-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SApZyjmaPitP0PouiZ+6OV9SRPEZh1V1xxqWsD7kRmXY/ouWjW7x8lT1UHQca2jZ NsksLB9ME6TErhKOejo2aA== 0000893220-97-001216.txt : 19970701 0000893220-97-001216.hdr.sgml : 19970701 ACCESSION NUMBER: 0000893220-97-001216 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEBS INDEX FUND INC CENTRAL INDEX KEY: 0000930667 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-97598 FILM NUMBER: 97633398 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027912919 FORMER COMPANY: FORMER CONFORMED NAME: WFBS INDEX FUND INC DATE OF NAME CHANGE: 19961226 FORMER COMPANY: FORMER CONFORMED NAME: FOREIGN FUND INC DATE OF NAME CHANGE: 19950524 497 1 497 WEBS INDEX FUND, INC. 1 SUPPLEMENT DATED JUNE 30, 1997 TO WEBS INDEX FUND, INC. PROSPECTUS DATED JANUARY 15, 1997 This Supplement supersedes the Supplement dated May 22, 1997 to the Prospectus of WEBS Index Fund, Inc. (the "Fund") dated January 15, 1997 and should be read in conjunction with such Prospectus. 1. The following sentence is added after the fifth sentence of the eighth paragraph on the cover page of the Prospectus: The Statement of Additional Information, material incorporated by reference herein and other information regarding the Fund is available at the SEC's Web site (http://www.sec.gov). 2. On June 2, 1997, the Malaysia WEBS Index Series of the Fund commenced using the Morgan Stanley Capital International ("MSCI") Malaysia (Free) Index as its benchmark index and changed its name accordingly. All references to the "Malaysia WEBS Index Series" in the Prospectus, except those references to historical information concerning the Malaysia WEBS Index Series, should be read as references to the "Malaysia (Free) WEBS Index Series". In connection with the Fund's use of the MSCI Malaysia (Free) Index, MSCI's creation of an Indonesia (Free) Index and Thailand (Free) Index and the inception of a new calculation methodology which allows the use of foreign prices for certain constituent stocks of the MSCI Indonesia (Free) Index, MSCI Malaysia (Free) Index, MSCI Thailand (Free) Index and the existing MSCI Singapore (Free) Index to reflect the investment conditions prevailing for international investors in those respective countries, the following changes were made to the Prospectus effective June 2, 1997: a. The second sentence under "THE BENCHMARK MSCI INDICES UTILIZED BY THE WEBS INDEX SERIES" on page 21 was deleted and the third sentence of the second paragraph under "THE BENCHMARK MSCI INDICES UTILIZED BY THE WEBS INDEX SERIES - Weighting" on page 22 was amended and restated as follows: Free indices are currently calculated for Malaysia, Mexico, Singapore, Indonesia, the Philippines and Thailand, and for those regional and international indices which include such markets. 2 b. The following paragraph was added after the second paragraph under "THE BENCHMARK MSCI INDICES UTILIZED BY THE WEBS INDEX SERIES - Weighting" on page 22: Indonesia, Malaysia, Singapore and Thailand currently impose foreign ownership limits on domestic stock, and when the foreign ownership limit is reached, foreigners may only trade with other foreigners, frequently at a price that is higher than the price available to domestic investors. The Free Indices for such countries are designed to reflect the actual investment conditions for international investors by using the foreign prices for stocks where relevant. The Free Indices for Indonesia, Malaysia, Singapore and Thailand will use foreign prices only when a foreign ownership limit is reached on a constituent stock and a determination is made that there is sufficient long-term liquidity at the foreign price. To compensate for the distorting inflation of a company's weight that may occur as a result of using the higher foreign prices for its shares, a compensating factor called a Free Market Capitalization Factor ("FMCF") is applied to the total number of shares of a "foreign priced" constituent stock in the respective Index. A FMCF is the approximate ratio of domestic price to foreign price and is applied in an effort to align the free market capitalization weight with the domestic market capitalization weight. 