World
Equity
Benchmark
Shares
[LOGO]
FEBRUARY 28,
[LOGO]
1 9 9 9
SEMI-ANNUAL REPORT
WEBS INDEX FUND, INC.
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WEBS INDEX FUND, INC.
INVESTMENT ADVISER
BARCLAYS GLOBAL FUND ADVISORS
ADMINISTRATOR
PFPC INC.
DISTRIBUTOR
FUNDS DISTRIBUTOR INC.
TRANSFER AGENT
PFPC INC.
CUSTODIAN AND SECURITIES LENDING AGENT
THE CHASE MANHATTAN BANK
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WEBS INDEX FUND, INC.
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Dear Shareholder:
We are pleased to present the semi-annual report for WEBS Index Fund, Inc.
covering the six month period September 1, 1998 through February 28, 1999. It
contains important information about the performance of your investment, a
management's discussion and analysis for each WEBS Index Series from the Fund's
adviser, Barclays Global Fund Advisors, and important financial information.
Each WEBS Index Series seeks to track the investment performance of a
specific country's stock market, as measured by a Morgan Stanley Capital
International (MSCI) country index. The Investment Advisor's discussion contains
information about performance and tracking for each of the WEBS Index Series.
GROWTH ACTIVITY
WEBS continue to gain favor with investors as an efficient way to invest in
selected foreign equity markets. As of February 28, 1999 net assets of the
seventeen WEBS Index Series have grown to $1.038 billion, representing a 39%
increase since August 31, 1998 and a 44% increase from one year ago.
As you know, the value of total net assets will fluctuate with the levels
of the respective foreign equity markets. A better indicator of the
attractiveness of WEBS is the number of shares outstanding. The total number of
shares outstanding for all seventeen WEBS Index Series has increased by 13.5% in
the six month period ended February 28, 1999 (from 87.9 million to 99.8
million). For the one year period ended February 28, 1999, the number of shares
outstanding has increased by 55% (64.2 million shares vs. 99.8 million shares).
The significant growth in assets and shares outstanding is confirmation that
WEBS have become an international investment vehicle of choice for many
investors.
INTERNATIONAL PERFORMANCE
Many Asian markets suffered declines during early 1998. However, since
August 1998, some of these Asian markets have experienced an upward trend. The
performance of the Asian WEBS Index Series in the six month period ended
February 28, 1999 reflected the increases in their respective markets. European
markets experienced less robust appreciation during the six month period, and
some declined, as the impact of the Asian recession and Russia's problems were
realized. On the other hand, the Canadian and Mexican markets appreciated
significantly over the six month period. There were a number of WEBS Index
Series that produced positive total NAV returns, in U.S. dollar terms, for the
six month period ended February 28, 1999. Some examples:
Six Months Ended
WEBS Index Series February 28, 1999
----------------- -----------------
Singapore (Free) 77.8%
Malaysia (Free) 47.3%
Hong Kong 37.1%
Australia 25.0%
France 9.2%
Germany 2.3%
Only the Austria WEBS Index Series had a negative return (5.7%) for the six
month period. While past performance is not an indication of future performance,
one can see that the six month period was rewarding for many investors.
SPECIAL NOTE WITH RESPECT TO MALAYSIA
As you may know, on September 1, 1998, the Malaysian government imposed
capital restrictions that prompted the Malaysia Series to suspend sales, and to
discourage redemptions, of Creation Units. Since the imposition of these capital
restrictions, the Fund has applied for, and received, regulatory relief from
Bank Negara Malaysia, the Malaysian Central Bank. As a result of this relief,
the Fund will honor requests, in proper form, for the redemption of Creation
Units of the Malaysia Series only through the delivery of Malaysian ringgits to
a redeeming investor's account at a duly licensed Malaysian financial
institution. However, the Fund is continuing to suspend sales of Creation Units
of the Malaysia Series until further notice.
To review details of a Supplement to the Prospectus, dated February 17,
1999, as well as a number of press releases on this topic, please access the
Fund's website at www.websontheweb.com. The pertinent information is under the
heading "What's New". Alternatively, please call 1-800-810-9327 to speak to a
Fund representative.
CONCLUSION
The popularity of the seventeen WEBS Index Series continues to grow because
investors like you understand that WEBS represent an easy, relatively
inexpensive way to access any of seventeen different foreign stock markets.
We thank you for your continued support and confidence in WEBS Index Fund,
Inc. and hope you will continue to use the various WEBS Index Series in your
portfolio.
Sincerely,
/s/ Nathan Most
---------------------------------
Nathan Most
Chairman and President
WEBS Index Fund, Inc.
1
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Introduction
Barclays Global Fund Advisors is the Investment Advisor for WEBS Index
Fund, Inc. Each WEBS Index Series holds a representative sample of the
underlying securities in a corresponding MSCI Index (using the analytic
technique known as "portfolio sampling" discussed below), as opposed to full
replication of the corresponding MSCI Index. In addition, certain WEBS Index
Series may invest to a limited extent in securities that are not in the relevant
benchmark index.
Key market conditions
Although the key market conditions summaries for each WEBS Index Series
address certain specific issues affecting economic performance in the various
national markets, there are some broad worldwide events affecting performance
that should be considered at the outset. The recession that began in Asia in
October 1997 continued to exert a negative presence in global economies
throughout 1998 and into 1999. Additionally, severe economic problems in Russia
in July and August of 1998 precipitated considerable volatility in global
markets. The Brazilian currency devaluation followed in January, adding further
worry about the state of a number of emerging market economies and the
implications for global growth. And finally, fears over inflation and interest
rates in the U.S. took center stage in February and fueled bearish sentiment
throughout global markets. At the same time, a number of positive factors such
as declining interest rates in Europe, overall stabilization in emerging market
economies, and continued confidence in the U.S. had a positive influence on
securities markets, with the result that many achieved healthy gains over the
course of the six-month period ending February 28, 1999.
Performance factors
When examining the performance numbers of each WEBS Index Series, remember
that expenses are incurred by the WEBS Index Series, and that such expenses
impact performance. This is in contrast to the corresponding MSCI Indices that
do not bear any expenses.
In addition, the performance of each WEBS Index Series may also vary
positively or negatively from that of its corresponding MSCI Index during any
period due to portfolio sampling, revenue differential and the impact of
uninvested assets.
Portfolio sampling is a highly disciplined approach to creating a
portfolio. Its goal is to capture index returns through investment in a subset
of the stocks in an index. The portfolios are designed to reflect the market's
size and industry profiles accurately. No attempt is made to actively manage the
WEBS Index Series using economic or market analysis or to hedge foreign exchange
risk. Because of portfolio sampling, the composition of each WEBS Index Series
varies from that of its benchmark index. This will normally cause a WEBS Index
Series' performance to vary positively or negatively from that of its benchmark
during any period.
A number of regulatory constraints adversely impact the Investment
Advisor's ability to create optimal portfolios of certain WEBS Index Series
through the use of portfolio sampling. As a result, portfolio returns can vary
significantly from what they would have been but for the constraints. The
principal regulatory constraints that affect Fund performance are tax-related,
and are referred to as the Single Issuer Rule and the 5/50 Rule.
The Single Issuer Rule, which is a quarterly test, generally requires that
no issuer in a portfolio can have a weight of greater than 25%. This constraint
applies to all share classes of an issuer. In Mexico, for example, Telefonos de
Mexico has two share classes (A and L shares) which have a collective weighting
in the MSCI Mexico Index of 31.30%. As a result of the Single Issuer Rule, the
portfolio cannot hold any combination of the two share classes above 25%.
The 5/50 Rule, which is also a quarterly test, generally prohibits 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. If a security has more than one share class, then all of the share
classes must be considered as one security for 5/50 Rule purposes. Many of the
benchmark MSCI Indices have a greater than 50% weighting of securities that
account for more than 5% of the respective index. For example, the sum of all of
the stocks with weightings of 5% or greater in the MSCI Switzerland Index is
2
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89%. In such situations, a WEBS Index Series must be underweight in some stocks
relative to the benchmark, and therefore overweight in others, in order to
comply with the Rule.
Another factor that causes performance of WEBS Index Series to differ from
that of their respective benchmarks is "revenue differential." The dividend
revenues received by the WEBS Index Series differ from those of the benchmark
MSCI Indices in both 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
assume the monthly dividend revenue is equal to 1/12th of the previous 12
months' dividends. In addition, unlike the MSCI Indices, each of the WEBS Index
Series receives interest on the cash which is invested in short-term investment
vehicles but is not invested in the benchmark securities and, in the case of
most WEBS Index Series, revenues from the lending of portfolio securities.
Finally, uninvested assets of a WEBS Index Series affects performance
relative to the benchmark MSCI Indices. Cash and deferred organizational
expenses are the principal "unequitized" assets of the WEBS Index Series. In
contrast, the MSCI Indices assume a 100% investment in the underlying stocks and
thus do not reflect any "unequitized" assets. The effect of uninvested assets
(referred to herein as "cash drag") will tend to cause each WEBS Index Series to
outperform its benchmark in falling markets and underperform the benchmark in
rising markets.
3
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Australia
Performance Review
The total return of the Australia WEBS Index Series (the "Australia
Series") was 24.99% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 26.02% over the same time period.
Significant Performance Factors
The Australia Series underperformed the benchmark by 1.03% during this
period as a result of portfolio sampling, revenue differential and expenses. Of
those three factors, expenses had the most significant impact on performance,
accounting for almost half of the under-performance.
Underperformance as a result of portfolio sampling was largely the result
of compliance with the 5/50 Rule. As stated in the introduction, regulatory
restrictions can adversely affect the Investment Advisor's ability to optimize a
WEBS Index Series' portfolio. In the case of the Australia Series, the 5/50 Rule
made it difficult to achieve index exposure to several key industries. On
February 28, 1999, the sum of all the weightings of 5% or greater in the MSCI
Australia Index was 56%. As a result, the Australia Series was overweighted in
several of the poorly performing sectors such as insurance (-12.51% for the
period) and underweighted in the telecommunications sector, one of the market's
top performers (40.48% for the period).
Key Market Conditions
The Australian stock market was finally able to shake off some of the
fallout from the Asian turmoil to enjoy solid returns in the six months ended
February 28, 1999. Following several months of volatility early in the period,
the market commenced its strongly upward path in mid-October, largely reflecting
a steadily improving world economic outlook and solid performances in many
global equity markets.
The local market was also boosted by positive economic data such as a
strong economic growth rate, falling unemployment and low inflation figures.
Corporate earnings continued to improve, culminating in a positive business
confidence level not seen in nearly a decade.
Within the market, there was a wide spectrum of returns. Health and
personal care, telecommunications and tourism were among the strongest
performers. Notable underperformers included insurance and food and household
products. Meanwhile, the slump in the resources sector has now lasted nearly
three years.
Comparison of Change in Value of a $10,000 Investment in the
Australia WEBS Index Series vs. the MSCI Australia Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS Index MSCI Index
03/12/96 10000 10000
05/31/96 10523 10588
08/31/96 10388 10383
11/30/96 11238 11232
02/28/97 11048 11054
05/31/97 11545 11519
08/31/97 11035 10990
11/30/97 9862 9750
02/28/98 10799 10880
05/31/98 10058 10132
08/31/98 8486 8724
11/30/98 10435 10722
02/28/99 10607 10994
Average Annual Total Return
One Since
Year Inception
---------- ---------
Australia WEBS Index Series (1.78)% 2.00%
MSCI Australia Index 1.05% 3.24%
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* The chart assumes a hypothetical $10,000 initial investment in the Australia
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the
relevant MSCI Index is unmanaged, does not incur expenses and is not
available for investment.
4
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Austria
Performance Review
The total return of the Austria WEBS Index Series (the "Austria Series")
was -5.74% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned -3.87% over the same time period.
Significant Performance Factors
The Austria Series underperformed the benchmark by 1.87% during this period
primarily as a result of portfolio sampling. The effect of expenses also had a
negative impact on performance. As stated in the introduction, regulatory
restrictions can adversely affect the Investment Advisor's ability to optimize
the portfolio of a WEBS Index Series. In the case of the Austria Series, the
5/50 Rule made it difficult to achieve index exposure to several key industries,
and resulted in other industries being overweight. It is important to note that
the sum of the weightings of 5% or greater in the MSCI Austria Index at February
28, 1999 was 76%. As a result, the Austria Series was underweighted in beverages
and tobacco, which returned 13.84% for the six-month period. The remaining
weight had to be reallocated to other industries, resulting in an overweighting
of the poorly performing construction and housing sector (which lost 20.86%
during the period) and miscellaneous materials sector (down 13.95%).
Key Market Conditions
The Austrian stockmarket experienced comparatively dismal performance over
the six-month period relative to other European markets. At the crux of the
disappointment lies Austria's ill-fated attempt at positioning itself as the
gateway to Eastern Europe. As a result, many investors sold Austrian shares in
favor of those of more Western-like markets. Among the Austrian industries most
impacted by Russia's financial turmoil were industrial and banking stocks. Bank
of Austria's losses in the Russian T-bill and forwards markets, in particular,
caused a heavy blow to the most heavily weighted stock in the Index. More
recently, however, the Bank of Austria has seen its share price soar on the back
of Goldman Sachs' decision to include it in their model bank portfolio.
Despite an uptick in the market since its early October trough, performance
appears to have been driven by external developments rather than domestic
events. U.S. gross domestic product (GDP) data, European rate cuts, and merger
activity in the European financial sector contributed to positive sentiment,
while concerns over financial conditions in Brazil and China inflicted further
volatility.
Comparison of Change in Value of a $10,000 Investment in the
Austria Webs Index Series vs. the MSCI Austria Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10577 10866
08/31/96 9661 10073
11/30/96 9569 10080
02/28/97 9401 9848
05/31/97 9782 10062
08/31/97 9764 9928
11/03/97 9373 9713
02/28/98 10535 11513
05/31/98 12532 13875
08/31/98 9975 10770
11/30/98 9442 10268
02/28/99 9403 10353
Average Annual Total Return
One Since
Year Inception
---------- ---------
Austria Webs Index Series (10.75)% (2.05)%
MSCI Austria Index (10.08)% 1.17%
- ------------------
* 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.
5
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Belgium
Performance Review
The total return of the Belgium WEBS Index Series (the "Belgium Series")
was 4.73% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 11.36% over the same time period.
Significant Performance Factors
The Belgium Series underperformed the benchmark by 6.63% during this period
for three reasons: portfolio sampling, the impact of expenses and cash drag. Of
those three factors, portfolio sampling had the most significant impact on
performance, accounting for almost 90% of the underperformance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize a WEBS Index Series' portfolio. In
the case of the Belgium Series, the 5/50 Rule made it difficult to achieve index
exposure to several key industries. It is important to note that the sum of
weightings of 5% or greater in the MSCI Belgium Index at February 28, 1999 was
79%. In such circumstances, a number of large-cap stocks in the Belgium Series'
portfolio were significantly underweighted relative to the benchmark. This
resulted in the Belgium Series being overweighted in several of the poorly
performing sectors of the market such as electronic components (down 30.20% for
the six-month period), industrial components (down 37.14%), metals-non ferrous
(down 35.28%), miscellaneous materials (down 17.53%) and transportation (down
43.03%). While these sectors contributed to the divergence in returns relative
to the benchmark index, their combined weight as represented in the Index is
only 6%. On the large-cap side, the Belgium Series was forced to underweight a
number of industries, including utilities and insurance, which enjoyed returns
of 22.46% and 23.69%, respectively, for the period.
Key Market Conditions
Fueled by merger and acquisition activity, the Belgian market rallied to
end the six-month period with healthy gains. Several large companies led the
way, including foreign takeover candidate Petrofina, Belgium's largest
industrial stock and Generale de Banque, the country's largest bank, which is
currently merging with Fortis, the Belgian-Dutch financial services group.
Meanwhile, improving consumer confidence levels supported economic growth
of 2.9% in 1998. Growth was attributed to an expansion in domestic demand rather
than exports, which contributed negatively to growth for the first time in five
years. Inflation remained low at around 1% per annum.
Comparison of Change in Value of a $10,000 Investment in the
Belgium WEBS Index Series vs. the MSCI Belgium Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10288 10237
08/31/96 10501 10496
11/30/96 10915 11107
02/28/97 11204 11595
05/31/97 11877 12172
08/31/97 11474 11662
11/30/97 12002 12385
02/28/98 13161 13768
05/31/98 15831 16912
08/31/98 15996 17633
11/30/98 16952 19087
02/28/99 16752 19637
Average Annual Total Return
One Since
Year Inception
---------- ---------
Belgium WEBS Index Series 27.29% 18.98%
MSCI Belgium Index 42.63% 25.51%
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* The chart assumes a hypothetical $10,000 initial investment in the Belgium
WEBS Index Series and reflects all expenses of the Index Series. Investors
should note that the Index Series is professionally managed while the
relevant MSCI Index is unmanaged, does not incur expenses and is not
available for investment.
6
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Canada
Performance Review
The total return of the Canada WEBS Index Series (the "Canada Series") was
20.78% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 20.91% over the same time period.
Significant Performance Factors
The Canada Series underperformed the benchmark by 0.13% as the positive
effects of portfolio sampling and revenue differential were more than offset by
the impact of expenses and cash drag.
The difference in returns as a result of security sampling was attributed
to the Canada Series' underweighted position in telecommunications, which
underperformed on a relative basis in the six-month period, returning 12.35%.
Key Market Conditions
For the past year and a half, the Canadian economy has been the victim of a
series of external shocks. External balances were weakened directly through
weaker export demand and indirectly through a marked fall in export prices as a
result of the pronounced decline in commodity markets. With the bottoming out of
commodity prices and improving trade activity, market sentiment gained strength
in the fourth quarter of 1998 to finish the year with a strong rally, albeit off
a low base. Evidence of economic strengthening, rising employment and a low rate
of inflation provided additional support.
Although the New Year rang in on renewed vigor, the market demonstrated
that it is not free from events in emerging markets. The January devaluation of
the Brazilian real, against the backdrop of a potential crisis in Latin America,
garnered considerable market attention. And, as the implications for global
growth were weighed, a temporary cloud was cast over the steadily stabilizing
commodity markets. While direct effects from loss of trade with Latin American
countries are limited, market concern centered on the implications of
potentially weaker economic growth in the U.S., Canada's largest trading
partner. Once initial fears had subsided, the market recovered somewhat only to
end the six-month period on a down note, largely as a result of a change in
investor sentiment toward interest rates in the U.S..
The outlook for corporate earnings weakened in February. It was reinforced
by a dip in the competitiveness of Canadian companies, reflecting a recovery in
the value of the Canadian dollar in January after the steep decline of last
year. With inflation falling faster than nominal interest rates, real cash
yields have also risen, implying another drag on future market performance.
Comparison of Change in Value of a $10,000 Investment in the
Canada WEBS Index Series vs. the MSCI Canada Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10639 10682
08/31/96 10463 10521
11/30/96 12546 12652
02/28/97 12569 12713
05/31/97 13183 13389
08/31/97 13445 13745
11/30/97 13165 13438
02/28/98 14322 14679
05/31/98 15157 15668
08/31/98 10529 10921
11/30/98 12454 12790
02/28/99 12717 13205
Average Annual Total Return
One Since
Year Inception
---------- ---------
Canada WEBS Index Series (11.14)% 8.43%
MSCI Canada Index (10.04)% 9.81%
- ------------------
* 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.
7
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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France
Performance Review
The total return of the France WEBS Index Series (the "France Series") was
9.20% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 9.72% over the same time period.
Significant Performance Factors
The France Series underperformed the benchmark by .52% during this period
as a result of expenses and security sampling, while revenue differential
contributed positively to performance.
Key Market Conditions
Paradoxically, while European Economic and Monetary Union (EMU) has brought
member countries closer together economically and monetarily, their markets have
rarely been as divergent as they are now. Equally interesting is the influence
Wall Street continues to exert on the European markets, particularly noticeable
in February's return to market volatility. In the midst of this, France, for
one, has performed better than many analysts had expected.
France has had several things going for it. Consumer confidence remains
very strong, as does consumer demand; French household consumption grew by
nearly 4.5% in 1998, GDP grew to 3.2% -- its highest rate this decade. This
strong growth rate persuaded companies to hire employees, pushing the
unemployment rate lower and boosting spending rates.
Moreover, the liquidity effect that was created by lower interest rates
made necessary by the introduction of the euro has directed cash flow into
equities. Additionally, fourth-quarter 1998 reported earnings, particularly by
banks, were stronger than expected. In fact, the French banking sector achieved
the best one-year performance relative to the MSCI Europe Index among European
banks, with the exception of Ireland and Spain. An improving domestic economy
and regulatory environment, which has facilitated merger activity, appear to be
the basis of this outperformance.
Comparison of Change in Value of a $10,000 Investment in the
France WEBS Index Series vs. the MSCI France Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10668 10701
08/31/96 10495 10371
11/30/96 11855 11766
02/28/97 12177 12210
05/31/97 11921 11975
08/31/97 12237 12194
11/30/97 12878 12848
02/28/98 14880 14933
05/31/98 17881 18027
08/31/98 16492 16500
11/30/98 18001 18079
02/28/99 18010 18103
Average Annual Total Return
One Since
Year Inception
---------- ---------
France WEBS Index Series 21.04% 21.91%
MSCI France Index 21.23% 22.12%
- ------------------
* 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.
8
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Germany
Performance Review
The total return of the Germany WEBS Index Series (the "Germany Series")
was 2.31% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 3.36% over the same time period.
Significant Performance Factors
The Germany Series underperformed the benchmark by 1.05% during this period
as a result of portfolio sampling and expenses, which more than offset the
positive effect of revenue differential. Of those factors, portfolio sampling
was by far the most significant cause of the underperformance. In particular,
the Germany Series' overweighted position in the poorly performing building and
materials sector (down 36.28% for the six-month period) caused returns to lag
the Index. Additionally, the Germany Series' overweighted position in insurance
(up 1.83%) contributed to the divergence. In this case, the disparity in
weightings as compared to the MSCI Index was not due to regulatory constraints
on optimization, but rather the result of the specific securities selected by
the Investment Advisor's optimizer.
Key Market Conditions
Caught between conflict and uncertainty, the German market lagged behind
most of Europe through most of the six-month period. While other European
Economic and Monetary Union (EMU) members benefited from the narrowing of the
spread between their respective interest rates and German rates in the approach
to EMU, the already relatively lower German rates prevented Germany from
enjoying the same gains. Moreover, the underlying situation in Germany has been
far from ideal with high wage settlements, political disputes, deflationary
concerns in Europe, and rising fears over inflation and interest rates in the
U.S. taking center stage. Germany is also more export dependant than the other
EMU members, which has exerted a negative drag on the economy during the recent
weakness in European trade. Anxieties were highlighted by a 0.4% decline in
Germany's economy in the fourth quarter, double-digit unemployment and a slump
in industrial production across EMU countries.
On the other hand, in spite of considerable market volatility, 1998 was a
year of record liquidity as healthy market activity was driven by increased
investor appetite for stocks. Both domestic and foreign investors invested a
higher volume in equity funds. For German households, accustomed to investing in
bond markets, stocks became a more significant investment vehicle. Meanwhile
foreign investors invested nearly five times as much in German equities in 1998
as in 1997. Against this background, the number of new issues broke a new
record.
Comparison of Change in Value of a $10,000 Investment in the
Germany WEBS Index Series vs. the MSCI Germany Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 9955 9984
08/31/96 10399 10451
11/30/96 10918 11034
02/28/97 11291 11476
05/31/97 12176 12376
08/31/97 12533 12778
11/30/97 12948 13240
02/28/98 14661 15107
05/31/98 17635 17924
08/31/98 15752 16102
11/30/98 16888 17413
02/28/99 16117 16643
Average Annual Total Return
One Since
Year Inception
---------- ---------
Germany WEBS Index Series 9.93% 17.43%
MSCI Germany Index 10.17% 18.71%
- ------------------
* 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.
9
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PERFORMANCE REVIEW WEBS INDEX FUND, INC.
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Hong Kong
Performance Review
The total return of the Hong Kong WEBS Index Series (the "Hong Kong
Series") was 37.06% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 43.44% over the same time period.
Significant Performance Factors
The Hong Kong Series underperformed the benchmark by 6.38% during this
period as a result of portfolio sampling, revenue differential and expenses. Of
those three factors, portfolio sampling had by far the most significant impact
on performance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize the portfolio of a WEBS Index
Series. In the case of the Hong Kong Series, the 5/50 Rule made it difficult to
achieve index exposure to several key industries. It is important to note that
the sum of all of the weightings of over 5% in the MSCI Hong Kong Index was 74%
at February 28, 1999. As a result, the Series was overweighted in several of the
poorly performing sectors such as miscellaneous materials (down 2.14% for the
six-month period) and underweighted in the multi-industry sector, which enjoyed
strong gains in the period (up 39.02%). On the other hand, several sectors in
which the Hong Kong Series was overweighted relative to the benchmark such as
real estate (up 66.14%) contributed positively to its performance.
