280,560
39,780 National Power Plc 412,308
29,640 Scottish Power Plc 252,796
15,948 Southern Electric Plc 134,705
-----------
1,973,555
-----------
TOTAL COMMON STOCK - BASKET
(Cost $36,274,717) 46,933,024
-----------
TOTAL INVESTMENTS
(COST $36,274,717)(DAGGER) 100.00% $46,933,024
======= ===========
- --------------
* Non-income producing security.
** Passive foreign investment company.
(DAGGER) Aggregate cost for Federal income tax purposes is $36,388,133. The
aggregate gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $11,291,642
Excess of tax cost over value (746,751)
-----------
$10,544,891
===========
See accompanying notes to financial statements.
41
<PAGE>
FEBRUARY 28, 1998
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) 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
----------- ---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value .................. $42,019,883 $5,559,227 $21,420,028 $22,508,823 $20,712,663 $33,966,147 $59,574,246
Cash and foreign currency .............. 70,225 55,670 88,822 161,519 148,249 271,233 11,698
Collateral for securities loaned ....... 6,469,604 710,818 4,422,166 1,552,992 497,691 7,137,577 5,765,256
Dividends receivable ................... 151,323 627 27,260 29,189 135,400 8,831 81,564
Interest receivable .................... 1,069 238 1,625 133 145 1,185 2,769
Receivable for securities sold ......... -- -- 706,467 108,597 -- -- 65,436
Receivable for Fund shares sold ........ -- -- -- -- -- -- --
Deferred organization cost ............. 86,643 64,432 28,143 61,201 167,977 159,586 44,483
Prepaid expenses ....................... 8,386 902 4,993 3,986 3,846 6,231 6,519
----------- ---------- ----------- ----------- ----------- ----------- -----------
Total assets ....................... 48,807,133 6,391,914 26,699,504 24,426,440 21,665,971 41,550,790 65,551,971
----------- ---------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Payable for securities purchased ....... -- -- -- 70,920 -- -- --
Payable for Fund shares redeemed ....... -- -- 708,328 -- -- -- --
Liability for in-kind subscriptions .... -- -- -- -- -- -- --
Payable for securities loaned .......... 6,469,604 710,818 4,422,166 1,552,992 497,691 7,137,577 5,765,256
Advisory fee payable ................... 18,697 1,924 10,632 9,315 8,443 13,316 17,793
Administration fee payable ............. 15,235 1,568 8,663 7,590 6,880 10,850 14,498
Distribution fee payable ............... 13,850 1,425 7,876 6,900 6,254 9,863 13,180
Due to custodian ....................... 6,191 3,184 4,969 1,610 1,675 2,524 46,431
Accrued expenses ....................... 33,034 4,248 6,619 17,241 8,083 12,865 41,582
----------- ---------- ----------- ----------- ----------- ----------- -----------
Total liabilities .................. 6,556,611 723,167 5,169,253 1,666,568 529,026 7,186,995 5,898,740
----------- ---------- ----------- ----------- ----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ........ 4,200 500 1,200 1,600 1,201 1,801 5,401
Paid-in capital ........................ 45,402,570 5,334,800 18,981,115 17,527,955 16,421,090 26,968,603 65,048,447
Accumulated net investment income/(loss) 102,683 (19,907) (480,421) 58,216 (69,608) (81,652) 110,056
Accumulated net realized gain/(loss)
on investments ....................... (113,635) 33,559 1,262,510 629,797 177,798 (24,237) (355,906)
Net unrealized appreciation/(depreciation)
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................... (3,145,296) 319,795 1,765,847 4,542,304 4,606,464 7,499,280 (5,154,767)
----------- ---------- ----------- ----------- ----------- ----------- -----------
Net Assets ............................. $42,250,522 $5,668,747 $21,530,251 $22,759,872 $21,136,945 $34,363,795 $59,653,231
=========== ========== =========== =========== =========== =========== ===========
Shares of common stock issued and
outstanding .......................... 4,200,030 500,030 1,200,030 1,600,030 1,201,000 1,801,000 5,401,000
=========== ========== =========== =========== =========== =========== ===========
Net Asset Value Per Share .............. $ 10.06 $ 11.34 $ 17.94 $ 14.22 $ 17.60 $ 19.08 $ 11.04
=========== ========== =========== =========== =========== =========== ===========
</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
----------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value .................. $63,529,349 $162,779,450 $93,627,116 $13,157,461 $15,010,464 $64,184,904
Cash and foreign currency .............. 138,083 426,374 -- 94,766 87,412 6,766,715
Collateral for securities loaned ....... 15,078,715 32,537,038 16,559,498 3,027,560 2,439,292 9,532,677
Dividends receivable ................... -- 48,724 61,322 -- 1,270 --
Interest receivable .................... 3,918 9,569 15,412 2,649 216 3,137
Receivable for securities sold ......... -- -- 163,265 -- -- --
Receivable for Fund shares sold ........ -- -- -- -- -- 1,358,695
Deferred organization cost ............. 84,801 352,171 47,149 47,634 39,893 56,615
Prepaid expenses ....................... 11,041 27,673 9,185 2,561 2,367 6,914
----------- ------------ ------------ ----------- ----------- -----------
Total assets ....................... 78,845,907 196,180,999 110,482,947 16,332,631 17,580,914 81,909,657
----------- ------------ ------------ ----------- ----------- -----------
LIABILITIES
Payable for securities purchased ....... -- -- -- -- -- 6,734,337
Payable for Fund shares redeemed ....... -- -- -- -- -- --
Liability for in-kind subscriptions .... -- -- -- -- -- 1,352,745
Payable for securities loaned .......... 15,078,715 32,537,038 16,559,498 3,027,560 2,439,292 9,532,677
Advisory fee payable ................... 26,274 61,663 23,225 6,323 5,615 17,417
Administration fee payable ............. 21,408 50,244 20,710 5,152 4,575 14,191
Distribution fee payable ............... 19,462 45,676 18,827 4,684 4,159 12,901
Due to custodian ....................... 3,781 16,336 89,842 6,831 3,855 38,353
Accrued expenses ....................... 27,380 38,987 38,596 6,294 12,689 25,877
----------- ------------ ------------ ----------- ----------- -----------
Total liabilities .................. 15,177,020 32,749,944 16,750,698 3,056,844 2,470,185 17,728,498
----------- ------------ ------------ ----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ........ 2,850 15,001 14,625 900 601 9,300
Paid-in capital ........................ 46,080,688 202,237,707 87,731,749 10,834,440 11,117,309 66,870,046
Accumulated net investment income/(loss) (817,373) (388,025) (1,487) (8,251) (16,909) (35,568)
Accumulated net realized gain/(loss)
on investments ....................... 655,130 (5,834,735) (1,364,014) 1,207,252 438,597 (2,488,252)
Net unrealized appreciation/(depreciation
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................... 17,747,592 (32,598,893) 7,351,376 1,241,446 3,571,131 (174,367)
----------- ------------ ------------ ----------- ----------- -----------
Net Assets ............................. $63,668,887 $163,431,055 $93,732,249 $13,275,787 $15,110,729 $64,181,159
=========== ============ =========== =========== =========== ===========
Shares of common stock issued and
outstanding .......................... 2,850,030 15,001,000 14,625,030 900,030 601,000 9,300,030
=========== ============ =========== =========== =========== ===========
Net Asset Value Per Share .............. $ 22.34 $ 10.89 $ 6.41 $ 14.75 $ 25.14 $ 6.90
=========== ============ =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
UNITED
SPAIN SWEDEN SWITZERLAND KINGDOM
WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value .................. $16,760,841 $11,992,415 $23,704,329 $46,933,024
Cash and foreign currency .............. 106,441 66,070 171,955 289,311
Collateral for securities loaned ....... 802,064 2,460,127 2,544,855 --
Dividends receivable ................... 10,556 -- 17,863 244,412
Interest receivable .................... 102 417 776 54
Receivable for securities sold ......... 148,642 -- -- 415,851
Receivable for Fund shares sold ........ -- -- --
Deferred organization cost ............. 69,942 45,533 107,506 101,491
Prepaid expenses ....................... 2,909 2,146 4,195 8,378
----------- ----------- ----------- -----------
Total assets ....................... 17,901,497 14,566,708 26,551,479 47,992,521
----------- ----------- ----------- -----------
LIABILITIES
Payable for securities purchased ....... 154,223 -- -- --
Payable for Fund shares redeemed ....... -- -- -- --
Liability for in-kind subscriptions .... -- -- -- --
Payable for securities loaned .......... 802,064 2,460,127 2,544,855 --
Advisory fee payable ................... 5,254 4,867 9,543 19,333
Administration fee payable ............. 5,310 3,966 7,776 15,752
Distribution fee payable ............... 4,827 3,605 7,069 14,320
Due to custodian ....................... 1,869 1,869 1,712 2,756
Accrued expenses ....................... 13,461 13,553 12,600 34,671
----------- ----------- ----------- -----------
Total liabilities .................. 987,008 2,487,987 2,583,555 86,832
----------- ----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ........ 675 600 1,376 2,401
Paid-in capital ........................ 12,406,341 10,120,742 18,285,607 36,863,433
Accumulated net investment income/(loss) 45,618 (81,737) (99,430) 178,080
Accumulated net realized gain/(loss)
on investments ....................... 215,755 394,586 1,388,728 201,146
Net unrealized appreciation/(depreciation)
on investments and translation of other
assets and liabilities denominated in
foreign currencies ................... 4,246,100 1,644,530 4,391,643 10,660,629
----------- ----------- ----------- -----------
Net Assets ............................. $16,914,489 $12,078,721 $23,967,924 $47,905,689
