UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number 811-07347
SCUDDER ADVISOR FUNDS II
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(Exact Name of Registrant as Specified in Charter)
One South Street, Baltimore, Maryland 21202
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 295-2663
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Salvatore Schiavone
Two International Place
Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
Date of fiscal year end: 12/31
Date of reporting period: 12/31/03
ITEM 1. REPORT TO STOCKHOLDERS
[Scudder Investments logo]
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Annual Report to Shareholders | ||
December 31, 2003 | ||
Contents |
<Click Here> Performance Summary <Click Here> Portfolio Management Review <Click Here> Portfolio Summary Scudder EAFE® Equity Index Fund <Click Here> Financial Statements <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Report of Independent Auditors <Click Here> Tax Information <Click Here> Trustees and Officers Scudder EAFE® Equity Index Portfolio <Click Here> Investment Portfolio <Click Here> Financial Statements <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Report of Independent Auditors <Click Here> Account Management Resources |
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Investments in mutual funds involve risk. Some funds have more risk than others. Investing in foreign securities presents certain unique risks not associated with domestic investments, such as currency fluctuation, political and economic changes and market risks. Additionally, the fund may not be able to mirror the MSCI EAFE® Index closely enough to track its performance for several reasons, including the fund's cost to buy and sell securities, the flow of money into and out of the fund and the potential underperformance of stocks selected. All of these factors may result in greater share price volatility. Please read this fund's prospectus for specific details regarding its investments and risk profile.
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Investment Management Americas Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.
Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
All performance shown is historical and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit scudder.com for the product's most recent month-end performance.
Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.
The MSCI EAFE® Index is the exclusive property of Morgan Stanley Capital International, a service of Morgan Stanley, and has been licensed for use by the fund's investment advisor. There is no guarantee that the fund will be able to mirror the MSCI EAFE® Index closely to track its performance.
Average Annual Total Returns | ||||
Scudder EAFE® Equity Index Fund | 1-Year | 3-Year | 5-Year | Life of Class* |
| Premier Class | 36.45% | -3.80% | -.70% | 3.02% |
| MSCI EAFE® Index+ | 38.59% | -2.91% | -.05% | 3.23% |
Sources: Lipper Inc. and Deutsche Asset Management, Inc.
* The Fund commenced operations on January 24, 1996. Index comparisons begin January 31, 1996.Net Asset Value and Distribution Information | |
Premier Class | |
| Net Asset Value: 12/31/03 | $ 10.35 |
| 12/31/02 | $ 7.77 |
| Distribution Information: Twelve Months: Income Dividends | $ .23 |
Premier Class Lipper Rankings - International Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
| 1-Year | 313 | of | 833 | 38 |
| 3-Year | 293 | of | 649 | 45 |
| 5-Year | 323 | of | 482 | 67 |
Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested.
Source: Lipper Inc. as of December 31, 2003. Includes portfolios that invest assets in securities with primary trading markets outside of the United States. It is not possible to invest directly in a Lipper category.
Growth of an Assumed $5,000,000 Investment |
[] Scudder EAFE® Equity Index Fund - Premier Class [] MSCI EAFE® Index+ |
 |
Yearly periods ended December 31 |
Comparative Results | |||||
Scudder EAFE® Equity Index Fund | 1-Year | 3-Year | 5-Year | Life of Class* | |
Premier Class | Growth of $5,000,000 | $6,822,500 | $4,451,000 | $4,828,000 | $6,333,500 |
| Average annual total return | 36.45% | -3.80% | -.70% | 3.02% | |
| MSCI EAFE® Index+ | Growth of $5,000,000 | $6,929,500 | $4,576,000 | $4,986,500 | $6,432,000 |
| Average annual total return | 38.59% | -2.91% | -.05% | 3.23% | |
The growth of $5,000,000 is cumulative.
The minimum investment for the Premier Class is $5,000,000.
* The Fund commenced operations on January 24, 1996. Index comparisons begin January 31, 1996.+ The Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Index is an unmanaged capitalization-weighted index that tracks international stock performance in the 21 developed markets of Europe, Australasia and the Far East. 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.
Scudder EAFE® Equity Index Fund: A Team Approach to Investing
Deutsche Asset Management, Inc. ("DeAM, Inc." or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for EAFE® Equity Index Portfolio, in which the fund invests all of its assets. DeAM, Inc. provides a full range of investment advisory services to institutional and retail clients. DeAM, Inc. is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.
Deutsche Asset Management is a global asset management organization that offers a wide range of investing expertise and resources. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.
DeAM, Inc. is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.
Northern Trust Investments, N.A. ("NTI"), an indirect subsidiary of Northern Trust Corporation, is the subadvisor for the portfolios. As of September 30, 2003, NTI had approximately $222 billion of assets under management.
A group of investment professionals is responsible for the day-to-day management of the portfolio.
In the following interview, Lead Portfolio Manager and Chief Investment Officer - Global Indexing James Creighton discusses Scudder EAFE® Equity Index Fund's market environment and performance during the 12-month period ended December 31, 2003.
Q: How did Scudder EAFE® Equity Index Fund perform over 2003?
A: Scudder EAFE® Equity Index Fund underperformed its benchmark, the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE®) Index, for the 12 months ended December 31, 2003.1 The fund produced a total return of 36.45% (Premier Class shares) for the annual period, as compared with 38.59% for the benchmark. The broad-based MSCI EAFE® Index is a group of international-company stocks that is not available for direct investment. (Please see pages 3 through 4 for more complete performance information.)
1 The MSCI EAFE® Index is the exclusive property of Morgan Stanley Capital International, a service of Morgan Stanley, and has been licensed for use by the fund's investment advisor. The MSCI EAFE® Index is an unmanaged, capitalization-weighted index containing approximately 1,100 equity securities of companies located in Europe, Australasia and the Far East. Benchmark returns do not reflect expenses, which have been deducted from the fund's return.Q: What were the primary factors affecting the international equity markets during the past 12 months?
A: International equities, like the broad US equity markets, experienced a welcome turnabout from the past three years, gaining ground for the 12 months ended December 31, 2003. Given the US dollar's 12% decline over the year against foreign currencies on a trade-weighted basis, US-based investors gained by owning non-dollar-based assets. However, local investors also earned positive results for the year. Still, the MSCI EAFE® Index saw divergent performance within the annual period.
During the first quarter, the MSCI EAFE® Index declined 8.04%, given a wide diversity of geopolitical concerns, including the war in Iraq and continued weakness in the global economy. During the second quarter, the MSCI EAFE® Index rose by an impressive 19.27%. Indeed, with the exception of Hong Kong, which remained affected by the economic implications of the SARS virus, all major overseas equity markets generated double-digit returns for the quarter. All major market sectors also scored double-digit gains for the quarter, except for consumer nondurables, which still produced positive returns. The primary reason for the rally was the signs of improvement shown in the US economy. International economies embraced the signals and advanced sharply.
The MSCI EAFE® Index increased 8.1% during the third quarter. The equity markets of the Pacific region, including Hong Kong, were particularly strong, as the negative implications of the SARS virus subsided. Japan's equity market also experienced double-digit gains on the strength of the yen and widespread belief that the country may see an economic turnaround. European equity market performance overall was positive but more modest, tending to follow the lead of the US market. In fact, most of the equity markets represented in the MSCI EAFE® Index generated positive results, with Finland and Spain posting the only losses.
During the fourth quarter, the MSCI EAFE® Index produced a strong 17.08% total return. US and international economies finished the year on an optimistic note, as indicators continued to point to a revival of economic activity with virtually no signs of inflation. In a reversal from the prior quarter, Europe's equity markets outperformed those of the Pacific region for the quarter, although the equity markets of all countries in the index had positive quarterly results.
Q: Which countries within the MSCI EAFE® Index were the best and worst performers?
A: Each of the 21 countries represented in the MSCI EAFE® Index posted double-digit gains for the 12 months ended December 31, 2003. The best performance came from Greece, Sweden and Germany. Finland, the Netherlands and the United Kingdom were the worst performers within the MSCI EAFE® Index.
On a regional basis, the Pacific Basin ex-Japan gained 45.77% in US dollar terms, as measured by the MSCI Pacific ex-Japan Index, outperforming Europe's total return of 38.54% in US dollar terms, as measured by the MSCI Europe Index, for the annual period.2 However, the greater weakness of the US dollar vs. European currencies helped bolster a 19.78% local currency return in Europe. Japan, as measured by the MSCI Japan Index, produced a 12-month total return of 35.91% in US dollar terms.3
2 The MSCI Pacific ex-Japan Index is an unmanaged index that reflects the performance of securities listed on the stock exchanges of four countries in the Pacific region, excluding Japan. The MSCI Europe Index is an unmanaged index representing the 16 developed markets of Europe. Benchmark returns do not reflect expenses, which have been deducted from the fund's return.3 The MSCI Japan Index is an unmanaged index of equity securities listed on the Tokyo Stock Exchange. Benchmark returns do not reflect expenses, which have been deducted from the fund's return.
All economic sectors had positive results for the year. Industrials was one of the top-performing sectors within the MSCI EAFE® Index for the 12-month period, followed closely by information technology and materials. Consumer staples was among the worst-performing sectors in the index during the year.
Q: What were the major changes to the MSCI EAFE® Index during the annual period?
A: On May 30, 2003, the annual full-country review of the MSCI EAFE® Index became effective after the market close in each member country. Specifically, there were 69 additions, 51 deletions, and 252 miscellaneous adjustments to the MSCI EAFE® Index.
The views expressed in this report reflect those of the portfolio managers 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.
Geographic Diversification (Excludes Cash Equivalents) | 12/31/03 | 12/31/02 |
| United Kingdom | 27% | 28% |
| Japan | 21% | 22% |
| France | 9% | 9% |
| Switzerland | 7% | 9% |
| Germany | 7% | 6% |
| Netherlands | 5% | 5% |
| Australia | 5% | 4% |
| Italy | 4% | 4% |
| Spain | 4% | 3% |
| Other | 11% | 10% |
| 100% | 100% | |
Sector Diversification (Excludes Cash Equivalents) | 12/31/03 | 12/31/02 |
| Financials | 26% | 24% |
| Consumer Discretionary | 13% | 13% |
| Health Care | 9% | 11% |
| Industrials | 9% | 8% |
| Energy | 8% | 9% |
| Consumer Staples | 8% | 10% |
| Telecommunication Services | 8% | 7% |
| Materials | 7% | 6% |
| Information Technology | 6% | 6% |
| Other | 6% | 6% |
| 100% | 100% | |
Geographic diversification and sector diversification are subject to change.
Ten Largest Equity Holdings at December 31, 2003 | Country | Percent |
| 1. BP PLC Exporter and producer of oil and natural gas | United Kingdom | 2.2% |
| 2. HSBC Holdings PLC Provider of international banking and financial services | United Kingdom | 2.1% |
| 3. Vodafone Group PLC Provider of mobile telecommunication services | United Kingdom | 2.1% |
| 4. GlaxoSmithKline PLC Developer of vaccines and health-related consumer products | United Kingdom | 1.7% |
| 5. Total SA Producer of oil and natural gas | France | 1.5% |
| 6. Royal Dutch Petroleum Co. Exporter and producer of oil and natural gas | Netherlands | 1.4% |
| 7. Novartis AG Manufacturer of pharmaceutical and nutrition products | Switzerland | 1.4% |
| 8. Nestle SA Producer and seller of food products | Switzerland | 1.3% |
| 9. Toyota Motor Corp. Manufacturer of diversified automotive products | Japan | 1.1% |
| 10. Royal Bank of Scotland Group PLC Provider of a wide range of financial services | United Kingdom | 1.0% |
Portfolio holdings are subject to change.
For more complete details about the fund's investment portfolio, see page 27. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the fund as of a month end is available upon request no earlier than 15 days after month end. Please call 1-800-SCUDDER.
Statement of Assets and Liabilities as of December 31, 2003 | |
| Assets | |
| Investment in the EAFE® Equity Index Portfolio, at value | $ 230,784,310 |
| Receivable for Fund shares sold | 332,957 |
| Total assets | 231,117,267 |
| Liabilities | |
| Payable for Fund shares redeemed | 261,414 |
| Other accrued expenses and payables | 49,247 |
| Total liabilities | 310,661 |
| Net assets, at value | $ 230,806,606 |
| Net Assets | |
| Net assets consist of: Undistributed net investment income | 1,077,744 |
| Net unrealized appreciation (depreciation) on investments | 28,713,923 |
| Accumulated net realized gain (loss) | (47,703,581) |
| Paid-in capital | 248,718,520 |
| Net assets, at value | $ 230,806,606 |
| Net Asset Value | |
| Net Asset Value, offering and redemption price per share ($230,806,606 / 22,309,857 shares of beneficial interest, $.001 par value, unlimited number of shares authorized) | $ 10.35 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the year ended December 31, 2003 | |
| Investment Income | |
| Net investment income allocated from the EAFE® Equity Index Portfolio: Dividends (net of foreign taxes withheld of $587,133) | $ 3,857,750 |
| Dividends from Cash Management Fund Institutional | 77,703 |
| Interest | 99,631 |
| Securities lending income | 52,160 |
| Expenses(a) | (595,792) |
| Total Income | 3,491,452 |
| Expenses: Administrator service fee | 256,212 |
| Auditing fees | 30,782 |
| Legal fees | 16,806 |
| Trustees' fees and expenses | 5,424 |
| Reports to shareholders | 17,089 |
| Registration fees | 22,844 |
| Other | 691 |
| Total expenses, before expense reductions | 349,848 |
| Expense reductions | (264,692) |
| Total expenses, after expense reductions | 85,156 |
| Net investment income (loss) | 3,406,296 |
| Realized and Unrealized Gain (Loss) on Investment Transactions | |
| Net realized gain (loss) from: Investments | (3,875,058) |
| Futures | 3,103,249 |
| Foreign currency related transactions | 1,723,488 |
| 951,679 | |
| Net unrealized appreciation (depreciation) during the period on investments | 56,970,370 |
| Net gain (loss) on investment transactions | 57,922,049 |
| Net increase (decrease) in net assets resulting from operations | $ 61,328,345 |
a For the year ended December 31, 2003, the Advisor for the EAFE® Equity Index Portfolio waived fees in the amount of $82,328, all of which was allocated to the Fund.
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | ||
| Increase (Decrease) in Net Assets | Years Ended December 31, | |
2003 | 2002 | |
| Operations: Net investment income (loss) | $ 3,406,296 | $ 2,499,067 |
| Net realized gain (loss) on investment transactions | 951,679 | (6,482,098) |
| Net unrealized appreciation (depreciation) on investment transactions during the period | 56,970,370 | (19,466,386) |
| Net increase (decrease) in net assets resulting from operations | 61,328,345 | (23,449,417) |
| Distributions to shareholders from: Net investment income | (4,691,014) | (2,225,697) |
| Fund share transactions: Proceeds from shares sold | 299,950,673 | 104,603,124 |
| Subscription in-kind | 11,066,674 | - |
| Reinvestment of distributions | 4,500,342 | 2,138,675 |
| Cost of shares redeemed | (278,001,936) | (84,777,796) |
| Net increase (decrease) in net assets from Fund share transactions | 37,515,753 | 21,964,003 |
| Increase (decrease) in net assets | 94,153,084 | (3,711,111) |
| Net assets at beginning of period | 136,653,522 | 140,364,633 |
| Net assets at end of period (including undistributed net investment income of $1,077,744 and $638,974, respectively) | $ 230,806,606 | $ 136,653,522 |
The accompanying notes are an integral part of the financial statements.
