UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number 811-22046
DWS RREEF World Real Estate & Tactical Strategies Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue
New York, NY 10154-0004
(Address of principal executive offices) (Zip code)
Registrant’s Telephone Number, including Area Code: (212) 454-7190
Paul Schubert
345 Park Avenue
New York, NY 10154-0004
(Name and Address of Agent for Service)
Date of fiscal year end: | 12/31 |
Date of reporting period: | 06/30/08 |
ITEM 1. REPORT TO STOCKHOLDERS
JUNE 30, 2008 Semiannual Report
to Stockholders |
|
DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. Ticker Symbol: DRP |
 |
Contents
Investments in funds involve risk. The fund is nondiversified and can take larger positions in fewer companies, increasing its overall risk profile. The fund involves additional risk due to its narrow focus. There are special risks associated with an investment in real estate, including credit risk, interest rate fluctuations and the impact of varied economic conditions. In addition, investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Derivatives could produce disproportionate losses due to a variety of factors, including the unwillingness or inability of the counterparty to meet its obligations or unexpected price or interest-rate movements. All of these factors may result in greater share price volatility. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds frequently trade at a discount to net asset value. The price of the fund's shares is determined by a number of factors, several of which are beyond the control of the fund. Therefore, the fund cannot predict whether its shares will trade at, below or above net asset value.
This report is sent to the stockholders of DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. for their information. It is not a prospectus, circular, or representation intended for use in the purchase or sale of shares of the fund or of any securities mentioned in the report.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Performance Summary June 30, 2008
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please visit www.dws-investments.com for the Fund's most recent month-end performance.
Average Annual Returns as of 6/30/08 |
| 6-Month‡ | 1-Year | Life of Fund* |
Based on Net Asset Value(a)
| -14.44% | -22.97% | -22.87% |
Based on Market Value(a)
| -8.50% | -32.61% | -32.27% |
UBS Global Real Estate Investors (US Hedged) Index(b)
| -12.40% | -23.69% | -23.69% |
Lipper Closed-End Real Estate Funds Category(c)
| -11.58% | -26.85% | -26.85% |
Sources: UBS and Deutsche Investment Management Americas Inc.
‡ Total returns shown for periods less than one year are not annualized.Net Asset Value and Market Price |
| As of 6/30/08 | As of 12/31/07 |
Net Asset Value
| $ 13.30 | $ 16.46 |
Market Price
| $ 12.21 | $ 14.13 |
Prices and Net Asset Value fluctuate and are not guaranteed.
Distribution Information |
Six months as of 6/30/08:
Income Dividends | $ .80 |
Lipper Rankings — Closed-End Real Estate Funds Category as of 6/30/08 |
Period | Rank | | Number of Funds Tracked | Percentile Ranking (%) |
1-Year
| 10 | of | 28 | 35 |
Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on net asset value total return with distributions reinvested.
* The Fund commenced operations on June 27, 2007. Index comparison began on June 30, 2007.a Total return based on net asset value reflects changes in the Fund's net asset value during the period. Total return based on market value reflects changes in market value. Each figure includes reinvestments of distributions. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund's shares trade during the period.b The UBS Global Real Estate Investors (US Hedged) Index is an unmanaged index that allows investors to track the performance of global real estate securities based by investor, asset type, and region. The index is calculated using closing market prices and translates into US dollars by S&P. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.c The Lipper Closed-End Real Estate Funds Category represents Funds that invest primarily in equity securities of domestic and foreign companies engaged in the real estate industry. Lipper figures represent the average of the total returns based on net asset value reported by all of the closed-end funds designated by Lipper Inc. as falling into the Closed-End Real Estate Funds Category. Category returns assume reinvestment of all distributions. It's not possible to invest directly into a Lipper category.Portfolio Management Review
In the following interview, Lead Portfolio Manager John F. Robertson discusses investment results for DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. as well as the outlook for and the fund's positioning within the four regions of the global real estate market.
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results.
Q: How did the fund perform over the semiannual period?
A: For the first six months of 2008, real estate securities prices continued to be volatile, as bargain hunters snapped up depressed European issues for a time while Asian real estate stocks were hit hard by the dimming prospects for the global economy. As oil and food prices increased dramatically in May and June, real estate securities that had rebounded earlier in 2008 sold off sharply. For its semiannual period ended June 30, 2008, DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. returned -14.44% on a net asset value basis. (Past performance is no guarantee of future results. Please see pages 4 through 5 for more complete performance information.) For the same period, the fund's benchmark, the UBS Global Real Estate Investors (US Hedged) Index returned -12.40%.1 Based on market price, the fund posted a - -8.50% return. The fund had a closing value of $12.21 per share based on market price ($13.30 per share based on net asset value) as of June 30, 2008.
1 The UBS Global Real Estate Investors (US Hedged) Index is an unmanaged index that allows investors to track the performance of global real estate securities based by investor, asset type and region. The index is calculated using closing market prices and translates into US dollars by S&P. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.Q: Would you describe the process that the investment team uses in managing DWS RREEF World Real Estate & Tactical Strategies Fund, Inc.?
A: In constructing the fund's investment portfolio, the managers employ a disciplined two-step process. First, they select sectors and geographic regions in which to invest, and determine the degree of representation of these sectors and regions through a systematic evaluation of public and private property market trends and conditions. Second, the managers use an in-house valuation process to identify investments that they believe have superior income and growth potential relative to other similar real estate issues. This process examines several factors, including property values of the issuer's holdings, a company's capital structure and its management and strategy. The managers seek to identify global real estate investments that they believe will provide superior returns, focusing on companies with strong cash flow growth potential and the capacity for sustained dividend increases. To find these issuers, the investment team tracks economic conditions and real estate market performance in major international metropolitan areas and analyzes the performance of various property types within those regions.
Consistent with the investment objective of high current income, the fund employs a global portable alpha strategy to seek to generate additional return. This strategy attempts to take advantage of short-term inefficiencies and relative mispricings within global equity, bond and currency markets. The global portable alpha strategy is implemented through the use of derivatives, primarily futures, forwards and swap contracts, and the return from these holdings is expected to have a low correlation to the fund's real estate securities holdings.2 Additionally, from time to time we may hedge the foreign currency exposure of the fund's real estate securities holdings (or remove hedges already in place). Such hedging can to some extent forgo the possible appreciation that would occur if a given foreign currency appreciated compared with the US dollar. The fund's exposure to currency fluctuations is subject to change over time.
2 Correlation is a measure of how closely two variables move over time.Q: Would you discuss the investment environment and performance of the four regions the fund covers — North America, Europe, Australia and Asia?
A: During early 2008, European real estate rebounded strongly as value investors searched for bargains in that region. However, those same securities were generally punished by investors during the second quarter as economic weakness, combined with resurgent inflation in Europe, darkened the near-term outlook for those markets. The UK market was particularly hard hit as the London office sector continues to suffer in the wake of the worldwide freeze-up of the credit markets that has negatively affected a large number of financial firms. In North America, real estate issues generally declined in the early part of the year, but recovered late in the first quarter and in April amid sentiment that commercial real estate securities were oversold. However, as oil and food prices continued to increase, inflation concerns expanded dramatically, and many North American real estate stocks that had rebounded from earlier declines once again sold off during May and June.