Key Market Conditions
The Hong Kong government invested U.S. $15 billion into stocks in August
and made itself the largest or second largest minority shareholder in every one
of the Hang Seng Index's 33 stocks. Combined with five consecutive cuts in
interest rates since September, the market rallied its way to the New Year.
As the euphoria that accompanied the rate cuts began to fade and investor
caution set in, the Hong Kong market began 1999 on a down note. The market
wanted deeper interest rate cuts to help turn around an economy that shrank 7.1%
in the third quarter. At that point, the Brazilian crisis commenced, resulting
in renewed concerns that China would devalue its currency. Fears focused on the
state of China's banking sector and bad debt, estimated at approximately 25% of
outstanding loans. A devaluation of China's currency would put pressure on the
Hong Kong-U.S. dollar peg and thus limit the scope for interest rate cuts.
Moreover, perceptions of China are clearly worsening among international
investors. This is likely to impact Hong Kong via the earnings impact of
companies exposed to China, and through the weakness in China-related shares in
the Hong Kong markets
The underlying reality has been that rising unemployment (which set a
record high of 5.8% in December), lackluster domestic consumption and poor
investment have yet to reverse. Banking stocks, which had previously performed
well, led the decline in the equity market in January on interest rate fears and
negative sentiment following the bankruptcy of China's second largest finance
company, the Guangdong International Trust & Investment Corp.
Comparison of Change in Value of a $10,000 Investment in the
Hong Kong WEBS Index Series vs. the MSCI Hong Kong Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10826 10817
08/31/96 10322 10415
11/30/96 12418 12543
02/28/97 11868 12190
05/31/97 12609 13030
08/31/97 12159 12645
11/30/97 9006 9437
02/28/98 9197 9871
05/31/98 6881 7465
08/31/98 5567 6108
11/30/98 8398 9459
02/28/99 7630 8761
Average Annual Total Return
One Since
Year Inception
---------- ---------
Hong Kong WEBS Index Series (17.05)% (8.71)%
MSCI Hong Kong Index (11.24)% (4.36)%
- ------------------
* 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.
10
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Italy
Performance Review
The total return of the Italy WEBS Index Series (the "Italy Series") was
12.44% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 13.26% over the same time period.
Significant Performance Factors
The Italy Series underperformed the benchmark by .82% during this period
for three reasons: security sampling, the impact of expenses and revenue
differential. Of those three factors, security sampling had the most significant
impact on performance.
In particular, the disparity in returns was a result of performance of
specific securities in the insurance sector selected by the Investment Advisor's
optimizer.
Key Market Conditions
Driven by euphoria in the run up to European Economic and Monetary Union
and the narrowing of Italian interest rates to core German levels, the Italian
market turned in a respectable performance for the six-month period -- but not
without volatility.
From late August to mid-October, a downward slide took hold largely as a
reaction to the financial difficulties in Russia. Then, a modest recovery in the
market was fueled by enthusiasm over gains in the telecommunications sector,
merger activity in financial services, deregulation in the utilities industry
and a spate of initial placement offers (IPOs) coming to market, only to lose
ground again in February. The February correction was precipitated by concerns
over a strengthening U.S. economy and the potential for an uptick in inflation.
Toward the end of the month, the market resumed its advance, boosted by the
euro's weakness, which has bode well for earnings upgrades.
On the economic front, hopes of a strengthening economy have been put on
hold. After years of fiscal tightening and lower interest rates, the
stabilization of public finances that was to spur economic growth is not yet
imminent -- a decline in world trade is viewed as the main culprit. Estimates
indicate real 1998 GDP growth was 1.3% -- a rate below its projected level and
down slightly from 1.5% in 1997.
Comparison of Change in Value of a $10,000 Investment in the
Italy WEBS Index Series vs. the MSCI Italy Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 11226 11207
08/31/96 10411 10333
11/30/96 11272 11205
02/28/97 11151 11102
05/31/97 11438 11408
08/31/97 12845 12862
11/30/97 14256 14173
02/28/98 17250 17297
05/31/98 21242 21319
08/31/98 18968 19129
11/30/98 21255 21444
02/28/99 21328 21666
Average Annual Total Return
One Since
Year Inception
---------- ---------
Italy WEBS Index Series 23.63% 29.05%
MSCI Italy Index 25.26% 29.74%
- ------------------
* 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.
11
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- -------------------------------------------------------------------------------
Japan
Performance Review
The total return of the Japan WEBS Index Series (the "Japan Series") was
20.86% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 21.54% over the same time period.
Significant Performance Factors
The Japan Series underperformed the benchmark by .68% during this period
primarily as a result of the impact of expenses and revenue differential.
Expenses accounted for .47% of the underperformance.
Key Market Conditions
Japan has been trying to inflate its economy for the last five years with a
series of fiscal spending programs and a policy of monetary ease that has taken
interest rates down close to zero. Because of a conflict between its long and
short-term fiscal objectives, budgetary policy has been ambivalent and has not
had the effect of boosting overall spending in a sustained way. More recently,
the Government's attempts at spending its way out of recession prompted fears
that the prospect of a massive issuance of debt would not be absorbed by the
market, driving interest rates to double to more than 2%. This doubling in bond
yields together with a tremendous appreciation in the yen against the U.S.
dollar since the autumn effectively tightened monetary policy and prompted fears
that corporate profits, particularly in the financial sector, would suffer.
Interest rates retrenched in mid-February as the central bank lowered its
short-term rates, providing some renewed support for equity values and a basis
for possible economic strengthening if the economy advances from the low levels
it reached at the end of last year.
Against this background, the market demonstrated significant volatility
over the six-month period as bad news vied with good for investor attention.
Company announcements that painted a dreary picture of the economy were often
accompanied by announcements of restructuring plans. And news that firms were
unwinding cross-holdings cheered the market until concerns about the effects of
an increase in equity supply took hold. Meanwhile banking stocks were some of
the better performers over the period, driven by substantial merger activity.
Comparison of Change in Value of a $10,000 Investment in the
Japan WEBS Index Series vs. the MSCI Japan Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10548 10596
08/31/96 9689 9720
11/30/96 9527 9561
02/28/97 8060 8117
05/31/97 8959 9033
08/31/97 8529 8596
11/30/97 7169 7206
02/28/98 7366 7438
05/31/98 6453 6525
08/31/98 5682 5785
11/30/98 6752 6871
02/28/99 6867 7031
Average Annual Total Return
One Since
Year Inception
---------- ---------
Japan WEBS Index Series (6.77)% (11.89)%
MSCI Japan Index (5.48)% (11.19)%
- ------------------
* 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.
12
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Malaysia (Free)
Performance Review
The total return of the Malaysia (Free) WEBS Index Series (the "Malaysia
Series") was 47.30% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 72.07% over the same time period.
Significant Performance Factors
In a difficult environment, the Malaysia Series underperformed the
benchmark by a considerable 24.77%. The underperformance was principally the
result of the Malaysia Series using a different exchange rate in computing its
net asset value than MSCI used in computing the benchmark index. Portfolio
sampling and, to a much lesser extent, the impact of expenses and cash drag also
contributed to the underperformance.
The challenges and issues confronting the Malaysia Series included the
Malaysian Government's imposition, on September 1, 1998, of comprehensive
capital controls and the use by the Malaysia Series of a significantly different
exchange rate than that used by MSCI in computing the MSCI Malaysia (Free)
Index.
The Malaysia Series and MSCI used the same exchange rates to value the
Malaysian ringgit (4.19 ringgits per U.S. dollar) at August 31, 1998. However,
on February 26, 1999, MSCI changed the value it uses to calculate index returns
to 4.47 ringgits per U.S. dollar, while the Malaysia Series used 5.07. This
difference in exchange rates resulted in the Malaysia Series underperforming the
benchmark by approximately 18% in the period.
Most of the remaining underperformance resulted from portfolio sampling.
One of the effects of the Malaysian capital controls was to eliminate securities
lending. At the time the controls were imposed, the Malaysia Series had a
considerable portion of its portfolio on loan. In many cases, the U.S. dollar
value of loaned securities was paid to the Malaysia Series in lieu of delivery
of the securities themselves. In light of the environment, it was determined
that it would be prudent to maintain a significant cash reserve so that the
Malaysia Series would be able to pay future expenses and to make distributions
to shareholders, including the special distribution of $.1763 per share paid on
November 13, 1998. This led to a significant underweighting of certain large-cap
stocks during part of the six-month period. As a result, at a critical time the
Malaysia Series was severely underweighted in a number of stocks that performed
well during the period, and overweighted in several sectors that underperformed
such as the food and household industry, which appreciated by only 12.62% during
the period, adversely affecting performance against the benchmark. Although the
Malaysia Series had a significant cash position for most of the six-month
period, (cash accounted for 5.63% of net assets at February 28, 1999), cash drag
had only a minor (-0.18%) effect on performance in the period.
Key Market Conditions
Following a one-and-a half year descent, the market turned around in
September to enjoy exceptionally strong gains up to the last few weeks of
January. Since the implementation of capital controls in September 1998 that
were to lock in foreign investors until September 1999, liquidity increased
dramatically and provided considerable support to the market. Additionally, the
government slashed interest rates over the last four months of the year,
providing further stimulus. These actions, coupled with exchange rate stability
and stepped-up fiscal spending, led to a slight revival of consumer confidence.
More recently, however, some weakness prevailed in the market as uncertainty set
in over recent elections and the introduction of a new exit tax that superseded
the lock-in capital controls in place since September 1, 1998 and prompted
foreign selling. In general, the market has seen relatively low volumes of
trading activity since September 1998.
Meanwhile, the real economy remains weak. The large current-account surplus
(estimated at 13% of GDP in 1998) reflects falling domestic demand rather than
rising exports, despite modest real export growth over the last several months
of 1998. Restructuring continues to proceed slowly, with controls delaying
structural reform. Only in the banking sector have reforms moved ahead.
Another critical factor underpinning investor sentiment was Malaysia's loss
of benchmark status. In September, Malaysia was removed from the MSCI Europe,
Australasia and Far East (EAFE) Index and in November it was removed from the
MSCI Emerging Markets Index.
Comparison of Change in Value of a $10,000 Investment in the
Malaysia (Free) WEBS Index Series vs. the MSCI Malaysia (Free) Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
<PAGE>
WEBS MSCI
03/12/96 10000 10000
05/31/96 10548 10596
08/31/96 9689 9720
11/30/96 9527 9561
02/28/97 8060 8117
05/31/97 8959 9033
08/31/97 8529 8596
11/30/97 7169 7206
02/28/98 7366 7438
05/31/98 6453 6525
08/31/98 5682 5785
11/30/98 6752 6871
02/28/99 6867 7031
Average Annual Total Return
One Since
Year Inception
---------- ---------
Malaysia (Free) WEBS Index Series (50.22)% (37.91)%
MSCI Malaysia (Free) Index (41.68)% (34.46)%
- ------------------
* 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.
13
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Mexico (Free)
Performance Review
The total return of the Mexico (Free) WEBS Index Series (the "Mexico
Series") was 38.38% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 42.71% over the same time period.
Significant Performance Factors
The Mexico Series underperformed the benchmark by 4.33% during this period
as a result of portfolio sampling, expenses and cash drag. Of those three
factors, portfolio sampling had the most significant impact on performance,
accounting for most of the underperformance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize a WEBS Index Series' portfolio. In
the case of the Mexico Series, both the 5/50 and the Single Issuer rules
constrain the Investment Advisor's ability to optimize the portfolio. It is
important to note that the sum of all the weightings of 5% or greater in the
MSCI Mexico (Free) Index at February 28, 1999 was 79%. In addition, Telefonos de
Mexico A and L shares combined had a 31.30% weighting in the benchmark on such
date. The Investment Advisor must, therefore, underweight the Telefonos de
Mexico securities because of the Single Issuer Rule. As a result of the Single
Issuer and 5/50 rules, the Investment Advisor had to reallocate the Mexico
Series' weight in favor of smaller-cap stocks, causing it to be overweighted in
several of the poorer-performing sectors such as construction and housing (down
13.21% in the period). The Mexico Series' underperformance due to exposure to
beverages & tobacco (up 19.40%) and multi-industry (up 20.13%), however, was a
result of specific issues held by the Mexico Series in those sectors rather than
the sectors themselves. On the large-cap side, the Mexico Series was forced by
the Single Issuer Rule to underweight telecommunications, which enjoyed returns
of 50.36% for the period.
Key Market Conditions
The Mexican market, the clear leader in Latin America during the six-month
period, has soared since the Brazilian devaluation in January, and has now
surpassed Brazil as the largest market in the region. Mexico has succeeded in
decoupling itself from the regional turmoil given its strong ties to the U.S.
and improving Mexican fundamentals following the market's nearly 40% collapse in
1998.
The rebound in the Mexican market reflects renewed confidence in Mexico's
growth prospects combined with positive news on inflation. Improved inflationary
expectations have allowed interest rates to decline and the peso to stabilize.
Mexico is also only one of two countries in the region, the other being
Colombia, which has seen earnings expectations increase in the last several
months. A robust U.S. economy has largely supported Mexican corporate earnings
through increased trade activity; Mexico's exports to the U.S. account for
around 85% of its total exports.
More recently, a turnaround in oil prices in response to supply cuts, a
re-evaluation of global demand and inventories for 1998, and a surging U.S.
economy has provided additional support to the market via improved government
fiscal accounts.
Comparison of Change in Value of a $10,000 Investment in the
Mexico (Free) WEBS Index Series vs. the MSCI Mexico (Free) Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 11618 11617
08/31/96 11592 11736
11/30/96 11311 11489
02/28/97 12820 13254
05/31/97 13283 13818
08/31/97 15675 16321
11/30/97 15892 16774
02/28/98 15311 16136
05/31/98 14107 15033
08/31/98 8750 9159
11/30/98 10724 11469
02/28/99 12108 13071
<PAGE>
Average Annual Total Return
One Year Since Inception
---------- ---------------
Mexico (Free) WEBS Index Series (20.93)% 6.65%
MSCI Mexico (Free) Index (18.99)% 9.44%
- ------------------
* 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.
14
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- -------------------------------------------------------------------------------
Netherlands
Performance Review
The total return of the Netherlands WEBS Index Series (the "Netherlands
Series") was 1.45% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 4.45% over the same time period.
Significant Performance Factors
The Netherlands Series underperformed the benchmark by 3.00% during this
period as a result of portfolio sampling, revenue differential and expenses. Of
those three factors, portfolio sampling had the most significant impact on
performance, accounting for approximately two-thirds of the underperformance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize a WEBS Index Series portfolio. In
the case of the Netherlands Series, the 5/50 Rule made it difficult to achieve
index exposure to several key industries. It is important to note that the sum
of all of the weightings of 5% or greater in the MSCI Netherlands Index at
February 28, 1999, was 82%. As a result, the Investment Advisor had to
reallocate the weight of several large-cap stocks in the benchmark in favor of
smaller-cap stocks, causing the Netherlands Series to be overweighted in several
of the poorly performing sectors such as construction (down 34.77% for the
period) and data processing and reproduction (down 25.22%). Additionally,
certain securities held by the Netherlands Series, notably in the business and
public services sectors, underperformed the securities in the same industry in
the benchmark, and this contributed to relative underperformance.
Key Market Conditions
The Dutch economy, dragged down by weaker export demand and slowing
investment growth, could no longer maintain its distinction as being stronger
than the European average in the six-month period.
Weak corporate earnings were the key focus in the Dutch market over the
period, reflecting the slowdown in economic activity and the challenges
presented by exposure to emerging markets, the slowdown in European demand and a
difficult pricing environment. Some stability in corporate earnings
expectations, however, is becoming apparent as a result of a weak euro,
providing some improvement in investor sentiment.
Growth and defensive sectors outperformed in this difficult economic
environment, with telecommunications and technology enjoying strong gains.
Similarly, the insurance and retail sectors have been buoyed by the recent wave
of merger and acquisition speculation. While cross-border mergers have been
relatively few in numbers, the potential for further consolidation is believed
to exist.
Comparison of Change in Value of a $10,000 Investment in the
Netherlands WEBS Index Series vs. the MSCI Netherlands Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 11113 10941
08/31/96 11118 10974
11/30/96 12259 12255
02/28/97 12934 12949
05/31/97 13825 13960
08/31/97 14237 14680
11/30/97 14728 15146
02/28/98 16811 17273
05/31/98 18985 19399
08/31/98 16716 16824
11/30/98 17306 17619
02/28/99 16952 17573
Average Annual Total Return
One Since
Year Inception
---------- ---------
Netherlands Webs Index Series 0.88% 19.46%
MSCI Netherlands Index 1.74% 20.91%
- ------------------
* 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.
15
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Singapore (Free)
Performance Review
The total return of the Singapore (Free) WEBS Index Series (the "Singapore
Series") was 77.84% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 68.81% over the same time period.
Significant Performance Factors
The Singapore Series outperformed the benchmark by 9.03% during this period
as a result of portfolio sampling. While the impact of expenses and cash drag
mitigated returns, portfolio sampling accounted for 10.04% of the
outperformance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to track the MSCI Index. In the case of the
Singapore Series, the 5/50 rule made it difficult to achieve index exposure to
several key industries. It is important to note that sum of the weightings of 5%
or greater in the MSCI Singapore (Free) Index at February 28, 1999 was 72%. As a
result, the Investment Advisor had to reallocate the weight of several large-cap
stocks in favor of smaller-cap stocks.
The performance differential between the Singapore Series and the benchmark
index was essentially driven by security-specific issues and not sector-related
concerns. When viewed in the context of a very robust market, the total of the
small misweights in the portfolio accounted for the wide divergence between the
Singapore Series and benchmark index returns.
Key Market Conditions
After hitting a ten-year low in early September, the Singapore market began
a powerful recovery that continued through mid-January. At this point the market
readjusted to reflect the potential implications of Brazil's currency
devaluation and a meltdown of the Latin American markets.
The market's rebound since its September low can be attributed largely to a
supportive interest rate environment; interest rates have been cut six times
since September, falling from 7.5% to 5.0%. Against this background, banks and
real estate companies performed exceptionally well and lifted the overall market
higher because of their heavy representation in the Index. Positive changes on
the regulatory front also contributed to higher ratings in the banking sector.
Meanwhile, the property sector received a boost as demand increased due to sharp
price cuts and falling interest rates.
On the other hand, another index heavyweight -- the telecommunications
sector -- performed poorly largely as a result of a slowdown in international
traffic growth. International telecommunications traffic growth is highly
correlated with GDP growth and has consequently suffered from the economic
slowdown. The threat of increased competition in basic services also had a
negative impact on companies' share prices.
Comparison of Change in Value of a $10,000 Investment in the
Singapore (Free) WEBS Index Series vs. the MSCI Singapore (Free) Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 9714 9692
08/31/96 9327 9196
11/30/96 9548 9358
02/28/97 9720 9670
05/31/97 9073 8986
08/31/97 7137 6961
11/30/97 6066 6223
02/28/98 5687 5978
05/31/98 4154 4382
08/31/98 2763 3108
11/30/98 5191 5517
02/28/99 4914 5246
Average Annual Total Return
One Since
Year Inception
---------- ---------
Singapore (Free) WEBS Index Series (13.59)% (21.28)%
MSCI Singapore (Free) Index (12.24)% (19.52)%
- ------------------
* 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.
16
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Spain
Performance Review
The total return of the Spain WEBS Index Series (the "Spain Series") was
21.89% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 21.28% over the same time period.
Significant Performance Factors
The Spain Series outperformed the benchmark by .61% during this period
primarily as a result of portfolio sampling and revenue differential. These
factors more than offset the negative effect of expenses on performance. In
general, Spanish companies tend to pay dividends in the second half of the Spain
Series' fiscal year.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize the portfolio of a WEBS Index
Series. In the case of the Spain Series, the 5/50 Rule made it difficult to
achieve index levels of exposure to several key industries, forcing the
portfolio to underweight certain stocks and to overweight other stocks in
different industries. It is important to note that, if all the benchmark
index-stock weightings of over 5% were summed, their total weight would equal
72%. Although the industry weighting of the Spain Series differed from those of
the benchmark in several respects, its overweighted position in insurance, which
returned 51.72% over the six-month period, was the principal cause of the
outperformance from portfolio sampling.
Key Market Conditions
The performance of the Spanish market exceeded European averages in the
six-month period as key variables surpassed expectations. Among the factors
fueling market optimism were a sharp reduction in interest rates, earnings
upgrades and a focus on the creation of shareholder value.
Spain's entry into the European Economic and Monetary Union demanded
certain economic and fiscal targets be met. As a result, a steady drop in
inflation caused a sharp reduction in Spanish interest rates toward German
levels. Favorable effects have been manifested through lower financing charges
for companies, and increased investment and consumption.
Consumers, encouraged by low interest rates in addition to rising
employment, continued to spend throughout the six-month period. As company
profits advanced, earnings forecasts were upgraded. In fact, healthy consumption
figures drove GDP up by 3.8% last year -- the highest growth rate of the 1990s.
We should, however, also note that worsening export growth prevented economic
growth rates from increasing any further, mainly as a result of the
deteriorating situation in Latin America, which is a major trading region for
Spain. On a related note, many of Spain's largest companies are heavily invested
in Latin America -- a factor that prompted a selloff in the Spanish market last
autumn as fears of a meltdown in Latin America's economy were reignited.
An increased focus on value creation, specifically growing shareholder
return on equity, also had an impact on company earnings and investor optimism.
The main vehicles used to create shareholder value were mergers and takeovers,
corporate restructuring and diversification, and share buybacks.
Comparison of Change in Value of a $10,000 Investment in the
Spain WEBS Index Series vs. the MSCI Spain Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 10640 10747
08/31/96 10845 10917
11/30/96 12361 12508
02/28/97 12893 13066
05/31/97 15229 15497
08/31/97 15092 15379
11/30/97 16471 16845
02/28/98 20478 21053
05/31/98 23918 24762
08/31/98 20009 20589
11/30/98 24448 25084
02/28/99 24389 24970
<PAGE>
Average Annual Total Return
One Since
Year Inception
---------- ---------
Spain WEBS Index Series 19.10% 35.01%
MSCI Spain Index 18.60% 36.09%
- ------------------
* 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.
17
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Sweden
Performance Review
The total return of the Sweden WEBS Index Series (the "Sweden Series") was
6.95% for the six-month period ended February 28, 1999, while the corresponding
MSCI Index returned 8.23% over the same time period.
Significant Performance Factors
The Sweden Series underperformed the benchmark by 1.28% during this period
primarily as a result of the impact of expenses and revenue differential.
Key Market Conditions
Sweden's stock market continued to demonstrate significant volatility
throughout the period, reflecting among other things, investor focus on both
negative and positive factors. On one side: deteriorating European economic
activity, intensifying price pressure and recent global bond market weakness. On
the other: increasing optimism about the U.S. economic outlook, heightened
European merger activity, further monetary easing and several positive earnings
developments for Swedish companies.
Earnings surprises came mainly from companies in the consumer goods, real
estate, media and defense industries -- Electrolux, Skandia and Astra were some
of the notable companies that announced results that exceeded expectations.
Results in the cyclical sectors --engineering, paper & pulp, metals & minerals
and chemicals -- were generally weaker than expected.
While Swedish cyclicals were hard hit in 1998, a renewed interest in
cyclical exporters has taken root more recently as these companies stand to
benefit from the strong U.S. dollar and economy, contributing to the market's
overall solid performance this year. Among the best performing sectors were the
heavy machinery and forestry sectors. The cyclical sectors are heavily
represented in the MSCI Sweden Index, accounting for a large part of its
outperformance relative to many other European markets so far in 1999.
Swedish consumer sentiment has remained mostly strong, boosted by the
loosening of monetary policy since 1996, the rapid pace of employment growth and
relatively strong gains in real incomes which accompanied the export boom. As a
result, we have seen a shift in GDP growth away from export-dependent industries
to those that rely principally on domestic demand.
Comparison of Change in Value of a $10,000 Investment in the
Sweden WEBS Index Series vs. the MSCI Sweden Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS Index
03/12/96 10000 10000
05/31/96 10976 10805
08/31/96 11413 11200
11/30/96 13163 12989
02/28/97 13357 13344
05/31/97 13840 13806
08/31/97 14847 14856
11/30/97 15236 15310
02/28/98 16353 16596
05/31/98 19050 19206
08/31/98 15659 16093
11/30/98 16477 17114
02/28/99 16748 17416
Average Annual Total Return
One Since
Year Inception
---------- ---------
Sweden WEBS Index Series 2.42% 18.97%
MSCI Sweden Index 4.94% 20.54%
- ------------------
* 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.