Years Ended December 31, | 2003 | 2002 | 2001 | 2000a | 1999 |
| Selected Per Share Data | |||||
| Net asset value, beginning of period | $ 7.77 | $ 9.46 | $ 12.27 | $ 14.58 | $ 11.59 |
| Income (loss) from investment operations: Net investment income (loss) | .17b | .16b | .19 | .25 | .08 |
| Net realized and unrealized gain (loss) on investment transactions | 2.64 | (1.72) | (2.87) | (2.47) | 3.15 |
Total from investment operations | 2.81 | (1.56) | (2.68) | (2.22) | 3.23 |
| Less distributions from: Net investment income | (.23) | (.13) | (.13) | (.02) | (.11) |
| Net realized gains on investment transactions | - | - | - | (.07) | (.13) |
Total distributions | (.23) | (.13) | (.13) | (.09) | (.24) |
| Net asset value, end of period | $ 10.35 | $ 7.77 | $ 9.46 | $ 12.27 | $ 14.58 |
| Total Return (%)c | 36.45 | (16.63) | (21.75) | (15.22) | 27.95 |
| Ratios to Average Net Assets and Supplemental Data | |||||
| Net assets, end of period ($ millions) | 231 | 137 | 140 | 171 | 120 |
| Ratio of expenses before expense reductions, including expenses of the EAFE® Equity Index Portfolio (%) | .60 | .65 | .63 | .65 | .71 |
| Ratio of expenses after expense reductions, including expenses of the EAFE® Equity Index Portfolio (%) | .40 | .40 | .40 | .40 | .40 |
| Ratio of net investment income (loss) (%) | 1.99 | 1.83 | 1.68 | 1.59 | 1.56 |
| a On April 30, 2000, the Institutional Class was renamed the Premier Class. b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. | |||||
The accompanying notes are an integral part of the financial statements.
A. Significant Accounting Policies
EAFE® Equity Index Fund - Premier Class ("Scudder EAFE® Equity Index Fund" or the "Fund") is a diversified series of the Scudder Advisor Funds II (formerly BT Advisor Funds) (the "Trust") which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the EAFE® Equity Index Portfolio (the "Portfolio"), a diversified, open-end management investment company advised by Deutsche Asset Management, Inc. ("DeAM, Inc."). Details concerning the Portfolio's investment objective and policies and the risk factors associated with the Portfolio's investments are described in the Prospectus and Statements of Additional Information.
On December 31, 2003, the Fund owned approximately 100% of the Portfolio. The financial statements of the Portfolio, including the Investment Portfolio, are contained elsewhere in this report and should be read in conjunction with the Fund's financial statements.
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. The Fund determines the valuation of its investment in the Portfolio by multiplying its proportionate ownership of the Portfolio by the total value of the Portfolio's net assets.
The Portfolio's policies for determining the value of its net assets are discussed in the Portfolio's financial statements which accompany this report.
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. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required.
At December 31, 2003, the Fund had a net tax basis capital loss carryforward of approximately $42,957,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until December 31, 2008 ($13,832,000), December 31, 2009 ($14,051,000) and December 31, 2010 ($14,930,000) and December 31, 2011 ($144,000), the respective expiration dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income, if any, are made annually. 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 passive foreign investment companies, foreign denominated investments, futures and certain securities sold at a loss. As a result, net investment income (loss) 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 net unrealized appreciation/depreciation of the Fund's investment in the Portfolio consists of an allocated portion of the Portfolio's appreciation/depreciation. Please refer to the Portfolio's financial statements for a breakdown of the appreciation/depreciation from investments.
At December 31, 2003, the Fund's components of distributable earnings (accumulated losses) on a tax-basis were as follows:
| Undistributed ordinary income* | $ 1,645,662 |
| Undistributed net long-term capital gains | $ - |
| Capital loss carryforwards | $ (42,957,000) |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
Years ended December 31, | ||
2003 | 2002 | |
| Distributions from ordinary income* | $ 4,691,014 | $ 2,225,697 |
* For tax purposes short-term capital gains distributions are considered ordinary income distributions.
Other. The Fund receives a daily allocation of the Portfolio's net investment income and net realized and unrealized gains and losses in proportion to its investment in the Portfolio. Expenses directly attributed to a fund are charged to that fund, while expenses which are attributable to the Trust are allocated among the funds in the Trust on the basis of relative net assets.
B. Related Parties
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG. Deutsche Asset Management, Inc. ("DeAM, Inc." or the "Advisor") is the Advisor for the Portfolio and Investment Company Capital Corp. ("ICCC" or the "Administrator") is the Administrator for the Fund, both indirect wholly-owned subsidiaries of Deutsche Bank AG.
Administrator Service Fee. For its services as Administrator, ICCC receives a fee (the "Administrator Service Fee") of 0.15% of the Fund's average daily net assets, computed and accrued daily and payable monthly.
For the year ended December 31, 2003, the Advisor and Administrator contractually agreed to waive their fees and reimburse expenses of the Fund to the extent necessary to maintain the annualized expenses at 0.40%, including expenses allocated from the Portfolio. Accordingly, for the year ended December 31, 2003, the Administrator Service Fee was $256,212, of which all was waived. In addition, under this arrangement the Advisor and Administrator reimbursed the Fund in the amount of $8,480.
Trustees' Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex's Audit Committee receives an annual fee for his services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
C. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Year Ended | Year Ended | |||
Shares | Dollars | Shares | Dollars | |
| Shares sold | 35,434,212 | $ 299,950,673 | 12,125,045 | $ 104,603,124 |
| Subscriptions in-kind | 1,534,906 | $ 11,066,674 | - | - |
| Shares issued to shareholders in reinvestment of distributions | 497,201 | $ 4,500,342 | 275,958 | $ 2,138,675 |
| Shares redeemed | (32,737,885) | $ (278,001,936) | (9,654,892) | $ (84,777,796) |
| Net increase (decrease) | 4,728,434 | $ 37,515,753 | 2,746,111 | $ 21,964,003 |
D. Concentration of Ownership
From time to time the Fund may have a concentration of several shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At December 31, 2003 there was one unaffiliated shareholder who held 26% and one affiliated shareholder who held 8% of the outstanding shares of the Fund.
To the Trustees of Scudder Advisors Funds II (formerly BT Advisor Funds) and Shareholders of EAFE® Equity Index Fund - Premier Class:
In our opinion, the accompanying statement of assets and liabilities and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of EAFE® Equity Index Fund - Premier Class (the "Fund") at December 31, 2003, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
Boston, Massachusetts | PricewaterhouseCoopers LLP |
The Fund paid foreign taxes of $587,133 and earned $4,044,366 of foreign source income year during the year ended December 31, 2003. Pursuant to section 853 of the Internal Revenue Code, the Fund designates $0.03 per share as foreign taxes paid and $0.18 per share as income earned from foreign sources for the year ended December 31, 2003.
For federal income tax purposes, the Fund designates $4,500,000, or the maximum amount allowable under tax law, as qualified dividend income.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
The following individuals hold the same position with the Fund and the Scudder Investment Portfolios.
Independent Trustees | ||
| Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years | Number of Funds in the Fund Complex Overseen |
| Richard R. Burt 2/3/47 Trustee since 2002 | Chairman, Diligence LLC (international information-collection and risk-management firm) (September 2002 to present); Chairman, IEP Advisors, Inc. (July 1998 to present); Chairman of the Board, Weirton Steel Corporation3 (April 1996 to present); Member of the Board, Hollinger International, Inc.3 (publishing) (September 1995 to present), HCL Technologies Limited (information technology) (April 1999 to present), UBS Mutual Funds (formerly known as Brinson and Mitchell Hutchins families of funds) (registered investment companies) (September 1995 to present); and Member, Textron Inc.3 International Advisory Council (July 1996 to present). Formerly, Partner, McKinsey & Company (consulting) (1991-1994) and US Chief Negotiator in Strategic Arms Reduction Talks (START) with former Soviet Union and US Ambassador to the Federal Republic of Germany (1985-1991); Member of the Board, Homestake Mining3 (mining and exploration) (1998-February 2001), Archer Daniels Midland Company3 (agribusiness operations) (October 1996-June 2001) and Anchor Gaming (gaming software and equipment) (March 1999-December 2001). | 68 |
| S. Leland Dill 3/28/30 Trustee since 1986 for the Fund and since 1993 for the Scudder Investment Portfolios | Trustee, Phoenix Zweig Series Trust (since September 1989), Phoenix Euclid Market Neutral Funds (since May 1998) (registered investment companies); Retired (since 1986). Formerly, Partner, KPMG Peat Marwick (June 1956-June 1986); Director, Vintners International Company Inc. (wine vintner) (June 1989-May 1992); Coutts (USA) International (January 1992-March 2000), Coutts Trust Holdings Ltd., Coutts Group (private bank) (March 1991-March 1999); General Partner, Pemco (investment company) (June 1979-June 1986). | 66 |
| Martin J. Gruber 7/15/37 Trustee since 1992 for the Fund and since 1999 for the Scudder Investment Portfolios | Nomura Professor of Finance, Leonard N. Stern School of Business, New York University (since September 1964); Trustee, CREF (pension fund) (since January 2000); Director, Japan Equity Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since January 2000) and Singapore Fund, Inc. (since January 2000) (registered investment companies). Formerly, Trustee, TIAA (pension fund) (January 1996-January 2000). | 66 |
| Joseph R. Hardiman 5/27/37 Trustee since 2002 | Private Equity Investor (January 1997 to present); Director, Corvis Corporation3 (optical networking equipment) (July 2000 to present), Brown Investment Advisory & Trust Company (investment advisor) (February 2001 to present), The Nevis Fund (registered investment company) (July 1999 to present), and ISI Family of Funds (registered investment companies) (March 1998 to present). Formerly, Director, Circon Corp.3 (medical instruments) (November 1998-January 1999); President and Chief Executive Officer, The National Association of Securities Dealers, Inc. and The NASDAQ Stock Market, Inc. (1987-1997); Chief Operating Officer of Alex. Brown & Sons Incorporated (now Deutsche Bank Securities Inc.) (1985-1987); General Partner, Alex. Brown & Sons Incorporated (now Deutsche Bank Securities Inc.) (1976-1985). | 66 |
| Richard J. Herring 2/18/46 Trustee since 1995 for the Fund and since 1999 for the Scudder Investment Portfolios | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Director, Lauder Institute of International Management Studies (since July 2000); Co-Director, Wharton Financial Institutions Center (since July 2000). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000). | 66 |
| Graham E. Jones 1/31/33 Trustee since 2002 | Senior Vice President, BGK Realty, Inc. (commercial real estate) (since 1995); Trustee, 8 open-end mutual funds managed by Weiss, Peck & Greer (since 1985) and Trustee of 18 open-end mutual funds managed by Sun Capital Advisers, Inc. (since 1998). | 66 |
| Rebecca W. Rimel 4/10/51 Trustee since 2002 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable foundation) (1994 to present); Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983 to present). | 66 |
| Philip Saunders, Jr. 10/11/35 Trustee since 1986 for the Fund and since 1993 for the Scudder Investment Portfolios | Principal, Philip Saunders Associates (economic and financial consulting) (since November 1988). Formerly, Director, Financial Industry Consulting, Wolf & Company (consulting) (1987-1988); President, John Hancock Home Mortgage Corporation (1984-1986); Senior Vice President of Treasury and Financial Services, John Hancock Mutual Life Insurance Company, Inc. (1982-1986). | 66 |
| William N. Searcy 9/03/46 Trustee since 2002 | Private investor (since October 2003); Trustee of 18 open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Formerly, Pension & Savings Trust Officer, Sprint Corporation3 (telecommunications) (November 1989 to October 2003). | 66 |
| Robert H. Wadsworth 1/29/40 Trustee since 2002 | President, Robert H. Wadsworth Associates, Inc. (consulting firm) (May 1983 to present). Formerly, President and Trustee, Trust for Investment Managers (registered investment company) (April 1999-June 2002); President, Investment Company Administration, L.L.C. (January 1992*-July 2001); President, Treasurer and Director, First Fund Distributors, Inc. (June 1990-January 2002); Vice President, Professionally Managed Portfolios (May 1991-January 2002) and Advisors Series Trust (October 1996-January 2002) (registered investment companies). * Inception date of the corporation which was the predecessor to the L.L.C. | 69 |
Interested Trustee | ||
| Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years | Number of Funds in the Fund Complex Overseen |
| Richard T. Hale4 7/17/45 Chairman since 2002 and Trustee since 1999 | Managing Director, Deutsche Investment Management Americas Inc. (2003-present); Managing Director, Deutsche Bank Securities Inc. (formerly Deutsche Banc Alex. Brown Inc.) and Deutsche Asset Management (1999 to present); Director and President, Investment Company Capital Corp. (registered investment advisor) (1996 to present); Director, Deutsche Global Funds, Ltd. (2000 to present), CABEI Fund (2000 to present), North American Income Fund (2000 to present) (registered investment companies); Director, Scudder Global Opportunities Fund (since 2003); Director/Officer Deutsche/Scudder Mutual Funds (various dates); President, Montgomery Street Income Securities, Inc. (2002 to present) (registered investment companies); Vice President, Deutsche Asset Management, Inc. (2000 to present). Formerly, Director, ISI Family of Funds (registered investment companies; 4 funds overseen) (1992-1999). | 201 |
Officers | |
| Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years |
| Richard T. Hale4 7/17/45 Chief Executive Officer since 2003 | See information presented under Interested Trustee. |
| Brenda Lyons5 2/21/63 President since 2003 | Managing Director, Deutsche Asset Management. |
| Kenneth Murphy5 10/13/63 Vice President and Anti-Money Laundering Compliance Officer since 2002 | Vice President, Deutsche Asset Management (September 2000-present). Formerly, Director, John Hancock Signature Services (1992-2000). |
| Bruce A. Rosenblum 9/14/60 Vice President since 2003 Assistant Secretary since 2002 | Director, Deutsche Asset Management. |
| Charles A. Rizzo5 8/5/57 Treasurer and Chief Financial Officer since 2002 | Director, Deutsche Asset Management (April 2000 to present); Formerly, Vice President and Department Head, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Senior Manager, Coopers & Lybrand L.L.P. (now PricewaterhouseCoopers LLP) (1993-1998). |
| Salvatore Schiavone5 11/03/65 Assistant Treasurer since 2003 | Director, Deutsche Asset Management. |
| Lucinda H. Stebbins5 11/19/45 Assistant Treasurer since 2003 | Director, Deutsche Asset Management. |
| Kathleen Sullivan D'Eramo5 1/25/57 Assistant Treasurer since 2003 | Director, Deutsche Asset Management. |
| John Millette5 8/23/62 Secretary since 2003 | Director, Deutsche Asset Management. |
| Daniel O. Hirsch 3/27/54 Assistant Secretary since 2003 | Managing Director, Deutsche Asset Management (2002-present) and Director, Deutsche Global Funds Ltd. (2002-present). Formerly, Director, Deutsche Asset Management (1999-2002); Principal, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Assistant General Counsel, United States Securities and Exchange Commission (1993-1998). |
| Caroline Pearson5 4/01/62 Assistant Secretary since 2002 | Managing Director, Deutsche Asset Management. |
1 Unless otherwise indicated, the mailing address of each Trustee and Officer with respect to fund operations is One South Street, Baltimore, MD 21202.