In Asia and Australia, real estate shares declined in the first quarter as investors once again linked real estate companies with the prospects — now darkening — for the global economy. A flurry of bargain hunting in April then ensued, until late in the second quarter, when inflation reports for several Asian countries came in higher than previously forecast, causing real estate markets in the region to tumble.
Q: What is your outlook concerning the global real estate securities market in the coming months?
A: Despite recent volatility and increasing concern over rising food and fuel prices in Asia, we believe that real estate demand there — along with economic growth — will continue to be strong. In North America, we had expected to see a succession of news headlines highlighting private commercial market write-downs, but instead a lack of transactions has lessened risk within the private real estate market. In addition, segments of European real estate appear to be undervalued. For example, the environment for commercial real estate in the UK is so negative at the moment that bargain hunters are likely to pounce.
Our outlook for the real estate market worldwide remains guarded in the near term, based on investor concerns over rising crude oil and food production prices. One question for investors is how much inflationary pressures will affect consumers worldwide, and, in turn, various real estate sectors.
Going forward, we will continue to employ our globally strategic and locally bottom-up process, focusing on high-quality assets and markets that we believe have the best fundamental characteristics.
Portfolio Summary
Asset Allocation (As a % of Investment Portfolio) | 6/30/08 | 12/31/07 |
| | |
Common Stocks | 82% | 82% |
Preferred Stocks | 9% | 7% |
Closed End Investment Companies | 4% | 5% |
Government & Agency Obligations | 4% | 3% |
Cash Equivalents | 1% | 3% |
| 100% | 100% |
Sector Diversification (As a % of Common and Preferred Stocks) | 6/30/08 | 12/31/07 |
| | |
Diversified | 45% | 49% |
Shopping Centers | 18% | 14% |
Office | 16% | 14% |
Industrials | 5% | 5% |
Health Care | 4% | 3% |
Hotels | 3% | 4% |
Apartments | 3% | 4% |
Regional Malls | 3% | 2% |
Storage | 2% | 2% |
Leisure Equipment & Products | 1% | 2% |
Retail | — | 1% |
| 100% | 100% |
Geographical Diversification (As a % of Common Stocks) | 6/30/08 | 12/31/07 |
| | |
North America | 18% | 20% |
Asia | 38% | 38% |
Europe | 28% | 25% |
Australia | 16% | 17% |
| 100% | 100% |
Asset allocation, sector diversification and geographical diversification are subject to change.
Ten Largest Equity Holdings at June 30, 2008 (27.3% of Net Assets) | Country | Percent |
1. The Link REIT
Owns and manages various shopping centers and parking spaces
| Hong Kong
| 5.6% |
2. Mitsubishi Estate Co., Ltd.
Owner and developer of residential and office properties
| Japan
| 4.0% |
3. Unibail-Rodamco
Investor and developer of real estate investments
| France
| 3.6% |
4. Nippon Building Fund, Inc.
Invests in real estate and securitized real estate products
| Japan
| 2.3% |
5. CapitalMall Trust
Owns and invests in shopping centers
| Singapore
| 2.1% |
6. Westfield Group
Invests in, leases and manages shopping centers
| Australia
| 2.0% |
7. Japan Real Estate Investment Corp.
Invests in securitized real estate products
| Japan
| 2.0% |
8. Ascendas Real Estate Investment Trust
Owner of business and industrial properties
| Singapore
| 1.9% |
9. BioMed Realty Trust, Inc.
Owns and provides real estate to the life sciences industry
| United States
| 1.9% |
10. Stockland
A property trust which invests in and manages retail and commercial properties
| Australia
| 1.9% |
Portfolio holdings are subject to change.
For more complete details about the Fund's investment portfolio, see page 12. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-investments.com on or after the last day of the following month. In addition, the Fund's top ten holdings and other information about the Fund is posted on www.dws-investments.com as of the calendar quarter-end on or after the 15th day following quarter-end. Please see the Account Management Resources section for contact information.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
Investment Portfolio as of June 30, 2008 (Unaudited)
(Ratios are shown as a percentage of Net Assets)
|
Shares
| Value ($) |
| |
Common Stocks 78.8% |
Australia 12.7% |
Abacus Property Group | 75,427 | 82,173 |
Aspen Group | 976,435 | 1,155,963 |
Becton Property Group | 550,964 | 749,308 |
Compass Hotel Group Ltd.* | 2,010,839 | 1,252,258 |
FKP Property Group | 186,883 | 879,462 |
Galileo Japan Trust | 1,186,000 | 454,415 |
Goodman Group | 649,655 | 1,929,202 |
GPT Group | 820,956 | 1,751,360 |
ING Industrial Fund (Unit) | 932,576 | 1,393,119 |
ING Real Estate Community Living Group (Unit) | 1,810,782 | 782,001 |
ING Real Estate Entertainment Fund (Unit) | 1,298,140 | 809,448 |
Macquarie Leisure Trust Group | 928,975 | 1,323,163 |
MFS Diversified Group | 2,672,179 | 666,038 |
Stockland | 567,707 | 2,928,547 |
Valad Property Group | 1,189,823 | 762,324 |
Westfield Group* | 207,101 | 3,226,647 |
(Cost $30,457,169) | 20,145,428 |
Belgium 1.5% |
Befimmo SCA | 10,000 | 1,055,858 |
Cofinimmo | 5,000 | 907,432 |
Warehouses De Pauw SCA | 6,169 | 371,654 |
(Cost $2,417,773) | 2,334,944 |
Canada 3.4% |
Canadian Real Estate Investment Trust | 90,800 | 2,606,370 |
H&R Real Estate Investment Trust (Unit) | 161,050 | 2,842,895 |
(Cost $6,104,108) | 5,449,265 |
China 0.4% |
Shui On Land Ltd. (Cost $760,746) | 823,500 | 680,940 |
Finland 1.4% |
Sponda Oyj (Cost $3,358,637) | 250,000 | 2,174,215 |
France 7.4% |
Fonciere des Murs | 30,000 | 1,082,985 |
Fonciere des Regions | 20,000 | 2,436,928 |
Societe de la Tour Eiffel | 20,000 | 2,360,352 |