=========== =========== =========== ===========
Shares of common stock issued and
outstanding .......................... 675,030 600,030 1,376,000 2,401,000
=========== =========== =========== ===========
Net Asset Value Per Share .............. $ 25.06 $ 20.13 $ 17.42 $ 19.95
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
42-43
<PAGE>
FOR THE SIX MONTH PERIOD ENDING FEBRUARY 28, 1998
STATEMENTS OF OPERATIONS (Unaudited) 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
----------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes) .......... $ 797,513 $ 2,736 $ 72,228 $ 186,232 $ 19,690 $ 53,556
Interest .............................................. 10,382 2,325 12,507 2,467 1,846 8,270
----------- -------- ---------- ---------- ---------- ----------
Total investment income ............................. 807,895 5,061 84,735 188,699 21,536 61,826
----------- -------- ---------- ---------- ---------- ----------
EXPENSES:
Advisory fees ......................................... 58,063 5,818 41,012 30,958 22,814 36,370
Administration fees ................................... 43,857 4,391 30,539 23,213 17,352 27,584
Distribution fees ..................................... 46,463 4,660 33,257 24,944 18,138 28,992
Custodian fees and expenses ........................... 21,685 4,155 18,150 8,386 9,850 13,530
Transfer agent fees ................................... 4,097 3,130 4,422 3,705 5,901 4,226
Directors' fees ....................................... 8,823 881 6,288 4,708 3,438 5,465
Legal fees ............................................ 26,794 1,279 9,012 16,798 5,030 7,987
Audit fees ............................................ 12,152 1,213 8,660 6,484 4,735 7,527
Federal and state registration fees ................... 1,116 768 -- -- 1,359 1,949
Amortization of deferred organization costs ........... 7,124 5,298 2,315 5,034 13,814 13,124
Insurance ............................................. 2,378 373 699 4,295 2,167 3,231
Printing .............................................. 3,967 396 2,827 2,117 1,546 2,457
Licensing fees ........................................ 6,451 647 4,557 3,440 2,535 4,041
Amex listing fee ...................................... 310 60 71 594 331 369
Miscellaneous expenses ................................ 3,283 2,586 1,294 6,619 2,703 3,228
----------- -------- ---------- ---------- ---------- ----------
Total expenses ...................................... 246,563 35,655 163,103 141,295 111,713 160,080
----------- -------- ---------- ---------- ---------- ----------
Net investment income/(loss) .......................... 561,332 (30,594) (78,368) 47,404 (90,177) (98,254)
----------- -------- ---------- ---------- ---------- ----------
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 ............... 149,999 64,527 426,750 219,497 212,938 10,989
Net realized gain/(loss) on investments on
in-kind redemptions ................................. (237,322) -- 866,304 538,741 -- --
Net realized gain/(loss) on foreign currency
related transactions ................................ (26,312) (111) 14,622 (1,862) (2,953) (5,863)
----------- -------- ---------- ---------- ---------- ----------
(113,635) 64,416 1,307,676 756,376 209,985 5,126
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... (1,583,131) 341,153 2,358,547 577,403 3,439,107 4,880,546
----------- -------- ---------- ---------- ---------- ----------
Net realized and unrealized gain/(loss) on
investments and foreign currency
related transactions and translation of
other assets and liabilities
denominated in foreign currencies ................... (1,696,766) 405,569 3,666,223 1,333,779 3,649,092 4,885,672
----------- -------- ---------- ---------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $(1,135,434) $374,975 $3,587,855 $1,381,183 $3,558,915 $4,787,418
=========== ======== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MALAYSIA MEXICO
HONG KONG ITALY JAPAN (FREE) (FREE)
WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES
----------- ----------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes) .......... $ 599,766 $ 11,151 $ 460,982 $ 286,430 $ 80,386
Interest .............................................. 17,326 22,186 50,792 30,425 15,149
----------- ----------- ------------ ----------- ---------
Total investment income ............................. 617,092 33,337 511,774 316,855 95,535
----------- ----------- ------------ ----------- ---------
EXPENSES:
Advisory fees ......................................... 46,092 67,803 188,092 45,791 21,150
Administration fees ................................... 35,038 51,969 140,945 35,637 15,805
Distribution fees ..................................... 36,660 53,502 151,641 35,595 17,094
Custodian fees and expenses ........................... 23,605 23,321 41,843 21,012 20,143
Transfer agent fees ................................... 5,575 3,569 8,485 6,248 4,121
Directors' fees ....................................... 6,856 10,188 28,370 6,522 3,223
Legal fees ............................................ 25,050 14,956 41,152 9,867 4,653
Audit fees ............................................ 9,443 14,032 39,073 8,983 4,438
Federal and state registration fees ................... 12,059 5,466 8,272 20,067 --
Amortization of deferred organization costs ........... 3,658 6,956 28,962 3,877 3,917
Insurance ............................................. 2,702 5,683 15,906 3,712 1,689
Printing .............................................. 3,083 4,581 12,755 2,932 1,449
Licensing fees ........................................ 5,121 7,534 20,899 5,088 2,350
Amex listing fee ...................................... 299 831 2,241 512 228
Miscellaneous expenses ................................ 1,100 4,218 10,869 1,702 3,466
----------- ----------- ------------ ----------- ---------
Total expenses ...................................... 216,341 274,609 739,505 207,545 103,726
----------- ----------- ------------ ----------- ---------
Net investment income/(loss) .......................... 400,751 (241,272) (227,731) 109,310 (8,191)
----------- ----------- ------------ ----------- ---------
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 ............... (563,127) 969,386 (724,010) (160,785) 164,930
Net realized gain/(loss) on investments on
in-kind redemptions ................................. 227,263 -- (3,172,392) (1,124,764) 1,041,984
Net realized gain/(loss) on foreign currency
related transactions ................................ (129) 3,810 (69,112) (64,544) 338
----------- ----------- ------------ ----------- ---------
(335,993) 973,196 (3,965,514) (1,350,093) 1,207,252
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... (4,896,884) 13,505,479 (17,848,867) 16,234,976 (1,371,378)
----------- ----------- ------------ ----------- ---------
Net realized and unrealized gain/(loss) on
investments and foreign currency
related transactions and translation of
other assets and liabilities
denominated in foreign currencies ................... (5,232,877) 14,478,675 (21,814,381) 14,884,883 (164,126)
----------- ----------- ------------ ----------- ---------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $(4,832,126) $14,237,403 $(22,042,112) $14,994,193 $(172,317)
=========== =========== ============ =========== =========
</TABLE>
<TABLE>
<CAPTION>
SINGAPORE UNITED
NETHERLANDS (FREE) SPAIN SWEDEN SWITZERLAND KINGDOM
WEBS WEBS WEBS WEBS WEBS WEBS
INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES
---------- ---------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes) .......... $ 69,429 $ 105,468 $ 111,270 $ -- $ -- $ 492,659
Interest .............................................. 2,154 11,520 2,792 2,020 4,465 9,211
---------- ---------- ---------- -------- ---------- ----------
Total investment income ............................. 71,583 116,988 114,062 2,020 4,465 501,870
---------- ---------- ---------- -------- ---------- ----------
EXPENSES:
Advisory fees ......................................... 16,456 36,233 16,746 14,645 26,883 51,975
Administration fees ................................... 12,452 27,830 12,798 12,684 20,419 39,640
Distribution fees ..................................... 13,145 28,532 13,251 10,098 21,399 41,210
Custodian fees and expenses ........................... 7,055 14,780 7,322 6,864 13,477 14,075
Transfer agent fees ................................... 3,471 5,420 3,520 3,497 3,403 3,807
Directors' fees ....................................... 2,483 5,250 2,510 2,215 4,051 7,824
Legal fees ............................................ 9,212 7,830 6,686 9,218 5,910 21,450
Audit fees ............................................ 3,420 7,231 3,458 3,051 5,580 10,775
Federal and state registration fees ................... 1,454 14,138 1,833 1,352 2,061 3,510
Amortization of deferred organization costs ........... 3,280 4,655 5,752 3,745 8,840 8,346
Insurance ............................................. 1,504 2,510 715 959 1,426 4,462
Printing .............................................. 1,116 2,361 1,129 996 1,821 3,518
Licensing fees ........................................ 1,828 4,026 1,861 1,627 2,987 5,775
Amex listing fee ...................................... 223 304 112 145 129 432
Miscellaneous expenses ................................ 2,829 1,042 3,556 3,949 5,862 8,614
---------- ---------- ---------- -------- ---------- ----------
Total expenses ...................................... 79,928 162,142 81,249 75,045 124,248 225,413
---------- ---------- ---------- -------- ---------- ----------
Net investment income/(loss) .......................... (8,345) (45,154) 32,813 (73,025) (119,783) 276,457
---------- ---------- ---------- -------- ---------- ----------
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 ............... 207,454 (1,244,482) 235,869 428,739 972,212 192,126