3. The historical performance charts for the MSCI Australia Index and MSCI Canada Index found on pages 27 and 28, respectively, are amended so that the bar graph for the 1988 total return figure of 36.40% for the MSCI Australia Index indicates positive performance and the bar graph for the 1994 total return figure of (3.04%) for the MSCI Canada Index indicates negative performance. 4. On June 17, 1997 the Board of Directors of the Fund approved a revised administrative and fund accounting services fee arrangement between the Fund and PFPC Inc. (the "Administrator"). The revised fee arrangement, which is effective July 1, 1997, involves: 1) revision of the Administrator's sliding fee schedule; 2) elimination of the minimum fees currently provided for; and 3) waiver by the Administrator of all deferred fees. In connection with the revised fee arrangement between the Fund and the Administrator, the following changes are made to the Prospectus effective July 1, 1997: a. The line items "Other Expenses, after fee deferrals*" and "Total Operating Expenses, after fee deferrals" contained in the "SUMMARY OF FUND EXPENSES" tables on pages 7 and 8 are revised so that the words "after fee deferrals" are deleted from both line items. 3 b. Note "B." under "SUMMARY OF FUND EXPENSES - EXPLANATION OF TABLES" on page 10 is revised so that: 1) The words "and the administration fee deferral arrangements" are deleted from the second sentence. 2) The fifth sentence is amended by: (i) deleting the first word and substituting "`Other Expenses,' which include fees" and (ii) deleting "are included in `Other Expenses,' and" and substituting a comma. 3) The seventh, eighth and tenth sentences are deleted. c. The section "MANAGEMENT OF THE FUND - Administrator" on page 31 is revised so that: 1) The third sentence of the first paragraph is amended by deleting ".10% per annum of the aggregate net assets of the Fund less than", which is replaced with ".17% per annum of the aggregate net assets of the Fund which total less than $1.5 billion; plus .10% per annum of the aggregate net assets of the Fund between $1.5 billion and". 2) The fifth, sixth, seventh, eighth, ninth and tenth sentences of the first paragraph and the second sentence of the second paragraph, are deleted. 3) The first sentence of the second paragraph is revised so that the words "and the Administrator will recoup 100% of any fees waived in the first year of operations" are deleted. 5. The following changes are made to the second paragraph under "IMPLEMENTATION OF POLICIES" on page 18: a. The third sentence is amended by substituting "plus or minus 5%" for "between 95% and 105%". b. The fifth sentence is amended by adding "the existence of uninvested assets in the portfolios (including cash and deferred organizational expenses)," after "Internal Revenue Code,". 6. It is expected that the Board of Directors of the Fund will authorize a special meeting of the shareholders of the France WEBS Index Series to be held in August 1997, for the purpose of requesting shareholder approval for changing the sub-classification of the France WEBS Index Series from diversified to non-diversified. 4 SUPPLEMENT DATED JUNE 30, 1997 TO WEBS INDEX FUND, INC. STATEMENT OF ADDITIONAL INFORMATION DATED JANUARY 15, 1997 This Supplement supersedes the Supplement dated May 22, 1997 to the Statement of Additional Information of WEBS Index Fund, Inc. (the "Fund") dated January 15, 1997 and should be read in conjunction with such Statement of Additional Information. 1. On June 2, 1997, the Malaysia WEBS Index Series of the Fund commenced using the Morgan Stanley Capital International ("MSCI") Malaysia (Free) Index as its benchmark index and changed its name accordingly. All references to the "Malaysia WEBS Index Series" in the Statement of Additional Information, except those references to historical information concerning the Malaysia WEBS Index Series, should be read as references to the "Malaysia (Free) WEBS Index Series". In connection with the Fund's use of the MSCI Malaysia (Free) Index, MSCI's creation of an Indonesia (Free) Index and Thailand (Free) Index and the inception of a new calculation methodology which allows the use of foreign prices for certain constituent stocks of the MSCI Indonesia (Free) Index, MSCI