18
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Switzerland
Performance Review
The total return of the Switzerland WEBS Index Series (the "Switzerland
Series") was 3.47% for the six-month period ended February 28, 1999, while the
corresponding MSCI Index returned 7.03% over the same time period.
Significant Performance Factors
The Switzerland Series underperformed the benchmark by 3.56% during this
period as a result of portfolio sampling, expenses and cash drag. Of those three
factors, portfolio sampling had by far the most significant negative impact on
performance.
As stated in the introduction, regulatory restrictions can adversely affect
the Investment Advisor's ability to optimize a WEBS Index Series' portfolio. In
the case of the Switzerland Series, the 5/50 Rule makes it difficult to optimize
the portfolio. It is important to note that the sum of all of the weightings of
5% or greater in the MSCI Switzerland Index is 89%. In fact, five companies in
the healthcare, banking, and food and household sectors represent nearly 80% of
the benchmark. As a result, the Investment Advisor had to reallocate part of the
weight of several large-cap stocks in favor of smaller-cap stocks in different
industries, causing the Switzerland Series to be overweighted in several sectors
that performed poorly in the six-month period such as chemicals (down 21.21%)
and merchandising (down 27.43%). On the large-cap side, the Switzerland Series
was forced to underweight health and personal care, which enjoyed returns of
14.32% for the period.
Key Market Conditions
Like other countries in Europe, Switzerland's main economic indicators have
been pointing to a swift and sharp slowdown in the economy. Yet, as was the case
in most of Europe, consumer sentiment remained positive and was the driving
force behind economic expansion in the six-month period. Strengthening domestic
demand partially offset the slowdown in export growth, which resulted from the
financial crisis in Asia and other emerging markets; retail sales grew faster in
1998 than at any time in the past decade.
Despite the fact that Switzerland is not a member of the European Union,
the performance of its market mirrored much of Europe, continuing downward from
mid-July into October, then up again on "euro-euphoria" with rallies across
euroland markets. Shortly after the start of the year, the optimism dissipated
with the advent of the Brazilian currency devaluation and the release of the
first key data from leading industrial companies, which fell short of analyst
expectations. By the end of February 1999, the rally staged by many cyclical
stocks has somewhat pulled the market back upwards.
Comparison of Change in Value of a $10,000 Investment in the
Switzerland WEBS Index Series vs. the MSCI Switzerland Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 9751 9617
08/31/96 10260 10319
11/30/96 10093 10125
02/28/97 10210 10347
05/31/97 11879 12050
08/31/97 11972 11998
11/30/97 12927 13557
02/28/98 15124 16271
05/31/98 16530 17244
08/31/98 14515 15609
11/30/98 15570 17129
02/28/99 15019 16706
Average Annual Total Return
One Since
Year Inception
---------- ---------
Switzerland WEBS Index Series (0.69)% 14.68%
MSCI Switzerland Index 2.68% 18.86%
- ------------------
* 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.
19
<PAGE>
PERFORMANCE REVIEW WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
United Kingdom
Performance Review
The total return of the United Kingdom WEBS Index Series (the "United
Kingdom Series") was 12.18% for the six-month period ended February 28, 1999,
while the corresponding MSCI Index returned 13.31% over the same time period.
Significant Performance Factors
The United Kingdom Series underperformed the benchmark by 1.13% during this
period as a result of the impact of expenses, portfolio sampling and cash drag.
While the most significant contributor to the underperformance was expenses, the
United Kingdom Series' underweighted position in the business and public
services sector, which returned 21.13% over the period, also caused returns to
lag the benchmark index.
Key Market Conditions
The UK market, the largest in the MSCI Europe Australasia and Far East
(EAFE) Index, rose 4.82% in February to end at its highest level ever. Shares
soared on a combination of encouraging corporate results and optimism on
interest rate cuts. The heavyweight banking sector, in particular, was helped by
strong earnings and expectations of further consolidation. Also helping improve
sentiment was the decision by the government to step up its campaign to join the
European Economic and Monetary Union (EMU).
In the period leading up to February's new high, interest rate cuts at home
and in the U.S., an important trading partner, boosted the market, especially
interest-sensitive stocks such as banks. Sentiment was also improved by a wave
of mergers, which reached a record level -- almost 7% of the small-and mid-cap
sectors were bid for in 1998. Additionally, companies continued to focus on the
creation of shareholder value through share buy-back programs, effectively
pumping more money back into the market. Meanwhile, the defensive qualities of
the market were demonstrated in the autumn correction as the UK market fell 25%
versus 35% for the rest of Europe.
Much discussion has also centered on the role the strong pound has and will
play in depressing economic activity. But so far, the UK economy has proved more
resilient than expected by many, with buoyancy evidenced in several important
areas such as business, services and finance (which accounts for nearly 25% of
its GDP) and transport, storage and communication (which accounts for almost 10%
of its GDP).
Comparison of Change in Value of a $10,000 Investment in the
United Kingdom WEBS Index Series vs. the MSCI United Kingdom Index
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
WEBS MSCI
03/12/96 10000 10000
05/31/96 9751 9617
08/31/96 10260 10319
11/30/96 10093 10125
02/28/97 10210 10347
05/31/97 11879 12050
08/31/97 11972 11998
11/30/97 12927 13557
02/28/98 15124 16271
05/31/98 16530 17244
08/31/98 14515 15609
11/30/98 15570 17129
02/28/99 15019 16706
Average Annual Total Return
One Since
Year Inception
---------- ---------
United Kingdom WEBS Index Series 6.59% 23.20%
MSCI United Kingdom Index 6.28% 24.06%
- ------------------
* 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.
20
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Australia WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - Basket 99.78%
Appliances & Household
Durables 0.50%
153,900 Email Limited $ 258,044
-------------
Bank 16.13%
351,000 National Australia Bank Limited 5,852,521
378,000 Westpac Banking Corporation Limited 2,499,255
-------------
8,351,776
-------------
Beverages & Tobacco 5.87%
278,100 Coca-Cola Amatil Limited 1,095,264
677,700 Foster's Brewing Group Limited 1,944,335
-------------
3,039,599
-------------
Broadcasting & Publishing 11.45%
542,700 News Corporation Limited 3,808,289
324,000 News Corporation Limited - Preferred 2,120,690
-------------
5,928,979
-------------
Building Materials &
Components 5.27%
450,900 Boral Limited 649,621
372,600 CSR Limited 897,772
175,500 James Hardie Industries Limited 386,898
394,200 Pioneer International Limited 794,370
-------------
2,728,661
-------------
Business & Public Services 4.12%
83,700 Brambles Industries Limited 2,131,086
-------------
Chemicals 1.15%
110,700 Orica Limited 594,642
-------------
Construction & Housing 0.31%
48,600 Leighton Holdings Limited 159,957
-------------
Energy Sources 8.18%
486,000 Broken Hill Proprietary Company
Limited 3,648,835
210,600 Santos Limited 583,290
-------------
4,232,125
-------------
Food & Household Products 0.87%
194,400 Burns Philp & Company Limited* 25,352
461,700 Goodman Fielder Limited 427,206
-------------
452,558
-------------
Forest Products & Paper 2.15%
224,100 Amcor Limited 1,114,999
-------------
Gold Mines 1.12%
108,000 Newcrest Mining Limited* 161,634
486,000 Normandy Mining Limited 416,492
-------------
578,126
-------------
Insurance 7.49%
297,000 AMP Limited* 3,363,024
189,000 GIO Australia Holdings Limited 513,372
-------------
3,876,396
-------------
<PAGE>
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Leisure & Tourism 2.07%
256,500 Crown Limited* $ 125,836
135,000 TABCORP Holdings Limited 947,335
-------------
1,073,171
-------------
Merchandising 3.87%
375,300 Coles Myer Limited 2,004,327
-------------
Metals - Non Ferrous 6.06%
577,800 Mount Isa Mines Holdings Limited 251,170
288,900 North Limited 430,577
102,600 Rio Tinto Limited 1,282,830
378,000 WMC Limited 1,173,690
-------------
3,138,267
-------------
Multi-Industry 4.84%
102,600 Howard Smith Limited 764,575
372,600 Pacific Dunlop Limited 650,191
283,500 Southcorp Limited 1,091,532
-------------
2,506,298
-------------
Real Estate 8.15%
348,300 General Property Trust 583,995
151,200 Lend Lease Corporation Limited 1,877,904
261,900 Stockland Trust Group 618,032
556,200 Westfield Trust 1,139,821
-------------
4,219,752
-------------
Telecommunications 9.15%
927,828 Telstra Corporation Limited 4,733,905
-------------
Utilities - Electrical & Gas 1.03%
81,000 Australian Gas Light Company Limited 531,128
-------------
TOTAL COMMON STOCK - BASKET
(Cost $55,368,196) 51,653,796
-------------
COMMON STOCK -
NON-BASKET 0.22%
Gold Mines 0.00%
64,400 RGC Gold Unsecured Notes (Guns)* 0
-------------
Miscellaneous Materials &
Components 0.22%
42,222 Westralian Sands Limited 112,745
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $193,210) 112,745
-------------
To al Investments
(Cost $55,561,406)+ 100.00% $51,766,541
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $55,701,426. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows:
Excess of value over tax cost $ 4,965,926
Excess of tax cost over value (8,900,811)
------------
$(3,934,885)
=============
See accompanying notes to financial statements.
21
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Austria WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----------
COMMON STOCK - BASKET 100.00%
Banking 21.97%
37,700 Bank Austria AG $ 2,027,972
-----------
Beverages & Tobacco 6.28%
5,680 Austria Tabakwerke AG 419,588
3,350 BBAG Oesterreichische Brau
Beteiligungs AG 159,646
-----------
579,234
-----------
Building Materials &
Components 4.90%
2,290 Wienerberger Baustoffindustrie AG 452,515
-----------
Business & Public Services 4.66%
10,050 Flughafen Wien AG 430,284
-----------
Chemicals 2.68%
3,961 Lenzing AG* 247,424
-----------
Constructionction & Housing 4.64%
3,607 Bau Holding AG 137,602
1,080 Bau Holding AG Vorzug 27,862
8,430 Universale-Bau AG 263,105
-----------
428,569
-----------
Electronic Components,
Instruments 0.61%
1,720 Austria Mikro Systeme
International AG 56,552
-----------
Energy Sources 8.74%
8,750 OMV AG 806,886
-----------
Insurance 4.93%
1,880 Generali Holding Vienna AG 415,870
260 Generali Holding Vienna AG
Vorzug 39,386
-----------
455,256
-----------
NO. OF
SHARES SECURITY VALUE
- ------ -------- -----------
Machinery & Engineering 8.19%
1,530 BWT AG $ 319,971
5,630 VA Technologie AG 435,735
-----------
755,706
-----------
Metals - Steel 3.21%
6,180 Boehler-Uddeholm AG 296,208
-----------
Miscellaneous Materials &
Commodities 6.48%
8,250 Mayr-Melnhof Karton AG 392,978
7,440 RHI AG 205,580
-----------
598,558
-----------
Transportation - Airlines 4.78%
13,410 Austrian Airlines AG 441,646
-----------
Utilities - Electrical & Gas 17.93%
10,330 Oesterreichische
Elektrizitaetswirtschafts AG -
Class A 1,655,685
-----------
TOTAL COMMON STOCK - BASKET
(Cost $9,956,426) 9,232,495
-----------
Total Investments+
(Cost $9,956,426) 100.00% 9,232,495
======= ===========
- ----------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $10,450,921. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 428,544
Excess of tax cost over value (1,646,970)
-----------
$(1,218,426)
===========
See accompanying notes to financial statements.
22
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Belgium WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------ -------- -----------
COMMON STOCK - BASKET 100.00%
Automobiles 3.96%
1,300 D'Ieteren SA $ 605,109
-----------
Banking 13.50%
26,860 KBC Bancassurance Holding 2,065,564
-----------
Building Materials &
Components 3.86%
6,720 Cimenteries CBR
Cementbedrijven 591,286
-----------
Chemicals 4.45%
9,900 Solvay SA 680,353
-----------
Electronic Components,
Instruments 2.93%
2,580 Barco NV 448,925
-----------
Energy Sources 9.17%
5,500 Electrafina SA* 654,510
1,620 PetroFina SA 749,079
-----------
1,403,589
-----------
Health & Personal Care 4.75%
14,000 UCB SA 726,965
-----------
Industrial Components 2.09%
780 Bekaert NV 320,251
-----------
Insurance 16.65%
70,000 Fortis B 2,547,453
-----------
Merchandising 8.67%
820 Colruyt NV 615,286
7,400 Delhaize-Le Lion SA 711,640
-----------
1,326,926
-----------
NO. OF
SHARES SECURITY VALUE
------ -------- -----------
Metals - Non Ferrous 2.04%
9,580 Union Miniere SA $ 312,143
-----------
Miscellaneous Materials &
Commodities 2.76%
4,180 Glaverbel SA 422,171
-----------
Multi-Industry 4.76%
3,900 Groupe Bruxelles Lambert SA 727,844
-----------
Transportation - Shipping 1.48%
6,560 Compagnie Maritime Belge SA
(CMB) 225,770
-----------
Utilities - Electrical & Gas 18.93%
4,260 Electrabel SA 1,777,124
6,360 Tractebel 1,119,219
-----------
2,896,343
-----------
TOTAL COMMON STOCK - BASKET
(Cost $14,748,459) 15,300,692
-----------
Total Investments
(Cost $14,748,459)+ 100.00% $15,300,692
======= ===========
- ----------
* Non-index security.
+ Aggregate cost for Federal income tax purposes is $14,957,063. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 1,643,040
Excess of tax cost over value (1,299,411)
-----------
$ 343,629
===========
See accompanying notes to financial statements.
23
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Canada WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Common Stock - Basket 100.00%
Aerospace & Military Technology 3.47%
36,400 Bombardier Incorporated -
Class B $ 534,124
-------------
Banking 16.85%
15,600 Bank Of Montreal 643,326
27,300 Bank Of Nova Scotia 563,362
23,400 Canadian Imperial Bank of
Commerce 551,090
10,400 National Bank Of Canada 144,684
14,300 Royal Bank Of Canada 691,553
-------------
2,594,015
-------------
Beverages & Tobacco 4.78%
5,200 Molson Company Limited -
Class A 74,064
14,300 Seagram Company Limited 662,186
-------------
736,250
-------------
Broadcasting & Publishing 6.50%
3,900 Quebecor Incorporated - Class B 85,260
10,400 Rogers Communications
Incorporated - Class B* 163,975
29,900 Thomson Corporation 751,709
-------------
1,000,944
-------------
Business & Public Services 1.65%
5,200 Extendicare Incorporated -
Class A* 17,913
20,800 Laidlaw Incorporated 159,841
3,900 Loewen Group Incorporated 7,363
6,500 Moore Corporation Limited 68,251
-------------
253,368
-------------
Chemicals 2.17%
7,800 Agrium Incorporated 62,007
11,700 Methanex Corporation* 49,993
3,900 Potash Corporation Of
Saskatchewan Incorporated 221,289
-------------
333,289
-------------
Electrical & Electronics 14.62%
11,700 Newbridge Networks Corporation* 284,071
33,800 Northern Telecom Limited 1,965,975
-------------
2,250,046
-------------
Energy Sources 10.35%
6,500 Alberta Energy Company Limited 139,301
6,500 Anderson Exploration Limited* 52,534
5,200 Canadian Natural Resources
Limited* 71,825
7,800 Canadian Occidental Petroleum
Limited 73,634
5,200 Enbridge Incorporated 244,584
13,000 Gulf Canada Resources Limited* 30,918
27,300 Imperial Oil Limited 421,391
16,900 Petro-Canada 181,371
7,800 Poco Petroleums Limited* 48,314
6,500 Ranger Oil Limited* 18,172
6,500 Renaissance Energy Limited* 57,271
5,200 Suncor Energy Incorporated 152,090
6,500 Talisman Energy Incorporated* 102,054
-------------
1,593,459
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Financial Services 1.32%
10,400 Power Corporation of Canada $ 203,935
-------------
Forest Products & Paper 1.42%
11,700 Abitibi Consolidated Incorporated 93,398
7,800 Domtar Incorporated 46,505
7,800 MacMillan Bloedel Limited 78,026
-------------
217,929
-------------
Gold Mines 3.44%
19,500 Barrick Gold Corporation 344,270
3,900 Cambior Incorporated 15,373
15,600 Placer Dome Incorporated 170,520
-------------
530,163
-------------
Health & Personal Care 0.56%
3,900 MDS Incorporated - Class B 85,777
-------------
Industrial Components 1.51%
3,900 Magna International
Incorporated - Class A 232,527
-------------
Insurance 0.59%
260 Fairfax Financial Holdings Limited* 91,297
-------------
Machinery & Engineering 0.33%
2,600 United Dominion Industries Limited 50,209
-------------
Merchandising 3.15%
5,200 Canadian Tire Corporation -
Class A 132,282
7,800 George Weston Limited 315,204
3,900 Hudson's Bay Company 37,721
-------------
485,207
-------------
Metals - Non Ferrous 5.55%
13,000 Alcan Aluminium Limited 315,204
3,900 Cameco Corporation 83,064
5,200 Cominco Limited 71,481
10,400 Inco Limited 130,215
15,600 Noranda Incorporated 167,936
3,900 Rio Algom Limited 40,563
6,500 Teck Corporation - Class B 45,860
-------------
854,323
-------------
Metals - Steel 0.42%
5,200 Dofasco Incorporated 65,452
-------------
Multi-Industry 6.81%
19,500 Canadian Pacific Limited 360,417
9,750 EdperBrascan Corporation -
Class A 117,878
26,000 Imasco Limited 570,123
-------------
1,048,418
-------------
Telecommunications 10.31%
33,800 BCE Incorporated 1,368,122
6,240 BCT Telus Communications
Incorporated 173,207
1,768 BCT Telus Communications
Incorporated - Class A * 46,147
-------------
1,587,476
-------------
See accompanying notes to financial statements.
24
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Canada WEBS Index Series (concluded)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Utilities - Electrical & Gas 4.20%
11,700 Transalta Corporation $ 189,510
24,024 Transcanada Pipelines Limited 329,445
6,500 Westcoast Energy Incorporated 127,459
-------------
646,414
-------------
TOTAL COMMON STOCK - BASKET
(Cost $15,341,594) 15,394,622
-------------
Total Investments
(Cost $15,341,594)+ 100.00% $ 15,394,622
======= =============
- ------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $15,356,650.
The aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 1,966,256
Excess of tax cost over value (1,928,284)
-------------
$ 37,972
=============
See accompanying notes to financial statements.
25
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
France WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 99.98%
Aerospace & Military Technology 0.63%
10,596 Thomson CSF $ 314,073
-------------
Automobiles 1.15%
4,272 PSA Peugeot Citroen 569,813
-------------
Banking 7.29%
17,892 Banque Nationale de Paris 1,427,966
13,284 Compagnie Financiere de Paribas 1,144,783
7,200 Societe Generale - Class A 1,056,789
-------------
3,629,538
-------------
Beverages & Tobacco 1.25%
5,508 Pernod Ricard 325,917
5,004 Societe Nationale D'Exploitation 296,644
-------------
622,561
-------------
Broadcasting & Publishing 1.72%
2,736 Canal Plus 854,822
-------------
Building Materials &
Components 3.87%
7,200 Compagnie de Saint Gobain 1,119,232
8,508 Lafarge SA 807,919
-------------
1,927,151
-------------
Business & Public Services 13.74%
5,400 Cap Gemini SA 933,682
2,544 Sodexho Alliance SA 416,687
10,200 Suez Lyonnaise des Eaux 2,039,082
13,224 Vivendi 3,447,871
-------------
6,837,322
-------------
Chemicals 1.71%
5,700 Air Liquide 849,766
-------------
Construction & Housing 1.38%
2,220 Bouygues SA 552,008
1,500 Groupe GTM 135,030
-------------
687,038
-------------
Electrical & Electronics 5.42%
11,700 Alcatel 1,258,741
2,388 Legrand SA 490,493
420 Sagem SA 242,527
11,976 Schneider SA 703,380
-------------
2,695,141
-------------
Energy Equipment & Services 0.04%
480 Compagnie Generale de
Geophysique SA* 19,128
-------------
Energy Sources 7.54%
19,200 Elf Aquitaine SA 2,002,393
16,800 Total SA - Class B 1,752,094
-------------
3,754,487
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Financial Services 0.45%
1,332 CPR SA $ 53,095
348 Societe Eurafrance SA 172,489
-------------
225,584
-------------
Food & Household Products 3.52%
2,280 Eridania Beghin-Say SA 330,395
5,700 Groupe Danone 1,419,822
-------------
1,750,217
-------------
Health & Personal Care 12.63%
924 Essilor International SA 353,001
5,280 L'OREAL 3,245,985
26,400 Rhone-Poulenc SA 1,209,999
8,400 Sanofi SA 1,478,214
-------------
6,287,199
-------------
Industrial Components 2.16%
10,800 Michelin - Class B 481,365
7,092 Valeo SA 592,875
-------------
1,074,240
-------------
Insurance 5.50%
21,000 AXA 2,738,800
-------------
Leisure & Tourism 2.16%
3,300 Accor SA 768,023
1,236 Club Mediterranee SA* 118,185
720 Pathe SA 188,910
-------------
1,075,118
-------------
Machinery & Engineering 0.68%
1,596 Compagnie Francaise d'Etudes
de Construction Technip 143,672
2,760 Sidel SA 194,219
-------------
337,891
-------------
Merchandising 10.05%
3,000 Carrefour SA 2,137,423
3,600 Casino Guichard Perrachon SA 330,790
8,700 Pinault-Printemps-Redoute SA 1,443,139
1,716 Promodes 1,093,564
-------------
5,004,916
-------------
Metals - Steel 0.55%
22,500 Usinor SA 276,152
-------------
Miscellaneous Materials &
Commodities 0.35%
1,452 Imetal SA 172,153
-------------
Multi-Industry 0.71%
9,228 Lagardere S.C.A. 354,568
-------------
Real Estate 0.56%
1,620 Simco SA 144,232
1,116 Union du Credit-Bail Immobilier 137,217
-------------
281,449
-------------
See accompanying notes to financial statements.
26
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
France WEBS Index Series (concluded)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Recreation - Other Consumer
Goods 3.37%
6,600 LVMH (Louis Vuitton Moet
Hennessy) $ 1,405,627
5,232 Societe BIC SA 269,954
-------------
1,675,581
-------------
Telecommunications 11.26%
59,904 France Telecom SA 5,606,278
-------------
Utilities - Electrical & Gas 0.29%
1,824 Primagaz Cie 146,175
-------------
TOTAL COMMON STOCK - BASKET
(Cost $44,976,139) 49,767,161
-------------
COMMON STOCK -
NON-BASKET 0.02%
Financial Services 0.02%
17 Societe Eurafrance SA 8,426
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $8,941) 8,426
-------------
Total Investments
(Cost $44,985,080)+ 100.00% $ 49,775,587
======= =============
- ------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $45,011,587.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 6,991,474
Excess of tax cost over value (2,227,474)
-------------
$ 4,764,000
=============
See accompanying notes to financial statements.