2 Length of time served represents the date that each Trustee or Officer first began serving in that position with Scudder Advisor Funds II of which this fund is a series and Scudder Investment Portfolios.
3 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
4 Mr. Hale is a Trustee who is an "interested person" within the meaning of Section 2(a)(19) of the 1940 Act. Mr. Hale is Vice President of Deutsche Asset Management, Inc. and a Managing Director of Deutsche Asset Management, the US asset management unit of Deutsche Bank AG and its affiliates.
5 Address: Two International Place, Boston, Massachusetts.
The fund's Statement of Additional Information includes additional information about the fund's Trustees. To receive your free copy of the Statement of Additional Information, call toll-free: 1-800-621-1048.
(The following financial statements of the EAFE® Equity Index Portfolio should be read in conjunction with the Fund's financial statements.)
| Value ($) | |
Common Stocks 86.1% | ||
| Australia 4.2% | ||
| Alumina Ltd. | 32,621 | 161,479 |
| Amcor Ltd. | 24,580 | 152,974 |
| AMP Ltd. | 47,571 | 179,570 |
| Aristocrat Leisure Ltd. | 9,700 | 12,571 |
| Australia & New Zealand Banking Group Ltd. | 49,567 | 660,282 |
| Australian Gas & Light Co., Ltd. | 13,411 | 113,474 |
| Australian Stock Exchange Ltd. | 1,531 | 19,702 |
| BHP Billiton Ltd. | 103,161 | 947,488 |
| BlueScope Steel Ltd. | 21,560 | 90,969 |
| Boral Ltd. | 13,615 | 52,112 |
| Brambles Industries Ltd. | 28,346 | 112,767 |
| Centro Properties Group | 12,866 | 38,582 |
| CFS Gandel Retail Trust | 40,976 | 41,370 |
| Coca-Cola Amatil Ltd. | 12,036 | 56,497 |
| Cochlear Ltd. | 1,114 | 18,012 |
| Coles Myer Ltd. | 29,901 | 170,319 |
| Commonwealth Bank of Australia | 34,599 | 767,721 |
| Commonwealth Property Office Fund | 22,142 | 19,185 |
| Computershare Ltd. | 10,718 | 26,730 |
| CSL Ltd. | 4,723 | 63,520 |
| CSR Ltd. | 25,654 | 35,759 |
| Deutsche Office Trust | 19,869 | 16,467 |
| Foster's Group Ltd. | 58,031 | 196,756 |
| Futuris Corp., Ltd. | 10,267 | 11,526 |
| General Property Trust | 55,720 | 125,527 |
| Harvey Norman Holdings Ltd. | 9,201 | 20,659 |
| HHG PLC* | 40,647 | 29,400 |
| Insurance Australia Group Ltd. | 48,929 | 156,679 |
| Investa Property Group | 30,734 | 45,387 |
| James Hardie Industries NV | 10,043 | 52,060 |
| John Fairfax Holdings Ltd. | 18,679 | 49,539 |
| Leighton Holdings | 4,873 | 43,361 |
| Lend Lease Corp., Ltd. | 10,876 | 82,355 |
| Lion Nathan Ltd. | 5,624 | 25,594 |
| Macquarie Bank Ltd. | 5,968 | 159,899 |
| Macquarie Goodman Industrial Trust | 30,579 | 38,937 |
| Macquarie Infrastructure Group, 144A | 55,704 | 142,699 |
| Mayne Group Ltd. | 22,896 | 56,238 |
| Mirvac Group | 18,630 | 60,639 |
| National Australia Bank Ltd. | 41,573 | 938,129 |
| Newcrest Mining Ltd. | 7,783 | 75,940 |
| Onesteel Ltd. | 8,598 | 13,086 |
| Orica Ltd. | 7,714 | 81,137 |
| Origin Energy Ltd. | 16,263 | 58,203 |
| Pacific Dunlop Ltd. | 2,546 | 12,373 |
| Paperlinx Ltd. | 8,341 | 31,297 |
| Patrick Corp., Ltd. | 3,376 | 37,214 |
| Publishing & Broadcasting Ltd. | 2,483 | 23,423 |
| QBE Insurance Group Ltd. | 17,094 | 136,522 |
| Rinker Group Ltd. | 27,806 | 137,225 |
| Rio Tinto Ltd. | 8,712 | 244,183 |
| Santos Ltd. | 15,472 | 80,086 |
| Sonic Healthcare Ltd. | 4,459 | 23,517 |
| Southcorp Ltd. | 16,569 | 33,707 |
| Stockland | 34,590 | 136,043 |
| Suncorp Metway Ltd. | 14,784 | 138,012 |
| TAB Ltd. | 8,356 | 29,087 |
| Tabcorp Holding Ltd. | 10,270 | 86,897 |
| Telstra Corp., Ltd. | 59,801 | 217,175 |
| The News Corp., Ltd. | 41,042 | 370,768 |
| Toll Holdings Ltd. | 3,993 | 24,820 |
| Transurban Group | 9,924 | 33,348 |
| Wesfarmers Ltd. | 10,560 | 210,766 |
| Westfield Holding Ltd. | 11,840 | 124,624 |
| Westfield Trust (REIT)* | 2,157 | 5,704 |
| Westfield Trust (REIT)* | 58,898 | 157,981 |
| Westpac Banking Corp., Ltd. | 47,797 | 575,842 |
| Westralian Sands Ltd. | 2,479 | 8,461 |
| WMC Resources Ltd. | 32,696 | 138,694 |
| Woodside Petroleum Ltd. | 13,110 | 146,190 |
| Woolworths Ltd. | 28,965 | 257,519 |
| (Cost $6,685,919) | 9,642,778 | |
| Austria 0.2% | ||
| Bank Austria Creditanstalt* | 990 | 50,574 |
| Boehler-Uddeholm AG | 260 | 17,559 |
| Erste Bank der Oesterreichischen Sparkassen AG | 770 | 95,152 |
| Flughafen Wien AG | 250 | 11,731 |
| Immofinanz Immobilien Anlagen AG* | 4,542 | 36,093 |
| Mayr Melnhof Karton AG | 150 | 18,031 |
| OMV AG | 400 | 59,576 |
| RHI AG* | 250 | 4,762 |
| Telekom Austria AG | 5,577 | 68,939 |
| VA Technologie AG* | 260 | 8,399 |
| Verbund "A" | 110 | 12,848 |
| Voest-Alpine Stahl AG | 320 | 13,037 |
| Wienerberger AG | 820 | 21,907 |
| (Cost $282,699) | 418,608 | |
| Belgium 0.9% | ||
| Agfa Gevaert NV | 2,975 | 84,807 |
| Barco NV | 214 | 18,760 |
| Bekaert NV | 369 | 23,505 |
| Cofinimmo | 119 | 16,541 |
| Colruyt NV | 399 | 38,451 |
| Compagnie Maritime Belge SA | 166 | 13,401 |
| D'ieteren NV | 90 | 18,459 |
| Delhaize Group | 1,934 | 99,481 |
| Dexia | 17,515 | 301,784 |
| Electrabel NPV | 823 | 258,692 |
| Fortis, VVPR Strip* | 2,223 | 28 |
| Fortis | 28,276 | 568,515 |
| Groupe Bruxelles Lambert SA | 1,839 | 103,618 |
| Interbrew | 4,075 | 108,762 |
| KBC Bankverzekeringsholding* | 2,402 | 112,162 |
| Mobistar SA* | 545 | 30,591 |
| Omega Pharma SA | 424 | 13,477 |
| Solvay SA | 1,743 | 151,149 |
| UCB SA | 2,390 | 90,107 |
| Umicore | 395 | 27,727 |
| (Cost $1,741,317) | 2,080,017 | |
| Denmark 0.6% | ||
| A P Moller - Maersk AS "B" | 30 | 216,495 |
| Bang & Olufsen AS "B" | 261 | 10,921 |
| Carlsberg AS "B" | 600 | 27,646 |
| Coloplast AS "B" | 406 | 34,732 |
| Danisco AS | 1,398 | 62,166 |
| Danske Bank AS | 13,606 | 319,225 |
| De Sammensluttede Vognmaend AS | 462 | 20,427 |
| FLS Industries AS "B"* | 744 | 8,570 |
| GN Store Nord AS * | 5,156 | 33,452 |
| Group 4 Falck AS | 1,922 | 39,396 |
| H. Lundbeck AS | 2,105 | 34,946 |
| ISS AS* | 1,269 | 62,556 |
| Kobenhavns Lufthavne AS | 143 | 16,763 |
| NEG Micon AS* | 427 | 6,944 |
| NKT Holding AS | 557 | 10,120 |
| Novo Nordisk AS "B" | 6,968 | 283,883 |
| Novozymes AS "B" | 1,619 | 59,103 |
| Ostasiatiske Kompagni | 461 | 20,148 |
| Tele Danmark AS | 3,412 | 123,113 |
| Topdanmark AS* | 740 | 39,613 |
| Vestas Wind Systems AS | 2,768 | 45,015 |
| William Demant Holding AS* | 765 | 25,854 |
| (Cost $964,813) | 1,501,088 | |
| Finland 1.4% | ||
| Amer Group Ltd. | 700 | 30,329 |
| Elisa Communications Oyj* | 3,200 | 42,785 |
| Fortum Oyj | 9,500 | 98,020 |
| Kesko Oyj | 1,900 | 33,264 |
| Kone Corp. "B" | 1,000 | 57,391 |
| Nokia Oyj | 130,800 | 2,261,940 |
| Nokian Renkaat Oyj | 200 | 15,111 |
| Orion-yhtyma Oy "B" | 700 | 15,028 |
| Outokumpu Oyj | 2,400 | 32,603 |
| Pohjola Group Oyj "D" | 500 | 13,370 |
| Rautaruukki Oyj | 200 | 1,473 |
| Sampo Insurance Co., Ltd. "A" | 7,700 | 79,642 |
| Stora Enso Oyj "R" | 17,900 | 241,135 |
| Tietoenator Oyj | 2,400 | 65,691 |
| UPM-Kymmene Oyj | 13,700 | 261,281 |
| Uponor Oyj | 900 | 28,380 |
| Valmet-Rauma Oyj | 2,800 | 34,188 |
| Wartsila Oyj | 1,200 | 23,007 |
| (Cost $3,095,545) | 3,334,638 | |
| France 8.2% | ||
| Accor SA | 5,462 | 247,333 |
| Alcatel SA* | 34,151 | 439,810 |
| Alstom* | 5,460 | 8,609 |
| Alstom* (Warrants) | 5,460 | 207 |
| Atos Origin SA* | 491 | 31,400 |
| Autoroutes du Sud de la France | 1,962 | 65,829 |
| Aventis SA | 18,723 | 1,237,492 |
| Axa | 39,041 | 835,677 |
| BNP Paribas SA | 22,117 | 1,392,633 |
| Bouygues SA | 5,196 | 181,676 |
| Business Objects SA* | 1,527 | 53,256 |
| Carrefour SA | 15,827 | 868,807 |
| CNP Assurances | 777 | 40,457 |
| Compagnie de Saint-Gobain | 8,652 | 423,541 |
| Compagnie Generale d'Industrie et de Participations | 2,806 | 124,621 |
| Compagnie Generale des Etablissements Michelin | 3,483 | 159,828 |
| Credit Agricole SA | 9,464 | 225,975 |
| Dassault Systemes SA | 1,177 | 53,683 |
| Essilor International SA | 2,438 | 126,082 |
| Etablissements Economiques du Casino Guichard-Perrachon SA | 913 | 88,789 |
| France Telecom SA* | 30,118 | 860,839 |
| Gecina SA | 344 | 50,593 |
| Groupe Air France | 1,503 | 23,034 |
| Groupe Danone | 3,450 | 563,105 |
| Hermes International | 203 | 39,279 |
| Imetal SA | 288 | 60,630 |
| Klepierre | 476 | 28,639 |
| L' Oreal SA | 9,366 | 767,898 |
| L'Air Liquide SA | 2,685 | 474,142 |
| Lafarge SA | 4,371 | 389,243 |
| Lagardere SCA | 3,303 | 190,689 |
| LVMH Moet-Hennessy Louis Vuitton SA | 6,616 | 481,512 |
| Pernod Ricard | 1,326 | 147,435 |
| Pinault-Printemps-Redoute SA | 1,886 | 182,343 |
| PSA Peugeot Citroen | 4,894 | 249,391 |
| Publicis Groupe | 2,549 | 82,630 |
| Renault SA, 144A | 4,684 | 323,177 |
| Sagem SA | 504 | 54,004 |
| Sanofi-Synthelabo SA | 9,998 | 752,876 |
| Schneider Electric SA | 5,429 | 355,405 |
| Societe BIC SA | 1,073 | 49,590 |
| Societe Generale | 8,952 | 790,413 |
| Sodexho Alliance SA | 2,348 | 70,813 |
| Suez SA | 22,608 | 454,270 |
| Technip SA | 420 | 45,454 |
| Television Francaise | 3,076 | 107,396 |
| Thales SA | 1,826 | 61,381 |
| Thomson SA* | 6,108 | 129,972 |
| Total Fina Elf SA VVPR Strip* | 972 | 12 |
| Total SA "B" | 17,405 | 3,235,991 |
| Unibail | 1,083 | 101,565 |
| Valeo SA | 1,746 | 69,924 |
| Vinci SA | 1,726 | 142,926 |
| Vivendi Environment | 6,691 | 179,766 |
| Vivendi Universal SA* | 24,730 | 601,093 |
| Wanadoo* | 10,309 | 84,521 |
| Zodiac SA | 882 | 25,877 |
| (Cost $14,990,453) | 18,833,533 | |
| Germany 5.9% | ||
| Adidas-Salomon AG | 1,215 | 138,388 |
| Allianz AG (Registered) | 7,564 | 954,849 |
| Altana AG | 1,800 | 108,186 |
| BASF AG | 14,970 | 841,778 |
| Bayer AG | 18,295 | 535,834 |
| Bayerische Hypo-und Vereinsbank AG "B"* | 2,230 | 52,318 |
| Bayerische Hypo-und Vereinsbank AG* | 6,933 | 160,382 |
| Beiersdorf AG | 650 | 78,872 |
| Celesio AG | 766 | 37,150 |
| Commerzbank AG | 11,500 | 225,561 |
| Continental AG | 3,150 | 119,476 |
| DaimlerChrysler AG | 23,010 | 1,073,876 |
| Deutsche Bank AG (Registered) | 13,805 | 1,144,030 |
| Deutsche Boerse AG | 2,800 | 153,103 |
| Deutsche Lufthansa A | 4,625 | 77,297 |
| Deutsche Post AG | 11,100 | 228,916 |
| Deutsche Telekom AG (Registered)* | 66,155 | 1,210,782 |
| Douglas Holding AG | 650 | 18,070 |
| E.ON AG | 16,368 | 1,068,213 |
| Epcos AG* | 1,350 | 30,481 |
| Fresenius Medical Care AG | 900 | 64,026 |
| HeidelbergCement AG* | 104 | 4,026 |
| HeidelbergCement AG WPR VVPR Strip* | 104 | 0 |
| HeidelbergCement AG* | 881 | 37,238 |
| Hypo Real Estate Holding AG* | 557 | 13,841 |
| Hypo Real Estate Holding AG* | 1,620 | 40,439 |
