-----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, Wnyzkh9OFXK5k6sVG7dH95ZProbmQ/zj4TDIazOgFke0x4S0qDWVIyzMkkRE6O7s A06j34uf9TGcMGV6DMV7gg== 0000935069-99-000237.txt : 19991110 0000935069-99-000237.hdr.sgml : 19991110 ACCESSION NUMBER: 0000935069-99-000237 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990831 FILED AS OF DATE: 19991109 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: N-30D SEC ACT: SEC FILE NUMBER: 811-09102 FILM NUMBER: 99744775 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 800-810-9327 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 N-30D 1 ANNUAL REPORT World Equity Benchmark Shares [GRAPHIC OMITTED] WEBS AUGUST 31, 1999 ANNUAL REPORT WEBS INDEX FUND, INC. WEBS INDEX FUND, INC. ================================================================================ Dear Shareholder: We are pleased to present the Annual Report for WEBS Index Fund, Inc. covering the year ended August 31, 1999. The report provides a review of 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. As you know, each of the WEBS Index Series seeks generally to track the investment performance of a Morgan Stanley Capital International (MSCI) index. These indices provide broad-based exposure to a particular country's stock market or to the stock markets of a given region. You will find information about performance and tracking for each WEBS Index Series in the Investment Advisor's discussion. GROWTH ACTIVITY As more and more investors discover their benefits, WEBS continue to grow in asset size. As of August 31, 1999, net assets of the seventeen WEBS Index Series stand at almost $1.6 billion, more than double their asset level of a year ago. Because the value of total net assets fluctuates with the respective foreign equity markets, however, we believe that the number of outstanding shares offers a better indicator of WEBS' attractiveness. Share growth has also been impressive: as of August 31, 1999, total outstanding shares number 124.5 million, up 42% over a year ago. This trend offers evidence of WEBS' growing acceptance among investors as a way to access any of seventeen foreign equity markets. INTERNATIONAL PERFORMANCE In many international equity markets, the past year was marked by significant recovery, especially in Asia as investors reacted to signs of government reform, corporate restructuring and improving economic outlooks in many countries. At the same time, sluggish economic activity, a weakened Euro and the Balkan war contributed to less positive performance in Europe. Against this backdrop, all but two of the seventeen WEBS Index Series - Belgium at (1.00%) and Austria at (8.69%) - produced positive returns, and eight posted returns of more than 25% for the year ended August 31, 1999. Reflecting the increases in their respective markets, notable examples included Singapore (Free) +144.52%, Hong Kong +90.51% and Japan +58.14%. Mexico also posted an impressive +66.92% return, propelled by economic reform and increased foreign investment as well as the strong U.S. economy. While past performance does not indicate future results, returns such as these illustrate the potential benefits of diversifying internationally with WEBS. SPECIAL NOTE WITH RESPECT TO MALAYSIA On September 1, 1998, the Malaysian government imposed capital restrictions that prompted the Fund to suspend sales and discourage redemptions of Creation Units of the Malaysia (Free) Series. Since the capital restrictions were imposed, the Fund applied for and received regulatory relief from Bank Negara Malaysia, the Malaysian Central Bank. This relief permits the Fund to honor requests, in proper form, for the redemption of Creation Units of the Malaysia (Free) Series only through the delivery of Malaysian ringgits to a redeeming investor's account at a duly licensed Malaysian institution. WEBS of the Malaysia (Free) Series have frequently traded at significantly different prices than their net asset values because of the disruption to the creation/redemption mechanism. The Fund is continuing its efforts to resume "in kind" creations and redemptions for the Malaysia (Free) Series, but there can be no assurance that the required Malaysian approvals will be granted. The Fund is also reviewing the possibility of offering Creation Units of WEBS of the Malaysia (Free) Series for cash. To review details of a supplement to the Prospectus dated February 17, 1999 as well as press releases on this topic, refer to the "What's New" section of the Fund's website at www.websontheweb.com. Alternatively, you can speak to a Fund representative at 1-800-810-9327. CONCLUSION WEBS have seen another growth year because investors like you have recognized that they offer an efficient way to participate in the investment opportunities available in a number of overseas markets. As always, we thank you for your support of 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 ================================================================================ Introduction Barclays Global Fund Advisors is the Investment Advisor for the WEBS Index Series. 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 world-wide events affecting performance that should be considered at the outset. A year ago, following the near collapse of a major US hedge fund, investors expected the world economy to plunge into recession in 1999. A year later, fears of recession have been replaced by concerns over rising inflation and higher interest rates. Activity in continental Europe, Japan and the former tiger economies of South-east Asia is recovering, and the US continues to defy those predicting a slowdown. A pick-up in global activity usually heralds a rise in commodity prices, and this upturn is no different. The price of oil has more than doubled from $10 since the start of the year, and metals prices have risen sharply too. The expectation that this rise in commodity prices will feed through into higher inflation has put investors and central banks on alert. Performance factors When examining the performance review numbers of each WEBS Index Series, remember that expenses are incurred by the WEBS Index Series, and that such expenses impact performance. Expenses affect every WEBS Index Series. This is in contrast to the corresponding MSCI Indices that do not bear any expenses. 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 the impact of portfolio sampling, revenue differential, and 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 accurately the market's size and industry profiles. 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 "optimize" the portfolios of certain WEBS Index Series through the use of portfolio sampling. The principal regulatory constraints that affect Fund performance are Internal Revenue Code requirements referred to as the Single Issuer Rule and the 5/50 Rule in this discussion. 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 was 89% on August 31, 1999. 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. 2 WEBS INDEX FUND, INC. ================================================================================ The revenues of a WEBS Index Series differ from those of its benchmark index. There are several reasons for this "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, the WEBS Index Series receive interest on uninvested cash and, in the case of most WEBS Index Series, revenues from the lending of portfolio securities. With respect to revenue differential in Hong Kong and Singapore in this period, the substantial returns in these markets resulted in a corresponding decrease in dividend yields on the stock held by the Series. MSCI, however, uses a 12-month rolling cycle to calculate the yield of the benchmark index, and as a result the benchmark index's return reflected yields that were not attainable by the index stocks in the 12-month period (since they reflected yields based on much lower stock prices). Finally, uninvested assets held in a WEBS Index Series affects performance relative to the MSCI benchmark 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - --------- Australia - --------- Performance Review The total return of the Australia WEBS Index Series (the "Australia Series") was 32.09% for the year ended August 31, 1999, while the corresponding MSCI Index returned 31.50% over the same time period. Significant Performance Factors The Australia Series outperformed the benchmark by 0.59% during this period as a result of the positive impact of portfolio sampling 1.78%, and revenue differential, 0.36%, which more than offset the effects of expenses, (1.00%), and cash drag, (0.55%). In particular, the portfolio was overweighted in several of the stronger performing sectors including metals, which returned 70.69%. Key Market Conditions Boosted by improving economic prospects combined with a favorable inflationary environment, the Australian stock market climbed upward for seven consecutive months beginning in mid-October, 1998. The brakes were put on the economy in May and again in July-August as concerns over rising interest rates, extended valuations and unsustainable consumer demand (in the form of a rising current account deficit) came to the forefront. Weakness in the US and Japanese markets also slowed market appreciation. Despite the increased market volatility at the end of the reporting period, the Australian economy continued to demonstrate resilience. Second quarter 1999 economic growth figures indicated an annualized growth rate of 4.1%. This represents nine consecutive quarters of growth exceeding 4% -- the longest sustained period of GDP growth above 4% since the early 1970s. On the other hand, the robust domestic economy coupled with weak foreign demand and falling commodity prices fueled a record current account deficit in the second quarter. However, financial markets focused on the positives as the prospects for stronger global growth are expected to improve the export outlook. Meanwhile, consumer wealth levels remained high and together with an improving job market fueled spending on services and housing, the strongest areas of the economy. The resource sector was the most notable market performer, finally seeming to overcome its three-year slump. Rising base metal prices, which have been boosted by rejuvenated Asian demand, have driven much of the outperformance. Share prices were also supported by the recent renewal of merger and takeover activity. Comparison of Change in Value of a $10,000 Investment in the Australia WEBS Index Series vs. the MSCI Australia Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Australia WEBS Index MSCI Index 03/12/96 10,000 10,000 08/31/96 10,388 10,383 02/28/97 11,048 11,054 08/31/97 11,035 10,990 02/28/98 10,799 10,880 08/31/98 8,486 8,724 02/28/99 10,607 10,994 08/31/99 11,208 11,471 Past performance is not predictive of future performance Value August 31, 1999 --------------- Australia WEBS Index Series $11,208* MSCI Australia Index $11,471 Average Annual Total Return One Since Year Inception ---------- --------- Australia WEBS Index Series 32.09% 3.34% MSCI Australia Index 31.50% 4.03% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------- Austria - ------- Performance Review The total return of the Austria WEBS Index Series (the "Austria Series") was (8.69%) for the year ended August 31, 1999, while the corresponding MSCI Index declined by 8.02% over the same time period. Significant Performance Factors The Austria Series underperformed the benchmark by .67% during this period primarily as a result of expenses. The impact of expenses, (1.32%), was somewhat mitigated by a revenue differential benefit of 1.00%. Revenue differential was caused by misweights in the portfolio that arose as a result of regulatory constraints. (The sum of all the weightings of 5% or greater in the MSCI Austria Index at August 31, 1999 was 67.90%). More specifically, the Series' overweighted positions in higher yielding securities led to its dividend revenue outperforming that of the benchmark. Portfolio sampling and cash drag contributed to the Austria Series' underperformance to a modest extent. Key Market Conditions Austria enjoys a relatively sound underlying economy. The shares of most companies trade at low multiples and the government has undertaken an impressive privatization program. And yet, the stock market's struggles are notable. It just can't seem to shake its track record. For the past seven and a half years, Austria's stock market has underperformed other European markets, climbing a mere 19% (as measured by the Wiener Bourse Index) compared to 225% for the Eurostoxx Index. The past 12 months were no exception. One consideration in understanding Austria's recent poor performance is the country's exposure to the economic slowdown in central and eastern Europe -- close to 15% of Austrian goods are exported to that region. Germany, Austria's largest trading partner has also experienced sluggish growth. Against this backdrop, Austria's economic growth in 1999 has been down somewhat from last year's healthy pace of 3.3%. Growth this year is estimated at around 2.2%, a figure in line with the European GDP average. Comparison of Change in Value of a $10,000 Investment in the Austria Webs Index Series vs. the MSCI Austria Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Austria WEBS MSCI 03/12/96 10,000 10,000 08/31/96 9,661 10,073 02/28/97 9,401 9,848 08/31/97 9,764 9,928 02/28/98 10,535 11,513 08/31/98 9,975 10,770 02/28/99 9,403 10,353 08/31/99 9,108 9,906 Past performance is not predictive of future performance Value August 31, 1999 --------------- Austria WEBS Index Series $9,108* MSCI Austria Index $9,906 Average Annual Total Return One Since Year Inception ---------- --------- Austria WEBS Index Series (8.69)% (2.65)% MSCI Austria Index (8.02)% (0.27)% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------- Belgium - ------- Performance Review The total return of the Belgium WEBS Index Series (the "Belgium Series") was (1.00%) for the year ended August 31, 1999, while the corresponding MSCI Index returned 3.12% over the same time period. Significant Performance Factors The Belgium Series underperformed the benchmark by 4.12% during this period as a result of the impact of portfolio sampling, (3.10%), and expenses, (1.24%). These were offset to a very limited degree by the positive effect of cash drag, 0.26%. Of those factors, portfolio sampling had the most significant impact on performance, accounting for over 75% 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 weightings of 5% or greater in the MSCI Belgium Index at August 31, 1999 was 80.36%. In such circumstances, a number of large-cap stocks in the 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, (42.81%) for the 12-month period, industrial components, (28.30%), metals-non ferrous, (18.64%), and miscellaneous materials, (13.74%). On the large-cap side, the Belgium Series was forced to underweight a number of industries, such as utilities which enjoyed a return of 10.12% for the period. Key Market Conditions In contrast to the strong rally enjoyed by Belgian stocks over the last three months of 1998, 1999 has been a difficult year. In August the market began to improve, fueled by stronger corporate earnings and an improving global environment. News of consolidation in the French retail sector also boosted Belgian retailers. The market's performance was influenced by several factors, including a slowdown in merger and acquisition activity and an investment shift toward European equities by Belgian financial institutions. In 1998, the market was supported by speculation of possible acquisitions and restructurings. Many of these anticipated transactions did not materialize in 1999, causing the speculation to switch to opportunities in other European markets. A market selloff was also driven by Belgian fund managers looking to raise cash to invest in European blue chips. Following the run up in Belgian share prices last year, many managers found themselves with significant positions. Belgium's struggles were also in part a result of its efforts to meet the Maastricht criteria for European Monetary Union ("EMU") membership. In last year's build up to EMU, the Belgian government implemented an economic policy characterized by a severe fiscal consolidation process. Its efforts to reduce expenditures contributed to a reduction in private consumption with a negative impact on GDP growth. The slowdown in several of its primary export markets, including Germany and the Netherlands, also weighed on investor sentiment. Comparison of Change in Value of a $10,000 Investment in the Belgium WEBS Index Series vs. the MSCI Belgium Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Belgium WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,501 10,496 02/28/97 11,204 11,595 08/31/97 11,474 11,662 02/28/98 13,161 13,768 08/31/98 15,996 17,633 02/28/99 16,752 19,637 08/31/99 15,836 18,184 Past performance is not predictive of future performance Value August 31, 1999 --------------- Belgium WEBS Index Series $15,837* MSCI Belgium Index $18,184 Average Annual Total Return One Since Year Inception ---------- --------- Belgium WEBS Index Series (1.00)% 14.15% MSCI Belgium Index 3.12% 18.78% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------ Canada - ------ Performance Review The total return of the Canada WEBS Index Series (the "Canada Series") was 39.71% for the year ended August 31, 1999, while the corresponding MSCI Index returned 39.20% over the same time period. Significant Performance Factors The Canada Series outperformed the benchmark by 0.51% as a result of portfolio sampling, although its contribution of 2.02% was somewhat offset by the impact of expenses, (1.22%), revenue differential and cash drag. The difference in returns as a result of portfolio sampling was attributable to the Fund's underweighted position in insurance, which underperformed on a relative basis over the 12-month period, returning 40.68%. The Series' overweighting in the telecommunications sector contributed positively to overall performance. Key Market Conditions The Canadian market overcame its shaky start to this year and recaptured most of its prior losses, although it remained down from its April 1998 high. With the Russian default of last August and depressed commodity prices seemingly behind, consumer confidence recovered with stability in the exchange rate and the ensuing reduction in interest rates in the spring. An equally important driver of performance was the rebound in Japanese industrial production and the related recovery in commodity prices. Of late, however, Canadian markets were not immune to corrective pressures stemming from developments in the U.S. market. Canadian equity markets spent most of July and August digesting fresh economic data and anxiously awaited the U.S. Federal Reserve's next move on interest rates. With a strengthening global economy and the threat of rising rates, the resource sectors performed well, while financials and utilities underperformed. In the first eight months of 1999, the oil & gas, paper and metals groups were up 42%, 39% and 32% respectively, while financial services were down 17%. The recovery of domestic growth has also been positive for markets. Increased consumer spending coupled with a surge in business investment and strong demand for housing, propelled the economy to a solid second quarter growth rate of 3.3% on an annualized basis. Consumer confidence also received a boost from continued improvement in the unemployment rate. Restructuring was another positive theme occurring in the Canadian markets. From the financial services sector to forest products, oil & gas, telecommunications, and media -- a flurry of activity provided support to a recovery in operating earnings. Comparison of Change in Value of a $10,000 Investment in the Canada WEBS Index Series vs. the MSCI Canada Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Canada WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,463 10,521 02/28/97 12,569 12,713 08/31/97 13,445 13,745 02/28/98 14,322 14,679 08/31/98 10,529 10,921 02/28/99 12,717 13,205 08/31/99 14,711 15,203 Past performance is not predictive of future performance Value August 31, 1999 --------------- Canada WEBS Index Series $14,710* MSCI Canada Index $15,203 Average Annual Total Return One Since Year Inception ---------- --------- Canada WEBS Index Series 39.71% 11.75% MSCI Canada Index 39.20% 12.82% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------ France - ------ Performance Review The total return of the France WEBS Index Series (the "France Series") was 21.01% for the year ended August 31, 1999, while the corresponding MSCI Index returned 20.22% over the same time period. Significant Performance Factors The France Series outperformed the benchmark by 0.79%, primarily because of portfolio sampling, which made a positive contribution to performance of 2.18%. Revenue differential had a smaller positive impact of 0.46%. These effects were somewhat offset by the impact of expenses, (1.07%), and cash drag, (0.78%). Positive contributions from portfolio sampling were a result of the Series' underweighted position in some of the relatively poorer performing sectors, such as electronics, which had a negative return of 0.38%. However, the underweighting of the business and public services sector, which returned 7.61%, still created a positive impact on performance as a result of the securities that the Investment Adviser chose to hold. Cash drag detracted from the Series' returns. A 1% position was held in cash during the summer months as a result of dividends accrued; normally, the majority of European companies declare dividends in the summer months. The cash position was temporarily further increased as a result of the acquisition for cash of the Series shares of Paribas by BNP. Key Market Conditions Supported by an improving domestic economy and a high level of acquisition activity, the French market continued to demonstrate resilience. Strong gains were enjoyed by the market and corporate earnings expectations trended decisively upwards. Among the industries experiencing revisions in earnings expectations were French financials, which were boosted by industry consolidation as BNP's acquisition of Paribas prompted a wave of substantial earnings upgrades. Of the major Euro-zone economies, France has been the least affected by the downturn in emerging markets and the quickest to recover. In fact, France was the largest single contributor to Euroland growth last year, driven largely by private consumption. While this is unlikely to be repeated, particularly in light of a slowdown in the economy in the first half of 1999, signs are surfacing that a pick-up in growth is resuming. A recent government report suggests an expected growth rate of between 2.6% and 3% next year. Meanwhile, an improved growth outlook in foreign markets is likely to be matched by an improving external balance, with net trade deficits no longer expected to dampen French real GDP growth. Other positive news includes an unemployment rate that continues to fall and an inflation rate that is under 1%. Comparison of Change in Value of a $10,000 Investment in the France WEBS Index Series vs. the MSCI France Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC France WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,495 10,371 02/28/97 12,177 12,210 08/31/97 12,237 12,194 02/28/98 14,880 14,933 08/31/98 16,492 16,500 02/28/99 18,010 18,103 08/31/99 19,957 19,836 Past performance is not predictive of future performance Value August 31, 1999 --------------- France WEBS Index Series $19,958* MSCI France Index $19,836 Average Annual Total Return One Since Year Inception ---------- --------- France WEBS Index Series 21.01% 22.01% MSCI France Index 20.22% 21.79% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------- Germany - ------- Performance Review The total return of the Germany WEBS Index Series (the "Germany Series") was 7.04% for the year ended August 31, 1999, while the corresponding MSCI Index returned 6.27% over the same time period. Significant Performance Factors The Germany Series outperformed the benchmark by .77% during this period as a result of the positive impact of portfolio sampling, 1.38%, and revenue differential, 0.39%, which more than offset the negative impact of expenses of 1.00%. The Series' underweighted position in the poorly performing automobiles sector, (17.11%) for the 12-month period, and the business and public services sector which declined by 31.54%, caused returns to exceed the benchmark. Additionally, the Series' overweighted position in telecommunications, which returned 68.08%, contributed to the divergence. Key Market Conditions Weighed down by depressed consumer sentiment, earnings disappointments and worries over the direction of interest rates in the United States, the German market posted modest gains during the 12 months ending August 31, 1999. Few sectors performed well in this environment. German industrials were hard hit by industry specific concerns, such as falling electricity prices, in addition to the introduction of the new accounting convention for goodwill write off. Among last year's top performers, the German retail sector was depressed by a high level of profit taking. Companies with interests in recreation and metals were among the top performers in this difficult market. The decline in overall business confidence in recent times was caused by a combination of factors, including a collapse in two of Germany's major European export markets, initially as a result of the Asian crisis in the second half of 1997 and then the Russian crisis in the autumn of 1998. Kosovo and the depressed Euro were additional debilitating factors. With continued improvement in each of these areas, there is increasing evidence that confidence and growth are returning to Germany. After suffering a fall in its GDP in the fourth quarter, Germany enjoyed a return to economic growth in the first quarter. More recently, initial signs of recovery have been evident in the survey of business conditions in Germany, which was above average in August for the first time this year and marked the third consecutive month of improvement. Manufacturing orders were also substantially above forecasts, rising by a strong 1.7% month-on-month in June. Meanwhile, domestic demand was up 2.8% in the first half of 1999 - a performance not seen since 1990. Comparison of Change in Value of a $10,000 Investment in the Germany WEBS Index Series vs. the MSCI Germany Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Germany WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,399 10,451 02/28/97 11,291 11,476 08/31/97 12,533 12,778 02/28/98 14,661 15,107 08/31/98 15,752 16,102 02/28/99 16,117 16,643 08/31/99 16,862 17,112 Past performance is not predictive of future performance Value August 31, 1999 --------------- Germany WEBS Index Series $16,861* MSCI Germany Index $17,112 Average Annual Total Return One Since Year Inception ---------- --------- Germany WEBS Index Series 7.04% 16.23% MSCI Germany Index 6.27% 16.72% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - --------- Hong Kong - --------- Performance Review The total return of the Hong Kong WEBS Index Series (the "Hong Kong Series") was 90.51% for the year ended August 31, 1999, while the corresponding MSCI Index returned 95.35% over the same time period. Significant Performance Factors The Hong Kong Series underperformed the benchmark by 4.84% during this period as a result of revenue differential, portfolio sampling and expenses, which more than offset the slight benefit of cash drag. Of those three factors, revenue differential had by far the most significant impact on performance with an adverse effect of (2.90%). In addition, security sampling contributed (1.02%) and expenses (1.01%). It is important to note that the extraordinary returns on the Hong Kong Series caused even the smallest misweights to manifest themselves into reportable return variances. The significant increase in market prices over the period resulted in a corresponding decrease in dividend yields on the stocks held by the Series. MSCI, however, uses a 12-month rolling cycle to calculate the yield of the benchmark index, and as a result the benchmark index's returned reflected yields that were not attainable by the index stocks in the 12-month period (since they reflected yields based on much lower stock prices.) This is the principal reason for the relatively large negative revenue differential contribution to 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 WEBS Index 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 70.63% at August 31, 1999. As a result, the Series was overweighted in several of the relatively poorer performing sectors, such as electronic components and telecommunications (up 21.18%and 28.57%, respectively for the 12-month period). The Hong Kong Series was also underweighted in the multi-industry and retail sectors, which enjoyed strong gains, 113.76% and 137.36%, respectively. On the other hand, several sectors in which the Series was overweighted relative to the benchmark, such as merchandising (up 798.15%), contributed positively to its performance. Key Market Conditions A return to