27
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Germany WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 100.00%
Automobiles 11.90%
81,200 DaimlerChrysler AG* $ 7,590,410
35,000 Volkswagen AG 2,263,121
11,900 Volkswagen AG Preferred 467,686
-------------
10,321,217
-------------
Banking 9.48%
52,150 Bayerische HypoVereinsbank AG 2,954,123
57,400 Deutsche Bank AG 2,996,311
65,100 Dresdner Bank AG 2,265,504
-------------
8,215,938
-------------
Building Materials &
Components 0.83%
700 Buderus AG 243,603
6,930 Heidelberger Zement AG 471,682
-------------
715,285
-------------
Business & Public Services 6.04%
8,400 SAP AG 2,858,680
6,300 SAP AG Vorzug 2,379,159
-------------
5,237,839
-------------
Chemicals 6.85%
78,400 BASF AG 2,715,438
91,000 Bayer AG 3,221,778
-------------
5,937,216
-------------
Construction & Housing 0.44%
5,600 Bilfinger & Berger Bau AG 105,126
8,400 Hochtief AG 277,569
-------------
382,695
-------------
Electrical & Electronics 4.38%
60,200 Siemens AG 3,800,046
-------------
Health & Personal Care 3.14%
11,200 Beiersdorf AG 829,939
23,100 Merck KGAA 811,496
8,400 Schering AG 1,079,843
-------------
2,721,278
-------------
Industrial Components 0.38%
13,300 Continental AG 331,438
-------------
Insurance 16.09%
30,800 Allianz AG 9,335,587
7,000 Amb Aachener & Muenchener
Beteiligungs AG 929,839
3,500 Axa Colonia Konzern AG 311,227
8,400 Muenchener Rueckversicherung
AG 1,694,920
8,400 Muenchener Rueckversicherung
AG (NEW)* 1,675,555
-------------
13,947,128
-------------
Machinery & Engineering 1.51%
1,400 Linde AG 786,905
1,400 MAN AG 381,772
700 MAN AG Vorzug 136,018
-------------
1,304,695
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Merchandising 3.03%
4,200 Douglas Holding AG $ 200,108
1,400 Karstadt AG 527,934
26,880 Metro AG 1,900,377
-------------
2,628,419
-------------
Metals - Steel 0.98%
4,200 Thyssen AG 850,688
-------------
Miscellaneous Materials &
Commodities 0.15%
2,800 SGL Carbon AG 132,176
-------------
Multi-Industry 1.17%
2,100 Preussag AG 1,016,676
-------------
Recreation - Other Consumer
Goods 0.77%
7,000 Adidas-Salomon AG 670,099
-------------
Telecommunications 22.70%
273,266 Deutsche Telekom AG 12,539,679
53,200 Mannesmann AG 7,142,703
-------------
19,682,382
-------------
Transportation - Airlines 1.37%
53,900 Deutsche Lufthansa AG 1,186,391
-------------
Utilities - Electrical & Gas 8.79%
39,900 RWE AG 1,738,953
19,950 RWE AG-Preferred 580,381
64,400 VEBA AG 3,435,949
3,500 Viag AG 1,868,516
-------------
7,623,799
-------------
TOTAL COMMON STOCK - BASKET
(Cost $86,823,578) 86,705,405
-------------
COMMON STOCK -
NON-BASKET 0.00%
Telecommunications 0.00%
3 Deutsche Telekom AG 138
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $131) 138
-------------
Total Investments
(Cost $86,823,709)+ 100.00% $ 86,705,543
======= =============
- ------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $86,823,709.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 8,295,387
Excess of tax cost over value (8,413,553)
-------------
$ (118,166)
==============
See accompanying notes to financial statements.
28
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Hong Kong WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 100.00%
Aerospace & Military Technology 1.19%
489,600 Hong Kong Aircraft Engineering
Company Limited $ 789,902
-------------
Banking 12.25%
1,468,800 Bank Of East Asia Limited 2,066,383
489,600 Hang Seng Bank Limited 3,981,104
714,000 Wing Lung Bank 2,101,138
-------------
8,148,625
-------------
Broadcasting & Publishing 5.84%
5,304,000 Oriental Press Group 527,128
4,284,000 South China Morning Post
Holdings Limited 1,838,496
510,000 Television Broadcasts Limited 1,517,269
-------------
3,882,893
-------------
Electrical & Electronics 2.23%
561,000 Johnson Electric Holdings
Limited 1,484,357
-------------
Electronic Components,
Instruments 1.03%
3,570,000 Elec & Eltek International
Holdings Limited 681,948
-------------
Leisure & Tourism 3.76%
2,448,000 HongKong & Shanghai Hotels
Limited 1,658,793
1,020,000 Regal Hotels International 109,270
1,020,000 Shangri-La Asia Limited 730,659
-------------
2,498,722
-------------
Merchandising 0.83%
306,000 Dickson Concepts International
Limited 233,021
1,326,000 Giordano International Limited 321,753
-------------
554,774
-------------
Miscellaneous Materials &
Commodities 1.09%
408,000 Varitronix International Limited 721,444
-------------
Multi-Industry 19.94%
510,000 Hopewell Holdings Limited 223,806
1,428,000 Hutchison Whampoa Limited 9,906,683
765,000 Swire Pacific Limited - Class A 3,129,985
-------------
13,260,474
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Real Estate 28.04%
612,000 Cheung Kong Holdings Limited $ 4,166,731
4,896,000 Chinese Estates Holdings 745,667
2,346,000 Hang Lung Development
Company Limited 2,255,828
1,224,000 Hysan Development Company
Limited 1,469,217
714,000 Miramar Hotel & Investment
Limited 718,811
1,632,000 New World Development
Company Limited 3,001,626
612,000 Sun Hung Kai Properties Limited 4,166,731
1,836,000 Wharf Holdings Limited 2,120,886
-------------
18,645,497
-------------
Telecommunications 10.71%
4,243,200 Hong Kong Telecommunications
Limited 7,119,647
-------------
Transportation - Airlines 3.42%
2,040,000 Cathay Pacific Airways Limited 2,277,550
-------------
Transportation - Shipping 0.89%
3,672,000 Shun Tak Holdings Limited 592,426
-------------
Utilities - Electrical & Gas 8.78%
561,000 CLP Holdings Limited 2,642,879
2,754,000 Hong Kong & China Gas
Company Limited 3,199,102
-------------
5,841,981
-------------
TOTAL COMMON STOCK - BASKET
(Cost $67,119,356) 66,500,240
-------------
COMMON STOCK -
NON-BASKET 0.00%
Financial Services 0.00%
276,000 Peregrine Investment Holdings
Limited*,** 0
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $397,590) 0
-------------
Total Investments
(Cost $67,516,946)+ 100.00% $ 66,500,240
======= =============
- ------------
* Non-income producing security.
** Fair valued security.
+ Aggregate cost for Federal income tax purposes is $71,323,046.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 2,080,749
Excess of tax cost over value (6,903,555)
-------------
$ (4,822,806)
=============
See accompanying notes to financial statements.
29
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Italy WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 100.00%
Automobiles 4.27%
768,320 Fiat SpA $ 2,323,744
600,000 Fiat SpA - Preferred 916,227
-------------
3,239,971
-------------
Banking 19.70%
380,580 Banca Commerciale Italiana SpA 2,384,396
93,060 Banca Popolare di Milano SpA 782,762
436,160 Banco Intesa SpA 2,392,653
198,480 Banco Intesa SpA Rnc 523,594
214,260 Istituto Bancario San Paolo di
Torino SpA 3,715,932
148,320 Mediobanca SpA 1,697,951
663,600 Unicredito Italiano SpA 3,441,445
-------------
14,938,733
-------------
Broadcasting & Publishing 4.48%
51,700 Arnoldo Mondadori Editore SpA 794,079
275,620 Mediaset SpA 2,606,697
-------------
3,400,776
-------------
Building Materials &
Components 1.49%
100,000 Italcementi SpA 1,131,176
-------------
Construction & Housing 0.75%
95,080 Sirti SpA 565,735
-------------
Energy Sources 12.77%
1,658,160 ENI SpA 9,685,995
-------------
Food & Household Products 0.79%
424,780 Parmalat Finanziaria SpA 598,761
-------------
Industrial Components 1.91%
497,820 Pirelli SpA 1,448,794
-------------
Insurance 14.75%
157,800 Assicurazioni Generali SpA 6,135,926
1,001,460 Istituto Nazionale delle
Assicurazioni SpA 2,413,196
135,920 Riunione Adriatica di
Sicurta SpA 1,429,315
76,040 Riunione Adriatica di
Sicurta SpA Rnc 551,031
59,920 Societa Assicuratrice Industriale
SpA 657,606
-------------
11,187,074
-------------
Merchandising 0.70%
60,080 La Rinascente SpA 530,946
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Multi-Industry 2.66%
1,347,020 Montedison SpA $ 1,344,639
311,740 Montedison SpA Rnc 252,839
300,000 SNIA BPD SpA 422,874
-------------
2,020,352
-------------
Real Estate 0.71%
980,620 Unione Immobiliare SpA * 538,372
-------------
Recreation - Other Consumer
Goods 0.51%
77,160 Bulgari SpA 385,160
-------------
Telecommunications 28.46%
627,560 Olivetti SpA* 1,929,025
1,386,760 Telecom Italia Mobile SpA 9,382,488
277,120 Telecom Italia Mobile SpA Rnc 1,115,891
758,300 Telecom Italia SpA 8,036,610
165,400 Telecom Italia SpA Rnc 1,121,417
-------------
21,585,431
-------------
Textiles & Apparel 1.53%
572,860 Benetton Group SpA 933,898
26,220 Marzotto SpA 227,195
-------------
1,161,093
-------------
Transportation - Airlines 0.86%
173,540 Alitalia SpA 648,887
-------------
Utilities - Electrical & Gas 3.66%
154,300 Edison SpA 1,420,852
48,760 Falck Acciaierie & Ferriere
Lombarde SpA 398,416
189,260 Italgas SpA 961,353
-------------
2,780,621
-------------
TOTAL COMMON STOCK - BASKET
(Cost $58,530,456) 75,847,877
-------------
Total Investments
(Cost $58,530,456)+ 100.00% $ 75,847,877
======= =============
- ----------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $60,020,669.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 16,316,430
Excess of tax cost over value (489,222)
-------------
$ 15,827,208
=============
See accompanying notes to financial statements.
30
<PAGE>
February 28, 1999
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 6.49%
450,000 Matsushita Electric Industrial
Company Limited $ 7,528,445
50,000 Pioneer Electronic Corporation 891,277
450,000 Sanyo Electric Company Limited 1,270,544
250,000 Sharp Corporation 2,439,949
100,000 Sony Corporation 7,568,479
-------------
19,698,694
-------------
Automobiles 9.70%
200,000 Honda Motor Company Limited 7,703,329
550,000 Nissan Motor Company Limited 2,146,228
750,000 Toyota Motor Corporation 19,595,449
-------------
29,445,006
-------------
Banking 12.74%
450,000 Asahi Bank Limited 1,972,187
250,000 Ashikaga Bank Limited 419,300
900,000 Bank Of Tokyo-Mitsubishi Limited 10,847,029
250,000 Bank Of Yokohama Limited 495,154
200,000 Chiba Bank Limited 741,677
550,000 Fuji Bank Limited 2,164,770
100,000 Gunma Bank Limited 750,105
150,000 Hokuriku Bank Limited 262,958
550,000 Industrial Bank Of Japan Limited 2,748,841
200,000 Joyo Bank Limited 706,279
300,000 Mitsubishi Trust & Banking
Corporation 2,548,673
250,000 Mitsui Trust & Banking Company
Limited 246,523
700,000 Sakura Bank Limited 1,522,124
100,000 Seventy-Seven Bank Limited 892,541
200,000 Shizuoka Bank Limited 2,408,765
600,000 Sumitomo Bank Limited 7,236,410
400,000 Tokai Bank Limited 1,958,702
50,000 Yamaguchi Bank Limited 493,047
250,000 Yasuda Trust & Banking Company
Limited* 233,881
-------------
38,648,966
-------------
Beverages & Tobacco 1.55%
100,000 Asahi Breweries Limited 1,324,905
250,000 Kirin Brewery Company Limited 2,960,388
100,000 Sapporo Breweries Limited 415,508
-------------
4,700,801
-------------
Building Materials &
Components 1.25%
100,000 Inax Corporation 642,225
100,000 Sekisui Chemical Company
Limited 632,111
50,000 Sumitomo Forestry Company
Limited 337,126
250,000 Taiheiyo Cement Corporation 663,717
50,000 Tostem Corporation 800,674
100,000 Toto Limited 717,236
-------------
3,793,089
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Business & Public Services 1.84%
150,000 Dai Nippon Printing Company
Limited $ 2,087,231
100,000 Kamigumi Company Limited 439,949
50,000 Kokuyo Company Limited 743,784
50,000 Mitsubishi Logistics Corporation 565,107
150,000 Toppan Printing Company Limited 1,756,005
-------------
5,592,076
-------------
Chemicals 3.13%
300,000 Asahi Chemical Industry
Company Limited 1,438,685
200,000 Dainippon Ink & Chemicals
Incorporated 595,027
100,000 Kuraray Company Limited 983,565
500,000 Mitsubishi Chemical Corporation 1,222,082
150,000 Mitsubishi Rayon Company
Limited 355,246
50,000 Shin-Etsu Chemical Company
Limited 1,171,513
250,000 Showa Denko K.K. 210,704
350,000 Sumitomo Chemical Company
Limited 1,271,386
200,000 Teijin Limited 718,078
300,000 Toray Industries Incorporated 1,312,263
150,000 Tosoh Corporation 219,975
-------------
9,498,524
-------------
Construction & Housing 2.32%
100,000 Daiwa House Industry Company
Limited 1,024,863
350,000 Kajima Corporation 840,708
50,000 Kandenko Company Limited 325,327
50,000 Kinden Corporation 657,396
350,000 Kumagai Gumi Company Limited* 247,788
100,000 Nishimatsu Construction Company
Limited 483,776
150,000 Obayashi Corporation 676,359
150,000 Sekisui House Limited 1,536,030
250,000 Shimizu Corporation 809,102
250,000 Taisei Corporation 434,050
-------------
7,035,399
-------------
Data Processing &
Reproduction 2.85%
200,000 Canon Incorporated 4,281,500
350,000 Fujitsu Limited 4,365,782
-------------
8,647,282
-------------
Electrical & Electronics 3.24%
700,000 Hitachi Limited 4,424,779
50,000 Makita Corporation 479,140
450,000 Mitsubishi Electric Corporation* 1,350,190
300,000 NEC Corporation 3,029,077
50,000 Omron Corporation 543,616
-------------
9,826,802
-------------
See accompanying notes to financial statements.
31
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Japan WEBS Index Series (continued)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Electronic Components,
Instruments 3.78%
50,000 Fanuc Limited $ 1,866,835
50,000 Kyocera Corporation 2,359,882
50,000 Murata Manufacturing Company
Limited 2,250,316
100,000 Nikon Corporation 1,399,073
100,000 Olympus Optical Company Limited 1,087,231
50,000 Tokyo Electron Limited 2,275,600
50,000 Yokogawa Electric Corporation 237,252
-------------
11,476,189
-------------
Energy Sources 0.58%
150,000 Cosmo Oil Company Limited 212,389
250,000 Japan Energy Corporation 223,346
150,000 Mitsubish Oil Company Limited* 270,544
300,000 Nippon Oil Company Limited 1,054,362
-------------
1,760,641
-------------
Financial Services 2.81%
50,000 Acom Company Limited 2,954,067
50,000 Credit Saison Company Limited 1,051,412
300,000 Daiwa Securities Company
Limited 1,238,938
400,000 Nomura Securities Coompany
Limited 3,290,350
-------------
8,534,767
-------------
Food & Household Products 2.13%
150,000 Ajinomoto Company Incorporated 1,639,697
100,000 Kao Corporation 1,997,472
100,000 Meiji Seika Incorporated 406,237
50,000 Nippon Meat Packers Incorporated 678,887
50,000 Nissin Food Products Company
Limited 1,057,733
50,000 Yamazaki Baking Company
Limited 672,566
-------------
6,452,592
-------------
Forest Products & Paper 0.66%
200,000 Nippon Paper Industries Company 765,276
250,000 Oji Paper Company Limited 1,234,724
-------------
2,000,000
-------------
Health & Personal Care 5.28%
50,000 Daiichi Pharmaceutical Company
Limited 761,062
50,000 Eisai Company Limited 935,525
100,000 Kyowa Hakko Kogyo Company
Limited 472,819
100,000 Sankyo Company Limited 2,149,178
100,000 Shionogi & Company Limited 774,547
100,000 Shiseido Company Limited 1,213,654
50,000 Taisho Pharmaceutical Company
Limited 1,327,434
200,000 Takeda Chemical Industries 6,877,370
50,000 Yamanouchi Pharmaceutical
Company Limited 1,525,495
-------------
16,037,084
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Industrial Components 4.57%
150,000 Bridgestone Corporation $ 3,356,511
200,000 Denso Corporation 3,472,398
100,000 Fujikura Limited 539,402
150,000 Furukawa Electric Company
Limited 562,579
100,000 Minebea Company Limited 994,522
100,000 NGK Insulators Limited 1,147,071
50,000 NGK Spark Plug Company
Limited 549,937
150,000 NSK Limited 681,416
150,000 NTN Corporation 458,913
200,000 Sumitomo Electric Industries 2,105,352
-------------
13,868,101
-------------
Insurance 2.42%
200,000 Mitsui Marine & Fire Insurance
Company Limited 945,638
100,000 Nichido Fire & Marine Insurance
Company Limited 536,873
150,000 Nippon Fire & Marine Insurance
Company Limited 462,705
200,000 Sumitomo Marine & Fire Insurance
Company Limited 1,114,201
400,000 Tokio Marine & Fire Insurance
Company Limited 4,281,500
-------------
7,340,917
-------------
Leisure & Tourism 0.08%
50,000 Tokyo Dome Corporation 257,059
-------------
Machinery & Engineering 3.16%
100,000 Amada Company Limited 492,204
100,000 Daikin Industries Limited 800,674
50,000 Ebara Corporation 520,017
250,000 Hitachi Zosen Corporation 305,520
300,000 Kawasaki Heavy Industries Limited 573,957
250,000 Komatsu Limited 1,224,189
350,000 Kubota Corporation 861,357
50,000 Kurita Water Industries Limited 659,503
700,000 Mitsubishi Heavy Industries Limited 2,601,770
300,000 Mitsui Engineering & Shipbuilding
Company Limited* 265,487
200,000 Sumitomo Heavy Industries Limited 446,692
50,000 Toyoda Automatic Loom Works
Limited 884,922
-------------
9,596,292
-------------
Merchandising 3.71%
150,000 Daiei, Incorporated 372,946
50,000 Hankyu Department Stores 308,049
50,000 Isetan Company Limited
Incorporated 434,471
100,000 Ito-Yokado Company Limited 5,832,280
50,000 Jusco Company Limited 809,524
100,000 Marui Company Limited 1,635,061
100,000 Mitsukoshi Limited 241,045
50,000 Mycal Corporation 280,236
50,000 Seiyu Limited* 172,777
50,000 Takashimaya Company Limited 375,895
50,000 Uny Company Limited 801,096
-------------
11,263,380
-------------
See accompanying notes to financial statements.
32
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Japan WEBS Index Series (concluded)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Metals - Non-Ferrous 0.33%
250,000 Mitsubishi Materials Corporation $ 438,264
200,000 Nippon Light Metal Company
Limited 197,219
100,000 Sumitomo Metal Mining Company 364,939
-------------
1,000,422
-------------
Metals - Steel 1.41%
450,000 Kawasaki Steel Corporation 701,643
1,300,000 Nippon Steel Corporation 2,278,972
700,000 NKK Corporation 412,979
650,000 Sumitomo Metal Industries Limited* 651,917
50,000 Tokyo Steel Manufacturing
Company Limited 224,189
-------------
4,269,700
-------------
Miscellaneous Materials &
Commodities 1.20%
250,000 Asahi Glass Company Limited 1,662,453
50,000 Nitto Denko Corporation 748,420
50,000 Toyo Seikan Kaisha Limited 952,381
200,000 Ube Industries Limited 283,186
-------------
3,646,440
-------------
Real Estate 1.37%
300,000 Mitsubishi Estate Company
Limited 2,960,809
150,000 Mitsui Fudosan Company Limited 1,202,276
-------------
4,163,085
-------------
Recreation - Other Consumer
Goods 2.32%
100,000 Casio Computer Company Limited 666,667
100,000 Citizen Watch Company Limited 676,780
100,000 Fuji Photo Film Company 3,674,673
100,000 Konica Corporation 420,565
50,000 Shimano Incorporated 1,150,442
50,000 Yamaha Corporation 462,284
-------------
7,051,411
-------------
Telecommunications 6.93%
2,550 Nippon Telegraph & Telephone
Corporation 21,018,963
-------------
Textiles & Apparel 0.20%
50,000 Nisshinbo Industries Incorporated 166,456
350,000 Toyobo Company Limited 436,578
-------------
603,034
-------------
Transportation - Airlines 0.34%
400,000 Japan Airlines Company Limited 1,021,492
-------------
Transportation - Road & Rail 4.43%
800 East Japan Railway Company 4,814,159
250,000 Hankyu Corporation 1,051,412
100,000 Keihin Electric Express Railway
Company Limited 307,627
300,000 Kinki Nippon Railway Company
Limited 1,582,807
200,000 Nagoya Railroad Company
Limited 675,938
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Transportation - Road & Rail (continued)
150,000 Nankai Electric Railway
Company Limited $ 704,172
200,000 Nippon Express Company Limited 1,001,264
150,000 Odakyu Electric Railway Company 505,689
50,000 Seino Transportation Company
Limited 265,487
200,000 Tobu Railway Company Limited 574,800
250,000 Tokyu Corporation 604,720
100,000 Yamato Transport Company
Limited 1,345,976
-------------
13,434,051
-------------
Transportation - Shipping 0.49%
300,000 Mitsui O.S.K. Lines Limited 467,762
300,000 Nippon Yusen Kabushiki Kaisha 1,011,378
-------------
1,479,140
-------------
Utilities - Electrical & Gas 4.76%
200,000 Kansai Electric Power Company
Incorporated 3,809,524
550,000 Osaka Gas Company Limited 1,645,596
100,000 Tohoku Electric Power Company
Incorporated 1,543,194
300,000 Tokyo Electric Power Company 6,055,626
600,000 Tokyo Gas Company Limited 1,405,815
-------------
14,459,755
-------------
Wholesale & International Trade 1.92%
300,000 Itochu Corporation 525,917
300,000 Marubeni Corporation 498,104
300,000 Mitsubishi Corporation 1,618,205
400,000 Mitsui & Company Limited 2,177,834
200,000 Sumitomo Corporation 1,004,635
-------------
5,824,695
-------------
TOTAL COMMON STOCK - BASKET
(Cost $332,110,889) 303,445,849
-------------
COMMON STOCK -
NON-BASKET 0.01%
Electronic Components,
Instruments
352 Tokyo Electron Limited 0.01% 16,020
-------------
Financial Services 0.00%
400 Credit Saison Company Limited 8,411
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $19,139) 24,431
-------------
Total Investments
(Cost $332,130,028)+ 100.00% $ 303,470,280
======= =============
- ----------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $334,375,631.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 9,065,147
Excess of tax cost over value (39,970,498)
-------------
$ (30,905,351)
=============
See accompanying notes to financial statements.
33
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Malaysia (Free) WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 99.80%
Automobiles 4.60%
454,000 Edaran Otomobil Nasional BHD $ 523,846
454,000 Oriental Holdings BHD 559,665
681,000 Perusahaan Otomobil
Nasional BHD 711,894
1,589,000 Tan Chong Motor Holdings BHD 341,619
-------------
2,137,024
-------------
Banking 14.39%
1,135,000 Commerce Asset Holdings BHD 788,008
2,951,000 Malayan Banking BHD 4,074,359
2,043,000 Public Bank BHD (Foreign) 846,213
2,043,000 RHB Capital BHD 983,219
-------------
6,691,799
-------------
Beverages & Tobacco 6.00%
1,135,000 Guinness Anchor BHD 828,304
454,000 Rothmans of Pall Mall BHD 1,961,065
-------------
2,789,369
-------------
Broadcasting & Publishing 0.62%
454,000 New Straits Times Press BHD 286,548
-------------
Building Materials &
Components 2.04%
681,000 Hume Industries (Malaysia) BHD 359,976
908,000 Malayan Cement BHD 218,493
2,043,000 Pan Malaysia Cement Works BHD 370,722
-------------
949,191
-------------
Construction & Housing 3.63%
227,000 Ekran BHD* 40,072
1,589,000 YTL Corporation BHD 1,645,414
-------------
1,685,486
-------------
Electrical & Electronics 0.17%
681,000 Time Engineering BHD* 81,263
-------------
Electronic Components,
Instruments 1.14%
454,000 Malaysian Pacific Industries BHD 528,324
-------------
Energy Sources 1.13%
681,000 Shell Refining Company BHD 523,846
-------------
Financial Services 2.58%
681,000 AMMB Holdings BHD 467,432
1,135,000 Idris Hydraulic (Malaysia) BHD* 164,541
1,135,000 MBF Capital BHD* 133,200
908,000 Rashid Hussain BHD* 433,404
-------------
1,198,577
-------------
Food & Household Products 3.95%
454,000 Nestle (Malaysia) BHD 1,316,331
681,000 Perlis Plantations BHD 521,160
-------------
1,837,491
-------------
Industrial Components 0.38%
908,000 Leader Universal Holdings BHD* 178,197
-------------
Leisure & Tourism 6.77%
2,951,000 Magnum Corporation BHD 1,140,821
2,043,000 Resorts World BHD 2,006,734
-------------
3,147,555
-------------
Machinery & Engineering 1.14%
681,000 UMW Holdings BHD 529,219
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Metals - Steel 0.40%
2,497,000 Amsteel Corporation BHD $ 187,152
-------------
Miscellaneous Materials &
Commodities 8.04%
2,043,000 Golden Hope Plantations BHD 1,531,243
1,589,000 Highlands & Lowlands BHD 717,714
681,000 IOI Corporation BHD 278,041
227,000 Kian Joo Can Factory BHD 235,059
908,000 Kuala Lumpur Kepong BHD 976,055
-------------
3,738,112
-------------
Multi-Industry 9.70%
3,178,000 Berjaya Group BHD 520,264
454,000 Land & General BHD* 71,637
1,816,000 Malaysia Mining Corporation BHD 651,897
1,589,000 Multi-Purpose Holdings BHD* 426,241
2,724,000 Sime Darby BHD 2,278,059
1,135,000 United Engineers (Malaysia) BHD* 559,665
-------------
4,507,763
-------------
Real Estate 1.15%
2,043,000 Hong Leong Properties BHD 278,041
1,135,000 Malaysian Resources Corporation
BHD 257,446
-------------
535,487
-------------
Telecommunications 15.65%
2,043,000 Technology Resources Industries
BHD 705,178
4,086,000 Telekom Malaysia BHD 6,568,225
-------------
7,273,403
-------------
Transportation - Airlines 0.49%
681,000 Malaysian Airline System BHD 229,686
-------------
Transportation - Shipping 4.30%
2,043,000 Malaysia International Shipping
BHD (Foreign) 1,998,675
-------------
Utilities - Electrical & Gas 11.53%
4,313,000 Tenaga Nasional BHD 5,359,349
-------------
TOTAL COMMON STOCK - BASKET
(Cost $70,468,510) 46,393,516
-------------
COMMON STOCK -
NON-BASKET 0.20%
Banking 0.20%
226,399 Public Bank BHD (Foreign) 93,775
-------------
Metals - Steel 0.00%
35,944 Silverstone BHD*,** 0
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $86,017) 93,775
-------------
Total Investments
(Cost $70,554,527)+ 100.00% $ 46,487,291
======= =============
- -------------------
* Non-income producing security.