Unibail-Rodamco | 25,000 | 5,771,682 |
(Cost $12,765,971) | 11,651,947 |
Hong Kong 9.8% |
Champion Real Estate Investment Trust | 5,120,000 | 2,367,561 |
Hongkong Land Holdings Ltd. | 582,000 | 2,471,053 |
Kerry Properties Ltd. | 346,500 | 1,815,545 |
The Link REIT | 3,879,000 | 8,824,732 |
(Cost $16,422,736) | 15,478,891 |
Japan 11.2% |
AEON Mall Co., Ltd. | 21,300 | 627,944 |
Japan Real Estate Investment Corp. | 296 | 3,128,801 |
Japan Retail Fund Investment Corp. | 134 | 771,115 |
Mitsubishi Estate Co., Ltd. | 274,400 | 6,264,918 |
Nippon Building Fund, Inc. | 311 | 3,651,310 |
Nippon Commercial Investment Corp. | 518 | 1,454,318 |
Nomura Real Estate Office Fund, Inc. | 257 | 1,927,424 |
(Cost $21,166,375) | 17,825,830 |
Singapore 8.6% |
Ascendas India Trust | 1,347,000 | 896,663 |
Ascendas Real Estate Investment Trust | 1,888,148 | 3,073,340 |
CapitaCommercial Trust | 775,000 | 1,084,557 |
Capitaland Ltd. | 466,000 | 1,957,273 |
CapitaMall Trust | 1,501,953 | 3,306,793 |
Lippo-Mapletree Indonesia Retail Trust | 1,400,000 | 558,475 |
Macquarie Prime REIT | 1,770,000 | 1,341,548 |
Suntec Real Estate Investment Trust | 1,330,000 | 1,332,481 |
(Cost $16,611,399) | 13,551,130 |
Sweden 0.2% |
Klovern AB (Cost $523,442) | 127,500 | 394,553 |
United Kingdom 11.2% |
Big Yellow Group PLC | 80,000 | 456,254 |
British Land Co. PLC | 100,000 | 1,401,832 |
Brixton PLC | 200,000 | 956,134 |
Capital & Regional PLC | 300,000 | 1,133,803 |
Conygar Investment Co. PLC* | 140,000 | 411,317 |
Derwent London PLC | 35,010 | 701,749 |
Equest Balkan Properties PLC | 412,500 | 665,476 |
Great Portland Estates PLC | 75,000 | 502,864 |
Hansteen Holdings PLC | 500,000 | 966,047 |
Helical Bar PLC | 150,000 | 879,051 |
Land Securities Group PLC | 66,500 | 1,621,634 |
Local Shopping REIT PLC | 600,000 | 813,626 |
London & Stamford Property Ltd.* | 380,000 | 800,425 |
Mapeley Ltd. | 50,000 | 1,292,416 |
NR Nordic & Russia Properties Ltd. | 2,500,000 | 2,440,399 |
Segro PLC | 230,000 | 1,790,046 |
Unite Group PLC | 200,000 | 925,451 |
(Cost $22,763,941) | 17,758,524 |
United States 11.0% |
BioMed Realty Trust, Inc. (REIT) | 66,700 | 1,636,151 |
BRE Properties, Inc. (REIT) | 7,900 | 341,912 |
CBL & Associates Properties, Inc. (REIT) | 33,950 | 775,418 |
Cogdell Spencer, Inc. (REIT) | 42,300 | 687,375 |
DCT Industrial Trust, Inc. (REIT) | 68,650 | 568,422 |
Developers Diversified Realty Corp. (REIT) | 20,700 | 718,497 |
Duke Realty Corp. (REIT) | 50,800 | 1,140,460 |
Extra Space Storage, Inc. (REIT) | 55,300 | 849,408 |
General Growth Properties, Inc. (REIT) | 31,550 | 1,105,196 |
Home Properties, Inc. (REIT) | 18,500 | 889,110 |
Host Hotels & Resorts, Inc. (REIT) | 66,950 | 913,868 |
Inland Real Estate Corp. (REIT) | 80,350 | 1,158,647 |
Liberty Property Trust (REIT) | 30,000 | 994,500 |
Mack-Cali Realty Corp. (REIT) | 31,550 | 1,078,063 |
Medical Properties Trust, Inc. (REIT) | 20,600 | 208,472 |
Omega Healthcare Investors, Inc. (REIT) | 52,600 | 875,790 |
Senior Housing Properties Trust (REIT) | 35,475 | 692,827 |
Simon Property Group, Inc. (REIT) | 8,450 | 759,571 |
UDR, Inc. (REIT) | 91,350 | 2,044,413 |
(Cost $19,744,527) | 17,438,100 |
Total Common Stocks (Cost $153,096,824) | 124,883,767 |
|
Closed End Investment Companies 3.8% |
Canada 1.4% |
Calloway Real Estate Investment Trust (Cost $2,724,601) | 114,300 | 2,196,999 |
Luxembourg 0.9% |
ProLogis European Properties (Cost $1,492,346) | 1,423,762 | 1,423,762 |
Netherlands 1.0% |
Nieuwe Steen Investments NV | 50,000 | 1,295,158 |
Vastned Offices/Industrial NV | 10,000 | 271,848 |
(Cost $1,735,185) | | 1,567,006 |
United Kingdom 0.5% |
Kenmore European Industrial Fund Ltd. (Cost $922,911) | 1,000,000 | 838,363 |
Total Closed End Investment Companies (Cost $6,875,043) | 6,026,130 |
|
Preferred Stocks 8.5% |
United States Real Estate Investment Trusts ("REITs") |
Apartment Investment & Management Co., 8.0%, Series V | 7,200 | 164,160 |
Ashford Hospitality Trust, 8.45%, Series D | 43,350 | 770,871 |
BioMed Realty Trust, Inc., 7.375%, Series A | 153,200 | 3,064,000 |
Corporate Office Properties Trust, 7.625%, Series J | 46,400 | 1,006,880 |
Digital Realty Trust, Inc., 7.875%, Series B | 18,800 | 396,116 |
Kilroy Realty Corp., 7.50%, Series F | 18,600 | 409,665 |
LaSalle Hotel Properties, 7.25%, Series G | 39,300 | 724,692 |
PS Business Parks, Inc., 6.70%, Series P | 26,600 | 514,710 |
Public Storage, 6.625%, Series M | 50,300 | 999,461 |
Public Storage, 7.25%, Series K | 46,900 | 1,034,614 |
Regency Centers Corp., 7.25%, Series D | 31,000 | 668,050 |
SL Green Realty Corp., 7.625%, Series C | 31,100 | 693,686 |
Tanger Factory Outlet Centers, Inc., 7.50%, Series C | 69,700 | 1,580,099 |
Taubman Centers, Inc., 7.625%, Series H | 12,300 | 282,777 |
Taubman Centers, Inc., 8.0%, Series G | 18,400 | 430,560 |
Vornado Realty Trust, 6.625%, Series I | 17,400 | 337,734 |
Vornado Realty Trust, 6.75%, Series H | 17,100 | 338,067 |
Total Preferred Stocks (Cost $16,058,598) | 13,416,142 |
| Principal Amount ($) | Value ($) |
| |
Corporate Bonds 0.4% |
Italy |
Immobiliare Grande Distribuzione, 2.5%, 6/28/2012 (Cost $760,872) | 600,000 | 697,639 |
|
Government & Agency Obligations 3.7% |
US Treasury Obligation |
US Treasury Bill, 1.08%**, 7/17/2008 (a) (Cost $5,814,208) | 5,817,000 | 5,813,347 |
|
Shares
| Value ($) |
| |
Cash Equivalents 1.5% |
Cash Management QP Trust, 2.49% (b) (Cost $2,313,313) | 2,313,313 | 2,313,313 |
| % of Net Assets | Value ($) |
| |
Total Investment Portfolio (Cost $184,918,858)+ | 96.7 | 153,150,338 |
Other Assets and Liabilities, Net | 3.3 | 5,233,393 |
Net Assets | 100.0 | 158,383,731 |
Portfolio holdings in real estate entities outside the United States are generally organized as either corporations, trusts or partnerships subject to the tax laws of their country of domicile.