| Infineon Technologies AG* | 11,950 | 166,106 |
| KarstadtQuelle AG | 1,100 | 27,195 |
| Linde AG | 2,166 | 116,660 |
| MAN AG | 2,650 | 80,389 |
| Merck KGaA | 1,340 | 55,828 |
| Metro AG | 4,192 | 184,801 |
| MLP AG* | 1,150 | 22,484 |
| Muenchener Rueckversicherungs-Gesellschaft AG (Registered) | 4,003 | 485,328 |
| ProSiebenSat.1Media AG | 2,489 | 41,598 |
| Puma AG | 400 | 70,636 |
| RWE AG "A" | 10,950 | 433,276 |
| SAP AG | 5,455 | 916,161 |
| Schering AG | 4,565 | 231,186 |
| Siemens AG | 21,152 | 1,694,186 |
| Suedzucker AG | 1,150 | 21,903 |
| Thyssen Krupp AG | 8,500 | 168,006 |
| TUI AG | 3,161 | 65,907 |
| Volkswagen AG | 6,280 | 349,725 |
| (Cost $11,454,386) | 13,548,507 | |
| Greece 0.3% | ||
| Alpha Credit Bank AE 144A | 4,650 | 140,532 |
| Bank of Piraeus | 1,190 | 14,320 |
| Coca-Cola Hellenic Bottling Co. SA | 2,520 | 52,574 |
| Commercial Bank of Greece | 1,550 | 38,867 |
| EFG Eurobank Ergasias | 4,160 | 80,597 |
| Greek Organization of Football Prognostics | 4,851 | 70,244 |
| Hellenic Petroleum SA | 2,970 | 26,074 |
| Hellenic Technodomiki SA | 1,900 | 11,983 |
| Hellenic Telecommunication Organization SA | 6,620 | 87,676 |
| Intracom SA | 2,190 | 14,861 |
| National Bank of Greece SA | 5,632 | 147,051 |
| Panafon Hellenic Telecom SA | 5,190 | 40,457 |
| Public Power Corp. | 2,116 | 52,313 |
| Titan Cement Co. SA | 810 | 33,205 |
| Viohalco, Hellenic Copper and Aluminum Industry SA* | 3,290 | 21,413 |
| (Cost $735,967) | 832,167 | |
| Hong Kong 1.4% | ||
| Amoy Properties Ltd. | 26,000 | 33,322 |
| ASM Pacific Technology Ltd. | 5,000 | 21,897 |
| Bank of East Asia Ltd. | 37,971 | 116,648 |
| BOC Hong Kong (Holdings) Ltd. | 72,000 | 135,401 |
| Cathay Pacific Airways Ltd. | 25,000 | 47,497 |
| Cheung Kong Holdings Ltd. | 41,000 | 326,105 |
| Cheung Kong Infrastructure Holdings | 10,000 | 22,412 |
| CLP Holdings Ltd. | 48,600 | 231,619 |
| Esprit Holdings Ltd. | 14,815 | 49,329 |
| Giordano International Ltd. | 26,000 | 12,056 |
| Hang Seng Bank Ltd. | 20,700 | 271,961 |
| Henderson Land Development Co., Ltd. | 17,000 | 75,107 |
| Hong Kong & China Gas Co., Ltd. | 100,887 | 153,989 |
| Hong Kong Electric Holdings Ltd. | 38,000 | 150,265 |
| Hong Kong Exchanges & Clearing Ltd. | 30,000 | 65,112 |
| Hopewell Holdings Ltd. | 14,000 | 21,549 |
| Hutchison Whampoa Ltd. | 58,100 | 428,438 |
| Hysan Development Co. | 13,590 | 21,006 |
| Johnson Electric Holdings Ltd. | 36,000 | 45,907 |
| Li & Fung Ltd. | 45,000 | 77,091 |
| MTR Corp., Ltd | 29,301 | 38,685 |
| New World Development Co., Ltd. | 36,107 | 29,068 |
| PCCW Ltd.* | 92,443 | 60,132 |
| Shangri-La Asia Ltd. | 26,226 | 24,660 |
| Sino Land Co., Ltd. | 52,000 | 29,638 |
| South China Morning Post Co., Ltd. | 27,200 | 12,000 |
| Sun Hung Kai Properties Ltd. (REIT) | 35,297 | 292,111 |
| Swire Pacific Ltd. "A" | 25,500 | 157,330 |
| Techtronic Industries | 11,000 | 30,534 |
| Television Broadcasts Ltd. | 9,000 | 45,443 |
| Wharf Holdings Ltd. | 35,102 | 97,209 |
| Yue Yuen Industrial Ltd. | 12,000 | 33,000 |
| (Cost $2,910,760) | 3,156,521 | |
| Ireland 0.6% | ||
| Allied Irish Bank PLC | 23,072 | 369,594 |
| Bank of Ireland | 26,266 | 358,473 |
| Bank of Ireland | 862 | 11,748 |
| CRH PLC | 14,327 | 294,202 |
| DCC PLC | 2,107 | 28,969 |
| Elan Corp. PLC* | 9,966 | 68,636 |
| Fyffes PLC | 7,415 | 15,526 |
| Grafton Group PLC | 5,343 | 36,629 |
| Greencore Group PLC | 4,282 | 19,174 |
| Independent News & Media PLC | 14,376 | 33,909 |
| Irish Life & Permanent PLC | 7,324 | 118,248 |
| Kerry Group PLC | 3,594 | 67,546 |
| Ryanair Holding PLC* | 5,147 | 42,783 |
| Waterford Wedgewood PLC* | 18,343 | 5,090 |
| Waterford Wedgewood PLC (Rights)* | 5,002 | 1,325 |
| (Cost $1,341,884) | 1,471,852 | |
| Italy 3.3% | ||
| Alleanza Assicurazioni SpA | 12,399 | 135,751 |
| Assicurazioni Generali SpA | 26,229 | 694,763 |
| Autogrill SpA* | 3,093 | 44,241 |
| Autostrade SpA* | 4,865 | 85,358 |
| Banca Fideuram SpA | 8,881 | 52,762 |
| Banca Intesa SpA RNC | 24,962 | 71,473 |
| Banca Intesa SpA | 98,304 | 384,387 |
| Banca Monte dei Paschi di Siena SpA* | 24,237 | 76,581 |
| Banca Nazionale del Lavoro* | 42,366 | 101,266 |
| Banca Popolare di Milano Scrl* | 7,824 | 51,219 |
| Banche Popolari Unite Scrl* | 8,990 | 162,836 |
| Banco Popolare di Verona e Novara | 10,434 | 176,620 |
| Benetton Group SpA | 1,610 | 18,500 |
| Bulgari SpA | 3,349 | 31,048 |
| Capitalia SpA | 30,799 | 90,128 |
| Enel SpA | 63,399 | 431,029 |
| Eni SpA | 69,635 | 1,313,999 |
| Fiat SpA* | 12,681 | 97,251 |
| FinecoGroup SpA* | 33,271 | 23,459 |
| Finmeccanica SpA | 168,303 | 131,832 |
| Gruppo Editoriale L'Espresso | 2,322 | 14,469 |
| Italcementi SpA | 2,001 | 24,962 |
| Luxottica Group SpA | 3,975 | 68,690 |
| Mediaset SpA | 16,253 | 193,117 |
| Mediobanca SpA | 12,764 | 138,459 |
| Mediolanum SpA | 6,085 | 47,971 |
| Mondadori Editore SpA | 3,666 | 32,877 |
| Pirelli & C. Accomandita per Azioni | 34,080 | 34,690 |
| Riunione Adriatica di Sicurta SpA | 8,549 | 145,574 |
| San Paolo IMI SpA | 28,103 | 366,530 |
| Seat Pagine Gialle SpA* | 90,262 | 85,958 |
| Snam Rete Gas SpA | 23,547 | 99,795 |
| Snia SpA | 9,294 | 23,094 |
| Telecom Italia Media SpA* | 36,758 | 18,268 |
| Telecom Italia Mobile SpA* | 104,488 | 568,041 |
| Telecom Italia Media SpA* | 152,884 | 311,437 |
| Telecom Italia Mobile SpA* | 254,088 | 753,161 |
| Tiscali SpA* | 2,936 | 20,516 |
| UniCredito Italiano SpA | 103,592 | 559,250 |
| (Cost $6,048,710) | 7,681,362 | |
| Japan 18.6% | ||
| ACOM Co., Ltd. | 1,800 | 81,627 |
| Aderans Co., Ltd. | 500 | 8,067 |
| Advantest Corp. | 1,800 | 142,764 |
| Aeon Co., Ltd. | 7,000 | 234,487 |
| AEON Credit Services Co., Ltd. | 330 | 14,072 |
| Aiful Corp. | 900 | 65,839 |
| Ajinomoto Co., Inc. | 17,000 | 195,586 |
| All Nippon Airways Co., Ltd.* | 9,000 | 22,254 |
| Alps Electric Co., Ltd. | 4,000 | 58,524 |
| Amada Co., Ltd. | 8,000 | 41,653 |
| Aoyama Trading Co., Ltd.* | 100 | 2,006 |
| Asahi Breweries, Ltd. | 10,000 | 91,164 |
| Asahi Chemical Industry Co., Ltd. | 37,000 | 200,933 |
| Asahi Glass Co., Ltd. | 20,000 | 164,225 |
| Asatsu, Inc. | 1,100 | 28,329 |
| Autobacs Seven Co., Ltd. | 1,100 | 25,301 |
| Bandai Co., Ltd. | 1,400 | 35,271 |
| Bank of Yokohama Ltd. | 29,000 | 134,758 |
| Bellsystem 24, Inc. | 50 | 10,189 |
| Benesse Corp. | 1,900 | 47,336 |
| Bridgestone Corp. | 17,000 | 228,581 |
| Canon, Inc. | 23,000 | 1,070,915 |
| Capcom Co., Ltd. | 600 | 7,390 |
| Casio Computer Co., Ltd. | 6,000 | 63,488 |
| Central Glass Co., Ltd. | 3,000 | 18,923 |
| Central Japan Railway Co. | 26 | 224,652 |
| Chubu Electric Power Co., Inc. | 16,400 | 342,017 |
| Chugai Pharmaceutical Co., Ltd. | 7,000 | 100,653 |
| Citizen Watch Co., Ltd. | 8,000 | 73,528 |
| COMSYS Holdings Corp.* | 3,000 | 19,203 |
| Credit Saison Co., Ltd. | 3,500 | 79,033 |
| CSK Corp. | 2,000 | 72,222 |
| Dai Nippon Printing Co., Ltd. | 18,000 | 252,776 |
| Daicel Chemical Industries Ltd. | 6,000 | 24,746 |
| DAIDO LIFE INSURANCE CO. | 27 | 80,368 |
| Daiichi Pharmaceutical Co., Ltd. | 7,000 | 126,127 |
| DAIKIN INDUSTRIES, Ltd. | 5,000 | 115,471 |
| Daimaru, Inc. | 4,000 | 22,208 |
| Dainippon Ink and Chemicals, Inc. | 21,000 | 39,974 |
| Daito Trust Construction Co., Ltd. | 2,000 | 59,345 |
| Daiwa House Industry Co., Ltd. | 11,000 | 117,010 |
| Daiwa Securities Group, Inc. | 33,000 | 224,475 |
| Denki Kagaku Kogyo Kabushiki Kaisha | 11,000 | 35,411 |
| Denso Corp. | 13,400 | 263,824 |
| DENTSU, Inc. | 4 | 20,155 |
| Dowa Mining Co., Ltd. | 5,000 | 26,873 |
| East Japan Railway Co. | 97 | 457,078 |
| Ebara Corp. | 8,000 | 34,786 |
| Eisai Co., Ltd. | 6,000 | 161,799 |
| FamilyMart Co., Ltd. | 1,000 | 22,768 |
| FANUC Ltd. | 4,300 | 257,591 |
| Fast Retailing Co., Ltd. | 1,600 | 97,191 |
| Fuji Electric Holdings Co., Ltd. | 9,000 | 19,735 |
| Fuji Photo Film Co., Ltd. | 13,000 | 419,707 |
| Fuji Television Network, Inc. | 6 | 32,472 |
| Fujikura Ltd. | 11,000 | 64,869 |
| Fujisawa Pharmaceutical Co., Ltd. | 7,000 | 149,249 |
| Fujitsu Ltd. | 42,000 | 247,681 |
| Hankyu Department Stores, Inc. | 2,000 | 13,399 |
| Hino Motors Ltd. | 4,000 | 28,515 |
| Hirose Electric Co., Ltd. | 800 | 91,817 |
| Hitachi Chemical Co., Ltd. | 1,800 | 30,232 |
| Hitachi Ltd. | 82,000 | 494,280 |
| Hitachi Software Engineering Co., Ltd. | 300 | 7,740 |
| Hokugin Financial Group, Inc.* | 14,000 | 18,942 |
| Honda Motor Co., Ltd. | 21,800 | 968,256 |
| House Foods Corp. | 3,000 | 33,955 |
| Hoya Corp. | 3,200 | 293,814 |
| Isetan Co., Ltd | 4,000 | 44,042 |
| Ishikawajima-Harima Heavy Industries Co., Ltd. | 35,000 | 49,967 |
| ITO EN, Ltd. | 500 | 21,508 |
| Ito-Yokado Co., Ltd. | 10,000 | 314,454 |
| Itochu Corp. | 38,000 | 125,520 |
| Itochu Techno-Science Corp. | 600 | 18,699 |
| JAFCO Co., Ltd. | 600 | 47,140 |
| Japan Airlines System Corp. | 19,000 | 50,173 |
| Japan Real Estate Investment Corp. (REIT) | 3 | 18,979 |
| Japan Tobacco, Inc. | 20 | 146,496 |
| JFE Holdings, Inc. | 13,225 | 360,951 |
| JGC Corp. | 4,000 | 41,728 |
| JSR Corp. | 5,000 | 111,738 |
| Kajima Corp. | 20,000 | 64,944 |
| Kamigumi Co., Ltd. | 4,000 | 28,292 |
| Kanebo Ltd.* | 8,000 | 8,062 |
| Kaneka Corp. | 8,000 | 59,718 |
| Kansai Electric Power Co., Inc. | 18,200 | 318,929 |
| Kao Corp. | 15,000 | 305,123 |
| Katokichi Co., Ltd. | 1,100 | 17,993 |
| Kawasaki Heavy Industries Ltd. | 40,000 | 49,268 |
| Kawasaki Kisen Kaisha Ltd. | 10,000 | 49,734 |
| Keihin Electric Express Railway Co., Ltd. | 12,000 | 70,430 |
| Keio Electric Railway Co., Ltd. | 13,000 | 67,566 |
| Keyence Corp. | 870 | 183,384 |
| Kikkoman Corp. | 3,000 | 21,331 |
| Kinden Corp. | 6,000 | 28,273 |
| Kinki Nippon Railway Co., Ltd.* | 40,900 | 122,887 |
| Kirin Brewery Co., Ltd. | 19,000 | 162,042 |
| Kokuyo Corp. | 3,000 | 32,612 |
| Komatsu Ltd. | 28,000 | 177,662 |
| Komori Corp. | 2,000 | 29,617 |
| Konami Co., Ltd. | 2,200 | 64,048 |
| Konica Minolta Holdings, Inc. | 10,000 | 134,459 |
| KOYO SEIKO Co., Ltd. | 2,000 | 20,547 |
| Kubota Corp. | 22,000 | 90,734 |
| Kuraray Co., Ltd. | 10,000 | 84,352 |
| Kurita Water Industries | 3,000 | 36,195 |
| Kyocera Corp. | 4,500 | 299,804 |
| Kyowa Hakko Kogyo Co., Ltd. | 8,000 | 50,910 |
| Kyushu Electric Power Co. | 9,900 | 170,250 |
| Lawson, Inc. | 1,400 | 47,812 |
| Mabuchi Motor Co., Ltd. | 700 | 53,886 |
| Makita Corp. | 2,000 | 20,024 |
| Marubeni Corp. | 40,000 | 76,514 |
| Marui Co., Ltd. | 10,000 | 125,968 |
| Matsushita Electric Industrial Co., Ltd. | 58,614 | 810,544 |