growth for the Hong Kong economy boosted investor sentiment, which fueled impressive gains in the market. In turn, good news in the market prompted higher spending, continuing the "feel good" cycle. Asian recovery has also led to a resurgence of foreign capital inflows into the region, a development that has particularly benefited Hong Kong's banking sector. Following 1998's 5.1% economic decline, the GDP increase of 0.5% year-on-year in the second quarter of 1999 was well received. This return to growth has been accompanied by signs of improvement in various areas of the economy: unemployment continues to fall, personal consumption improved significantly in the second quarter, and July export figures indicated a recovery after a poor first quarter. Meanwhile, as infrastructure spending gets underway and companies fully factor in the improvement in sales, additional support to the economy should be on its way. More negatively, Hong Kong recently saw the first increase in the best lending rate since January 1998, which could potentially restrain growth. Moreover, compared to its Asian neighbors, Hong Kong's economic growth remains fragile and fragmented. This primarily reflects the short-term cost of maintaining the Hong Kong dollar peg. Finally, the sustainability of the wealth effect, which has been generated by a rise in property and stock prices, as a sustainable source of growth is an additional concern. Comparison of Change in Value of a $10,000 Investment in the Hong Kong WEBS Index Series vs. the MSCI Hong Kong Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Hong Kong WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,322 10,415 02/28/97 11,868 12,190 08/31/97 12,159 12,645 02/28/98 9,197 9,871 08/31/98 5,567 6,108 02/28/99 7,630 8,761 08/31/99 10,606 11,932 Past performance is not predictive of future performance Value August 31, 1999 --------------- Hong Kong WEBS Index Series $10,604* MSCI Hong Kong Index $11,932 Average Annual Total Return One Since Year Inception ---------- --------- Hong Kong WEBS Index Series 90.51% 1.70% MSCI Hong Kong Index 95.35% 5.22% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ----- Italy - ----- Performance Review The total return of the Italy WEBS Index Series (the "Italy Series") was 5.14% for the year ended August 31, 1999, while the corresponding MSCI Index returned 4.36% over the same time period. Significant Performance Factors The Italy Series outperformed the benchmark by 0.78% during this period as a result of portfolio sampling and revenue differential. Of those factors, portfolio sampling had the most significant impact on performance with a return of 1.48% while revenue differential contributed 0.50% and the expense impact was 1.03%. In particular, the disparity in returns was a result of the Series' underweighted position in some of the poorer performing sectors such as banking and transportation, which returned (0.17%) and (17.70%), respectively. The Series' overweighted position in the well performing broadcasting and publishing sector, up 66.76%, also contributed to its relative outperformance. Key Market Conditions The market's recent underperformance follows years of outperformance in Europe resulting from the considerable fall in long-term rates from 1995 to 1998. With stretched valuations and a slowdown in merger activity in the banking and telecommunications sectors (which represent a significant part of the market), the support the market had become accustomed to over the last several years was no longer evident. Meanwhile, fears of an increase in the Fed Funds rate dominated sentiment in August, driving down the market because of the preponderance of interest rate-sensitive stocks. As such, the Italian market suffered from relative earnings downgrades, with no support from any further fall in long-term rates. As the Italian market languished, it was also true that Italy was the weakest economy within Euroland. First quarter growth rose by only 0.2%, largely due to sluggish net exports and weak growth in world trade, while the year-on-year change in industrial production remained firmly in negative territory, (1.5%). Economic activity was poor as Italy was still feeling the effects of the fiscal squeeze required to qualify for Euro entry and lost the opportunity for a competitive devaluation. Moreover, its May deficit exceeded the 2% of GDP target as stipulated by the EMU stability pact. Given that Italy can not restore its competitiveness in the short term via currency devaluation and is unable to revive the economy through fiscal relaxation, life has become increasingly difficult for the Italian authorities. Meanwhile, consumer confidence, which was robust in the first quarter, deteriorated between April and June partly due to pension reform issues and partly due to pressure from other Euroland governments. Business sentiment seemed to deteriorate throughout the year. While consumers fear pension reform, cheaper and more available credit should boost growth in 2000. A much improved budgetary outlook in July confirms higher than expected fiscal revenues from the government's campaign to clamp down on taxes. Comparison of Change in Value of a $10,000 Investment in the Italy WEBS Index Series vs. the MSCI Italy Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Italy WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,411 10,333 02/28/97 11,151 11,102 08/31/97 12,845 12,862 02/28/98 17,250 17,297 08/31/98 18,968 19,129 02/28/99 21,328 21,666 08/31/99 19,943 19,963 Past performance is not predictive of future performance Value August 31, 1999 --------------- Italy WEBS Index Series $19,941* MSCI Italy Index $19,963 Average Annual Total Return One Since Year Inception ---------- --------- Italy WEBS Index Series 5.14% 21.98% MSCI Italy Index 4.36% 22.02% - ---------- * The chart assumes a hypothetical $10,000 initial investment in the Italy WEBS Index Series and reflects all expenses of the Index Series. Investors should note that the Index Series is professionally managed while the relevant MSCI Index is unmanaged, does not incur expenses and is not available for investment. 11 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ----- Japan - ----- Performance Review The total return of the Japan WEBS Index Series (the "Japan Series") was 58.14% for the year ended August 31, 1999, while the corresponding MSCI Index returned 62.65% over the same time period. Significant Performance Factors The Japan Series underperformed the benchmark by 4.51 % during this period as a result of portfolio sampling, expenses, revenue differential and cash drag. Of those factors, portfolio sampling had by far the most significant impact on performance, (2.72%), while the expense impact was (0.95%), revenue differential was (0.47%) and cash drag was (0.38%). In particular, the Series' underweighted position in a well performing business and public services sector (up 148.44%) contributed to the underperformance. Additionally, the Series was overweighted in several of the relatively poorer performing sectors such as utilities and automobiles, which were up 20.73% and 36.63%, respectively. Key Market Conditions When the poorest performing sector returns 20%, it is evident that the 12-month period was good for investors. Stronger economic growth, an inflow of foreign capital and buoyant acquisition activity helped to maintain the market's positive mood and allowed it to break loose from its four-year battle with disappointing performance. The banking sector in particular raced ahead to return more than 112%, as August saw the creation of the world's largest bank through the consolidation of the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank. How long will the euphoria last? At this stage, many risks remain. During July, for example, reality returned as a temporary setback in sentiment prompted a correction in the market. In this instance, the strength of the yen outweighed the optimism created by restructuring in the banking and other corporate sectors. A stronger yen is a double blow to the economy as it makes Japan's exports less competitive and cuts into profits overseas when repatriated. There is reason for caution regarding the near-term outlook for the Japanese economy. Despite data that suggest a real economic growth rate of 2.5% for the first half of 1999, many are left questioning its implications and its sustainability. Factors that have contributed to the stronger economy include a rapidly recovering Asia, which has helped spur activity in Japan's manufacturing sector. Additional support has been driven by government policy initiatives such as expanded public spending and large-scale spending aimed at the financial sector. On the other hand, this fragile increase in GDP has also been fueled by increased consumption, which has fostered a decline in personal savings. Comparison of Change in Value of a $10,000 Investment in the Japan WEBS Index Series vs. the MSCI Japan Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Japan WEBS MSCI 03/12/96 10,000 10,000 08/31/96 9,689 9,720 02/28/97 8,060 8,117 08/31/97 8,529 8,596 02/28/98 7,366 7,438 08/31/98 5,682 5,785 02/28/99 6,867 7,031 08/31/99 8,986 9,409 Past performance is not predictive of future performance Value August 31, 1999 --------------- Japan WEBS Index Series $8,986* MSCI Japan Index $9,409 Average Annual Total Return One Since Year Inception ---------- --------- Japan WEBS Index Series 58.14% (3.03)% MSCI Japan Index 62.65% (1.74)% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - --------------- Malaysia (Free) - --------------- Performance Review The total return of the Malaysia (Free) WEBS Index Series (the "Malaysia Series") was 185.81% for the year ended August 31, 1999, while the corresponding MSCI Index returned 204.68% over the same time period. Significant Performance Factors The Malaysia Index Series underperformed the benchmark by a considerable 18.87%. Revenue differential contributed (3.74%) to the underperformance of the Malaysia Series in the 12-month period. The significant increase in market prices over the period resulted in a corresponding decrease in dividend yields on the stocks held by the Series. MSCI, however, uses a 12-month rolling cycle to calculate the yield of the benchmark index, and as a result the benchmark index's return reflected yields that were not attainable by the index stocks in the 12-month period (since they reflected yields based on much lower stock prices.) Uncertain market conditions in Malaysia also prompted the Series to maintain higher cash balances than normal (on the order of 3-6%) in order to facilitate distributions and pay expenses. This cash drag had a negative impact of 7.18%. Because of the high returns in the Malaysia market, any cash balance had an exaggerated impact on tracking error. Most of the remaining underperformance resulted from portfolio sampling. In particular, the disparity in returns was a result of the performance of specific securities in several sectors selected by the Investment Advisor. Some of the areas impacted included: beverages and tobacco, which was overweighted (this category returned 58.31% for the year); food and household products, which returned 24.96%; miscellaneous materials, which returned 49.57%; and multi-industry, which was underweighted (the sector returned 310.33%). The Series' overweighted positions in leisure and tourism and machinery and engineering helped offset some of the relative underperformance as the sectors enjoyed returns of 228.38% and 794.19%, respectively. Since the Malaysia Series and MSCI used the same exchange rate at the beginning and end of the 12-month period, there was no exchange rate related impact on performance compared to the benchmark. Key Market Conditions The 12-month period ended August 31, 1999 was a good time to have investment exposure in Asia. Malaysia was no exception. The tremendous rise in the Malaysian market, like that of its Asian neighbors, reflects the confluence of many positive factors including a supportive interest rate environment, improvement in corporate earnings, and a recovery in exports. A brighter macroeconomic picture has been evident in the exceptionally strong second quarter of 1999, which saw a GDP growth rate of 4.1% year over year. The rebound has been led by recovery in the manufacturing, agricultural and services sectors. The market's impressive absolute returns, however, disguise some of the prominent trends occurring in the market. Most recently, panic selling took hold in July as heavy profit taking resulted from negative sentiment. The vicious cycle reversed as rumors of Malaysia's proposed reinclusion in certain MSCI indices stemmed the selling tide. In September, 1999, MSCI announced that, effective February 2000, MSCI will be returning Malaysia to its Emerging Markets Free Index and its All-Country Far East Free ex-Japan Index. MSCI had deleted Malaysia from these indices in September, 1998 in reaction to Malaysia's imposition of stringent capital controls. Capital controls became less of an issue for investors after September 1, 1999. Foreign investors who had invested prior to September 1998 can now freely repatriate their investments, but most have chosen not to do so. However, a remaining exit tax of 10% of profits on money entering Malaysia or reinvested in Malaysia after February 14, 1999 continues to be a source of irritation to foreign investors. Comparison of Change in Value of a $10,000 Investment in the Malaysia (Free) WEBS Index Series vs. the MSCI Malaysia (Free) Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Malaysia WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,428 10,512 02/28/97 11,834 12,172 08/31/97 6,237 6,385 02/28/98 4,877 4,890 08/31/98 1,648 1,657 02/28/99 2,428 2,852 08/31/99 4,711 5,050 Past performance is not predictive of future performance Value August 31, 1999 --------------- Malaysia (Free) WEBS Index Series $4,711* MSCI Malaysia (Free) Index $5,050 Average Annual Total Return One Since Year Inception ---------- --------- Malaysia (Free) WEBS Index Series 185.81% (19.48)% MSCI Malaysia (Free) Index 204.68% (17.86)% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------------- Mexico (Free) - ------------- Performance Review The total return of the Mexico (Free) WEBS Index Series (the "Mexico Series") was 66.92% for the year ended August 31, 1999, while the corresponding MSCI Index returned 75.29% over the same time period. Significant Performance Factors The Mexico Series underperformed the benchmark by 8.37% during this period as a result of the impact of portfolio sampling, (5.08%), expenses, (1.25%), revenue differential, (0.71%), and cash drag, (1.33%). Of these 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 the portfolio of a WEBS Index Series. In the case of the Mexico (Free) WEBS Index 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 as of August 31, 1999 was 56.62%. In addition, Telefonos de Mexico A and L shares combined had a 29.51% weighting in the benchmark on such date. The Investment Advisor had to, 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 Series' weight in favor of smaller-capitalization stocks. As a result, it was underweighted in several of the better performing sectors such as building materials up 114.45%, and overweighted in several of the relatively poorer-performing sectors such as beverages and tobacco which returned (13.21%). On the large-capitalization side, the Series was forced by the Single Issuer Rule to underweight telecommunications, which enjoyed returns of 108.37% for the period. Additionally, cash drag impacted the Series relative performance. Typically, the Series keeps .50-.75% of net assets in cash. However, due to liquidity constraints, Empaques Ponderosa and Groupo Dina, which were both index names, were placed in the cash component due to illiquidity which had prevented authorized participants from creating new shares of the Series. Once liquidity improved, the cash weights were reduced and these securities were returned to the basket. Key Market Conditions Although recent fears of rising interest rates in the U.S. put pressure on the market during July and August, continued positive news on Mexico's economic growth and consumer sentiment provided a backdrop for impressive gains overall. The banking, telecommunications and energy equipment sectors were among the market's top performers, returning approximately 125%, 108% and 150%, respectively. Mexico is becoming increasingly sensitive to the direction of U.S. interest rates. Higher U.S. rates pose a distinct threat to the peso's value and to inflation. They would also pull much needed capital away from Mexico back into the U.S. This would place additional pressure on the already weakened currency. Moreover, because of the increasing dependence of Mexican entities on U.S. financial markets, investment would likely suffer as well. On the economic front, Mexico's GDP grew by 3.2% year-over-year in the second quarter of 1999. The higher-than-expected growth rate was driven by strong export growth thanks to sustained growth in the United States. Trade with the U.S. accounts for 81% of Mexico's total external trade. The transport and communications divisions of the services sector experienced the strongest gains, up 8.5%. Comparison of Change in Value of a $10,000 Investment in the Mexico (Free) WEBS Index Series vs. the MSCI Mexico (Free) Index Mexico WEBS MSCI 03/12/96 10,000 10,000 08/31/96 11,592 11,736 02/28/97 12,820 13,254 08/31/97 15,675 16,321 02/28/98 15,311 16,136 08/31/98 8,750 9,159 02/28/99 12,108 13,071 08/31/99 14,605 16,055 Past performance is not predictive of future performance Value August 31, 1999 --------------- Mexico (Free) WEBS Index Series $14,604* MSCI Mexico (Free) Index $16,055 Average Annual Total Return One Since Year Inception ---------- --------- Mexico (Free) WEBS Index Series 66.92% 11.52% MSCI Mexico (Free) Index 75.29% 14.60% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ----------- Netherlands - ----------- Performance Review The total return of the Netherlands WEBS Index Series (the "Netherlands Series") was 8.98% for the year ended August 31, 1999, while the corresponding MSCI Index returned 12.11% over the same time period. Significant Performance Factors The Netherlands Series underperformed the benchmark by 3.13% during this period as a result of portfolio sampling, (3.84%), and expenses, (1.07%). On the other hand, the positive impact of revenue differential, which was 1.41%, helped offset some of the relative underperformance. Revenue differential was caused by misweights in the portfolio that arose as a result of regulatory constraints. More specifically, the Series' overweighted position in higher yielding securities led to its relative outperformance in this area. Portfolio sampling had the most significant impact on returns, 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 August 31, 1999, was 74.24%. 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 Series to be overweighted in several of the poorly performing sectors such as data processing and reproduction (down 39.30% for the period) and wholesale and international trade (down 28.37%). Additionally, the Series was underweighted in the energy sector, which returned 38.70%. Key Market Conditions Home to some of the world's leading banks, food retailers, financial services, oil, chemical, and electronics companies, the Netherlands has long attracted investors due to the openness of Dutch companies and the favorable investment environment. Given the caliber of its companies, it is not surprising that the Dutch stock market is showing significant upward revisions and enjoying the most positive earnings surprises in the Euroland region. Since the international crisis, which peaked in October of last year, earnings of Dutch companies have been improving steadily; Dutch earnings per share growth is expected to reach 24%, a figure that is double the European average of 12%. One negative for investors is an apparent trend toward higher prices, with July CPI figures significantly surpassing expectations and rising far above the Euroland average. Comparison of Change in Value of a $10,000 Investment in the Netherlands WEBS Index Series vs. the MSCI Netherlands Index Netherlands WEBS MSCI 03/12/96 10,000 10,000 08/31/96 11,118 10,974 02/28/97 12,934 12,949 08/31/97 14,237 14,680 02/28/98 16,811 17,273 08/31/98 16,716 16,824 02/28/99 16,952 17,573 08/31/99 18,209 18,862 Past performance is not predictive of future performance Value August 31, 1999 --------------- Netherlands WEBS Index Series $18,216* MSCI Netherlands Index $18,862 Average Annual Total Return One Since Year Inception ---------- --------- Netherlands WEBS Index Series 8.98% 18.84% MSCI Netherlands Index 12.11% 20.04% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ---------------- Singapore (Free) - ---------------- Performance Review The total return of the Singapore (Free) WEBS Index Series (the "Singapore Series") was 144.52% for the year ended August 31, 1999, while the corresponding MSCI Index returned 134.05% over the same time period. Significant Performance Factors The Singapore Series outperformed the benchmark by 10.47% during this period as a result of portfolio sampling. While the impact of expenses, (0.97%), revenue differential, (1.32%), and cash drag, (1.10%), mitigated returns, portfolio sampling had a positive effect of 13.85% on performance. The performance differential between the Singapore Series and the benchmark index was driven by security-specific as well as sector-related factors. In particular, the Series held shares in the Overseas Union Bank and Sembawang Marine in the early part of the year, while the index did not. Non-index names were held due to regulatory constraints placed on the Singapore Series by the 5/50 Rule conflicting with the Series' former industry concentration policy. The weight of all the non-index names, however, was less than 5%. Due to changes in the industry concentration policy approved by shareholders in October 1998, non-index positions were liquidated. Significant share price gains in these stocks contributed to the discrepancy in relative performance. Furthermore, extraordinary returns on the fund caused ordinary misweights to manifest in the appearance of considerable return variances. On the other hand, security specific issues in electronic components and real estate mitigated returns. Sector-related issues also played a part. For example, the Series' underweighted positions in transportation (road and rail, and shipping) and multi-industry contributed to its outperformance, while underweighting in telecommunications detracted from returns. Revenue differential also contributed to the underperformance of the Singapore Series in the 12-month period. The significant increase in market prices over the period resulted in a corresponding decrease in dividend yields on the stocks held by the Series. MSCI, however, uses a 12-month rolling cycle to calculate the yield of the benchmark index, and as a result the benchmark index's returned reflected yields that were not attainable by the index stocks in the 12-month period (since they reflected yields based on much lower stock prices). Similarly, a cash drag existed due to the market's robust performance. The Series held less than .8% in cash, but because the Series returned 144.52%, the negative impact of cash drag was approximately 1.1%. Key Market Conditions At a 6.7% GDP growth rate for the second quarter of 1999, Singapore's economic recovery is the most impressive in Asia after South Korea. The country's broad-based rebound has been driven by strong exports, private consumption and the cyclical recovery in the manufacturing sector. Low inflation and a relatively benign interest rate environment provided an additional boost to consumer sentiment. The market took all this positive news into account, achieving impressive gains. MSCI has recently announced certain changes in the MSCI Far East Free Index that will result in a reduction in Singapore's weighting in such index, effective February 2000, from 12.5% to 9%. This may result in some selling pressure in the Singapore market as investors benchmarked to the MSCI Far East Index reduce their investment allocation to Singapore. On the economic front, inflation appears to be returning with the recovery in asset prices and the potential restoration of pension cutbacks. Comparison of Change in Value of a $10,000 Investment in the Singapore (Free) WEBS Index Series vs. the MSCI Singapore (Free) Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Singapore WEBS MSCI 03/12/96 10,000 10,000 08/31/96 9,327 9,196 02/28/97 9,720 9,670 08/31/97 7,137 6,961 02/28/98 5,687 5,978 08/31/98 2,763 3,108 02/28/99 4,914 5,246 08/31/99 6,756 7,274 Past performance is not predictive of future performance Value August 31, 1999 --------------- Singapore (Free) WEBS Index Series $6,756* MSCI Singapore (Free) Index $7,274 Average Annual Total Return One Since Year Inception ---------- --------- Singapore (Free) WEBS Index Series 144.52% (10.67)% MSCI Singapore (Free) Index 134.05% (8.76)% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ----- Spain - ----- Performance Review The total return of the Spain WEBS Index Series (the "Spain Series") was 13.39% for the year ended August 31, 1999, while the corresponding MSCI Index returned 15.15% over the same time period. Significant Performance Factors The Spain Series underperformed the benchmark by 1.76% during this period. The underperformance was primarily due to the impact of expenses, which was (1.04%). Portfolio sampling and cash drag also had negative impacts of (0.37%) and (0.26%), respectively. Key Market Conditions After gaining strength over the last three months of 1998, the Spanish market struggled to achieve any further upside through August 31, 1999 and lagged behind most European markets throughout the period. July in particular was a poor month as Spain ended as the worst performing market in MSCI's Europe, Australasia and Far East ("EAFE") Index. Hurt by fears of an interest rate increase in the United States, the banking sector was especially hard hit and larger cap stocks performed poorly, weighed down by concerns about Latin America. On the other hand, economic growth shows no sign of cooling. GDP growth for 1999 is expected to be above the Euroland average with 3 to 3.5% growth likely for 1999, compared to an expected 2% for Euroland as a whole. In the past few years, better economic fundamentals have been reflected in Spain's relative market outperformance. Meanwhile, despite the strong economic growth, the economy shows few signs of overheating, with inflation remaining modest at just above 2%, although somewhat higher than the Euroland average. Consumer confidence has rebounded to match the highs achieved at the end of 1998. This trend looks likely to continue, supported by another record year for tourism (foreign tourism accounts for 29% of all exports of goods and services). The arrival of European Monetary Union has also forced Spain to focus on fiscal issues and helped the general government deficit to fall to 1.8 per cent last year from a high of 7.1 per cent of GDP in 1995. Comparison of Change in Value of a $10,000 Investment in the Spain WEBS Index Series vs. the MSCI Spain Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Spain WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,845 10,917 02/28/97 12,893 13,066 08/31/97 15,092 15,379 02/28/98 20,478 21,053 08/31/98 20,009 20,589 02/28/99 24,389 24,970 08/31/99 22,687 23,707 Past performance is not predictive of future performance Value August 31, 1999 --------------- Spain WEBS Index Series $22,686* MSCI Spain Index $23,707 Average Annual Total Return One Since Year Inception ---------- --------- Spain WEBS Index Series 13.39% 26.59% MSCI Spain Index 15.15% 28.21% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ------ Sweden - ------ Performance Review The total return of the Sweden WEBS Index Series (the "Sweden Series") was 25.09% for the year ended August 31, 1999, while the corresponding MSCI Index returned 29.54% over the same time period. Significant Performance Factors The Sweden Series underperformed the benchmark by 4.45% during this period primarily as a result of portfolio sampling, the impact of expenses, and revenue differential. Portfolio sampling was the largest contributor to the underperformance, with an impact of (2.82%). In particular, due to Single Issuer Rule constraints, the Series was underweighted in Ericsson, which rose 38.20%. The Series was also overweighted the business and public services sector which underperformed the market, returning (2.71%). Key Market Conditions Strong domestic demand, improving international growth prospects, a solid service sector and a healthy rebound of manufacturers' confidence were several of the factors behind the impressive performance of the Swedish market in the 12-month period ended August 31, 1999. As less restrictive monetary and fiscal policies stimulated both private consumption and business investment, GDP growth is expected to reach 3.8% in 1999. Despite the robust growth, the main risk to the economy, higher inflation, has not materialized. Increased competition, more