Net realized gain/(loss) on investments on
in-kind redemptions ................................. 304,916 (1,246,364) -- -- 446,121 --
Net realized gain/(loss) on foreign currency
related transactions ................................ (4,322) 94,017 (50) (4,831) (411) 9,020
---------- ---------- ---------- -------- ---------- ----------
508,048 (2,396,829) 235,819 423,908 1,417,922 201,146
Net change in unrealized appreciation/(depreciation) on
investments and translation of other assets and
liabilities denominated in foreign currencies ....... 1,645,554 4,800,338 3,641,434 442,322 3,394,266 7,357,890
---------- ---------- ---------- -------- ---------- ----------
Net realized and unrealized gain/(loss) on
investments and foreign currency
related transactions and translation of
other assets and liabilities
denominated in foreign currencies ................... 2,153,602 2,403,509 3,877,253 866,230 4,812,188 7,559,036
---------- ---------- ---------- -------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $2,145,257 $2,358,355 $3,910,066 $793,205 $4,692,405 $7,835,493
========== ========== ========== ======== ========== ==========
</TABLE>
See accompanying notes to financial statements.
44-45
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC.
================================================================================
<TABLE>
<CAPTION>
AUSTRALIA AUSTRIA BELGIUM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------- ------------------------ ------------------------
For the For the For the
six months For the six months For the six months For the
ending year ending year ending year
02/28/98 ended 02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97 (Unaudited) 08/31/97
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ..................... $ 561,332 $ 287,423 $ (30,594) $ (6,855) $ (78,368) $ 668,880
Net realized gain/(loss) on investments and
foreign currency related transactions .......... (113,635) 168,792 64,416 (1,197,601) 1,307,676 357,522
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and liabilities
denominated in foreign currencies .............. (1,583,131) (1,840,776) 341,153 1,155,714 2,358,547 (623,667)
----------- ----------- ---------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations ................................ (1,135,434) (1,384,561) 374,975 (48,742) 3,587,855 402,735
----------- ----------- ---------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ........................... (288,422) (287,423) -- -- -- (668,880)
In excess of net investment income ............... -- (160,198) -- -- -- (587,754)
Net realized gains ............................... -- (187,118) -- -- -- (230,479)
In excess of net realized gains .................. -- -- -- -- -- --
Return of capital ................................ -- (796,674) -- -- -- (24,077)
----------- ----------- ---------- ----------- ----------- -----------
Net decrease in net assets from distributions .... (288,422) (1,431,413) -- -- -- (1,511,190)
----------- ----------- ---------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ............. 8,036,412 34,012,042 1,088,983 2,076,237 5,255,582 31,836,329
Cost of shares redeemed .......................... (5,767,765) (1,967,117) -- (11,342,765) (19,840,847) --
----------- ----------- ---------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived
from capital share transactions ................ 2,268,647 32,044,925 1,088,983 (9,266,528) (14,585,265) 31,836,329
----------- ----------- ---------- ----------- ----------- -----------
Total increase/(decrease) in net assets .......... 844,791 29,228,951 1,463,958 (9,315,270) (10,997,410) 30,727,874
NET ASSETS:
Beginning of period .............................. 41,405,731 12,176,780 4,204,789 13,520,059 32,527,661 1,799,787
----------- ----------- ---------- ----------- ----------- -----------
End of period .................................... $42,250,522 $41,405,731 $5,668,747 $ 4,204,789 $21,530,251 $32,527,661
=========== =========== ========== =========== =========== ===========
Capital Share Transactions:
Shares sold ...................................... 800,000 3,000,000 100,000 200,000 320,000 1,960,000
Shares redeemed .................................. (600,000) (200,000) -- (1,100,000) (1,200,000) --
----------- ----------- ---------- ----------- ----------- -----------
Net increase/(decrease) in shares .............. 200,000 2,800,000 100,000 (900,000) (880,000) 1,960,000
=========== =========== ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
CANADA FRANCE GERMANY
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
------------------------ ------------------------ -------------------------
For the For the For the
six months For the six months For the six months For the
ending year ending year ending year
02/28/98 ended 02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97 (Unaudited) 08/31/97
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ..................... $ 47,404 $ 86,380 $ (90,177) $ 154,485 $ (98,254) $ 41,384
Net realized gain/(loss) on investments and
foreign currency related transactions .......... 756,376 629,622 209,985 571,535 5,126 727,681
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and liabilities
denominated in foreign currencies .............. 577,403 3,938,920 3,439,107 1,283,516 4,880,546 2,325,587
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations ................................ 1,381,183 4,654,922 3,558,915 2,009,536 4,787,418 3,094,652
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ........................... -- (86,380) -- (154,485) -- (41,384)
In excess of net investment income ............... -- (4,605) -- -- -- (19,425)
Net realized gains ............................... (111,522) (251,961) (32,187) (198,868) -- (99,278)
In excess of net realized gains .................. -- -- -- -- -- --
Return of capital ................................ -- -- -- -- -- (37,144)
----------- ----------- ----------- ----------- ----------- -----------
Net decrease in net assets from distributions .... (111,522) (342,946) (32,187) (353,353) -- (197,231)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ............. -- 9,629,687 3,091,493 5,656,482 5,090,512 13,746,949
Cost of shares redeemed .......................... (2,677,609) (3,550,242) -- (15,723,875) -- (20,822,544)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived
from capital share transactions ................ (2,677,609) 6,079,445 3,091,493 (10,067,393) 5,090,512 (7,075,595)
----------- ----------- ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets .......... (1,407,948) 10,391,421 6,618,221 (8,411,210) 9,877,930 (4,178,174)
NET ASSETS:
Beginning of period .............................. 24,167,820 13,776,399 14,518,724 22,929,934 24,485,865 28,664,039
----------- ----------- ----------- ----------- ----------- -----------
End of period .................................... $22,759,872 $24,167,820 $21,136,945 $14,518,724 $34,363,795 $24,485,865
=========== =========== =========== =========== =========== ===========
Capital Share Transactions:
Shares sold ...................................... -- 800,000 200,000 400,000 300,000 900,000
Shares redeemed .................................. (200,000) (300,000) -- (1,200,000) -- (1,500,000)
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares .............. (200,000) 500,000 200,000 (800,000) 300,000 (600,000)
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
HONG KONG ITALY
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------ -------------------------
For the For the
six months For the six months For the
ending year ending year
02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ..................... $ 400,751 $ 258,683 $ (241,272) $ 221,768
Net realized gain/(loss) on investments and
foreign currency related transactions .......... (335,993) 821,392 973,196 (570,558)
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and liabilities
denominated in foreign currencies .............. (4,896,884) (209,522) 13,505,479 5,911,350
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations ................................ (4,832,126) 870,553 14,237,403 5,562,560
----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ........................... (294,988) (258,683) -- (221,768)
In excess of net investment income ............... -- (12,817) (76,411) (469,323)
Net realized gains ............................... -- (581,360) -- --
In excess of net realized gains .................. -- (3,851) -- --
Return of capital ................................ -- (236,349) -- --
----------- ----------- ----------- -----------
Net decrease in net assets from distributions .... (294,988) (1,093,060) (76,411) (691,091)
----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale of shares ............. 43,571,712 19,035,945 17,013,223 11,652,066
Cost of shares redeemed .......................... (4,207,981) (1,242,282) -- (19,198,572)
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets derived
from capital share transactions ................ 39,363,731 17,793,663 17,013,223 (7,546,506)
----------- ----------- ----------- -----------
Total increase/(decrease) in net assets .......... 34,236,617 17,571,156 31,174,215 (2,675,037)
NET ASSETS:
Beginning of period .............................. 25,416,614 7,845,458 32,494,672 35,169,709
----------- ----------- ----------- -----------
End of period .................................... $59,653,231 $25,416,614 $63,668,887 $32,494,672
=========== =========== =========== ===========
Capital Share Transactions:
Shares sold ...................................... 3,975,000 1,200,000 900,000 750,000
Shares redeemed .................................. (300,000) (75,000) -- (1,350,000)