| Matsushita Electric Works Ltd. | 10,000 | 89,857 |
| Meiji Dairies Corp. | 3,000 | 12,877 |
| Meiji Seika Kaisha Ltd. | 9,000 | 36,279 |
| Meitec Corp. | 1,100 | 42,288 |
| Millea Holdings, Inc. | 42 | 548,661 |
| Minebea Co., Ltd. | 8,000 | 40,608 |
| Mitsubishi Chemical Corp. | 52,000 | 135,374 |
| Mitsubishi Corp. | 30,000 | 317,999 |
| Mitsubishi Electric Corp. | 46,000 | 191,005 |
| Mitsubishi Estate Co., Ltd. (REIT) | 29,000 | 274,928 |
| Mitsubishi Gas Chemical Co. | 7,000 | 23,841 |
| Mitsubishi Heavy Industries Ltd. | 85,000 | 236,353 |
| Mitsubishi Logistics Corp. | 3,000 | 24,942 |
| Mitsubishi Materials Corp.* | 23,000 | 35,411 |
| Mitsubishi Rayon Co., Ltd. | 17,000 | 63,768 |
| Mitsubishi Tokyo Financial Group, Inc. | 113 | 881,478 |
| Mitsui & Co. | 35,000 | 281,842 |
| Mitsui Chemicals, Inc. | 13,000 | 75,814 |
| Mitsui Engineering & Shipbuilding Co., Ltd. | 14,000 | 23,122 |
| Mitsui Fudosan Co., Ltd. (REIT) | 20,000 | 180,648 |
| Mitsui Mining & Smelting Co., Ltd. | 11,000 | 45,675 |
| Mitsui O.S.K. Lines, Ltd. | 17,000 | 82,962 |
| Mitsui Sumitomo Insurance Co., Ltd. | 34,260 | 281,318 |
| Mitsui Trust Holdings, Inc. | 14,100 | 78,808 |
| Mitsukoshi Ltd.* | 15,000 | 61,025 |
| Mitsumi Electric Co., Ltd. | 900 | 9,909 |
| Mizuho Financial Group, Inc.* | 159 | 482,178 |
| Murata Manufacturing Co., Ltd. | 6,700 | 361,976 |
| Namco Ltd. | 1,100 | 30,484 |
| NEC Corp. | 47,000 | 346,020 |
| Net One Systems Co., Ltd. | 3 | 23,094 |
| NGK Insulators Ltd. | 7,000 | 52,253 |
| NGK Spark Plug Co., Ltd. | 4,000 | 32,434 |
| Nichii Gakkan Co. | 330 | 18,722 |
| Nichirei Corp. | 9,000 | 29,141 |
| Nidec Corp. | 1,100 | 105,001 |
| Nikko Cordial Corp. | 37,000 | 206,112 |
| Nikon Corp. | 7,000 | 105,552 |
| Nintendo Co., Ltd. | 2,800 | 261,267 |
| Nippon Building Fund, Inc. | 4 | 25,679 |
| Nippon Express Co., Ltd. | 21,000 | 99,151 |
| Nippon Meat Packers, Inc. | 5,000 | 48,894 |
| Nippon Mining Holdings, Inc. | 10,000 | 34,898 |
| Nippon Oil Co., Ltd. | 37,000 | 188,504 |
| Nippon Sheet Glass Co., Ltd. | 10,000 | 29,206 |
| Nippon Steel Corp. | 158,000 | 339,087 |
| Nippon Telegraph & Telephone Corp. | 148 | 713,968 |
| Nippon Unipac Holdings | 25 | 129,001 |
| Nippon Yusen Kabushiki Kaisha | 28,000 | 126,715 |
| Nishimatsu Construction Co., Ltd. | 5,000 | 16,562 |
| Nissan Chemical Industries, Ltd. | 3,000 | 26,733 |
| Nissan Motor Co., Ltd. | 70,000 | 799,477 |
| Nisshin Seifun Group, Inc. | 4,000 | 35,607 |
| Nisshinbo Industries | 2,000 | 11,141 |
| Nissin Food Products Co., Ltd. | 2,800 | 69,758 |
| Nitto Denko Corp. | 4,700 | 249,977 |
| Nomura Holdings, Inc. | 49,000 | 834,422 |
| Nomura Research Institute, Ltd. | 300 | 29,253 |
| NSK Ltd. | 13,000 | 47,429 |
| NTN Corp. | 9,000 | 42,913 |
| NTT Data Corp. | 37 | 139,825 |
| NTT DoCoMo, Inc. | 478 | 1,083,829 |
| Obayashi Corp. | 16,000 | 71,513 |
| Obic Co., Ltd. | 200 | 40,235 |
| OJI Paper Co., Ltd. | 23,000 | 148,512 |
| Oki Electric Industry Co.* | 10,000 | 39,097 |
| Okumura Corp. | 1,000 | 4,255 |
| Olympus Corp. | 5,000 | 108,473 |
| Omron Corp. | 6,000 | 121,769 |
| Onward Kashiyama Co. | 4,000 | 48,521 |
| Oracle Corp. Japan | 1,100 | 56,966 |
| Oriental Land Co., Ltd. | 1,300 | 80,181 |
| ORIX Corp. | 2,200 | 181,879 |
| Osaka Gas Co. | 58,000 | 156,947 |
| Pioneer Electronics Corp. | 3,600 | 99,431 |
| Promise Co., Ltd. | 2,200 | 95,866 |
| Q.P. Corp. | 2,000 | 16,609 |
| Resona Holdings, Inc.* | 125,000 | 157,460 |
| Ricoh Co., Ltd. | 19,000 | 374,965 |
| ROHM Co., Ltd. | 3,100 | 363,311 |
| Sankyo Co., Ltd., Gunma | 900 | 28,553 |
| Sankyo Co., Ltd. | 10,000 | 188,019 |
| Sanyo Electric Co., Ltd. | 38,000 | 198,563 |
| Sapporo Holdings Ltd. | 5,000 | 13,763 |
| Secom Co., Ltd. | 5,400 | 201,549 |
| Sega Corp.* | 2,300 | 21,890 |
| Seiko Epson Corp. | 1,200 | 55,986 |
| Seino Transportation Co. | 2,000 | 16,534 |
| Sekisui Chemical Co., Ltd. | 14,000 | 71,326 |
| Sekisui House Ltd. | 13,000 | 134,282 |
| Seven-Eleven Japan Co., Ltd. | 12,000 | 363,908 |
| Sharp Corp. | 28,000 | 441,803 |
| Shimachu Co., Ltd. | 700 | 13,880 |
| Shimamura Co., Ltd. | 600 | 40,758 |
| Shimano, Inc. | 3,100 | 64,360 |
| SHIMIZU Corp. | 13,000 | 49,491 |
| Shin-Etsu Chemical Co., Ltd. | 10,300 | 420,957 |
| Shionogi & Co., Ltd. | 8,000 | 148,997 |
| Shiseido Co., Ltd. | 9,000 | 109,424 |
| Showa Denko KK* | 19,000 | 42,727 |
| Showa Shell Sekiyu KK | 5,000 | 40,636 |
| SKYLARK Co., Ltd. | 2,000 | 33,032 |
| SMC Corp. | 1,400 | 174,265 |
| Snow Brand Milk Products Co., Ltd.* | 1,500 | 4,325 |
| Softbank Corp. | 5,900 | 180,573 |
| Sompo Japan Insurance, Inc. | 19,000 | 156,191 |
| Sony Corp. | 24,500 | 848,138 |
| Stanley Electric Co., Ltd. | 3,300 | 63,894 |
| Sumitomo Bakelite Co., Ltd. | 2,000 | 13,045 |
| Sumitomo Chemical Co., Ltd. | 32,000 | 131,977 |
| Sumitomo Corp. | 17,000 | 126,743 |
| Sumitomo Electric Industries Ltd. | 16,000 | 143,025 |
| Sumitomo Heavy Industries Ltd.* | 18,000 | 40,814 |
| Sumitomo Metal Industries Ltd. | 70,000 | 69,236 |
| Sumitomo Metal Mining Co., Ltd. | 12,000 | 89,017 |
| Sumitomo Mitsui Financial Group, Inc. | 104 | 554,110 |
| Sumitomo Osaka Cement Co., Ltd. | 12,000 | 23,514 |
| Sumitomo Realty & Development Co., Ltd. | 8,000 | 70,467 |
| Suzuken Co., Ltd. | 800 | 25,977 |
| Taiheiyo Cement Corp. | 29,000 | 81,991 |
| Taisei Corp. | 25,000 | 91,444 |
| Taisho Pharmaceutical Co., Ltd. | 5,000 | 89,391 |
| Taiyo Yuden Co., Ltd. | 2,000 | 26,145 |
| Takara Holdings, Inc. | 4,000 | 37,473 |
| Takashimaya Co., Ltd. | 9,000 | 64,244 |
| Takeda Chemical Industries, Ltd. | 23,000 | 912,102 |
| Takefuji Corp. | 1,870 | 87,419 |
| TDK Corp. | 3,200 | 230,512 |
| Teijin Ltd. | 23,000 | 67,603 |
| Teikoku Oil Co., Ltd. | 4,000 | 20,118 |
| Terumo Corp. | 5,300 | 100,639 |
| The 77 Bank Ltd. | 8,000 | 45,087 |
| The Bank of Fukuoka Ltd. | 13,000 | 54,586 |
| The Chiba Bank, Ltd. | 14,000 | 57,348 |
| The Furukawa Electric Co., Ltd. | 13,000 | 43,184 |
| The Gunma Bank Ltd. | 10,000 | 44,695 |
| The Joyo Bank Ltd. | 16,000 | 52,253 |
| The Shizuoka Bank Ltd. | 17,000 | 125,632 |
| The Sumitomo Trust & Banking Co., Ltd. | 30,000 | 176,355 |
| The Suruga Bank Ltd. | 4,000 | 25,716 |
| THK Co., Ltd. | 1,800 | 36,615 |
| TIS, Inc. | 600 | 20,267 |
| Tobu Railway Co., Ltd. | 20,000 | 71,475 |
| Toda Corp. | 6,000 | 16,964 |
| Toho Co., Ltd. | 4,300 | 54,728 |
| Tohoku Electric Power Co., Inc. | 11,200 | 185,709 |
| Tokyo Broadcasting System, Inc. | 1,000 | 15,928 |
| Tokyo Electric Power Co. | 32,300 | 708,267 |
| Tokyo Electron Ltd. | 4,100 | 311,412 |
| Tokyo Gas Co., Ltd. | 70,000 | 249,510 |
| Tokyo Style Co., Ltd. | 2,000 | 21,611 |
| Tokyu Corp. | 23,000 | 118,037 |
| TonenGeneral Sekiyu K.K. | 7,000 | 57,936 |
| Toppan Printing Co., Ltd. | 14,000 | 145,656 |
| Toray Industries, Inc. | 33,000 | 137,949 |
| Toshiba Corp. | 76,000 | 287,916 |
| Tosoh Corp. | 15,000 | 50,107 |
| Tostem Inax Holding Corp. | 7,848 | 151,585 |
| Toto Ltd. | 10,000 | 84,725 |
| Toyo Seikan Kaisha Ltd. | 4,000 | 55,911 |
| Toyo Suisan Kaisha Ltd. | 1,000 | 11,113 |
| Toyobo Co., Ltd. | 20,000 | 43,669 |
| Toyoda Gosei Co., Ltd. | 900 | 25,949 |
| Toyota Industries Corp. | 3,600 | 76,421 |
| Toyota Motor Corp. | 74,000 | 2,499,580 |
| Trend Micro, Inc. | 2,500 | 67,066 |
| Ube Industries Ltd. | 13,000 | 26,080 |
| UFJ Holdings, Inc. | 101 | 485,350 |
| Uni-Charm Co. | 1,400 | 68,844 |
| UNY Co., Ltd. | 4,000 | 41,056 |
| Ushio, Inc. | 2,000 | 33,200 |
| USS Co., Ltd. | 400 | 28,292 |
| Wacoal Corp. | 4,000 | 32,957 |
| West Japan Railway Corp. | 29 | 113,922 |
| World Co., Ltd. | 1,300 | 41,364 |
| Yakult Honsha Co., Ltd. | 4,000 | 62,518 |
| Yamada Denki Co., Ltd. | 1,600 | 53,746 |
| Yamaha Corp. | 4,000 | 78,567 |
| Yamaha Motor Co., Ltd. | 2,000 | 21,816 |
| Yamaichi Securities Co., Ltd.* | 14,000 | 0 |
| Yamanouchi Pharmaceutical Co., Ltd. | 9,300 | 288,971 |
| Yamato Transport Co., Ltd. | 11,000 | 129,533 |
| Yamazaki Baking Co., Ltd. | 5,000 | 41,476 |
| Yokogawa Electric Corp. | 5,000 | 72,222 |
| (Cost $42,613,864) | 42,889,689 | |
| Luxembourg 0.1% | ||
| Arcelor (Cost $113,054) | 8,563 | 149,269 |
| Netherlands 4.7% | ||
| ABN AMRO Holding NV | 41,467 | 970,247 |
| Aegon NV | 37,307 | 551,981 |
| Akzo Nobel NV | 7,602 | 293,417 |
| ASML Holding NV* | 12,868 | 255,152 |
| Corio NV | 1,313 | 50,844 |
| DSM NV | 1,953 | 96,147 |
| Euronext NV | 2,162 | 54,732 |
| European Aeronautic & Space Co. | 7,353 | 174,828 |
| Fortis Bank Nederland NV VVPR Strip* | 50 | 0 |
| Hagemeyer NV | 2,586 | 5,839 |
| Heineken NV | 5,210 | 198,398 |
| IHC Caland NV | 572 | 31,024 |
| ING Groep NV | 46,424 | 1,082,718 |
| Koninklijke (Royal) Philips Electronics NV | 36,074 | 1,053,370 |
| Koninklijke Ahold NV* | 29,576 | 225,326 |
| Koninklijke KPN NV* | 56,358 | 435,054 |
| Koninklijke Numico* | 3,485 | 96,312 |
| Oce NV | 1,190 | 18,237 |
| Qiagen NV* | 3,029 | 37,175 |
| Reed Elsevier NV | 17,309 | 215,052 |
| Rodamco Europe NV | 1,277 | 74,368 |
| Royal Dutch Petroleum Co. | 56,100 | 2,957,842 |
| STMicroelectronics NV | 16,394 | 444,590 |
| TPG NV | 9,305 | 217,954 |
| Unilever NV | 15,667 | 1,024,638 |
| Vedior NV | 2,619 | 40,963 |
| Vendex NV | 1,497 | 20,865 |
| VNU NV | 6,262 | 197,859 |
| Wereldhave NV | 229 | 17,143 |
| Wolters Kluwer NV | 6,608 | 103,354 |
| (Cost $10,243,140) | 10,945,429 | |
| New Zealand 0.2% | ||
| Auckland International Airport Ltd. | 5,780 | 26,602 |
| Carter Holt Harvey Ltd. | 23,574 | 29,098 |
| Contact Energy Ltd. | 7,349 | 25,958 |
| Fisher & Paykel Appliances Holdings Ltd. | 4,480 | 11,295 |
| Fisher & Paykel Corp., Ltd. | 2,321 | 19,277 |
| Fletcher Building Ltd. | 13,125 | 36,537 |
| Fletcher Challenge Forests Ltd.* | 382 | 341 |
| Fletcher Challenge Forests Ltd. "P" | 7,142 | 6,377 |
| Independent Newspapers Ltd. | 3,432 | 11,604 |
| NGC Holdings Ltd. | 3,106 | 4,567 |
| Sky City Entertainment Group Ltd. | 11,722 | 35,479 |
| Sky Network Television Ltd.* | 2,305 | 8,475 |
| Telecom Corp. of New Zealand Ltd. | 50,905 | 179,474 |
| The Warehouse Group Ltd. | 3,494 | 11,745 |
| Tower Ltd.* | 6,155 | 5,051 |
| (Cost $268,197) | 411,880 | |
| Norway 0.4% | ||
| Aker Kvaerner ASA* | 1,102 | 18,842 |
| Den Norske Bank | 19,450 | 129,807 |
| Frontline Ltd. | 1,300 | 33,708 |
| Norsk Hydro ASA | 4,000 | 246,813 |
| Norske Skogindustrier ASA | 2,800 | 53,451 |
| Orkla ASA | 5,614 | 125,734 |
| Schibsted ASA | 1,200 | 20,653 |
| Smedvig ASA "A" | 900 | 6,832 |
| Statoil ASA | 11,950 | 134,269 |
