UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number | 811-07347 |
DWS ADVISOR FUNDS II
(FORMERLY SCUDDER ADVISOR FUNDS II
(Exact Name of Registrant as Specified in Charter)
One South Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 454-7190
Paul Schubert
345 Park Avenue
New York, NY 10154
(Name and Address of Agent for Service)
Date of fiscal year end: | 12/31 |
Date of reporting period: | 12/31/05 |
ITEM 1. | REPORT TO STOCKHOLDERS |
DECEMBER 31, 2005 Annual Report
to Shareholders |
|
DWS EAFE® Equity Index Fund (formerly Scudder EAFE® Equity Index Fund) |
 |
Contents
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.
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management, Inc., Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Performance Summary December 31, 2005
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when 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 www.dws-scudder.com for the Fund's most recent month-end performance.
To discourage short-term trading, shareholders redeeming shares held less than 30 days will have a lower total return due to the effect of the 2% short-term redemption fee.
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.
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 as of 12/31/05 |
DWS EAFE® Equity Index Fund | 1-Year | 3-Year | 5-Year | Life of Class* |
Institutional Class | 13.57% | 22.77% | 3.84% | 5.60% |
MSCI EAFE® Index+
| 13.54% | 23.68% | 4.55% | 5.84% |
Sources: Lipper Inc. and Deutsche Asset Management, Inc.
* The Fund commenced operations on January 24, 1996. Index returns begin January 31, 1996.Net Asset Value and Distribution Information |
| Institutional Class |
Net Asset Value: 12/31/05
| $ 13.15 |
12/31/04
| $ 11.89 |
Distribution Information: Twelve Months:
Distributions as of 12/31/05 | $ .36 |
Institutional Class Lipper Rankings — International Multi-Cap Core Funds Category as of 12/31/05 |
Period | Rank | | Number of Funds Tracked | Percentile Ranking (%) |
1-Year
| 169 | of | 289 | 59 |
3-Year
| 115 | of | 232 | 50 |
5-Year
| 103 | of | 179 | 58 |
Source: Lipper Inc. 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. Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested.
Growth of an Assumed $1,000,000 Investment |
[] DWS EAFE® Equity Index Fund — Institutional Class [] MSCI EAFE® Index+ |
 |
Yearly periods ended December 31 |
Comparative Results as of 12/31/05 |
DWS EAFE® Equity Index Fund | 1-Year | 3-Year | 5-Year | Life of Class* |
Institutional Class | Growth of $1,000,000
| $1,135,700 | $1,850,600 | $1,207,300 | $1,718,000 |
Average annual total return
| 13.57% | 22.77% | 3.84% | 5.60% |
MSCI EAFE® Index+
| Growth of $1,000,000
| $1,135,400 | $1,892,000 | $1,249,400 | $1,756,200 |
Average annual total return
| 13.54% | 23.68% | 4.55% | 5.84% |
The growth of $1,000,000 is cumulative.
The minimum initial investment for Institutional Class shares is $1,000,000.
* The Fund commenced operations on January 24, 1996. Index returns 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. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates. 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.Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended December 31, 2005.
The tables illustrate your Fund's expenses in two ways:
Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended December 31, 2005 |
Actual Fund Return | Institutional Class |
Beginning Account Value 7/1/05
| $ 1,000.00 |
Ending Account Value 12/31/05
| $ 1,156.10 |
Expenses Paid per $1,000*
| $ 2.12 |
Hypothetical 5% Fund Return | Institutional Class |
Beginning Account Value 7/31/05
| $ 1,000.00 |
Ending Account Value 12/31/05
| $ 1,023.24 |
Expenses Paid per $1,000*
| $ 1.99 |
* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.Annualized Expense Ratios | Institutional Class |
DWS EAFE® Equity Index Fund
| .40% |
For more information, please refer to the Fund's prospectus.
Portfolio Management Review
DWS 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 portfolio. As of December 31, 2005, Northern Trust Corporation and its subsidiaries had assets under custody of $2.9 trillion, and assets under investment management of $618 billion.
Portfolio Manager
Steven Wetter
Vice President at NTI.
Joined NTI in 2003.
Responsible for non-US Index portfolio management and trading as well as managing non-US equity, currency overlay, and global bond index mandates.
From 1992 to 2003, he was a trader and portfolio manager at Deutsche Bank with its non-US indexing business. Beginning in 1998, he worked for the international group at DWS Scudder.
In the following interview, Portfolio Manager Steven Wetter, of Northern Trust Investments, N.A., the fund's subadvisor, discusses the recent market environment as well as the performance of the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE®) Index and DWS EAFE® Equity Index Fund during the 12-month period ended December 31, 2005.
Q: How did DWS EAFE Equity Index Fund perform during 2005?
A: For the 12-month period, DWS EAFE® Equity Index Fund produced a total return of 13.57% (Institutional Class shares), as compared with a return of 13.54% for its benchmark, the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Index. The net impact of fair-value pricing, transaction costs and fund expenses accounted for the difference in returns between the portfolio and the index.
The broad-based MSCI EAFE® Index is a group of international company stocks that is not available for direct investment. (Please see pages 5 and 6 for more complete performance information. Past performance is no guarantee of future results.)
Q: What were the primary factors affecting the international equity markets during the past 12 months?
A: International equities were strong performers over the past year, as the market environment was favorable in many areas. With corporate news flow positive and cash flow climbing to record levels, investor sentiment remained positive toward equities, particularly those outside the US marketplace. The benchmark's return was even higher in local currency terms, but the strengthening of the US dollar versus foreign currencies significantly reduced the US dollar return. (Since foreign shares are denominated in local-country currencies, a loss in the value of the local currencies versus the dollar decreases the value of the investment in US dollar terms.) Nonetheless, international equities as an asset class comfortably outperformed the 4.91% return of US stocks, as measured by the S&P 500 Index.1
1 The Standard & Poor's 500 (S&P 500) Index is an unmanaged capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.Q: Which sectors within the MSCI EAFE® Index were the best and worst performers?
A: The clear winner during the past year was materials, which at the end of the period made up 7% of the fund's assets. China has continued to be a major consumer of raw and processed materials. The country has not experienced the economic slowdown that many had expected, with year-over-year gross domestic product growing at 9.4% in the third quarter. Strong growth has allowed China's infrastructure build-out to continue, feeding demand for steel, chemicals, resins and ores. A number of Japanese steel stocks — which are direct beneficiaries of China's growth — were among the top performers in the MSCI EAFE Index during 2005.
Energy stocks — which made up 8% of the fund at the close of the year — also performed particularly well, as the escalating price of crude oil provided a profit windfall for oil exploration and production companies. At the beginning of the annual period, energy prices stood near $45/barrel. In 2005, energy prices ascended on general supply/demand imbalances, intensified by increased demand from Asia. The US hurricane season contributed further to this imbalance by reducing supplies, sending oil to $70/barrel. With such a considerable upward price movement, companies either directly or peripherally related to this sector were beneficiaries of increased pricing power. Each of the four energy stocks within the top 20 holdings in the MSCI EAFE Index — BP PLC, Total S.A., Royal Dutch Shell PLC and Eni S.p.A. — produced double-digit returns for the year.
The most significant laggard during the 12-month period was the telecommunications services sector, the only one of the 10 industries in the index to post a negative total return. A lack of pricing power weighed on the performance of the major fixed-line telecom stocks in Continental Europe, including the large index components Telefonica S.A., Deutsche Telekom AG and France Telecom SA, all of which produced negative double-digit returns. In addition, shares of Vodafone Group PLC, which has the third-largest weighting in the index, lost ground due to a more challenging competitive environment in both Europe and Japan.
Among the other major industry sectors, industrials and financials outperformed the broader market, while health care, utilities, technology and consumer stocks, despite their positive absolute returns, underperformed.
Q: Which countries and regions out- and underperformed during the period?
A: On a regional basis, the Asian markets outperformed their European peers. Japan experienced a long-awaited rally due to several factors, including Prime Minister Junichiro Koizumi's reelection, the continuation of the reform process, and the expectation that the seven-year deflationary cycle is set to end in 2006. In fact, Japan's core consumer price index, which excludes prices of fresh foods, rose in December for the first time in two years, indicating that Japan may be in the final stage of overcoming deflation. The promising return to positive inflation in Japan would act as a lever allowing companies to raise prices, increase profitability and boost wages.
Stocks in Europe performed well, led by Austria and Denmark. The major Continental markets of France and Germany provided mid-single-digit returns as the economic outlook for the two countries remained muted. The UK market was the most notable laggard within Europe. Record consumer debt levels in the UK have been a burden on the economy, causing retail sales to flatten. Coupled with a slowdown in the previously hot residential housing market, the picture for the UK economy became clouded, and the market's return was subdued as a result.
Generally, countries with high levels of exposure to oils and/or metals and mining produced outstanding returns. Australia, Canada and Norway were all among the top country performers, with Canada the best of the 22 developed markets tracked by MSCI. Ireland was the worst performer in the index for the year.
Q: Have you made any changes to your investment approach?
A: We have made no changes in our strategy. Our goal is to maintain a fully invested posture, replicating the return and risk characteristics of the index. To this end, all changes made to the index in 2005 were incorporated in the fund in order to maintain proper tracking. The index itself provides broad-based exposure to 22 of the largest developed markets outside the United States, across all sectors of the economy. Going forward, we will continue to follow a passive strategy designed to provide returns that approximate those of the benchmark 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.