Malaysia (Free) Index, MSCI Thailand (Free) Index and the existing MSCI Singapore (Free) Index to reflect the investment conditions prevailing for international investors in those respective countries, the following changes were made to the Statement of Additional Information effective June 2, 1997: a. The third sentence of the second paragraph under "THE MSCI INDICES - WEIGHTING" on page 27 was amended and restated as follows: Free indices are currently calculated for Malaysia, Mexico, Singapore, Indonesia, the Philippines and Thailand, and for those regional and international indices which include such markets. b. The following paragraph was added after the second paragraph under the "THE MSCI INDICES: WEIGHTING" on page 27: Indonesia, Malaysia, Singapore and Thailand currently impose foreign ownership limits on domestic stock, and when the foreign ownership limit is reached, foreigners may only trade with other foreigners, frequently at a price 5 that is higher than the price available to domestic investors. The Free Indices for such countries are designed to reflect the actual investment conditions for international investors by using the foreign prices for stocks where relevant. The Free Indices for Indonesia, Malaysia, Singapore and Thailand will use foreign prices only when a foreign ownership limit is reached on a constituent stock and a determination is made that there is sufficient long-term liquidity at the foreign price. To compensate for the distorting inflation of a company's weight that may occur as a result of using the higher foreign prices for its shares, a compensating factor called a Free Market Capitalization Factor ("FMCF") is applied to the total number of shares of a "foreign priced" constituent stock in the respective Index. A FMCF is the approximate ratio of domestic price to foreign price and is applied in an effort to align the free market capitalization weight with the domestic market capitalization weight. 2. On June 17, 1997 the Board of Directors of the Fund approved a revised administrative and fund accounting services fee arrangement between the Fund and PFPC Inc. (the "Administrator"). The revised fee arrangement, which is effective July 1, 1997, involves: 1) revision of the Administrator's sliding fee schedule; 2) elimination of the minimum fees currently provided for; and 3) waiver by the Administrator of all deferred fees. In connection with the revised fee arrangement between the Fund and the Administrator, the following changes are made to the Statement of Additional Information effective July 1, 1997: a. The section "INVESTMENT ADVISORY, MANAGEMENT, ADMINISTRATIVE AND DISTRIBUTION SERVICES - THE ADMINISTRATOR" on pages 51 and 52 is revised so that: 1) The first sentence of the second paragraph is amended by deleting ".10% per annum of the aggregate net assets of the Fund less than", which is replaced with ".17% per annum of the aggregate net assets of the Fund which total less than $1.5 billion; plus .10% per annum of the aggregate net assets of the Fund between $1.5 billion and". 2) The third, fourth, fifth, sixth, seventh, eighth, ninth and tenth sentences of the second paragraph are deleted. 3) The first sentence of the third paragraph is revised so that the words "and the Administrator will recoup 100% of any fees waived during the first year of operations" are deleted. 4) The second sentence of the third paragraph is deleted. 3. The second sentence of the second paragraph under "INVESTMENT ADVISORY, MANAGEMENT, ADMINISTRATIVE AND DISTRIBUTION SERVICES - THE DISTRIBUTOR" on page 52 is amended so that the number "25%" is replaced by ".25%". 