deregulation and a more flexible labor market have kept it at bay. More recently, the strong growth in GDP has fueled debate on the Swedish budget surplus, which is expected to hit 3.1% of GDP in 2000, assuming no tax cuts. Since the official target is 2%, there appears to be considerable room for tax cuts. If implemented, these cuts would significantly boost consumer spending. Comparison of Change in Value of a $10,000 Investment in the Sweden WEBS Index Series vs. the MSCI Sweden Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Sweden WEBS Index 03/12/96 10,000 10,000 08/31/96 11,413 11,200 02/28/97 13,357 13,344 08/31/97 14,847 14,856 02/28/98 16,353 16,596 08/31/98 15,659 16,093 02/28/99 16,748 17,416 08/31/99 19,589 20,846 Past performance is not predictive of future performance Value August 31, 1999 --------------- Sweden WEBS Index Series $19,590* MSCI Sweden Index $20,846 Average Annual Total Return One Since Year Inception ---------- --------- Sweden WEBS Index Series 25.09% 21.36% MSCI Sweden Index 29.54% 23.55% - ---------- * 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 PERFORMANCE REVIEW WEBS INDEX FUND, INC. ================================================================================ - ----------- Switzerland - ----------- Performance Review The total return of the Switzerland WEBS Index Series (the "Switzerland Series") was 1.47% for the year ended August 31, 1999, while the corresponding MSCI Index returned 2.34% over the same time period. Significant Performance Factors The Switzerland Series underperformed the benchmark by .87% during this period as a result of the impact of expenses and cash drag. These factors more than offset the positive effect of revenue differential and portfolio sampling. Key Market Conditions The Swiss market has recorded relatively flat performance since mid-January. This absolute result, however, conceals the underlying movements taking place in the market. In the first half of the year, foreign investors sold off their defensive positions in blue chip companies in order to reallocate assets to other more cyclical markets. Within Switzerland, investors focused on the small- and mid-cap growth stocks, driving up gains in these classes, while in the summer months, rekindled interest-rate fears and the dollar's weakness helped to drive up share prices of retail, food and transport-oriented companies. For the past 12 months overall, electronics companies were among the top performers, while the transportation and merchandising sectors were among the laggards. Underperforming exports, an uncompetitive exchange rate and the disadvantage of not belonging to the European Union have long been the cause of substandard economic growth in Switzerland relative to the rest of Europe. In the first quarter of 1999, GDP edged up a mere 0.4% quarter-on-quarter, although increasing signs of a recovery were evident in the second quarter. Fortunately, the economic outlook for Euroland is improving, and the Swiss franc appears to be losing strength. These factors may result in better economic performance for the Swiss economy in 2000. Comparison of Change in Value of a $10,000 Investment in the Switzerland WEBS Index Series vs. the MSCI Switzerland Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Switzerland WEBS MSCI 03/12/96 10,000 10,000 08/31/96 10,260 10,319 02/28/97 10,210 10,347 08/31/97 11,972 11,998 02/28/98 15,124 16,271 08/31/98 14,515 15,609 02/28/99 15,019 16,706 08/31/98 14,727 15,974 Past performance is not predictive of future performance Value August 31, 1999 --------------- Switzerland WEBS Index Series $14,728* MSCI Switzerland Index $15,974 Average Annual Total Return One Since Year Inception ---------- --------- Switzerland WEBS Index Series 1.47% 11.79% MSCI Switzerland Index 2.34% 14.43% - ---------- * 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 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 15.33% for the year ended August 31, 1999, while the corresponding MSCI Index returned 16.24% over the same time period. Significant Performance Factors The United Kingdom Series underperformed the benchmark by .91% during this period primarily as a result of the impact of expenses and cash drag, which more than offset the modest positive contributions of revenue differential and portfolio sampling. Key Market Conditions While encouraging corporate results and optimism on interest rate cuts fueled positive consumer sentiment and provided support to the UK market in the first six months of the period, performance over the six months to August 31 was considerably less robust. No longer supported by prospects of further interest rate cuts at home coupled with fears of tighter money in the United States, investor sentiment in July was depressed. Negative sentiment was reflected in banking shares in particular, with the average bank stock in the benchmark Index falling 6.3%. Sentiment turned positive again in August when a less hawkish than expected Bank of England inflation report cheered the market, indicating that interest rates were not likely to rise as much as expected. Additionally, the realization that the interest rate environment in the United States had become more benign, with the Federal Reserve announcing a `neutral' bias after a much-anticipated 25 basis point hike, provided support to the market. Corporate activity has also been an important source of market returns. Six of the ten biggest takeovers in UK history have taken place in 1999. Economic activity gathered pace in the second quarter of 1999 from the slow growth experienced at the end of 1998 and into the first quarter of 1999. Improving sentiment about the economy is also reflected in upgrades to 1999 consensus estimates of GDP growth, which rose from around 0.5% to 1.4% in the last six months. In addition, consumer confidence has strengthened since the beginning of the year. Persistent sterling strength has been a problem and a key factor supporting interest rate cuts earlier this year. But sterling fell significantly against the U.S. dollar in August 1999, and, though this has been due more to dollar strength than sterling weakness, it does begin to remove one of the arguments for lower rates. Moreover, if the business and consumer confidence surveys are to be believed, economic recovery in the United Kingdom now looks well supported. Comparison of Change in Value of a $10,000 Investment in the United Kingdom WEBS Index Series vs. the MSCI United Kingdom Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC United Kingdom WEBS MSCI 03/12/96 10,000 10,000 08/31/96 11,040 11,078 02/28/97 12,767 12,996 08/31/97 14,405 14,601 02/28/98 17,432 17,851 08/31/98 16,564 16,742 02/28/99 18,581 18,971 08/31/99 19,102 19,461 Past performance is not predictive of future performance Value August 31, 1999 --------------- United Kingdom WEBS Index Series $19,102* MSCI United Kingdom Index $19,461 Average Annual Total Return One Since Year Inception ---------- --------- United Kingdom WEBS Index Series 15.33% 20.48% MSCI United Kingdom Index 16.24% 21.13% - ---------- * 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 MSCIIndex is unmanaged, does not incur expenses and is not available for investment. 20 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - --------------------------- Australia WEBS Index Series - --------------------------- - ---------------------------------------------------------------------- NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 99.96% Appliances & Household Durables 0.50% 153,900 Email Limited $ 274,582 ----------- Banking 13.85% 351,000 National Australia Bank Limited 5,298,439 378,000 Westpac Banking Corporation Limited 2,288,185 ----------- 7,586,624 ----------- Beverages & Tobacco 5.45% 278,100 Coca-Cola Amatil Limited 1,002,451 677,700 Foster's Brewing Group Limited 1,982,102 ----------- 2,984,553 ----------- Broadcasting & Publishing 11.75% 542,700 News Corporation Limited 3,959,507 375,300 News Corporation Limited - Preferred 2,479,894 ----------- 6,439,401 ----------- Building Materials & Components 5.68% 450,900 Boral Limited 689,552 372,600 CSR Limited 949,683 175,500 James Hardie Industries Limited 466,214 394,200 Pioneer International Limited 1,004,737 ----------- 3,110,186 ----------- Business & Public Services 4.25% 83,700 Brambles Industries Limited 2,327,907 ----------- Chemicals 1.05% 110,700 Orica Limited 573,474 ----------- Construction & Housing 0.35% 48,600 Leighton Holdings Limited 193,797 ----------- Energy Sources 10.67% 486,000 Broken Hill Proprietary Company Limited 5,218,095 210,600 Santos Limited 628,029 ----------- 5,846,124 ----------- Food & Household Products 0.77% 461,700 Goodman Fielder Limited 423,641 ----------- Forest Products & Paper 2.13% 224,100 Amcor Limited 1,165,934 ----------- Gold Mines 1.10% 108,000 Newcrest Mining Limited* 254,625 486,000 Normandy Mining Limited 346,841 ----------- 601,466 ----------- Insurance 5.95% 297,000 AMP Limited 2,953,978 189,000 GIO Australia Holdings Limited 304,810 ----------- 3,258,788 ----------- Leisure & Tourism 1.68% 135,000 TABCORP Holdings Limited 920,435 ----------- Merchandising 3.81% 375,300 Coles Myer Limited 2,090,333 ----------- Metals - Non Ferrous 8.23% 577,800 Mount Isa Mines Holdings Limited 452,854 288,900 North Limited 636,941 102,600 Rio Tinto Limited 1,758,634 378,000 WMC Limited 1,663,631 ----------- 4,512,060 ----------- Multi-Industry 4.44% 102,600 Howard Smith Limited 817,209 372,600 Pacific Dunlop Limited 553,190 283,500 Southcorp Limited 1,065,090 ----------- 2,435,489 ----------- Real Estate 7.60% 348,300 General Property Trust 590,352 151,200 Lend Lease Corporation Limited 1,844,229 261,900 Stockland Trust Group 600,611 556,200 Westfield Trust 1,130,570 ----------- 4,165,762 ----------- Telecommunications 9.74% 1,027,728 Telstra Corporation Limited 5,337,177 ----------- Utilities - Electrical & Gas 0.96% 81,000 Australian Gas Light Company Limited 525,422 ----------- TOTAL COMMON STOCK - BASKET (Cost $56,077,529) 54,773,155 ----------- COMMON STOCK - NON-BASKET 0.04% Appliances & Household Durables 0.00% 12,825 Email Limited Redemption Rights* 2,288 ----------- Gold Mines 0.04% 26,632 Goldfields Limited 18,497 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $5,636) 20,785 ----------- Total Investments (Cost $56,083,165)+ 100.00% $54,793,940 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $56,217,167. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 4,267,411 Excess of tax cost over value (5,690,638) ----------- $(1,423,227) =========== See accompanying notes to financial statements. 21 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------- Austria WEBS Index Series - ------------------------- - ---------------------------------------------------------------------- NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Banking 22.50% 53,900 Bank Austria $ 2,860,964 ----------- Beverages & Tobacco 6.71% 9,800 Austria Tabakwerke 534,150 7,000 BBAG Oesterreichische Brau Beteiligungs 319,425 ----------- 853,575 ----------- Building Materials & Components 4.71% 25,200 Wienerberger Baustoffindustrie 598,656 ----------- Business & Public Services 4.57% 14,700 Flughafen Wien 581,509 ----------- Chemicals 1.54% 3,500 Lenzing 195,944 ----------- Construction & Housing 3.41% 8,607 Bau Holding 300,477 1,512 Bau Holding Vorzug 51,428 2,422 Universale-Bau 81,868 ----------- 433,773 ----------- Electronic Components, Instruments 0.71% 2,408 Austria Mikro Systeme International* 90,678 ----------- Energy Sources 7.84% 9,940 OMV 996,940 ----------- Insurance 4.71% 3,500 Generali Holding Vienna 598,923 ----------- Machinery & Engineering 8.45% 2,450 BWT 456,771 7,000 VA Technologie 617,408 ----------- 1,074,179 ----------- Metals - Steel 4.50% 11,900 Boehler-Uddeholm 571,808 ----------- Miscellaneous Materials & Commodities 9.31% 12,250 Mayr-Melnhof Karton 587,462 21,000 RHI 595,817 ----------- 1,183,279 ----------- Transportation - Airlines 4.36% 23,800 Austrian Airlines 554,336 ----------- Utilities - Electrical & Gas 16.68% 14,140 Oesterreichische Elektrizitaetswirtschafts - Class A* 2,120,925 ----------- TOTAL COMMON STOCK - BASKET (Cost $13,622,555) 12,715,489 ----------- Total Investments (Cost $13,622,555)+ 100.00% $12,715,489 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $14,173,127. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 67,636 Excess of tax cost over value (1,525,274) ----------- $(1,457,638) =========== See accompanying notes to financial statements. 22 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------- Belgium WEBS Index Series - ------------------------- - ---------------------------------------------------------------------- NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Automobiles 4.35% 1,218 D'Ieteren $ 566,093 ----------- Banking 9.19% 21,357 KBC Bancassurance Holding 1,195,649 ----------- Building Materials & Components 4.49% 6,426 Cimenteries CBR Cementbedrijven 584,429 ----------- Chemicals 4.43% 8,190 Solvay 576,596 ----------- Electronic Components, Instruments 5.01% 4,704 Barco NV 650,918 ----------- Energy Sources 3.68% 3,843 Electrafina 478,193 ----------- Health & Personal Care 4.31% 13,230 UCB 560,392 ----------- Industrial Components 3.89% 1,092 Bekaert NV 505,917 ----------- Insurance 18.15% 68,733 Fortis B 2,359,589 ----------- Merchandising 9.94% 1,050 Colruyt NV 699,852 6,972 Delhaize-Le Lion 592,845 ----------- 1,292,697 ----------- Metals - Non Ferrous 1.58% 5,124 Union Miniere 205,187 ----------- Miscellaneous Materials & Commodities 3.71% 4,704 Glaverbel 481,977 ----------- Multi-Industry 4.72% 3,213 Groupe Bruxelles Lambert 613,955 ----------- Utilities - Electrical & Gas 22.55% 4,746 Electrabel 1,585,676 7,371 Tractebel 1,346,198 ----------- 2,931,874 ----------- TOTAL COMMON STOCK - BASKET (Cost $12,883,290) 13,003,466 ----------- COMMON STOCK - NON-BASKET 0.00% Energy Sources 0.00% 5,103 Total Fina - Vvpr* 0 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $0) 0 ----------- Total Investments (Cost $12,883,290)+ 100.00% $13,003,466 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $13,491,940. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 203,615 Excess of tax cost over value (692,089) ----------- $ (488,474) =========== See accompanying notes to financial statements. 23 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------ Canada WEBS Index Series - ------------------------ - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Aerospace & Military Technology 3.23% 18,900 Bombardier Incorporated - Class B $ 294,481 700 Spar Aerospace Limited 5,348 ---------- 299,829 ---------- Banking 13.93% 7,700 Bank Of Montreal 270,909 14,700 Bank Of Nova Scotia 319,180 12,600 Canadian Imperial Bank of Commerce 274,005 5,600 National Bank Of Canada 67,926 8,400 Royal Bank Of Canada 358,866 ---------- 1,290,886 ---------- Beverages & Tobacco 4.93% 2,800 Molson Company Limited - Class A 47,943 7,700 Seagram Company Limited 408,943 ---------- 456,886 ---------- Broadcasting & Publishing 6.10% 2,100 Quebecor Incorporated - Class B 52,774 5,600 Rogers Communications Incorporated - Class B* 98,512 14,000 Thomson Corporation 413,751 ---------- 565,037 ---------- Business & Public Services 1.23% 2,800 Extendicare Incorporated - Class A* 9,945 11,200 Laidlaw Incorporated 70,553 3,500 Moore Corporation Limited 32,955 ---------- 113,453 ---------- Chemicals 1.92% 4,200 Agrium Incorporated 42,501 6,300 Methanex Corporation* 18,576 2,100 Potash Corporation Of Saskatchewan Incorporated 117,230 ---------- 178,307 ---------- Electrical & Electronics 17.43% 6,300 Newbridge Networks Corporation* 173,100 35,000 Nortel Networks Corporation 1,442,501 ---------- 1,615,601 ---------- Energy Sources 11.88% 3,500 Alberta Energy Company Limited 107,894 3,500 Anderson Exploration Limited* 50,429 2,800 Canadian Natural Resources Limited* 69,428 4,200 Canadian Occidental Petroleum Limited 77,402 5,600 Enbridge Incorporated 119,716 7,000 Gulf Canada Resources Limited* 28,615 12,600 Imperial Oil Limited 265,139 3,500 Petro-Canada 52,657 4,200 Poco Petroleums Limited* 41,657 3,500 Ranger Oil Limited* 15,950 3,500 Renaissance Energy Limited* 53,947 2,800 Suncor Energy Incorporated 115,494 3,500 Talisman Energy Incorporated* 102,734 ---------- 1,101,062 ---------- Financial Services 1.32% 7,000 Power Corporation of Canada 121,967 ---------- Forest Products & Paper 2.07% 6,300 Abitibi Consolidated Incorporated 75,151 4,900 Domtar Incorporated 53,525 4,200 MacMillan Bloedel Limited 63,470 ---------- 192,146 ---------- Gold Mines 3.20% 10,500 Barrick Gold Corporation 202,654 2,100 Cambior Incorporated 5,700 700 Echo Bay Mines Limited* 938 8,400 Placer Dome Incorporated 87,254 ---------- 296,546 ---------- Health & Personal Care 0.45% 2,100 MDS Incorporated - Class B 41,868 ---------- Industrial Components 1.13% 2,100 Magna International Incorporated - Class A 104,282 ---------- Insurance 0.25% 140 Fairfax Financial Holdings Limited* 23,361 ---------- Machinery & Engineering 0.89% 3,500 United Dominion Industries Limited 82,563 ---------- Merchandising 3.06% 3,500 Canadian Tire Corporation - Class A 89,365 4,200 George Weston Limited 150,161 2,100 Hudson's Bay Company 27,443 1,400 Sobeys Canada Incorporated 17,028 ---------- 283,997 ---------- Metals - Non Ferrous 6.77% 7,000 Alcan Aluminium Limited 230,331 2,100 Cameco Corporation 39,264 2,800 Cominco Limited 48,318 5,600 Inco Limited 115,025 2,100 Inco Limited VBN Shares 18,436 8,400 Noranda Incorporated 113,430 2,100 Rio Algom Limited 32,016 3,500 Teck Corporation - Class B 30,375 ---------- 627,195 ---------- Metals - Steel 1.00% 4,200 Dofasco Incorporated 71,632 2,800 Stelco Incorporated Class A 21,485 ---------- 93,117 ---------- Miscellaneous Materials & Commodities 0.23% 2,100 CCL Industries Incorporated - Class B 21,532 ---------- Multi-Industry 7.46% 10,500 Canadian Pacific Limited 246,984 5,250 EdperBrascan Corporation - Class A 76,523 14,000 Imasco Limited 368,248 ---------- 691,755 ---------- See accompanying notes to financial statements. 24 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------------------ Canada WEBS Index Series (concluded) - ------------------------------------ - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- Telecommunications 7.43% 14,000 BCE Incorporated 652,996 1,652 BCT Telus Communications Incorporated - A shares 35,704 ---------- 688,700 ---------- Transportation - Airlines 0.64% 9,800 Air Canada Inc.* 59,436 ---------- Utilities - Electrical & Gas 3.45% 6,300 Transalta Corporation 83,595 11,900 Transcanada Pipelines Limited 167,870 3,500 Westcoast Energy Incorporated 68,372 ---------- 319,837 ---------- TOTAL COMMON STOCK - BASKET (Cost $8,245,910) 9,269,363 ---------- Total Investments (Cost $8,245,910)+ 100.00% $9,269,363 ====== ========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $8,245,910. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $1,506,383 Excess of tax cost over value (482,930) ---------- $1,023,453 ========== See accompanying notes to financial statements. 25 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------ France WEBS Index Series - ------------------------ - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 95.62% Aerospace & Military Technology 0.72% 15,011 Thomson CSF $ 548,622 ---------- Automobiles 1.47% 6,052 PSA Peugeot Citroen 1,112,335 ---------- Banking 2.55% 25,347 Banque Nationale de Paris 1,938,442 ---------- Beverages & Tobacco 1.30% 7,803 Pernod Ricard 598,392 7,089 Societe Nationale D'Exploitation 386,387 ---------- 984,779 ---------- Broadcasting & Publishing 1.32% 14,592 Canal Plus 1,004,963 ---------- Building Materials & Components 4.30% 10,200 Compagnie de Saint Gobain 1,971,691 12,053 Lafarge 1,294,803 ---------- 3,266,494 ---------- Business & Public Services 11.39% 7,650 Cap Gemini 1,313,114 3,604 Sodexho Alliance 591,974 14,450 Suez Lyonnaise des Eaux 2,410,114 56,202 Vivendi 4,339,671 ---------- 8,654,873 ---------- Chemicals 1.63% 8,075 Air Liquide 1,238,502 ---------- Construction & Housing 1.45% 3,145 Bouygues 867,059 2,125 Groupe GTM 232,096 ---------- 1,099,155 ---------- Electrical & Electronics 6.30% 16,575 Alcatel 2,538,687 3,383 Legrand 804,030 476 Sagem 301,680 16,966 Schneider 1,137,996 ---------- 4,782,393 ---------- Energy Equipment & Services 0.05% 680 Compagnie Generale de Geophysique* 41,265 ---------- Energy Sources 10.32% 27,200 Elf Aquitaine 4,769,410 23,800 Total - Class B 3,067,075 ---------- 7,836,485 ---------- Financial Services 0.51% 1,887 CPR 85,709 493 Societe Eurafrance 302,559 ---------- 388,268 ---------- Food & Household Products 3.19% 3,230 Eridania Beghin-Say 427,164 8,075 Groupe Danone 1,997,639 ---------- 2,424,803 ---------- Health & Personal Care 11.93% 1,309 Essilor International 436,933 7,480 L'OREAL 4,831,541 37,400 Rhone-Poulenc 1,814,100 47,600 Sanofi-Synthelabo 1,981,029 ---------- 9,063,603 ---------- Industrial Components 1.94% 15,300 Michelin - Class B 662,779 10,047 Valeo 811,868 ---------- 1,474,647 ---------- Insurance 4.87% 29,750 AXA 3,701,859 ---------- Leisure & Tourism 2.19% 4,675 Accor 1,124,923 1,751 Club Mediterranee* 181,259 3,060 Pathe 355,551 ---------- 1,661,733 ---------- Machinery & Engineering 0.90% 2,261 Compagnie Francaise d'Etudes de Construction Technip 249,816 3,910 Sidel 432,425 ---------- 682,241 ---------- Merchandising 12.00% 25,500 Carrefour 4,148,093 5,100 Casino Guichard Perrachon 537,097 12,325 Pinault-Printemps-Redoute 2,135,101 2,431 Promodes 2,293,106 ---------- 9,113,397 ---------- Metals - Steel 0.65% 31,875 Usinor 493,260 ---------- Miscellaneous Materials & Commodities 0.43% 2,057 Imetal 327,660 ---------- Multi-Industry 0.70% 13,073 Lagardere S.C.A. 530,266 ---------- Real Estate 0.55% 2,295 Simco 201,816 1,581 Union du Credit-Bail Immobilier 217,937 ---------- 419,753 ---------- Recreation - Other Consumer Goods 4.26% 9,350 LVMH (Louis Vuitton Moet Hennessy) 2,845,395 7,412 Societe BIC 388,333 ---------- 3,233,728 ---------- Telecommunications 8.70% 84,864 France Telecom 6,606,609 ---------- TOTAL COMMON STOCK - BASKET (Cost $62,445,969) 72,630,135 ---------- See accompanying notes to financial statements. 26 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------------------ France WEBS Index Series (concluded) - ------------------------------------ - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - NON-BASKET 4.38% Banking 4.03% 14,391 Compagnie Financiere de Paribas $ 1,530,763 7,800 Societe Generale - Class A 1,526,714 ----------- 3,057,477 ----------- Electrical & Electronics 0.09% 261 Sagem 67,683 7 Sagem - New 4,436 ----------- 72,119 ----------- Recreation - Other Consumer Goods 0.26% 660 LVMH (Louis Vuitton Moet Hennessy) NB 200,851 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $2,858,357) 3,330,447 ----------- Total Investments (Cost $65,304,326)+ 100.00% $75,960,582 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $65,361,706. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $11,077,308 Excess of tax cost over value (478,432) ----------- $10,598,876 =========== See accompanying notes to financial statements. 27 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------- Germany WEBS Index Series - ------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Automobiles 11.01% 108,800 DaimlerChrysler $ 8,205,683 40,000 Volkswagen 2,412,591 13,600 Volkswagen - Preferred 469,758 ------------ 11,088,032 ------------ Banking 10.85% 59,600 Bayerische Hypo Vereinsbank 3,531,805 64,000 Deutsche Bank 4,373,931 65,600 Dresdner Bank 3,021,189 ------------ 10,926,925 ------------ Building Materials & Components 1.14% 20,800 Buderus 351,537 7,920 Heidelberger Zement 798,944 ------------ 1,150,481 ------------ Business & Public Services 4.14% 6,400 SAP 2,244,428 4,800 SAP Vorzug 1,926,693 ------------ 4,171,121 ------------ Chemicals 7.60% 76,800 BASF 3,480,215 96,000 Bayer 4,172,811 ------------ 7,653,026 ------------ Construction & Housing 0.57% 6,400 Bilfinger & Berger Bau 154,135 9,600 Hochtief 416,774 ------------ 570,909 ------------ Electrical & Electronics 6.42% 76,800 Siemens 6,457,463 ------------ Health & Personal Care 2.81% 12,800 Beiersdorf 861,265 26,400 Merck KGAA 897,940 9,600 Schering 1,066,779 ------------ 2,825,984 ------------ Industrial Components 0.35% 15,200 Continental 350,016 ------------ Insurance 13.23% 30,400 Allianz 8,005,408 8,000 AMB Aachener & Muenchener Beteiligungs 676,033 4,000 Axa Colonia Konzern 388,719 22,400 Muenchener Rueckversicherung (NEW) 4,254,273 ------------ 13,324,433 ------------ Machinery & Engineering 1.49% 12,800 Linde 781,494 16,000 MAN 540,826 8,000 MAN - Preferred 172,811 ------------ 1,495,131 ------------ Merchandising 2.96% 4,800 Douglas Holding 207,880 1,600 Karstadt 757,156 35,200 Metro 2,018,971 ------------ 2,984,007 ------------ Metals - Steel 1.11% 48,000 Thyssen 1,120,524 ------------ Miscellaneous Materials & Commodities 0.23% 3,200 SGL Carbon 233,231 ------------ Multi-Industry 1.36% 24,000 Preussag 1,366,431 ------------ Recreation - Other Consumer Goods 0.74% 8,000 Adidas-Salomon 743,636 ------------ Telecommunications 23.84% 376,000 Deutsche Telekom 16,641,386 48,000 Mannesmann 7,361,994 ------------ 24,003,380 ------------ Transportation - Airlines 1.18% 61,600 Deutsche Lufthansa 1,190,747 ------------ Utilities - Electrical & Gas 8.97% 61,520 RWE 2,654,581 22,800 RWE - Preferred 727,327 60,800 VEBA 3,872,652 83,200 Viag 1,770,867 ------------ 9,025,427 ------------ TOTAL COMMON STOCK - BASKET (Cost $99,603,410) $100,680,904 ------------ Total Investments (Cost $99,603,410)+ 100.00% $100,680,904 ====== ============ - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $100,013,218. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 8,675,876 Excess of tax cost over value (8,008,190) ------------ $ 667,686 ============ See accompanying notes to financial statements. 28 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - --------------------------- Hong Kong WEBS Index Series - --------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Aerospace & Military Technology 0.96% 417,600 Hong Kong Aircraft Engineering Company Limited $ 736,764 ----------- Banking 15.66% 1,078,800 Bank Of East Asia Limited 2,486,803 669,900 Hang Seng Bank Limited 7,570,150 487,200 Wing Lung Bank 2,014,001 ----------- 12,070,954 ----------- Broadcasting & Publishing 4.03% 4,350,000 Oriental Press Group 560,192 1,566,000 South China Morning Post Holdings Limited 993,220 348,000 Television Broadcasts Limited 1,550,610 ----------- 3,104,022 ----------- Electrical & Electronics 2.55% 435,000 Johnson Electric Holdings Limited 1,960,671 ----------- Electronic Components, Instruments 0.69% 3,045,000 Elec & Eltek International Holdings Limited 533,302 ----------- Leisure & Tourism 2.54% 1,609,500 Hong Kong & Shanghai Hotels Limited 1,274,716 870,000 Regal Hotels International Limited* 92,992 522,000 Shangri-La Asia Limited 591,562 ----------- 1,959,270 ----------- Merchandising 1.15% 957,000 Giordano International Limited 887,344 ----------- Miscellaneous Materials & Commodities 0.99% 348,000 Varitronix International Limited 766,342 ----------- Multi-Industry 21.57% 435,000 Hopewell Holdings Limited 302,503 1,305,000 Hutchison Whampoa Limited 12,730,355 696,000 Swire Pacific Limited - Class A 3,594,189 ----------- 16,627,047 ----------- Real Estate 24.74% 348,000 Cheung Kong Holdings Limited 3,025,035 3,828,000 Chinese Estates Holdings Limited* 626,070 1,305,000 Hang Lung Development Company Limited 1,504,115 870,000 Hysan Development Company Limited 1,131,587 174,000 Miramar Hotel & Investment Limited 188,224 1,479,000 New World Development Company Limited 3,561,698 696,000 Sun Hung Kai Properties Limited 5,960,439 1,131,000 Wharf Holdings Limited 3,073,211 ----------- 19,070,379 ----------- Telecommunications 12.01% 4,071,600 Hong Kong Telecommunications Limited 9,254,590 ----------- Transportation - Airlines 3.45% 1,566,000 Cathay Pacific Airways Limited 2,662,031 ----------- Transportation - Shipping 0.52% 1,914,000 Shun Tak Holdings Limited 404,234 ----------- Utilities - Electrical & Gas 9.14% 739,500 CLP Holdings Limited 3,504,559 2,523,000 Hong Kong & China Gas Company Limited 3,541,531 ----------- 7,046,090 ----------- TOTAL COMMON STOCK - BASKET (Cost $57,148,028) 77,083,040 ----------- 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 $57,545,618)+ 100.00% $77,083,040 ====== =========== - ---------- * Non-income producing security. ** Fair valued security. + Aggregate cost for Federal income tax purposes is $62,026,344. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $15,604,382 Excess of tax cost over value (547,686) ----------- $15,056,696 =========== See accompanying notes to financial statements. 