Portfolio Summary
Geographic Diversification (Excludes Cash Equivalents) | 12/31/05 | 12/31/04 |
| | |
Japan | 26% | 22% |
United Kingdom | 22% | 25% |
France | 9% | 9% |
Switzerland | 7% | 7% |
Germany | 7% | 7% |
Netherlands | 6% | 5% |
Australia | 5% | 5% |
Italy | 4% | 4% |
Spain | 4% | 4% |
Other | 10% | 12% |
| 100% | 100% |
Sector Diversification (Excludes Cash Equivalents) | 12/31/05 | 12/31/04 |
| | |
Financials | 29% | 28% |
Consumer Discretionary | 12% | 13% |
Industrials | 11% | 9% |
Energy | 8% | 8% |
Health Care | 8% | 8% |
Materials | 8% | 7% |
Consumer Staples | 7% | 8% |
Information Technology | 6% | 6% |
Telecommunication Services | 6% | 8% |
Utilities | 5% | 5% |
| 100% | 100% |
Geographic diversification and sector diversification are subject to change.
Ten Largest Equity Holdings at December 31, 2005 (14.6% of Net Assets) | Country | Percent |
1. BP PLC
Exporter and producer of oil and natural gas
| United Kingdom
| 2.1% |
2. Royal Dutch Shell PLC
Explores, produces and refines petroleum
| Netherlands
| 2.0% |
3. HSBC Holdings PLC
Provider of international banking and financial services
| United Kingdom
| 1.7% |
4. Toyota Motor Corp.
Manufacturer of diversified automotive products
| Japan
| 1.4% |
5. GlaxoSmithKline PLC
Develops, manufactures and markets vaccines and medicines
| United Kingdom
| 1.4% |
6. Vodafone Group PLC
Provider of mobile telecommunication services
| United Kingdom
| 1.3% |
7. Total SA
Producer of oil and natural gas
| France
| 1.3% |
8. Novartis AG
Manufacturer of pharmaceutical and nutrition products
| Switzerland
| 1.2% |
9. Nestle SA
Producer and seller of food products
| Switzerland
| 1.2% |
10. Roche Holding AG
Developer of pharmaceutical and chemical products
| Switzerland
| 1.0% |
Portfolio holdings are subject to change.
For more complete details about the Fund's investment portfolio, see page 34. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-scudder.com on the 15th of the following month. Please see the Account Management Resources section for contact information.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
Financial Statements
Statement of Assets and Liabilities as of December 31, 2005 |
Assets |
Investments in the EAFE® Equity Index Portfolio, at value
| $ 308,813,092 |
Receivable for Fund shares sold
| 704,210 |
Due from Advisor
| 20,405 |
Other assets
| 7,208 |
Total assets
| 309,544,915 |
Liabilities |
Payable for Fund shares redeemed
| 385,797 |
Other accrued expenses and payables
| 66,053 |
Total liabilities
| 451,850 |
Net assets, at value | $ 309,093,065 |
Net Assets |
Net assets consist of:
Accumulated distributions in excess of net investment income
| (2,470,705) |
Net unrealized appreciation (depreciation) on investments
| 98,411,619 |
Accumulated net realized gain (loss)
| (46,872,898) |
Paid-in capital
| 260,025,049 |
Net assets, at value | $ 309,093,065 |
Net Asset Value | |
Net Asset Value, offering and redemption price(a) per share ($309,093,065 ÷ 23,504,322 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized)
| $ 13.15 |
(a) Redemption price per share for shares held less than 30 days is equal to net asset value less a 2% redemption fee.The accompanying notes are an integral part of the financial statements.
Statement of Operations for the year ended December 31, 2005 |
Investment Income |
Income and expenses allocated from EAFE® Equity Index Portfolio:
Dividends (net of foreign taxes withheld of $849,765)
| $ 7,955,359 |
Interest — Cash Management QP Trust
| 145,018 |
Interest — Cash Management Fund Institutional
| 65,139 |
Interest
| 18,313 |
Expenses(a)
| (1,037,187) |
Net investment income from the EAFE® Equity Index Portfolio
| 7,146,642 |
Expenses:
Administrator service fee
| 446,506 |
Auditing fees
| 27,448 |
Legal fees
| 29,988 |
Trustees' fees and expenses
| 4,415 |
Reports to shareholders
| 63,332 |
Registration fees
| 30,382 |
Other
| 1,874 |
Total expenses before expense reductions
| 603,945 |
Expense reductions
| (471,932) |
Total expenses after expense reductions
| 132,013 |
Net investment income (loss) | 7,014,629 |
Realized and Unrealized Gain (Loss) on Investment Transactions |
Net realized gain (loss) from:
Investments
| (2,488,900) |
Futures
| 2,563,507 |
Foreign currency related transactions
| (520,619) |
| (446,012) |
Net unrealized appreciation (depreciation) during the period on:
Investments
| 32,576,511 |
Futures
| (400,027) |
Foreign currency related transactions
| (603,391) |
| 31,573,093 |
Net gain (loss) on investment transactions | 31,127,081 |
Net increase (decrease) in net assets resulting from operations | $ 38,141,710 |
a For the year ended December 31, 2005, the Advisor for EAFE® Equity Index Portfolio waived/reimbursed fees in the amount of $167,385, 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 |
| Years Ended December 31, |
Increase (Decrease) in Net Assets | 2005 | 2004 |
Operations:
Net investment income (loss)
| $ 7,014,629 | $ 4,780,954 |
Net realized gain (loss) on investment transactions
| (446,012) | 3,574,237 |
Net unrealized appreciation (depreciation) during the period on investment transactions
| 31,573,093 | 38,124,603 |
Net increase (decrease) in net assets resulting from operations
| 38,141,710 | 46,479,794 |
Distributions to shareholders from:
Net investment income
| (7,653,718) | (10,001,126) |
Tax return of capital
| (681,921) | — |
Fund share transactions:
Proceeds from shares sold
| 83,326,794 | 69,455,677 |
Reinvestment of distributions
| 8,027,440 | 9,084,704 |
Cost of shares redeemed
| (97,155,321) | (60,738,784) |
Redemption fees
| 1,210 | — |
Net increase (decrease) in net assets from Fund share transactions
| (5,799,877) | 17,801,597 |
Increase (decrease) in net assets | 24,006,194 | 54,280,265 |
Net assets at beginning of period
| 285,086,871 | 230,806,606 |
Net assets at end of period (including accumulated distributions in excess of net investment income of $2,470,705 and $1,340,254, respectively)
| $ 309,093,065 | $ 285,086,871 |
The accompanying notes are an integral part of the financial statements.
Financial Highlights
Years Ended December 31, | 2005 | 2004 | 2003 | 2002 | 2001 |
Selected Per Share Data |
Net asset value, beginning of period | $ 11.89 | $ 10.35 | $ 7.77 | $ 9.46 | $ 12.27 |
Income (loss) from investment operations: Net investment income (loss) | .29a | .33 | .17a | .16a | .19 |
Net realized and unrealized gain (loss) on investment transactions | 1.33 | 1.64 | 2.64 | (1.72) | (2.87) |
Total from investment operations | 1.62 | 1.97 | 2.81 | (1.56) | (2.68) |
Less distributions from: Net investment income | (.33) | (.43) | (.23) | (.13) | (.13) |
Tax return of capital | (.03) | — | — | — | — |
Total distributions | (.36) | (.43) | (.23) | (.13) | (.13) |
Redemption fees
| .00* | — | — | — | — |
Net asset value, end of period | $ 13.15 | $ 11.89 | $ 10.35 | $ 7.77 | $ 9.46 |
Total Return (%)b
| 13.57 | 19.42 | 36.45 | (16.63) | (21.75) |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions)
| 309 | 285 | 231 | 137 | 140 |
Ratio of expenses before expense reductions, including expenses of the EAFE® Equity Index Portfolio (%)
| .56 | .58 | .60 | .65 | .63 |
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) (%)
| 2.35 | 1.98 | 1.99 | 1.83 | 1.68 |
a Based on average shares outstanding during the period.
b Total return would have been lower had certain expenses not been reduced.
* Amount is less than $.005.
|
Notes to Financial Statements
A. Significant Accounting Policies
DWS EAFE® Equity Index Fund (formerly "EAFE® Equity Index Fund") (the "Fund") is a diversified series of the DWS Advisor Funds II (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." or the "Advisor"). 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 Statement of Additional Information.
On December 31, 2005, 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.
During the year ended December 31, 2005, the Fund utilized $13,000 of a prior year capital loss carryforward. At December 31, 2005, the Fund had a net tax basis capital loss carryforward of approximately $42,600,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until December 31, 2008 ($13,400,000), December 31, 2009 ($14,100,000), December 31, 2010 ($14,900,000) and December 31, 2011 ($200,000), the respective expiration dates, whichever occurs first, which may be subject to certain limitations under Sections 382-383 of the Internal Revenue Code.
In addition, from November 1, 2005 through December 31, 2005, the Fund incurred approximately $261,000 of net currency losses. As permitted by tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the fiscal year ended December 31, 2006.
Distribution of Income and Gains. Net investment income of the Fund is declared and distributed to shareholders 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, 2005, the Fund's components of distributable earnings (accumulated losses) on a tax-basis were as follows:
Undistributed ordinary income
| $ — |
Capital loss carryforwards
| $ 42,600,000 |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| Years Ended December 31, |
| 2005 | 2004 |
Distributions from ordinary income
| $ 7,653,718 | $ 10,001,126 |
Return of capital distributions
| $ 681,921 | $ — |
Redemption Fees. Effective February 1, 2005, the Fund imposes a redemption fee of 2% of the total redemption amount on all Fund shares redeemed or exchanged within 30 days of buying them, either by purchase or exchange. This fee is assessed and retained by the Fund for the benefit of the remaining shareholders. The redemption fee is accounted for as an addition to paid-in capital.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. The Fund receives a daily allocation of the Portfolio's income, expenses 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
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG.