4. The following disclosure is added after the last paragraph under "PERFORMANCE INFORMATION" on page 68: A comparison of the quoted non-standard performance offered for various investments is valid only if performance is calculated in the same manner. Since there are different methods for calculating performance, investors should consider the effects of the methods used to calculate performance when comparing performance of the Fund with performance quoted with respect to other investment companies or types of investments. Because some or all of the Fund's investments are denominated in foreign currencies, the strength or weakness of the U.S. dollar as against these currencies may account for part of the Fund's investment performance. Historical information on the value of the dollar versus foreign currencies may be used from time to time in advertisements concerning the Fund. Such historical information is not indicative of future fluctuations in the value of the U.S. dollar against these currencies. In addition, marketing materials may cite country and economic statistics and historical stock market performance information for any of the countries in which the Fund invests, including, but not limited to, the following: population growth, gross domestic product, inflation rate, average stock market price-earnings ratios and the total value of stock markets. Sources for such statistics may include official publications of various foreign governments and exchanges. From time to time, in advertising and marketing literature, the Fund's performance may be compared to the performance of broad groups of open-end and closed-end investment companies with similar investment goals, as tracked 6 by independent organizations such as Investment Company Data, Inc., Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., Morningstar, Inc., Value Line Mutual Fund Survey and other independent organizations. When these organizations' tracking results are used, the Fund will be compared to the appropriate fund category, that is, by fund objective and portfolio holdings, or to the appropriate volatility grouping, where volatility is a measure of a fund's risk. In addition, in connection with the communication of its performance to current or prospective shareholders, the Fund also may compare those figures to the performance of certain unmanaged indices which may assume the reinvestment of dividends or interest but generally do not reflect deductions for administrative and management costs. Examples of such indices include, but are not limited to the following: Dow Jones Industrial Average Consumer Price Index Standard & Poor's 500 Composite Stock Price Index (S&P 500) NASDAQ OTC Composite Index NASDAQ Industrials Index International Finance Corporation's (Global) Composite and (Investable) Composite Indices Morgan Stanley Capital International Indices NASDAQ Composite Index Wilshire 5000 Stock Index For examples of how these sources of information have been used, please see Appendix C to this Statement of Additional Information, "Supplemental Educational Information on WEBS." In addition, the Fund from time to time may compare the results of each WEBS Index Series to the following national benchmarks: COUNTRY NATIONAL INDEX Australia All Ordinares Austria Vienna Stock Exchange Belgium Brussels Stock Exchange Canada Toronto 300 France CAC40 Germany DAX Hong Kong Hang Seng Italy BCI Japan Nikkei 225 Malaysia KLSE Mexico IPC 7 Netherlands CBS All Share Singapore SES All Spain Madrid Stock Exchange Sweden Aff. General Switzerland Swiss Bank U.K. FTSE100 From time to time, the Fund may use in marketing materials a graph entitled "The Efficient Frontier," which illustrates the historical risks and returns of selected unmanaged indices which track the performance of various combinations of United States and international securities for a certain time period, such as twenty years. A twenty year graph, for example, shall use twenty year annualized international returns represented by the Morgan Stanley Capital International Europe, Australasia and Far East (EAFE) Index and twenty year annualized United States returns represented by the S&P 500 Index. Risk is measured by the standard deviation in overall performance within each index. Data presented in the graph shall be provided by Ibbotson Associates, Inc. Performance of an index is historical and does not represent performance of the Fund, and is not a guarantee of future results. For an example of the use of an "Efficient Frontier" graph, please see "The Case for International Index Investing" at Appendix C of this Statement of Additional Information. Evaluation of Fund performance or other relevant statistical information made by independent sources may also be used in advertisements and sales literature concerning the