29 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------- Italy WEBS Index Series - ----------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Automobiles 5.29% 69,138 Fiat SpA $ 2,244,958 54,000 Fiat SpA-Priv 850,185 ----------- 3,095,143 ----------- Banking 19.48% 306,000 Banca Commerciale Italiana SpA 2,091,609 83,754 Banca Popolare di Milano SpA 610,439 446,544 Banco Intesa SpA 1,893,343 178,632 Banco Intesa SpA Rnc 360,396 198,000 Istituto Bancario San Paolo di Torino SpA 2,666,841 108,000 Mediobanca SpA 1,118,103 576,000 Unicredito Italiano SpA 2,664,920 ----------- 11,405,651 ----------- Broadcasting & Publishing 4.48% 36,000 Arnoldo Mondadori Editore SpA 581,506 230,058 Mediaset SpA 2,040,316 ----------- 2,621,822 ----------- Building Materials & Components 0.85% 36,000 Italcementi SpA 495,071 ----------- Construction & Housing 0.76% 85,572 Sirti SpA 443,000 ----------- Energy Sources 14.25% 1,386,000 ENI SpA 8,344,988 ----------- Food & Household Products 0.84% 382,302 Parmalat Finanziaria SpA 495,091 ----------- Industrial Components 1.47% 342,000 Pirelli SpA 858,703 ----------- Insurance 14.95% 142,020 Assicurazioni Generali SpA 4,811,008 810,000 Istituto Nazionale delle Assicurazioni SpA 1,966,177 90,000 Riunione Adriatica di Sicurta SpA 846,857 68,436 Riunione Adriatica di Sicurta SpA Rnc 561,252 53,928 Societa Assicuratrice Industriale SpA 567,022 ----------- 8,752,316 ----------- Merchandising 0.74% 54,072 La Rinascente SpA 431,399 ----------- Multi-Industry 2.44% 630,396 Montedison SPA 951,554 145,890 Montedison SpA Rnc 172,596 270,000 SNIA BPD SpA 304,024 ----------- 1,428,174 ----------- Real Estate 0.72% 882,558 Unione Immobiliare SpA 420,630 ----------- Recreation - Other Consumer Goods 0.77% 69,444 Bulgari SpA 453,840 ----------- Telecommunications 27.48% 564,804 Olivetti SpA* 1,314,913 1,152,000 Telecom Italia Mobile SpA 6,689,071 249,408 Telecom Italia Mobile SpA Rnc 866,750 630,000 Telecom Italia SpA 6,367,878 148,860 Telecom Italia SpA Rnc 849,887 ----------- 16,088,499 ----------- Textiles & Apparel 1.48% 360,000 Benetton Group SpA 692,469 23,598 Marzotto SpA 176,455 ----------- 868,924 ----------- Transportation - Airlines 0.80% 174,186 Alitalia SpA 466,422 ----------- Utilities - Electrical & Gas 3.20% 138,870 Edison SpA 1,161,480 170,334 Italgas SpA 712,139 ----------- 1,873,619 ----------- TOTAL COMMON STOCK - BASKET (Cost $52,292,226) 58,543,292 ----------- COMMON STOCK - NON-BASKET 0.00% Automobiles 0.00% 11 Fiat SPA 357 ----------- Multi-Industry 0.00% 9 Montedison SPA 14 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $374) 371 ----------- Total Investments (Cost $52,292,600)+ 100.00% $58,543,663 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $53,029,375. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 6,815,848 Excess of tax cost over value (1,301,560) ----------- $ 5,514,288 =========== See accompanying notes to financial statements. 30 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------- Japan WEBS Index Series - ----------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 99.99% Appliances & Household Durables 7.17% 810,000 Matsushita Electric Industrial Company Limited $ 15,956,952 90,000 Pioneer Corporation 1,594,054 810,000 Sanyo Electric Company Limited 3,509,052 450,000 Sharp Corporation 6,853,938 180,000 Sony Corporation 23,278,763 ------------ 51,192,759 ------------ Automobiles 8.39% 360,000 Honda Motor Company Limited 14,446,623 990,000 Nissan Motor Company Limited* 5,760,591 1,350,000 Toyota Motor Corporation 39,769,255 ------------ 59,976,469 ------------ Banking 13.33% 810,000 Asahi Bank Limited 4,949,610 450,000 Ashikaga Bank Limited 923,435 1,620,000 Bank Of Tokyo-Mitsubishi Limited 24,157,052 450,000 Bank Of Yokohama Limited 1,395,412 360,000 Chiba Bank Limited 1,349,446 990,000 Fuji Bank Limited 10,202,928 180,000 Gunma Bank Limited 1,165,580 270,000 Hokuriku Bank Limited* 544,211 990,000 Industrial Bank of Japan Limited 10,067,491 360,000 Joyo Bank Limited 1,444,662 540,000 Mitsubishi Trust & Banking Corporation 5,663,733 450,000 Mitsui Trust & Banking Company Limited 927,539 1,260,000 Sakura Bank Limited 6,665,147 180,000 Seventy-Seven Bank Limited 1,758,220 360,000 Shizuoka Bank Limited 3,939,988 1,080,000 Sumitomo Bank Limited 14,774,956 720,000 Tokai Bank Limited 4,570,386 90,000 Yamaguchi Bank Limited 701,810 ------------ 95,201,606 ------------ Beverages & Tobacco 1.25% 180,000 Asahi Breweries Limited 2,731,725 450,000 Kirin Brewery Company Limited 5,458,525 180,000 Sapporo Breweries Limited 755,164 ------------ 8,945,414 ------------ Building Materials & Components 1.04% 180,000 Inax Corporation 1,326,463 180,000 Sekisui Chemical Company Limited 1,001,414 90,000 Sumitomo Forestry Company Limited 712,481 450,000 Taiheiyo Cement Corporation 1,177,892 90,000 Tostem Corporation 1,846,869 180,000 Toto Limited 1,329,746 ------------ 7,394,865 ------------ Business & Public Services 1.62% 270,000 Dai Nippon Printing Company Limited 4,407,862 180,000 Kamigumi Company Limited 1,083,497 90,000 Kokuyo Company Limited 1,600,620 90,000 Mitsubishi Logistics Corporation 1,009,622 270,000 Toppan Printing Company Limited 3,447,490 ------------ 11,549,091 ------------ Chemicals 3.20% 540,000 Asahi Chemical Industry Company Limited 2,881,116 360,000 Dainippon Ink & Chemicals Incorporated 1,395,412 180,000 Kuraray Company Limited 2,160,427 900,000 Mitsubishi Chemical Corporation 3,020,658 270,000 Mitsubishi Rayon Company Limited 760,910 90,000 Shin-Etsu Chemical Company Limited 3,660,906 450,000 Showa Denko 615,623 630,000 Sumitomo Chemical Company Limited 3,229,149 360,000 Teijin Limited 1,526,745 540,000 Toray Industries Incorporated 2,767,842 270,000 Tosoh Corporation 849,560 ------------ 22,868,348 ------------ Construction & Housing 2.10% 180,000 Daiwa House Industry Company Limited 1,805,828 630,000 Kajima Corporation 2,717,771 90,000 Kandenko Company Limited 532,719 90,000 Kinden Corporation 902,914 630,000 Kumagai Gumi Company Limited* 660,769 180,000 Nishimatsu Construction Company Limited 1,042,455 270,000 Obayashi Corporation 1,455,333 270,000 Sekisui House Limited 2,898,354 450,000 Shimizu Corporation 2,006,931 450,000 Taisei Corporation 1,005,518 ------------ 15,028,592 ------------ Data Processing & Reproduction 4.05% 360,000 Canon Incorporated 10,506,635 630,000 Fujitsu Limited 18,444,069 ------------ 28,950,704 ------------ Electrical & Electronics 3.99% 1,260,000 Hitachi Limited 12,767,203 90,000 Makita Corportion 1,067,080 810,000 Mitsubishi Electric Corporation 4,092,663 540,000 NEC Corporation 8,766,474 90,000 Omron Corporation 1,834,557 ------------ 28,527,977 ------------ Electronic Components, Instruments 4.37% 90,000 Fanuc Limited 5,417,484 90,000 Kyocera Corporation 5,909,982 90,000 Murata Manufacturing Company Limited 7,223,312 180,000 Nikon Corporation 3,046,924 180,000 Olympus Optical Company Limited 2,677,550 90,000 Tokyo Electron Limited 6,320,398 90,000 Yokogawa Electric Corporation 627,936 ------------ 31,223,586 ------------ Energy Sources 0.54% 270,000 Cosmo Oil Company Limited 492,499 450,000 Japan Energy Corporation 574,582 630,000 Nippon Mitsubishi Oil Corporation 2,786,721 ------------ 3,853,802 ------------ See accompanying notes to financial statements. 31 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------------------- Japan WEBS Index Series (continued) - ----------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- Financial Services 3.72% 90,000 Acom Company Limited $ 9,119,431 90,000 Credit Saison Company Limited 2,027,452 540,000 Daiwa Securities Group Incorporated 4,880,660 720,000 Nomura Securities Company Limited 10,539,468 ----------- 26,567,011 ----------- Food & Household Products 2.01% 270,000 Ajinomoto Company Incorporated 3,080,578 180,000 Kao Corporation 5,105,568 180,000 Meiji Seika Incorporated 1,346,163 90,000 Nippon Meat Packers Incorporated 1,231,246 90,000 Nissin Food Products Company Limited 2,380,409 90,000 Yamazaki Baking Company Limited 1,190,205 ----------- 14,334,169 ----------- Forest Products & Paper 0.77% 360,000 Nippon Paper Industries Company 2,363,993 450,000 Oji Paper Company Limited 3,119,157 ----------- 5,483,150 ----------- Health & Personal Care 5.56% 90,000 Daiichi Pharmaceutical Company Limited 1,388,025 90,000 Eisai Company Limited 2,076,702 180,000 Kyowa Hakko Kogyo Company Limited 1,362,579 180,000 Sankyo Company Limited 5,007,068 180,000 Shionogi & Company Limited 1,543,162 180,000 Shiseido Company Limited 2,511,742 90,000 Taisho Pharmaceutical Company Limited 3,784,030 360,000 Takeda Chemical Industries 18,058,279 90,000 Yamanouchi Pharmaceutical Company Limited 4,005,655 ----------- 39,737,242 ----------- Industrial Components 4.32% 270,000 Bridgestone Corporation 7,633,727 360,000 Denso Corporation 8,011,309 180,000 Fujikura Limited 1,152,447 270,000 Furukawa Electric Company Limited 1,526,745 180,000 Minebea Company Limited 2,166,993 180,000 NGK Insulators Limited 1,887,911 90,000 NGK Spark Plug Company Limited 922,614 270,000 NSK Limited 1,733,595 270,000 NTN Corporation 935,747 360,000 Sumitomo Electric Industries 4,892,152 ----------- 30,863,240 ----------- Insurance 2.03% 360,000 Mitsui Marine & Fire Insurance Company Limited 1,973,277 180,000 Nichido Fire & Marine Insurance Company Limited 861,872 270,000 Nippon Fire & Marine Insurance Company Limited 886,497 360,000 Sumitomo Marine & Fire Insurance Company Limited 2,331,160 720,000 Tokio Marine & Fire Insurance Company Limited 8,470,975 ----------- 14,523,781 ----------- Leisure & Tourism 0.07% 90,000 Tokyo Dome Corporation* 505,632 ----------- Machinery & Engineering 3.02% 180,000 Amada Company Limited 1,510,329 180,000 Daikin Industries Limited 1,969,994 90,000 Ebara Corporation 1,108,122 450,000 Hitachi Zosen Corporation* 529,436 540,000 Kawasaki Heavy Industries Limited 1,231,246 450,000 Komatsu Limited 2,872,908 630,000 Kubota Corporation 1,988,052 90,000 Kurita Water Industries Limited 1,630,170 1,260,000 Mitsubishi Heavy Industries Limited 5,481,509 540,000 Mitsui Engineering & Shipbuilding Company Limited* 581,148 360,000 Sumitomo Heavy Industries Limited* 1,208,263 90,000 Toyoda Automatic Loom Works Limited 1,470,929 ----------- 21,582,106 ----------- Merchandising 3.45% 270,000 Daiei Incorporated* 1,149,984 90,000 Hankyu Department Stores 625,473 90,000 Isetan Company Limited Incorporated 800,310 180,000 Ito-Yokado Company Limited 13,231,794 90,000 Jusco Company Limited 1,731,953 180,000 Marui Company Limited 3,004,241 180,000 Mitsukoshi Limited* 1,067,080 90,000 Mycal Corporation 541,748 90,000 Seiyu Limited* 453,099 90,000 Takashimaya Company Limited 804,414 90,000 Uny Company Limited 1,231,246 ----------- 24,641,342 ----------- Metals - Non Ferrous 0.34% 450,000 Mitsubishi Materials Corporation* 1,268,184 360,000 Nippon Light Metal Company Limited 495,782 180,000 Sumitomo Metal Mining Company 699,348 ----------- 2,463,314 ----------- Metals - Steel 1.56% 810,000 Kawasaki Steel Corporation 1,846,869 2,340,000 Nippon Steel Corporation 6,125,040 1,260,000 NKK Corporation* 1,172,146 1,170,000 Sumitomo Metal Industries Limited* 1,568,608 90,000 Tokyo Steel Manufacturing Company Limited 420,265 ----------- 11,132,928 ----------- Miscellaneous Materials & Commodities 1.15% 450,000 Asahi Glass Company Limited 2,840,075 90,000 Nitto Denko Corporation 2,487,118 90,000 Toyo Seikan Kaisha Limited 2,093,119 360,000 Ube Industries Limited 794,564 ----------- 8,214,876 ----------- Real Estate 1.09% 540,000 Mitsubishi Estate Company Limited 5,575,083 270,000 Mitsui Fudosan Company Limited 2,194,081 ----------- 7,769,164 ----------- See accompanying notes to financial statements. 32 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------------------- Japan WEBS Index Series (concluded) - ----------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- Recreation - Other Consumer Goods 1.85% 180,000 Casio Computer Company Limited $ 1,250,946 180,000 Citizen Watch Company Limited 1,546,445 180,000 Fuji Photo Film Company 6,566,647 180,000 Konica Corporation 723,973 90,000 Shimano Incorporated 2,150,577 90,000 Yamaha Corporation 984,997 ------------ 13,223,585 ------------ Telecommunications 7.21% 45,900 Nippon Telegraph & Telephone Corporation 51,490,720 ------------ Textiles & Apparel 0.21% 90,000 Nisshinbo Industries Incorporated 468,694 630,000 Toyobo Company Limited 1,005,518 ------------ 1,474,212 ------------ Transportation - Airlines 0.39% 720,000 Japan Airlines Company Limited 2,764,558 ------------ Transportation - Road & Rail 3.73% 1,440 East Japan Railway Company 8,707,374 450,000 Hankyu Corporation 1,596,516 180,000 Keihin Electric Express Railway Company Limited 645,173 540,000 Kinki Nippon Railway Company Limited 2,698,892 360,000 Nagoya Railroad Company Limited 1,073,647 270,000 Nankai Electric Railway Company Limited 1,108,122 360,000 Nippon Express Company Limited 2,748,142 270,000 Odakyu Electric Railway Company 866,797 90,000 Seino Transportation Company Limited 572,940 360,000 Tobu Railway Company Limited 1,113,047 450,000 Tokyu Corporation 1,181,996 180,000 Yamato Transport Company Limited 4,350,404 ------------ 26,663,050 ------------ Transportation - Shipping 0.42% 540,000 Mitsui O.S.K. Lines Limited 1,034,247 540,000 Nippon Yusen Kabushiki Kaisha 1,969,994 ------------ 3,004,241 ------------ Utilities - Electrical & Gas 3.94% 360,000 Kansai Electric Power Company Incorporated 6,894,979 990,000 Osaka Gas Company Limited 3,160,199 180,000 Tohoku Electric Power Company Incorporated 2,856,491 540,000 Tokyo Electric Power Company 12,558,712 1,080,000 Tokyo Gas Company Limited 2,659,492 ------------ 28,129,873 ------------ Wholesale & International Trade 2.10% 540,000 Itochu Corporation 1,649,870 540,000 Marubeni Corporation 1,275,571 540,000 Mitsubishi Corporation 4,486,662 720,000 Mitsui & Company Limited 5,062,885 360,000 Sumitomo Corporation 2,560,992 ------------ 15,035,980 ------------ TOTAL COMMON STOCK - BASKET (Cost $618,935,784) 714,317,387 ------------ COMMON STOCK - NON-BASKET 0.01% Electronic Components, Instruments 0.01% 352 Tokyo Electron Limited 24,720 ------------ Energy Sources 0.00% 500 Nippon Mitsubishi Oil Corporation 2,211 ------------ Financial Services 0.00% 400 Credit Saison Company Limited 9,011 ------------ TOTAL COMMON STOCK - NON-BASKET (Cost $21,578) 35,942 ------------ Total Investments (Cost $618,957,362)+ 100.00% $714,353,329 ====== ============ - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $624,313,812. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 99,918,660 Excess of tax cost over value (9,879,143) ------------ $ 90,039,517 ============ See accompanying notes to financial statements. 33 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - --------------------------------- Malaysia (Free) WEBS Index Series - --------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 99.68% Automobiles 5.41% 454,000 Edaran Otomobil Nasional $ 1,672,632 454,000 Oriental Holdings 997,605 681,000 Perusahaan Otomobil Nasional 1,353,039 1,589,000 Tan Chong Motor Holdings 945,037 ----------- 4,968,313 ----------- Banking 17.40% 1,135,000 Commerce Asset Holdings 2,613,487 2,951,000 Malayan Banking 9,707,237 2,043,000 Public Bank 1,924,721 2,043,000 RHB Capital* 1,741,926 ----------- 15,987,371 ----------- Beverages & Tobacco 4.82% 1,135,000 Guinness Anchor 1,266,421 454,000 Rothmans of Pall Mall 3,166,053 ----------- 4,432,474 ----------- Broadcasting & Publishing 1.08% 454,000 New Straits Times Press* 991,632 ----------- Building Materials & Components 1.90% 681,000 Hume Industries (Malaysia) 663,079 908,000 Malayan Cement 296,295 2,043,000 Pan Malaysia Corporation 790,318 ----------- 1,749,692 ----------- Construction & Housing 3.64% 227,000 Ekran* 107,526 1,589,000 YTL Corporation 3,240,724 ----------- 3,348,250 ----------- Electrical & Electronics 0.27% 681,000 Time Engineering* 247,310 ----------- Electronic Components, Instruments 1.77% 454,000 Malaysian Pacific Industries 1,624,842 ----------- Energy Sources 0.95% 681,000 Shell Refining Company 874,547 ----------- Financial Services 2.48% 681,000 AMMB Holdings 1,218,632 1,135,000 MBF Capital* 382,316 908,000 Rashid Hussain 673,832 ----------- 2,274,780 ----------- Food & Household Products 2.69% 454,000 Nestle (Malaysia) 1,756,263 681,000 Perlis Plantations 713,258 ----------- 2,469,521 ----------- Industrial Components 0.39% 908,000 Leader Universal Holdings* 363,200 ----------- Leisure & Tourism 8.47% 2,951,000 Magnum Corporation 2,593,774 2,043,000 Resorts World 5,188,145 ----------- 7,781,919 ----------- Machinery & Engineering 1.60% 681,000 UMW Holdings 1,469,526 ----------- Metals - Steel 0.71% 2,497,000 Amsteel Corporation 653,820 ----------- Miscellaneous Materials & Commodities 5.09% 2,043,000 Golden Hope Plantations 1,677,410 1,589,000 Highlands & Lowlands 965,945 681,000 IOI Corporation* 413,976 227,000 Kian Joo Can Factory 409,197 908,000 Kuala Lumpur Kepong 1,206,684 ----------- 4,673,212 ----------- Multi-Industry 9.49% 3,178,000 Berjaya Group 928,310 454,000 Land & General* 259,258 1,816,000 Malaysia Mining Corporation 855,432 1,589,000 Multi-Purpose Holdings* 961,763 2,724,000 Sime Darby 3,584,211 1,135,000 United Engineers (Malaysia)* 2,135,592 ----------- 8,724,566 ----------- Real Estate 1.80% 2,043,000 Hong Leong Properties 639,782 1,135,000 Malaysian Resources Corporation* 1,015,526 ----------- 1,655,308 ----------- Telecommunications 14.75% 2,043,000 Technology Resources Industries 1,403,218 4,086,000 Telekom Malaysia 12,150,474 ----------- 13,553,692 ----------- Transportation - Airlines 0.83% 681,000 Malaysian Airline System 763,437 ----------- Transportation - Shipping 3.39% 2,043,000 Malaysia International Shipping 3,118,263 ----------- Utilities - Electrical & Gas 10.75% 4,313,000 Tenaga Nasional 9,874,500 ----------- TOTAL COMMON STOCK - BASKET (Cost $69,800,040) 91,600,175 ----------- COMMON STOCK - NON-BASKET 0.32% Building Materials & Components 0.10% 5,448,000 Malayan Cement Berhad Rights* expiration 9/9/99 93,189 ----------- Financial Services 0.22% 1,135,000 Idris Hydraulic (Malaysia)*/** 198,625 ----------- Metals - Steel 0.00% 35,944 Silverstone BHD*/** 0 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $511,737) 291,814 ----------- Total Investments (Cost $70,311,777)+ 100.00% $91,891,989 ====== =========== - ---------- * Non-income producing security. ** Fair valued security. + Aggregate cost for Federal income tax purposes is $72,936,931. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $23,657,753 Excess of tax cost over value (4,702,695) ----------- $18,955,058 =========== See accompanying notes to financial statements. 34 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------------- Mexico (Free) WEBS Index Series - ------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Banking 6.23% 16,000 Grupo Financiero Banamex Accival SA de CV - Series L* $ 28,406 368,000 Grupo Financiero Banamex Accival SA de CV - Series O* 708,449 1,552,000 Grupo Financiero Bancomer SA de CV - Series O 378,456 176,000 Grupo Financiero Banorte SA de CV - Series O* 210,824 ----------- 1,326,135 ----------- Beverages & Tobacco 18.83% 304,000 Fomento Economico Mexicano SA de CV - Series UBD 999,786 156,800 Grupo Continental SA 216,334 768,000 Grupo Modelo SA de CV - Series C 2,057,583 128,000 Savia SA de CV* 736,513 ----------- 4,010,216 ----------- Broadcasting & Publishing 6.79% 80,000 Grupo Televisa SA - Series CPO* 1,445,989 ----------- Building Materials & Components 6.75% 80,000 Apasco SA de CV 440,642 80,000 Cemex SA de CV - Series A 356,791 96,000 Cemex SA de CV - Series B 427,123 48,000 Cemex SA de CV - Series CPO 212,535 ----------- 1,437,091 ----------- Chemicals 0.32% 48,000 Cydsa SA de CV - Series A 68,791 ----------- Construction & Housing 1.05% 32,000 Corporacion GEO SA de CV - Series B* 106,267 192,000 Empresas ICA Sociedad Controladora SA de CV 118,280 ----------- 224,547 ----------- Energy Equipment & Services 0.87% 16,000 Tubos de Acero de Mexico SA 185,669 ----------- Financial Services 0.75% 1,488,000 Grupo Financiero Probursa SA de CV - Series B* 159,144 ----------- Food & Household Products 4.90% 112,000 Grupo Herdez SA - Series B* 34,019 400,000 Grupo Industrial Bimbo SA de CV - Series A 843,636 256,000 Grupo Industrial Maseca SA de CV - Series B 165,921 ----------- 1,043,576 ----------- Health & Personal Care 4.54% 304,000 Kimberly-Clark de Mexico SA de CV - Series A 965,647 ----------- Merchandising 9.82% 128,000 Cifra SA de CV - Series C* 194,396 880,000 Cifra SA de CV - Series V* 1,460,706 288,000 Controladora Comercial Mexicana SA de CV - Series UBC 271,059 352,000 Grupo Elektra SA de CV - Series CPO 164,141 ----------- 2,090,302 ----------- Metals - Non Ferrous 5.59% 176,000 Grupo Mexico SA - Series B 763,294 160,000 Industrias Penoles SA - Series CPO 427,808 ----------- 1,191,102 ----------- Miscellaneous Materials & Commodities 0.64% 96,000 Vitro SA - Series A 136,556 ----------- Multi-Industry 8.70% 144,000 Alfa SA de CV - Series A 546,738 400,000 Desc SA de CV - Series B 372,193 240,000 Grupo Carso SA de CV - Series A1* 933,048 ----------- 1,851,979 ----------- Telecommunications 24.22% 256,000 Telefonos de Mexico SA - Series A 948,706 1,136,000 Telefonos de Mexico SA - Series L 4,209,882 ----------- 5,158,588 ----------- TOTAL COMMON STOCK - BASKET (Cost $20,830,535) 21,295,332 ----------- Total Investments (Cost $20,830,535)+ 100.00% $21,295,332 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $20,871,167. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 2,059,186 Excess of tax cost over value (1,635,021) ----------- $ 424,165 =========== See accompanying notes to financial statements. 35 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------------- Netherlands WEBS Index Series - ----------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Appliances & Household Durables 4.81% 14,904 Philips Electronics $ 1,535,740 ----------- Banking 5.35% 70,200 ABN Amro Holding 1,709,211 ----------- Beverages & Tobacco 4.00% 25,650 Heineken 1,278,842 ----------- Broadcasting & Publishing 5.14% 48,600 Elsevier 559,565 29,160 Wolters Klumer - CVA 1,084,221 ----------- 1,643,786 ----------- Business & Public Services 6.53% 16,119 Getronics 789,179 43,200 TNT Post Group 1,065,512 13,500 Vedior 233,152 ----------- 2,087,843 ----------- Chemicals 3.70% 25,380 Akzo Nobel 1,180,933 ----------- Construction & Housing 1.23% 19,710 Hollandsche Beton Groep 233,181 3,429 IHC Caland 161,363 ----------- 394,544 ----------- Data Processing & Reproduction 2.65% 39,825 Oce 845,550 ----------- Energy Equipment & Services 0.85% 10,530 Koninklijke Pakhoed 270,841 ----------- Energy Sources 22.38% 116,370 Royal Dutch/Shell Group 7,154,045 ----------- Financial Services 8.71% 50,760 Ing Groep 2,782,765 ----------- Food & Household Products 6.20% 28,485 Unilever 1,981,343 ----------- Insurance 9.86% 36,045 Aegon 3,152,557 ----------- Machinery & Engineering 1.71% 25,353 Stork 547,659 ----------- Merchandising 4.84% 43,200 Koninklijke Ahold 1,546,931 ----------- Metals - Steel 1.47% 8,100 Koninklijke Hoogovens 468,443 ----------- Telecommunications 4.92% 35,100 Koninklijke Kpn 1,572,029 ----------- Transportation - Airlines 1.97% 22,950 KLM - Koninklijke Luchvaart Mij 630,295 ----------- Transportation - Road & Rail 0.96% 10,800 Koninklijke Nedlloyd 308,017 ----------- Wholesale & International Trade 2.72% 15,120 Buhrmann 266,720 24,300 Hagemeyer 603,201 ----------- 869,921 ----------- TOTAL COMMON STOCK - BASKET (Cost $31,660,520) 31,961,295 ----------- Total Investments (Cost $31,660,520)+ 100.00% $31,961,295 ====== =========== - ---------- + Aggregate cost for Federal income tax purposes is $31,982,325. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 2,183,296 Excess of tax cost over value (2,204,326) ----------- $ (21,030) =========== See accompanying notes to financial statements. 36 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ---------------------------------- Singapore (Free) WEBS Index Series - ---------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 98.58% Automobiles 1.77% 286,000 Cycle & Carriage Limited $ 1,613,133 286,000 Inchcape Motors Limited 387,152 ------------ 2,000,285 ------------ Banking 23.09% 858,000 Development Bank of Singapore Limited 9,831,621 1,573,000 Oversea-Chinese Banking Corporation Limited 11,020,246 715,000 United Overseas Bank Limited 5,306,359 ------------ 26,158,226 ------------ Beverages & Tobacco 2.40% 715,000 Fraser & Neave Limited 2,716,856 ------------ Broadcasting & Publishing 4.20% 286,000 Singapore Press Holdings Limited 4,754,497 ------------ Business & Public Services 1.06% 572,000 Parkway Holdings Limited 1,202,209 ------------ Electronic Components, Instruments 2.46% 143,000 Creative Technology Limited 1,417,859 143,000 Venture Manufacturing (Singapore) Limited 1,366,918 ------------ 2,784,777 ------------ Leisure & Tourism 3.22% 572,000 Hotel Properties Limited 526,391 429,000 Overseas Union Enterprise Limited 1,207,303 858,000 Shangri-La Hotel Limited 1,915,383 ------------ 3,649,077 ------------ Machinery & Engineering 3.80% 3,575,000 Singapore Technologies Engineering Limited 4,308,763 ------------ Merchandising 0.40% 143,000 Robinson & Company Limited 449,979 ------------ Metals - Steel 0.54% 286,000 Natsteel Limited 607,896 ------------ Multi-Industry 10.34% 572,000 Haw Par Corporation Limited 950,900 1,430,000 Keppel Corporation Limited 4,627,145 2,574,000 Sembcorp Industries Limited 3,423,238 2,288,000 Straits Trading Company Limited 2,716,856 ------------ 11,718,139 ------------ Real Estate 13.40% 858,000 City Developments Limited 5,195,986 2,002,000 DBS Land Limited 4,564,318 429,000 First Capital Corporation Limited 596,010 4,004,000 United Industrial Corporation Limited 2,294,045 2,717,000 United Overseas Land Limited 2,532,619 ------------ 15,182,978 ------------ Telecommunications 14.11% 9,008,994 Singapore Telecommunications Limited 15,992,930 ------------ Transportation - Airlines 11.84% 1,430,000 Singapore Airlines Limited 13,414,475 ------------ Transportation - Road & Rail 2.36% 5,291,000 Comfort Group Limited* 2,670,160 ------------ Transportation - Shipping 3.59% 3,146,000 Neptune Orient Lines Limited* 4,071,887 ------------ TOTAL COMMON STOCK - BASKET (Cost $79,962,515) 111,683,134 ------------ COMMON STOCK - NON-BASKET 1.42% Banking 1.41% 139,854 Development Bank of Singapore Limited 1,602,554 ------------ Broadcasting & Publishing 0.01% 700 Singapore Press Holdings Limited 11,637 ------------ TOTAL COMMON STOCK - NON-BASKET (Cost $1,010,605) 1,614,191 ------------ Total Investments (Cost $80,973,120)+ 100.00% $113,297,325 ====== ============ - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $85,340,163. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 29,338,368 Excess of tax cost over value (1,381,206) ------------ $ 27,957,162 ============ See accompanying notes to financial statements. 37 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------- Spain WEBS Index Series - ----------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 99.90% Banking 28.20% 76,000 Argentaria Corp SA $ 1,730,010 266,000 Banco Bilbao Vizcaya SA 3,545,917 535,154 Banco Santander Central Hispano SA 5,375,847 ----------- 10,651,774 ----------- Beverages & Tobacco 3.15% 21,166 El Aguila SA* 203,455 51,300 Tabacalera SA 984,600 ----------- 1,188,055 ----------- Building Materials & Components 1.49% 13,300 Portland Valderrivas SA 393,507 19,000 Uralita SA 167,381 ----------- 560,888 ----------- Business & Public Services 4.76% 47,880 Aguas de Barcelona 788,981 76,000 Autopistas Concesionaria Espanola SA 850,153 16,112 Prosegur Cia de Seguridad SA 158,959 ----------- 1,798,093 ----------- Chemicals 0.26% 126,977 Ercros SA* 96,571 ----------- Construction & Housing 4.96% 9,500 Actividades de Construccion y Servicios SA 265,823 17,100 Fomento de Construcciones y Contratas SA 1,014,223 48,279 Groupo Dragados 593,097 ----------- 1,873,143 ----------- Energy Sources 5.16% 93,100 Repsol SA 1,950,114 ----------- Food & Household Products 1.48% 24,491 Azucarera Ebro Agricolas SA 360,626 380,000 Puleva SA* 196,683 ----------- 557,309 ----------- Forest Products & Paper 0.40% 7,600 Empresa Nacional de Celulosas SA 152,530 ----------- Health & Personal Care 0.61% 19,000 Fabrica Espanola de Productos y Farmaceuticos SA 231,805 ----------- Insurance 1.05% 21,128 Corporacion Mapfre 398,368 ----------- Leisure & Tourism 1.55% 28,500 Sol Melia SA 388,048 38,000 TelePizza SA* 198,289 ----------- 586,337 ----------- Machinery & Engineering 1.17% 17,100 Zardoya Otis SA 442,718 ----------- Merchandising 1.44% 19,000 Cortefiel SA 542,284 ----------- Metals - Non Ferrous 0.69% 19,000 Asturiana de Zinc* 260,505 ----------- Metals - Steel 1.46% 16,625 Acerinox SA 550,713 ----------- Miscellaneous Materials & Commodities 1.01% 38,000 Viscofan 381,325 ----------- Multi-Industry 1.93% 24,738 Corporacion Financiera Alba 727,742 ----------- Real Estate 2.89% 9,937 Metrovacesa SA 213,603 46,322 Urbis Ser 1, 2, 3 296,026 62,244 Vallehermoso SA 581,873 ----------- 1,091,502 ----------- Telecommunications 20.75% 491,454 Telefonica SA* 7,838,761 ----------- Utilities - Electrical & Gas 15.49% 79,800 Endesa SA 1,601,563 68,400 Gas Natural SDG SA 1,609,029 114,000 Iberdrola SA 1,637,689 70,300 Union Electrica Fenosa SA 1,002,482 ----------- 5,850,763 ----------- TOTAL COMMON STOCK - BASKET (Cost $37,862,990) 37,731,300 ----------- COMMON STOCK - NON-BASKET 0.10% Business & Public Services 0.10% 3,600 Autopistas Concesionaria Espanola SA 39,465 ----------- Real Estate 0.00% 13 Metrovacesa SA 280 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $54,060) 39,745 ----------- Total Investments (Cost $37,917,050)+ 100.00% $37,771,045 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $37,917,050. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 2,484,700 Excess of tax cost over value (2,630,705) ----------- $ (146,005) =========== See accompanying notes to financial statements. 38 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ------------------------ Sweden WEBS Index Series - ------------------------ - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Appliances & Household Durables 4.10% 42,000 Electrolux AB - B $ 844,170 ----------- Automobiles 7.35% 18,000 Volvo AB - A 506,720 36,000 Volvo AB - B 1,006,901 ----------- 1,513,621 ----------- Banking 13.13% 57,600 ForeningsSparbanken AB 864,802 80,400 Skandinaviska Enskilda Banken AB - A 832,328 64,800 Svenska Handelsbanken AB - A 898,365 8,400 Svenska Handelsbanken AB - B 107,810 ----------- 2,703,305 ----------- Beverages & Tobacco 0.78% 39,600 Swedish Match AB 159,666 ----------- Business & Public Services 6.60% 10,800 Esselte AB - A 88,921 10,800 Esselte AB - B 90,883 42,000 Securitas AB - B 600,073 15,600 WM-Data AB - B 578,932 ----------- 1,358,809 ----------- Chemicals 3.44% 20,400 AGA AB - A 344,569 21,600 AGA AB - B 364,838 ----------- 709,407 ----------- Construction & Housing 2.05% 10,800 Skanska AB - B 422,376 ----------- Electrical & Electronics 24.77% 158,400 Ericsson LM - B 5,101,635 ----------- Financial Services 0.40% 7,200 Om Gruppen AB 81,511 ----------- Forest Products & Paper 3.05% 21,600 Svenska Cellulosa AB - B 627,679 ----------- Industrial Components 3.08% 14,400 SKF AB - A 306,865 14,400 SKF AB - B 327,788 ----------- 634,653 ----------- Insurance 7.23% 73,200 Skandia Forsakrings AB 1,488,994 ----------- Machinery & Engineering 7.91% 12,000 Atlas Copco AB - A 345,805 4,800 Atlas Copco AB - B 136,869 27,600 Sandvik AB - A 751,907 14,400 Sandvik AB - B 394,915 ----------- 1,629,496 ----------- Merchandising 10.59% 86,400 Hennes Mauritz AB - B 2,181,184 ----------- Metals - Steel 1.05% 10,800 SSAB Svenskt Stal AB - A 150,381 4,800 SSAB Svenskt Stal AB - B 65,674 ----------- 216,055 ----------- Multi-Industry 1.46% 33,600 Trelleborg AB - B 301,053 ----------- Real Estate 0.45% 10,800 Drott AB - B 93,498 ----------- Telecommunications 2.56% 15,600 NetCom AB - B* 526,989 ----------- TOTAL COMMON STOCK - BASKET (Cost $17,182,468) 20,594,101 ----------- Total Investments (Cost $17,182,468)+ 100.00% $20,594,101 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $17,197,433. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 3,977,566 Excess of tax cost over value (580,898) ----------- $ 3,396,668 ============ See accompanying notes to financial statements. 39 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - ----------------------------- Switzerland WEBS Index Series - ----------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Banking 17.65% 2,480 Banque Cantonale Vaudoise $ 777,506 12,760 Credit Suisse Group 2,408,659 11,860 UBS AG 3,346,413 240 Vontobel Holding AG 396,013 ----------- 6,928,591 ----------- Building Materials & Components 6.16% 1,460 Forbo Holding AG 578,180 660 Holderbank Financiere Glarus AG - Bearer 812,422 3,060 Holderbank Financiere Glarus AG - Registered 1,028,011 ----------- 2,418,613 ----------- Business & Public Services 3.16% 2,220 Adecco SA 1,223,484 60 SGS Societe Generale de Surveillance Holding SA* 16,039 ----------- 1,239,523 ----------- Chemicals 3.89% 260 EMS-Chemie Holding AG* 1,261,303 880 Sika Finanz AG 265,144 ----------- 1,526,447 ----------- Electrical & Electronics 4.30% 16,540 ABB Ltd. 1,686,641 ----------- Financial Services 2.51% 320 Julius Baer Holding Limited AG 986,338 ----------- Food & Household Products 4.52% 900 Nestle SA 1,776,120 ----------- Health & Personal Care 32.19% 3,860 Novartis AG 5,553,957 60 Roche Holding AG - Bearer 1,069,236 520 Roche Holding AG - Genussein 6,013,068 ----------- 12,636,261 ----------- Insurance 8.42% 840 Schweizerische Rueckversicherungs (Swiss Re) 1,638,308 2,840 Zurich Allied AG 1,666,398 ----------- 3,304,706 ----------- Leisure & Tourism 0.16% 140 Moevenpick Holding AG 61,910 ----------- Machinery & Engineering 1.87% 200 Georg Fischer AG 61,382 40 Schindler Holding AG - Participation Certificates 60,933 300 Schindler Holding AG - Registered 485,117 200 Sulzer AG 125,536 ----------- 732,968 ----------- Merchandising 3.84% 680 Jelmoni Holding AG - Bearer 688,931 480 Jelmoni Holding AG - Registered 98,845 2,860 Valora Holding AG 721,088 ----------- 1,508,864 ----------- Multi-Industry 4.18% 1,380 Alusuisse Lonza Group AG 1,639,496 ----------- Recreation - Other Consumer Goods 1.73% 2,180 Tag Heuer International SA 237,050 600 The Swatch Group AG - B 441,159 ----------- 678,209 ----------- Telecommunications 4.40% 5,240 Swisscom AG 1,727,530 ----------- Transportation - Airlines 1.02% 1,900 SairGroup 399,413 ----------- TOTAL COMMON STOCK - BASKET (Cost $39,688,503) 39,251,630 ----------- COMMON STOCK - NON-BASKET 0.00% Electrical & Electronics 0.00% 10 ABB Ltd. 1,020 ----------- TOTAL COMMON STOCK - NON-BASKET (Cost $816) 1,020 ----------- Total Investments (Cost $39,689,319)+ 100.00% $39,252,650 ====== =========== - ---------- * Non-income producing security. + Aggregate cost for Federal income tax purposes is $40,074,203. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 1,291,059 Excess of tax cost over value (2,112,612) ----------- $ (821,553) =========== See accompanying notes to financial statements. 40 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - -------------------------------- United Kingdom WEBS Index Series - -------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- COMMON STOCK - BASKET 100.00% Aerospace & Military Technology 1.35% 146,160 British Aerospace Plc $ 1,067,602 131,880 Rolls-Royce Plc 524,326 ----------- 1,591,928 ----------- Banking 15.63% 104,720 Abbey National Plc 1,798,403 98,280 Barclays Plc 2,923,633 153,832 Halifax Group Plc 1,717,928 457,800 HSBC Holdings Plc 5,664,616 370,104 Lloyds TSB Group Plc 5,121,070 56,700 Royal Bank of Scotland Group Plc 1,177,963 ----------- 18,403,613 ----------- Beverages & Tobacco 3.91% 120,456 British American Tobacco Plc 1,013,984 155,120 Cadbury Schweppes Plc 979,648 257,628 Diageo Plc 2,609,875 ----------- 4,603,507 ----------- Broadcasting & Publishing 2.11% 111,916 British Sky Broadcasting Group Plc 1,059,970 44,772 Pearson Plc 924,395 75,040 Reed International Plc 499,249 ----------- 2,483,614 ----------- Building Materials & Components 1.87% 75,880 Blue Circle Industries Plc 522,834 42,280 BPB Plc 256,648 41,132 Caradon Plc 114,753 54,852 Hanson Plc 466,589 22,260 Hepworth Plc 81,610 23,660 RMC Group Plc 387,872 46,620 Wolseley Plc 371,826 ----------- 2,202,132 ----------- Business & Public Services 4.15% 15,792 Anglian Water Plc 187,912 67,480 British Airport Authority Plc 705,301 33,208 Compass Group Plc 310,245 15,680 De La Rue Plc 94,550 5,880 Misys Plc 52,050 33,600 Railtrack Group Plc 643,483 136,976 Rentokil Initial Plc 550,093 109,592 Reuters Group Plc 1,606,281 19,908 Thames Water Plc 286,188 38,192 United Utilities Plc 453,533 ----------- 4,889,636 ----------- Chemicals 1.24% 38,360 BOC Group Plc 808,046 57,260 Imperial Chemical Industries Plc 650,964 ----------- 1,459,010 ----------- Construction & Housing 0.11% 43,540 Taylor Woodrow Plc 129,173 ----------- Electrical & Electronics 1.83% 215,880 General Electric Company Plc 2,159,180 ----------- Electronic Components, Instruments 1.39% 21,700 Bowthorpe Plc 209,710 222,936 Invensys Plc 1,138,177 51,044 Williams Plc 289,738 ----------- 1,637,625 ----------- Energy Sources 11.02% 671,160 BP Amoco Plc 12,465,052 15,036 Burmah Castrol Plc 286,024 94,640 Lasmo Plc 232,837 ----------- 12,983,913 ----------- Financial Services 0.82% 26,992 Provident Financial Plc 347,225 25,620 Schroders Plc 553,687 18,956 St. James Place Capital Plc 62,639 ----------- 963,551 ----------- Food & Household Products 2.31% 65,800 Associated British Foods Plc 451,264 229,740 Unilever Plc 2,168,507 32,956 United Biscuits Holdings Plc 102,807 ----------- 2,722,578 ----------- Forest Products & Paper 0.20% 68,600 Arjo Wiggins Appleton Plc 238,819 ----------- Gold Mines 0.12% 15,904 Lonmin Plc 145,770 ----------- Health & Personal Care 13.19% 123,200 Astrazeneca Plc 4,893,208 217,840 Glaxo Wellcome Plc 5,730,691 376,600 Smithkline Beecham Plc 4,908,168 ----------- 15,532,067 ----------- Industrial Components 0.43% 50,540 BBA Group Plc 414,468 48,020 BICC Plc 87,254 ----------- 501,722 ----------- Insurance 5.61% 120,204 Allied Zurich AG Plc 1,469,955 70,280 CGU Plc 1,047,040 396,144 Legal & General Group Plc 1,087,677 140,000 Prudential Corporation Plc 2,090,239 109,452 Royal & Sun Alliance Insurance Group 911,674 ----------- 6,606,585 ----------- Leisure & Tourism 3.19% 73,500 Bass Plc 988,643 44,800 Carlton Communications Plc 339,661 140,000 Granada Group Plc 1,250,542 84,000 Hilton Group Plc 321,134 77,980 Rank Organisation Plc 323,824 54,460 Scottish & Newcastle Plc 537,252 ----------- 3,761,056 ----------- Machinery & Engineering 1.01% 50,400 GKN Plc 772,342 28,000 Smith Industries Plc 419,399 ----------- 1,191,741 ----------- See accompanying notes to financial statements. 41 August 31, 1999 PORTFOLIO OF INVESTMENTS WEBS INDEX FUND, INC. ================================================================================ - -------------------------------------------- United Kingdom WEBS Index Series (concluded) - -------------------------------------------- - ------------------------------------------------------------------------ NO. OF SHARES SECURITY VALUE - ------ -------- ----- Merchandising 5.87% 66,780 Boots Company Plc $ 824,696 63,224 Great Universal Stores Plc 637,434 90,384 Kingfisher Plc 1,087,851 209,244 Marks & Spencer Plc 1,398,009 28,560 Next Plc 338,004 99,680 Safeway Plc 413,536 126,728 Sainsbury Plc 874,210 451,220 Tesco Plc 1,336,848 ------------ 6,910,588 ------------ Metals - Non Ferrous 1.26% 82,320 Rio Tinto Plc 1,482,550 ------------ Metals - Steel 0.33% 147,280 British Steel Plc 386,619 ------------ Miscellaneous Materials & Commodities 0.28% 99,120 Pilkington Plc 172,136 34,384 Rexam Plc 162,275 ------------ 334,411 ------------ Multi-Industry 0.28% 40,796 TI Group Plc 329,148 ------------ Real Estate 0.86% 50,820 British Land Company Plc 425,754 23,520 Land Securities Plc 330,737 30,408 MEPC Plc 255,971 ------------ 1,012,462 ------------ Recreation - Other Consumer Goods 0.48% 65,772 EMI Group Plc 559,478 ------------ Telecommunications 13.92% 441,140 British Telecommunications Plc 6,760,135 171,780 Cable & Wireless Plc 1,972,227 380,240 Vodafone Group Plc 7,667,281 ------------ 16,399,643 ------------ Textiles & Apparel 0.06% 89,460 Coats Viyella Plc 75,882 ------------ Transportation - Airlines 0.47% 84,840 British Airways Plc 555,581 ------------ Transportation - Shipping 0.74% 52,920 Peninsular & Oriental Steam Navigation Company Plc 868,398 ------------ Utilities - Electrical & Gas 3.96% 267,484 BG Plc 1,609,703 302,260 Centrica Plc 805,601 107,016 National Grid Group Plc 714,569 88,060 National Power Plc 626,582 30,100 Scottish and Southern Energy Plc 276,369 69,160 Scottish Power Plc 636,673 ------------ 4,669,497 ------------ TOTAL COMMON STOCK - BASKET (Cost $111,092,951) 117,791,477 ------------ Total Investments (Cost $111,092,951)+ 100.00% $117,791,477 ====== ============ - ---------- + Aggregate cost for Federal income tax purposes is $111,256,036. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $ 10,897,271 Excess of tax cost over value (4,361,830) ------------ $ 6,535,441 ============ See accompanying notes to financial statements. 42 (THIS PAGE INTENTIONALLY LEFT BLANK.) August 31, 1999 STATEMENTS OF ASSETS AND LIABILITIES WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================
Australia Austria Belgium Canada France WEBS WEBS WEBS WEBS WEBS Index Index Index Index Index Series Series Series Series Series ------------- ------------- ------------- ------------- ------------- Assets Investments, at value .................... $ 54,793,940 $ 12,715,489 $ 13,003,466 $ 9,269,363 $ 75,960,582 Cash and foreign currency (at value) ..... 27,268 22,546 2,090,561 315,340 1,477,675 Cash collateral for securities loaned .... 2,500,470 -- 420,951 -- 1,000,000 Dividends receivable ..................... 112,844 38,480 58,823 12,107 412,004 Interest receivable ...................... 712 20 276 42 1,192 Receivable for securities sold ........... -- 56,395 -- -- -- Deferred organization cost ............... 51,037 37,954 16,577 36,050 98,946 Prepaid expenses ......................... 7,051 1,431 1,560 1,759 7,541 ------------- ------------- ------------- ------------- ------------- Total assets ......................... 57,493,322 12,872,315 15,592,214 9,634,661 78,957,940 ------------- ------------- ------------- ------------- ------------- Liabilities Payable for securities loaned ............ 2,500,470 -- 420,951 -- 1,000,000 Advisory fee payable ..................... 13,044 2,941 3,169 2,212 16,213 Administration fee payable ............... 10,448 2,355 2,538 1,772 12,981 Distribution fee payable ................. 9,662 2,178 2,347 1,639 12,009 Custody fee payable ...................... 4,169 2,090 3,569 -- 11,596 Accrued expenses ......................... 13,373 4,472 531 3,091 19,907 Advances under loan arrangement .......... 985,000 82,000 1,663,000 373,000 -- ------------- ------------- ------------- ------------- ------------- Total liabilities .................... 3,536,166 96,036 2,096,105 381,714 1,072,706 ------------- ------------- ------------- ------------- ------------- Net Assets Capital stock, $0.001 par value .......... 5,400 1,400 840 700 3,401 Paid-in capital .......................... 56,667,587 14,663,343 13,986,478 8,213,467 67,250,158 Accumulated net investment income/(loss) . (3,799) 7,062 (36,463) 15,655 (38,451) Accumulated net realized gain/(loss) on investments ......................... (1,422,189) (988,593) (596,138) -- -- Net unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... (1,289,843) (906,933) 141,392 1,023,125 10,670,126 ------------- ------------- ------------- ------------- ------------- Net Assets ............................... $ 53,957,156 $ 12,776,279 $ 13,496,109 $ 9,252,947 $ 77,885,234 ============= ============= ============= ============= ============= Shares of common stock issued and outstanding ............................ 5,400,030 1,400,030 840,030 700,030 3,401,000 ============= ============= ============= ============= ============= Net Asset Value Per Share ................ $ 9.99 $ 9.13 $ 16.07 $ 13.22 $ 22.90 ============= ============= ============= ============= ============= Malaysia Germany Hong Kong Italy Japan (Free) WEBS WEBS WEBS WEBS WEBS Index Index Index Index Index Series Series Series Series Series ------------- ------------- ------------- ------------- ------------- Assets Investments, at value .................... $ 100,680,904 $ 77,083,040 $ 58,543,663 $ 714,353,329 $ 91,891,989 Cash and foreign currency (at value) ..... 2,091,759 1,364,960 4,404,052 44,264 3,383,041 Cash collateral for securities loaned .... 4,187,400 2,805,236 12,695,909 75,265,450 -- Dividends receivable ..................... 68,431 158,870 674 118,335 31,658 Interest receivable ...................... 1,394 2,086 7,396 20,097 1,776 Receivable for securities sold ........... -- -- -- -- -- Deferred organization cost ............... 94,004 26,202 49,827 207,446 27,773 Prepaid expenses ......................... 12,209 9,583 9,981 41,618 5,848 ------------- ------------- ------------- ------------- ------------- Total assets ......................... 107,136,101 81,449,977 75,711,502 790,050,539 95,342,085 ------------- ------------- ------------- ------------- ------------- Liabilities Payable for securities loaned ............ 4,187,400 2,805,236 12,695,909 75,265,450 -- Advisory fee payable ..................... 22,738 18,243 14,715 160,885 21,237 Administration fee payable ............... 18,209 14,613 11,786 128,845 17,003 Distribution fee payable ................. 16,843 13,513 10,900 119,174 15,731 Custody fee payable ...................... 10,328 19,136 9,057 47,823 7,926 Accrued expenses ......................... 25,349 8,919 14,289 217,292 29,290 Advances under loan arrangement .......... 1,210,000 1,370,000 4,731,000 458,000 -- ------------- ------------- ------------- ------------- ------------- Total liabilities .................... 5,490,867 4,249,660 17,487,656 76,397,469 91,187 ------------- ------------- ------------- ------------- ------------- Net Assets Capital stock, $0.001 par value .......... 4,801 6,526 2,700 54,001 17,025 Paid-in capital .......................... 100,941,870 69,779,582 52,648,848 624,461,761 88,268,321 Accumulated net investment income/(loss) . 3,642 (154,629) (716,071) (3,466,264) (47,967) Accumulated net realized gain/(loss) on investments ......................... (409,809) (11,968,428) (10,621) (2,800,315) (14,625,066) Net unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 1,104,730 19,537,266 6,298,990 95,403,887 21,638,585 ------------- ------------- ------------- ------------- ------------- Net Assets ............................... $ 101,645,234 $ 77,200,317 $ 58,223,846 $ 713,653,070 $ 95,250,898 ============= ============= ============= ============= ============= Shares of common stock issued and outstanding ............................ 4,801,000 6,526,000 2,700,030 54,001,000 17,025,030 ============= ============= ============= ============= ============= Net Asset Value Per Share ................ $ 21.17 $ 11.83 $ 21.56 $ 13.22 $ 5.59 ============= ============= ============= ============= ============= Mexico Singapore (Free) Netherlands (Free) Spain Sweden WEBS WEBS WEBS WEBS WEBS Index Index Index Index Index Series Series Series Series Series ------------- ------------- ------------- ------------- ------------- Assets Investments, at value .................... $ 21,295,332 $ 31,961,295 $ 113,297,325 $ 37,771,045 $ 20,594,101 Cash and foreign currency (at value) ..... 195,319 1,927,382 92,420 615 7,727 Cash collateral for securities loaned .... 977,400 11,374,090 35,437,500 2,068,750 672,300 Dividends receivable ..................... -- 181,032 135,472 29,507 -- Interest receivable ...................... 281 1,637 16,152 443 291 Receivable for securities sold ........... -- -- -- -- -- Deferred organization cost ............... 28,059 23,499 33,350 41,197 26,821 Prepaid expenses ......................... 1,415 3,561 13,575 5,931 2,248 ------------- ------------- ------------- ------------- ------------- Total assets ......................... 22,497,806 45,472,496 149,025,794 39,917,488 21,303,488 ------------- ------------- ------------- ------------- ------------- Liabilities Payable for securities loaned ............ 977,400 11,374,090 35,437,500 2,068,750 672,300 Advisory fee payable ..................... 5,041 7,382 25,123 8,388 4,639 Administration fee payable ............... 4,036 5,912 20,122 6,717 3,716 Distribution fee payable ................. 3,734 5,468 18,610 6,213 3,436 Custody fee payable ...................... 3,556 4,780 13,240 7,242 3,568 Accrued expenses ......................... 7,419 9,706 17,801 10,638 4,050 Advances under loan arrangement .......... 67,000 2,380,000 56,000 1,341,000 578,000 ------------- ------------- ------------- ------------- ------------- Total liabilities .................... 1,068,186 13,787,338 35,588,396 3,448,948 1,269,709 ------------- ------------- ------------- ------------- ------------- Net Assets Capital stock, $0.001 par value .......... 1,600 1,351 14,300 1,425 900 Paid-in capital .......................... 21,086,994 31,736,511 93,597,941 36,626,873 16,626,342 Accumulated net investment income/(loss) . 8,648 (49,327) (267,912) (14,323) 9,771 Accumulated net realized gain/(loss) on investments ......................... (132,938) (321,804) (12,230,986) -- (14,965) Net unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 465,316 318,427 32,324,055 (145,435) 3,411,731 ------------- ------------- ------------- ------------- ------------- Net Assets ............................... $ 21,429,620 $ 31,685,158 $ 113,437,398 $ 36,468,540 $ 20,033,779 ============= ============= ============= ============= ============= Shares of common stock issued and outstanding ............................ 1,600,030 1,351,000 14,300,030 1,425,030 900,030 ============= ============= ============= ============= ============= Net Asset Value Per Share ................ $ 13.39 $ 23.45 $ 7.93 $ 25.59 $ 22.26 ============= ============= ============= ============= ============= United Switzerland Kingdom WEBS WEBS Index Index Series Series ------------- ------------- Assets Investments, at value .................... $ 39,252,650 $ 117,791,477 Cash and foreign currency (at value) ..... 16,558 21,773 Cash collateral for securities loaned .... 1,012,044 -- Dividends receivable ..................... 97,774 642,262 Interest receivable ...................... 340 211 Receivable for securities sold ........... -- -- Deferred organization cost ............... 63,326 59,783 Prepaid expenses ......................... 5,490 12,485 ------------- ------------- Total assets ......................... 40,448,182 118,527,991 ------------- ------------- Liabilities Payable for securities loaned ............ 1,012,044 -- Advisory fee payable ..................... 8,733 26,574 Administration fee payable ............... 6,994 21,285 Distribution fee payable ................. 6,469 19,685 Custody fee payable ...................... 6,899 8,622 Accrued expenses ......................... 10,654 35,768 Advances under loan arrangement .......... 897,000 5,014,000 ------------- ------------- Total liabilities .................... 1,948,793 5,125,934 ------------- ------------- Net Assets Capital stock, $0.001 par value .......... 2,501 5,601 Paid-in capital .......................... 39,324,689 106,900,608 Accumulated net investment income/(loss) . (6,433) (95,600) Accumulated net realized gain/(loss) on investments ......................... (384,883) (108,893) Net unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... (436,485) 6,700,341 ------------- ------------- Net Assets ............................... $ 38,499,389 $ 113,402,057 ============= ============= Shares of common stock issued and outstanding ............................ 2,501,000 5,601,000 ============= ============= Net Asset Value Per Share ................ $ 15.39 $ 20.25 ============= =============
See accompanying notes to financial statements. 44-45 For the year ended August 31, 1999 STATEMENTS OF OPERATIONS WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================
Australia Austria Belgium Canada WEBS WEBS WEBS WEBS Index Index Index Index Series Series Series Series ------------- ------------- ------------- ------------- Investment income: Dividends (net of foreign withholding taxes) .................. $ 1,504,225 $ 229,161 $ 269,894 $ 210,791 Interest ...................................................... 17,352 6,858 10,528 4,812 ------------- ------------- ------------- ------------- Total investment income ..................................... 1,521,577 236,019 280,422 215,603 ------------- ------------- ------------- ------------- Expenses: Advisory fees ................................................. 135,613 27,123 44,906 33,205 Administration fees ........................................... 110,319 22,059 36,546 27,026 Distribution fees ............................................. 100,454 20,091 33,264 24,597 Custodian fees and expenses ................................... 40,033 16,871 21,409 9,189 Transfer agent fees ........................................... 8,930 7,280 10,930 7,180 Directors' fees ............................................... 9,347 1,965 3,176 1,837 Legal fees .................................................... 13,128 3,029 5,345 2,573 Audit fees .................................................... 19,644 3,437 11,204 7,867 Federal and state registration fees ........................... 3,424 2,141 -- 723 Amortization of deferred organization costs ................... 24,957 18,560 8,107 17,629 Insurance ..................................................... 7,049 797 3,768 3,053 Printing ...................................................... 7,117 1,452 2,703 1,859 Licensing fees ................................................ 15,068 3,014 4,990 3,689 Amex listing fee .............................................. 934 120 391 309 Interest expense .............................................. 175 1,283 18,533 2,146 Miscellaneous expenses ........................................ 6,475 2,799 788 8,150 ------------- ------------- ------------- ------------- Total expenses .............................................. 502,667 132,021 206,060 151,032 ------------- ------------- ------------- ------------- Net investment income/(loss) .................................. 1,018,910 103,998 74,362 64,571 ------------- ------------- ------------- ------------- 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 ....................... (1,159,901) (960,861) 1,189,653 400,975 Net realized gain/(loss) on investments on in-kind redemptions ......................................... 81,915 -- 2,320,440 974,624 Net realized gain/(loss) on foreign currency related transactions ........................................ 27,827 (6,384) (10,343) 9,337 ------------- ------------- ------------- ------------- (1,050,159) (967,245) 3,499,750 1,384,936 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ............... 11,353,376 36,686 (2,955,479) 2,309,528 ------------- ------------- ------------- ------------- Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................... 10,303,217 (930,559) 544,271 3,694,464 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ............................................. $ 11,322,127 $ (826,561) $ 618,633 $ 3,759,035 ============= ============= ============= ============= France Germany Hong Kong Italy WEBS WEBS WEBS WEBS Index Index Index Index Series Series Series Series ------------- ------------- ------------- ------------- Investment income: Dividends (net of foreign withholding taxes) .................. $ 873,650 $ 1,219,822 $ 2,682,214 $ 1,095,808 Interest ...................................................... 10,068 58,980 134,523 96,641 ------------- ------------- ------------- ------------- Total investment income ..................................... 883,718 1,278,802 2,816,737 1,192,449 ------------- ------------- ------------- ------------- Expenses: Advisory fees ................................................. 137,387 219,901 197,467 186,292 Administration fees ........................................... 111,716 178,860 160,647 151,590 Distribution fees ............................................. 101,768 162,890 146,272 137,994 Custodian fees and expenses ................................... 45,456 66,856 88,127 58,298 Transfer agent fees ........................................... 9,980 12,030 29,980 10,930 Directors' fees ............................................... 9,960 16,361 14,200 13,174 Legal fees .................................................... 15,918 24,602 18,654 17,204 Audit fees .................................................... 15,947 25,022 23,931 27,702 Federal and state registration fees ........................... 6,826 7,186 -- 1,763 Amortization of deferred organization costs ................... 48,386 45,969 12,813 24,366 Insurance ..................................................... 3,780 6,312 6,239 9,610 Printing ...................................................... 7,488 11,629 9,645 9,912 Licensing fees ................................................ 15,265 24,433 21,941 20,699 Amex listing fee .............................................. 790 1,177 999 1,137 Interest expense .............................................. 1,659 3,795 8,141 29,461 Miscellaneous expenses ........................................ 8,200 7,700 1,513 7,348 ------------- ------------- ------------- ------------- Total expenses .............................................. 540,526 814,723 740,569 707,480 ------------- ------------- ------------- ------------- Net investment income/(loss) .................................. 343,192 464,079 2,076,168 484,969 ------------- ------------- ------------- ------------- 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 ....................... 159,487 1,463,921 (3,934,301) 6,638,229 Net realized gain/(loss) on investments on in-kind redemptions ......................................... 3,436,647 7,601,953 (348,039) 5,587,888 Net realized gain/(loss) on foreign currency related transactions ........................................ (16,147) (19,265) (1,233) (5,952) ------------- ------------- ------------- ------------- 3,579,987 9,046,609 (4,283,573) 12,220,165 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ............... 5,565,223 (4,137,292) 45,476,872 (9,880,532) ------------- ------------- ------------- ------------- Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................... 9,145,210 4,909,317 41,193,299 2,339,633 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ............................................. $ 9,488,402 $ 5,373,396 $ 43,269,467 $ 2,824,602 ============= ============= ============= ============= Malaysia Mexico Japan (Free) (Free) Netherlands WEBS WEBS WEBS WEBS Index Index Index Index Series Series Series Series ------------- ------------- ------------- ------------- Investment income: Dividends (net of foreign withholding taxes) .................. $ 2,436,545 $ 1,033,309 $ 248,993 $ 808,167 Interest ...................................................... 