DeAM, Inc. 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, 2005, the Advisor and Administrator have contractually agreed to waive a portion of their fees and reimburse expenses of the Fund to the extent necessary to maintain the annual expenses at 0.40%, including expenses allocated from the Portfolio.
Accordingly, for the year ended December 31, 2005, the Administrator Service Fee was $446,506, all of which was waived. In addition, under this arrangement the Advisor and Administrator reimbursed the Fund in the amount of $25,426.
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 Lead Trustee of the Board and the Chairman of each committee of the Board receives additional compensation for his/her services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Typesetting and Filing Service Fees. Under an agreement with Deutsche Investment Management Americas Inc. ("DeIM"), an indirect, wholly owned subsidiary of Deutsche Bank AG, DeIM is compensated for providing typesetting and regulatory filing services to the Fund. For the year ended December 31, 2005, the amount charged to the Fund by DeIM included in the reports to shareholders aggregated $19,160, of which $8,400 is unpaid.
C. Share Transactions
The following table summarizes share and dollar activity in the Fund:
| Year Ended December 31, 2005 | Year Ended December 31, 2004 |
| Shares | Dollars | Shares | Dollars |
Shares sold
| 6,916,415 | $ 83,326,794 | 6,470,054 | $ 69,455,677 |
Shares issued to shareholders in reinvestment of distributions
| 579,209 | $ 8,027,440 | 787,494 | $ 9,084,704 |
Shares redeemed
| (7,959,691) | $ (97,155,321) | (5,599,016) | $ (60,738,784) |
Redemption Fees
| | $ 1,210 | | $ — |
Net increase (decrease) | (464,067) | $ (5,799,877) | 1,658,532 | $ 17,801,597 |
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, 2005 there were two unaffiliated shareholders who held 42%,and 12%, respectively, and one affiliated shareholder who held 11% of the outstanding shares of the Fund.
E. Regulatory Matters and Litigation
Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds' advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.
With respect to the lawsuits, based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.
With respect to the regulatory matters, Deutsche Asset Management ("DeAM") has advised the funds as follows:
DeAM expects to reach final agreements with regulators early in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.
Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999-2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.
There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM's practices during 2001-2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors' payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors' procedures regarding non-cash compensation regarding entertainment provided to such associated persons. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
F. Subsequent Events
On January 13, 2006, DWS EAFE® Equity Index Fund, formerly a feeder fund in a master-feeder structure, received all of its assets from the master portfolio, EAFE® Equity Index Portfolio, and converted to a stand-alone fund. The master portfolio closed after the conversion of the feeder fund.
Effective February 6, 2006, Scudder Investments changed its name to DWS Scudder and Scudder funds were renamed DWS funds.
Report of Independent Registered Public Accounting Firm
To the Trustees of DWS Advisor Funds II and Shareholds of DWS EAFE® Equity Index Fund:
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 DWS EAFE® Equity Index Fund (formerly "EAFE Equity Index Fund") (the "Fund") at December 31, 2005, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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.
As discussed in Note F, "Subsequent Events", effective January 13, 2006, the Fund became a stand-alone fund upon conversion of the master portfolio into the Fund.
Boston, Massachusetts
March 1, 2006 | PricewaterhouseCoopers LLP |
Tax Information (Unaudited)
The Fund paid foreign taxes of $512,375 and earned $6,785,868 of foreign source income year during the year ended December 31, 2005. Pursuant to section 853 of the Internal Revenue Code, the Fund designates $0.02 per share as foreign taxes paid and $0.29 per share as income earned from foreign sources for the year ended December 31, 2005.
For federal income tax purposes, the Fund designates $6,300,000, 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.
Trustees and Officers
The following individuals hold the same position with the fund and the DWS 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 Inc. (international information collection and risk-management firm (since September 2002); Chairman, IEP Advisors, Inc. (July 1998-present); Member of the Board, Hollinger International, Inc.3 (publishing) (September 1995 to present), HCL Technologies Limited (information technology) (since April 1999), 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 (since July 1996); Director, The European Equity Fund, Inc. (since 2000), The New Germany Fund, Inc. (since 2004), The Central Europe and Russia Fund, Inc. (since 2000), DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). 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); Chairman of the Board, Weirton Steel Corporation3 (April 1996-2004 )
| 54 |
Martin J. Gruber
7/15/37
Trustee since 1992 for the fund and since 1999 for the DWS Investment Portfolios
| Nomura Professor of Finance, Leonard N. Stern School of Business, New York University (since September 1965); 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), DWS Global High Income Fund, Inc. (since 2005), DWS Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee, TIAA (pension funds) (January 1996-January 2000); Trustee, CREF and CREF Mutual Funds (January 2000-March 2005); Chairman, CREF and CREF Mutual Funds, (February 2004-March 2005) and Director, S.G. Cowen Mutual Funds (January 1985-January 2001)
| 51 |
Richard J. Herring
2/18/46
Trustee since 1995 for the fund and since 1999 for the DWS 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).
| 51 |
Graham E. Jones
1/31/33
Trustee since 2002
| Senior Vice President, BGK Realty, Inc. (commercial real estate) (since 1995); Director, Scudder Global High Income Fund, Inc. (since 2005), Scudder Global Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee, Morgan Stanley Asset Management, various funds (1985-2001); Trustee, Weiss, Peck and Greer, various funds (1985-2005); Trustee, 7 open-end mutual funds managed by Sun Capital Advisers, Inc. (since 1998).
| 51 |
Rebecca W. Rimel
4/10/51
Trustee since 2002
| President and Chief Executive Officer, The Pew Charitable Trusts (charitable foundation) (1994-present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994-present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-present); Director, DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005)
| 51 |
Philip Saunders, Jr.
10/11/35
Trustee since 1986 for the fund and since 1993 for the DWS 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).
| 51 |
William N. Searcy, Jr.
9/3/46
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-October 2003).
| 51 |
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 |
William N. Shiebler4
2/6/42
Trustee since 2004
| Vice Chairman, Deutsche Asset Management ("DeAM") and a member of the DeAM Global Executive Committee (since 2002); Vice Chairman of Putnam Investments, Inc. (1999); Director and Senior Managing Director of Putnam Investments, Inc. and President, Chief Executive Officer, and Director of Putnam Mutual Funds Inc. (1990-1999).
| 120 |
Officers |
Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years |
Vincent J. Esposito6
6/8/56
President since 2005
| Managing Director5, Deutsche Asset Management (since 2003); President and Chief Executive Officer of The Central Europe and Russia Fund, Inc., The European Equity Fund, Inc., The New Germany Fund, Inc. (since 2003) (registered investment companies); Vice Chairman and Director of The Brazil Fund, Inc. (2004-present); formerly, Managing Director, Putnam Investments (1991-2002)
|
Paul H. Schubert6
1/11/63
Chief Financial Officer since 2004
Treasurer since June 2005
| Managing Director5, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998)
|
John Millette7
8/23/62
Secretary since 2003
| Director5, Deutsche Asset Management.
|
Patricia DeFilippis6
6/21/63
Assistant Secretary since 2005
| Vice President, Deutsche Asset Management (since June 2005); Counsel, New York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC (1998-2003)
|
Elisa D. Metzger
9/15/62
Assistant Secretary since 2005
| Director5, Deutsche Asset Management (since September 2005); Counsel, Morrison and Foerster LLP (1999-2005)
|
Caroline Pearson7
4/1/62
Assistant Secretary since 2002
| Managing Director5, Deutsche Asset Management.
|
Scott M. McHugh7
9/13/71
Assistant Treasurer since 2005
| Director5, Deutsche Asset Management.
|
Kathleen Sullivan D'Eramo7
1/25/57
Assistant Treasurer since 2003
| Director5, Deutsche Asset Management.
|
John Robbins6
4/8/66
Anti-Money Laundering Compliance Officer since 2005
| Managing Director5, Deutsche Asset Management (since 2005); formerly, Chief Compliance Officer and Anti-Money Laundering Compliance Officer for GE Asset Management (1999-2005)
|
Philip Gallo6
8/2/62
Chief Compliance Officer since 2004
| Managing Director5, Deutsche Asset Management (2003-present). Formerly, Co-Head of Goldman Sachs Asset Management Legal (1994-2003)
|
A. Thomas Smith6,8
12/14/56
Chief Legal Officer, since 2005
| Managing Director5, Deutsche Asset Management (2004-present); formerly, General Counsel, Morgan Stanley and Van Kampen and Investments (1999-2004); Vice President and Associate General Counsel, New York Life Insurance Company (1994-1999); senior attorney, The Dreyfus Corporation (1991-1993); senior attorney, Willkie Farr & Gallagher (1989-1991); staff attorney, US Securities & Exchange Commission and the Illinois Securities Department (1986-1989)
|
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 DWS Advisor Funds II of which this fund is a series and DWS Investment Portfolios.3 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.4 Mr. Shiebler is a Trustee who is an "interested person" within the meaning of Section 2(a)(19) of the 1940 Act. Mr. Shiebler is a Managing Director of Deutsche Asset Management, the US asset management unit of Deutsche Bank AG and its affiliates. Mr. Shiebler's business address is 345 Park Avenue, New York, New York 10154.5 Executive title, not a board directorship6 Address: 345 Park Avenue, New York, New York 101547 Address: Two International Place, Boston, Massachusetts 021108 Elected on December 2, 2005The 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 DWS EAFE® Equity Index Portfolio should be read in conjunction with the Fund's financial statements.)