----------- ----------- ----------- -----------
Net increase/(decrease) in shares .............. 3,675,000 1,125,000 900,000 (600,000)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
46-47
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued) 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
six months For the six months For the six months For the
ending year ending year ending year
02/28/98 ended 02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97 (Unaudited) 08/31/97
------------ ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ......... $ (227,731) $ (566,842) $ 109,310 $ 6,540 $ (8,191) $ 13,244
Net realized gain/(loss) on
investments and foreign currency
related transactions ............... (3,965,514) (3,695,529) (1,350,093) (17,452) 1,207,252 717,222
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and
liabilities denominated in foreign
currencies ......................... (17,848,867) (6,001,060) 16,234,976 (8,968,575) (1,371,378) 2,056,611
------------ ----------- ----------- ----------- ------------ -----------
Net increase/(decrease) in net assets
resulting from operations .......... (22,042,112) (10,263,431) 14,994,193 (8,979,487) (172,317) 2,787,077
------------ ----------- ----------- ----------- ------------ -----------
DISTRIBUTIONS:
Net investment income. ............... -- -- (109,310) (6,540) -- (13,244)
In excess of net investment income ... -- -- (5,043) (7,611) (10,100) (6,992)
Net realized gains ................... -- -- -- -- -- (480,039)
In excess of net realized gains ...... (8,401) (59,225) -- -- -- --
Return of capital .................... -- -- -- (25,600) -- (50,400)
------------ ----------- ----------- ----------- ------------ -----------
Net decrease in net assets from
distributions ...................... (8,401) (59,225) (114,353) (39,751) (10,100) (550,675)
------------ ----------- ----------- ----------- ------------ -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale
of shares .......................... 32,635,708 91,183,410 67,365,828 12,040,298 -- 9,898,729
Cost of shares redeemed .............. (6,110,956) (25,067,882) (852,399) -- (3,168,304) (1,267,357)
------------ ----------- ----------- ----------- ------------ -----------
Net increase/(decrease) in net assets
derived from capital share
transactions ....................... 26,524,752 66,115,528 66,513,429 12,040,298 (3,168,304) 8,631,372
------------ ----------- ----------- ----------- ------------ -----------
Total increase/(decrease) in
net assets ......................... 4,474,239 55,792,872 81,393,269 3,021,060 (3,350,721) 10,867,774
NET ASSETS:
Beginning of period .................. 158,956,816 103,163,944 12,338,980 9,317,920 16,626,508 5,758,734
------------ ----------- ----------- ----------- ------------ -----------
End of period ........................ $163,431,055 $158,956,816 $93,732,249 $12,338,980 $ 13,275,787 $16,626,508
============ =========== =========== =========== ============ ===========
Capital Share Transactions:
Shares sold .......................... 3,000,000 7,200,000 13,275,000 825,000 -- 700,000
Shares redeemed ...................... (600,000) (1,800,000) (150,000) -- (200,000) (100,000)
------------ ----------- ----------- ----------- ------------ -----------
Net increase/(decrease) in shares .... 2,400,000 5,400,000 13,125,000 825,000 (200,000) 600,000
============ =========== =========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
NETHERLANDS SINGAPORE (FREE) SPAIN
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
---------------------------- -------------------------- ----------------------------
For the For the For the
six months For the six months For the six months For the
ending year ending year ending year
02/28/98 ended 02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97 (Unaudited) 08/31/97
----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ......... $ (8,345) $ 44,855 $ (45,154) $ 3,681 $ 32,813 $ 54,300
Net realized gain/(loss) on
investments and foreign currency
related transactions ............... 508,048 303,600 (2,396,829) (90,177) 235,819 583,153
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and
liabilities denominated in foreign
currencies ......................... 1,645,554 1,559,687 4,800,338 (4,451,395) 3,641,434 460,457
----------- ------------ ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .......... 2,145,257 1,908,142 2,358,355 (4,537,891) 3,910,066 1,097,910
----------- ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ............... -- (44,855) -- (3,681) -- (54,300)
In excess of net investment income ... -- (4,630) -- (13,239) -- (24,069)
Net realized gains ................... (66,984) (320,639) -- (37,220) (13,561) (379,744)
In excess of net realized gains ...... -- -- -- -- -- --
Return of capital .................... -- (8,873) -- (37,832) -- (39,171)
----------- ------------ ----------- ----------- ----------- -----------
Net decrease in net assets from
distributions ...................... (66,984) (378,997) -- (91,972) (13,561) (497,284)
----------- ------------ ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale
of shares .......................... 4,479,510 1,170,170 49,462,444 11,351,615 4,696,616 4,683,798
Cost of shares redeemed .............. (1,108,188) -- (2,361,202) (1,107,208) -- (1,190,432)
----------- ------------ ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
derived from capital share
transactions ....................... 3,371,322 1,170,170 47,101,242 10,244,407 4,696,616 3,493,366
----------- ------------ ----------- ----------- ----------- -----------
Total increase/(decrease) in
net assets ......................... 5,449,595 2,699,315 49,459,597 5,614,544 8,593,121 4,093,992
NET ASSETS:
Beginning of period .................. 9,661,134 6,961,819 14,721,562 9,107,018 8,321,368 4,227,376
----------- ------------ ----------- ----------- ----------- -----------
End of period ........................ $15,110,729 $ 9,661,134 $64,181,159 $14,721,562 $16,914,489 $ 8,321,368
=========== ============ =========== =========== =========== ===========
Capital Share Transactions:
Shares sold .......................... 200,000 50,000 7,900,000 1,000,000 225,000 225,000
Shares redeemed ...................... (50,000) -- (300,000) (100,000) -- (75,000)
----------- ------------ ----------- ----------- ----------- -----------
Net increase/(decrease) in shares .... 150,000 50,000 7,600,000 900,000 225,000 150,000
=========== ============ =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
SWEDEN SWITZERLAND UNITED KINGDOM
WEBS WEBS WEBS
INDEX INDEX INDEX
SERIES SERIES SERIES
----------------------- -------------------------- --------------------------
For the For the For the
six months For the six months For the six months For the
ending year ending year ending year
02/28/98 ended 02/28/98 ended 02/28/98 ended
(Unaudited) 08/31/97 (Unaudited) 08/31/97 (Unaudited) 08/31/97
---------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income/(loss) ......... $ (73,025) $ (10,481) $ (119,783) $ (26,117) $ 276,457 $ 524,938
Net realized gain/(loss) on
investments and foreign currency
related transactions ............... 423,908 340,558 1,417,922 561,884 201,146 1,949,688
Net change in unrealized appreciation/
(depreciation) on investments and
translation of other assets and
liabilities denominated in foreign
currencies ......................... 442,322 912,384 3,394,266 910,641 7,357,890 2,438,474
---------- --------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .......... 793,205 1,242,461 4,692,405 1,446,408 7,835,493 4,913,100
---------- --------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
Net investment income. ............... -- -- -- -- (33,235) (524,938)
In excess of net investment income ... -- -- -- -- -- (102,415)
Net realized gains ................... (25,381) (345,698) -- (568,979) -- (304,957)
In excess of net realized gains ...... -- -- -- -- -- --
Return of capital .................... -- -- -- (1,191) -- (176,359)
---------- --------- ----------- ----------- ----------- -----------
Net decrease in net assets from
distributions ...................... (25,381) (345,698) -- (570,170) (33,235) (1,108,669)
---------- --------- ----------- ----------- ----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from the sale
of shares .......................... 3,067,485 2,946,675 7,371,489 8,262,901 10,382,077 19,063,646
Cost of shares redeemed .............. -- -- (1,901,034) (1,492,280) -- (8,936,965)
---------- --------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
derived from capital share
transactions ....................... 3,067,485 2,946,675 5,470,455 6,770,621 10,382,077 10,126,681
---------- --------- ----------- ----------- ----------- -----------
Total increase/(decrease) in
net assets ......................... 3,835,309 3,843,438 10,162,860 7,646,859 18,184,335 13,931,112
NET ASSETS:
Beginning of period .................. 8,243,412 4,399,974 13,805,064 6,158,205 29,721,354 15,790,242
---------- --------- ----------- ----------- ----------- -----------
End of period ........................ $12,078,721 $8,243,412 $23,967,924 $13,805,064 $47,905,689 $29,721,354
========== ========= =========== =========== =========== ===========
Capital Share Transactions:
Shares sold .......................... 150,000 150,000 500,000 625,000 600,000 1,200,000
Shares redeemed ...................... -- -- (125,000) (125,000) -- (600,000)
---------- --------- ----------- ----------- ----------- -----------
Net increase/(decrease) in shares .... 150,000 150,000 375,000 500,000 600,000 600,000
========== ========= =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
48-49
<PAGE>
FINANCIAL HIGHLIGHTS WEBS INDEX FUND, INC.