Fund, including reprints of, or selections from, editorials or articles about the Fund. Sources for Fund performance information and articles about the Fund include, but are not limited to, the following: American Association of Individual Investors' Journal, a monthly publication of the AAII that includes articles on investment analysis techniques. Barron's, a Dow Jones and Company, Inc. business and financial weekly that periodically reviews investment company performance data. Business Week, a national business weekly that periodically reports the performance rankings and ratings of a variety of investment companies investing abroad. CDA Investment Technologies, an organization that provides performance and ranking information through examining the dollar results of hypothetical mutual fund investments and comparing these results against appropriate indices. 8 Forbes, a national business publication that from time to time reports the performance of specific investment companies. Fortune, a national business publication that periodically rates the performance of a variety of investment companies. The Frank Russell Company, a West-Coast investment management firm that periodically evaluates international stock markets and compares foreign equity market performance to U.S. stock market performance. Ibbotson Associates, Inc., a company specializing in investment research and data. Investment Company Data, Inc., an independent organization that provides performance ranking information for broad classes of mutual funds. Investor's Business Daily, a daily newspaper that features financial, economic, and business news. Kiplinger's Personal Finance Magazine, a monthly investment advisory publication that periodically features the performance of a variety of securities. Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a weekly publication of industry-wide mutual fund averages by type of fund. Money, a monthly magazine that from time to time features both specific funds and the mutual fund industry as a whole. Morgan Stanley International, an integrated investment banking firm that compiles statistical information. The New York Times, a nationally distributed newspaper that regularly covers financial news. Smart Money, a national personal finance magazine published monthly by Dow Jones & Company, Inc. and The Hearst Corporation that focuses on ideas for investing, spending and saving. Value Line Mutual Fund Survey, an independent organization that provides biweekly performance and other information on mutual funds. The Wall Street Journal, a Dow Jones and Company, Inc. newspaper that regularly covers financial news. 9 Wiesenberger Investment Companies Services, an annual compendium of information about mutual funds and other investment companies, including comparative data on funds' backgrounds, management policies, salient features, management results, income and dividend records and price ranges. Worth, a national publication distributed ten times per year by Capital Publishing Company, a subsidiary of Fidelity Investments that focuses on personal financial journalism. 5. On May 22, 1997, all references to ING as the IOPV symbol for the Germany WEBS Index Series were changed to "WDG". 6. The fourth sentence of the third paragraph under "REDEMPTION OF WEBS IN CREATION UNITS" on page 61 is amended so that the words "or New Zealand" are added after the word "Australian" and the first sentence of the twelfth paragraph under "REDEMPTION OF WEBS IN CREATION UNITS" on page 62 is amended so that the words "and New Zealand" are added after the word "Australian". 7. The following charts, "Average Annual Performance of MSCI Indices and the S&P 500 - periods ending 3/31/97," and "Annual Market Performance and Ranking for 17 MSCI Indices and S&P 500 - periods ending 12/31," replace the charts, "Average Annual Performance of MSCI Indices - periods ending 9/30/96," and "Annual Market Performance and Ranking for 17 MSCI Indices and S&P 500," contained in Appendix C to the Statement of Additional Information: 10 [WEBS LOGO] Average Annual Performance of MSCI Indices and the S&P 500 - periods ending 3/31/97 In US Dollars - (Reinvestment of Net Dividends, except for Mexico (Free) and S&P 500.)* World Equity Benchmark Shares