| Storebrand ASA* | 3,850 | 25,058 |
| Tandberg ASA* | 3,600 | 26,515 |
| Telenor ASA | 19,750 | 129,137 |
| Tomra Systems ASA | 5,300 | 31,946 |
| (Cost $701,489) | 982,765 | |
| Portugal 0.3% | ||
| Banco BPI SA | 9,159 | 33,734 |
| Banco Comercial Portugues SA | 51,674 | 115,367 |
| Banco Espirito Santo e Comercial de Lisboa SA | 3,035 | 49,767 |
| Brisa-Auto Estradas de Portugal SA | 7,187 | 48,046 |
| CIMPOR-Cimentos de Portugal | 4,045 | 20,919 |
| Electricidade de Portugal | 47,548 | 125,347 |
| Jeronimo Martins SA* | 1,209 | 15,951 |
| Portugal Telecom SGPS SA (Registered) | 25,686 | 258,544 |
| PT Multimedia Servicos* | 861 | 16,725 |
| Sonae SGPS SA* | 24,104 | 20,066 |
| (Cost $622,030) | 704,466 | |
| Singapore 0.7% | ||
| Capitaland Ltd. | 27,750 | 25,327 |
| Chartered Semiconductor Manufacturing Ltd.* | 26,400 | 26,893 |
| City Developments Ltd. | 13,000 | 46,311 |
| ComfortDelGro Corp., Ltd. | 40,000 | 19,196 |
| Creative Technologies Ltd. | 1,000 | 10,540 |
| Cycle & Carriage Ltd. | 1,759 | 6,007 |
| Datacraft Asia Ltd.* | 4,000 | 5,040 |
| DBS Group Holdings Ltd. | 30,513 | 264,112 |
| Fraser & Neave Ltd. | 4,860 | 36,057 |
| Haw Par Corp., Ltd. | 4,245 | 11,148 |
| Keppel Corp. | 13,750 | 49,388 |
| Keppel Land Ltd. | 1,000 | 930 |
| Neptune Orient Lines Ltd.* | 26,000 | 33,068 |
| Oversea-Chinese Banking Corp., Ltd. (Foreign Registered) | 26,337 | 187,645 |
| Overseas Union Enterprise | 3,000 | 12,277 |
| Parkway Holdings Ltd. | 9,000 | 5,167 |
| SembCorp Industries Ltd. | 31,329 | 23,244 |
| SembCorp Logistics Ltd. | 5,000 | 5,888 |
| SembCorp. Marine Ltd. | 10,000 | 5,829 |
| Singapore Airlines Ltd. | 15,000 | 98,922 |
| Singapore Exchange Ltd. | 13,000 | 12,936 |
| Singapore Post Ltd. | 28,000 | 11,459 |
| Singapore Press Holdings Ltd. | 10,296 | 114,582 |
| Singapore Technologies Engineering Ltd. | 33,000 | 39,640 |
| Singapore TeleCommunications Ltd. | 174,000 | 200,813 |
| ST Assembly Test Services Ltd.* | 5,000 | 6,242 |
| United Overseas Bank Ltd. | 32,448 | 252,201 |
| United Overseas Land Co. | 13,000 | 14,697 |
| Venture Corp., Ltd | 6,000 | 70,659 |
| Wing Tai Holdings Ltd. | 14,000 | 6,842 |
| (Cost $1,443,757) | 1,603,060 | |
| Spain 3.2% | ||
| Abertis Infraestructuras SA | 6,612 | 99,997 |
| Acciona SA | 871 | 53,009 |
| Acerinox SA | 1,459 | 68,791 |
| Actividades de Construccion y Servicios SA | 2,731 | 133,297 |
| Altadis SA | 8,102 | 229,938 |
| Amadeus Global Travel Distribution SA "A" | 6,395 | 41,542 |
| Antena 3 Television SA* | 418 | 18,422 |
| Banco Bilbao Vizcaya Argentaria SA | 83,108 | 1,147,870 |
| Banco Popular Espanol SA | 4,263 | 254,339 |
| Banco Santander Central Hispano SA | 117,376 | 1,390,211 |
| Corp. Financiera Reunida SA | 1,973 | 22,672 |
| Corp. Mapfre SA | 2,476 | 35,072 |
| Endesa SA | 24,688 | 474,888 |
| Fomento de Construcciones y Contratas SA | 1,152 | 42,488 |
| Gas Natural SDG SA | 5,308 | 124,197 |
| Grupo Ferrovial | 1,654 | 57,957 |
| Iberdrola SA | 21,151 | 418,057 |
| Iberia Lineas Aereas de Espana SA | 6,671 | 19,185 |
| Indra Sistemas SA | 2,647 | 33,956 |
| Industria de Diseno Textil SA | 5,994 | 121,725 |
| Repsol SA | 25,213 | 491,666 |
| Sacyr Vallehermoso SA | 2,869 | 43,426 |
| Sociedad General de Aguas de Barcelona SA | 1,657 | 24,725 |
| Telefonica Publicidad e Informacio | 1,980 | 10,864 |
| Telefonica SA | 128,580 | 1,887,827 |
| Union Fenosa SA | 5,422 | 101,833 |
| Zeltia SA | 3,485 | 24,617 |
| (Cost $5,400,024) | 7,372,571 | |
| Sweden 2.0% | ||
| ABB Ltd. (Registered)* | 7,601 | 38,135 |
| Alfa Laval AB | 900 | 13,696 |
| Assa Abloy AB "B"* | 8,300 | 98,627 |
| Atlas Copco AB "A" | 3,171 | 113,481 |
| Atlas Copco AB "B" | 1,942 | 63,291 |
| Axfood AB | 500 | 11,570 |
| Billerud | 1,000 | 15,079 |
| Castellum AB | 700 | 16,539 |
| Drott AB "B" | 2,500 | 47,427 |
| Electrolux AB "B" | 8,300 | 182,258 |
| Eniro AB | 4,700 | 45,071 |
| Gambro AB "B" | 2,500 | 20,673 |
| Gambro AB "A" | 5,000 | 41,346 |
| Getinge AB "B" | 3,600 | 34,523 |
| Grupo Prisa SA | 2,251 | 32,652 |
| Hennes & Mauritz AB "B" | 13,100 | 311,328 |
| Hoganas AB "B" | 600 | 12,842 |
| Holmen AB "B" | 1,400 | 49,713 |
| Modern Times Group AB "B"* | 1,200 | 25,266 |
| Nordea AB | 65,514 | 491,676 |
| OM Hex AB | 1,800 | 22,390 |
| Sandvik AB | 6,100 | 210,248 |
| SAS AB | 1,500 | 14,176 |
| Securitas AB "B" | 8,000 | 107,848 |
| Skandia Forsakrings AB | 22,400 | 81,564 |
| Skandinaviska Enskilda Banken "A" | 12,960 | 190,925 |
| Skanska AB "B" | 10,400 | 91,782 |
| SKF AB "B" | 2,400 | 92,727 |
| SSAB Svenskt Stal AB "B" | 100 | 1,716 |
| SSAB Svenskt Stal AB "A" | 1,800 | 32,146 |
| Svenska Cellulosa AB "B" | 5,166 | 211,083 |
| Svenska Handelsbanken AB "B" | 800 | 15,844 |
| Svenska Handelsbanken AB "A" | 15,200 | 310,536 |
| Swedish Match AB | 9,865 | 100,771 |
| Tele2 AB "B"* | 2,500 | 133,420 |
| Telefonaktiebolaget LM Ericsson "B"* | 402,100 | 720,900 |
| TeliaSonera AB | 1,600 | 8,355 |
| TeliaSonera AB | 41,951 | 219,221 |
| Trelleborg AB "B" | 2,300 | 37,399 |
| Volvo AB "B" | 6,280 | 192,014 |
| Volvo AB "A" | 2,810 | 82,402 |
| WM-Data AB "B"* | 7,800 | 16,803 |
| (Cost $3,184,549) | 4,559,463 | |
| Switzerland 6.4% | ||
| ABB Ltd. (Registered) | 42,602 | 215,981 |
| Adecco SA (Registered) | 3,400 | 218,557 |
| Ciba Specialty Chemicals AG (Registered) | 2,000 | 154,760 |
| Clariant AG (Registered)* | 4,500 | 66,404 |
| Compagnie Financiere Richemont AG (Bearer) | 14,700 | 353,014 |
| Credit Suisse Group (Registered) | 32,740 | 1,197,886 |
| Geberit AG (Registered) | 50 | 24,581 |
| Givaudan | 222 | 115,241 |
| Holcim Ltd. (Registered) | 3,625 | 168,830 |
| Kudelski SA (Bearer) | 1,000 | 33,030 |
| Kuoni Reisen AG (Registered) "B" | 10 | 3,347 |
| Logitech International SA (Registered) | 1,100 | 47,584 |
| Lonza Group AG (Registered) | 1,150 | 66,113 |
| Nestle SA (Registered) | 11,030 | 2,755,828 |
| Nobel Biocare Holding AG | 100 | 9,756 |
| Nobel Biocare Holding AG (Bearer) | 500 | 50,637 |
| Novartis AG (Registered) | 65,140 | 2,957,438 |
| Oerlikon-Buehrle Holding AG (Registered) | 276 | 39,110 |
| Roche Holding AG | 19,300 | 1,946,776 |
| Roche Holding AG (Bearer) | 900 | 124,803 |
| Schindler Holding AG (Participating Certificates) | 30 | 7,326 |
| Serono SA (Bearer) | 200 | 142,632 |
| SGS Holdings SA (Registered) | 125 | 78,431 |
| Sulzer AG (Registered) | 105 | 28,272 |
| Swatch Group AG (Registered) | 1,800 | 42,935 |
| Swatch Group AG (Bearer) "B" | 850 | 102,062 |
| Swiss Re (Registered) | 8,500 | 573,883 |
| Swisscom AG (Registered) | 760 | 250,722 |
| Syngenta AG (Registered) | 3,074 | 207,046 |
| Synthes-Stratec, Inc. | 110 | 108,866 |
| UBS AG (Registered) | 32,348 | 2,215,384 |
| Valora Holding AG (Registered) | 90 | 22,414 |
| Zurich Financial Services AG | 3,856 | 554,977 |
| (Cost $11,228,586) | 14,884,626 | |
| United Kingdom 22.5% | ||
| 3i Group PLC | 16,664 | 184,207 |
| Aegis Group PLC | 20,907 | 36,959 |
| Alliance Unichem PLC | 4,827 | 44,847 |
| AMEC PLC | 7,045 | 32,790 |
| Amersham PLC | 20,645 | 282,911 |
| Amvescap PLC | 18,467 | 134,136 |
| Argyll Group PLC | 25,832 | 131,331 |
| ARM Holdings PLC | 25,576 | 58,834 |
| Associated British Ports Holdings PLC | 7,056 | 56,715 |
| AstraZeneca Group PLC | 6,372 | 310,395 |
| AstraZeneca PLC | 40,412 | 1,938,808 |
| Aviva PLC | 64,296 | 564,276 |
| BAA PLC | 32,033 | 284,569 |
| BAE Systems PLC | 91,325 | 275,064 |
| Balfour Beatty PLC | 4,146 | 16,217 |
| Barclays PLC | 178,446 | 1,591,636 |
| Barratt Developments PLC | 8,077 | 78,513 |
| BBA Group PLC | 16,408 | 73,285 |
| Berkeley Group PLC | 4,489 | 70,717 |
| BG Group PLC | 92,655 | 475,622 |
| BHP Billiton PLC | 70,279 | 613,953 |
| BOC Group PLC | 13,813 | 211,048 |
| Boots Group PLC | 23,185 | 286,797 |
| BP PLC | 605,030 | 4,906,421 |
| BPB PLC | 10,824 | 67,237 |
| Brambles Industries PLC | 19,281 | 70,240 |
| British Airways PLC | 19,365 | 80,599 |
| British American Tobacco PLC | 45,794 | 631,232 |
| British Land PLC | 14,835 | 155,092 |
| British Sky Broadcasting Group PLC* | 36,471 | 458,979 |
| BT Group PLC | 240,568 | 810,705 |
| Bunzl PLC | 14,569 | 111,299 |
| Cable and Wireless PLC | 58,446 | 139,677 |
| Cadbury Schweppes PLC | 54,044 | 396,904 |
| Canary Wharf Group PLC* | 14,669 | 70,310 |
| Capita Group PLC | 19,439 | 84,561 |
| Carlton Communications PLC | 15,577 | 64,136 |
| Carnival PLC | 5,128 | 206,639 |
| Cattles PLC | 6,367 | 38,097 |
| Celltech Group PLC | 6,093 | 41,230 |
| Centrica PLC | 123,177 | 465,267 |
| Close Brothers Group PLC | 2,533 | 33,283 |
| Cobham PLC | 2,233 | 46,650 |
| Compass Group PLC | 61,268 | 416,780 |
| Daily Mail & General Trust | 7,052 | 83,193 |
| De La Rue PLC | 2,911 | 14,448 |
| Diageo PLC | 86,456 | 1,137,555 |
| Electrocomponents PLC | 11,845 | 68,914 |
| EMAP PLC | 5,822 | 89,319 |
| EMI Group PLC | 18,815 | 53,470 |
| Enterprise Inns PLC | 3,439 | 62,425 |
| Exel PLC | 7,787 | 102,946 |
| Firstgroup PLC | 8,522 | 41,724 |
| FKI PLC | 16,691 | 31,971 |
| Friends Provident PLC | 38,296 | 90,493 |
| George Wimpey PLC | 7,301 | 48,783 |
| GKN PLC | 17,946 | 85,777 |
| GlaxoSmithKline PLC | 162,870 | 3,731,993 |
| Granada Compass PLC | 68,011 | 148,535 |
| Great Portland Estates PLC | 307 | 1,289 |
| GUS PLC | 29,367 | 406,640 |
| Hammerson PLC | 6,081 | 70,486 |
| Hanson PLC | 19,402 | 142,490 |
| Hays PLC | 56,416 | 121,192 |
| HBOS PLC | 101,894 | 1,319,705 |
| Hilton Group PLC | 43,083 | 173,339 |
| HSBC Holdings PLC | 296,761 | 4,664,349 |
| IMI PLC | 10,076 | 60,832 |
| Imperial Chemical Industries PLC | 28,808 | 102,626 |
| Imperial Tobacco Group PLC | 20,297 | 399,682 |
| Intercontinental Hotels Group PLC | 20,435 | 193,517 |
| Invensys PLC | 94,327 | 30,817 |
| J Sainsbury PLC | 36,560 | 204,688 |
| Johnson Mathey PLC | 5,236 | 91,951 |
| Kelda Group PLC | 8,259 | 69,341 |
| Kesa Electricals PLC | 14,930 | 68,755 |
| Kidde PLC | 13,274 | 25,307 |
| Kingfisher PLC | 65,318 | 325,648 |
| Land Securities Group PLC | 12,123 | 215,284 |
| Legal & General Group PLC | 184,225 | 330,615 |
| Liberty International PLC | 5,389 | 65,842 |
| Lloyds TSB Group PLC | 150,009 | 1,203,054 |
| LogicaCMG PLC | 17,235 | 79,061 |
| Man Group PLC | 7,221 | 188,859 |
| Marks & Spencer Group PLC | 64,133 | 331,794 |
| MFI Furniture Group PLC | 10,649 | 28,786 |
| Misys PLC | 15,595 | 59,115 |
| Mitchells & Butlers PLC | 14,424 | 58,098 |
| National Grid Transco PLC | 87,346 | 625,841 |
| National Power PLC | 29,638 | 65,525 |