279,811 114,117 8,616 16,556 ------------- ------------- ------------- ------------- Total investment income ..................................... 2,716,356 1,147,426 257,609 824,723 ------------- ------------- ------------- ------------- Expenses: Advisory fees ................................................. 1,096,060 176,782 39,012 68,016 Administration fees ........................................... 890,839 143,744 31,717 55,318 Distribution fees ............................................. 811,896 130,950 28,898 50,383 Custodian fees and expenses ................................... 234,451 77,551 28,857 26,682 Transfer agent fees ........................................... 46,230 30,880 8,730 8,030 Directors' fees ............................................... 77,221 10,394 2,713 4,928 Legal fees .................................................... 122,422 270,210 3,974 7,622 Audit fees .................................................... 108,365 29,977 6,367 8,732 Federal and state registration fees ........................... 97,948 -- 3,211 3,232 Amortization of deferred organization costs ................... 101,444 13,581 13,721 11,491 Insurance ..................................................... 26,367 7,471 2,102 2,254 Printing ...................................................... 56,144 11,296 2,075 3,710 Licensing fees ................................................ 121,784 19,642 4,335 7,557 Amex listing fee .............................................. 7,588 1,071 371 396 Interest expense .............................................. 81 -- 1,346 7,128 Miscellaneous expenses ........................................ 32,600 9,507 4,500 3,877 ------------- ------------- ------------- ------------- Total expenses .............................................. 3,831,440 933,056 181,929 269,356 ------------- ------------- ------------- ------------- Net investment income/(loss) .................................. (1,115,084) 214,370 75,680 555,367 ------------- ------------- ------------- ------------- 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 ....................... (198,628) (12,770,274) (124,916) 1,779,092 Net realized gain/(loss) on investments on in-kind redemptions ......................................... (18,814,684) -- (176,163) 850,582 Net realized gain/(loss) on foreign currency related transactions ........................................ 341,777 (65,970) 13,072 (49,350) ------------- ------------- ------------- ------------- (18,671,535) (12,836,244) (288,007) 2,580,324 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ............... 178,555,572 75,448,531 5,395,343 (767,104) ------------- ------------- ------------- ------------- Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................... 159,884,037 62,612,287 5,107,336 1,813,220 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ............................................. $ 158,768,953 $ 62,826,657 $ 5,183,016 $ 2,368,587 ============= ============= ============= ============= Singapore (Free) Spain Sweden Switzerland WEBS WEBS WEBS WEBS Index Index Index Index Series Series Series Series ------------- ------------- ------------- ------------- Investment income: Dividends (net of foreign withholding taxes) .................. $ 1,363,960 $ 452,270 $ 250,421 $ 448,281 Interest ...................................................... 271,963 11,930 10,456 16,048 ------------- ------------- ------------- ------------- Total investment income ..................................... 1,635,923 464,200 260,877 464,329 ------------- ------------- ------------- ------------- Expenses: Advisory fees ................................................. 255,259 92,868 43,348 93,758 Administration fees ........................................... 207,640 75,553 35,257 76,274 Distribution fees ............................................. 189,081 68,791 32,110 69,451 Custodian fees and expenses ................................... 91,366 30,386 18,579 36,413 Transfer agent fees ........................................... 34,030 10,030 6,805 8,205 Directors' fees ............................................... 18,528 6,711 3,071 6,675 Legal fees .................................................... 23,907 9,913 4,774 9,177 Audit fees .................................................... 26,421 10,876 6,025 12,142 Federal and state registration fees ........................... -- 3,578 1,586 3,508 Amortization of deferred organization costs ................... 16,308 20,148 13,116 30,967 Insurance ..................................................... 7,209 2,999 1,831 3,773 Printing ...................................................... 12,048 4,810 2,377 5,006 Licensing fees ................................................ 28,362 10,318 4,816 10,418 Amex listing fee .............................................. 1,117 483 310 555 Interest expense .............................................. 10 4,286 2,575 7,626 Miscellaneous expenses ........................................ 6,237 5,599 5,150 5,399 ------------- ------------- ------------- ------------- Total expenses .............................................. 917,523 357,349 181,730 379,347 ------------- ------------- ------------- ------------- Net investment income/(loss) .................................. 718,400 106,851 79,147 84,982 ------------- ------------- ------------- ------------- 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 ....................... 1,737,289 1,785,678 549,798 415,196 Net realized gain/(loss) on investments on in-kind redemptions ......................................... 3,653,370 1,139,310 -- 549,128 Net realized gain/(loss) on foreign currency related transactions ........................................ 158,170 (21,693) 4,498 42,256 ------------- ------------- ------------- ------------- 5,548,829 2,903,295 554,296 1,006,580 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ............... 62,353,180 (665,542) 3,068,134 (1,316,317) ------------- ------------- ------------- ------------- Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................... 67,902,009 2,237,753 3,622,430 (309,737) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ............................................. $ 68,620,409 $ 2,344,604 $ 3,701,577 $ (224,755) ============= ============= ============= ============= United Kingdom WEBS Index Series ------------- Investment income: Dividends (net of foreign withholding taxes) .................. $ 2,829,640 Interest ...................................................... 18,236 ------------- Total investment income ..................................... 2,847,876 ------------- Expenses: Advisory fees ................................................. 245,947 Administration fees ........................................... 200,033 Distribution fees ............................................. 182,183 Custodian fees and expenses ................................... 55,929 Transfer agent fees ........................................... 10,130 Directors' fees ............................................... 17,214 Legal fees .................................................... 26,250 Audit fees .................................................... 28,307 Federal and state registration fees ........................... 13,151 Amortization of deferred organization costs ................... 29,235 Insurance ..................................................... 7,929 Printing ...................................................... 12,428 Licensing fees ................................................ 27,327 Amex listing fee .............................................. 1,446 Interest expense .............................................. 6,895 Miscellaneous expenses ........................................ 16,948 ------------- Total expenses .............................................. 881,352 ------------- Net investment income/(loss) .................................. 1,966,524 ------------- 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 ....................... 3,268,152 Net realized gain/(loss) on investments on in-kind redemptions ......................................... 3,423,935 Net realized gain/(loss) on foreign currency related transactions ........................................ (31,853) ------------- 6,660,234 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ............... 1,407,869 ------------- Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................... 8,068,103 ------------- Net increase/(decrease) in net assets resulting from operations ............................................. $ 10,034,627 =============
See accompanying notes to financial statements. 46-47 STATEMENTS OF CHANGES IN NET ASSETS WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================
Australia Austria WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ....................... $ 1,018,910 $ 1,004,449 $ 103,998 $ 33,653 Net realized gain/(loss) on investments and foreign currency related transactions ............ (1,050,159) (813,545) (967,245) 483,280 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies .... 11,353,376 (11,081,054) 36,686 (922,261) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations .................................. 11,322,127 (10,890,150) (826,561) (405,328) ------------- ------------- ------------- ------------- Distributions: Net investment income .............................. (1,018,910) (1,004,449) (103,998) (33,653) In excess of net investment income ................. (7,396) (19,218) (13,614) (10,327) Net realized gains ................................. -- -- -- (483,280) In excess of net realized gains .................... -- -- -- (2,230) Return of capital .................................. (319,842) -- (25,471) (1,490) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions ...... (1,346,148) (1,023,667) (143,083) (530,980) ------------- ------------- ------------- ------------- Capital Share Transactions: Net proceeds from sale of shares ................... 14,143,418 14,115,736 5,660,757 4,816,685 Cost of shares redeemed ............................ (4,261,441) (9,508,450) -- -- ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ....................... 9,881,977 4,607,286 5,660,757 4,816,685 ------------- ------------- ------------- ------------- Total increase/(decrease) in net asets ............. 19,857,956 (7,306,531) 4,691,113 3,880,377 Net assets: Beginning of year .................................. 34,099,200 41,405,731 8,085,166 4,204,789 ------------- ------------- ------------- ------------- End of year ........................................ $ 53,957,156 $ 34,099,200 $ 12,776,279 $ 8,085,166 ============= ============= ============= ============= Capital Share Transactions: Shares sold ........................................ 1,400,000 1,400,000 600,000 400,000 Shares redeemed .................................... (400,000) (1,000,000) -- -- ------------- ------------- ------------- ------------- Net increase/(decrease) in shares .................. 1,000,000 400,000 600,000 400,000 ============= ============= ============= ============= Belgium Canada WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ....................... $ 74,362 $ 383,039 $ 64,571 $ 97,330 Net realized gain/(loss) on investments and foreign currency related transactions ............ 3,499,750 4,866,929 1,384,936 4,111,037 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies .... (2,955,479) 3,689,571 2,309,528 (5,251,304) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations .................................. 618,633 8,939,539 3,759,035 (1,042,937) ------------- ------------- ------------- ------------- Distributions: Net investment income .............................. -- (383,039) (64,571) (92,345) In excess of net investment income ................. (7,001) (1,697,275) (6,549) -- Net realized gains ................................. (997,661) (2,779,100) (385,919) (468,666) In excess of net realized gains .................... -- -- -- -- Return of capital .................................. (770,321) (139,253) -- -- ------------- ------------- ------------- ------------- Net decrease in net assets from distributions ...... (1,774,983) (4,998,667) (457,039) (561,011) ------------- ------------- ------------- ------------- Capital Share Transactions: Net proceeds from sale of shares ................... 2,006,880 9,993,974 7,126,953 -- Cost of shares redeemed ............................ (13,118,955) (20,697,973) (8,107,562) (15,632,312) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ....................... (11,112,075) (10,703,999) (980,609) (15,632,312) ------------- ------------- ------------- ------------- Total increase/(decrease) in net asets ............. (12,268,425) (6,763,127) 2,321,387 (17,236,260) Net assets: Beginning of year .................................. 25,764,534 32,527,661 6,931,560 24,167,820 ------------- ------------- ------------- ------------- End of year ........................................ $ 13,496,109 $ 25,764,534 $ 9,252,947 $ 6,931,560 ============= ============= ============= ============= Capital Share Transactions: Shares sold ........................................ 120,000 560,000 600,000 -- Shares redeemed .................................... (680,000) (1,240,000) (600,000) (1,100,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares .................. (560,000) (680,000) -- (1,100,000) ============= ============= ============= ============= France Germany WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ....................... $ 343,192 $ 435,172 $ 464,079 $ 626,103 Net realized gain/(loss) on investments and foreign currency related transactions ............ 3,579,987 312,674 9,046,609 39,489 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies .... 5,565,223 3,937,546 (4,137,292) 2,623,288 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations .................................. 9,488,402 4,685,392 5,373,396 3,288,880 ------------- ------------- ------------- ------------- Distributions: Net investment income .............................. (343,192) (435,172) (464,079) (626,103) In excess of net investment income ................. (70,988) (62,742) (47,802) (12,798) Net realized gains ................................. (157,628) (312,674) (1,463,921) (39,489) In excess of net realized gains .................... -- (13,549) (380,445) (12,490) Return of capital .................................. (271,980) (178,534) (37,182) (290,393) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions ...... (843,788) (1,002,671) (2,393,429) (981,273) ------------- ------------- ------------- ------------- Capital Share Transactions: Net proceeds from sale of shares ................... 34,466,929 27,720,237 50,334,147 46,140,403 Cost of shares redeemed ............................ (11,147,991) -- (24,602,755) -- ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ....................... 23,318,938 27,720,237 25,731,392 46,140,403 ------------- ------------- ------------- ------------- Total increase/(decrease) in net asets ............. 31,963,552 31,402,958 28,711,359 48,448,010 Net assets: Beginning of year .................................. 45,921,682 14,518,724 72,933,875 24,485,865 ------------- ------------- ------------- ------------- End of year ........................................ $ 77,885,234 $ 45,921,682 $ 101,645,234 $ 72,933,875 ============= ============= ============= ============= Capital Share Transactions: Shares sold ........................................ 1,600,000 1,400,000 2,400,000 2,100,000 Shares redeemed .................................... (600,000) -- (1,200,000) -- ------------- ------------- ------------- ------------- Net increase/(decrease) in shares .................. 1,000,000 1,400,000 1,200,000 2,100,000 ============= ============= ============= ============= Hong Kong Italy WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ....................... $ 2,076,168 $ 1,733,479 $ 484,969 $ 455,253 Net realized gain/(loss) on investments and foreign currency related transactions ............ (4,283,573) (9,056,025) 12,220,165 9,664,471 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies .... 45,476,872 (25,681,723) (9,880,532) 11,937,409 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations .................................. 43,269,467 (33,004,269) 2,824,602 22,057,133 ------------- ------------- ------------- ------------- Distributions: Net investment income .............................. (2,076,168) (1,733,479) (179,682) (455,253) In excess of net investment income ................. (331,861) (12,675) -- (2,610,741) Net realized gains ................................. -- -- (6,161,860) (1,763,418) In excess of net realized gains .................... -- -- -- -- Return of capital .................................. -- (983,923) (689,335) -- ------------- ------------- ------------- ------------- Net decrease in net assets from distributions ...... (2,408,029) (2,730,077) (7,030,877) (4,829,412) ------------- ------------- ------------- ------------- Capital Share Transactions: Net proceeds from sale of shares ................... 4,990,436 65,939,721 18,459,343 24,566,181 Cost of shares redeemed ............................ (18,624,427) (5,649,119) (14,397,461) (15,920,335) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ....................... (13,633,991) 60,290,602 4,061,882 8,645,846 ------------- ------------- ------------- ------------- Total increase/(decrease) in net asets ............. 27,227,447 24,556,256 (144,393) 25,873,567 Net assets: Beginning of year .................................. 49,972,870 25,416,614 58,368,239 32,494,672 ------------- ------------- ------------- ------------- End of year ........................................ $ 77,200,317 $ 49,972,870 $ 58,223,846 $ 58,368,239 ============= ============= ============= ============= Capital Share Transactions: Shares sold ........................................ 525,000 6,600,000 750,000 1,200,000 Shares redeemed .................................... (1,800,000) (525,000) (600,000) (600,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares .................. (1,275,000) 6,075,000 150,000 600,000 ============= ============= ============= =============
See accompanying notes to financial statements. 48-49 STATEMENTS OF CHANGES IN NET ASSETS (continued) WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================
Japan Malaysia (Free) WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ..... $ (1,115,084) $ (343,352) $ 214,370 $ 691,076 Net realized gain/(loss) on investments and foreign currency related transactions .. (18,671,535) (4,044,653) (12,836,244) (4,401,103) Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 178,555,572 (68,401,659) 75,448,531 (44,926,346) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ..................... 158,768,953 (72,789,664) 62,826,657 (48,636,373) ------------- ------------- ------------- ------------- Distributions: Net investment income ............ -- -- (116,388) (688,802) In excess of net investment income (2,424,032) -- -- -- Net realized gains ............... -- (8,383) -- -- In excess of net realized gains .. -- -- -- -- Return of capital ................ (265,218) (259,229) (3,326,074) (450,458) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions .................. (2,689,250) (267,612) (3,442,462) (1,139,260) ------------- ------------- ------------- ------------- Capital Stock Transactions: Net proceeds from sale of shares . 383,655,690 121,696,694 -- 74,873,951 Cost of shares redeemed .......... (27,567,601) (6,110,956) -- (1,570,595) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ............. 356,088,089 115,585,738 -- 73,303,356 ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ..................... 512,167,792 42,528,462 59,384,195 23,527,723 Net assets: Beginning of year ................ 201,485,278 158,956,816 35,866,703 12,338,980 ------------- ------------- ------------- ------------- End of year ...................... $ 713,653,070 $ 201,485,278 $ 95,250,898 $ 35,866,703 ============= ============= ============= ============= Capital Share Transactions: Shares sold .................... 33,000,000 12,000,000 -- 15,825,000 Shares redeemed ................ (3,000,000) (600,000) -- (300,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares 30,000,000 11,400,000 -- 15,525,000 ============= ============= ============= ============= Mexico (Free) Netherlands WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ..... $ 75,680 $ 85,136 $ 555,367 $ 165,472 Net realized gain/(loss) on investments and foreign currency related transactions .. (288,007) 1,577,042 2,580,324 1,632,091 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 5,395,343 (7,542,851) (767,104) (840,046) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ..................... 5,183,016 (5,880,673) 2,368,587 957,517 ------------- ------------- ------------- ------------- Distributions: Net investment income ............ (75,680) (83,213) (555,367) (154,868) In excess of net investment income (21,243) -- (17,097) -- Net realized gains ............... -- (261,068) (1,779,092) (1,331,940) In excess of net realized gains .. (8,020) -- (319,338) -- Return of capital ................ (89,641) -- (111,506) (68,776) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions .................. (194,584) (344,281) (2,782,400) (1,555,584) ------------- ------------- ------------- ------------- Capital Stock Transactions: Net proceeds from sale of shares . 11,363,778 1,486,432 13,324,865 14,394,424 Cost of shares redeemed .......... (2,218,426) (4,592,150) (3,575,197) (1,108,188) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ............. 9,145,352 (3,105,718) 9,749,668 13,286,236 ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ..................... 14,133,784 (9,330,672) 9,335,855 12,688,169 Net assets: Beginning of year ................ 7,295,836 16,626,508 22,349,303 9,661,134 ------------- ------------- ------------- ------------- End of year ...................... $ 21,429,620 $ 7,295,836 $ 31,685,158 $ 22,349,303 ============= ============= ============= ============= Capital Share Transactions: Shares sold .................... 900,000 100,000 550,000 550,000 Shares redeemed ................ (200,000) (300,000) (150,000) (50,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares 700,000 (200,000) 400,000 500,000 ============= ============= ============= ============= Singapore (Free) Spain WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ..... $ 718,400 $ 519,573 $ 106,851 $ 121,310 Net realized gain/(loss) on investments and foreign currency related transactions .. 5,548,829 (15,780,309) 2,903,295 1,661,273 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 62,353,180 (25,054,420) (665,542) (84,559) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ..................... 68,620,409 (40,315,156) 2,344,604 1,698,024 ------------- ------------- ------------- ------------- Distributions: Net investment income ............ (718,400) (519,573) (106,851) (121,310) In excess of net investment income (901,448) (92,309) (25,193) (12,880) Net realized gains ............... -- -- (1,779,176) (573,744) In excess of net realized gains .. -- -- -- -- Return of capital ................ (151,866) (211,720) (52,032) (67,213) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions .................. (1,771,714) (823,602) (1,963,252) (775,147) ------------- ------------- ------------- ------------- Capital Stock Transactions: Net proceeds from sale of shares . 25,731,770 76,731,080 15,098,787 17,901,806 Cost of shares redeemed .......... (26,391,185) (3,065,766) (4,040,953) (2,116,697) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ............. (659,415) 73,665,314 11,057,834 15,785,109 ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ..................... 66,189,280 32,526,556 11,439,186 16,707,986 Net assets: Beginning of year ................ 47,248,118 14,721,562 25,029,354 8,321,368 ------------- ------------- ------------- ------------- End of year ...................... $ 113,437,398 $ 47,248,118 $ 36,468,540 $ 25,029,354 ============= ============= ============= ============= Capital Share Transactions: Shares sold .................... 3,800,000 13,100,000 525,000 675,000 Shares redeemed ................ (3,800,000) (500,000) (150,000) (75,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares -- 12,600,000 375,000 600,000 ============= ============= ============= ============= Sweden Switzerland WEBS WEBS Index Index Series Series ------------------------------ ------------------------------ For the For the For the For the year year year year ended ended ended ended 08/31/99 08/31/98 08/31/99 08/31/98 ------------- ------------- ------------- ------------- Operations: Net investment income/(loss) ..... 79,147 $ 64,048 $ 84,982 $ (6,909) Net realized gain/(loss) on investments and foreign currency related transactions .. 554,296 639,667 1,006,580 2,711,388 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 3,068,134 (858,611) (1,316,317) (117,545) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ..................... 3,701,577 (154,896) (224,755) 2,586,934 ------------- ------------- ------------- ------------- Distributions: Net investment income ............ (79,147) (64,048) (84,982) -- In excess of net investment income (9,823) (5,006) (90,051) (13,567) Net realized gains ............... (549,798) (639,667) (415,196) (2,272,030) In excess of net realized gains .. (11,025) (9,750) (360,924) -- Return of capital ................ (11,369) (13,138) (27,488) (53,400) ------------- ------------- ------------- ------------- Net decrease in net assets from distributions .................. (661,162) (731,609) (978,641) (2,338,997) ------------- ------------- ------------- ------------- Capital Stock Transactions: Net proceeds from sale of shares . 3,202,043 6,434,414 18,201,550 17,011,012 Cost of shares redeemed .......... -- -- (7,661,744) (1,901,034) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ............. 3,202,043 6,434,414 10,539,806 15,109,978 ------------ ------------- ------------- ------------- Total increase/(decrease) in net assets ..................... 6,242,458 5,547,909 9,336,410 15,357,915 Net assets: Beginning of year ................ 13,791,321 8,243,412 29,162,979 13,805,064 ------------- ------------- ------------- ------------- End of year ...................... $ 20,033,779 $ 13,791,321 $ 38,499,389 $ 29,162,979 ============= ============= ============= ============= Capital Share Transactions: Shares sold .................... 150,000 300,000 1,125,000 1,000,000 Shares redeemed ................ -- -- (500,000) (125,000) ------------- ------------- ------------- ------------- Net increase/(decrease) in shares 150,000 300,000 625,000 875,000 ============= ============= ============= ============= United Kingdom WEBS Index Series ------------------------------ For the For the year year ended ended 08/31/99 08/31/98 ------------- ------------- Operations: Net investment income/(loss) ..... $ 1,966,524 $ 963,424 Net realized gain/(loss) on investments and foreign currency related transactions .. 6,660,234 438,393 Net change in unrealized appreciation/(depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ..................... 1,407,869 1,989,733 ------------- ------------- Net increase/(decrease) in net assets resulting from operations ..................... 10,034,627 3,391,550 ------------- ------------- Distributions: Net investment income ............ (1,966,524) (963,424) In excess of net investment income (30,855) (151,877) Net realized gains ............... (3,268,152) (387,328) In excess of net realized gains .. (100,408) -- Return of capital ................ (479,427) (228,725) ------------- ------------- Net decrease in net assets from distributions .................. (5,845,366) (1,731,354) ------------- ------------- Capital Stock Transactions: Net proceeds from sale of shares . 57,840,429 31,463,983 Cost of shares redeemed .......... (11,473,166) -- ------------- ------------- Net increase/(decrease) in net assets derived from capital share transactions ............. 46,367,263 31,463,983 ------------- ------------- Total increase/(decrease) in net assets ..................... 50,556,524 33,124,179 Net assets: Beginning of year ................ 62,845,533 29,721,354 ------------- ------------- End of year ...................... $ 113,402,057 $ 62,845,533 ============= ============= Capital Share Transactions: Shares sold .................... 2,800,000 1,600,000 Shares redeemed ................ (600,000) -- ------------- ------------- Net increase/(decrease) in shares 2,200,000 1,600,000 ============= =============
See accompanying notes to financial statements. 50-51 FINANCIAL HIGHLIGHTS WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================ (For a share outstanding throughout the period)