================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
AUSTRALIA AUSTRIA
WEBS WEBS
INDEX INDEX
SERIES SERIES
---------------------------------- ----------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 03/12/96*- 02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
----------- -------- ---------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ................... $ 10.35 $ 10.15 $ 9.95(1) $ 10.51 $ 10.40 $ 10.91(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss)(DAGGER) ................... 0.13 0.17 0.10 (0.08) (0.02) 0.04
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies .................... (0.36) 0.47 0.29 0.91 0.13 (0.41)
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations .................................. (0.23) 0.64 0.39 0.83 0.11 (0.37)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ................... (0.06) (0.16) (0.08) -- -- (0.02)
Dividends in excess of net investment income ........... -- (0.04) (0.05) -- -- (0.01)
Distributions from net realized gains .................. -- (0.04) (0.02) -- -- (0.03)
Distributions in excess of net realized gains .......... -- -- -- -- -- --
Return of capital ...................................... -- (0.20) (0.04) -- -- (0.08)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................. (0.06) (0.44) (0.19) -- -- (0.14)
------- ------- ------- ------- ------- -------
Net asset value, end of period ......................... $ 10.06 $ 10.35 $ 10.15 $ 11.34 $ 10.51 $ 10.40
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (2) .............................. (2.15)%(4) 6.23% 3.88%(4) 7.90%(4) 1.06% (3.39)%(4
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ................... $42,251 $41,406 $12,177 $ 5,669 $ 4,205 $13,520
Ratios of expenses to average net assets (5) ........... 1.15%(3) 1.33% 1.59%(3) 1.65%(3) 1.68% 1.56%(3)
Ratios of net investment income/(loss) to average
net assets (5) ....................................... 2.61%(3) 1.57% 2.18%(3) (1.42)%(3) (0.22)% 0.87%(3)
Portfolio turnover (6) ................................. 1.14%(4) 5.30% 8.84%(4) 17.25%(4) 28.47% 9.60%(4)
Average commission rate paid ........................... $0.0253 $0.0182 $0.0085 $0.1852 $0.1719 $0.2986
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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)
Ratios of net investment income/(loss) to average
net assets before waivers ........................ -- 1.57% 2.17%(3) -- (0.22)% 0.86%(3)
(6) Excludes portfolio securities received or
delivered as a result of processing
capital share transactions in Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
BELGIUM
WEBS
INDEX
SERIES
---------------------------------------
For the
six months For the For the
ended year period
02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96
----------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ................... $ 15.64 $ 14.99 $ 14.92(1)
------- ------- -------
Net investment income/(loss)(DAGGER) ................... (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 .................... 2.34 0.62 0.36
------- ------- -------
Net increase/(decrease) in net assets resulting
from operations .................................. 2.30 1.39 0.76
------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ................... -- (0.33) (0.54)
Dividends in excess of net investment income ........... -- (0.28) (0.09)
Distributions from net realized gains .................. -- (0.12) (0.06)
Distributions in excess of net realized gains .......... -- -- --
Return of capital ...................................... -- (0.01) --
------- ------- -------
Total dividends and distributions .................. -- (0.74) (0.69)
------- ------- -------
Net asset value, end of period ......................... $ 17.94 $ 15.64 $ 14.99
======= ======= =======
TOTAL INVESTMENT RETURN (2) .............................. 14.71%(4) 9.26% 5.01%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ................... $21,530 $32,528 $ 1,800
Ratios of expenses to average net assets (5) ........... 1.07%(3) 1.24% 2.29%(3)
Ratios of net investment income/(loss) to average
net assets (5) ....................................... (0.52)%(3) 4.63% 5.67%(3)
Portfolio turnover (6) ................................. 18.98%(4) 16.83% 6.25%(4)
Average commission rate paid ........................... $0.3552 $0.3379 $0.4327
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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 ................................... -- 1.24% 2.30%(3)
Ratios of net investment income/(loss) to average
net assets before waivers ........................ -- 4.63% 5.66%(3)
(6) Excludes portfolio securities received or
delivered as a result of processing
capital share transactions in Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
CANADA FRANCE
WEBS WEBS
INDEX INDEX
SERIES SERIES
--------------------------------- ----------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 3/12/96*- 02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
----------- -------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ................... $ 13.43 $ 10.60 $ 10.17(1) $ 14.50 $ 12.73 $ 12.42(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss)(DAGGER) ................... 0.03 0.05 0.04 (0.08) 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 .................... 0.83 2.97 0.43 3.21 1.95 0.45
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations .................................. 0.86 3.02 0.47 3.13 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 .................. (0.07) (0.14) -- (0.03) (0.20) 0.00**
Distributions in excess of net realized gains .......... -- -- 0.00** -- -- --
Return of capital ...................................... -- -- 0.00** -- -- (0.21)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................. (0.07) (0.19) (0.04) (0.03) (0.35) (0.31)
------- ------- ------- ------- ------- -------
Net asset value, end of period ......................... $ 14.22 $ 13.43 $ 10.60 $ 17.60 $ 14.50 $ 12.73
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (2) .............................. 6.45%(4) 28.50% 4.63%(4) 21.59%(4) 16.60% 4.95%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ................... $22,760 $24,168 $13,776 $21,137 $14,519 $22,930
Ratios of expenses to average net assets (5) ........... 1.23%(3) 1.35% 1.44%(3) 1.32%(3) 1.52% 1.84%(3)
Ratios of net investment income/(loss) to average
net assets (5) ....................................... 0.41%(3) 0.39% 0.79%(3) (1.07)%(3 1.17% 2.72%(3)
Portfolio turnover (6) ................................. 0.31%(4) 11.02% 0.00%(4) 5.86%(4) 7.13% 0.00%(4)
Average commission rate paid ........................... $0.0212 $0.0217 -- $0.0304 $0.0137 $0.3956
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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).
</FN>
</TABLE>
See accompanying notes to financial statements.
50-51
<PAGE>
FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC.