Investment Portfolio as of December 31, 2005
| Shares | Value ($) |
| |
Common Stocks 95.6% |
Australia 5.0% |
Alinta Ltd. | 3,780 | 30,898 |
Alumina Ltd. | 39,127 | 212,835 |
Amcor Ltd. | 30,791 | 168,619 |
AMP Ltd. | 53,882 | 303,762 |
Ansell Ltd. | 2,546 | 20,625 |
Aristocrat Leisure Ltd. | 11,798 | 106,557 |
Australia & New Zealand Banking Group Ltd. | 54,497 | 956,845 |
Australian Gas & Light Co., Ltd. | 16,260 | 204,908 |
Australian Stock Exchange Ltd. | 4,390 | 104,595 |
AXA Asia Pacific Holdings Ltd. | 18,956 | 70,595 |
Babcock & Brown Ltd. | 2,317 | 29,131 |
BHP Billiton Ltd. | 105,523 | 1,759,916 |
BlueScope Steel Ltd. | 24,736 | 126,394 |
Boral Ltd. | 13,615 | 80,847 |
Brambles Industries Ltd. | 27,583 | 204,638 |
Caltex Australia Ltd. | 1,505 | 21,382 |
Centro Properties Group | 31,415 | 145,782 |
CFS Gandel Retail Trust | 45,527 | 66,752 |
CFS Gandel Retail Trust (Unit)* | 1,426 | 2,091 |
Coca-Cola Amatil Ltd. | 18,969 | 107,217 |
Cochlear Ltd. | 1,114 | 37,347 |
Coles Myer Ltd. | 31,773 | 237,819 |
Commonwealth Bank of Australia | 36,445 | 1,142,188 |
Commonwealth Property Office Fund | 22,142 | 20,696 |
Computershare Ltd. | 10,718 | 53,352 |
CSL Ltd. | 5,559 | 173,200 |
CSR Ltd. | 25,654 | 65,448 |
DB RREEF Trust | 51,291 | 52,266 |
Downer EDI Ltd. | 2,059 | 10,838 |
Foster's Group Ltd. | 66,505 | 272,052 |
Futuris Corp., Ltd. | 11,043 | 15,706 |
General Property Trust | 51,669 | 155,302 |
Harvey Norman Holdings Ltd. | 9,201 | 19,696 |
Iluka Resources Ltd. | 2,479 | 14,248 |
ING Industrial Fund | 10,536 | 17,224 |
Insurance Australia Group Ltd. | 49,201 | 195,495 |
Investa Property Group | 30,734 | 44,724 |
John Fairfax Holdings Ltd. | 38,931 | 114,447 |
Leighton Holdings | 4,873 | 63,874 |
Lend Lease Corp., Ltd. | 14,197 | 150,705 |
Lion Nathan Ltd. | 5,624 | 31,499 |
Macquarie Airports | 9,059 | 21,052 |
Macquarie Bank Ltd. | 6,798 | 339,633 |
Macquarie Communications Infrastructure Group | 8,274 | 34,453 |
Macquarie Goodman Group | 42,963 | 150,552 |
Macquarie Infrastructure Group | 71,385 | 186,303 |
Mayne Pharma Ltd.* | 22,896 | 42,634 |
Mirvac Group | 33,586 | 101,442 |
Multiplex Group | 8,300 | 19,167 |
National Australia Bank Ltd. | 44,389 | 1,054,347 |
Newcrest Mining Ltd. | 11,381 | 202,745 |
Onesteel Ltd. | 8,598 | 21,116 |
Orica Ltd. | 8,679 | 129,797 |
Origin Energy Ltd. | 26,752 | 147,285 |
Pacific Brands Ltd. | 8,016 | 15,632 |
Paperlinx Ltd. | 8,341 | 23,481 |
Patrick Corp., Ltd. | 24,398 | 132,358 |
Perpetual Trustees Australia Ltd. | 1,300 | 64,806 |
Publishing & Broadcasting Ltd. | 2,483 | 29,998 |
Qantas Airways Ltd. | 18,814 | 55,722 |
QBE Insurance Group Ltd. | 24,108 | 346,402 |
Rinker Group Ltd. | 26,794 | 323,122 |
Rio Tinto Ltd. | 8,087 | 409,072 |
Santos Ltd. | 20,039 | 179,960 |
Sonic Healthcare Ltd. | 10,322 | 111,993 |
Stockland | 39,174 | 186,670 |
Suncorp Metway Ltd. | 16,609 | 244,130 |
Symbion Health Ltd. | 22,896 | 59,251 |
TABCORP Holding Ltd. | 14,914 | 170,234 |
Telstra Corp., Ltd. | 68,952 | 198,657 |
Toll Holdings Ltd. | 4,152 | 45,353 |
Transurban Group | 22,352 | 108,149 |
Wesfarmers Ltd. | 10,714 | 290,379 |
Westfield Group | 44,103 | 587,148 |
Westpac Banking Corp., Ltd. | 55,846 | 931,401 |
Woodside Petroleum Ltd. | 14,100 | 405,096 |
Woolworths Ltd. | 32,987 | 407,480 |
(Cost $8,304,378) | 15,389,535 |
Austria 0.4% |
Boehler-Uddeholm AG | 260 | 43,878 |
Erste Bank der Oesterreichischen Sparkassen AG | 3,980 | 220,866 |
Flughafen Wien AG | 250 | 17,886 |
Immofinanz Immobilien Anlagen AG* | 10,849 | 104,090 |
Mayr Melnhof Karton AG | 150 | 20,898 |
Meinl European Land Ltd.* | 2,162 | 38,166 |
Oesterreichische Elektrizititaetswirtschafts AG "A" | 280 | 99,872 |
OMV AG | 5,250 | 306,042 |
RHI AG* | 250 | 6,729 |
Telekom Austria AG | 11,217 | 251,881 |
Voestalpine AG | 670 | 67,349 |
Wienerberger AG | 2,310 | 91,984 |
(Cost $644,693) | 1,269,641 |
Belgium 1.2% |
Agfa Gevaert NV | 2,975 | 54,276 |
Barco NV | 214 | 16,088 |
Bekaert NV | 369 | 34,490 |
Belgacom SA | 4,634 | 151,145 |
Cofinimmo | 119 | 18,836 |
Colruyt NV | 515 | 71,092 |
Compagnie Maritime Belge SA | 830 | 27,366 |
Delhaize Group | 2,152 | 140,636 |
Dexia | 16,478 | 380,022 |
Euronav SA | 830 | 24,084 |
Fortis | 35,247 | 1,124,594 |
Groupe Bruxelles Lambert SA | 1,991 | 195,289 |
Interbrew | 5,477 | 238,425 |
KBC Bankverzekeringsholding | 5,527 | 514,640 |
Mobistar SA | 744 | 59,015 |
Omega Pharma SA | 424 | 22,092 |
SA D'Ieteren NV | 90 | 24,773 |
Solvay SA | 1,907 | 210,192 |
UCB SA | 2,752 | 129,281 |
Umicore | 632 | 74,523 |
(Cost $2,252,931) | 3,510,859 |
Bermuda 0.0% |
Frontline Ltd.(Cost $27,665) | 1,700 | 64,984 |
Denmark 0.8% |
A P Moller-Maersk AS | 37 | 382,799 |
Bang & Olufsen AS "B" | 261 | 26,837 |
Carlsberg AS "B" | 1,050 | 56,315 |
Coloplast AS "B" | 812 | 50,380 |
Dampskibsselskabet Torm AS | 435 | 21,053 |
Danisco AS | 1,415 | 108,337 |
Danske Bank AS | 13,607 | 479,333 |
De Sammensluttede Vognmaend AS | 648 | 79,997 |
FLSmidth & Co. AS "B" | 744 | 21,959 |
GN Store Nord AS | 6,554 | 85,799 |
H. Lundbeck AS | 2,105 | 43,590 |
NKT Holding AS | 557 | 25,543 |
Novo Nordisk AS "B" | 7,313 | 411,371 |
Novozymes AS "B" | 1,619 | 88,631 |
Ostasiatiske Kompagni | 461 | 43,452 |
TDC AS | 6,047 | 362,225 |
Topdanmark AS* | 546 | 47,392 |
Vestas Wind Systems AS* | 4,730 | 77,682 |
William Demant Holding AS* | 765 | 42,304 |
(Cost $1,099,057) | 2,454,999 |
Finland 1.4% |
Amer Group Ltd. | 2,100 | 39,108 |
Cargotec Corp. "B"* | 1,200 | 41,612 |
Elisa Oyj "A" | 4,300 | 79,671 |
Fortum Oyj | 12,500 | 234,412 |
Kesko Oyj "B" | 1,900 | 53,873 |
Kone Oyj "B"* | 2,400 | 95,271 |
Metso Oyj | 3,000 | 82,115 |
Neste Oil Oyj* | 3,875 | 109,552 |
Nokia Oyj | 127,000 | 2,322,989 |
Nokian Renkaat Oyj | 3,100 | 39,087 |
Orion Oyj "B" | 2,200 | 40,736 |
Outokumpu Oyj | 3,200 | 47,545 |
Rautaruukki Oyj | 2,400 | 58,390 |
Sampo Oyj "A" | 11,300 | 196,925 |
Stora Enso Oyj "R" | 17,100 | 231,599 |
TietoEnator Oyj | 2,240 | 81,812 |
UPM-Kymmene Oyj | 14,900 | 292,120 |