* Non-income producing security.** Annualized yield at time of purchase; not a coupon rate.+ The cost for federal income tax purposes was $185,150,616. At June 30, 2008, net unrealized depreciation for all securities based on tax cost was $32,000,278. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $752,214 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $32,752,492.(a) At June 30, 2008, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.REIT: Real Estate Investment Trust.At June 30, 2008, open futures contracts purchased were as follows:
Futures | Expiration Date | Contracts | Aggregated Face Value ($) | Value ($) | Unrealized Depreciation ($) |
10 Year Canadian Government Bond
| 9/19/2008 | 49 | 5,678,475 | 5,644,827 | (33,648) |
10 Year US Treasury Note
| 9/19/2008 | 392 | 44,694,363 | 44,657,375 | (36,988) |
EOE Dutch Stock Index
| 7/18/2008 | 9 | 1,317,856 | 1,207,572 | (110,284) |
FTSE 100 Index
| 9/19/2008 | 58 | 6,839,634 | 6,524,980 | (314,654) |
Hang Seng Stock Index
| 7/30/2008 | 41 | 5,995,051 | 5,815,640 | (179,411) |
S&P Canada 60 Index
| 9/18/2008 | 27 | 4,738,127 | 4,587,114 | (151,013) |
S&P MIB 30 Index
| 9/19/2008 | 10 | 2,469,200 | 2,336,170 | (133,030) |
S&P Mini 500 Index
| 9/19/2008 | 75 | 5,104,214 | 4,804,125 | (300,089) |
SPI 200 Index
| 9/18/2008 | 16 | 2,060,615 | 1,991,307 | (69,308) |
United Kingdom Treasury Bond
| 9/26/2008 | 97 | 20,492,329 | 20,169,128 | (323,201) |
Total unrealized depreciation | (1,651,626) |
At June 30, 2008, open futures contracts sold were as follows:
Futures | Expiration Date | Contracts | Aggregated Face Value ($) | Value ($) | Unrealized Appreciation/ (Depreciation) ($) |
10 Year Federal Republic of Germany Bond
| 9/8/2008 | 253 | 44,383,816 | 44,044,025 | 339,791 |
10 Year Japanese Government Bond
| 9/10/2008 | 14 | 17,713,212 | 17,858,455 | (145,243) |
2 Year Federal Republic of Germany Bond
| 9/8/2008 | 163 | 26,321,865 | 26,260,230 | 61,635 |
CAC 40 10 Euro Index
| 7/18/2008 | 115 | 8,532,195 | 8,046,390 | 485,805 |
DAX Index
| 9/19/2008 | 17 | 4,632,735 | 4,336,038 | 296,697 |
DJ Euro Stoxx 50 Index
| 9/19/2008 | 52 | 2,936,115 | 2,767,255 | 168,860 |
IBEX 35 Index
| 7/18/2008 | 3 | 607,072 | 564,630 | 42,442 |
Russell E Mini 2000 Index
| 9/19/2008 | 60 | 4,431,759 | 4,150,200 | 281,559 |
Topix Index
| 9/12/2008 | 41 | 5,397,721 | 5,090,973 | 306,748 |
Total net unrealized appreciation | 1,838,294 |
At June 30, 2008, the Fund had the following open forward foreign currency exchange contracts:
Contracts to Deliver | | In Exchange For | | Settlement Date | Unrealized Appreciation ($) |
USD
| 6,365,232 |
| EUR
| 4,059,000 |
| 9/17/2008 | 107,066 |
USD
| 30,717,668 |
| NOK
| 157,685,000 |
| 9/17/2008 | 459,963 |
USD
| 3,284,542 |
| NZD
| 4,365,000 |
| 9/17/2008 | 37,746 |
USD
| 44,314,622 |
| SGD
| 60,072,000 |
| 9/17/2008 | 358,160 |
Total net unrealized appreciation | 962,935 |
Contracts to Deliver | | In Exchange For | | Settlement Date | Unrealized Depreciation ($) |
AUD
| 2,957,000 |
| USD
| 2,805,769 |
| 9/17/2008 | (41,595) |
CHF
| 25,734,000 |
| USD
| 25,208,561 |
| 9/17/2008 | (429,723) |
DKK
| 17,845,000 |
| USD
| 3,751,430 |
| 9/17/2008 | (56,813) |
GBP
| 5,064,000 |
| USD
| 10,026,480 |
| 9/17/2008 | (174,467) |
HKD
| 19,388,000 |
| USD
| 2,490,307 |
| 9/17/2008 | (2,785) |
SEK
| 20,526,000 |
| USD
| 3,393,581 |
| 9/17/2008 | (8,687) |
Total net unrealized depreciation | (714,070) |
Currency Abbreviations |
AUD Australian Dollar
CHF Swiss Franc
DKK Danish Krone
EUR Euro Currency
GBP Pound Sterling
HKD Hong Kong Dollar
NOK Norwegian Krone
NZD New Zealand Dollar
SEK Swedish Krona
SGD Singapore Dollar
USD United States Dollar
|
Fair Value Measurements
The following is a summary of the inputs used as of June 30, 2008 in valuing the Fund's assets carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For information on the Fund's policy regarding the valuation of investments and of the valuation inputs, and their aggregate levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs | Investments in Securities at Value | Net Unrealized Appreciation on Other Financial Instruments++ |
Level 1 — Quoted Prices
| $ 40,852,336 | $ 186,668 |
Level 2 — Other Significant Observable Inputs
| 112,298,002 | 248,865 |
Level 3 — Significant Unobservable Inputs
| — | — |
Total | $ 153,150,338 | $ 435,533 |
++ Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as future contracts, forward foreign currency exchange contracts, which are valued at the unrealized appreciation/depreciation on the instrument.The accompanying notes are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities as of June 30, 2008 (Unaudited) |
Assets |
Investments:
Investments in securities, at value (cost $182,605,545) | $ 150,837,025 |
Investment in Cash Management QP Trust (cost $2,313,313) | 2,313,313 |
Total investments, at value (cost $184,918,858)
| 153,150,338 |
Cash
| 13,517 |
Foreign currency, at value (cost $3,926,342)
| 3,930,678 |
Deposit with broker on open futures
| 502,158 |
Receivable for investments sold
| 276,586 |
Receivable for variation margin on open futures contracts
| 334,152 |
Unrealized appreciation on forward foreign currency exchange contracts
| 962,935 |
Interest receivable
| 22,324 |
Dividends receivable
| 1,240,875 |
Foreign taxes recoverable
| 65,778 |
Other assets
| 4,893 |
Total assets
| 160,504,234 |
Liabilities |
Payable for investments purchased
| 1,143,992 |
Unrealized depreciation on forward foreign currency exchange contracts
| 714,070 |
Accrued management fee
| 124,007 |
Other accrued expenses and payables
| 138,434 |
Total liabilities
| 2,120,503 |
Net assets at value | $ 158,383,731 |
Net Assets Consist of |
Accumulated distributions in excess of net investment income
| (10,933,810) |
Net unrealized appreciation (depreciation) on:
Investments | (31,768,520) |
Futures | 186,668 |
Foreign currency | 225,839 |
Accumulated net realized gain (loss)
| (26,320,471) |
Paid-in capital
| 226,994,025 |
Net assets at value | $ 158,383,731 |
Net Asset Value |
Net Asset Value per common share ($158,383,731 ÷ 11,911,396 shares of common stock outstanding, $.01 par value, 100,000,000 common shares authorized)
| $ 13.30 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the six months ended June 30, 2008 (Unaudited) |
Investment Income |
Income:
| |
Dividends (net of foreign taxes withheld of $627,984)
| $ 5,141,893 |
Interest
| 42,438 |
Interest — Cash Management QP Trust
| 58,331 |
Total income
| 5,242,662 |
Expenses:
Management fee
| 801,064 |
Administration fee
| 89,007 |
Stock Exchange listing fees
| 6,188 |
Services to shareholders
| 5,650 |
Custodian fee
| 52,930 |
Professional fees
| 60,403 |
Directors' fees and expenses
| 5,889 |
Reports to shareholders
| 48,697 |
Other
| 72,825 |
Total expenses, before expense reductions
| 1,142,653 |
Expense reductions
| (958) |
Total expenses after expense reductions
| 1,141,695 |
Net investment income | 4,100,967 |
Realized and Unrealized Gain (Loss) |
Net realized gain (loss) from:
Investments
| (17,103,200) |
Futures
| 943,883 |
Foreign currency
| (7,780,947) |
| (23,940,264) |
Change in net unrealized appreciation (depreciation) on:
Investments
| (9,509,195) |
Futures
| (1,173,550) |
Foreign currency
| 2,432,486 |
| (8,250,259) |
Net gain (loss) | (32,190,523) |
Net increase (decrease) in net assets resulting from operations | $ (28,089,556) |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets |
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2008 (Unaudited) | Period Ended December 31, 2007+ |
Operations:
Net investment income
| $ 4,100,967 | $ 3,332,748 |
Net realized gain (loss)
| (23,940,264) | (3,194,510) |
Change in net unrealized appreciation (depreciation)
| (8,250,259) | (23,105,754) |
Net increase (decrease) in net assets resulting from operations