** Fair valued security.
+ Aggregate cost for Federal income tax purposes is $73,243,954. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 77,911
Excess of tax cost over value (26,834,574)
-------------
$ (26,756,663)
=============
See accompanying notes to financial statements.
34
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Mexico (Free) WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
- ------- -------- -----
COMMON STOCK - BASKET 99.53%
Banking 2.74%
132,000 Grupo Financiero Banamex
Accival SA de CV - Series B* $ 202,718
11,000 Grupo Financiero Banamex
Accival SA de CV - Series L* 15,560
495,000 Grupo Financiero Bancomer
SA de CV - Series B 117,530
-------------
335,808
-------------
Beverages & Tobacco 20.98%
99,000 Empresas La Moderna SA
de CV - Series A* 584,148
198,000 Fomento Economico Mexicano
SA de CV - Series UBD 523,132
53,900 Grupo Continental SA 134,512
594,000 Grupo Modelo SA de CV -
Series C 1,326,335
-------------
2,568,127
-------------
Broadcasting & Publishing 4.96%
44,000 Grupo Televisa SA - Series CPO* 606,820
-------------
Building Materials &
Components 6.78%
55,000 Apasco SA de CV 243,951
88,000 Cemex SA de CV - Series A 252,508
77,000 Cemex SA de CV - Series B 238,449
33,000 Cemex SA de CV - Series CPO 95,191
-------------
830,099
-------------
Chemicals 0.28%
33,000 Cydsa SA de CV 33,675
-------------
Construction & Housing 1.31%
22,000 Corporacion GEO SA de CV -
Series B* 58,459
132,000 Empresas ICA Sociedad
Controladora SA de CV 101,359
-------------
159,818
-------------
Energy Equipment & Services 0.58%
11,000 Tubos de Acero de Mexico SA 71,129
-------------
Financial Services 0.53%
539,000 Grupo Financiero Probursa
SA de CV - Series B* 65,350
-------------
Food & Household Products 5.55%
264,000 Grupo Industrial Bimbo
SA de CV - Series A 528,133
176,000 Grupo Industrial Maseca
SA de CV - Series B 151,149
-------------
679,282
-------------
Health & Personal Care 5.30%
209,000 Kimberly-Clark de Mexico
SA de CV -Series A 649,331
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Merchandising 10.43%
88,000 Cifra SA de CV - Series C* $ 112,917
682,000 Cifra SA de CV - Series V* 882,001
198,000 Controladora Comercial
Mexicana SA de CV -
Series UBC 166,042
242,000 Grupo Elektra SA de CV -
Series CPO 116,140
-------------
1,277,100
-------------
Metals - Non Ferrous 4.62%
121,000 Grupo Mexico SA - Series B 334,362
77,000 Industrias Penoles SA - Series CP 231,836
-------------
566,198
-------------
Miscellaneous Materials &
Commodities 0.82%
66,000 Vitro SA - Series A 100,292
-------------
Multi-Industry 9.76%
143,000 Alfa SA de CV - Series A 353,978
341,000 Desc SA de CV - Series B 326,616
154,000 Grupo Carso SA de CV -
Series A1 515,019
-------------
1,195,613
-------------
Telecommunications 24.89%
253,000 Telefonos de Mexico SA -
Series A 728,517
814,000 Telefonos de Mexico SA -
Series L 2,319,252
-------------
3,047,769
-------------
TOTAL COMMON STOCK - BASKET
(Cost $13,193,577) 12,186,411
-------------
COMMON STOCK -
NON-BASKET 0.47%
Machinery & Engineering 0.15%
55,000 Consorcio Grupo Dina SA* 18,616
-------------
Miscellaneous Materials &
Commodities 0.32%
72,000 Empaques Ponderosa SA
de CV - Series B* 38,555
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $96,009) 57,171
-------------
Total Investments
(Cost $13,289,586)+ 100.00% $ 12,243,582
======= =============
- ----------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $13,312,167. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 662,870
Excess of tax cost over value (1,731,455)
-------------
$ (1,068,585)
=============
See accompanying notes to financial statements.
35
<PAGE>
February 28, 1999
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 4.76%
17,600 Royal Philips Electronics NV $ 1,226,905
-------------
Banking 4.69%
59,400 ABN Amro Holding NV 1,209,636
-------------
Beverages & Tobacco 4.24%
20,900 Heineken NV 1,092,139
-------------
Broadcasting & Publishing 6.47%
50,424 Elsevier NV 819,263
4,400 Wolters Kluwer NV 847,724
-------------
1,666,987
-------------
Business & Public Services 6.93%
13,134 Getronics NV 573,137
28,600 TNT Post Group NV 978,022
11,000 Vedior NV 233,667
-------------
1,784,826
-------------
Chemicals 3.69%
25,080 Akzo Nobel NV 951,262
-------------
Construction & Housing 0.94%
16,060 Hollandsche Beton Groep NV 153,387
2,794 IHC Caland NV 90,177
-------------
243,564
-------------
Data Processing & Reproduction 2.26%
20,900 Oce NV 581,633
-------------
Energy Equipment & Services 0.81%
8,580 Koninklijke Pakhoed NV 208,163
-------------
Energy Sources 19.49%
114,400 Royal Dutch/Shell Group 5,023,548
-------------
Financial Services 9.56%
44,000 Ing Groep NV 2,463,471
-------------
Food & Household Products 8.62%
30,800 Unilever NV - CVA 2,221,471
-------------
NO. OF
SHARES SECURITY VALUE
- ------- -------- -----
Forest Products & Paper 0.89%
12,320 Buhrmann NV $ 230,600
-------------
Insurance 10.25%
25,300 Aegon NV 2,641,348
-------------
Machinery & Engineering 0.46%
6,358 Stork NV 117,959
-------------
Merchandising 4.76%
31,900 Koninklijke Ahold NV 1,225,697
-------------
Metals - Steel 0.77%
6,600 Koninklijke Hoogovens NV 198,889
-------------
Telecommunications 4.93%
24,200 Koninklijke Kpn NV 1,269,896
-------------
Transportation - Airlines 2.02%
18,700 KLM - Konin Luchvaart Mij NV 521,435
-------------
Transportation - Road & Rail 1.09%
24,200 Koninklijke Nedlloyd NV 280,280
-------------
Wholesale & International Trade 2.37%
19,800 Hagemeyer NV 610,796
-------------
TOTAL COMMON STOCK - BASKET
(Cost $26,773,410) 25,770,505
-------------
Total Investments
(Cost $26,773,410)+ 100.00% $ 25,770,505
======= =============
- -------------------
+ Aggregate cost for Federal income tax purposes is $26,828,856. The
aggregate gross unrealized appreciation (depreciation) for all securities
is as follows:
Excess of value over tax cost $ 1,215,210
Excess of tax cost over value (2,273,561)
-------------
$ (1,058,351)
=============
See accompanying notes to financial statements.
36
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Singapore (Free) WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
- ------- -------- -----
COMMON STOCK - BASKET 100.00%
Automobiles 0.63%
160,000 Cycle & Carriage Limited $ 585,366
-------------
Banking 26.78%
960,000 Development Bank of Singapore
Limited (Foreign) 6,968,641
1,760,000 Oversea-Chinese Banking
Corporation Limited 11,753,775
640,000 Overseas Union Bank Limited 2,341,463
640,000 United Overseas Bank
Limited (Foreign) 3,753,775
-------------
24,817,654
-------------
Beverages & Tobacco 2.93%
800,000 Fraser & Neave Limited 2,717,770
-------------
Broadcasting & Publishing 3.34%
272,000 Singapore Press Holdings
Limited (Foreign) 3,095,935
-------------
Business & Public Services 1.52%
640,000 Parkway Holdings Limited 1,122,416
160,000 Sembawang Marine and
Logistics Limited 282,462
-------------
1,404,878
-------------
Electronic Components,
Instruments 2.96%
160,000 Creative Technology Limited 2,072,009
160,000 Venture Manufacturing
(Singapore) Limited 673,635
-------------
2,745,644
-------------
Leisure & Tourism 1.63%
160,000 Hotel Properties Limited 69,686
960,000 Shangri-La Hotel Limited 1,438,328
-------------
1,508,014
-------------
Machinery & Engineering 3.71%
4,000,000 Singapore Technologies
Engineering Limited 3,437,863
-------------
Merchandising 0.44%
160,000 Robinson & Company Limited 406,969
-------------
Metals - Steel 0.33%
320,000 Natsteel Limited 302,904
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Multi-Industry 10.60%
640,000 Haw Par Corporation Limited $ 717,305
1,600,000 Keppel Corporation Limited 3,716,609
2,880,000 Sembcorp Industries Limited* 3,127,526
2,560,000 Straits Trading Company Limited 2,259,698
-------------
9,821,138
-------------
Real Estate 13.14%
960,000 City Developments Limited 4,013,937
2,240,000 DBS Land Limited 2,770,732
160,000 First Capital Corporation Limited 117,073
5,920,000 United Industrial Corporation
Limited 2,440,883
4,480,000 United Overseas Land Limited 2,835,772
-------------
12,178,397
-------------
Telecommunications 16.21%
10,559,994 Singapore Telecommunications
Limited 15,024,382
-------------
Transportation - Airlines 12.73%
1,600,000 Singapore Airlines Limited
(Foreign) 11,800,232
-------------
Transportation - Road & Rail 1.76%
5,920,000 Comfort Group Limited 1,632,985
-------------
Transportation - Shipping 1.29%
3,520,000 Neptune Orient Lines Limited* 1,195,819
-------------
TOTAL COMMON STOCK - BASKET
(Cost $86,631,301) 92,675,950
-------------
Total Investments
(Cost $86,631,301)+ 100.00% $ 92,675,950
======= =============
- -------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $91,914,825.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 7,982,488
Excess of tax cost over value (7,221,363)
-------------
$ 761,125
=============
See accompanying notes to financial statements.
37
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Spain WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 99.74%
Banking 28.69%
76,000 Argentaria SA $ 1,818,841
332,500 Banco Bilbao Vizcaya SA 4,924,114
165,300 Banco Central Hispanoamericano
SA 1,972,545
147,250 Banco Santander SA 2,925,893
-------------
11,641,393
-------------
Beverages & Tobacco 3.41%
21,166 El Aguila SA* 232,361
51,300 Tabacalera SA 1,151,126
-------------
1,383,487
-------------
Business & Public Services 5.50%
76,000 Autopistas Concesionaria
Espanola SA 1,077,955
16,112 Prosegur Cia de Seguridad SA 158,129
15,960 Sociedad General de Aguas de
Barcelona SA 995,189
-------------
2,231,273
-------------
Chemicals 0.38%
126,977 Ercros SA* 153,335
-------------
Construction & Housing 5.38%
9,500 Actividades de Construccion y
Servicios SA 350,419
16,093 Dragados & Construcciones SA 621,877
17,100 Fomento de Construcciones y
Contratas SA 1,212,699
-------------
2,184,995
-------------
Energy Sources 4.43%
34,200 Repsol SA 1,798,399
-------------
Food & Household Products 1.23%
24,491 Azucarera Ebro Agricolas SA 500,623
-------------
Forest Products & Paper 0.31%
7,600 Empresa Nacional de Celulosas
SA 125,483
-------------
Insurance 1.14%
21,128 Corporacion Mapfre 461,568
-------------
Leisure & Tourism 1.29%
5,700 Sol Melia SA 212,066
38,000 TelePizza SA* 310,788
-------------
522,854
-------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Machinery & Engineering 0.69%
9,500 Zardoya Otis SA $ 277,936
-------------
Metals - Steel 1.07%
16,625 Acerinox SA 434,556
-------------
Miscellaneous Materials &
Commodities 0.52%
6,973 Viscofan Industria Navarra De
Envolturas Celulosicas SA 212,196
-------------
Multi-Industry 1.47%
4,123 Corporacion Financiera Alba SA 595,201
-------------
Real Estate 3.39%
23,161 Inmobiliaria Urbis SA* 373,765
9,500 Metrovacesa SA 244,563
62,244 Vallehermoso SA 759,165
-------------
1,377,493
-------------
Telecommunications 18.17%
161,500 Telefonica SA 7,375,482
-------------
Utilities - Electrical & Gas 22.67%
163,400 Endesa SA 4,330,260
19,000 Gas Natural SDG SA 1,888,716
114,000 Iberdrola SA 1,783,381
70,300 Union Electrica Fenosa SA 1,195,450
-------------
9,197,807
-------------
TOTAL COMMON STOCK - BASKET
(Cost $36,199,518) 40,474,081
-------------
COMMON STOCK -
NON-BASKET 0.26%
Telecommunications 0.26%
2,324 Telefonica SA 106,134
-------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $82,241) 106,134
-------------
Total Investments
(Cost $36,281,759)+ 100.00% $ 40,580,215
======= =============
- ---------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $36,287,841.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 4,678,653
Excess of tax cost over value (386,279)
-------------
$4,292,374
=============
See accompanying notes to financial statements.
38
<PAGE>
February 28, 1999
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 4.53%
38,500 Electrolux AB - B $ 729,025
------------
Automobiles 4.39%
13,200 Volvo AB - A 335,144
14,300 Volvo AB - B 370,038
------------
705,182
------------
Banking 11.05%
27,500 ForeningsSparbanken AB 627,892
47,300 Skandinaviska Enskilda Banken - A 527,028
17,600 Svenska Handelsbanken - A 621,529
------------
1,776,449
------------
Beverages & Tobacco 0.90%
44,000 Swedish Match AB 145,202
------------
Business & Public Services 5.74%
7,700 Esselte AB - A 118,613
6,600 Esselte AB - B 105,285
30,800 Securitas AB - B 508,207
4,400 WM-Data AB - B 190,209
------------
922,314
------------
Chemicals 1.97%
11,000 AGA AB - A 144,666
13,200 AGA AB - B 172,796
------------
317,462
------------
Construction & Housing 2.47%
12,100 Skanska AB - B 396,359
------------
Electrical & Electronics 26.91%
52,800 ABB AB - A 597,954
11,000 ABB AB - B 123,904
136,400 Ericsson LM - B 3,604,335
------------
4,326,193
------------
Financial Services 0.80%
9,900 Om Gruppen AB 128,994
------------
Forest Products & Paper 2.72%
22,000 Svenska Cellulosa AB - B 438,018
------------
Health & Personal Care 15.97%
107,800 Astra AB - A 2,133,159
22,000 Astra AB - B 433,999
------------
2,567,158
------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Industrial Components 1.85%
11,000 SKF AB - A $ 145,336
11,000 SKF AB - B 151,364
------------
296,700
------------
Insurance 5.02%
44,000 Skandia Forsakrings AB 806,381
------------
Machinery & Engineering 4.15%
14,300 Atlas Copco AB - A 352,624
7,700 Atlas Copco AB - B 187,999
6,600 Sandvik AB - A* 126,181
------------
666,804
------------
Merchandising 6.84%
14,300 Hennes & Mauritz AB - B 1,100,536
------------
Metals - Non Ferrous 0.47%
5,500 Granges AB 75,682
------------
Metals - Steel 0.93%
8,800 SSAB Svenskt Stal AB - A 92,694
5,500 SSAB Svenskt Stal AB - B 56,929
------------
149,623
------------
Multi-Industry 0.73%
13,200 Trelleborg AB - B 118,144
------------
Real Estate 1.00%
8,800 Diligentia AB 58,402
12,100 Drott AB - B* 103,142
------------
161,544
------------
Telecommunications 1.56%
6,600 NetCom AB - B* 251,559
------------
TOTAL COMMON STOCK - BASKET
(Cost $14,911,075) 16,079,329
------------
Total Investments
(Cost $14,911,075)+ 100.00% $ 16,079,329
======= ============
- -----------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $14,929,981.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 2,108,818
Excess of tax cost over value (959,470)
------------
$ 1,149,348
============
See accompanying notes to financial statements.
39
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
Switzerland WEBS Index Series
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
COMMON STOCK - BASKET 100.00%
Banking 17.60%
475 Banca del Gottardo $ 450,711
2,356 Banque Cantonale Vaudoise 708,865
11,362 Credit Suisse Group 1,764,164
10,887 UBS AG 3,388,336
228 Vontobel Holding AG 369,747
--------------
6,681,823
--------------
Building Materials & Components 5.51%
1,387 Forbo Holding AG 564,716
627 Holderbank Financiere Glarus
AG - Bearer 652,485
3,477 Holderbank Financiere Glarus
AG - Registered 875,788
--------------
2,092,989
--------------
Business & Public Services 2.94%
2,109 Adecco SA 1,106,093
57 SGS Societe Generale de
Surveillance Holding SA 11,407
--------------
1,117,500
--------------
Chemicals 3.89%
247 EMS-Chemie Holding AG*,** 1,261,335
836 Sika Finanz AG 215,187
--------------
1,476,522
--------------
Electrical & Electronics 2.63%
684 ABB AG - Bearer 835,470
665 ABB AG - Registered 161,535
--------------
997,005
--------------
Financial Services 2.43%
304 Julius Baer Holding Limited AG** 923,265
--------------
Food & Household Products 5.20%
1,045 Nestle SA 1,972,310
--------------
Health & Personal Care 33.96%
3,477 Novartis AG 6,099,327
57 Roche Holding AG - Bearer 1,018,574
456 Roche Holding AG - Genussein 5,774,343
--------------
12,892,244
--------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Insurance 9.42%
798 Schweizerische Rueckversicherungs
(Swiss Re) $ 1,786,978
2,698 Zurich Allied AG 1,791,095
--------------
3,578,073
--------------
Leisure & Tourism 0.19%
133 Moevenpick Holding AG 73,058
--------------
Machinery & Engineering 1.91%
190 Georg Fischer AG 62,280
38 Schindler Holding AG - Participation
Certificates 61,624
285 Schindler Holding AG - Registered 489,718
190 Sulzer AG 112,104
--------------
725,726
--------------
Merchandising 3.28%
646 Jelmoni Holding AG - Bearer 566,158
456 Jelmoni Holding AG - Registered 79,928
2,717 Valora Holding AG 600,924
--------------
1,247,010
--------------
Multi-Industry 4.40%
1,501 Alusuisse Lonza Group AG 1,668,699
--------------
Recreation - Other Consumer
Goods 0.44%
2,071 Tag Heuer International SA** 166,855
--------------
Telecommunications 5.18%
4,978 Swisscom AG* 1,968,390
--------------
Transportation - Airlines 1.02%
1,805 SAirGroup 388,627
--------------
TOTAL COMMON STOCK - BASKET
(Cost $37,156,029) 37,970,096
--------------
Total Investments
(Cost $37,156,029)+ 100.00% $ 37,970,096
======= ==============
- ----------------------
* Non-income producing security.
** Non index security.
+ Aggregate cost for Federal income tax purposes is $37,553,534.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 2,346,891
Excess of tax cost over value (1,930,329)
--------------
$ 416,562
==============
See accompanying notes to financial statements.
40
<PAGE>
February 28, 1999
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 1.31%
109,620 British Aerospace Plc $ 696,299
98,910 Rolls-Royce Plc 432,183
--------------
1,128,482
--------------
Banking 15.14%
78,540 Abbey National Plc 1,576,538
89,355 Barclays Plc 2,384,824
100,800 HSBC Holdings Plc ($HK10) 2,885,676
50,400 HSBC Holdings Plc (75p) 1,469,483
273,000 Lloyds TSB Group Plc 3,912,060
42,525 Royal Bank of Scotland Group Plc 829,763
--------------
13,058,344
--------------
Beverages & Tobacco 4.57%
94,752 British American Tobacco Plc 864,459
61,320 Cadbury Schweppes Plc 940,105
193,221 Diageo Plc 2,134,279
--------------
3,938,843
--------------
Broadcasting & Publishing 2.91%
94,710 British Sky Broadcasting Group Plc 869,766
39,375 Pearson Plc 865,440
80,640 Reed International Plc 776,081
--------------
2,511,287
--------------
Building Materials &
Components 1.49%
56,910 Blue Circle Industries Plc 284,678
31,710 BPB Plc 121,157
30,849 Caradon Plc 76,107
41,139 Hanson Plc 336,279
16,695 Hepworth Plc 41,054
17,745 RMC Group Plc 196,576
34,965 Wolseley Plc 225,736
--------------
1,281,587
--------------
Business & Public Services 3.46%
18,018 Anglian Water Plc 209,270
11,760 De La Rue Plc 38,809
25,200 Railtrack Group Plc 626,549
88,074 Reuters Group Plc 1,228,228
25,977 Thames Water Plc 425,723
36,015 United Utilities Plc 456,664
--------------
2,985,243
--------------
Chemicals 0.89%
28,770 BOC Group Plc 388,535
42,945 Imperial Chemical Industries Plc 375,292
--------------
763,827
--------------
Construction & Housing 0.10%
32,655 Taylor Woodrow Plc 88,671
--------------
Electrical & Electronics 1.53%
165,480 General Electric Company Plc 1,320,193
--------------
Electronic Components,
Instruments 0.90%
16,275 Bowthorpe Plc 97,902
104,202 BTR Siebe Plc 439,447
38,283 Williams Plc 237,805
--------------
775,154
--------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Energy Sources 8.68%
503,370 BP Amoco Plc $ 7,168,885
13,545 Burmah Castrol Plc 176,088
70,980 LASMO Plc 136,452
--------------
7,481,425
--------------
Financial Services 0.82%
20,244 Provident Financial Plc 314,093
19,215 Schroders Plc 396,170
--------------
710,263
--------------
Food & Household Products 2.98%
68,145 Associated British Foods Plc 528,920
204,960 Unilever Plc 1,970,076
24,717 United Biscuits Holdings Plc 71,868
--------------
2,570,864
--------------
Forest Products & Paper 0.12%
51,450 Arjo Wiggins Appleton Plc 99,320
--------------
Gold Mines 0.09%
11,928 Lonrho Plc 76,578
--------------
Health & Personal Care 14.34%
185,220 Glaxo Wellcome Plc 5,907,744
294,000 Smithkline Beecham Plc 4,139,985
55,755 Zeneca Group Plc 2,318,734
--------------
12,366,463
--------------
Industrial Components 0.64%
37,905 BBA Group Plc 230,143
36,015 BICC Plc 51,638
59,010 LucasVarity Plc 268,004
--------------
549,785
--------------
Insurance 6.66%
94,752 Allied Zurich AG Plc* 1,398,770
52,710 CGU Plc 776,439
79,989 Guardian Royal Exchange Plc 453,304
74,277 Legal & General Group Plc 926,351
105,000 Prudential Corporation Plc 1,421,374
90,300 Royal & Sun Alliance Insurance
Group Plc 763,085
--------------
5,739,323
--------------
Leisure & Tourism 3.62%
55,125 Bass Plc 764,767
33,600 Carlton Communications Plc 331,576
52,500 Granada Group Plc 1,058,461
63,000 Ladbroke Group Plc 291,928
58,485 Rank Group Plc 224,629
40,845 Scottish & Newcastle Plc 449,202
--------------
3,120,563
--------------
Machinery & Engineering 0.96%
37,800 GKN Plc 511,089
21,000 Smith Industries Plc 318,422
--------------
829,511
--------------
See accompanying notes to financial statements.