Uponor Oyj | 1,800 | 38,358 |
Wartsila Oyj "B" | 1,800 | 53,276 |
YIT-Yhtyma Oyj | 2,100 | 89,826 |
(Cost $2,934,802) | 4,228,277 |
France 8.4% |
Accor SA | 5,590 | 307,472 |
Air France | 3,869 | 82,861 |
Alcatel SA* | 35,313 | 437,720 |
Alstom* | 3,197 | 184,023 |
Atos Origin SA* | 1,845 | 121,556 |
Autoroutes du Sud de la France | 1,979 | 117,147 |
Axa | 42,430 | 1,369,348 |
BNP Paribas SA | 22,146 | 1,792,045 |
Bouygues SA | 5,679 | 277,675 |
Business Objects SA* | 1,527 | 61,809 |
CapGemini SA* | 3,829 | 153,719 |
Carrefour SA | 15,816 | 741,118 |
Casino Guichard-Perrachon SA | 945 | 62,932 |
CNP Assurances | 777 | 61,265 |
Compagnie de Saint-Gobain | 8,736 | 519,713 |
Compagnie Generale des Etablissements Michelin "B" | 4,250 | 238,899 |
Credit Agricole SA | 16,779 | 528,599 |
Dassault Systemes SA | 1,982 | 111,904 |
Essilor International SA | 2,763 | 223,090 |
France Telecom SA | 47,393 | 1,177,719 |
Gecina SA | 171 | 19,637 |
Groupe Danone | 6,668 | 696,667 |
Hermes International | 487 | 121,827 |
Imerys SA | 1,152 | 83,331 |
Klepierre | 490 | 46,003 |
L' Air Liquide SA | 3,100 | 596,390 |
L'Oreal SA | 8,439 | 627,430 |
Lafarge SA | 4,866 | 437,825 |
Lagardere S.C.A. | 3,422 | 263,335 |
LVMH Moet- Hennessy Louis Vuitton SA | 6,974 | 619,652 |
Neopost SA | 859 | 86,137 |
PagesJaunes SA | 3,445 | 89,687 |
Pernod Ricard SA | 2,003 | 349,537 |
Pinault-Printemps-Redoute SA | 1,920 | 216,284 |
PSA Peugeot Citroen | 4,498 | 259,336 |
Publicis Groupe | 3,900 | 135,746 |
Renault SA | 5,272 | 430,041 |
Sagem SA | 5,325 | 127,346 |
Sanofi-Aventis | 29,349 | 2,571,225 |
Schneider Electric SA | 6,439 | 574,403 |
SCOR | 15,577 | 33,564 |
Societe BIC SA | 1,073 | 63,834 |
Societe des Autoroutes du Nord et de l'Est de la France* | 451 | 30,541 |
Societe des Autoroutes Paris-Rhin-Rhone | 839 | 59,995 |
Societe Generale | 9,887 | 1,216,172 |
Societe Television Francaise 1 | 3,454 | 95,851 |
Sodexho Alliance SA | 2,348 | 96,737 |
Suez SA (a) | 24,775 | 771,408 |
Suez SA (a) | 3,124 | 97,197 |
Technip SA | 2,450 | 147,348 |
Thales SA | 2,114 | 95,856 |
Thomson SA | 7,747 | 162,339 |
Total SA | 15,683 | 3,939,939 |
Total SA VVPR Strip* | 972 | 0 |
Unibail | 1,371 | 182,439 |
Valeo SA | 2,050 | 76,232 |
Veolia Environnement | 9,378 | 424,564 |
Vinci SA | 4,390 | 377,585 |
Vivendi Universal SA | 30,116 | 943,414 |
Zodiac SA | 882 | 56,648 |
(Cost $16,701,137) | 25,794,116 |
Germany 6.1% |
Adidas-Salomon AG | 1,383 | 261,973 |
Allianz AG (Registered) | 10,584 | 1,603,139 |
Altana AG | 2,010 | 109,463 |
BASF AG | 15,113 | 1,157,809 |
Bayer AG | 18,712 | 781,784 |
Beiersdorf AG | 553 | 68,088 |
Celesio AG | 1,138 | 97,893 |
Commerzbank AG | 16,322 | 502,800 |
Continental AG | 3,726 | 330,753 |
DaimlerChrysler AG | 25,655 | 1,310,289 |
Deutsche Bank AG (Registered) (b) | 13,887 | 1,346,503 |
Deutsche Boerse AG | 2,857 | 292,781 |
Deutsche Lufthansa AG (Registered) | 6,416 | 95,025 |
Deutsche Post AG | 19,577 | 474,667 |
Deutsche Telekom AG (Registered) | 76,792 | 1,280,070 |
Douglas Holdings AG | 650 | 25,010 |
E.ON AG | 17,528 | 1,813,465 |
Epcos AG* | 1,350 | 17,677 |
Fresenius Medical Care AG | 1,066 | 112,321 |
HeidelbergCement AG VVPR Strip* | 104 | 0 |
Heidelberger Druckmaschinen AG | 1,322 | 50,585 |
Hochtief AG | 1,606 | 71,928 |
Hypo Real Estate Holding AG | 3,920 | 204,106 |
Infineon Technologies AG* | 19,063 | 174,456 |
IVG Immobilien AG | 1,687 | 35,371 |
KarstadtQuelle AG* | 2,059 | 31,275 |
Linde AG | 2,435 | 189,601 |
MAN AG | 4,013 | 214,175 |
Merck KGaA | 1,544 | 127,864 |
Metro AG | 4,152 | 200,555 |
MLP AG | 1,150 | 23,853 |
Muenchener Rueckversicherungs-Gesellschaft AG (Registered) | 4,846 | 656,219 |
Premiere AG* | 1,539 | 26,966 |
Puma AG | 455 | 132,783 |
RWE AG | 11,920 | 882,711 |
SAP AG | 6,285 | 1,139,635 |
Schering AG | 4,699 | 314,874 |
Siemens AG (Registered) | 22,571 | 1,934,659 |
Suedzucker AG | 1,245 | 29,229 |
ThyssenKrupp AG | 10,252 | 213,860 |
TUI AG | 6,169 | 126,350 |
Volkswagen AG | 4,958 | 261,851 |
Wincor Nixdorf AG | 421 | 44,544 |
(Cost $12,545,422) | 18,768,960 |
Greece 0.6% |
Alpha Bank AE | 7,874 | 229,881 |
Coca-Cola Hellenic Bottling Co. SA | 3,920 | 115,465 |
Cosmote Mobile Telelcommunications SA | 3,670 | 81,598 |
EFG Eurobank Ergasias | 5,980 | 187,896 |
Emporiki Bank of Greece SA (a) | 1,860 | 62,935 |
Emporiki Bank of Greece SA (a) | 465 | 15,800 |
Germanos SA | 1,260 | 21,212 |
Hellenic Petroleum SA | 2,970 | 41,772 |
Hellenic Technodomiki SA | 2,280 | 14,738 |
Hellenic Telecommunications Organization SA* | 10,230 | 218,003 |
Intracom SA | 2,190 | 14,520 |
National Bank of Greece SA | 8,981 | 382,136 |
OPAP SA | 6,889 | 237,336 |
Piraeus Bank SA | 4,650 | 99,533 |
Public Power Corp. (PPC) | 3,486 | 76,186 |
Titan Cement Co. | 2,230 | 91,083 |
Viohalco, Hellenic Copper and Aluminum Industry SA | 3,290 | 26,486 |
(Cost $1,202,934) | 1,916,580 |
Hong Kong 1.5% |
ASM Pacific Technology Ltd. | 5,000 | 28,374 |
Bank of East Asia Ltd. | 42,971 | 129,684 |
BOC Hong Kong Holdings Ltd. | 105,000 | 202,453 |
Cathay Pacific Airways Ltd. | 35,000 | 61,390 |
Cheung Kong (Holdings) Ltd. | 42,000 | 431,448 |
Cheung Kong Infrastrucure Holdings Ltd. | 10,000 | 31,211 |
CLP Holdings Ltd. | 49,600 | 287,545 |
Esprit Holdings Ltd. | 26,815 | 190,556 |
Giordano International Ltd. | 26,000 | 14,587 |
Hang Lung Properties Ltd. | 63,000 | 98,315 |
Hang Seng Bank Ltd. | 21,800 | 284,813 |
Henderson Land Development Co., Ltd. | 22,000 | 103,564 |
Hong Kong & China Gas Co., Ltd. | 100,887 | 214,690 |
Hong Kong Electric Holding Ltd. | 39,500 | 195,879 |
Hong Kong Exchanges & Clearing Ltd. | 32,000 | 132,686 |
Hopewell Holdings Ltd. | 21,000 | 52,814 |
Hutchison Telecommunications International Ltd.* | 30,000 | 43,334 |
Hutchison Whampoa Ltd. | 60,100 | 572,813 |
Hysan Development Co. | 13,660 | 33,826 |
Johnson Electric Holdings Ltd. | 36,000 | 34,126 |
Kerry Properties Ltd. | 11,156 | 29,567 |
Kingboard Chemical Holdings Ltd. | 8,900 | 24,105 |
Li & Fung Ltd. | 55,000 | 106,047 |