================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
GERMANY HONG KONG
WEBS WEBS
INDEX INDEX
SERIES SERIES
------------------------------- -----------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 03/12/96*- 02/28/98 ended 03/12/96*-
Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
---------- -------- ---------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....................... $ 16.31 $ 13.64 $ 13.23(1) $ 14.73 $ 13.05 $ 12.83(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss)(DAGGER) ....................... (0.06) 0.03 0.06 0.13 0.26 0.15
Net realized and unrealized gain/(loss) on investments and
foreign currency related transactions and translation
of other assets and liabilities denominated in
foreign currencies ....................................... 2.83 2.77 0.47 (3.72) 2.12 0.27
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting from
operations ........................................... 2.77 2.80 0.53 (3.59) 2.38 0.42
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... -- (0.03) (0.03) (0.10) (0.21) (0.13)
Dividends in excess of net investment income ............... -- (0.01) (0.01) -- (0.01) (0.02)
Distributions from net realized gains ...................... -- (0.07) -- -- (0.34) (0.01)
Distributions in excess of net realized gains .............. -- -- (0.01) -- 0.00** --
Return of capital .......................................... -- (0.02) (0.07) -- (0.14) (0.04)
------- ------- ------- ------- ------- -------
Total dividends and distributions ...................... -- (0.13) (0.12) (0.10) (0.70) (0.20)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................. $ 19.08 $ 16.31 $ 13.64 $ 11.04 $ 14.73 $ 13.05
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (2) .................................. 16.98%(4) 20.51% 4.00%(4) (24.36)%(4) 17.80% 3.22%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ....................... $34,364 $24,486 $28,664 $59,653 $25,417 $ 7,845
Ratios of expenses to average net assets (5) ............... 1.19%(3) 1.37% 1.68%(3) 1.27%(3) 1.43% 1.52%(3)
Ratios of net investment income/(loss) to average
net assets (5) ........................................... (0.73)%(3) 0.23% 1.00%(3) 2.35%(3) 1.71% 2.37%(3)
Portfolio turnover (6) ..................................... 0.00%(4) 9.04% 0.00%(4) 7.55%(4) 22.90% 0.00%(4)
Average commission rate paid ............................... $0.1526 0.0236 -- $0.0051 $0.0058 $0.0007
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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)
Ratios of net investment income/(loss) to average
net assets before waivers ............................ -- 0.22% 0.99%(3) -- 1.71% 2.36%(3)
(6) Excludes portfolio securities received or delivered as a
result of processing capital share transactions in
Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
ITALY
WEBS
INDEX
SERIES
---------------------------------------
For the
six months For the For the
ended year period
02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96
----------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....................... $ 16.66 $ 13.79 $ 13.62(1)
------- ------- -------
Net investment income/(loss)(DAGGER) ....................... (0.09) 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 ....................................... 5.80 3.10 0.31
------- ------- -------
Net increase/(decrease) in net assets resulting from
operations ........................................... 5.71 3.22 0.56
------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... -- (0.11) (0.14)
Dividends in excess of net investment income ............... (0.03) (0.24) (0.03)
Distributions from net realized gains ...................... -- -- (0.14)
Distributions in excess of net realized gains .............. -- -- --
Return of capital .......................................... -- -- (0.08)
------- ------- -------
Total dividends and distributions ...................... (0.03) (0.35) (0.39)
------- ------- -------
Net asset value, end of period ............................. $ 22.34 $ 16.66 $ 13.79
======= ======= =======
TOTAL INVESTMENT RETURN (2) .................................. 34.29%(4) 23.37% 4.11%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ....................... $63,669 $32,495 $35,170
Ratios of expenses to average net assets (5) ............... 1.09%(3) 1.33% 1.43%(3)
Ratios of net investment income/(loss) to average
net assets (5) ........................................... (0.96)%(3) 0.76% 3.69%(3)
Portfolio turnover (6) ..................................... 4.72%(4) 13.70% 19.80%(4)
Average commission rate paid ............................... $0.0075 $0.0045 $0.0046
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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% 1.44%(3)
Ratios of net investment income/(loss) to average
net assets before waivers ............................ -- 0.76% 3.68%(3)
(6) Excludes portfolio securities received or delivered as a
result of processing capital share transactions in
Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
JAPAN
WEBS
INDEX
SERIES
------------------------------------
For the
six months For the For the
ended year period
02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96
----------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....................... $ 12.61 $ 14.33 $ 14.79(1)
-------- -------- --------
Net investment income/(loss)(DAGGER) ....................... (0.02) (0.06) (0.07)
Net realized and unrealized gain/(loss) on investments and
foreign currency related transactions and translation
of other assets and liabilities denominated in
foreign currencies ....................................... (1.69) (1.65) (0.39)
-------- -------- --------
Net increase/(decrease) in net assets resulting from
operations ........................................... (1.71) (1.71) (0.46)
-------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... -- -- --
Dividends in excess of net investment income ............... -- -- --
Distributions from net realized gains ...................... -- -- --
Distributions in excess of net realized gains .............. (0.01) (0.01) --
Return of capital .......................................... -- -- --
-------- -------- --------
Total dividends and distributions ...................... (0.01) (0.01) --
-------- -------- --------
Net asset value, end of period ............................. $ 10.89 $ 12.61 $ 14.33
======== ======== ========
TOTAL INVESTMENT RETURN (2) .................................. (13.63)%(4) (11.97)% (3.11)%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ....................... $163,431 $158,957 $103,164
Ratios of expenses to average net assets (5) ............... 1.06%(3) 1.19% 1.37%(3)
Ratios of net investment income/(loss) to average
net assets (5) ........................................... (0.33)%(3) (0.48)% (1.01)%(3)
Portfolio turnover (6) ..................................... 0.00%(4) 12.90% 21.54%(4)
Average commission rate paid ............................... $ 0.0016 $ 0.0162 $ 0.0152
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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)
Ratios of net investment income/(loss) to average
net assets before waivers ............................ -- (0.48)% (1.02)%(3)
(6) Excludes portfolio securities received or delivered as a
result of processing capital share transactions in
Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
MALAYSIA (FREE)
WEBS
INDEX
SERIES
---------------------------------
For the
six months For the For the
ended year period
02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96
----------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....................... $ 8.23 $ 13.80 $13.24(1)
------- ------- ------
Net investment income/(loss)(DAGGER) ....................... 0.02 0.01 (0.02)
Net realized and unrealized gain/(loss) on investments and
foreign currency related transactions and translation
of other assets and liabilities denominated in
foreign currencies ....................................... (1.82) (5.55) 0.59
------- ------- ------
Net increase/(decrease) in net assets resulting from
operations ........................................... (1.80) (5.54) 0.57
------- ------- ------
LESS DISTRIBUTIONS
Dividends from net investment income ....................... (0.02) 0.00** --
Dividends in excess of net investment income ............... 0.00** (0.01) --
Distributions from net realized gains ...................... -- -- --
Distributions in excess of net realized gains .............. -- -- --
Return of capital .......................................... -- (0.02) (0.01)
------- ------- ------
Total dividends and distributions ...................... (0.02) (0.03) (0.01)
------- ------- ------
Net asset value, end of period ............................. $ 6.41 $ 8.23 $13.80
======= ======= ======
TOTAL INVESTMENT RETURN (2) .................................. (21.79)%(4) (40.20)% 4.28%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ....................... $93,732 $12,339 $9,318
Ratios of expenses to average net assets (5) ............... 1.22%(3) 1.46% 1.58%(3)
Ratios of net investment income/(loss) to average
net assets (5) ........................................... 0.64%(3) 0.04% (0.35)%(3)
Portfolio turnover (6) ..................................... 0.71%(4) 0.00% 0.00%(4)
Average commission rate paid ............................... $0.0028 $ -- $ --
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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 .............................................. -- 1.47% 1.59%(3)
Ratios of net investment income/(loss) to average
net assets before waivers ............................ -- 0.04% (0.36)%(3)
(6) Excludes portfolio securities received or delivered as a
result of processing capital share transactions in
Creation Unit(s).
</FN>
</TABLE>
See accompanying notes to financial statements.
52-53
<PAGE>
FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC.