| New Dixons Group PLC | 48,793 | 121,412 |
| Next PLC | 7,611 | 153,007 |
| Novar PLC | 3,491 | 8,624 |
| Pearson PLC | 23,085 | 257,046 |
| Persimmon PLC | 5,281 | 50,767 |
| Pilkington PLC | 24,287 | 41,630 |
| Provident Financial PLC | 5,748 | 66,935 |
| Prudential Corp. PLC | 55,352 | 467,945 |
| Rank Group PLC | 12,851 | 64,242 |
| Reckitt Benkiser PLC | 17,418 | 394,126 |
| Reed Elsevier PLC | 35,626 | 297,993 |
| Rentokil Initial PLC | 53,025 | 180,353 |
| Reuters Group PLC | 43,825 | 184,365 |
| Rexam PLC | 13,590 | 104,064 |
| Rio Tinto PLC | 30,018 | 829,158 |
| RMC Group PLC | 5,987 | 74,756 |
| Rolls-Royce PLC | 43,647 | 138,494 |
| Royal & Sun Alliance Insurance Group PLC | 69,098 | 109,162 |
| Royal Bank of Scotland Group PLC | 76,946 | 2,267,282 |
| SABMiller PLC | 19,783 | 205,050 |
| Schroders PLC | 5,472 | 61,909 |
| Scottish & Newcastle PLC | 19,477 | 131,884 |
| Scottish & Southern Energy PLC | 24,539 | 295,639 |
| Scottish Power PLC | 50,650 | 337,523 |
| Serco Group PLC | 13,638 | 41,992 |
| Severn Trent PLC | 8,356 | 112,039 |
| Shell Transport & Trading Co., PLC | 265,409 | 1,974,133 |
| Signet Group PLC | 38,960 | 71,837 |
| Slough Estates PLC | 12,154 | 95,570 |
| Smith & Nephew PLC | 25,569 | 214,787 |
| SmithKline Industries PLC | 16,326 | 193,184 |
| SSL International PLC | 3,036 | 17,935 |
| Stagecoach Group PLC | 25,112 | 35,289 |
| Tate & Lyle PLC | 9,166 | 51,113 |
| Taylor Woodrow PLC | 12,869 | 61,510 |
| Tesco PLC | 202,883 | 936,125 |
| The Peninsular and Oriental Steam Navigation Co. | 16,244 | 66,882 |
| The Sage Group PLC | 29,135 | 91,664 |
| TI Group PLC "A" | 11,991 | 0 |
| Tomkins PLC | 19,905 | 95,318 |
| Unilever PLC | 77,761 | 724,905 |
| United Business Media PLC | 7,063 | 61,955 |
| United Utilities PLC "A" | 7,770 | 42,354 |
| United Utilities PLC | 13,986 | 124,059 |
| Vodafone Group PLC | 1,867,275 | 4,629,650 |
| Whitbread PLC | 6,946 | 89,403 |
| William Hill PLC | 8,574 | 65,539 |
| Wolseley PLC | 16,886 | 238,805 |
| WPP Group PLC | 32,984 | 323,869 |
| Yell Group PLC | 9,349 | 51,045 |
| (Cost $45,949,370) | 51,819,370 | |
| Total Common Stocks (Cost $172,020,513) | 198,823,659 | |
Shares | Value ($) | |
Preferred Stocks 0.4% | ||
| Fresnius Medical Care AG | 500 | 25,195 |
| Henkel KGaA | 1,750 | 136,857 |
| The News Corp., Ltd. | 55,626 | 419,114 |
| Porsche AG | 200 | 118,698 |
| RWE AG | 1,035 | 36,489 |
| Volkswagon AG | 2,700 | 97,912 |
| Wella AG | 400 | 35,444 |
| Total Preferred Stocks (Cost $725,009) | 869,709 | |
Principal Amount ($) | Value ($) | |
US Government Backed 1.2% | ||
| US Treasury Bill, 0.94%**, 1/22/2004 (Cost $2,688,585) | 2,690,000 | 2,688,788 |
Shares | Value ($) | |
Cash Equivalents 7.2% | ||
| Cash Management Fund Institutional, 0.93%, (b) (Cost $16,620,767) | 16,620,767 | 16,620,767 |
% of Net Assets | Value ($) | |
| Total Investment Portfolio (Cost $192,054,874) (a) | 94.9 | 219,002,923 |
| Other Assets and Liabilities, Net | 5.1 | 11,781,387 |
| Net Assets | 100.0 | 230,784,310 |
* Non-income producing security.
** Annualized yield at time of purchase; not a coupon rate.
(a) The cost for federal income tax purposes was $197,065,064. At December 31, 2003, net unrealized appreciation for all securities based on tax cost was $21,937,859. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $38,300,551 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $16,362,692.
(b) Cash Management Fund Institutional is an affiliated fund and is also managed by Deutsche Asset Management, Inc. The rate is the annualized seven-day yield.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers.
At December 31, 2003, open futures contracts purchased were as follows:Futures | Expiration Date | Contracts | Aggregate Face Value ($) | Value ($) | Unrealized Appreciation (Depreciation) ($) |
| DAX Index | 3/19/2004 | 5 | $ 622,967 | $ 629,887 | $ 6,920 |
| Hang Seng Index | 1/29/2004 | 7 | 564,959 | 569,658 | 4,699 |
| IBEX 35 Index | 1/16/2004 | 2 | 189,839 | 194,059 | 4,220 |
| MIB 30 Index | 3/19/2004 | 2 | 348,728 | 338,383 | (10,345) |
| Nikkei 225 | 3/11/2004 | 69 | 3,534,939 | 3,708,750 | 173,811 |
| DJ Euro Stoxx 50 Index | 3/19/2004 | 344 | 11,876,693 | 11,971,428 | 94,735 |
| SPI 200 Index | 3/18/2004 | 23 | 1,409,569 | 1,431,838 | 22,269 |
| FTSE 100 Index | 3/19/2004 | 81 | 6,292,988 | 6,476,526 | 183,538 |
| TOPIX Index | 3/11/2004 | 19 | 1,797,116 | 1,852,664 | 55,548 |
| Total Net Unrealized Appreciation | $535,395 | ||||
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of December 31, 2003 | |
| Assets | |
| Investments: | |
Investments in securities, at value (cost $175,434,107) | $ 202,382,156 |
Investment in Cash Management Fund Institutional (cost $16,620,767) | 16,620,767 |
| Total investments in securities, at value (cost $192,054,874) | 219,002,923 |
| Foreign currency, at value (cost $9,180,777)* | 10,263,822 |
| Dividends receivable | 203,743 |
| Interest receivable | 765 |
| Receivable for shares of beneficial interest subscribed | 787,964 |
| Receivable for daily variation margin on open futures contracts | 411,511 |
| Foreign taxes recoverable | 131,628 |
| Unrealized appreciation on forward foreign currency exchange contracts | 121,875 |
| Other assets | 2,949 |
| Total assets | 230,927,180 |
| Liabilities | |
| Accrued advisory fee | 83,134 |
| Other accrued expenses and payables | 59,736 |
| Total liabilities | 142,870 |
| Net assets, at value | $ 230,784,310 |
* Includes segregated foreign currency of $4,130,447 to cover margin requirements on foreign futures contracts.
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the year ended December 31, 2003 | |
| Investment Income | |
| Dividends (net of foreign taxes withheld of $587,133) | $ 3,857,750 |
| Dividends from Cash Management Fund Institutional | 77,703 |
| Interest | 99,631 |
| Securities lending income | 52,160 |
| Total income | 4,087,244 |
| Expenses: Advisory fee | 414,968 |
| Administrator service fee | 170,869 |
| Auditing | 58,933 |
| Legal | 16,579 |
| Trustees' fees and expenses | 5,781 |
| Other | 11,392 |
| Total expenses, before expense reductions | 678,522 |
| Expense reductions | (82,730) |
| Total expenses, after expense reductions | 595,792 |
| Net investment income (loss) | 3,491,452 |
| Realized and Unrealized Gain (Loss) on Investment Transactions | |
| Net realized gain (loss) from: Investments | (3,875,058) |
| Futures | 3,103,249 |
| Foreign currency related transactions | 1,723,488 |
| 951,679 | |
| Net unrealized appreciation (depreciation) during the period on: Investments | 55,310,920 |
| Futures | 759,604 |
| Foreign currency related transactions | 899,846 |
| 56,970,370 | |
| Net gain (loss) on investment transactions | 57,922,049 |
| Net increase (decrease) in net assets resulting from operations | $ 61,413,501 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | ||
| Increase (Decrease) in Net Assets | Years Ended December 31, | |
2003 | 2002 | |
| Operations: Net investment income | $ 3,491,452 | $ 2,564,987 |
| Net realized gain (loss) on investment transactions | 951,679 | (6,482,098) |
| Net unrealized appreciation (depreciation) on investment transactions during the period | 56,970,370 | (19,466,388) |
| Net increase (decrease) in net assets resulting from operations | 61,413,501 | (23,383,499) |
| Capital transactions in shares of beneficial interest: Proceeds from capital invested | 268,471,061 | 77,845,963 |
| Subscriptions in-kind | 11,066,674 | - |
| Value of capital withdrawn | (246,836,691) | (58,436,177) |
| Net increase (decrease) in net assets from capital transactions in shares of beneficial interest | 32,701,044 | 19,409,786 |
| Increase (decrease) in net assets | 94,114,545 | (3,973,713) |
| Net assets at beginning of period | 136,669,765 | 140,643,478 |
| Net assets at end of period | $ 230,784,310 | $ 136,669,765 |
The accompanying notes are an integral part of the financial statements.
Years Ended December 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
| Ratios to Average Net Assets and Supplemental Data | |||||
| Net assets, end of period ($ millions) | 231 | 137 | 141 | 172 | 120 |
| Ratio of expenses before expense reductions (%) | .40 | .44 | .42 | .46 | .40 |
| Ratio of expenses after expense reductions (%) | .35 | .35 | .35 | .35 | .35 |
| Ratio of net investment income (loss) (%) | 2.04 | 1.88 | 1.73 | 1.64 | 1.61 |
| Portfolio turnover rate (%) | 6 | 10 | 26 | 52 | 4 |
| Total Investment Return (%)a | 36.50 | (16.58) | - | - | - |
| a Total return would have been lower had certain expenses not been reduced. | |||||
A. Significant Accounting Policies
The EAFE® Equity Index Portfolio (the "Portfolio"), a series of the Scudder Investment Portfolios (formerly BT Investment Portfolios) (the "Trust"), is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end management investment company organized as a New York business trust.
The Portfolio'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 Portfolio 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 are valued at the most recent sale 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 as well as Cash Management Fund Institutional 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 Trustees.
Foreign Currency Translations. The books and records of the Portfolio 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 gains and losses on investment securities.
Futures Contracts. 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 Portfolio may enter into futures contracts as a hedge against anticipated interest rate, currency or equity market changes, and for duration management, risk management and return enhancement purposes.
Upon entering into a futures contract, the Portfolio 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 Portfolio 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 Portfolio. When entering into a closing transaction, the Portfolio 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 Portfolio'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 Portfolio gives up the opportunity to profit from favorable price movements in the hedged positions during the term of the contract.
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 Portfolio 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.
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 Portfolio gives up the opportunity to profit from favorable exchange rate movements during the term of the contract.