Link (REIT)* | 65,000 | 123,232 |
MTR Corp., Ltd. | 38,301 | 75,578 |
New World Development Co., Ltd. | 65,350 | 90,183 |
Orient Overseas International Ltd. | 4,400 | 14,925 |
PCCW Ltd. | 119,443 | 73,558 |
SCMP Group Ltd. | 27,200 | 10,085 |
Shangri-La Asia Ltd. | 36,499 | 60,960 |
Sino Land Co., Ltd. | 32,747 | 39,912 |
Solomon Systech International Ltd. | 28,000 | 11,556 |
Sun Hung Kai Properties Ltd. (REIT) | 37,297 | 364,376 |
Swire Pacific Ltd. "A" | 26,500 | 237,533 |
Techtronic Industries Co., Ltd. | 30,000 | 71,386 |
Television Broadcasts Ltd. | 9,000 | 47,823 |
Wharf Holdings Ltd. | 36,102 | 127,811 |
Wing Hang Bank Ltd. | 4,000 | 28,786 |
Yue Yuen Industrial (Holdings) Ltd. | 18,000 | 50,028 |
(Cost $3,575,906) | 4,731,559 |
Ireland 0.8% |
Allied Irish Banks PLC | 26,532 | 566,973 |
Bank of Ireland PLC (b) | 25,404 | 400,008 |
Bank of Ireland PLC (b) | 4,336 | 68,325 |
C&C Group PLC | 8,628 | 55,159 |
CRH PLC | 16,352 | 481,074 |
DCC PLC | 2,107 | 45,150 |
Depfa Bank PLC | 10,713 | 158,412 |
Eircom Group PLC | 23,313 | 54,649 |
Elan Corp. PLC* | 12,546 | 169,327 |
Fyffes PLC | 7,415 | 20,191 |
Grafton Group PLC (Units)* | 6,932 | 75,502 |
Greencore Group PLC | 4,345 | 17,284 |
IAWS Group PLC | 3,475 | 49,986 |
Independent News & Media PLC | 19,065 | 57,330 |
Irish Life & Permanent PLC | 8,361 | 170,850 |
Kerry Group PLC | 4,249 | 94,119 |
Kingspan Group PLC | 2,310 | 29,126 |
Paddy Power PLC | 1,301 | 18,637 |
Ryanair Holdings PLC* | 5,147 | 50,576 |
Waterford Wedgwood PLC (Units)* | 5,002 | 355 |
(Cost $2,103,497) | 2,583,033 |
Italy 3.6% |
Alleanza Assicurazioni SpA | 12,046 | 148,888 |
Assicurazioni Generali SpA | 27,827 | 972,518 |
Autogrill SpA | 3,093 | 42,367 |
Autostrade SpA | 8,564 | 205,415 |
Banca Antonventeta SpA | 3,070 | 95,553 |
Banca Fideuram SpA | 8,881 | 48,260 |
Banca Intesa SpA | 92,622 | 490,707 |
Banca Intesa SpA (RCN) | 28,797 | 142,337 |
Banca Monte dei Paschi di Siena SpA | 31,366 | 146,587 |
Banca Nazionale del Lavoro SpA* | 36,581 | 120,613 |
Banca Popolare di Milano | 10,530 | 115,377 |
Banche Popolari Unite | 10,297 | 225,770 |
Banco Popolari di Verona e Novara | 10,549 | 213,436 |
Benetton Group SpA | 1,610 | 18,337 |
Bulgari SpA | 3,349 | 37,389 |
Capitalia SpA | 41,015 | 237,447 |
Enel SpA | 122,529 | 962,487 |
Eni SpA | 74,971 | 2,079,604 |
Fiat SpA* | 13,826 | 120,473 |
Fineco SpA | 2,988 | 28,760 |
Finmeccanica SpA | 8,407 | 162,732 |
Gruppo Editoriale L'Espresso SpA | 2,322 | 12,247 |
Italcementi SpA | 2,001 | 37,359 |
Lottomatica SpA* | 657 | 23,747 |
Luxottica Group SpA | 4,644 | 117,823 |
Mediaset SpA | 23,538 | 249,406 |
Mediobanca SpA | 13,729 | 262,173 |
Mediolanum SpA | 6,085 | 40,126 |
Mondadori (Arnoldo) Editore SpA | 3,666 | 34,092 |
Pirelli & C. Accomandita per Azioni | 84,527 | 77,656 |
San Paolo IMI SpA | 31,494 | 492,545 |
SeatPagine Gialle SpA* | 129,754 | 60,601 |
Snam Rete Gas SpA | 29,235 | 120,188 |
Telecom Italia Media SpA* | 43,490 | 23,015 |
Telecom Italia SpA | 304,463 | 886,716 |
Telecom Italia SpA (Saving Shares) | 171,547 | 425,483 |
Terna SpA | 33,898 | 83,675 |
Tiscali SpA* | 2,936 | 9,298 |
UniCredito Italiano SpA (a) | 101,852 | 699,379 |
UniCredito Italiano SpA (a) | 129,186 | 890,130 |
(Cost $7,283,595) | 11,160,716 |
Japan 24.5% |
ACOM Co., Ltd. | 2,300 | 147,827 |
Aderans Co., Ltd. | 500 | 15,008 |
Advantest Corp. | 2,200 | 221,800 |
AEON Co., Ltd. | 19,200 | 488,405 |
AEON Credit Services Co., Ltd. | 1,130 | 106,930 |
Aiful Corp. | 1,950 | 162,865 |
Aisin Seiki Co., Ltd. | 6,000 | 220,291 |
Ajinomoto Co., Inc. | 17,000 | 173,986 |
All Nippon Airways Co., Ltd. | 13,000 | 52,911 |
Alps Electric Co., Ltd. | 6,000 | 83,588 |
Amada Co., Ltd. | 12,000 | 105,821 |
Aoyama Trading Co., Ltd. | 2,200 | 74,431 |
Asahi Breweries Ltd. | 11,000 | 134,218 |
Asahi Glass Co., Ltd. | 30,000 | 387,417 |
Asahi Kasei Corp. | 35,000 | 236,825 |
Asatsu, Inc. | 1,100 | 34,977 |
Astellas Pharma, Inc. | 15,400 | 600,670 |
Autobacs Seven Co., Ltd. | 1,100 | 57,735 |
Bank of Yokohama Ltd. | 34,000 | 278,204 |
Benesse Corp. | 1,900 | 66,537 |
Bridgestone Corp. | 20,000 | 416,331 |
Canon Sales Co., Inc. | 2,000 | 42,735 |
Canon, Inc. | 22,000 | 1,287,150 |
Casio Computer Co., Ltd. | 7,000 | 117,166 |
Central Glass Co., Ltd. | 3,000 | 16,611 |
Central Japan Railway Co. | 45 | 431,170 |
Chiyoda Corp. | 4,000 | 91,915 |
Chubu Electric Power Co., Inc. | 17,600 | 419,350 |
Chugai Pharmaceutical Co., Ltd. | 9,000 | 193,072 |
Citizen Watch Co., Ltd. | 8,000 | 66,477 |
COMSYS Holdings Corp. | 3,000 | 42,913 |
Credit Saison Co., Ltd. | 4,800 | 239,725 |
CSK Corp. | 2,100 | 104,880 |
Dai Nippon Printing Co., Ltd. | 18,000 | 320,516 |
Daicel Chemical Industries Ltd. | 6,000 | 43,142 |
Daido Steel Co., Ltd. | 8,000 | 76,449 |
Daiichi Sankyo Co., Ltd.* | 18,272 | 352,472 |
Daikin Industries Ltd. | 7,000 | 204,774 |
Daimaru, Inc. | 7,000 | 101,022 |
Dainippon Ink & Chemical, Inc. | 21,000 | 90,991 |
Dainippon Screen Manufacturing Co., Ltd. | 5,000 | 41,845 |
Daito Trust Construction Co., Ltd. | 2,500 | 129,309 |
Daiwa House Industry Co., Ltd. | 14,000 | 218,900 |
Daiwa Securities Group, Inc. | 38,000 | 430,797 |
Denki Kagaku Kogyo Kabushiki Kaisha | 17,000 | 75,101 |
Denso Corp. | 15,100 | 521,109 |
DENTSU, Inc. | 59 | 192,106 |
Dowa Mining Co., Ltd. | 10,000 | 108,365 |
E*Trade Securities Co., Ltd. | 10 | 77,246 |
East Japan Railway Co. | 100 | 687,667 |
Ebara Corp. | 8,000 | 43,210 |
Eisai Co., Ltd. | 7,000 | 293,806 |
Electric Power Development Co., Ltd. | 3,600 | 123,627 |
FamilyMart Co., Ltd. | 2,300 | 77,814 |
FANCU Ltd. | 5,100 | 432,874 |
Fast Retailing Co., Ltd. | 1,800 | 175,978 |
Fuji Electric Holdings Co., Ltd. | 13,000 | 68,894 |
Fuji Photo Film Co., Ltd. | 15,000 | 496,036 |
Fuji Television Network, Inc. | 21 | 52,885 |
Fujikura Ltd. | 11,000 | 89,168 |
Fujitsu Ltd. | 50,000 | 380,718 |
Hankyu Department Stores, Inc. | 2,000 | 17,467 |
Hikari Tsushin, Inc. | 500 | 47,060 |
Hino Motors Ltd. | 6,000 | 38,004 |
Hirose Electric Co., Ltd. | 900 | 120,041 |