41
<PAGE>
February 28, 1999
PORTFOLIO OF INVESTMENTS (Unaudited) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
United Kingdom WEBS Index Series (concluded)
- --------------------------------------------------------------------------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Merchandising 7.82%
59,535 Boots Company Plc $ 956,135
64,155 Great Universal Stores Plc 817,072
91,350 Kingfisher Plc 1,151,717
182,175 Marks & Spencer Plc 1,225,017
32,445 Next Plc 376,313
74,760 Safeway Plc 321,271
126,000 Sainsbury Plc 727,676
410,445 Tesco Plc 1,163,833
--------------
6,739,034
--------------
Metals - Non Ferrous 0.93%
61,740 Rio Tinto Plc 799,667
--------------
Metals - Steel 0.25%
110,460 British Steel Plc 219,869
--------------
Miscellaneous Materials &
Commodities 0.18%
74,340 Pilkington Plc 75,028
25,788 Rexam Plc 81,798
--------------
156,826
--------------
Multi-Industry 0.32%
44,310 TI Group Plc 278,615
--------------
Real Estate 1.16%
38,115 British Land Company Plc 308,965
40,215 Land Securities Plc 522,160
22,806 MEPC Plc 172,081
--------------
1,003,206
--------------
Recreation - Other Consumer
Goods 0.42%
49,329 EMI Group Plc 364,108
--------------
Telecommunications 12.35%
334,425 British Telecommunications Plc 5,791,445
141,225 Cable & Wireless Plc 1,930,979
159,600 Vodafone Group Plc 2,927,527
--------------
10,649,951
--------------
Textiles & Apparel 0.05%
67,095 Coats Viyella Plc 40,845
--------------
NO. OF
SHARES SECURITY VALUE
------- -------- -----
Transportation - Airlines 0.54%
63,630 British Airways Plc $ 469,667
--------------
Transportation - Shipping 0.54%
39,690 Peninsular & Oriental Steam
Navigation Company Plc 466,384
--------------
Utilities - Electrical & Gas 4.23%
222,243 BG Plc 1,308,421
251,895 Centrica Plc* 468,102
87,192 National Grid Group Plc 629,964
69,615 National Power Plc 553,155
22,575 Scottish and Southern Energy Plc 209,215
51,870 Scottish Power Plc 479,047
--------------
3,647,904
--------------
TOTAL COMMON STOCK - BASKET
(Cost $76,412,471) 86,231,802
--------------
COMMON STOCK -
NON-BASKET 0.00%
Business & Public Services 0.00%
11 Anglian Water Plc 128
--------------
Electronic Components,
Instruments 0.00%
16 BTR Siebe Plc 67
--------------
Energy Sources 0.00%
18 BP Amoco Plc 256
--------------
Miscellaneous Materials &
Commodities 0.00%
14 Rexam Plc 44
--------------
Utilities - Electrical & Gas 0.00%
18 Scottish and Southern Energy Plc 167
--------------
TOTAL COMMON STOCK - NON-BASKET
(Cost $733) 662
--------------
Total Investments
(Cost $76,413,204)+ 100.00% $ 86,232,464
======= ==============
- -------------------
* Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $76,529,186.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 12,814,171
Excess of tax cost over value (3,110,893)
--------------
$ 9,703,278
==============
See accompanying notes to financial statements.
42
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE>
February 28, 1999
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
<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............... $51,766,541 $ 9,232,495 $15,300,692 $15,394,622 $49,775,587 $86,705,543 $66,500,240
Cash and foreign currency........... 409,213 380,903 40,749 86,334 113,935 168,054 4,742,933
Collateral for securities loaned.... 2,657,735 15,738 1,057,056 1,249,755 1,503,150 8,587,468 3,396,090
Dividends receivable................ 93,925 14,452 41,213 18,843 248,862 20,384 27,041
Interest receivable................. 553 12 425 206 370 2,593 1,596
Receivable for securities sold...... -- 30,712 860,281 -- -- -- 1,453,929
Deferred organization cost.......... 65,306 48,566 21,212 46,129 126,611 120,287 33,527
Prepaid expenses.................... 186 106 83 50 304 287 88
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets.................... 54,993,459 9,722,984 17,321,711 16,795,939 51,768,819 95,604,616 76,155,444
----------- ----------- ----------- ----------- ----------- ----------- -----------
Liabilities
Payable for securities
purchased......................... -- 153,510 819,427 25,770 -- -- 6,114,806
Payable for securities loaned....... 2,657,735 15,738 1,057,056 1,249,755 1,503,150 8,587,468 3,396,090
Advisory fee payable................ 22,354 4,097 7,177 6,725 22,969 36,766 28,684
Administration fee payable.......... 18,214 3,338 5,848 5,479 18,715 29,958 23,372
Distribution fee payable............ 16,558 3,035 5,316 4,981 17,014 27,234 21,247
Custody fee payable................. 22,612 8,799 9,248 17,468 25,214 34,858 39,341
Accrued expenses.................... 14,114 5,424 3,663 12,035 14,000 19,338 17,105
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities............... 2,751,587 193,941 1,907,735 1,322,213 1,601,062 8,735,622 9,640,645
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets
Capital stock, $0.001 par value..... 5,400 1,000 800 1,300 2,401 4,201 7,651
Paid-in capital..................... 56,846,310 10,956,297 11,851,643 15,345,805 42,013,419 80,843,409 82,841,913
Accumulated net investment
income/(loss)..................... 175,594 (40,994) (913,245) 31,008 (229,822) (179,415) (44,553)
Accumulated net realized gain/
(loss) on investments............. (980,913) (661,782) 3,922,665 42,546 3,596,998 6,320,824 (15,273,038)
Net unrealized appreciation/
(depreciation) on investments
and translation of other
assets and liabilities
denominated in foreign
currencies........................ (3,804,519) (725,478) 552,113 53,067 4,784,761 (120,025) (1,017,174)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets.......................... $52,241,872 $ 9,529,043 $15,413,976 $15,473,726 $50,167,757 $86,868,994 $66,514,799
=========== =========== =========== =========== =========== =========== ===========
Shares of common stock issued
and outstanding................... 5,400,030 1,000,030 800,030 1,300,030 2,401,000 4,201,000 7,651,000
=========== =========== =========== =========== =========== =========== ===========
Net Asset Value Per Share........... $ 9.67 $ 9.53 $ 19.27 $ 11.90 $ 20.89 $ 20.68 $ 8.69
=========== =========== =========== =========== =========== =========== ===========
See accompanying notes to financial statements.
44
<PAGE>
WEBS INDEX FUND, INC.
<CAPTION>
Malaysia Mexico Singapore United
Italy Japan (Free) (Free) Netherlands (Free) Spain Sweden Switzerland Kingdom
WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS
Index Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series Series
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 75,847,877 $303,470,280 $46,487,291 $12,243,582 $25,770,505 $ 92,675,950 $40,580,215 $16,079,329 $37,970,096 $86,232,464
52,630 937,656 2,766,081 46,063 73,386 198,603 278,137 87,150 217,290 249,651
32,506,100 59,278,434 -- 972,127 8,067,900 24,247,136 5,587,068 1,006,020 878,105 --
12,789 107,369 24,500 -- 4,074 1,756 15,036 -- 34,002 296,881
6,247 19,559 2,349 346 884 23,898 844 127 330 73
-- -- -- -- -- 322,417 -- -- -- --
63,759 265,448 35,539 35,905 30,068 42,675 52,717 34,321 81,031 76,498
138 614 92 -- 52 111 136 99 200 229
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
108,489,540 364,079,360 49,315,852 13,298,023 33,946,869 117,512,546 46,514,153 17,207,046 39,181,054 86,855,796
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
-- -- -- -- -- 147,739 -- -- -- --
32,506,100 59,278,434 -- 972,127 8,067,900 24,247,136 5,587,068 1,006,020 878,105 --
34,204 133,155 23,129 5,509 11,283 40,589 15,756 7,083 17,371 37,477
27,870 108,497 18,846 4,489 9,194 33,073 12,839 5,771 14,154 30,536
25,337 98,633 17,132 4,081 8,358 30,066 11,671 5,246 12,868 27,760
25,012 108,716 25,679 21,359 17,240 47,693 20,621 8,263 21,298 38,412
16,134 76,594 66,969 6,442 7,815 26,868 14,089 7,015 12,294 25,836
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
32,634,657 59,804,029 151,755 1,014,007 8,121,790 24,573,164 5,662,044 1,039,398 956,090 160,021
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
3,000 30,001 17,025 1,100 1,101 16,000 1,425 825 2,376 4,201
56,085,088 352,959,704 88,604,608 13,955,843 24,971,914 103,628,895 35,740,630 14,968,000 36,845,977 73,509,488
(2,775,128) (802,410) (206,017) 5,494 (40,061) (730,542) 43,460 (77,555) (169,713) (32,223)
5,224,456 (19,261,235) (15,184,284) (632,578) 1,895,338 (16,019,968) 768,296 109,576 732,516 3,404,131
17,317,467 (28,650,729) 24,067,235 (1,045,843) (1,003,213) 6,044,997 4,298,298 1,166,802 813,808 9,810,178
- ------------ ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- -----------
$ 75,854,883 $304,275,331 $49,164,097 $12,284,016 $25,825,079 $ 92,939,382 $40,852,109 $16,167,648 $38,224,964 $86,695,775
============ ============ =========== =========== =========== ============ =========== =========== =========== ===========
3,000,030 30,001,000 17,025,030 1,100,030 1,101,000 16,000,030 1,425,030 825,030 2,376,000 4,201,000
============ ============ =========== =========== =========== ============ =========== =========== =========== ===========
$ 25.28 $ 10.14 $ 2.89 $ 11.17 $ 23.46 $ 5.81 $ 28.67 $ 19.60 $ 16.09 $ 20.64
============ ============ =========== =========== =========== ============ =========== =========== =========== ===========
</TABLE>
45
<PAGE>
For the six month period ending February 28, 1999
STATEMENTS OF OPERATIONS (Unaudited)
<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) .................. $ 651,598 $ 5,746 $ 36,150 $ 109,515 $ 23,255 $ 123,281
Interest .............................. 7,755 937 6,647 3,420 2,367 28,711
----------- ----------- ----------- ----------- ----------- -----------
Total investment income ............. 659,353 6,683 42,797 112,935 25,622 151,992
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Advisory fees ......................... 57,611 11,256 26,867 15,190 61,468 95,926
Administration fees ................... 46,943 9,171 21,892 12,377 50,086 78,162
Distribution fees ..................... 42,675 8,338 19,902 11,252 45,532 71,057
Custodian fees and expenses ........... 19,522 8,862 11,386 4,619 20,549 31,361
Transfer agent fees ................... 4,182 3,232 6,382 3,482 5,182 5,982
Directors' fees ....................... 5,197 1,223 2,243 1,140 5,569 8,677
Legal fees ............................ 7,387 1,695 4,568 1,828 9,194 14,333
Audit fees ............................ 6,882 881 7,080 4,271 3,107 5,411
Federal and state registration fees ... 3,287 1,005 -- 2,882 580 3,572
Amortization of deferred organization
costs ............................... 10,688 7,948 3,472 7,549 20,721 19,686
Insurance ............................. 4,085 394 2,454 1,926 1,752 2,945
Printing .............................. 3,224 339 844 995 3,348 5,279
Licensing fees ........................ 6,401 1,251 2,985 1,688 6,830 10,658
Amex listing fee ...................... 612 60 367 302 268 373
Miscellaneous expenses ................ 4,243 3,053 17,304 6,431 7,319 8,996
----------- ----------- ----------- ----------- ----------- -----------
Total expenses ...................... 222,939 58,708 127,746 75,932 241,505 362,418
----------- ----------- ----------- ----------- ----------- -----------
Net investment income/(loss) .......... 436,414 (52,025) (84,949) 37,003 (215,883) (210,426)
----------- ----------- ----------- ----------- ----------- -----------
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 ...................... (786,226) (635,287) 1,768,590 93,288 160,437 453,154
Net realized gain/(loss) on investments
on in-kind redemptions .............. -- -- 2,152,280 -- 3,436,647 6,029,889
Net realized gain/(loss) on foreign
currency related transactions ....... 3,040 1,236 19,488 6,064 (86) 10,824
----------- ----------- ----------- ----------- ----------- -----------
(783,186) (634,051) 3,940,358 99,352 3,596,998 6,493,867
Net change in unrealized
appreciation/(depreciation)
on investments and translation
of other assets and liabilities
denominated in foreign currencies ... 8,838,700 218,141 (2,544,758) 1,339,470 (320,142) (5,362,047)
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized
gain/(loss) on investments and
foreign currency related transactions
and translation of other assets and
liabilities denominated in
foreign currencies .................. 8,055,514 (415,910) 1,395,600 1,438,822 3,276,856 1,131,820
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net
assets resulting from operations .... $ 8,491,928 $ (467,935) $ 1,310,651 $ 1,475,825 $ 3,060,973 $ 921,394
=========== =========== =========== =========== =========== ===========
See accompanying notes to financial statements.
46
<PAGE>
WEBS INDEX FUND, INC.
<CAPTION>
Malaysia Mexico Singapore United
Hong Kong Italy Japan (FREE) (FREE) Netherlands (FREE) Spain Sweden Switzerland Kingdom
WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS WEBS
Index Index Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series Series Series
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 937,005 $ 2,608 $ 753,282 $ 425,717 $ 112,698 $ 116,293 $ 496,213 $ 187,956 $ -- $ 373 $ 607,677
115,304 36,001 141,752 73,091 4,091 7,865 152,433 7,542 1,865 3,308 8,429
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
1,052,309 38,609 895,034 498,808 116,789 124,158 648,646 195,498 1,865 3,681 616,106
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
85,862 89,967 351,959 63,293 13,794 30,682 103,688 41,024 19,151 44,607 98,532
69,961 73,307 286,782 51,572 11,239 25,000 84,486 33,427 15,604 36,347 80,286
63,601 66,642 260,710 46,883 10,217 22,728 76,806 30,389 14,186 33,043 72,987
42,675 29,517 72,795 34,751 12,179 15,067 37,573 15,355 7,784 19,769 24,056
16,982 5,382 13,982 18,282 3,982 3,982 13,982 4,982 3,982 3,982 4,482
7,821 8,099 32,289 6,391 1,238 2,786 10,440 3,701 1,736 4,003 8,843
11,165 11,044 46,508 211,522 1,689 4,599 15,350 6,271 2,367 5,458 13,059
5,986 8,537 26,898 8,073 1,914 1,805 9,280 4,719 2,683 5,038 9,630
-- 3,697 16,886 -- 919 1,486 2,882 3,535 860 2,863 4,311
5,488 10,435 43,442 5,816 5,875 4,921 6,983 8,628 5,616 13,262 12,520
3,195 5,510 13,390 4,518 1,291 1,144 3,383 1,383 1,015 1,987 4,036
4,445 5,187 16,065 4,105 411 1,724 5,516 2,228 576 2,428 4,434
9,540 9,996 39,107 7,033 1,533 3,409 11,521 4,558 2,128 4,956 10,948
471 762 1,705 407 233 159 306 177 154 275 556
11,097 33,035 20,949 5,453 4,310 8,790 3,720 6,826 5,348 9,996 15,288
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
338,289 361,117 1,243,467 468,099 70,824 128,282 385,916 167,203 83,190 188,014 363,968
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
714,020 (322,508) (348,433) 30,709 45,965 (4,124) 262,730 28,295 (81,325) (184,333) 252,138
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
(4,069,667) 5,060,726 -- (13,254,781) (462,986) 1,537,775 379,247 1,194,882 157,072 381,182 1,488,850
(3,680,775) 1,571,278 (16,848,335) -- (176,163) 697,524 (2,648,587) -- -- 307,892 2,145,861
647 (3,534) 180,313 (75,019) 14,593 5,097 151,579 (4,272) 5,496 67,401 18,299
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
(7,749,795) 6,628,470 (16,668,022) (13,329,800) (624,556) 2,240,396 (2,117,761) 1,190,610 162,568 756,475 3,653,010
24,922,432 1,137,945 54,500,956 29,742,711 3,884,184 (2,088,744) 36,074,122 3,778,191 823,205 (66,024) 4,517,706
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
17,172,637 7,766,415 37,832,934 16,412,911 3,259,628 151,652 33,956,361 4,968,801 985,773 690,451 8,170,716
- ----------- ---------- ----------- ----------- ---------- ---------- ----------- ---------- -------- -------- ----------
$17,886,657 $7,443,907 $37,484,501 $16,443,620 $3,305,593 $ 147,528 $34,219,091 $4,997,096 $904,448 $506,118 $8,422,854
=========== ========== =========== =========== ========== ========== =========== ========== ======== ======== ==========
</TABLE>
47
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<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
02/28/99 ended 02/28/99 ended 02/28/99 ended
(Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income/(loss) ......... $ 436,414 $ 1,004,449 $ (52,025) $ 33,653 $ (84,949) $ 383,039
Net realized gain/(loss) on
investments and foreign currency
related transactions ............... (783,186) (813,545) (634,051) 483,280 3,940,358 4,866,929
Net change in unrealized appreciation/
depreciation) on investments and
translation of other assets and
liabilities denominated in
foreign currencies ................. 8,838,700 (11,081,054) 218,141 (922,261) (2,544,758) 3,689,571
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in net
assets resulting from operations ... 8,491,928 (10,890,150) (467,935) (405,328) 1,310,651 8,939,539
------------ ------------ ------------ ------------ ------------ ------------
Distributions:
Net investment income ................ (74,980) (1,004,449) -- (33,653) -- (383,039)
In excess of net investment income ... -- (19,218) -- (10,327) -- (1,697,275)
Net realized gains ................... -- -- -- (483,280) -- (2,779,100)
In excess of net realized gains ...... -- -- -- (2,230) -- --
Return of capital .................... -- -- -- (1,490) -- (139,253)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in net assets
from distributions ................. (74,980) (1,023,667) -- (530,980) -- (4,998,667)
------------ ------------ ------------ ------------ ------------ ------------
Capital Share Transactions:
Net proceeds from sale of shares ..... 9,725,724 14,115,736 1,911,812 4,816,685 -- 9,993,974
Cost of shares redeemed .............. -- (9,508,450) -- -- (11,661,209) (20,697,973)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in net
assets derived from
capital share transactions ......... 9,725,724 4,607,286 1,911,812 4,816,685 (11,661,209) (10,703,999)
------------ ------------ ------------ ------------ ------------ ------------
Total increase/(decrease) in net asets 18,142,672 (7,306,531) 1,443,877 3,880,377 (10,350,558) (6,763,127)
Net assets:
Beginning of period .................. 34,099,200 41,405,731 8,085,166 4,204,789 25,764,534 32,527,661
------------ ------------ ------------ ------------ ------------ ------------
End of period ........................ $ 52,241,872 $ 34,099,200 $ 9,529,043 $ 8,085,166 $ 15,413,976 $ 25,764,534
============ ============ ============ ============ ============ ============
Capital Share Transactions:
Shares sold .......................... 1,000,000 1,400,000 200,000 400,000 -- 560,000
Shares redeemed ...................... -- (1,000,000) -- -- (600,000) (1,240,000)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in shares .... 1,000,000 400,000 200,000 400,000 (600,000) (680,000)
============ ============ ============ ============ ============ ============
See accompanying notes to financial statements.
48
<PAGE>
WEB INDEX FUND, INC.
<CAPTION>
Canada France Germany Hong Kong Italy
WEBS WEBS WEBS WEBS WEBS
Index Index Index Index Index
Series Series Series Series Series
- ------------------------- ------------------------ ------------------------- ------------------------ ------------------------
For the For the For the For the For the
six months For the six months For the six months For the six months For the six months For the
ending year ending year ending year ending year ending year
02/28/99 ended 02/28/99 ended 02/28/99 ended 02/28/99 ended 02/28/99 ended
(Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 37,003 $ 97,330 $ (215,883) $ 435,172 $ (210,426) $ 626,103 $ 714,020 $ 1,733,479 $ (322,508) $ 455,253
99,352 4,111,037 3,596,998 312,674 6,493,867 39,489 (7,749,795) (9,056,025) 6,628,470 9,664,471
1,339,470 (5,251,304) (320,142) 3,937,546 (5,362,047) 2,623,288 24,922,432 (25,681,723) 1,137,945 11,937,409
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,475,825 (1,042,937) 3,060,973 4,685,392 921,394 3,288,880 17,886,657 (33,004,269) 7,443,907 22,057,133
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(18,862) (92,345) -- (435,172) -- (626,103) (714,020) (1,733,479) -- (455,253)
-- -- -- (62,742) -- (12,798) (51,415) (12,675) -- (2,610,741)
(41,750) (468,666) -- (312,674) (143,680) (39,489) -- -- (1,404,014) (1,763,418)
-- -- -- (13,549) -- (12,490) -- -- -- --
-- -- -- (178,534) -- (290,393) -- (983,923) -- --
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(60,612) (561,011) -- (1,002,671) (143,680) (981,273) (765,435) (2,730,077) (1,404,014) (4,829,412)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
7,126,953 -- 12,333,093 27,720,237 31,642,983 46,140,403 3,187,705 65,939,721 15,009,163 24,566,181
-- (15,632,312) (11,147,991) -- (18,485,578) -- (3,766,998) (5,649,119) (3,562,412) (15,920,335)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
7,126,953 (15,632,312) 1,185,102 27,720,237 13,157,405 46,140,403 (579,293) 60,290,602 11,446,751 8,645,846
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
8,542,166 (17,236,260) 4,246,075 31,402,958 13,935,119 48,448,010 16,541,929 24,556,256 17,486,644 25,873,567
6,931,560 24,167,820 45,921,682 14,518,724 72,933,875 24,485,865 49,972,870 25,416,614 58,368,239 32,494,672
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$15,473,726 $ 6,931,560 $50,167,757 $45,921,682 $86,868,994 $72,933,875 $66,514,799 $49,972,870 $75,854,883 $58,368,239
=========== ============ =========== =========== =========== =========== =========== =========== =========== ===========
600,000 -- 600,000 1,400,000 1,500,000 2,100,000 375,000 6,600,000 600,000 1,200,000
-- (1,100,000) (600,000) -- (900,000) -- (525,000) (525,000) (150,000) (600,000)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
600,000 (1,100,000) -- 1,400,000 600,000 2,100,000 (150,000) 6,075,000 450,000 600,000
=========== ============ =========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
49
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
Japan Malaysia (Free) Mexico (Free) Netherlands
WEBS WEBS WEBS WEBS
Index Index Index Index
Series Series Series Series
-------------------------- ------------------------ ----------------------- ------------------------
For the For the For the For the
six months For the six months For the six months For the six months For the
ending year ending year ending year ending year
02/28/99 ended 02/28/99 ended 02/28/99 ended 02/28/99 ended
(Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income/
(loss) .................$ (348,433) $ (343,352) $ 30,709 $ 691,076 $ 45,965 $ 85,136 $ (4,124) $ 165,472
Net realized gain/(loss)
on investments and
foreign currency
related transactions ... (16,668,022) (4,044,653) (13,329,800) (4,401,103) (624,556) 1,577,042 2,240,396 1,632,091
Net change in unrealized
appreciation
(depreciation) on
investments and
translation of other
assets and liabilities
denominated in foreign
currencies ............. 54,500,956 (68,401,659) 29,742,711 (44,926,346) 3,884,184 (7,542,851) (2,088,744) (840,046
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Net increase/(decrease)
in net assets resulting
from operations ........ 37,484,501 (72,789,664) 16,443,620 (48,636,373) 3,305,593 (5,880,673) 147,528 957,517
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Distributions:
Net investment
income ................. -- -- (30,709) (688,802) (45,439) (83,213) -- (154,868)
In excess of net
investment income ...... -- -- (114,004) -- -- -- (43,135) --
Net realized gains ....... -- (8,383) -- -- -- (261,068) (342,591) (1,331,940)
In excess of net
realized gains ......... -- -- -- -- (8,022) -- -- --
Return of capital ........ -- (259,229) (3,001,513) (450,458) -- -- -- (68,776)
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Net decrease in net
assets from
distributions .......... -- (267,612) (3,146,226) (1,139,260) (53,461) (344,281) (385,726) (1,555,584)
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Capital Stock Transactions:
Net proceeds from sale
of shares .............. 85,714,066 121,696,694 -- 74,873,951 3,954,474 1,486,432 6,008,853 14,394,424
Cost of shares
redeemed ............... (20,408,514) (6,110,956) -- (1,570,595) (2,218,426) (4,592,150) (2,294,879) (1,108,188)
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Net increase/(decrease)
in net assets derived
from capital share
transactions ........... 65,305,552 115,585,738 -- 73,303,356 1,736,048 (3,105,718) 3,713,974 13,286,236
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
Total increase/(decrease)
in net asets ........... 102,790,053 42,528,462 13,297,394 23,527,723 4,988,180 (9,330,672) 3,475,776 12,688,169
Net assets:
Beginning of period ...... 201,485,278 158,956,816 35,866,703 12,338,980 7,295,836 16,626,508 22,349,303 9,661,134
------------ ------------ ----------- ----------- ----------- ---------- ----------- -----------
End of period ............$304,275,331 $201,485,278 $49,164,097 $35,866,703 $12,284,016 $7,295,836 $25,825,079 $22,349,303
============ ============ =========== =========== =========== ========== =========== ===========
Capital Share Transactions:
Shares sold ............ 8,400,000 12,000,000 -- 15,825,000 400,000 100,000 250,000 550,000
Shares redeemed ........ (2,400,000) (600,000) -- (300,000) (200,000) (300,000) (100,000) (50,000)
------------ ------------ ---------- ----------- ----------- ---------- ----------- -----------
Net increase/(decrease)
in shares .............. 6,000,000 11,400,000 -- 15,525,000 200,000 (200,000) 150,000 500,000
============ ============ =========== =========== =========== ========== =========== ===========
See accompanying notes to financial statements.