Total Cumulative Return $10,000 Investment YID 1 Yr 3 Yr 5 Yr 10 Yr 3/31/87-3/31/97 ------ ----- ----- ----- ----- --------------- Australia -1.65 8.30 11.31 10.43 8.74 $23,107 Austria -2.73 -2.75 -2.03 0.06 8.18 $21,945 Belgium 5.49 19.77 16.25 14.87 12.77 $33,253 Canada -1.15 19.54 14.65 9.65 6.31 $18,442 France 5.94 18.43 12.61 10.86 8.98 $23,631 Germany 11.29 20.57 16.04 13.18 10.20 $26,416 Hong Kong -8.79 8.64 11.22 20.70 19.69 $60,332 Italy 1.33 14.72 0.57 6.16 0.43 $10,433 Japan -11.81 -25.74 -7.80 2.88 -0.63 $9,392 Malaysia 0.12 10.02 12.29 18.89 19.00** $51,347** Mexico (Free) 10.23 19.02 -10.72 -2.21 32.84** $138,308** Netherlands 5.71 27.36 24.69 21.98 15.78 $43,294 Singapore (Free) -6.67 -17.08 3.93 12.35 11.90 $30,771 Spain -1.32 30.36 18.72 11.96 10.69 $27,613 Sweden 6.70 33.60 30.16 21.61 15.93 $43,850 Switzerland 10.32 5.71 18.36 23.60 14.05 $37,230 United Kingdom 1.16 28.75 18.38 14.82 12.11 $31,372 - ----------------------------------------------------------------------------------------------------------------- EAFE -1.57 1.45 6.53 10.57 6.01 $17,923 - ----------------------------------------------------------------------------------------------------------------- EAFE EX Japan 3.33 19.44 15.95 14.98 11.30 $29,183 - ----------------------------------------------------------------------------------------------------------------- Europe 4.88 22.45 17.05 14.98 11.15 $28,775 - ----------------------------------------------------------------------------------------------------------------- S&P 500 2.68 19.83 22.30 16.42 13.38 $35,102
MSCI: Morgan Stanley Capital International EAFE: Europe, Australasia and Far East. *Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P 500 Indices. Net dividends means dividends after reduction for taxes withheld at source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend withholding rate used by MSCI is that relevant for residents of Luxembourg, and such rate is higher than the rate applicable to U.S. residents in the case of the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%) and Germany (15% vs. 10%). **Return calculated since 12/31/87 (inception of indices). On June 2 1997 the Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as its benchmark index. Past performance is no guarantee of future results, nor do index results represent any past or expected future performance of WEBS. It is not possible to invest in an index. Indices are unmanaged, and do not bear expenses, unlike WEBS. Foreign markets may be volatile and performance is subject to market fluctuations, political risks and currency risks. Funds Distributor Inc., Distributor. For more information on WEBS, including a prospectus which details charges and expenses, please call 800-810-WEBS. Source: Morgan Stanley Capital International and Standard and Poor's Corporation Please read the prospectus carefully before you invest. 06/97 11 [WEBS LOGO] Annual Market Performance and Ranking for 17 MSCI Indices and S&P 500-periods ending 12/31 In US Dollars - (Reinvestment of Net Dividends, except for Mexico (Free) and S&P 500.)* World Equity Benchmark Shares
Ranking 1996 1995 1994 1993 -------------------------- --------------------------- -------------------------- --------------------------- 1. Spain 40.05% Switzerland 44.12% Japan 21.44% Hong Kong 116.70% 2. Sweden 37.21% S&P 500 37.58% Sweden 18.34% Malaysia 110.00% 3. Hong Kong 33.08% Sweden 33.36% Netherlands 11.70% Singapore (Free) 67.97% 4. Canada 28.54% Spain 29.83% Italy 11.56% Mexico (Free) 49.35% 5. Netherlands 27.51% Netherlands 27.71% Belgium 8.24% Switzerland 45.79% 6. United Kingdom 27.42% Belgium 25.88% Singapore (Free) 6.68% Sweden 36.99% 7. Malaysia 25.89% Hong Kong 22.57% Australia 5.40% Germany 35.64% 8. S&P 500 22.96% United Kingdom 21.27% Germany 4.66% Netherlands 35.28% 9. France 21.20% Canada 18.31% Switzerland 3.54% Australia 35.17% 10. Mexico (Free) 18.70% Germany 16.41% S&P 500 1.32% Spain 29.78% 11. Australia 16.49% France 14.12% United Kingdom -1.63% Italy 28.53% 12. Germany 13.58% Australia 11.19% Canada -3.04% Austria 28.09% 13. Italy 12.59% Singapore (Free) 6.45% Spain -4.80% Japan 25.48% 14. Belgium 12.03% Malaysia 5.16% France -5.18% United Kingdom 24.44% 15. Austria 4.51% Italy 1.05% Austria -6.28% Belgium 23.51% 16. Switzerland 2.28% Japan 0.69% Malaysia -19.90% France 20.91% 17. Singapore (Free) -6.86% Austria -4.72% Hong Kong -28.90% Canada 17.58% 18. Japan -15.50% Mexico (Free) -20.37% Mexico (Free) -40.55% S&P 500 10.08%