Hitachi Chemical Co., Ltd. | 3,900 | 103,175 |
Hitachi Construction Machinery Co., Ltd. | 2,000 | 46,636 |
Hitachi Ltd. | 91,000 | 613,431 |
Hitachi Software Engineering Co., Ltd. | 300 | 6,283 |
Hokkaido Electric Power Co., Inc. | 4,800 | 97,681 |
Hokugin Financial Group, Inc. | 31,000 | 144,834 |
Honda Motor Co., Ltd. | 22,500 | 1,283,970 |
House Food Corp. | 3,000 | 45,534 |
Hoya Corp. | 12,100 | 435,019 |
IBIDEN Co., Ltd. | 3,900 | 208,996 |
Inpex Corp. | 10 | 89,032 |
Isetan Co., Ltd. | 6,000 | 127,952 |
Ishikawajima-Harima Heavy Industries Co., Ltd.* | 35,000 | 110,697 |
ITO EN, Ltd. | 1,100 | 65,850 |
Itochu Corp. | 43,000 | 358,774 |
Itochu Techno-Science Corp. | 600 | 28,745 |
JAFCO Co., Ltd. | 600 | 53,572 |
Japan Airlines Corp. | 19,000 | 51,715 |
Japan Real Estate Investment Corp. (REIT) | 11 | 90,660 |
Japan Retail Fund Investment Corp. (REIT) | 9 | 69,903 |
Japan Tobacco, Inc. | 26 | 379,192 |
JFE Holdings, Inc. | 16,225 | 544,800 |
JGC Corp. | 7,000 | 133,251 |
JSR Corp. | 6,000 | 157,714 |
Kajima Corp. | 30,000 | 172,468 |
Kamigumi Co., Ltd. | 6,000 | 53,267 |
Kaneka Corp. | 9,000 | 108,746 |
Kansai Electric Power Co., Inc. | 21,900 | 470,738 |
Kansai Paint Co., Ltd. | 3,000 | 25,718 |
Kao Corp. | 16,000 | 428,711 |
Katokichi Co., Ltd. | 3,300 | 22,469 |
Kawasaki Heavy Industries Ltd. | 43,000 | 156,781 |
Kawasaki Kisen Kaisha Ltd. | 13,000 | 81,570 |
KDDI Corp. | 72 | 415,144 |
Keihin Electric Express Railway Co., Ltd. | 12,000 | 94,628 |
Keio Electric Railway Co., Ltd. | 16,000 | 95,646 |
Keisei Electric Railway Co., Ltd. | 5,000 | 34,129 |
Keyence Corp. | 870 | 247,497 |
Kikkoman Corp. | 6,000 | 58,252 |
Kinden Corp. | 6,000 | 54,182 |
Kintetsu Corp. | 43,900 | 175,697 |
Kirin Brewery Co., Ltd. | 22,000 | 256,497 |
Kobe Steel Ltd. | 82,000 | 265,604 |
Kokuyo Corp. | 3,000 | 44,465 |
Komatsu Ltd. | 27,000 | 446,661 |
Komori Corp. | 2,000 | 36,800 |
Konami Co., Ltd. | 3,200 | 70,412 |
Konica Minolta Holdings, Inc. | 15,000 | 152,754 |
Koyo Seiko Co., Ltd. | 4,000 | 74,448 |
Kubota Corp. | 30,000 | 252,088 |
Kuraray Co., Ltd. | 12,000 | 124,340 |
Kuraya Sanseido, Inc. | 5,100 | 73,818 |
Kurita Water Industries | 3,000 | 57,108 |
Kyocera Corp. | 4,900 | 357,315 |
Kyowa Hakko Kogyo Co., Ltd. | 10,000 | 69,784 |
Kyushu Electric Power Co. | 10,800 | 234,434 |
Lawson, Inc. | 1,900 | 78,297 |
Leopalace21 Corp. | 4,000 | 145,165 |
Mabuchi Motor Co., Ltd. | 700 | 38,877 |
Makita Corp. | 3,000 | 73,769 |
Marubeni Corp. | 38,000 | 203,960 |
Marui Co., Ltd. | 10,000 | 196,295 |
Matsumotokiyoshi Co., Ltd. | 500 | 15,814 |
Matsushita Electric Industrial Co., Ltd. | 60,614 | 1,169,261 |
Matsushita Electric Works Ltd. | 12,000 | 112,130 |
Meiji Dairies Corp. | 8,000 | 40,497 |
Meiji Seika Kaisha Ltd. | 12,000 | 63,798 |
Meitec Corp. | 1,100 | 35,630 |
Millea Holdings, Inc. | 43 | 740,153 |
Minebea Co., Ltd. | 8,000 | 42,668 |
Mitsubishi Chemical Holdings Corp.* | 33,000 | 207,903 |
Mitsubishi Corp. | 35,000 | 774,579 |
Mitsubishi Electric Corp. | 55,000 | 389,409 |
Mitsubishi Estate Co., Ltd. | 33,000 | 685,547 |
Mitsubishi Gas & Chemical Co., Ltd. | 10,000 | 94,544 |
Mitsubishi Heavy Industries Ltd. | 86,000 | 379,192 |
Mitsubishi Logistics Corp. | 3,000 | 50,519 |
Mitsubishi Materials Corp. | 31,000 | 158,503 |
Mitsubishi Rayon Co., Ltd. | 17,000 | 112,435 |
Mitsubishi Securities Co., Ltd. | 7,000 | 87,845 |
Mitsubishi UFJ Financial Group, Inc. | 212 | 2,876,161 |
Mitsui & Co., Ltd. | 42,000 | 539,534 |
Mitsui Chemicals, Inc. | 20,000 | 134,481 |
Mitsui Engineering & Shipbuilding Co., Ltd. | 14,000 | 45,584 |
Mitsui Fudosan Co., Ltd. | 22,000 | 446,772 |
Mitsui Mining & Smelting Co., Ltd. | 19,000 | 119,379 |
Mitsui O.S.K. Lines Ltd. | 31,000 | 270,480 |
Mitsui Sumitomo Insurance Co., Ltd. | 35,260 | 431,426 |
Mitsui Trust Holdings, Inc. | 15,100 | 181,300 |
Mitsukoshi Ltd. | 15,000 | 97,935 |
Mitsumi Electric Co., Ltd. | 900 | 10,180 |
Mizuho Financial Group, Inc. | 279 | 2,214,304 |
Murata Manufacturing Co., Ltd. | 6,000 | 384,619 |
Namco Bandai Holdings, Inc.* | 5,350 | 78,207 |
NEC Corp. | 54,000 | 336,083 |
NEC Electronics Corp. | 1,000 | 32,815 |
Net One Systems Co., Ltd. | 18 | 43,499 |
NGK Insulators Ltd. | 9,000 | 133,853 |
NGK Spark Plug Co., Ltd. | 6,000 | 129,732 |
Nichii Gakkan Co. | 300 | 7,631 |
Nichirei Corp. | 9,000 | 37,546 |
Nidec Corp. | 3,200 | 272,150 |
Nikko Cordial Corp. | 23,500 | 372,222 |
Nikon Corp. | 8,000 | 126,239 |
Nintendo Co., Ltd. | 3,000 | 362,488 |
Nippon Building Fund, Inc. | 12 | 101,242 |
Nippon Electric Glass Co., Ltd. | 6,000 | 131,004 |
Nippon Express Co., Ltd. | 25,000 | 152,414 |
Nippon Meat Packers, Inc. | 5,000 | 52,487 |
Nippon Mining Holdings, Inc. | 24,000 | 170,738 |
Nippon Oil Co., Ltd. | 35,000 | 271,548 |
Nippon Sheet Glass Co., Ltd. | 10,000 | 43,668 |
Nippon Steel Corp. | 181,000 | 644,592 |
Nippon Telegraph & Telephone Corp. | 151 | 686,276 |
Nippon Unipac Holdings | 32 | 128,071 |
Nippon Yusen Kabushiki Kaisha | 30,000 | 205,537 |
Nishi-Nippon City Bank Ltd. | 12,000 | 71,633 |
Nishimatsu Construction Co., Ltd. | 5,000 | 20,520 |
Nissan Chemical Industries Ltd. | 4,000 | 56,913 |
Nissan Motor Co., Ltd. | 67,000 | 678,891 |
Nisshin Seifun Group, Inc. | 6,600 | 69,730 |
Nisshin Steel Co., Ltd. | 29,000 | 93,687 |
Nisshinbo Industries | 2,000 | 21,860 |
Nissin Food Products Co., Ltd. | 2,800 | 80,960 |
Nitto Denko Corp. | 4,700 | 366,244 |
NOK Corp. | 3,300 | 89,541 |
Nomura Holdings, Inc. | 51,300 | 983,067 |
Nomura Real Estate Office Fund, Inc. (REIT) | 3 | 21,368 |
Nomura Research Institute Ltd. | 700 | 85,768 |
NSK Ltd. | 16,000 | 109,348 |
NTN Corp. | 13,000 | 102,735 |
NTT Data Corp. | 39 | 194,115 |
NTT DoCoMo, Inc. | 485 | 740,238 |
Obayashi Corp. | 19,000 | 140,001 |
Obic Co., Ltd. | 200 | 44,058 |
Odakyu Electric Railway Co., Ltd. | 20,000 | 119,049 |
Oji Paper Co., Ltd. | 25,000 | 147,751 |
Oki Electric Industry Co., Ltd. | 15,000 | 54,818 |
Okumura Corp. | 1,000 | 5,622 |
Olympus Corp. | 7,000 | 184,000 |