================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
MEXICO (FREE) NETHERLANDS
WEBS WEBS
INDEX INDEX
SERIES SERIES
--------------------------------- ----------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 03/12/96*- 02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
----------- -------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ...................... $ 15.11 $ 11.52 $ 9.95(1) $ 21.42 $ 17.36 $ 15.91(1)
------- ------- ------ ------- ------- -------
Net investment income/(loss)(DAGGER) ...................... (0.01) 0.02 0.00** (0.02) 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 ....................... (0.34) 4.07 1.59 3.87 4.79 1.54
------- ------- ------ ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations ..................................... (0.35) 4.09 1.59 3.85 4.90 1.78
------- ------- ------ ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ...................... -- (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) -- (0.13) (0.71) (0.08)
Distributions in excess of net realized gains ............. -- -- -- -- -- (0.01)
Return of capital ......................................... -- (0.04) (0.01) -- (0.02) (0.09)
------- ------- ------ ------- ------- -------
Total dividends and distributions ..................... (0.01) (0.50) (0.02) (0.13) (0.84) (0.33)
------- ------- ------ ------- ------- -------
Net asset value, end of period ............................ $ 14.75 $ 15.11 $11.52 $ 25.14 $ 21.42 $ 17.36
======= ======= ====== ======= ======= =======
TOTAL INVESTMENT RETURN (2) ................................. (2.32)%(4) 35.21% 15.93%(4) 18.08%(4) 28.04% 11.19%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ...................... $13,276 $16,627 $5,759 $15,111 $ 9,661 $ 6,962
Ratios of expenses to average net assets (5) .............. 1.32%(3) 1.63% 1.75%(3) 1.31%(3) 1.46% 1.63%(3)
Ratios of net investment income/(loss) to average
net assets (5) .......................................... (0.10)%(3) 0.14% 0.01%(3) (0.14)%(3) 0.54% 2.93%(3)
Portfolio turnover (6) .................................... 2.64%(4) 22.80% 0.00%(4) 1.64%(4) 12.68% 4.32%(4)
Average commission rate paid .............................. $0.0058 $0.0066 $ -- $0.0536 $0.0354 $0.0651
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December
31, 1996. 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 -- 1.63% 1.76%(3) -- 1.46% 1.64%(3)
Ratios of net investment income/(loss) to average
net assets before waivers ........................... -- 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).
</FN>
</TABLE>
<TABLE>
<CAPTION>
SINGAPORE (FREE) SPAIN
WEBS WEBS
INDEX INDEX
SERIES SERIES
----------------------------------- ------------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 03/12/96*- 02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
----------- -------- ---------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period .................. $ 8.66 $ 11.38 $ 12.24(1) $ 18.49 $ 14.09 $ 13.28(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss)(DAGGER) .................. (0.01) 0.00** 0.04 0.05 0.19 0.14
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions and
translation of other assets and liabilities
denominated in foreign currencies ................... (1.75) (2.67) (0.86) 6.54 5.33 0.98
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations ................................. (1.76) (2.67) (0.82) 6.59 5.52 1.12
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income .................. -- 0.00** (0.03) -- (0.12) (0.18)
Dividends in excess of net investment income .......... -- (0.01) (0.01) -- (0.05) --
Distributions from net realized gains ................. -- (0.02) -- (0.02) (0.86) (0.13)
Distributions in excess of net realized gains ......... -- -- -- -- -- --
Return of capital ..................................... -- (0.02) -- -- (0.09) --
------- ------- ------- ------- ------- -------
Total dividends and distributions ................. -- (0.05) (0.04) (0.02) (1.12) (0.31)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................ $ 6.90 $ 8.66 $ 11.38 $ 25.06 $ 18.49 $ 14.09
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (2) ............................. (20.32)%(4) (23.48)% (6.73)%(4) 35.68%(4) 39.15% 8.45%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .................. $64,181 $14,722 $ 9,107 $16,914 $ 8,321 $ 4,227
Ratios of expenses to average net assets (5) .......... 1.21%(3) 1.43% 1.56%(3) 1.31%(3) 1.67% 1.76%(3)
Ratios of net investment income/(loss) to average
net assets (5) ...................................... (0.34)%(3) 0.03% 0.69%(3) 0.53%(3) 1.04% 2.04%(3)
Portfolio turnover (6) ................................ 24.00%(4) 13.40% 26.29%(4) 2.25%(4) 19.21% 4.73%(4)
Average commission rate paid .......................... $0.0074 $0.0076 $0.0118 $0.0436 $0.0344 $0.0723
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December
31, 1996. 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)
Ratios of net investment income/(loss) to average
net assets before waivers ....................... -- 0.03% 0.68%(3) -- 1.04% 2.03%(3)
(6) Excludes portfolio securities received or delivered
as a result of processing capital share transactions
in Creation Unit(s).
</FN>
</TABLE>
<TABLE>
<CAPTION>
SWEDEN
WEBS
INDEX
SERIES
--------------------------------------
For the
six months For the For the
ended year period
02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96
----------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ...................... $ 18.32 $ 14.67 $ 13.22(1)
------- ------- -------
Net investment income/(loss)(DAGGER) ...................... (0.13) (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 ....................... 1.98 4.45 1.67
------- ------- -------
Net increase/(decrease) in net assets resulting
from operations ..................................... 1.85 4.42 1.87
------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ...................... -- -- (0.23)
Dividends in excess of net investment income .............. -- -- (0.07)
Distributions from net realized gains ..................... (0.04) (0.77) (0.12)
Distributions in excess of net realized gains ............. -- -- --
Return of capital ......................................... -- -- --
------- ------- -------
Total dividends and distributions ..................... (0.04) (0.77) (0.42)
------- ------- -------
Net asset value, end of period ............................ $ 20.13 $ 18.32 $ 14.67
======= ======= =======
TOTAL INVESTMENT RETURN (2) ................................. 10.15%(4) 30.10% 14.13%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ...................... $12,079 $ 8,243 $ 4,400
Ratios of expenses to average net assets (5) .............. 1.38%(3) 1.64% 1.75%(3)
Ratios of net investment income/(loss) to average
net assets (5) .......................................... (1.35)%(3) (0.19)% 3.05%(3)
Portfolio turnover (6) .................................... 4.91%(4) 13.71% 5.87%(4)
Average commission rate paid .............................. $0.0402 $0.0229 $0.0561
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December
31, 1996. 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 -- 1.64% 1.76%(3)
Ratios of net investment income/(loss) to average
net assets before waivers ........................... -- (0.19)% 3.04%(3)
(6) Excludes portfolio securities received or delivered
as a result of processing capital share transactions
in Creation Unit(s).
</FN>
</TABLE>
See accompanying notes to financial statements.
54-55
<PAGE>
FINANCIAL HIGHLIGHTS (concluded) WEBS INDEX FUND, INC.
================================================================================
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
SWITZERLAND UNITED KINGDOM
WEBS WEBS
INDEX INDEX
SERIES SERIES
---------------------------------- ----------------------------------
For the For the
six months For the For the six months For the For the
ended year period ended year period
02/28/98 ended 03/12/96*- 02/28/98 ended 03/12/96*-
(Unaudited) 08/31/97 08/31/96 (Unaudited) 08/31/97 08/31/96
----------- -------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ................ $ 13.79 $ 12.29 $ 12.07(1) $ 16.50 $ 13.15 $ 12.14(1)
------- ------- ------- ------- ------- -------
Net investment income/(loss)(DAGGER) ................ (0.09) (0.04) 0.08 0.13 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 ........................................ 3.72 2.11 0.24 3.34 3.62 1.06
------- ------- ------- ------- ------- -------
Net increase/(decrease) in net assets
resulting from operations ..................... 3.63 2.07 0.32 3.47 4.00 1.27
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income ................ -- -- (0.10) (0.02) (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) (0.02) (0.65) (0.26)
------- ------- ------- ------- ------- -------
Net asset value, end of period ...................... $ 17.42 $ 13.79 $ 12.29 $ 19.95 $ 16.50 $ 13.15
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (2) ........................... 26.32%(4) 16.69% 2.60%(4) 21.01%(4) 30.48% 10.41%(4)
RATIOS/ SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ................ $23,968 $13,805 $ 6,158 $47,906 $29,721 $15,790
Ratios of expenses to average net assets (5) ........ 1.25%(3) 1.52% 1.82%(3) 1.17%(3) 1.38% 1.61%(3)
Ratios of net investment income/(loss) to average
net assets (5) .................................... (1.20)%(3) (0.29)% 1.39%(3) 1.44%(3) 2.47% 3.62%(3)
Portfolio turnover (6) .............................. 34.39%(4) 48.05% 17.06%(4) 1.97%(4) 1.84% 0.00%(4)
Average commission rate paid ........................ $0.6544 $0.8788 $0.7852 $0.0270 $0.0314 $ --
<FN>
* Commencement of operations.
** Less than one cent per share.
(DAGGER) 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 through December 31, 1996. 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).
</FN>
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) WEBS INDEX FUND, INC.
================================================================================
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 October 29, 1997, the
France WEBS Index Series changed its status from a diversified to a
non-diversified investment company.
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.
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
================================================================================
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.
58
<PAGE>
WEBS INDEX FUND, INC.
================================================================================
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, passive foreign investment
companies, 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, 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.
59
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
================================================================================
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 the Administration and Accounting Services Agreement
was amended to provide for aggregate fees to PFPC 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.