Australia WEBS Index Series -------------------------------------------- For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 7.75 $ 10.35 $ 10.15 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 0.20 0.23 0.17 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 2.29 (2.60) 0.47 ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 2.49 (2.37) 0.64 ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. (0.19) (0.23) (0.16) Dividends in excess of net investment income ..................................... 0.00** 0.00** (0.04) Distributions from net realized gains ............................................ -- -- (0.04) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ (0.06) -- (0.20) ---------- ---------- ---------- Total dividends and distributions ............................................ (0.25) (0.23) (0.44) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 9.99 $ 7.75 $ 10.35 ========== ========== ========== Total Investment Return (2) ......................................................... 32.09% (23.11)% 6.23% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 53,957 $ 34,099 $ 41,406 Ratios of expenses to average net assets (5) ..................................... 1.00% 1.05% 1.33% Ratios of net investment income/(loss) to average net assets (5) ................. 2.03% 2.38% 1.57% Portfolio turnover (6) ........................................................... 13.83% 1.49% 5.30% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- 1.57% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Australia Austria WEBS WEBS Index Index Series Series ---------- ---------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 9.95(1) $ 10.11 $ 10.51 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 0.10 0.10 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 .......................................................... 0.29 (0.98) 0.20 ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 0.39 (0.88) 0.26 ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. (0.08) (0.07) (0.04) Dividends in excess of net investment income ..................................... (0.05) (0.01) (0.01) Distributions from net realized gains ............................................ (0.02) -- (0.61) Distributions in excess of net realized gains .................................... -- -- 0.00** Return of capital ................................................................ (0.04) (0.02) 0.00** ---------- ---------- ---------- Total dividends and distributions ............................................ (0.19) (0.10) (0.66) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 10.15 $ 9.13 $ 10.11 ========== ========== ========== Total Investment Return (2) ......................................................... 3.88%(4) (8.69)% 2.16% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 12,177 $ 12,776 $ 8,085 Ratios of expenses to average net assets (5) ..................................... 1.59%(3) 1.31% 1.41% Ratios of net investment income/(loss) to average net assets (5) ................. 2.18%(3) 1.04% 0.51% Portfolio turnover (6) ........................................................... 8.84%(4) 49.95% 36.14% * 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 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 ...................... 1.60%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. 2.17%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Austria Belgium WEBS WEBS Index Index Series Series ------------------------- ---------- For the For the For the year period year ended 03/12/96*- ended 08/31/97 08/31/96 08/31/99 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 10.40 $ 10.91(1) $ 18.40 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. (0.02) 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 .......................................................... 0.13 (0.41) (0.30) ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 0.11 (0.37) (0.22) ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. -- (0.02) -- Dividends in excess of net investment income ..................................... -- (0.01) (0.01) Distributions from net realized gains ............................................ -- (0.03) (1.19) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ -- (0.08) (0.91) ---------- ---------- ---------- Total dividends and distributions ............................................ -- (0.14) (2.11) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 10.51 $ 10.40 $ 16.07 ========== ========== ========== Total Investment Return (2) ......................................................... 1.06% (3.39)%(4) (1.00)% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 4,205 $ 13,520 $ 13,496 Ratios of expenses to average net assets (5) ..................................... 1.68% 1.56%(3) 1.24% Ratios of net investment income/(loss) to average net assets (5) ................. (0.22)% 0.87%(3) 0.45% Portfolio turnover (6) ........................................................... 28.47% 9.60%(4) 62.99% * 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 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). Belgium WEBS Index Series ---------------------------------------- For the For the For the year year period ended ended 03/12/96*- 08/31/98 08/31/97 08/31/96 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 15.64 $ 14.99 $ 14.92(1) ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 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 .......................................................... 6.09 0.62 0.36 ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 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 ................................................... $ 18.40 $ 15.64 $ 14.99 ========== ========== ========== Total Investment Return (2) ......................................................... 39.42% 9.26% 5.01%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 25,765 $ 32,528 $ 1,800 Ratios of expenses to average net assets (5) ..................................... 1.04% 1.24% 2.29%(3) Ratios of net investment income/(loss) to average net assets (5) ................. 1.28% 4.63% 5.67%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 52-53 FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================ (For a share outstanding throughout the period)
Canada WEBS Index Series ------------------------------------------- For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 9.90 $ 13.43 $ 10.60 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.07 0.07 0.05 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 3.87 (2.89) 2.97 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 3.94 (2.82) 3.02 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.08) (0.13) (0.05) Dividends in excess of net investment income ..................................... (0.01) (0.00)** (0.00)** Distributions from net realized gains ............................................ (0.53) (0.58) (0.14) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ -- -- -- ----------- ----------- ----------- Total dividends and distributions ............................................ (0.62) (0.71) (0.19) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 13.22 $ 9.90 $ 13.43 =========== =========== =========== Total Investment Return (2) ......................................................... 39.71% (21.69)% 28.50% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 9,253 $ 6,932 $ 24,168 Ratios of expenses to average net assets (5) ..................................... 1.23% 1.14% 1.35% Ratios of net investment income/(loss) to average net assets (5) ................. 0.53% 0.46% 0.39% Portfolio turnover (6) ........................................................... 11.66% 3.70% 11.02% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- 0.39% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Canada France WEBS WEBS Index Index Series Series ----------- --------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 10.17(1) $ 19.13 $ 14.50 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.04 0.14 0.30 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 0.43 3.88 4.76 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 0.47 4.02 5.06 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.03) (0.10) (0.19) Dividends in excess of net investment income ..................................... (0.01) (0.02) (0.03) Distributions from net realized gains ............................................ -- (0.05) (0.13) Distributions in excess of net realized gains .................................... 0.00** -- (0.01) Return of capital ................................................................ 0.00** (0.08) (0.07) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.04) (0.25) (0.43) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 10.60 $ 22.90 $ 19.13 =========== =========== =========== Total Investment Return (2) ......................................................... 4.63%(4) 21.01% 34.77% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 13,776 $ 77,885 $ 45,922 Ratios of expenses to average net assets (5) ..................................... 1.44%(3) 1.06% 1.18% Ratios of net investment income/(loss) to average net assets (5) ................. 0.79%(3) 0.67% 1.58% Portfolio turnover (6) ........................................................... 0.00%(4) 0.00% 5.65% * 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 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 ...................... 1.45%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. 0.78%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). France Germany WEBS WEBS Index Index Series Series --------------------------- ----------- For the For the For the year period year ended 03/12/96*- ended 08/31/97 08/31/96 08/31/99 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 12.73 $ 12.42(1) $ 20.25 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.17 0.17 0.12 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 1.95 0.45 1.31 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 2.12 0.62 1.43 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.15) (0.09) (0.10) Dividends in excess of net investment income ..................................... -- (0.01) (0.01) Distributions from net realized gains ............................................ (0.20) 0.00** (0.31) Distributions in excess of net realized gains .................................... -- -- (0.08) Return of capital ................................................................ -- (0.21) (0.01) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.35) (0.31) (0.51) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 14.50 $ 12.73 $ 21.17 =========== =========== =========== Total Investment Return (2) ......................................................... 16.60% 4.95%(4) 7.04% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 14,519 $ 22,930 $ 101,645 Ratios of expenses to average net assets (5) ..................................... 1.52% 1.84%(3) 1.00% Ratios of net investment income/(loss) to average net assets (5) ................. 1.17% 2.72%(3) 0.57% Portfolio turnover (6) ........................................................... 7.13% 0.00%(4) 13.67% * 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 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). Germany WEBS Index Series ---------------------------------------- For the For the For the year year period ended ended 03/12/96*- 08/31/98 08/31/97 08/31/96 ---------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 16.31 $ 13.64 $ 13.23(1) ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 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 .......................................................... 3.92 2.77 0.47 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 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 ............................................ (0.01) (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 ............................................ (0.27) (0.13) (0.12) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 20.25 $ 16.31 $ 13.64 =========== =========== =========== Total Investment Return (2) ......................................................... 25.69% 20.51% 4.00%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 72,934 $ 24,486 $ 28,664 Ratios of expenses to average net assets (5) ..................................... 1.08% 1.37% 1.68%(3) Ratios of net investment income/(loss) to average net assets (5) ................. 1.43% 0.23% 1.00%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 54-55 FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC. FOREIGN FUND, INC. =============================================================================== (For a share outstanding throughout the period)
Hong Kong WEBS Index Series ---------------------------------------------- For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 6.41 $ 14.73 $ 13.05 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.29 0.35 0.26 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 5.49 (8.27) 2.12 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 5.78 (7.92) 2.38 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.31) (0.28) (0.21) Dividends in excess of net investment income ..................................... (0.05) 0.00** (0.01) Distributions from net realized gains ............................................ -- -- (0.34) Distributions in excess of net realized gains .................................... -- -- 0.00** Return of capital ................................................................ -- (0.12) (0.14) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.36) (0.40) (0.70) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 11.83 $ 6.41 $ 14.73 =========== =========== =========== Total Investment Return (2) ......................................................... 90.51% (54.22)% 17.80% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 77,200 $ 49,973 $ 25,417 Ratios of expenses to average net assets (5) ..................................... 1.01% 1.09% 1.43% Ratios of net investment income/(loss) to average net assets (5) ................. 2.84% 3.76% 1.71% Portfolio turnover (6) ........................................................... 42.89% 21.50% 22.90% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- 1.71% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Hong Kong Italy WEBS WEBS Index Index Series Series ----------- ---------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 12.83(1) $ 22.89 $ 16.66 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.15 0.17 0.18 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 0.27 1.05 7.94 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 0.42 1.22 8.12 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.13) (0.06) (0.18) Dividends in excess of net investment income ..................................... (0.02) -- (1.02) Distributions from net realized gains ............................................ (0.01) (2.24) (0.69) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ (0.04) (0.25) -- ----------- ----------- ----------- Total dividends and distributions ............................................ (0.20) (2.55) (1.89) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 13.05 $ 21.56 $ 22.89 =========== =========== =========== Total Investment Return (2) ......................................................... 3.22%(4) 5.14% 47.66% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 7,845 $ 58,224 $ 58,368 Ratios of expenses to average net assets (5) ..................................... 1.52%(3) 1.03% 1.02% Ratios of net investment income/(loss) to average net assets (5) ................. 2.37%(3) 0.70% 0.76% Portfolio turnover (6) ........................................................... 0.00%(4) 7.89% 8.16% * 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 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%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. 2.36%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Italy Japan WEBS WEBS Index Index Series Series ---------------------------- ----------- For the For the For the year period year ended 03/12/96*- ended 08/31/97 08/31/96 08/31/99 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 13.79 $ 13.62(1) $ 8.39 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.12 0.25 (0.03) Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 3.10 0.31 4.91 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 3.22 0.56 4.88 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.11) (0.14) -- Dividends in excess of net investment income ..................................... (0.24) (0.03) (0.04) Distributions from net realized gains ............................................ -- (0.14) -- Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ -- (0.08) (0.01) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.35) (0.39) (0.05) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 16.66 $ 13.79 $ 13.22 =========== =========== =========== Total Investment Return (2) ......................................................... 23.37% 4.11%(4) 58.14% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 32,495 $ 35,170 $ 713,653 Ratios of expenses to average net assets (5) ..................................... 1.33% 1.43%(3) 0.94% Ratios of net investment income/(loss) to average net assets (5) ................. 0.76% 3.69%(3) (0.27)% Portfolio turnover (6) ........................................................... 13.70% 19.80%(4) 0.00% * 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 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). Japan WEBS Index Series ----------------------------------------- For the For the For the year year period ended ended 03/12/96*- 08/31/98 08/31/97 08/31/96 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 12.61 $ 14.33 $ 14.79(1) ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. (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 .......................................................... (4.19) (1.65) (0.39) ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. (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 ................................................... $ 8.39 $ 12.61 $ 14.33 =========== =========== =========== Total Investment Return (2) ......................................................... (33.38)% (11.97)% (3.11)%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 201,485 $ 158,957 $ 103,164 Ratios of expenses to average net assets (5) ..................................... 1.04% 1.19% 1.37%(3) Ratios of net investment income/(loss) to average net assets (5) ................. (0.21)% (0.48)% (1.01)%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 56-57 FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================ (For a share outstanding throughout the period)
Malaysia (Free) WEBS Index Series ---------------------------------------- For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 2.11 $ 8.23 $ 13.80 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 0.01 0.06 0.01 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 3.67 (6.10) (5.55) ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 3.68 (6.04) (5.54) ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. (0.01) (0.05) 0.00** Dividends in excess of net investment income ..................................... -- -- (0.01) Distributions from net realized gains ............................................ -- -- -- Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ (0.19) (0.03) (0.02) ---------- ---------- ---------- Total dividends and distributions ............................................ (0.20) (0.08) (0.03) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 5.59 $ 2.11 $ 8.23 ========== ========== ========== Total Investment Return (2) ......................................................... 185.81% (73.57)% (40.20)% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 95,251 $ 35,867 $ 12,339 Ratios of expenses to average net assets (5) ..................................... 1.43% 1.09% 1.46% Ratios of net investment income/(loss) to average net assets (5) ................. 0.33% 1.40% 0.04% Portfolio turnover (6) ........................................................... 7.24% 2.11% 0.00% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- 0.04% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Malaysia (Free) Mexico (Free) WEBS WEBS Index Index Series Series -------------- --------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 13.24(1) $ 8.11 $ 15.11 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. (0.02) 0.06 0.09 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 0.59 5.36 (6.71) ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 0.57 5.42 (6.62) ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. -- (0.06) (0.09) Dividends in excess of net investment income ..................................... -- (0.01) -- Distributions from net realized gains ............................................ -- -- (0.29) Distributions in excess of net realized gains .................................... -- (0.01) -- Return of capital ................................................................ (0.01) (0.06) -- ---------- ---------- ---------- Total dividends and distributions ............................................ (0.01) (0.14) (0.38) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 13.80 $ 13.39 $ 8.11 ========== ========== ========== Total Investment Return (2) ......................................................... 4.28%(4) 66.92% (44.18)% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 9,318 $ 21,430 $ 7,296 Ratios of expenses to average net assets (5) ..................................... 1.58%(3) 1.26% 1.34% Ratios of net investment income/(loss) to average net assets (5) ................. (0.35)%(3) 0.52% 0.60% Portfolio turnover (6) ........................................................... 0.00%(4) 18.36% 14.05% * 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 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 ...................... 1.59%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. (0.36)%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Mexico (Free) Netherlands WEBS WEBS Index Index Series Series ------------------------- ----------- For the For the For the year period year ended 03/12/96*- ended 08/31/97 08/31/96 08/31/99 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 11.52 $ 9.95(1) $ 23.50 ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 0.02 0.00** 0.53 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 4.07 1.59 1.60 ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 4.09 1.59 2.13 ---------- ---------- ---------- Less Distributions Dividends from net investment income ............................................. (0.01) -- (0.43) Dividends in excess of net investment income ..................................... (0.01) (0.01) (0.01) Distributions from net realized gains ............................................ (0.44) -- (1.42) Distributions in excess of net realized gains .................................... -- -- (0.24) Return of capital ................................................................ (0.04) (0.01) (0.08) ---------- ---------- ---------- Total dividends and distributions ............................................ (0.50) (0.02) (2.18) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 15.11 $ 11.52 $ 23.45 ========== ========== ========== Total Investment Return (2) ......................................................... 35.21% 15.93%(4) 8.98% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 16,627 $ 5,759 $ 31,685 Ratios of expenses to average net assets (5) ..................................... 1.63% 1.75%(3) 1.07% Ratios of net investment income/(loss) to average net assets (5) ................. 0.14% 0.01%(3) 2.20% Portfolio turnover (6) ........................................................... 22.80% 0.00%(4) 32.13% * 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 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). Netherlands WEBS Index Series --------------------------------------- For the For the For the year year period ended ended 03/12/96*- 08/31/98 08/31/97 08/31/96 ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 21.42 $ 17.36 $ 15.91(1) ---------- ---------- ---------- Net investment income/(loss) (+) ................................................. 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 .......................................................... 3.53 4.79 1.54 ---------- ---------- ---------- Net increase/(decrease) in net assets resulting from operations .............. 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 ..................................... -- (0.01) (0.01) Distributions from net realized gains ............................................ (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 ............................................ (1.70) (0.84) (0.33) ---------- ---------- ---------- Net asset value, end of period ................................................... $ 23.50 $ 21.42 $ 17.36 ========== ========== ========== Total Investment Return (2) ......................................................... 17.41% 28.04% 11.19%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 22,349 $ 9,661 $ 6,962 Ratios of expenses to average net assets (5) ..................................... 1.12% 1.46% 1.63%(3) Ratios of net investment income/(loss) to average net assets (5) ................. 1.00% 0.54% 2.93%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 58-59 FINANCIAL HIGHLIGHTS (continued) WEBS INDEX FUND, INC. FOREIGN FUND, INC. ================================================================================ (For a share outstanding throughout the period)
Singapore (Free) WEBS Index Series --------------------------------------------- For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 3.30 $ 8.66 $ 11.38 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.05 0.07 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 .......................................................... 4.70 (5.37) (2.67) ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 4.75 (5.30) (2.67) ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.05) (0.04) 0.00** Dividends in excess of net investment income ..................................... (0.06) (0.01) (0.01) Distributions from net realized gains ............................................ -- -- (0.02) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ (0.01) (0.01) (0.02) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.12) (0.06) (0.05) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 7.93 $ 3.30 $ 8.66 =========== =========== =========== Total Investment Return (2) ......................................................... 144.52% (61.29)% (23.48)% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 113,438 $ 47,248 $ 14,722 Ratios of expenses to average net assets (5) ..................................... 0.97% 1.08% 1.43% Ratios of net investment income/(loss) to average net assets (5) ................. 0.76% 1.17% 0.03% Portfolio turnover (6) ........................................................... 25.31% 67.17% 13.40% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- 0.03% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Singapore (Free) Spain WEBS WEBS Index Index Series Series ----------- ------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 12.24(1) $ 23.84 $ 18.49 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.04 0.09 0.16 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... (0.86) 3.14 5.94 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. (0.82) 3.23 6.10 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.03) (0.07) (0.12) Dividends in excess of net investment income ..................................... (0.01) (0.02) (0.02) Distributions from net realized gains ............................................ -- (1.35) (0.55) Distributions in excess of net realized gains .................................... -- -- -- Return of capital ................................................................ -- (0.04) (0.06) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.04) (1.48) (0.75) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 11.38 $ 25.59 $ 23.84 =========== =========== =========== Total Investment Return (2) ......................................................... (6.73)%(4) 13.39% 32.58% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 9,107 $ 36,469 $ 25,029 Ratios of expenses to average net assets (5) ..................................... 1.56%(3) 1.04% 1.11% Ratios of net investment income/(loss) to average net assets (5) ................. 0.69%(3) 0.31% 0.61% Portfolio turnover (6) ........................................................... 26.29%(4) 16.58% 9.10% * 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 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 ...................... 1.57%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. 0.68%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Spain Sweden WEBS WEBS Index Index Series Series --------------------------- ------------ For the For the For the year period year ended 03/12/96*- ended 08/31/97 08/31/96 08/31/99 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 14.09 $ 13.28(1) $ 18.39 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.19 0.14 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 .......................................................... 5.33 0.98 4.52 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 5.52 1.12 4.62 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.12) (0.18) (0.09) Dividends in excess of net investment income ..................................... (0.05) -- (0.01) Distributions from net realized gains ............................................ (0.86) (0.13) (0.62) Distributions in excess of net realized gains .................................... -- -- (0.01) Return of capital ................................................................ (0.09) -- (0.02) ----------- ----------- ----------- Total dividends and distributions ............................................ (1.12) (0.31) (0.75) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 18.49 $ 14.09 $ 22.26 =========== =========== =========== Total Investment Return (2) ......................................................... 39.15% 8.45%(4) 25.09% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 8,321 $ 4,227 $ 20,034 Ratios of expenses to average net assets (5) ..................................... 1.67% 1.76%(3) 1.13% Ratios of net investment income/(loss) to average net assets (5) ................. 1.04% 2.04%(3) 0.49% Portfolio turnover (6) ........................................................... 19.21% 4.73%(4) 33.44% * 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 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). Sweden WEBS Index Series ------------------------------------------ For the For the For the year year period ended ended 03/12/96*- 08/31/98 08/31/97 08/31/96 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 18.32 $ 14.67 $ 13.22(1) ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 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 .......................................................... 0.95 4.45 1.67 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 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 ............................................ (0.86) (0.77) (0.12) Distributions in excess of net realized gains .................................... (0.01) -- -- Return of capital ................................................................ (0.02) -- -- ----------- ----------- ----------- Total dividends and distributions ............................................ (0.98) (0.77) (0.42) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 18.39 $ 18.32 $ 14.67 =========== =========== =========== Total Investment Return (2) ......................................................... 5.48% 30.10% 14.13%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 13,791 $ 8,243 $ 4,400 Ratios of expenses to average net assets (5) ..................................... 1.17% 1.64% 1.75%(3) Ratios of net investment income/(loss) to average net assets (5) ................. 0.48% (0.19)% 3.05%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 60-61 FINANCIAL HIGHLIGHTS (concluded) WEBS INDEX FUND, INC. FOREIGN FUND, INC. =============================================================================== (For a share outstanding throughout the period)