50
<PAGE>
WEBS INDEX FUND, INC.
<CAPTION>
Singapore (Free) Spain Sweden Switzerland
WEBS WEBS WEBS WEBS
Index Index Index Index
Series Series Series Series
- -------------------------- ------------------------- ----------------------- ------------------------
For the For the For the For the
six months For the six months For the six months For the six months For the
ending year ending year ending year ending year
02/28/99 ended 02/28/99 ended 02/28/99 ended 02/28/99 ended
(Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98 (Unaudited) 08/31/98
- ------------ ------------ ----------- ----------- ----------- --------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 262,730 $ 519,573 $ 28,295 $ 121,310 $ (81,325) $ 64,048 $ (184,333) $ (6,909)
(2,117,761) (15,780,390) 1,190,610 1,661,273 162,568 639,667 756,475 2,711,388
36,074,122 (25,054,420) 3,778,191 (84,559) 823,205 (858,611) (66,024) (117,545)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
34,219,091 (40,315,156) 4,997,096 1,698,024 904,448 (154,896) 506,118 2,586,934
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
(262,730) (519,573) -- (121,310) -- (64,048) -- --
(666,712) (92,309) -- (12,880) -- (5,006) -- (13,567)
-- -- (415,812) (573,744) (49,052) (639,667) -- (2,272,030)
-- -- -- -- -- (9,750) -- --
-- (211,720) -- (67,213) -- (13,138) -- (53,400)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
(929,442) (823,602) (415,812) (775,147) (49,052) (731,609) -- (2,338,997)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
15,230,672 76,731,080 11,241,471 17,901,806 1,520,931 6,434,414 10,380,346 17,011,012
(2,829,057) (3,065,766) -- (2,116,697) -- -- (1,824,479) (1,901,034)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
12,401,615 73,665,314 11,241,471 15,785,109 1,520,931 6,434,414 8,555,867 15,109,978
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
45,691,264 32,526,556 15,822,755 16,707,986 2,376,327 5,547,909 9,061,985 15,357,915
47,248,118 14,721,562 25,029,354 8,321,368 13,791,321 8,243,412 29,162,979 13,805,064
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
$92,939,382 $ 47,248,118 $40,852,109 $25,029,354 $16,167,648 $13,791,321 $38,224,964 $29,162,979
=========== ============ =========== =========== =========== =========== =========== ===========
2,500,000 13,100,000 375,000 675,000 75,000 300,000 625,000 1,000,000
(800,000) (500,000) -- (75,000) -- -- (125,000) (125,000)
- ----------- ------------ ----------- ----------- ----------- ----------- ----------- -----------
1,700,000 12,600,000 375,000 600,000 75,000 300,000 500,000 875,000
=========== ============ =========== =========== =========== =========== =========== ===========
<CAPTION>
United Kingdom
WEBS
Index
Series
- -------------------------
For the
six months For the
ending year
02/28/99 ended
(Unaudited) 08/31/98
- ----------- -----------
<C> <C>
$ 252,138 $ 963,424
3,653,010 438,393
4,517,706 1,989,733
- ----------- -----------
8,422,854 3,391,550
- ----------- -----------
(128,791) (963,424)
-- (151,877)
(248,879) (387,328)
-- --
-- (228,725)
- ----------- -----------
(377,670) (1,731,354)
- ----------- -----------
23,038,372 31,463,983
(7,233,314) --
- ----------- -----------
15,805,058 31,463,983
- ----------- -----------
23,850,242 33,124,179
62,845,533 29,721,354
- ----------- -----------
$86,695,775 $62,845,533
=========== ===========
1,200,000 1,600,000
(400,000) --
- ----------- -----------
800,000 1,600,000
=========== ===========
</TABLE>
51
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Australia
WEBS
Index
Series
------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- -------- --------- -----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ............. $ 7.75 $ 10.35 $ 10.15 $ 9.95(1)
------ ------- ------- -------
Net investment income/(loss)(+) .................. 0.09 0.23 0.17 0.10
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions and translation of
other assets and liabilities denominated
in foreign currencies .......................... 1.85 (2.60) 0.47 0.29
------- ------- ------- -------
Net increase/(decrease) in net assets
resulting from operations .................... 1.94 (2.37) 0.64 0.39
------- ------- ------- -------
Less Distributions
Dividends from net investment income ............. (0.02) (0.23) (0.16) (0.08)
Dividends in excess of net investment income ..... -- 0.00** (0.04) (0.05)
Distributions from net realized gains ............ -- -- (0.04) (0.02)
Distributions in excess of net realized gains .... -- -- -- --
Return of capital ................................ -- -- (0.20) (0.04)
------- ------- ------- -------
Total dividends and distributions ............ (0.02) (0.23) (0.44) (0.19)
------- ------- ------- -------
Net asset value, end of period ................... $ 9.67 $ 7.75 $ 10.35 $ 10.15
======= ======= ======= =======
Total Investment Return (2) 24.99%(4) (23.11)% 6.23% 3.88%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $52,242 $34,099 $41,406 $12,177
Ratios of expenses to average net assets (5) ..... 1.04%(3) 1.05% 1.33% 1.59%(3)
Ratios of net investment income/
(loss) to average net assets (5) ............... 2.05%(3) 2.38% 1.57% 2.18%(3)
Portfolio turnover (6) ........................... 14.07%(4) 1.49% 5.30% 8.84%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout
the period.
(1) Net asset value per share on March 12, 1996
(commencement of operations).
(2) Total investment return is calculated
assuming a purchase of capital stock at net
asset value per share on the first day and a
sale at the net asset value per share on the
last day of the period reported. Dividends
and distributions, if any, are assumed, for
purposes of this calculation, to be
reinvested at the net asset value per share
on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American
Stock Exchange 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)
Ratios of net investment income/(loss) to
average net assets before waivers .......... -- -- 1.57% 2.17%(3)
(6) Excludes portfolio securities received or
delivered as a result of processing capital
share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
52
<PAGE>
WEBS INDEX FUND, INC.
<TABLE>
<CAPTION>
Austria
WEBS
Index
Series
---------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- -------- -------- ----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ............. $10.11 $10.51 $10.40 $10.91(1)
------ ------ ------ ------
Net investment income/(loss)(+) .................. (0.06) 0.06 (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 .......................... (0.52) 0.20 0.13 (0.41)
------ ------ ------ ------
Net increase/(decrease) in net assets
resulting from operations .................... (0.58) 0.26 0.11 (0.37)
------ ------ ------ ------
Less Distributions
Dividends from net investment income ............. -- (0.04) -- (0.02)
Dividends in excess of net investment income ..... -- (0.01) -- (0.01)
Distributions from net realized gains ............ -- (0.61) -- (0.03)
Distributions in excess of net realized gains .... -- 0.00** -- --
Return of capital ................................ -- 0.00** -- (0.08)
------ ------ ------ ------
Total dividends and distributions ............ -- (0.66) -- (0.14)
------ ------ ------ ------
Net asset value, end of period ................... $ 9.53 $10.11 $10.51 $10.40
====== ====== ====== ======
Total Investment Return (2) (5.74)%(4) 2.16% 1.06% (3.39)%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $ 9,529 $8,085 $ 4,205 $13,520
Ratios of expenses to average net assets (5) ..... 1.41%(3) 1.41% 1.68% 1.56%(3)
Ratios of net investment income/
(loss) to average net assets (5) ............... (1.25)%(3) 0.51% (0.22)% 0.87%(3)
Portfolio turnover (6) ........................... 35.78%(4) 36.14% 28.47% 9.60%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout
the period.
(1) Net asset value per share on March 12, 1996
(commencement of operations).
(2) Total investment return is calculated
assuming a purchase of capital stock at net
asset value per share on the first day and a
sale at the net asset value per share on the
last day of the period reported. Dividends
and distributions, if any, are assumed, for
purposes of this calculation, to be
reinvested at the net asset value per share
on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American
Stock Exchange 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 ............................. -- -- 1.69% 1.57%(3)
Ratios of net investment income/(loss) to
average net assets before waivers .......... -- -- (0.22)% 0.86%(3)
(6) Excludes portfolio securities received or
delivered as a result of processing capital
share transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
Belgium
WEBS
Index
Series
----------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
---------- -------- -------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ............. $ 18.40 $ 15.64 $ 14.99 $ 14.92(1)
------- ------- ------- -------
Net investment income/(loss)(+) .................. (0.08) 0.24 0.77 0.40
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions and translation of
other assets and liabilities denominated
in foreign currencies .......................... 0.95 6.09 0.62 0.36
------- ------- ------- -------
Net increase/(decrease) in net assets
resulting from operations .................... 0.87 6.33 1.39 0.76
------- ------- ------- -------
Less Distributions
Dividends from net investment income ............. -- (0.27) (0.33) (0.54)
Dividends in excess of net investment income ..... -- (1.21) (0.28) (0.09)
Distributions from net realized gains ............ -- (1.99) (0.12) (0.06)
Distributions in excess of net realized gains .... -- -- -- --
Return of capital ................................ -- (0.10) (0.01) --
------- ------- ------- -------
Total dividends and distributions ............ -- (3.57) (0.74) (0.69)
------- ------- ------- -------
Net asset value, end of period ................... $ 19.27 $ 18.40 $ 15.64 $ 14.99
======= ======= ======= =======
Total Investment Return (2) 4.73%(4) 39.42% 9.26% 5.01%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $15,414 $ 25,765 $32,528 $ 1,800
Ratios of expenses to average net assets (5) ..... 1.28%(3) 1.04% 1.24% 2.29%(3)
Ratios of net investment income/
(loss) to average net assets (5) ............... (0.85)%(3) 1.28% 4.63% 5.67%(3)
Portfolio turnover (6) ........................... 20.15%(4) 50.46% 16.83% 6.25%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout
the period.
(1) Net asset value per share on March 12, 1996
(commencement of operations).
(2) Total investment return is calculated
assuming a purchase of capital stock at net
asset value per share on the first day and a
sale at the net asset value per share on the
last day of the period reported. Dividends
and distributions, if any, are assumed, for
purposes of this calculation, to be
reinvested at the net asset value per share
on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American
Stock Exchange 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).
</TABLE>
See accompanying notes to financial statements.
53
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Canada
WEBS
Index
Series
---------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- --------- -------- ---------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 9.90 $ 13.43 $ 10.60 $ 10.17(1)
------ ------- ------- -------
Net investment income/(loss)(+) 0.04 0.07 0.05 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 2.02 (2.89) 2.97 0.43
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from operations 2.06 (2.82) 3.02 0.47
------- ------- ------- -------
Less Distributions
Dividends from net investment income (0.02) (0.13) (0.05) (0.03)
Dividends in excess of net investment income -- (0.00)** (0.00)** (0.01)
Distributions from net realized gains (0.04) (0.58) (0.14) --
Distributions in excess of net realized gains -- -- -- 0.00**
Return of capital -- -- -- 0.00**
-------- ------- -------- -------
Total dividends and distributions (0.06) (0.71) (0.19) (0.04)
-------- ------- -------- -------
Net asset value, end of period $ 11.90 $ 9.90 $ 13.43 $ 10.60
======= ====== ======= =======
Total Investment Return (2) 20.78%(4) (21.69)% 28.50% 4.63%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $15,474 $ 6,932 $24,168 $13,776
Ratios of expenses to average net assets (5) 1.35%(3) 1.14% 1.35% 1.44%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.66%(3) 0.46% 0.39% 0.79%(3)
Portfolio turnover (6) 4.98%(4) 3.70% 11.02% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 0.39% 0.78%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
54
<PAGE>
WEBS INDEX FUND, INC.
<TABLE>
<CAPTION>
France
WEBS
Index
Series
--------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 19.13 $ 14.50 $ 12.73 $ 12.42(1)
------- ------- ------- -------
Net investment income/(loss)(+) (0.10) 0.30 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 1.86 4.76 1.95 0.45
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from operations 1.76 5.06 2.12 0.62
------- ------- ------- -------
Less Distributions
Dividends from net investment income -- (0.19) (0.15) (0.09)
Dividends in excess of net investment income -- (0.03) -- (0.01)
Distributions from net realized gains -- (0.13) (0.20) 0.00**
Distributions in excess of net realized gains -- (0.01) -- --
Return of capital -- (0.07) -- (0.21)
------- ------- ------- -------
Total dividends and distributions -- (0.43) (0.35) (0.31)
------- ------- ------- -------
Net asset value, end of period $ 20.89 $ 19.13 $ 14.50 $ 12.73
======= ======= ======= =======
Total Investment Return (2) 9.20%(4) 34.77% 16.60% 4.95%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $50,168 $45,922 $14,519 $22,930
Ratios of expenses to average net assets (5) 1.06%(3) 1.18% 1.52% 1.84%(3)
Ratios of net investment income/(loss) to average net assets (5) (0.95)%(3) 1.58% 1.17% 2.72%(3)
Portfolio turnover (6) 0.00%(4) 5.65% 7.13% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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 -- -- 1.52% 1.85%(3)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 1.17% 2.71%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
Germany
WEBS
Index
Series
-------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
Unaudited) 08/31/98 08/31/97 08/31/96
---------- -------- -------- ---------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 20.25 $ 16.31 $ 13.64 $ 13.23(1)
------- ------- ------- -------
Net investment income/(loss)(+) (0.06) 0.29 0.03 0.06
Net realized and unrealized gain/(loss) on investments and foreign
currency related transactions and translation of other assets and
liabilities denominated in foreign currencies 0.53 3.92 2.77 0.47
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from operations 0.47 4.21 2.80 0.53
------- ------- ------- -------
Less Distributions
Dividends from net investment income -- (0.17) (0.03) (0.03)
Dividends in excess of net investment income -- (0.01) (0.01) (0.01)
Distributions from net realized gains (0.04) (0.01) (0.07) --
Distributions in excess of net realized gains -- 0.00** -- (0.01)
Return of capital -- (0.08) (0.02) (0.07)
------- -------- ------- -------
Total dividends and distributions (0.04) (0.27) (0.13) (0.12)
------- ------- ------- -------
Net asset value, end of period $ 20.68 $ 20.25 $ 16.31 $ 13.64
======= ======= ======= =======
Total Investment Return (2) 2.31%(4) 25.69% 20.51% 4.00%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $86,869 $72,934 $24,486 $28,664
Ratios of expenses to average net assets (5) 1.02%(3) 1.08% 1.37% 1.68%(3)
Ratios of net investment income/(loss) to average net assets (5) (0.59)%(3) 1.43% 0.23% 1.00%(3)
Portfolio turnover (6) 1.87%(4) 0.64% 9.04% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 0.22% 0.99%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Hong Kong
WEBS
Index
Series
-------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
---------- -------- -------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 6.41 $ 14.73 $ 13.05 $ 12.83(1)
-------- ------- ------- -------
Net investment income/(loss)(+) 0.10 0.35 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 2.29 (8.27) 2.12 0.27
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from operations 2.39 (7.92) 2.38 0.42
------- ------- ------- -------
Less Distributions
Dividends from net investment income (0.10) (0.28) (0.21) (0.13)
Dividends in excess of net investment income (0.01) 0.00** (0.01) (0.02)
Distributions from net realized gains -- -- (0.34) (0.01)
Distributions in excess of net realized gains -- -- 0.00** --
Return of capital -- (0.12) (0.14) (0.04)
------- ------- ------- -------
Total dividends and distributions (0.11) (0.40) (0.70) (0.20)
------- ------- ------- -------
Net asset value, end of period $ 8.69 $ 6.41 $ 14.73 $ 13.05
======= ======= ======= =======
Total Investment Return (2) 37.06%(4) (54.22)% 17.80% 3.22%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $66,515 $49,973 $25,417 $ 7,845
Ratios of expenses to average net assets (5) 1.06%(3) 1.09% 1.43% 1.52%(3)
Ratios of net investment income/(loss) to average net assets (5) 2.25%(3) 3.76% 1.71% 2.37%(3)
Portfolio turnover (6) 35.72%(4) 21.50% 22.90% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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% 1.53%(3)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 1.71% 2.36%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
56
<PAGE>
WEBS INDEX FUND, INC.
<TABLE>
<CAPTION>
Italy
WEBS
Index
Series
--------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- -------- -------- ----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 22.89 $ 16.66 $ 13.79 $ 13.62(1)
------- ------- ------- -------
Net investment income/(loss)(+) (0.12) 0.18 0.12 0.25
Net realized and unrealized gain/(loss) on investments and foreign
currency related transactions and translation of other assets and
liabilities denominated in foreign currencies 2.98 7.94 3.10 0.31
------- ------- ------- -------
Net increase/(decrease) in net assets resulting from operations 2.86 8.12 3.22 0.56
------- ------- ------- -------
Less Distributions
Dividends from net investment income -- (0.18) (0.11) (0.14)
Dividends in excess of net investment income -- (1.02) (0.24) (0.03)
Distributions from net realized gains (0.47) (0.69) -- (0.14)
Distributions in excess of net realized gains -- -- -- --
Return of capital -- -- -- (0.08)
------- ------- ------- -------
Total dividends and distributions (0.47) (1.89) (0.35) (0.39)
------- ------- ------- -------
Net asset value, end of period $ 25.28 $ 22.89 $ 16.66 $ 13.79
======= ======= ======= =======
Total Investment Return (2) 12.44%(4) 47.66% 23.37% 4.11%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $75,855 $58,368 $32,495 $35,170
Ratios of expenses to average net assets (5) 1.08%(3) 1.02% 1.33% 1.43%(3)
Ratios of net investment income/(loss) to average net assets (5) (0.97)%(3) 0.76% 0.76% 3.69%(3)
Portfolio turnover (6) 7.26%(4) 8.16% 13.70% 19.80%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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).
</TABLE>
<TABLE>
<CAPTION>
Japan
WEBS
Index
Series
--------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- -------- -------- ----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $8.39 $12.61 $14.33 $14.79(1)
------- ------- ------- -------
Net investment income/(loss)(+) (0.01) (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 1.76 (4.19) (1.65) (0.39)
------- ------ ------- -------
Net increase/(decrease) in net assets resulting from operations 1.75 (4.21) (1.71) (0.46)
------- ------ ------- -------
Less Distributions
Dividends from net investment income -- -- -- --
Dividends in excess of net investment income -- -- -- --
Distributions from net realized gains -- 0.00** -- --
Distributions in excess of net realized gains -- -- (0.01) --
Return of capital -- (0.01) -- --
------- ------- ------- -------
Total dividends and distributions -- (0.01) (0.01) --
------- ------- ------- -------
Net asset value, end of period $ 10.14 $ 8.39 $ 12.61 $ 14.33
======= ======= ======= =======
Total Investment Return (2) 20.86%(4) (33.38)% (11.97)% (3.11)%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $304,275 $ 201,485 $158,957 $103,164
Ratios of expenses to average net assets (5) 0.95%(3) 1.04% 1.19% 1.37%(3)
Ratios of net investment income/(loss) to average net assets (5) (0.27)%(3) (0.21)% (0.48)% (1.01)%(3)
Portfolio turnover (6) 0.00%(4) 0.00% 12.90% 21.54%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset value
per share on the last day of the period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at the
net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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).
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Malaysia (Free)
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $2.11 $8.23 $13.80 $13.24(1)
---------- ---------- ---------- ---------
Net investment income/(loss)(+) 0.00** 0.06 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 0.96 (6.10) (5.55) 0.59
---------- ---------- ---------- ---------
Net increase/(decrease) in net assets resulting from operations 0.96 (6.04) (5.54) 0.57
---------- ---------- ---------- ---------
Less Distributions
Dividends from net investment income -- (0.05) 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 (0.18) (0.03) (0.02) (0.01)
---------- ---------- ---------- ---------
Total dividends and distributions (0.18) (0.08) (0.03) (0.01)
---------- ---------- ---------- ---------
Net asset value, end of period $2.89 $2.11 $8.23 $13.80
========== ========== ========== =========
Total Investment Return (2) 47.30%(4) (73.57)% (40.20)% 4.28%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $49,164 $35,867 $12,339 $9,318
Ratios of expenses to average net assets (5) 2.00%(3) 1.09% 1.46% 1.58%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.13%(3) 1.40% 0.04% (0.35)%(3)
Portfolio turnover (6) 10.38%(4) 2.11% 0.00% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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).
</TABLE>
See accompanying notes to financial statements.