Effective October 29, 1997, the Administration and Accounting Services
Agreement was amended to provide for aggregate fees to PFPC 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 billon 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 billon 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. On October 29, 1997 PFPC
entered into a Sub-Administration Agreement with Morgan Stanley Trust Company
("MSTC"). The Administrator pays MSTC a fee of .05% of the average daily net
assets of the Fund for its sub-administration services.
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 of up to .25% of the average
daily net assets of each WEBS Index Series 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. Prior to October 29, 1997 the Distributor was
paid a fee at an annual rate of .25% of the average daily net assets of such
WEBS Index Series. Effective October 29, 1997 the fee payable to the Distributor
under the 12b-1 Plan was reduced to .20% of the average daily net assets of each
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%).
Effective April 1, 1998, the fees payable under the Custody Agreement were
revised. For its custody services to each WEBS Index Series, MSTC is now paid
per annum fees based on the aggregate net assets of the WEBS Index Series as
follows: Australia WEBS Index Series (.09%); Austria WEBS Index Series (.09%);
Belgium WEBS Index Series (.09%); Canada WEBS Index Series (.065%); France WEBS
Index Series (.09%); Germany WEBS Index Series (.09%); Hong Kong WEBS Index
Series (.11%); Italy WEBS Index Series (.08%); Japan WEBS Index Series (.055%);
Malaysia (Free) WEBS Index Series (.11%); Mexico (Free) WEBS Index Series
(.23%); Netherlands WEBS Index Series (.09%); Singapore (Free) WEBS Index Series
(.09%); Spain WEBS Index Series (.09%); Sweden WEBS Index Series (.09%);
Switzerland WEBS Index Series (.09%); and United Kingdom WEBS Index Series
(.065%).
MSTC also receives certain fees for each transaction of the WEBS Index
Series and is reimbursed for certain out-of-pocket expenses.
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. Effective
October 29, 1997 the Chairman of the Board receives an annual fee of $30,000
plus $7,500 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.
60
<PAGE>
WEBS INDEX FUND, INC.
================================================================================
FOREIGN CURRENCY
At February 28, 1998, each WEBS Index Series' cash balance included the
following amount of foreign currency:
VALUE COST
---------- ----------
Australia WEBS Index Series $ 35,972 $ 34,203
Austria WEBS Index Series $ 16,541 $ 16,569
Belgium WEBS Index Series $ 42,093 $ 42,143
Canada WEBS Index Series $ 122,366 $ 121,741
France WEBS Index Series $ 93,294 $ 92,685
Germany WEBS Index Series $ 170,069 $ 173,573
Hong Kong WEBS Index Series $ 15,556 $ 15,550
Italy WEBS Index Series $ 77,063 $ 77,125
Japan WEBS Index Series $ 160,752 $ 156,893
Malaysia (Free) WEBS Index Series $ 3,931 $ 3,931
Mexico (Free) WEBS Index Series $ 65,482 $ 65,100
Netherlands WEBS Index Series $ 46,957 $ 47,042
Singapore (Free) WEBS Index Series $6,752,163 $6,743,840
Spain WEBS Index Series $ 66,287 $ 66,494
Sweden WEBS Index Series $ 30,709 $ 30,709
Switzerland WEBS Index Series $ 123,115 $ 122,872
United Kingdom WEBS Index Series $ 246,457 $ 245,583
STOCK LOAN
Each WEBS Index Series may lend securities from its portfolio to brokers,
dealers and other financial institutions. Because the collateral pledged to each
WEBS Index Series in connection with these loans generates income, securities
lending enables a WEBS Index Series to earn income that may partially offset the
expenses of the WEBS Index Series. Each WEBS Index Series receives collateral
equal to at least 100% of the current market value of the loaned securities. The
WEBS Index Series invests collateral in short-term investments, and bears the
risk of loss of the invested collateral. In addition, a WEBS Index Series is
exposed to the risk of loss should a borrower default on its obligation to
return the borrowed securities. For its services as the securities lending
agent, the Fund pays MSTC, in respect of each WEBS Index Series, 50% of the net
investment income earned on the collateral for securities loaned.
The market values of securities on loan to broker/dealers at February 28,
1998, 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 $ 6,077,343 $ 6,469,604
Austria WEBS Index Series $ 657,496 $ 710,818
Belgium WEBS Index Series $ 4,175,454 $ 4,422,166
Canada WEBS Index Series $ 1,464,177 $ 1,552,992
France WEBS Index Series $ 480,983 $ 497,691
Germany WEBS Index Series $ 6,747,684 $ 7,137,577
Hong Kong WEBS Index Series $ 4,983,502 $ 5,765,256
Italy WEBS Index Series $13,998,393 $15,078,715
Japan WEBS Index Series $30,576,890 $32,537,038
Malaysia (Free) WEBS Index Series $15,410,988 $16,559,498
Mexico (Free) WEBS Index Series $ 2,789,355 $ 3,027,560
Netherlands WEBS Index Series $ 2,355,911 $ 2,439,292
Singapore (Free) WEBS Index Series $ 8,915,059 $ 9,532,677
Spain WEBS Index Series $ 791,038 $ 802,064
Sweden WEBS Index Series $ 2,342,545 $ 2,460,127
Switzerland WEBS Index Series $ 2,420,255 $ 2,544,855
United Kingdom WEBS Index Series $ -- $ --
61
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
================================================================================
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.
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
except that residents of Australia and New Zealand are paid redemption proceeds
in cash only. Shares of each WEBS Index Series may also be redeemed in the
specified aggregations for cash by other persons 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%. None of the WEBS Index Series
had advances on the Line of Credit outstanding at February 28,
1998.
Average borrowings under the line of credit did not exceed 10% of net
assets of any WEBS Index Series during the six months ended February 28, 1998.
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 six
months ended February 28, 1998:
PURCHASES OF SALES OF
WEBS INDEX SERIES SECURITIES SECURITIES
----------------- ------------- -----------
Australia WEBS Index Series $ 619,077 $ 489,467
Austria WEBS Index Series $1,066,635 $ 754,511
Belgium WEBS Index Series $5,633,218 $5,606,538
Canada WEBS Index Series $ 70,920 $ 457,261
France WEBS Index Series $ 985,431 $1,146,501
Germany WEBS Index Series $ -- $ 53,438
Hong Kong WEBS Index Series $3,018,382 $2,658,260
Italy WEBS Index Series $2,352,582 $2,739,226
Japan WEBS Index Series $ -- $ 128,724
Malaysia (Free) WEBS Index Series $1,125,845 $ 255,443
Mexico (Free) WEBS Index Series $ 411,228 $ 654,538
Netherlands WEBS Index Series $ 199,290 $ 499,074
Singapore (Free) WEBS Index Series $7,632,361 $6,782,094
Spain WEBS Index Series $ 282,971 $ 454,610
Sweden WEBS Index Series $ 536,501 $ 931,311
Switzerland WEBS Index Series $6,865,580 $7,399,570
United Kingdom WEBS Index Series $ 833,676 $ 747,635
62
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WEBS INDEX FUND, INC.
================================================================================
For the six months ended February 28, 1998, 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 $17,752
Austria WEBS Index Series $ 391
Belgium WEBS Index Series $12,746
Canada WEBS Index Series $32,865
France WEBS Index Series $ 1,434
Germany WEBS Index Series $ 5,951
Hong Kong WEBS Index Series $ --
Italy WEBS Index Series $ 1,968
Japan WEBS Index Series $81,372
Malaysia (Free) WEBS Index Series $12,393
Mexico (Free) WEBS Index Series $ --
Netherlands WEBS Index Series $12,252
Singapore (Free) WEBS Index Series $ --
Spain WEBS Index Series $19,502
Sweden WEBS Index Series $ --
Switzerland WEBS Index Series $ --
United Kingdom WEBS Index Series $74,897
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.
63
<PAGE>
[GRAPHIC OMITTED]
WEBS INDEX FUND, INC.
INVESTMENT ADVISER
BARCLAYS GLOBAL FUND ADVISORS
ADMINISTRATOR
PFPC INC.
DISTRIBUTOR
FUNDS DISTRIBUTOR INC.
TRANSFER AGENT
PNC BANK, N.A.
CUSTODIAN, SECURITIES LENDING AGENT, AND SUB-ADMINISTRATOR
MORGAN STANLEY TRUST COMPANY
400 BELLEVUE PARKWAY
WILMINGTON, DE 19809