| (28,089,556) | (22,967,516) |
Distributions to shareholders from:
Net investment income
| (9,576,762) | (7,976,460) |
Fund share transactions:
Offering costs from issuance of common shares
| — | (475,000) |
Proceeds from shares sold
| — | 226,812,501 |
Reinvestment of distributions
| — | 556,524 |
Net increase (decrease) in net assets from Fund share transactions
| — | 226,894,025 |
Increase (decrease) in net assets | $ (37,666,318) | $ 195,950,049 |
Net assets at beginning of period
| 196,050,049 | 100,000* |
Net assets at end of period (including accumulated distributions in excess of net investment income of $10,933,810, and $5,458,015)
| $ 158,383,731 | $ 196,050,049 |
Other Information |
Shares outstanding at beginning of period
| 11,911,396 | 5,236** |
Shares issued
| — | 11,875,000 |
Shares issued to shareholders in reinvestment of distributions
| — | 31,160 |
Shares outstanding at end of period
| 11,911,396 | 11,911,396 |
+ For the period from June 27, 2007, (commencement of operations) to December 31, 2007.* Initial Capital at June 27, 2007.** Shares issued from initial capital.The accompanying notes are an integral part of the financial statements.
Financial Highlights
Period Ended December 31, | 2008a | 2007b |
Selected Per Share Data |
Net asset value, beginning of period | $ 16.46 | $ 19.10c |
Income (loss) from investment operations: Net investment incomed | .34 | 0.29 |
Net realized and unrealized gain (loss) | (2.70) | (2.22) |
Total from investment operations | (2.36) | (1.93) |
Offering costs charged to paid-in capital
| — | (.04) |
Less distributions from: Net investment income | (.80) | (.67) |
Net asset value, end of period | $ 13.30 | $ 16.46 |
Market price, end of period | $ 12.21 | $ 14.13 |
Total Return |
Based on net asset value (%)e
| (14.44)** | (10.16)** |
Based on market price (%)e
| (8.50)** | (26.34)** |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($000s)
| 158 | 196 |
Ratio of expenses (%)
| 1.28* | 1.20* |
Ratio of net investment income (%)
| 2.29f** | 3.11* |
Portfolio turnover rate (%)
| 34** | 24** |
a For the six months ended June 30, 2008 (Unaudited).
b For the period from June 27, 2007 (commencement of operations) to June 27, 2008.
c Beginning per share amount reflects $20.00 initial public offering price net of sales load ($0.90 per share).
d Based on average shares outstanding during the period.
e Total return based on net asset value reflects changes in the Fund's net asset value during the period. Total return based on market value reflects changes in the market value. Each figure assumes that dividend and capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund's shares traded during the period.
f The ratio for the six months ended June 30, 2008 has not been annualized, since the Fund believes it would not be appropriate because the Fund's dividends received may require year-end adjustments and reclassifications.
* Annualized
** Not annualized
|
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. (the ``Fund'') is registered under the Investment Company Act of 1940, as amended (the ``1940 Act''), as a closed-end, non-diversified management investment company organized as a Maryland corporation. The Fund is authorized to issue 100,000,000 shares, all of which are currently classified as Common Stock.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Equity securities and closed-end investment companies are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies and Cash Management QP Trust are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Directors. The Fund may use a fair valuation model to value international equity securities in order to adjust for events which may occur between the close of the foreign exchanges and the close of the New York Stock Exchange.
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), which governs the application of generally accepted accounting principles that require fair value measurements of the Fund's assets and liabilities. Fair value is an estimate of the price the Fund would receive upon selling a security in a timely transaction to an independent buyer in the principal or most advantageous market of the security. FAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels as follows:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
For Level 1 inputs, the Fund uses unadjusted quoted prices in active markets for assets or liabilities with sufficient frequency and volume to provide pricing information as the most reliable evidence of fair value. The Fund's Level 2 valuation techniques include inputs other than quoted prices within Level 1 that are observable for an asset or liability, either directly or indirectly. Level 2 observable inputs may include quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active in which there are few transactions, the prices are not current, or price quotations vary substantially over time or among market participants. Inputs that are observable for the asset or liability in Level 2 include such factors as interest rates, yield curves, prepayment speeds, credit risk, and default rates for similar liabilities. For Level 3 valuation techniques, the Fund uses unobservable inputs that reflect assumptions market participants would be expected to use in pricing the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available and are developed based on the best information available under the circumstances. In developing unobservable inputs, market participant assumptions are used if they are reasonably available without undue cost and effort.
The Fund may record changes to valuations based on the amount that might reasonably be expected to receive for a security upon its current sale consistent with the fair value measurement objective. Each determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to the type of the security, the existence of any contractual restrictions on the security's disposition, the price and extent of public trading in similar securities of the issue or of comparable companies, quotations or evaluated prices from broker-dealers and/or pricing services, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company's financial statements, an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold, and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination, and the movement of the market in which the security is normally traded. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value determined upon sale of those investments.
New Accounting Pronouncement. In March 2008, FASB issued Statement of Financial Accounting Standards No. 161 ("FAS 161") Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. FAS 161 requires enhanced disclosure about an entity's derivative and hedging activities. FAS 161 is effective for fiscal years beginning after November 15, 2008. Management is currently evaluating the impact the adoption of FAS 161 will have on the Fund's financial statement disclosures.
Foreign Currency Translations. The books and records of the Fund are maintained in US dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into US dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into US dollars at the prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the US dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange contract ("forward currency contract") is a commitment to purchase or sell a foreign currency at the settlement date at a negotiated rate. The Fund may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign currency denominated portfolio holdings and to facilitate transactions in foreign currency denominated securities. The Fund may also invest in forward foreign currency exchange contracts as part of its global portable alpha strategy.
Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and unrealized gain (loss) is recorded daily. Sales and purchases of forward currency contracts having the same settlement date and broker are offset and any gain (loss) is realized on the date of offset; otherwise, gain (loss) is realized on settlement date. Realized and unrealized gains and losses which represent the difference between the value of a forward currency contract to buy and a forward currency contract to sell are included in net realized and unrealized gain (loss) from foreign currency related transactions.
Certain risks may arise upon entering into forward currency contracts from the potential inability of counterparties to meet the terms of their contracts. Additionally, when utilizing forward currency contracts to hedge, the Fund gives up the opportunity to profit from favorable exchange rate movements during the term of the contract.
Futures. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). The Fund may enter into futures contracts on equity and fixed-income securities, including on financial indices, and security indices and on currency as part of its global portable alpha strategy.
Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary an amount ("initial margin") equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value of the underlying security and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize a gain or loss equal to the difference between the value of the futures contract to sell and the futures contract to buy. Futures contracts are valued at the most recent settlement price.
Certain risks may arise upon entering into futures contracts, including the risk that an illiquid secondary market will limit the Fund's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the securities or currencies hedged. When utilizing futures contracts to hedge, the Fund gives up the opportunity to profit from favorable price movements in the hedged positions during the term of the contract.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable income to its shareholders.
Additionally, based on the Fund's understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which it invests, the Fund will provide for foreign taxes and where appropriate, deferred foreign taxes.
From November 1, 2007 through December 31, 2007, the Fund incurred approximately $2,391,000 of net realized capital losses and approximately $5,921,000 of passive foreign investment companies losses. As permitted by the tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the year ending December 31, 2008.
The Fund has reviewed the tax positions as of December 31, 2007 and has determined that no provision for income tax is required in the Fund's financial statements.
Distribution of Income and Gains. Distributions from net investment income of the Fund, if any, is usually declared and distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in foreign denominated investments, recognition of certain foreign currency gains (losses) as ordinary income, investments in passive foreign investment companies and certain securities sold at a loss. As a result, net investment income and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
The Fund has a policy to make a level distribution each quarter to shareholders. The Fund estimates that at times it will distribute more than its income, therefore, a portion of the distributions may be a return of capital.
The tax character of current year distributions will be determined at the end of the current fiscal year. Distribution notifications are posted on the Fund's website at www.dws-investments.com.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Real Estate Investment Trusts. The Fund recharacterizes distributions received from a United States Real Estate Investment Trust ("US REIT") investment based on information provided by the US REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from a US REIT, the recharacterization will be estimated and a recharacterization will be made in the following year when such information becomes available. Distributions received from US REITs in excess of income are recorded as either a reduction of cost of investments or realized gains. The Fund distinguishes between dividends on a tax basis and a financial reporting basis and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a tax return of capital. With respect to the distributions received from foreign domiciled corporations, generally determined to be passive foreign investment companies for tax reporting purposes, such amounts are included in dividend income without any recharacterization.
Other. Investment transactions are accounted for on the trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding rates. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis.
B. Purchases and Sales of Securities
During the six months ended June 30, 2008, purchases and sales of investment securities (excluding short-term investments and US Treasury Obligations) aggregated $58,933,926 and $68,683,270, respectively.
C. Related Parties
Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Investment Manager"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Investment Manager is responsible for managing the Fund's affairs and supervising all aspects of the Fund's operations, subject at all times to the general supervision of the Fund's Board of Directors (the "Board").
Pursuant to the Investment Management Agreement, the Investment Manager has delegated the day-to-day management of the portion of the Fund's investment portfolio invested in real estate securities, direct investments in preferred stocks and bonds and related investment activities, including management of cash assets, to RREEF America, L.L.C. (the "Investment Advisor"), also an indirect wholly owned subsidiary of Deutsche Bank AG and an affiliate of DB Real Estate, the real estate investment management group of Deutsche Asset Management. Subject to the general supervision of the Board and the Investment Manager, the Investment Advisor is responsible for managing the real estate-related investment operations of the Fund and the composition of the Fund's holdings of securities and certain other investments. The Investment Manager, not the Fund, compensates the Investment Advisor for its services. The Investment Management Fee payable under the Investment Management Agreement is equal to an annual rate of 0.90% of the Fund's average daily total managed assets, computed and accrued daily and payable monthly. Total managed assets equal the total asset value of the common shares plus the liquidation preference of Preferred Shares, if any, plus the principal amount of any borrowings, minus liabilities (other than debt representing financial leverage).
Pursuant to investment subadvisory agreements between the Investment Advisor, RREEF Global Advisers Limited, Deutsche Asset Management (Hong Kong) Limited and Deutsche Investments Australia Limited, indirect wholly owned subsidiaries of Deutsche Bank AG (collectively, the "subadvisors"), these entities act as subadvisors to the Investment Advisor in relation to the Fund's investments. As subadvisors, under the supervision of the Board of Directors, DIMA and RREEF, the subadvisors manage the Fund's investments in specific foreign markets. The Investment Advisor pays each subadvisor for its services from the investment advisory fee it receives from the Investment Manager.
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Investment Manager an annual fee ("Administration Fee") of 0.10% of the Fund's average daily total managed assets (calculated as described above under "Management Agreement"), computed and accrued daily and payable monthly. For the six months ended June 30, 2008, the Administration Fee was $89,007, of which $13,779 is unpaid.
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Investment Manager and Investment Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the six months ended June 30, 2008, the amount charged to the Fund by DISC aggregated $6,308, all which is unpaid.
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing certain regulatory filing services to the Fund. For the six months ended June 30, 2008, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $6,188, of which $4,653 is unpaid.
Directors' Fees and Expenses. The Fund paid each Director not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson and Vice Chairperson.
In connection with the board consolidation of the two DWS Funds Boards of Directors, certain Independent Board Members retired prior to their normal retirement date, and received a one-time retirement benefit. DIMA has agreed to reimburse the Funds for the cost of this benefit. During the period ended June 30, 2008, the Fund paid its allocated portion of the retirement benefit of $958 to the non-continuing Independent Board Members, and the Fund was reimbursed by DIMA for this payment.
Cash Management QP Trust. Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Cash Management QP Trust (the "QP Trust"), and other affiliated funds managed by the Investment Manager. The QP Trust seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Investment Manager a management fee for the affiliated funds' investments in the QP Trust.
D. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $490 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.35 percent. The Fund may borrow up to a maximum of 5 percent of its net assets under the agreement.
E. Real Estate Concentration Risk
The Fund concentrates its investments in real estate securities, including US REITs. A fund with a concentrated portfolio is vulnerable to the risks of the industry in which it invests and is subject to greater risks and market fluctuations than funds investing in a broader range of industries. Real estate securities are susceptible to the risks associated with direct ownership of real estate such as declines in property values; increases in property taxes, operating expenses, interest rates or competition; zoning changes; and losses from casualty and condemnation.
Dividend Reinvestment and Cash Purchase Plan
Computershare Inc. (the "Plan Agent"), including any successor Plan Agent, has been appointed by the Board of Directors of the Fund to act as agent for each shareholder who has not elected in writing to receive dividends and distributions in cash (each a "Participant") under the Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan"). Each shareholder who has elected in writing to not participate in the Plan will receive all distributions in cash. The Fund's transfer agent and dividend disbursing agent (the "Transfer Agent") will open an account for each Participant under the Plan in the same name in which such Participant's present shares are registered, and put into effect for such Participant the dividend reinvestment option of the Plan as of the first record date for a dividend or capital gains distribution, and the cash purchase option of the Plan as of the next appropriate date as provided below.