Switzerland WEBS Index Series ------------------------------------------ For the For the For the year year year ended ended ended 08/31/99 08/31/98 08/31/97 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 15.55 $ 13.79 $ 12.29 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.04 (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 .......................................................... 0.19 3.01 2.11 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 0.23 3.01 2.07 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.03) -- -- Dividends in excess of net investment income ..................................... (0.04) (0.01) -- Distributions from net realized gains ............................................ (0.17) (1.21) (0.57) Distributions in excess of net realized gains .................................... (0.14) -- -- Return of capital ................................................................ (0.01) (0.03) 0.00** ----------- ----------- ----------- Total dividends and distributions ............................................ (0.39) (1.25) (0.57) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 15.39 $ 15.55 $ 13.79 =========== =========== =========== Total Investment Return (2) ......................................................... 1.47% 21.24% 16.69% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 38,499 $ 29,163 $ 13,805 Ratios of expenses to average net assets (5) ..................................... 1.09% 1.15% 1.52% Ratios of net investment income/(loss) to average net assets (5) ................. 0.24% (0.03)% (0.29)% Portfolio turnover (6) ........................................................... 35.10% 43.09% 48.05% * 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 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% Ratios of net investment income/(loss) to average net assets before waivers ................................................. -- -- (0.29)% (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). Switzerland United Kingdom WEBS WEBS Index Index Series Series ----------- ---------------------------- For the For the For the period year year 03/12/96*- ended ended 08/31/96 08/31/99 08/31/98 ----------- ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 12.07(1) $ 18.48 $ 16.50 ----------- ----------- ----------- Net investment income/(loss) (+) ................................................. 0.08 0.44 0.37 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 0.24 2.40 2.12 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 0.32 2.84 2.49 ----------- ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.10) (0.36) (0.29) Dividends in excess of net investment income ..................................... -- (0.01) (0.04) Distributions from net realized gains ............................................ -- (0.60) (0.11) Distributions in excess of net realized gains .................................... -- (0.02) -- Return of capital ................................................................ -- (0.08) (0.07) ----------- ----------- ----------- Total dividends and distributions ............................................ (0.10) (1.07) (0.51) ----------- ----------- ----------- Net asset value, end of period ................................................... $ 12.29 $ 20.25 $ 18.48 =========== =========== =========== Total Investment Return (2) ......................................................... 2.60%(4) 15.33% 14.98% Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 6,158 $ 113,402 $ 62,846 Ratios of expenses to average net assets (5) ..................................... 1.82%(3) 0.97% 1.03% Ratios of net investment income/(loss) to average net assets (5) ................. 1.39%(3) 2.16% 1.90% Portfolio turnover (6) ........................................................... 17.06%(4) 13.24% 2.83% * 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 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 ...................... 1.83%(3) -- -- Ratios of net investment income/(loss) to average net assets before waivers ................................................. 1.38%(3) -- -- (6) Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Unit(s). United Kingdom WEBS Index Series --------------------------- For the For the year period ended 03/12/96*- 08/31/97 08/31/96 ----------- ----------- Per Share Operating Performance Net asset value, beginning of period ............................................. $ 13.15 $ 12.14(1) ----------- ----------- Net investment income/(loss) (+) ................................................. 0.38 0.21 Net realized and unrealized gain/(loss) on investments and foreign currency related transactions and translation of other assets and liabilities denominated in foreign currencies .......................................................... 3.62 1.06 ----------- ----------- Net increase/(decrease) in net assets resulting from operations .............. 4.00 1.27 ----------- ----------- Less Distributions Dividends from net investment income ............................................. (0.32) (0.20) Dividends in excess of net investment income ..................................... (0.06) (0.03) Distributions from net realized gains ............................................ (0.17) 0.00** Distributions in excess of net realized gains .................................... -- -- Return of capital ................................................................ (0.10) (0.03) ----------- ----------- Total dividends and distributions ............................................ (0.65) (0.26) ----------- ----------- Net asset value, end of period ................................................... $ 16.50 $ 13.15 =========== =========== Total Investment Return (2) ......................................................... 30.48% 10.41%(4) Ratios/ Supplemental Data Net assets, end of period (in 000's) ............................................. $ 29,721 $ 15,790 Ratios of expenses to average net assets (5) ..................................... 1.38% 1.61%(3) Ratios of net investment income/(loss) to average net assets (5) ................. 2.47% 3.62%(3) Portfolio turnover (6) ........................................................... 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 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).
See accompanying notes to financial statements. 62-63 NOTES TO FINANCIAL STATEMENTS 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. 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, Inc ("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). 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. The non-redeemable WEBS 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 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. 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, 1998 will be treated for tax purposes as arising on September 1, 1999. Each WEBS Index Series incurred and will elect to defer such losses as follows: Net Realized Foreign Exchange Capital WEBS Index Series Losses Losses --------------------------------- ---------------- ------------ Australia WEBS Index Series $ -- $ 635,689 Austria WEBS Index Series $ 6,761 $ 433,748 Belgium WEBS Index Series $ 29,990 $ -- Canada WEBS Index Series $ -- $ -- France WEBS Index Series $ 17,090 $ -- Germany WEBS Index Series $ 30,583 $ -- Hong Kong WEBS Index Series $ 1,249 $1,929,343 Italy WEBS Index Series $ 8,064 $ -- Japan WEBS Index Series $ -- $ 199,159 Malaysia (Free) WEBS Index Series $ 57,261 $2,976,252 Mexico (Free) WEBS Index Series $ 1,599 $ 92,305 Netherlands WEBS Index Series $ 57,894 $ -- Singapore (Free) WEBS Index Series $ -- $ 523,937 Spain WEBS Index Series $ 29,328 $ -- Sweden WEBS Index Series $ -- $ -- Switzerland WEBS Index Series $ 29,055 $ -- United Kingdom WEBS Index Series $ 63,025 $ -- In addition, each of the following WEBS Index Series has a capital loss carryover which will expire as follows: 2006 2007 ---------- ------------ Australia WEBS Index Series $ -- $ 674,888 Austria WEBS Index Series $ -- $ 4,273 Hong Kong WEBS Index Series $ -- $5,876,138 Japan WEBS Index Series $ 165,085 $ 592,342 Malaysia (Free) WEBS Index Series $ 13,817 $9,010,668 Singapore (Free) WEBS Index Series $ 46,119 $7,619,991 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 NOTES TO FINANCIAL STATEMENTS (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. 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, at least annually, to shareholders, substantially all of its net investment income, including net foreign currency gains, if any, and any realized net capital gains after the utilization of available capital loss carryovers. An additional distribution may be made to the extent necessary to avoid payment of a 4% Federal excise tax. In addition, each WEBS Index Series intends to distribute at least annually amounts representing the dividend yield on the underlying portfolio securities of each WEBS Index Series, net of expenses, as if such WEBS Index Series owned such underlying portfolio securities for the entire dividend period. As a result, some portion of each distribution may result in a return of capital. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional WEBS. Distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized gains are determined in accordance with U.S. tax law principles, which may differ from generally accepted accounting principles. These book/tax differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within each WEBS Index Series' capital accounts based on their Federal tax treatment. Dividends and distributions which exceed net investment income and realized net capital gains for financial reporting purposes but not for tax purposes are reported as distributions in excess of net investment income and realized net capital gains. To the extent they exceed net investment income and net realized gains for tax purposes, they are reported as return of capital distributions. For the year ended August 31, 1999, each Index Series reclassified certain amounts from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. Organization Costs Organization costs were originally allocated to each WEBS Index Series based on the expected future net assets of each WEBS Index Series. Such organization costs have been deferred and are amortized ratably on the reverse sum of the years digits method over a period of sixty months from the commencement of operations. If any of the shares initially issued to the Distributor are redeemed before the end of the amortization period, the proceeds of the redemption will be reduced by their pro rata share of the unamortized organization costs. The pro rata share by which the proceeds are reduced is derived by dividing the number of original shares redeemed by the total number of original shares outstanding at the time of redemption. 66 WEBS INDEX FUND, INC. ================================================================================ 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 Worldwide Inc. (formerly PFPC Inc.) ("PFPC" or the "Administrator"). Under the Administration and Accounting Services Agreement, PFPC assists in supervising the operations of each WEBS Index Series. For its services to the WEBS Index Series, the Administrator receives an aggregate fee equal to each WEBS Index Series' allocable portion of: .22% per annum of the aggregate average daily net assets of the Fund up to $1.5 billion; plus .15% per annum of the aggregate average daily net assets of the Fund between $1.5 billon and $3 billion, plus .14% per annum of the aggregate average daily net assets of the Fund between $3 billion and $5 billion, plus .13% per annum of the aggregate average daily net assets of the Fund between $5 billon and $7.5 billion, plus .115% per annum of the aggregate average daily net assets of the Fund between $7.5 billion and $10 billion, plus .10% per annum of the aggregate average daily net assets of the Fund in excess of $10 billion. PFPC has a Sub-Administration Agreement with Morgan Stanley & Co, Incorporated ("MS&Co."). The Administrator pays MS&Co. a fee of .05% of the average daily net assets of the Fund for its sub-administration services. PFPC, Inc., (formerly PNCBank, 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 of such WEBS Index Series. The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the Act ("Rule 12b-1 Plan") with respect to each WEBS Index Series. Under the Rule 12b-1 Plan, Funds Distributor, Inc. ("Distributor") is paid an annual fee of up to .25% of the average daily net assets of each WEBS Index Series as compensation in connection with the offering and sale of shares of each WEBS Index Series. The fee paid to the Distributor under the Rule 12b-1 Plan is accrued daily and paid monthly with respect to each WEBS Index Series. For its services to the WEBS Index Series, the Distributor currently receives a fee under the Rule 12b-1 Plan of .20% of the average daily net assets of each WEBS Index Series. From time to time the Distributor may waive all or a portion of the fee. The Chase Manhattan Bank (Chase) serves as global custodian as well as the Securities Lending Agent to each of the WEBS Index Series. Prior to February 1, 1999, for its custody services to each WEBS Index Series, 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 1, 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 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 their attendance at the Board of Directors meetings. 67 NOTES TO FINANCIAL STATEMENTS (continued) ================================================================================ FOREIGN CURRENCY At August 31, 1999, each WEBS Index Series' cash balance included the following amount of foreign currency: Cost Value ----------- ----------- Australia WEBS Index Series $ 27,348 $ 27,443 Austria WEBS Index Series $ 21,680 $ 21,680 Belgium WEBS Index Series $2,067,643 $2,090,401 Canada WEBS Index Series $ 314,661 $ 314,345 France WEBS Index Series $ 773,789 $ 790,114 Germany WEBS Index Series $2,065,302 $2,092,244 Hong Kong WEBS Index Series $1,364,756 $1,364,628 Italy WEBS Index Series $4,355,560 $4,403,499 Japan WEBS Index Series $ 3 $ 3 Malaysia (Free) WEBS Index Series $1,151,049 $1,209,422 Mexico (Free) WEBS Index Series $ 193,950 $ 194,468 Netherlands WEBS Index Series $1,907,451 $1,926,975 Singapore (Free) WEBS Index Series $ 44,605 $ 44,739 Spain WEBS Index Series $ 302 $ 309 Sweden WEBS Index Series $ 7,612 $ 7,710 Switzerland WEBS Index Series $ 14,749 $ 15,304 United Kingdom WEBS Index Series $ 21,164 $ 21,237 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. Prior to February 1, 1999, for its services as the securities lending agent, the Fund paid Chase, in respect of each WEBS Index Series, 50% of the net investment income earned on the collateral for securities loaned. Effective February 1, 1999, the securities lending fee paid to Chase was reduced to 40% of such net investment income. The market values of securities on loan to broker/dealers at August 31, 1999, and the cash collateral received with respect to such loans were as follows: Cash Marked Value Collateral of Loaned WEBS Index Series Received Securities --------------------------------- ----------- ------------ Australia WEBS Index Series $ 2,500,470 $ 2,313,796 Austria WEBS Index Series $ -- $ -- Belgium WEBS Index Series $ 420,951 $ 407,994 Canada WEBS Index Series $ -- $ -- France WEBS Index Series $ 1,000,000 $ 955,952 Germany WEBS Index Series $ 4,187,400 $ 3,950,431 Hong Kong WEBS Index Series $ 2,805,236 $ 2,637,784 Italy WEBS Index Series $12,695,909 $11,554,406 Japan WEBS Index Series $75,265,450 $66,079,331 Malaysia (Free) WEBS Index Series $ -- $ -- Mexico (Free) WEBS Index Series $ 977,400 $ 925,464 Netherlands WEBS Index Series $11,374,090 $10,575,973 Singapore (Free) WEBS Index Series $35,437,500 $31,639,463 Spain WEBS Index Series $ 2,068,750 $ 1,941,578 Sweden WEBS Index Series $ 672,300 $ 613,189 Switzerland WEBS Index Series $ 1,012,044 $ 949,925 United Kingdom WEBS Index Series $ -- $ -- 68 WEBS INDEX FUND, INC. ================================================================================ CAPITAL SHARES The Fund currently is authorized to issue 6 billion shares of capital 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 generally 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 that residents of New Zealand are paid redemption proceeds in cash only. Shares of each WEBS Index Series may also be redeemed in the specified aggregations for cash by other persons at the sole discretion of the Fund. LOAN AGREEMENT At August 31, 1999 the Fund had entered into a Term Loan Agreement with PNC Bank, N.A., an affiliate of the Administrator. Under the terms of the Loan, any of the WEBS Index Series could request an advance of the full amount of the $25,000,000 term loan; provided, however, that: (i) Total outstanding loans to all WEBS Index Series under the Term Loan may not exceed $25,000,000 and (ii) The aggregate amount outstanding under the Term Loan to any one WEBS Index Series may not exceed the lowest of (a) $25,000,000, (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 loan. Advances made under the Term Loan were due and payable on September 30, 1999 and bore interest at a rate per annum equal to the sum of the Federal Funds Rate plus 1%. The interest rate at August 31, 1999 was 6.38%.
Average Advances Average Number of Days Outstanding Interest Advances Outstanding WEBS Index Series During the Year Rate During the Year --------------------------------- --------------- -------- -------------------- Australia Webs Index Series $ 985,000 6.38% 1 Austria Webs Index Series $ 282,000 6.53% 26 Belgium Webs Index Series $3,929,346 6.53% 26 Canada Webs Index Series $ 394,267 6.52% 30 France Webs Index Series $ 315,000 6.52% 30 Germany Webs Index Series $ 697,097 6.53% 31 Hong Kong Webs Index Series $1,495,806 6.53% 31 Italy Webs Index Series $4,580,032 6.53% 31 Japan WEBS Index Series $ 458,000 6.38% 1 Mexico (Free) Webs Index Series $ 295,846 6.53% 26 Netherlands Webs Index Series $1,370,385 6.53% 26 Singapore (Free) WEBS Index Series $ 56,000 6.38% 1 Spain Webs Index Series $ 681,385 6.53% 26 Sweden Webs Index Series $ 565,500 6.53% 26 Switzerland Webs Index Series $1,066,239 6.47% 46 United Kingdom Webs Index Series $ 862,261 6.47% 46
69 NOTES TO FINANCIAL STATEMENTS (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 year ended August 31, 1999: Purchases of Sales of WEBS Index Series Securities Securities ---------------------------------- ------------ ----------- Australia WEBS Index Series $ 7,923,278 $ 6,770,590 Austria WEBS Index Series $ 4,937,960 $ 5,133,230 Belgium WEBS Index Series $10,717,990 $16,864,452 Canada WEBS Index Series $ 1,364,951 $ 2,101,164 France WEBS Index Series $ -- $ 801,501 Germany WEBS Index Series $11,081,164 $14,340,577 Hong Kong WEBS Index Series $30,698,138 $31,101,811 Italy WEBS Index Series $ 5,409,132 $16,145,095 Japan WEBS Index Series $ -- $ 646,362 Malaysia (Free) WEBS Index Series $ 4,412,501 $10,827,621 Mexico (Free) WEBS Index Series $ 2,605,336 $ 2,985,278 Netherlands WEBS Index Series $ 8,057,066 $11,174,213 Singapore (Free) WEBS Index Series $23,766,185 $23,902,836 Spain WEBS Index Series $ 5,606,266 $ 6,706,318 Sweden WEBS Index Series $ 5,358,284 $ 5,891,428 Switzerland WEBS Index Series $12,048,390 $13,333,533 United Kingdom WEBS Index Series $12,880,456 $11,908,201 FOREIGN INCOME TAXES For the year ended August 31, 1999, each WEBS Index Series' net foreign withholding taxes deducted from foreign dividends received were as follows: Foreign Withholding WEBS Index Series Tax --------------------------------- ----------- Australia Webs Index Series $ 33,550 Austria Webs Index Series $ 40,220 Belgium Webs Index Series $ 47,625 Canada Webs Index Series $ 37,112 France Webs Index Series $106,956 Germany Webs Index Series $126,554 Hong Kong Webs Index Series $ -- Italy Webs Index Series $179,078 Japan Webs Index Series $429,976 Malaysia (Free) Webs Index Series $ -- Mexico (Free) Webs Index Series $ 11,213 Netherlands Webs Index Series $141,059 Singapore (Free) Webs Index Series $ -- Spain Webs Index Series $ 79,663 Sweden Webs Index Series $ 45,392 Switzerland Webs Index Series $ 79,043 United Kingdom Webs Index Series $337,554 70 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. 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 REPATRIATION RESTRICTIONS 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 then 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 Malaysian (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 its Malaysia Series. 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 had to 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 subsequent to August 31, 1999 -- 0% Levy 71 NOTES TO FINANCIAL STATEMENTS (continued) ================================================================================ Profits on capital invested prior to February 15, 1999 could be repatriated without the payment of any levy, but were subject to a 10% levy if they were repatriated from investments made after twelve months after the principal entered Malaysia. Capital invested in Malaysia on or subsequent to February 15, 1999 would not be subject to levies upon repatriation of capital. However capital invested in Malaysia after February 15, 1999 would be subject to a 30% levy on profit repatriated within twelve months from the date it was earned. Profit repatriated after twelve months would 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. 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 Malaysian Series. The redeeming holder of Creation Units of the Malaysian 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 were prior to September 1, 1998, and such discounts or premiums may be material. 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 (Free) WEBS Index 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 used a foreign exchange rate of 3.8 ringgits per U.S. dollar in computing its net asset value per share. These rates were determined in good faith in accordance with the Fund's policies for the valuation of foreign currency. The Malaysia (Free) WEBS Index Series may use different exchange rates for computing its net asset value in the future. SUBSEQUENT EVENTS On September 21, 1999 Bank Negara Malaysia announced that the levy imposed on transactions on investments in Malaysian securities on or before February 14, 1999 had been removed. Repatriations of monies invested on or after February 15, 1999 will be subject to a standard levy of 10% of the amount attributable to profit. 72 WEBS INDEX FUND, INC. ================================================================================ FEDERAL TAXATION NOTICE (Unaudited) The WEBS Index Series paid the following foreign taxes during the year ended August 31, 1999 which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code. In addition, each of the WEBS Index Series earned the following foreign source income and is designating the following distributions as long-term capital gain distributions:
Long-Term Foreign Source Capital Gains WEBS Index Series Income Foreign Taxes Distributions -------------------------------- -------------- ------------- ------------- Australia Webs Index Series $1,602,795 $ 33,550 $ -- Austria Webs Index Series $ 269,378 $ 40,220 $ -- Belgium Webs Index Series $ 228,548 $ 47,625 $ 750,493 Canada Webs Index Series $ 248,862 $ 37,112 $ 332,151 France Webs Index Series $1,010,669 $ 106,956 $ 93,974 Germany Webs Index Series $1,347,557 $ 126,554 $1,844,366 Hong Kong Webs Index Series $3,171,308 $ -- $ -- Italy Webs Index Series $ 679,685 $ 179,078 $5,834,287 Japan Webs Index Series $6,095,378 $ 429,976 $ -- Malaysia (Free) Webs Index Series $1,032,810 $ -- $ -- Mexico (Free) Webs Index Series $ 260,206 $ 11,213 $ 8,020 Netherlands Webs Index Series $ 949,940 $ 141,059 $1,850,031 Singapore (Free) Webs Index Series $1,119,413 $ -- $ -- Spain Webs Index Series $ 532,732 $ 79,663 $1,682,127 Sweden Webs Index Series $ 296,498 $ 45,392 $ 560,823 Switzerland Webs Index Series $ 527,379 $ 79,043 $ 776,120 United Kingdom Webs Index Series $3,150,028 $ 337,554 $3,194,882
Shareholders will receive more detailed information along with Form 1099-DIV in January 2000. 73 REPORT OF INDEPENDENT AUDITORS ================================================================================ Shareholders and Board of Directors WEBS Index Fund, Inc. We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of WEBS Index Fund, Inc. (comprised of the Australia WEBS Index Series, the Austria WEBS Index Series, the Belgium WEBS Index Series, the Canada WEBS Index Series, the France WEBS Index Series, the Germany WEBS Index Series, the Hong Kong WEBS Index Series, the Italy WEBS Index Series, the Japan WEBS Index Series, the Malaysia (Free) WEBS Index Series, the Mexico (Free) WEBS Index Series, the Netherlands WEBS Index Series, the Singapore (Free) WEBS Index Series, the Spain WEBS Index Series, the Sweden WEBS Index Series, the Switzerland WEBS Index Series, and the United Kingdom WEBS Index Series) (collectively, the "Fund") as of August 31, 1999, and the related statements of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 1999 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Series comprising WEBS Index Fund, Inc. at August 31, 1999, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP New York, New York October 15, 1999 74 (THIS PAGE INTENTIONALLY LEFT BLANK.) (THIS PAGE INTENTIONALLY LEFT BLANK.) P.O Box 8500, Boston, MA 02266-8500 800-222-8977 CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR [GRAPHIC OMITTED] WEBS INDEX FUND, INC. INVESTMENT ADVISER BARCLAYS GLOBAL FUND ADVISORS ADMINISTRATOR PFPC WORLDWIDE INC. DISTRIBUTOR FUNDS DISTRIBUTOR INC. TRANSFER AGENT PFPC INC. CUSTODIAN AND SECURITIES LENDING AGENT THE CHASE MANHATTAN BANK 400 BELLEVUE PARKWAY WILMINGTON, DE 19809 -----END PRIVACY-ENHANCED MESSAGE-----