Ranking 1992 1991 1990 -------------------------- -------------------------- --------------------------- 1. Hong Kong 32.29% Mexico (Free) 126.05% Mexico (Free) 62.65% 2. Mexico (Free) 24.98% Hong Kong 49.52% United Kingdom 10.29% 3. Malaysia 17.76% Australia 33.64% Hong Kong 9.17% 4. Switzerland 17.23% S&P 500 30.47% Austria 6.33% 5. S&P 500 7.62% Singapore (Free) 24.96% S&P 500 -3.10% 6. Singapore (Free) 6.28% France 17.83% Netherlands -3.19% 7. France 2.81% Netherlands 17.80% Switzerland -6.23% 8. Netherlands 2.30% United Kingdom 16.02% Malaysia -7.91% 9. Belgium -1.47% Switzerland 15.77% Germany -9.36% 10. United Kingdom -3.65% Spain 15.63% Belgium -10.98% 11. Germany -10.27% Sweden 14.42% Singapore (Free) -11.66% 12. Austria -10.65% Belgium 13.77% Canada -13.00% 13. Australia -10.82% Canada 11.08% France -13.83% 14. Canada -12.15% Japan 8.92% Spain -13.85% 15. Sweden -14.41% Germany 8.16% Australia -17.54% 16. Japan -21.45% Malaysia 4.95% Italy -19.19% 17. Spain -21.87% Italy -1.82% Sweden -20.99% 18. Italy -22.22% Austria -12.23% Japan -36.10%
MSCI: Morgan Stanley Capital International *Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P 500 Indices. Net dividends means dividends after reduction for taxes withheld at source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since Mexican and U.S. companies do not withhold tax from U.S. investors. U.S. Market represented by the S&P 500 Index. The dividend withholding rate used by MSCI is that relevant for residents of Luxembourg, and such rate is higher than the rate applicable to U.S. residents in the case of the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%) and Germany (15% vs. 10%). Past performance is no guarantee of future results, nor do index results represent any past or expected future performance of WEBS. It is not possible to invest in an index. Indices are unmanaged, and do not bear expenses, unlike WEBS. Foreign markets may be volatile and performance is subject to market fluctuations, political risks and currency risks. Annual total return in U.S. $ for each country index is based on the change for the period of 1/1 through 12/31 in the market and currency value of the individual stocks comprising each index, assuming reinvestment of any dividends. On June 2, 1997 the Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as its benchmark index. Funds Distributor Inc., Distributor. For more information on WEBS, including a prospectus which details charges and expenses, please call 800-810-WEBS. Sources: Lipper Analytical Services, Morgan Stanley Capital International, and Standard and Poor's Corporation Please read the prospectus carefully before you invest. 06/97 12 8. The following chart, "MSCI Indices vs. S&P 500 - periods ending 3/31/97," and graph, "MSCI Indices and S&P 500 Total Cumulative Return - $10,000 Investment," are added to Appendix C to the Statement of Additional Information: 13 MSCI Indices vs. S&P 500 - periods ending 3/31/97 In US Dollars - (Reinvestment of Net Dividends except for Mexico (Free) and the S&P 500)* World Equity Benchmark Ten Year Growth of $10,000 Shares 3/31/87 - 3/31/97 Mexico (Free)** $138,308 Hong Kong $ 60,332 Malaysia** $ 51,347 Sweden $ 43,850 Netherlands $ 43,294 Switzerland $ 37,230 - -------------------------------------------------------------------------------- S&P 500 $ 35,102 - -------------------------------------------------------------------------------- Belgium $ 33,253 United Kingdom $ 31,372 Singapore (Free) $ 30,771 Spain $ 27,613 Germany $ 26,416 France $ 23,631 Australia $ 23,107 Austria $ 21,945 Canada $ 18,442 Italy $ 10,433 Japan $ 9,392
Seven Year Growth of $10,000 3/31/90 - 3/31/97 Hong Kong $46,149 Mexico (Free) $36,565 Switzerland $32,431 Netherlands $31,127 - -------------------------------------------------------------------------------- S&P 500 $27,174 - -------------------------------------------------------------------------------- Sweden $26,828 United Kingdom $24,804 Malaysia $24,717 Belgium $20,849 Spain $20,596 Australia $19,804 Singapore (Free) $18,953 France $17,803 Germany $16,617 Canada $15,862 Italy $10,342 Japan $ 9,203 Austria $ 6,655