Whenever the Fund declares an income dividend or a capital gains distribution payable in common stock or cash at the option of the stockholders, each Participant is deemed to have elected to take such dividend or distribution entirely in additional shares of common stock of the Fund, and the Transfer Agent shall record such shares, including fractions, for the Participant's account. If the market price per share of the Fund's common stock on the valuation date equals or exceeds the net asset value per share on the valuation date, the number of additional shares to be issued by the Fund and credited to the Participant's account shall be determined by dividing the dollar amount of the dividend or capital gains distribution payable on the Participant's shares by the greater of the following amounts per share of the Fund's common stock on the valuation date: (a) the net asset value; or (b) 95% of the market price. If the market price per share of the Fund's common stock on the valuation date is less than the net asset value per share on the valuation date, the Plan Agent shall apply the dollar amount of the dividend or capital gains distribution on such Participant's shares (less such Participant's pro rata share of brokerage commissions incurred with respect to the Plan Agent's open-market purchases in connection with the reinvestment of such dividend and distribution) to the purchase on the open market of shares of the Fund's common stock for the Participant's account. Such purchases will be made on or shortly after the payment date for such dividend or distribution, and in no event more than 45 days after such date except where temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities law. The valuation date will be the payment date for the dividend or capital gains distribution or, if such date is not a New York Stock Exchange trading date, then the next preceding New York Stock Exchange trading date.
Should the Fund declare an income dividend or capital gains distribution payable only in cash, the Plan Agent shall apply the amount of such dividend or distribution on each Participant's shares (less such Participant's pro rata share of brokerage commissions incurred with respect to the Plan Agent's open-market purchases in connection with the reinvestment of such dividend or distribution) to the purchase on the open market of shares of the Fund's common stock for the Participant's account. Such purchases will be made on or shortly after the payment date for such dividend or distribution, and in no event more than 45 days after such date except where temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities law.
For all purposes of the Plan: (a) the market price of the Fund's common stock on a particular date shall be the mean between the highest and lowest sales prices on the New York Stock Exchange on that date, or, if there is no sale on such Exchange on that date, then the mean between the closing bid and asked quotations for such stock on such Exchange on such date provided, however, that if the valuation date precedes the "ex-dividend" date on such Exchange for a particular dividend and/or distribution, then the market price on such valuation date shall be as determined above, less the per share amount of the dividend and/or distribution; (b) net asset value per share of the Fund's common stock on a particular date shall be as determined by or on behalf of the Fund; and (c) all dividends, distributions and other payments (whether made in cash or in shares) shall be made net of any applicable withholding tax.
Each Participant, semiannually, has the option of sending additional funds, in any amount from $100 to $3,000 for the purchase on the open market of shares of the common stock of the Fund for such Participant's account. Voluntary payments will be invested by the Plan Agent on or shortly after the 15th of February and August, and in no event more than 45 days after such dates except where temporary curtailment or suspension of purchases is necessary to comply with applicable provisions of federal securities law. Optional cash payments received from a Participant on or prior to the fifth day preceding the 15th of February or August will be applied by the Plan Agent to the purchase of additional shares of common stock as of that investment date. Funds received after the fifth day preceding the 15th of February or August and prior to the 30th day preceding the next investment date will be returned to the Participant. No interest will be paid on optional cash payments held until investment. Consequently, Participants are strongly urged to make their optional cash payments shortly before the 15th of February or August. However, Participants should allow sufficient time to ensure that their payments are received by the Transfer Agent on or prior to the fifth day preceding the 15th of February or August. Optional cash payments should be in US funds and be sent by first-class mail, postage prepaid, only to the following address:
DWS RREEF World Real Estate & Tactical Strategies Fund, Inc.
Dividend Reinvestment and Cash
Purchase Plan
210 West 10th Street
Kansas City, MO 64105
(800) 294-4366
Deliveries to any other address do not constitute valid delivery. Participants may withdraw their entire voluntary cash payment by written notice received by the Plan Agent not less than 48 hours before such payment is to be invested.
Investments of voluntary cash payments and other open-market purchases provided for above may be made on any securities exchange where the Fund's common stock is traded, in the over-the-counter market or in negotiated transactions and may be on such terms as to price, delivery and otherwise as the Plan Agent shall determine. Participants' funds held by the Plan Agent or the Transfer Agent uninvested will not bear interest, and it is understood that, in any event, the Plan Agent shall have no liability in connection with any inability to purchase shares within 45 days after the initial date of such purchase as herein provided, or with the timing of any purchases effected. The Plan Agent shall have no responsibility as to the value of the common stock of the Fund acquired for a Participant's account. For the purposes of cash investments the Plan Agent or the Transfer Agent may commingle Participants' funds, and the average price (including brokerage commissions) of all shares purchased by the Plan Agent as Agent shall be the price per share allocable to each Participant in connection therewith.
The Transfer Agent will record shares acquired pursuant to the Plan in noncertificated form on the books of the Fund in the Participant's name. The Transfer Agent will forward to each Participant any proxy solicitation material. Upon a Participant's written request, the Transfer Agent will deliver to such Participant, without charge, a certificate or certificates for the full shares.
The Transfer Agent will confirm to each Participant each acquisition made for such Participant's account as soon as practicable but no later than 60 days after the date thereof. The Transfer Agent will send to each Participant a statement of account confirming the transaction and itemizing any previous reinvestment activity for the calendar year. A statement reflecting the amount of cash received by the Transfer Agent will be issued on receipt of each cash deposit. The statements are the record of the costs of shares and should be retained for tax purposes. Certificates representing shares will not be issued to a Participant under the Plan unless such Participant so requests in writing or unless his account is terminated. Although Participants may from time to time have an undivided fractional interest (computed to four decimal places) in a share of the Fund, no certificates for a fractional share will be issued. However, dividends and distributions on fractional shares will be credited to a Participant's account. In the event of termination of a Participant's account under the Plan, the Transfer Agent will adjust for any such undivided fractional interest in cash at the market value of the Fund's shares at the time of termination less the pro rata expense of any sale required to make such an adjustment.
Any stock dividends or split shares distributed by the Fund on shares held for a Participant under the Plan will be credited to such Participant's account. In the event that the Fund makes available to its stockholders rights to purchase additional shares or other securities, the shares held for a Participant under the Plan will be added to other shares held by such Participant in calculating the number of rights to be issued to such Participant.
The Plan Agent's and/or Transfer Agent's service fee for handling capital gains distributions or income dividends will be paid by the Fund. Participants will be charged a $1.00 service fee for each voluntary cash investment and a pro rata share of brokerage commissions on all open market purchases.
Participants may terminate their accounts under the Plan by notifying the Transfer Agent in writing. Such termination will be effective immediately if such Participant's notice is received by the Transfer Agent not less than ten days prior to any dividend or distribution record date; otherwise such termination will be effective as soon as practicable upon completion of the reinvestment of capital gains distributions or income dividends. The Plan may be terminated by the Fund upon notice in writing mailed to Participants at least 30 days prior to any record date for the payment of any dividend or distribution by the Fund. Upon any termination the Transfer Agent will cause a certificate or certificates for the full number of shares held for each Participant under the Plan and cash adjustment for any fraction to be delivered to such Participant without charge.