Federal Income Taxes. The Portfolio is considered a partnership under the Internal Revenue Code. Therefore, no federal income tax provision is necessary.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment 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 taxes. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Portfolio is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis.
The Portfolio makes a daily allocation of its net investment income and realized and unrealized gains and losses from securities and foreign currency transactions to its investors in proportion to their investment in the Portfolio.
B. Purchases and Sales of Securities
During the year ended December 31, 2003, purchases and sales of investment securities (excluding short-term investments) aggregated $26,526,252 and $9,910,424, respectively.
C. Related Parties
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG. Deutsche Asset Management, Inc. ("DeAM, Inc." or the "Advisor") is the Advisor for the Portfolio and Investment Company Capital Corp. ("ICCC" or the "Administrator") is the Administrator for the Portfolio, both indirect wholly owned subsidiaries of Deutsche Bank AG.
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Advisor directs the investments of the Portfolio in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Portfolio. The advisory fee payable under the Investment Advisory Agreement is equal to an annual rate of 0.25% of the Portfolio's average daily assets, computed and accrued daily and payable monthly.
On January 31, 2003, Deutsche Bank AG completed the sale of its global passive equity, enhanced equity and passive fixed income businesses to Northern Trust Investments, N.A. ("NTI"), an indirect subsidiary of Northern Trust Corporation. Under this agreement, Deutsche Investment Bank Americas Inc. ("DeIM") remained as investment advisor to the Fund until the Board and shareholder approval of NTI as sub-advisor to the Portfolio. Effective April 25, 2003, NTI serves as sub-advisor to the Portfolio and is paid by the Advisor for its services. NTI is responsible for the day to day management of the Portfolio. The Advisor waives a portion of its advisory fees equivalent to the advisory fees charged on assets invested in the affiliated money market fund, Cash Management Fund Institutional.
In addition, for the year ended December 31, 2003, the Advisor and Administrator maintained the annualized expenses of the Portfolio at not more than 0.35% of the Portfolio's average daily net assets. The amount of the waiver and whether the Advisor and Administrator waive their fees may vary at anytime without notice to the shareholders.
Accordingly, for the year ended December 31, 2003, the Advisor did not impose a portion of its advisory fee aggregating $82,328 and the amount imposed aggregated $332,640, which was equivalent to an annual effective rate of 0.19% of the Portfolio's average daily net assets.
Administrator Service Fee. For its services as Administrator, ICCC receives a fee (the "Administrator Service Fee") of 0.10% of the Portfolio's average daily net assets, computed and accrued daily and payable monthly. For the year ended December 31, 2003, the Administrator Service Fee was $170,869, of which $18,394 is unpaid.
Trustees' Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex's Audit Committee receives an annual fee for his services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Other. The Portfolio may invest in Cash Management Fund Institutional, an open-end management investment company managed by DeAM, Inc. Distributions from Cash Management Fund Institutional for the Portfolio for the year ended December 31, 2003, totaled $77,703.
D. Expense Off-Set Arrangement
The Fund has entered into an agreement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the year ended December 31, 2003, pursuant to the Administrative Agreement, the Administrator Service Fee was reduced by $402 for custodian credits earned.
E. Forward Foreign Currency Commitments
As of December 31, 2003, the Portfolio had the following open forward foreign currency exchange contracts:
Contracts to Deliver | In Exchange For | Settlement Date | Net Unrealized Appreciation (Depreciation) | ||
| USD | 2,862,135 | EUR | 2,350,000 | 3/12/2004 | $ 96,573 |
| USD | 3,715,055 | JPY | 400,000,000 | 3/12/2004 | 25,302 |
| Total unrealized appreciation (depreciation) | $ 121,875 | ||||
Currency Abbreviations | ||||
| USD | US Dollar | EUR | Euro | |
| JPY | Japanese Yen | |||
F. Securities Lending
The Portfolio may lend securities to financial institutions. The Portfolio retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the securities and to participate in any changes in their market value. The Portfolio requires the borrowers of the securities to maintain collateral with the Portfolio in the form of cash and/or government securities equal to 102% of the value of domestic securities and 105% of the value of international securities. The Portfolio may invest the cash collateral in an affiliated money market fund. The Portfolio receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral. The fees earned for lending securities may be shared with an affiliate regardless of whether or not the cash collateral is invested in an affiliated money market fund. Either the Portfolio or the borrower may terminate the loan. The Portfolio is subject to all investment risks associated with the value of any cash collateral received, including, but not limited to, interest rate, market, credit and liquidity risk associated with such investments. At December 31, 2003, no securities were on loan.
G. Line of Credit
Prior to April 11, 2003, the Portfolio and several other affiliated funds (the "Participants") shared in a $200 million revolving credit facility administered by a syndicate of banks for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants were charged an annual commitment fee which was allocated pro rata based upon net assets among each of the Participants. Interest was calculated at the Federal Funds Rate plus 0.625 percent.
Effective April 11, 2003, the Portfolio entered into a new revolving credit facility administered by J.P. Morgan Chase Bank that provides $1.25 billion of credit coverage. The new revolving credit facility covers the funds and portfolios advised or administered by DeAM, Inc. or its affiliates. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Portfolio may borrow up to a maximum of 33 percent of its net assets under the agreement. During the year ended December 31, 2003, the Portfolio had no borrowings on the line of credit.
To the Trustees of Scudder Investment Portfolios (formerly BT Investment Portfolios) and Holders of Beneficial Interest of EAFE® Equity Index Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of EAFE® Equity Index Portfolio (the "Portfolio") at December 31, 2003, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Portfolio's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
Boston, Massachusetts | PricewaterhouseCoopers LLP |
Automated Information Lines | ScudderACCESS (800) 972-3060 Personalized account information, information on other Scudder funds and services via touchtone telephone and for Classes A, B, and C only, the ability to exchange or redeem shares. |
Web Site | scudder.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day.Obtain prospectuses and applications, blank forms, interactive worksheets, news about Scudder funds, subscription to fund updates by e-mail, retirement planning information, and more. |
For More Information | (800) 621-1048 To speak with a Scudder service representative. |
Written Correspondence | Scudder Investments PO Box 219356Kansas City, MO 64121-9356 |
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities can be found on our Web site - scudder.com (type "proxy voting" in the search field) - or on the SEC's Web site - www.sec.gov. To obtain a written copy without charge, call us toll free at (800) 621-1048. |
Principal Underwriter | If you have questions, comments or complaints, contact: Scudder Distributors, Inc. 222 South Riverside PlazaChicago, IL 60606-5808 (800) 621-1148 |
Premier Class | |
Nasdaq Symbol | BTAEX |
CUSIP Number | 81111W 105 |
Fund Number | 558 |
Notes |
Notes |
Notes |
Notes |
Notes |
ITEM 2. CODE OF ETHICS.
As of the end of the period, December 31, 2003, Scudder Advisor Funds II has
adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to
its President and Treasurer and its Chief Financial Officer. A copy of the code
of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Fund's Board of Directors/Trustees has determined that the Fund has at least
one "audit committee financial expert" serving on its audit committee: Mr. S.
Leland Dill. This audit committee member is "independent," meaning that he is
not an "interested person" of the Fund (as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940) and he does not accept any
consulting, advisory, or other compensatory fee from the Fund (except in the
capacity as a Board or committee member).
An "audit committee financial expert" is not an "expert" for any purpose,
including for purposes of Section 11 of the Securities Act of 1933, as a result
of being designated as an "audit committee financial expert." Further, the
designation of a person as an "audit committee financial expert" does not mean
that the person has any greater duties, obligations, or liability than those
imposed on the person without the "audit committee financial expert"
designation. Similarly, the designation of a person as an "audit committee
financial expert" does not affect the duties, obligations, or liability of any
other member of the audit committee or board of directors.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
EAFE EQUITY INDEX FUND
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that PricewaterhouseCoopers, LLP
("PWC"), the Fund's auditor, billed to the Fund during the Fund's last two
fiscal years. For engagements with PWC entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that PWC provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund's Auditor Billed to the Fund
- --------------------------------------------------------------------------------
Fiscal Year Audit All Other
Ended Fees Billed Audit-Related Tax Fees Fees Billed
December 31 to Fund Fees Billed to Fund Billed toFund to Fund
- --------------------------------------------------------------------------------
2003 $13,300 $1,237 $8,320 $0
- --------------------------------------------------------------------------------
2002 $9,000 $0 $6,125 $0
- --------------------------------------------------------------------------------
The above "Tax Fees" were billed for professional services rendered for tax
compliance.
Services that the Fund's Auditor Billed to the Adviser and
Affiliated Fund Service Providers
The following table shows the amount of fees billed by PWC to Deutsche
Investment Management Americas, Inc. ("DeIM" or the "Adviser"), and any entity
controlling, controlled by or under common control with DeIM ("Control
Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service
Provider"), for engagements directly related to the Fund's operations and
financial reporting, during the Fund's last two fiscal years.
- --------------------------------------------------------------------------------
Audit-Related Tax Fees All
Fees Billed to Billed to Other Fees Billed
Fiscal Year Adviser and Adviser and to Adviser and
Ended Affiliated Fund Affiliated Fund Affiliated Fund
December 31 Service Provider Service Providers Service Providers
- --------------------------------------------------------------------------------
2003 $538,457 $0 $0
- --------------------------------------------------------------------------------
2002 $399,300 $69,500 $92,400
- --------------------------------------------------------------------------------
The "Audit-Related Fees" were billed for services in connection with the
assessment of internal controls, agreed-upon procedures and additional related
procedures.
Non-Audit Services
The following table shows the amount of fees that PWC billed during the Fund's
last two fiscal years for non-audit services. For engagements entered into on or
after May 6, 2003, the Audit Committee pre-approved all non-audit services that
PWC provided to the Adviser and any Affiliated Fund Service Provider that
related directly to the Fund's operations and financial reporting. The Audit
Committee requested and received information from PWC about any non-audit
services that PWC rendered during the Fund's last fiscal year to the Adviser and
any Affiliated Fund Service Provider. The Committee considered this information
in evaluating PWC's independence.
- --------------------------------------------------------------------------------
Total Non-Audit Fees
billed to Adviser and
Affiliated Fund
Service Providers Total Non-Audit Fees
Total (engagements related billed to Adviser
Non-Audit directly to the and Affiliated Fund
Fees operations and Service Providers
Fiscal Year Billed financial reporting (all other Total of
Ended to Fund of the Fund) engagements) (A), (B)
December 31 (A) (B) (C) and (C)
- --------------------------------------------------------------------------------
2003 $8,320 $0 $3,967,000 $3,975,320
- --------------------------------------------------------------------------------
2002 $6,125 $161,900 $17,092,950 $17,260,975
- --------------------------------------------------------------------------------
All other engagement fees were billed for services in connection with risk
management, tax services and process improvement/integration initiatives for
DeIM and other related entities that provide support for the operations of the
fund.
EAFE EQUITY INDEX PORTFOLIO
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that PricewaterhouseCoopers, LLP
("PWC"), the Fund's auditor, billed to the Fund during the Fund's last two
fiscal years. For engagements with PWC entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that PWC provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund's Auditor Billed to the Fund
- --------------------------------------------------------------------------------
Fiscal Year Audit All Other
Ended Fees Billed Audit-Related Tax Fees Fees Billed
December 31 to Fund Fees Billed to Fund Billed toFund to Fund
- --------------------------------------------------------------------------------
2003 $45,700 $1,237 $4,000 $0
- --------------------------------------------------------------------------------
2002 $32,000 $0 $3,690 $0
- --------------------------------------------------------------------------------
The above "Tax Fees" were billed for professional services rendered for tax
compliance.
Services that the Fund's Auditor Billed to the Adviser and
Affiliated Fund Service Providers
The following table shows the amount of fees billed by PWC to Deutsche
Investment Management Americas, Inc. ("DeIM" or the "Adviser"), and any entity
controlling, controlled by or under common control with DeIM ("Control
Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service
Provider"), for engagements directly related to the Fund's operations and
financial reporting, during the Fund's last two fiscal years.
- --------------------------------------------------------------------------------
Audit-Related Tax Fees All
Fees Billed to Billed to Other Fees Billed
Fiscal Year Adviser and Adviser and to Adviser and
Ended Affiliated Fund Affiliated Fund Affiliated Fund
December 31 Service Provider Service Providers Service Providers
- --------------------------------------------------------------------------------
2003 $538,457 $0 $0
- --------------------------------------------------------------------------------
2002 $399,300 $69,500 $92,400
- --------------------------------------------------------------------------------
The "Audit-Related Fees" were billed for services in connection with the
assessment of internal controls, agreed-upon procedures and additional related
procedures.
Non-Audit Services
The following table shows the amount of fees that PWC billed during the Fund's
last two fiscal years for non-audit services. For engagements entered into on or
after May 6, 2003, the Audit Committee pre-approved all non-audit services that
PWC provided to the Adviser and any Affiliated Fund Service Provider that
related directly to the Fund's operations and financial reporting. The Audit
Committee requested and received information from PWC about any non-audit
services that PWC rendered during the Fund's last fiscal year to the Adviser and
any Affiliated Fund Service Provider. The Committee considered this information
in evaluating PWC's independence.
- --------------------------------------------------------------------------------
Total Non-Audit Fees
billed to Adviser and
Affiliated Fund
Service Providers Total Non-Audit Fees
Total (engagements related billed to Adviser
Non-Audit directly to the and Affiliated Fund
Fees operations and Service Providers
Fiscal Year Billed financial reporting (all other Total of
Ended to Fund of the Fund) engagements) (A), (B)
December 31 (A) (B) (C) and (C)
- --------------------------------------------------------------------------------
2003 $4,000 $0 $3,967,000 $3,971,000
- --------------------------------------------------------------------------------
2002 $3,690 $161,900 $17,092,950 $17,258,540
- --------------------------------------------------------------------------------
All other engagement fees were billed for services in connection with risk
management, tax services and process improvement/integration initiatives for
DeIM and other related entities that provide support for the operations of the
fund.
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The Chief Executive and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on the evaluation of the
Disclosure Controls and Procedures as of a date within 90 days of the filing
date of this report.
(b) During the filing period of the report, management identified issues
relating to the overall fund expense payment and accrual process. Management
discussed these matters with the Registrant's Audit Committee and auditors,
instituted additional procedures to enhance its internal controls and will
continue to develop additional controls and redesign work flow to strengthen the
overall control environment associated with the processing and recording of fund
expenses.
ITEM 10. EXHIBITS.
(a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached
hereto as EX-99.CODE ETH.
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as
Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as
Exhibit 99.906CERT.
Form N-CSR Item F
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Scudder EAFE Equity Index Fund
By: /s/Richard T. Hale
---------------------------
Richard T. Hale
Chief Executive Officer
Date: February 27, 2004
---------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Registrant: Scudder EAFE Equity Index Fund
By: /s/Richard T. Hale
---------------------------
Richard T. Hale
Chief Executive Officer
Date: February 27, 2004
---------------------------
By: /s/Charles A. Rizzo
---------------------------
Charles A. Rizzo
Chief Financial Officer
Date: February 27, 2004
---------------------------