58
<PAGE>
WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mexico (Free)
WEBS
Index
Series
----------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $8.11 $15.11 $11.52 $9.95(1)
---------- --------- ---------- ---------
Net investment income/(loss)(+) 0.04 0.09 0.02 0.00**
Net realized and unrealized gain/(loss) on investments and foreign
currency related transactions and translation of other assets
and liabilities denominated in foreign currencies 3.07 (6.71) 4.07 1.59
---------- --------- ---------- ---------
Net increase/(decrease) in net assets resulting from operations 3.11 (6.62) 4.09 1.59
---------- --------- ---------- ---------
Less Distributions
Dividends from net investment income (0.04) (0.09) (0.01) --
Dividends in excess of net investment income -- -- (0.01) (0.01)
Distributions from net realized gains -- (0.29) (0.44) --
Distributions in excess of net realized gains (0.01) -- -- --
Return of capital -- -- (0.04) (0.01)
---------- --------- ---------- ---------
Total dividends and distributions (0.05) (0.38) (0.50) (0.02)
---------- --------- ---------- ---------
Net asset value, end of period $11.17 $8.11 $15.11 $11.52
========== ========= ========== =========
Total Investment Return (2) 38.38%(4) (44.18)% 35.21% 15.93%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $12,284 $7,296 $16,627 $5,759
Ratios of expenses to average net assets (5) 1.39%(3) 1.34% 1.63% 1.75%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.90%(3) 0.60% 0.14% 0.01%(3)
Portfolio turnover (6) 7.67%(4) 14.05% 22.80% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 0.13% 0.00%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
Netherlands
WEBS
Index
Series
----------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $23.50 $21.42 $17.36 $15.91(1)
---------- ---------- --------- ---------
Net investment income/(loss)(+) 0.00** 0.25 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 0.37 3.53 4.79 1.54
---------- ---------- --------- ---------
Net increase/(decrease) in net assets resulting from operations 0.37 3.78 4.90 1.78
---------- ---------- --------- ---------
Less Distributions
Dividends from net investment income -- (0.16) (0.10) (0.14)
Dividends in excess of net investment income (0.05) -- (0.01) (0.01)
Distributions from net realized gains (0.36) (1.47) (0.71) (0.08)
Distributions in excess of net realized gains -- -- -- (0.01)
Return of capital -- (0.07) (0.02) (0.09)
---------- ---------- --------- ---------
Total dividends and distributions (0.41) (1.70) (0.84) (0.33)
---------- ---------- --------- ---------
Net asset value, end of period $23.46 $23.50 $21.42 $17.36
========== ========== ========= =========
Total Investment Return (2) 1.45%(4) 17.41% 28.04% 11.19%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $25,825 $22,349 $9,661 $6,962
Ratios of expenses to average net assets (5) 1.13%(3) 1.12% 1.46% 1.63%(3)
Ratios of net investment income/(loss) to average net assets (5) (0.04)%(3 1.00% 0.54% 2.93%(3)
Portfolio turnover (6) 23.21%(4) 15.81% 12.68% 4.32%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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 -- -- 1.46% 1.64%(3)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 0.53% 2.92%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
59
<PAGE>
FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Singapore (Free)
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 3.30 $ 8.66 $ 11.38 $ 12.24(1)
-------- -------- -------- --------
Net investment income/(loss)(+) 0.02 0.07 0.00** 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 2.55 (5.37) (2.67) (0.86)
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting from operations 2.57 (5.30) (2.67) (0.82)
-------- -------- -------- --------
Less Distributions
Dividends from net investment income (0.02) (0.04) 0.00** (0.03)
Dividends in excess of net investment income (0.04) (0.01) (0.01) (0.01)
Distributions from net realized gains -- -- (0.02) --
Distributions in excess of net realized gains -- -- -- --
Return of capital -- (0.01) (0.02) --
-------- -------- -------- --------
Total dividends and distributions (0.06) (0.06) (0.05) (0.04)
-------- -------- -------- --------
Net asset value, end of period $ 5.81 $ 3.30 $ 8.66 $ 11.38
======== ======== ======== ========
Total Investment Return (2) 77.84%(4) (61.29)% (23.48)% (6.73)%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $ 92,939 $47,248 $14,722 $ 9,107
Ratios of expenses to average net assets (5) 1.00%(3) 1.08% 1.43% 1.56%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.68%(3) 1.17% 0.03% 0.69%(3)
Portfolio turnover (6) 20.24%(4) 67.17% 13.40% 26.29%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 0.03% 0.68%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
60
<PAGE>
<TABLE>
<CAPTION>
Spain
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 23.84 $ 18.49 $ 14.09 $ 13.28(1)
-------- -------- -------- --------
Net investment income/(loss)(+) 0.03 0.16 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 5.20 5.94 5.33 0.98
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting from operations 5.23 6.10 5.52 1.12
-------- -------- -------- --------
Less Distributions
Dividends from net investment income -- (0.12) (0.12) (0.18)
Dividends in excess of net investment income -- (0.02) (0.05) --
Distributions from net realized gains (0.40) (0.55) (0.86) (0.13)
Distributions in excess of net realized gains -- -- -- --
Return of capital -- (0.06) (0.09) --
-------- -------- -------- --------
Total dividends and distributions (0.40) (0.75) (1.12) (0.31)
-------- -------- -------- --------
Net asset value, end of period $ 28.67 $ 23.84 $ 18.49 $ 14.09
======== ======== ======== ========
Total Investment Return (2) 21.89%(4) 32.58% 39.15% 8.45%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $40,852 $25,029 $ 8,321 $ 4,227
Ratios of expenses to average net assets (5) 1.10%(3) 1.11% 1.67% 1.76%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.19%(3) 0.61% 1.04% 2.04%(3)
Portfolio turnover (6) 7.49%(4) 9.10% 19.21% 4.73%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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 -- -- 1.67% 1.77%(3)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 1.04% 2.03%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
<TABLE>
<CAPTION>
Sweden
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 18.39 $ 18.32 $ 14.67 $ 13.22(1)
-------- -------- ---------- ----------
Net investment income/(loss)(+) (0.11) 0.10 (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 1.39 0.95 4.45 1.67
-------- -------- ---------- ----------
Net increase/(decrease) in net assets resulting from operations 1.28 1.05 4.42 1.87
-------- -------- ---------- ----------
Less Distributions
Dividends from net investment income -- (0.08) -- (0.23)
Dividends in excess of net investment income -- (0.01) -- (0.07)
Distributions from net realized gains (0.07) (0.86) (0.77) (0.12)
Distributions in excess of net realized gains -- (0.01) -- --
Return of capital -- (0.02) -- --
-------- -------- ---------- ----------
Total dividends and distributions (0.07) (0.98) (0.77) (0.42)
-------- -------- ---------- ----------
Net asset value, end of period $ 19.60 $ 18.39 $ 18.32 $ 14.67
======== ======== ========== ==========
Total Investment Return (2) 6.95%(4) 5.48% 30.10% 14.13%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $16,168 $ 13,791 $ 8,243 $ 4,400
Ratios of expenses to average net assets (5) 1.17%(3) 1.17% 1.64% 1.75%(3)
Ratios of net investment income/(loss) to average net assets (5) (1.15)%(3) 0.48% (0.19)% 3.05%(3)
Portfolio turnover (6) 5.19%(4) 10.88% 13.71% 5.87%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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).
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
FINANCIAL HIGHLIGHTS (concluded) WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Switzerland
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 15.55 $ 13.79 $ 12.29 $ 12.07(1)
-------- -------- -------- --------
Net investment income/(loss)(+) (0.09) (0.00)%** (0.04) 0.08
Net realized and unrealized gain/(loss) on investments and foreign
currency related transactions and translation of other assets
and liabilities denominated in foreign currencies 0.63 3.01 2.11 0.24
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting from operations 0.54 3.01 2.07 0.32
-------- -------- -------- --------
Less Distributions
Dividends from net investment income -- -- -- (0.10)
Dividends in excess of net investment income -- (0.01) -- --
Distributions from net realized gains -- (1.21) (0.57) --
Distributions in excess of net realized gains -- -- -- --
Return of capital -- (0.03) 0.00** --
-------- -------- -------- --------
Total dividends and distributions -- (1.25) (0.57) (0.10)
-------- -------- -------- --------
Net asset value, end of period $ 16.09 $ 15.55 $ 13.79 $ 12.29
======== ======== ======== ========
Total Investment Return (2) 3.47%(4) 21.24% 16.69% 2.60%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $38,225 $29,163 $13,805 $ 6,158
Ratios of expenses to average net assets (5) 1.14%(3) 1.15% 1.52% 1.82%(3)
Ratios of net investment income/(loss) to average net assets (5) (1.12)%(3) (0.03)% (0.29)% 1.39%(3)
Portfolio turnover (6) 32.50%(4) 43.09% 48.05% 17.06%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- (0.29)% 1.38%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
<TABLE>
<CAPTION>
United Kingdom
WEBS
Index
Series
---------------------------------------------------------
For the
six months For the For the For the
ended year year period
02/28/99 ended ended 03/12/96*-
(Unaudited) 08/31/98 08/31/97 08/31/96
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 18.48 $ 16.50 $ 13.15 $ 12.14(1)
-------- -------- -------- --------
Net investment income/(loss)(+) 0.07 0.37 0.38 0.21
Net realized and unrealized gain/(loss) on investments and foreign
currency related transactions and translation of other assets
and liabilities denominated in foreign currencies 2.18 2.12 3.62 1.06
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting from operations 2.25 2.49 4.00 1.27
-------- -------- -------- --------
Less Distributions
Dividends from net investment income (0.03) (0.29) (0.32) (0.20)
Dividends in excess of net investment income -- (0.04) (0.06) (0.03)
Distributions from net realized gains (0.06) (0.11) (0.17) 0.00**
Distributions in excess of net realized gains -- -- -- --
Return of capital -- (0.07) (0.10) (0.03)
-------- -------- -------- --------
Total dividends and distributions (0.09) (0.51) (0.65) (0.26)
-------- -------- -------- --------
Net asset value, end of period $ 20.64 $ 18.48 $ 16.50 $ 13.15
======== ======== ======== ========
Total Investment Return (2) 12.18%(4) 14.98% 30.48% 10.41%(4)
Ratios/Supplemental Data
Net assets, end of period (in 000's) $86,696 $62,846 $29,721 $15,790
Ratios of expenses to average net assets (5) 1.00%(3) 1.03% 1.38% 1.61%(3)
Ratios of net investment income/(loss) to average net assets (5) 0.69%(3) 1.90% 2.47% 3.62%(3)
Portfolio turnover (6) 3.65%(4) 2.83% 1.84% 0.00%(4)
* Commencement of operations.
** Less than one cent per share.
+ Based on average shares outstanding throughout the period.
(1) Net asset value per share on March 12, 1996 (commencement of operations).
(2) Total investment return is calculated assuming a purchase of capital stock
at net asset value per share on the first day and a sale at the net asset
value per share on the last day of the period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at the net asset value per share on the ex-dividend date.
(3) Annualized.
(4) Not Annualized.
(5) Includes voluntary waivers by the American Stock Exchange 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 -- -- 1.38% 1.62%(3)
Ratios of net investment income/(loss) to average
net assets before waivers -- -- 2.47% 3.61%(3)
(6) Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Unit(s).
</TABLE>
63
<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. WEBS of the Malaysia (Free) WEBS Index Series are not currently
being offered. 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.
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.
64
<PAGE>
WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
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. See also "Foreign Currency Translation" below.
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, 1997 would be treated
for tax purposes as arising on September 1, 1998. Each WEBS Index Series
incurred and will elect to defer such losses as follows:
<TABLE>
<CAPTION>
Foreign Exchange Net Realized Capital
WEBS Index Series Losses Losses
----------------- ---------------- --------------------
<S> <C> <C>
Australia WEBS Index Series $103,316 $ 197,727
Austria WEBS Index Series $ 5,323 $ --
Belgium WEBS Index Series $ 18,568 $ --
Canada WEBS Index Series $ 3,884 $ --
France WEBS Index Series $ 9,731 $ --
Germany WEBS Index Series $ 9,486 $ --
Hong Kong WEBS Index Series $ 180 $3,919,056
Italy WEBS Index Series $ 8,912 $ --
Japan WEBS Index Series $132,921 $ 584,399
Malaysia (Free) WEBS Index Series $102,105 $ 872,070
Mexico (Free) WEBS Index Series $ 7,149 $ --
Netherlands WEBS Index Series $ 2,936 $ --
Singapore (Free) WEBS Index Series $ 77,834 $9,133,649
Spain WEBS Index Series $ 2,589 $ --
Sweden WEBS Index Series $ 7,790 $ --
Switzerland WEBS Index Series $ 12,227 $ --
United Kingdom WEBS Index Series $ 877 $ --
</TABLE>
In addition, each of the following WEBS Index Series has a capital loss
carryover which will expire in 2006:
Japan WEBS Index Series $174,602
Malaysia (Free) WEBS Index Series 13,817
Singapore (Free) WEBS Index Series 46,119
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.
65
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
- --------------------------------------------------------------------------------
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.
Foreign currency and assets and liabilities denominated in foreign currency
are generally 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). However,
the Fund may use a different exchange rate from the rate used by MSCI in the
event that the Adviser concludes that such rate is more appropriate. The
Malaysia (Free) WEBS Index Series was valuing the Malaysian Ringgit ("MR") at
5.07 MR per U.S. dollar at February 28, 1999 while MSCI was valuing the
Malaysian Ringgit at 4.47 MR per U.S. dollar on such date.
Effective January 1, 1999, the Austria, Belgium, France, Germany, Italy,
Netherlands, and Spain WEBS Index Series are converted into U.S. Dollars using
the Euro exchange rate.
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 to shareholders, at least
annually, 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, 1998, each Webs 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.
66
<PAGE>
WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
If any of the shares initially issued to Funds Distributor Inc. ("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.
PFPC is paid aggregate fees equal to each WEBS Index Series' allocable
portion of: .22% per annum of the aggregate average daily net assets of the Fund
up to $1.5 billion; plus .15% per annum of the aggregate average daily net
assets of the Fund between $1.5 billion and $3 billion, plus .14% per annum of
the aggregate average daily net assets of the Fund between $3 billion and $5
billion, plus .13% per annum of the aggregate average daily net assets of the
Fund between $5 billion and $7.5 billion, plus .115% per annum of the aggregate
average daily net assets of the Fund between $7.5 billion and $10 billion, plus
.10% per annum of the aggregate average daily net assets of the Fund in excess
of $10 billion. PFPC has a Sub-Administration Agreement with Morgan Stanley &
Co. Incorporated ("MS&Co.") whereby the Administrator pays MS&Co. 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 average daily net assets of each 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% (currently .20%)
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. From time to time the
Distributor may waive all or a portion of the fee.
The Chase Manhattan Bank serves as custodian as well as Securities Lending
Agent to each of the Webs Index Series.
Prior to February 17, 1999, Chase was 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%).
Effective February 17, 1999, the fees payable under the Custody Agreement
were revised. For its custody services to each WEBS Index Series, Chase is now
paid per annum fees based on the aggregate net assets of the WEBS Index Series
as follows: Australia WEBS Index Series (.07%); Austria WEBS Index Series
(.09%); Belgium WEBS Index Series (.09%); Canada WEBS Index Series (.05%);
France WEBS Index Series (.09%); Germany WEBS Index Series (.08%); Hong Kong
WEBS Index Series (.10%); Italy WEBS Index Series (.08%); Japan WEBS Index
Series (.055%); Malaysia (Free) WEBS Index Series (.10%); Mexico (Free) WEBS
Index Series (.15%); 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 (.05%). Chase 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. 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.
67
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY
At February 28, 1999, each WEBS Index Series' cash balance included the
following amount of foreign currency:
<TABLE>
<CAPTION>
Value Cost
---------- ----------
<S> <C> <C>
Australia WEBS Index Series $ 333,934 $ 340,277
Austria WEBS Index Series $ 377,298 $ 378,969
Belgium WEBS Index Series $ 505 $ 538
Canada WEBS Index Series $ 35,492 $ 35,720
France WEBS Index Series $ 102,150 $ 107,791
Germany WEBS Index Series $ 120,857 $ 122,155
Hong Kong WEBS Index Series $4,618,601 $4,618,601
Italy WEBS Index Series $ 12,739 $ 12,711
Japan WEBS Index Series $ 850,933 $ 840,138
Malaysia (Free) WEBS Index Series $ 151,462 $ 151,462
Mexico (Free) WEBS Index Series $ 30,731 $ 30,569
Netherlands WEBS Index Series $ 32,520 $ 32,680
Singapore (Free) WEBS Index Series $ 167,008 $ 166,650
Spain WEBS Index Series $ 169,802 $ 169,857
Sweden WEBS Index Series $ 62,022 $ 63,474
Switzerland WEBS Index Series $ 200,910 $ 200,910
United Kingdom WEBS Index Series $ 130,736 $ 133,208
</TABLE>
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 receive cash collateral and may invest such collateral in
short-term investments, and bear 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 Chase, 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,
1999, and the collateral received with respect to such loans were as follows:
<TABLE>
<CAPTION>
Cash
Market Value of Collateral
WEBS Index Series Loaned Securities Received
----------------- ----------------- -----------
<S> <C> <C>
Australia WEBS Index Series $ 2,517,856 $ 2,657,735
Austria WEBS Index Series $ 15,219 $ 15,738
Belgium WEBS Index Series $ 993,373 $ 1,057,056
Canada WEBS Index Series $ 1,233,126 $ 1,249,755
France WEBS Index Series $ 1,413,242 $ 1,503,150
Germany WEBS Index Series $ 8,183,697 $ 8,587,468
Hong Kong WEBS Index Series $ 3,029,063 $ 3,396,090
Italy WEBS Index Series $30,468,058 $32,506,100
Japan WEBS Index Series $55,897,511 $59,278,434
Malaysia (Free) WEBS Index Series $ -- $ --
Mexico (Free) WEBS Index Series $ 910,427 $ 972,127
Netherlands WEBS Index Series $ 7,633,425 $ 8,067,900
Singapore (Free) WEBS Index Series $22,563,972 $24,247,136
Spain WEBS Index Series $ 5,286,189 $ 5,587,068
Sweden WEBS Index Series $ 771,613 $ 1,006,020
Switzerland WEBS Index Series $ 829,124 $ 878,105
United Kingdom WEBS Index Series $ -- $ --
</TABLE>
68
<PAGE>
WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
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. Shares of the Malaysia (Free) WEBS Index Series are
not currently being offered. 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 redemptions of Creation Units of the Malaysia (Free) WEBS Index
Series are paid only in Malaysian Ringgits to shareholders that have established
an appropriate account with a duly licensed Malaysian financial institution and
acknowledged certain risks and restrictions, and except for residents of
Australia and New Zealand whom 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
The Fund 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
$20,000,000 line of credit; provided, however, that:
(i) Total outstanding advances to all WEBS Index Series under the line
of credit may not exceed $20,000,000 and
(ii) The aggregate amount outstanding under the line of credit to any
one WEBS Index Series may not exceed the lowest of (a) $20,000,000 (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%. There were no loans outstanding at February 28,1999.
The maximum amount of advances outstanding during the six months ended
February 28, 1999 was as follows:
WEBS Index Series Advances
----------------- ----------
Austria WEBS Index Series $ 290,000
Belgium WEBS Index Series $4,020,000
Canada WEBS Index Series $ 395,000
France WEBS Index Series $ 315,000
Germany WEBS Index Series $ 680,000
Hong Kong WEBS Index Series $1,500,000
Italy WEBS Index Series $4,575,000
Mexico (Free) WEBS Index Series $ 305,000
Netherlands WEBS Index Series $1,330,000
Spain WEBS Index Series $ 655,000
Sweden WEBS Index Series $ 565,000
Switzerland WEBS Index Series $1,070,000
United Kingdom WEBS Index Series $ 770,000
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, 1999.
69
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 1999:
<TABLE>
<CAPTION>
Purchases of Sales of
WEBS Index Series Securities Securities
----------------- ------------ -----------
<S> <C> <C>
Australia WEBS Index Series $ 6,222,052 $ 6,004,875
Austria WEBS Index Series $ 3,010,972 $ 3,565,991
Belgium WEBS Index Series $ 4,191,306 $ 8,351,736
Canada WEBS Index Series $ 571,613 $ 910,696
France WEBS Index Series $ -- $ 574,201
Germany WEBS Index Series $ 1,372,094 $ 2,406,253
Hong Kong WEBS Index Series $22,697,918 $24,060,125
Italy WEBS Index Series $ 4,972,128 $11,207,642
Japan WEBS Index Series $ -- $ --
Malaysia (Free) WEBS Index Series $ 4,412,501 $10,100,364
Mexico (Free) WEBS Index Series $ 776,833 $ 1,024,794
Netherlands WEBS Index Series $ 5,396,330 $ 7,014,115
Singapore (Free) WEBS Index Series $15,750,883 $15,538,205
Spain WEBS Index Series $ 2,320,007 $ 3,505,646
Sweden WEBS Index Series $ 750,244 $ 1,486,598
Switzerland WEBS Index Series $10,806,565 $12,129,140
United Kingdom WEBS Index Series $ 2,663,517 $ 3,204,658
</TABLE>
FOREIGN INCOME TAXES
For the six months ended February 28, 1999, 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 $ 18,021
Austria WEBS Index Series $ 817
Belgium WEBS Index Series $ 6,379
Canada WEBS Index Series $ 19,287
France WEBS Index Series $ 2,635
Germany WEBS Index Series $ 13,698
Hong Kong WEBS Index Series $ --
Italy WEBS Index Series $ 460
Japan WEBS Index Series $132,929
Malaysia (Free) WEBS Index Series $ --
Mexico (Free) WEBS Index Series $ 39
Netherlands WEBS Index Series $ 19,220
Singapore (Free) WEBS Index Series $ --
Spain WEBS Index Series $ 33,020
Sweden WEBS Index Series $ --
Switzerland WEBS Index Series $ --
United Kingdom WEBS Index Series $ 90,931
70
<PAGE>
WEBS INDEX FUND, INC.
- --------------------------------------------------------------------------------
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.
Prior to October 16, 1998 each WEBS Index Series had 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 would maintain at least 25% of
the value of its assets in securities of issuers in each industry for which its
benchmark index had a concentration of more than 25% (except where the
concentration of the index was the result of a single stock). A special meeting
of the shareholders of WEBS Index Fund, Inc. was held on October 16, 1998. At
the meeting the shareholders voted to approve a change in each of the WEBS Index
Series' concentration policy as follows:
With respect to the two most heavily weighted industries or groups of
industries in the benchmark index of the WEBS Index Series, the WEBS Index
Series will invest in portfolio securities (consistent with its investment
objective and other investment policies) such that the weighting of each such
industry or group of industries in the WEBS Index Series does not diverge by
more than 10 percentage points from the respective weightings of such industry
or group of industries in the benchmark index. An exception to the general
policy stated in the previous sentence is that if investment in the stock of a
single issuer would account for more than 25% of the WEBS Index Series, the WEBS
Index Series will invest less than 25% of its net assets in such stock and will
reallocate the excess to stock(s) in the same industry or group of industries,
and/or to stock(s) in another industry or group of industries, in the benchmark
index.
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.
MALAYSIAN CAPITAL CONTROLS
Bank Negara Malaysia, the central bank of Malaysia, announced measures on
September 1, 1998 that significantly restricted the rights of non-residents
(such as the Fund) with respect to transactions in Malaysian securities. The
"Measures to Regain Monetary Independence" were intended to insulate Malaysia
from the problems confronting the international financial markets and the
current escalation of regional contagion effects. The measures affected a number
of areas in addition to trading in securities, including dealings in foreign
currency, general payments, exports of goods, credit facilities and investments
abroad.
Certain restrictions imposed by the capital controls at September 1, 1998
were as follows:
o Ringgit-denominated securities had to be deposited with authorized
depositories and any transactions in ringgit-denominated securities held by
non-residents had to be transacted through an authorized depository for good
delivery;
o All payments by non-residents for any security registered in Malaysia had
to be made (a) in a foreign currency or (b) in ringgit from an "external
account";
o All proceeds in ringgit received by a non-resident from the sale of any
security registered in Malaysia had to be retained in an external account,
unless the security was held for more than one year (in which case proceeds from
the sale of the security either could be immediately converted to a foreign
currency or credited to the external account); and
o The use of funds in an external account was limited to the purchase of
ringgit assets in Malaysia.
On September 3, 1998 the Malaysia (Free) WEBS Index Series ("Malaysia
Series") announced that it was unable to exchange Creation Units of WEBS
principally on an in-kind basis. In such circumstances, the Fund temporarily
suspended new creations of Creation Units of WEBS of the Malaysia Series.
71
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
- --------------------------------------------------------------------------------
Effective February 4, 1999, the Malaysian Central Bank announced a system
of graduated exit levies and profit taxes that replaced the prior repatriation
restrictions. In general, capital invested in Malaysia prior to February 15,
1999 may be repatriated subject to a graduated levy based on the duration of the
investment:
-- Capital repatriated by March 31, 1999 - 30% Levy
-- Capital repatriated by May 30, 1999 - 20% Levy
-- Capital repatriated by August 31, 1999 - 10% Levy
-- Capital repatriated by subsequent to August 31, 1999 - 0% Levy
Profits on capital invested prior to February 15, 1999 may be repatriated
without the payment of any levy, but are subject to a 10% levy if they are
repatriated on or after September 1, 1999. Capital invested in Malaysia on or
subsequent to February 15, 1999 will not be subject to levies upon repatriation
on capital. However capital invested in Malaysia after February 15, 1999 will be
subject to a 30% levy on profit repatriated within twelve months from the date
it was earned. Profit repatriated after twelve months will be subject to a 10%
levy.
Effective February 17, 1999, the Malaysia Series announced that it is able
to honor requests for the redemption of Creation Units through the delivery of
Malaysian Ringgits only. The Malaysia Series is now permitted to transfer
Malaysian ringgits representing redemption proceeds from its account to a
redeeming investor's account maintained at a duly licensed Malaysian financial
institution. The Malaysia Series will not make redemption payments in U.S.
dollars because of the restrictions on repatriation of ringgits. Investors that
redeem Creation Units of the Malaysia Series at different times may be subject
to significantly different economic consequences, depending on how the Malaysian
exit levies and profit taxes are applied, including the extent to which, if any,
the Malaysian authorities trace the sources of ringgits paid to redeeming
investors by the Malaysia Series. The redeeming holder of creation units of the
Malaysia Series must open a ringgit denominated account in Malaysia in its own
name to accept ringgit proceeds. The Fund also announced that, for the time
being, it is continuing the suspension of sales of Creation Units of the
Malaysia Series. The continued suspension of creations, and the limitations
under Malaysian law on effecting in-kind redemptions and on repatriating
redemption proceeds in ringgits, are likely to cause the Malaysia Series to
continue to trade at larger discounts or premiums to net asset value than they
did prior to September 1, 1998, and such discounts or premiums may be material.
On October 20, 1998 the Fund's Board of Directors declared a dividend of
$.1763 per share of the Malaysia Series payable on November 13, 1998 to
shareholders of record on November 10, 1998. The dividend was a return of
capital, assuming all other current year and accumulated earnings and profits
will be distributed for Federal income tax purposes. The dividend was paid from
cash that the Malaysia Series obtained when settling outstanding loans of its
portfolio securities following the imposition of the Malaysian capital controls.
The "official" exchange rate of 3.8 ringgits per U.S. dollar was fixed by
Malaysian regulatory authorities on September 2, 1998 in connection with the
capital controls imposed by the Malaysian government. The Malaysia Series
converted ringgits to U.S. dollars in computing its net asset value as follows:
September 2 through September 4, 1998, 3.8; September 8 to October 1, 1998, 4.0;
October 1 to October 7 at 4.47; and October 7, to March 31, 1999 at 5.07%.
Effective April 1, 1999, the Index Series uses a foreign exchange rate of 3.8
ringgits per U.S. dollar in computing its net asset value per share. Such rate
currently differs from the rate being used by MSCI to compile the MSCI Malaysia
(Free) Index, the benchmark for the Malaysia Series. These rates were determined
in good faith in accordance with the Fund's policies for the valuation of
foreign currency. The Malaysia Series may use different exchange rates for
computing its net asset value in the future.
72