If a Participant elects by notice to the Plan Agent in writing in advance of such termination to have the Plan Agent sell part or all of such Participant's shares and remit the proceeds to such Participant, the Plan Agent is authorized to deduct a fee of 5% of the gross proceeds, to a maximum of $3.50, plus brokerage commissions for this transaction and any transfer taxes. In such case, certificates for withdrawn shares will not be issued to such Participant, and the Plan Agent will, within ten (10) business days after receipt of such written notice, cause such shares to be sold at market prices for such Participant's account. It should be noted, however, that the Fund's share price may fluctuate during the period between a request for sale, its receipt by the Plan Agent, and the ultimate sale in the open market within 10 business days. This risk should be evaluated by such Participant when considering whether to request that the Plan Agent sell his or her shares. The risk of a price decline is borne solely by such Participant. A check for the proceeds will not be mailed prior to receipt by the Transfer Agent of proceeds of the sale; settlement currently occurs three (3) business days after the sale of shares. Information regarding the sale of shares will be provided to the Internal Revenue Service (the "IRS").
The reinvestment of dividends and capital gains distributions does not relieve the Participant of any income tax which may be payable on such dividends and distributions. The Transfer Agent will report to each Participant the taxable amount of dividends and distributions credited to his account. Participants will be treated as receiving the amount of the distributions made by the Fund, which amount generally will be either equal to the amount of the cash distribution the stockholder would have received if the stockholder had elected to receive cash or, for shares issued by the Fund, the fair market value of the shares issued to the stockholder.
Non-US stockholders who elect to have their dividends and distributions reinvested and whose dividends and distributions are subject to United States income tax withholding will have their dividends and distributions reinvested net of withholding tax. US stockholders who elect to have their dividends and distributions reinvested will have their dividends and distributions reinvested net of the back-up withholding tax imposed under Section 3406(a)(i) of the Internal Revenue Code of 1986, as amended, if (i) such stockholder has failed to furnish to the Fund his taxpayer identification number (the "TIN"), which for an individual is his social security number; (ii) the IRS has notified the Fund that the TIN furnished by the stockholder is incorrect; (iii) the IRS notifies the Fund that the stockholder is subject to back-up withholding; or (iv) the stockholder has failed to certify, under penalties of perjury, that he is not subject to back-up withholding. Foreign non-corporate stockholders may also be subject to back-up withholding tax with respect to long-term capital gains distributions if they fail to make certain certifications. Stockholders have previously been requested by the Fund or their brokers to submit all information and certifications required in order to exempt them from back-up withholding if such exemption is available to them.
These terms and conditions may be amended or supplemented by the Fund at any time or times but, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission, any securities exchange on which shares of the Fund are listed, or any other regulatory authority, only by mailing to Participants appropriate written notice at least 30 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted by a Participant unless, prior to the effective date thereof, the Transfer Agent receives written notice of the termination of such Participant's account under the Plan. Any such amendment may include an appointment by the Fund of a successor Plan Agent or Transfer Agent under these terms and conditions, with full power and authority to perform all or any of the acts to be performed by the Plan Agent or Transfer Agent under these terms and conditions. Notwithstanding the above, if for any reason operation of the Plan in accordance with its terms should become impracticable or unreasonable under the circumstances then prevailing, or in the judgment of the Fund's Board of Directors such operation would not be in the interests of the Fund's stockholders generally, then the Fund's Board of Directors shall have the authority to amend, effective immediately, the terms of the Plan to the extent that such amendment does not adversely affect the interests of Participants in any material respect. Appropriate written notice of such amendment shall be given within 30 days of its effective date.
Each of the Plan Agent and Transfer Agent shall at all times act in good faith and agree to use its best efforts within reasonable limits to insure the accuracy of all services performed under the Plan and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by its negligence, bad faith, or willful misconduct or that of its employees.
These terms and conditions shall be governed by the laws of the State of New York.
Stockholder Meeting Results
The Annual Meeting of Stockholders of DWS RREEF World Real Estate & Tactical Strategies Fund, Inc. (the "Fund") was held on July 2, 2008. The following matter was voted upon by the Stockholders of the Fund.
1. The election of the following Class I Board Members to hold office for a term of three years and until their respective successors have been duly elected and qualified:
| Number of Votes: |
| For | Withheld |
John W. Ballantine
| 10,624,230 | 366,270 |
Henry P. Becton, Jr.
| 10,616,729 | 373,771 |
Dawn-Marie Driscoll
| 10,621,790 | 368,710 |
Paurl K. Freeman
| 10,623,211 | 367,289 |
Keith R. Fox
| 10,622,711 | 367,789 |
Until recently, substantially all DWS open-end funds and most DWS closed-end funds were overseen by one of two boards of directors or trustees (the "Boards"). In 2007, each Board, including the Board that has historically overseen the Fund (the "New York Board"), determined that the formation of a single consolidated Board overseeing all DWS funds (the "Consolidated Board") would be in the best interests of the funds. Accordingly, each Board approved a plan to consolidate the New York Board with the other primary DWS fund board (the "Chicago Board"). (The geographic references in the preceding sentences merely indicate where each Board historically held most of its meetings.)
The Consolidated Board consists of nine members from the Fund's original New York Board (Henry P. Becton, Jr., Dawn-Marie Driscoll, Keith R. Fox, Kenneth C. Froewiss, Richard J. Herring, Rebecca W. Rimel, William N. Searcy, Jr., Jean Gleason Stromberg and Axel Schwarzer) and four members from the Chicago Board (John W. Ballantine, Paul K. Freeman, William McClayton and Robert H. Wadsworth). Prior to consolidation, three members of the Fund's original Board (Martin J. Gruber, Graham E. Jones and Carl W. Vogt) resigned.
Account Management Resources
Automated Information Line | DWS Investments Closed-End Fund Info Line (800) 349-4281
|
Web Site | www.dws-investments.com Obtain quarterly fact sheets, financial reports, press releases and webcasts when available.
|
Written Correspondence | Deutsche Investment Management Americas Inc. 345 Park Avenue
New York, NY 10154
|
Proxy Voting | The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
|
Legal Counsel | Willkie Farr & Gallagher LLP 787 Seventh Avenue
New York, NY 10019
|
Dividend Re-Investment Plan Agent | Computershare Inc. P.O. Box 43078
Providence, RI 02940-3078
|
Transfer Agent | DWS Investments Service Company P.O. Box 219066
Kansas City, MO 64121-9066
(800) 294-4366 |
Custodian | Brown Brothers Harriman & Co. 40 Water Street
Boston, MA 02109
|
Independent Auditors | PricewaterhouseCoopers LLP 125 High Street
Boston, MA 02110
|
NYSE Symbol | DRP
|
CUSIP Number | 23339T100
|
Privacy Statement
This privacy statement is issued by DWS Investments Distributors, Inc., Deutsche Investment Management Americas Inc., DeAM Investor Services, Inc., DWS Trust Company and the DWS Funds.
We never sell customer lists or individual client information. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal and state standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.
In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our Web sites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third-party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the DWS Investments Companies listed in the first paragraph of this Privacy Statement.
We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.
Questions on this policy may be sent to:
DWS Investments
Attention: Correspondence — Chicago
P.O. Box 219415
Kansas City, MO 64121-9415
September 2007
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