Five Year Growth of $10,000 3/31/92 - 3/31/97 Switzerland $28,843 Malaysia $27,753 Netherlands $27,001 Sweden $26,596 Hong Kong $25,617 - -------------------------------------------------------------------------------- S&P 500 $21,390 - -------------------------------------------------------------------------------- Belgium $19,998 United Kingdom $19,960 Germany $18,575 Singapore(Free) $17,897 Spain $17,593 France $16,747 Australia $16,423 Canada $15,853 Italy $13,483 Japan $11,525 Austria $10,032 Mexico (Free) $ 8,943
MSCI: Morgan Stanley Capital International *Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P 500 Indices. Net dividends means dividends after reduction for taxes withheld at source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend withholding rate used by MSCI is that relevant for residents of Luxembourg, and such rate is higher than the rate applicable to U.S. residents in the case of the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%) and Germany (15% vs. 10%). **Return calculated since 12/31/87 (inception of indices). On June 2, 1997 the Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as its benchmark index. Past performance is no guarantee of future results, nor do index results represent any past or expected future performance of WEBS. It is not possible to invest in an index. Indices are unmanaged and do not bear expenses, unlike WEBS. Foreign markets may be volatile and performance is subject to market fluctuations, political risks and currency risks. Funds Distributor Inc., Distributor. For more information on WEBS, including a prospectus which details charges and expenses, please call 800-810-WEBS. Sources: Morgan Stanley Capital International and Standard and Poor's Corporation. Please read the prospectus carefully before you invest. 04/97 14 MSCI Indices and S&P 500 Total Cumulative Return -- $10,000 Investment for the ten years ended 3/31/97 In US Dollars (Reinvestment of Net Dividends except for Mexico (Free) and the S&P 500)* World Equity Benchmark Shares
Average Annual Return Total Cumulative Return Mexico (Free)** 32.84% $138,308 Hong Kong 19.69% $ 60,332 Malaysia** 19.00% $ 51,347 Sweden 15.93% $ 43,850 Netherlands 15.78% $ 43,294 Switzerland 14.05% $ 37,230 S&P 500 13.38% $ 35,102 Belgium 12.77% $ 33,253 United Kingdom 12.11% $ 31,372 Singapore (Free) 11.90% $ 30,771 Spain 10.69% $ 27,613 Germany 10.20% $ 26,416 France 8.98% $ 23,631 Australia 8.74% $ 23,107 Austria 8.18% $ 21,945 Canada 6.31% $ 18,442 Italy 0.43% $ 10,433 Japan -0.63% $ 9,392
MSCI: Morgan Stanley Capital International *Assumes reinvestment of net dividends except for the Mexico (Free) and the S&P 500 Indices. Net dividends means dividends after reduction for taxes withheld at source. The Mexico (Free) and S&P 500 Indices reflect gross dividends since Mexican and U.S. companies do not withhold tax from U.S. investors. The dividend withholding rate used by MSCI is that relevant for residents of Luxembourg, and such rate is higher than the rate applicable to U.S. residents in the case of the following WEBS Index Series: Australia (30% vs. 15%), Austria (15% vs. 11%) and Germany (15% vs. 10%). **Return calculated since 12/31/87 (inception of indices). On June 2, 1997 the Malaysia WEBS Index Series will commence using the MSCI Malaysia (Free) Index as its benchmark index. Past performance is no guarantee of future results, nor do index results represent any past or expected future performance of WEBS. It is not possible to invest in an index. Indices are unmanaged and do not bear expenses, unlike WEBS. Foreign markets may be volatile and performance is subject to market fluctuations, political risks and currency risks. Funds Distributor Inc., Distributor. For more information on WEBS, including a prospectus which details charges and expenses, please call 800-810-WEBS. Sources: Morgan Stanley Capital International and Standard and Poor's Corporation. Please read the prospectus carefully before you invest. 04/97 -----END PRIVACY-ENHANCED MESSAGE-----