Omron Corp. | 7,000 | 161,445 |
Onward Kashiyama Co. | 4,000 | 78,687 |
Oracle Corp. | 1,100 | 54,657 |
Oriental Land Co., Ltd. | 1,600 | 87,234 |
ORIX Corp. | 2,400 | 611,523 |
Osaka Gas Co. | 61,000 | 210,514 |
Pioneer Corp. | 5,400 | 74,909 |
Promise Co., Ltd. | 2,700 | 179,718 |
Q.P. Corp. | 2,000 | 17,823 |
Rakuten, Inc. | 119 | 115,029 |
Resona Holding, Inc.* | 130 | 523,594 |
Ricoh Co., Ltd. | 20,000 | 350,193 |
ROHM Co., Ltd. | 3,200 | 348,124 |
Ryohin Keikaku Co., Ltd. | 400 | 34,901 |
Sanken Electric Co., Ltd. | 2,000 | 32,272 |
Sankyo Co., Ltd. | 1,300 | 75,287 |
Santen Pharmaceutical Co., Ltd. | 2,000 | 55,285 |
Sanyo Electric Co., Ltd.* | 50,000 | 135,668 |
Sapporo Holdings Ltd. | 5,000 | 28,024 |
SBI Holdings, Inc. | 179 | 121,119 |
Secom Co., Ltd. | 6,400 | 334,829 |
Sega Sammy Holdings, Inc. | 4,000 | 133,972 |
Seiko Epson Corp. | 3,300 | 82,965 |
Seino Transportation Co. | 4,000 | 43,583 |
Sekisui Chemical Co., Ltd. | 14,000 | 94,730 |
Sekisui House Ltd. | 15,000 | 188,748 |
Seven & I Holdings Co., Ltd.* | 23,600 | 1,010,557 |
SFCG Co., Ltd. | 130 | 31,416 |
Sharp Corp. | 27,000 | 410,718 |
Shimachu Co., Ltd. | 700 | 21,249 |
Shimamura Co., Ltd. | 700 | 96,867 |
Shimano, Inc. | 2,500 | 65,714 |
Shimizu Corp. | 18,000 | 132,327 |
Shin-Etsu Chemical Co., Ltd. | 11,500 | 611,396 |
Shinko Securities Co., Ltd. | 12,000 | 60,440 |
Shinsei Bank Ltd. | 27,000 | 156,137 |
Shionogi & Co., Ltd. | 10,000 | 140,840 |
Shiseido Co., Ltd. | 11,000 | 205,198 |
Showa Denko KK | 34,000 | 132,615 |
Showa Shell Sekiyu KK | 5,000 | 59,694 |
Skylark Co., Ltd. | 2,000 | 31,882 |
SMC Corp. | 1,500 | 214,313 |
Softbank Corp. | 21,600 | 912,096 |
Sojitz Corp.* | 7,000 | 41,548 |
Sompo Japan Insurance, Inc. | 24,000 | 324,586 |
Sony Corp. | 28,900 | 1,181,142 |
Stanley Electric Co., Ltd. | 4,700 | 76,397 |
Sumitomo Bakelite Co., Ltd. | 2,000 | 16,518 |
Sumitomo Chemical Co., Ltd. | 42,000 | 288,464 |
Sumitomo Corp. | 30,000 | 387,926 |
Sumitomo Electric Industries Ltd. | 20,000 | 303,727 |
Sumitomo Heavy Industries Ltd. | 18,000 | 151,100 |
Sumitomo Metal Industries Ltd. | 116,000 | 446,551 |
Sumitomo Metal Mining Co., Ltd. | 17,000 | 210,311 |
Sumitomo Mitsui Finance Group, Inc. | 138 | 1,462,670 |
Sumitomo Osaka Cement Co., Ltd. | 12,000 | 35,002 |
Sumitomo Realty & Development Co., Ltd. | 12,000 | 260,991 |
Sumitomo Rubber Industries Ltd. | 4,000 | 56,981 |
Suzuken Co., Ltd. | 1,900 | 60,737 |
T&D Holdings, Inc. | 6,550 | 434,316 |
Taiheiyo Cement Corp. | 29,000 | 117,785 |
Taisei Corp. | 29,000 | 131,556 |
Taisho Pharmaceutical Co., Ltd. | 5,000 | 93,696 |
Taiyo Nippon Sanso Corp. | 6,000 | 40,090 |
Taiyo Yuden Co., Ltd. | 2,000 | 27,558 |
Takara Holdings, Inc. | 4,000 | 23,742 |
Takashimaya Co., Ltd. | 8,000 | 127,799 |
Takeda Chemical Industries Ltd. | 25,300 | 1,368,669 |
Takefuji Corp. | 3,320 | 225,490 |
Tanabe Seiyaku Co., Ltd. | 6,000 | 58,303 |
TDK Corp. | 3,600 | 248,171 |
Teijin Ltd. | 27,000 | 171,476 |
Teikoku Oil Co., Ltd. | 5,000 | 65,460 |
Terumo Corp. | 4,800 | 142,044 |
The 77 Bank Ltd. | 8,000 | 60,779 |
The Bank of Fukuoka Ltd. | 17,000 | 145,445 |
The Bank of Kyoto Ltd. | 7,000 | 84,580 |
The Chiba Bank Ltd. | 19,000 | 159,334 |
The Furukawa Electric Co., Ltd.* | 19,000 | 148,539 |
The Gunma Bank Ltd. | 10,000 | 73,939 |
The Joyo Bank Ltd. | 19,000 | 113,096 |
The Shizuoka Bank Ltd. | 17,000 | 170,382 |
The Sumitomo Trust & Banking Co., Ltd. | 36,000 | 367,830 |
The Suruga Bank Ltd. | 6,000 | 75,652 |
THK Co., Ltd. | 3,700 | 96,630 |
TIS, Inc. | 1,000 | 30,864 |
Tobu Railway Co., Ltd. | 26,000 | 136,245 |
Toda Corp. | 6,000 | 32,967 |
Toho Co., Ltd. | 4,300 | 96,256 |
Tohoku Electric Power Co., Inc. | 12,200 | 248,272 |
Tokuyama Corp. | 6,000 | 77,076 |
Tokyo Broadcasting System, Inc. | 1,000 | 27,134 |
Tokyo Electric Power Co. | 32,700 | 794,383 |
Tokyo Electron Ltd. | 4,900 | 307,873 |
Tokyo Gas Co., Ltd. | 64,000 | 284,360 |
Tokyo Steel Manufacturing Co., Ltd. | 2,600 | 37,699 |
Tokyo Style Co., Ltd. | 2,000 | 24,505 |
Tokyo Tatemono Co., Ltd. | 5,000 | 49,816 |
Tokyu Corp. | 28,000 | 198,007 |
Tokyu Land Corp. | 13,000 | 129,961 |
TonenGeneral Sekiyu K.K. | 10,000 | 107,517 |
Toppan Printing Co., Ltd. | 17,000 | 198,635 |
Toray Industries, Inc. | 38,000 | 309,967 |
Toshiba Corp. | 86,000 | 513,368 |
Tosoh Corp. | 15,000 | 65,884 |
Tostem Inax Holding Corp. | 6,848 | 137,035 |
TOTO Ltd. | 10,000 | 84,538 |
Toyo Seikan Kaisha Ltd. | 5,000 | 81,443 |
Toyo Suisan Kaisha Ltd. | 2,000 | 32,289 |
Toyobo Co., Ltd. | 20,000 | 66,986 |
Toyoda Gosei Co., Ltd. | 900 | 17,552 |
Toyota Industries Corp. | 6,000 | 215,712 |
Toyota Motor Corp. | 83,600 | 4,338,254 |
Toyota Tsusho Corp. | 5,000 | 113,622 |
Trend Micro, Inc. | 3,000 | 113,452 |
Ube Industries Ltd. | 29,000 | 78,687 |
Uni-Charm Co. | 1,400 | 62,916 |
UNY Co., Ltd. | 6,000 | 94,679 |
Ushio, Inc. | 4,000 | 93,441 |
USS Co., Ltd. | 800 | 51,011 |
Wacoal Corp. | 4,000 | 54,199 |
West Japan Railway Corp. | 48 | 200,246 |
Yahoo Japan Corp. | 226 | 343,019 |
Yakult Honsha Co., Ltd. | 3,000 | 62,322 |
Yamada Denki Co., Ltd. | 2,100 | 262,823 |
Yamaha Corp. | 5,000 | 83,139 |
Yamaha Motor Co., Ltd. | 6,000 | 156,696 |
Yamato Transport Co., Ltd. | 11,000 | 182,439 |
Yamazaki Baking Co., Ltd. | 5,000 | 40,700 |
Yokogawa Electric Corp. | 7,000 | 119,303 |
ZEON Corp. | 4,000 | 52,911 |
(Cost $51,056,777) | 75,715,332 |
Luxembourg 0.1% |
Arcelor | 14,570 | 361,375 |
Stolt-Nielsen SA | 1,200 | 39,738 |
(Cost $254,904) | 401,113 |
Netherlands 5.4% |
ABN AMRO Holding NV | 49,703 | 1,299,850 |
Aegon NV | 39,780 | 647,564 |
Akzo Nobel NV | 7,649 | 354,529 |
ASML Holding NV* | 14,087 | 281,851 |
Buhrmann NV | 2,219 | 32,654 |
Corio NV | 1,310 | 71,187 |
Euronext NV | 2,583 | 134,553 |
European Aeronautic Defence & Space Co. | 6,825 | 257,756 |
Fortis Bank Nederland (Holdings) NV VVPR Strip* | 50 | 0 |
Getronics NV | 2,768 | 37,227 |
Hagemeyer NV* | 10,177 | 33,013 |
Heineken NV | 7,425 | 235,408 |
ING Groep NV | 52,820 | 1,832,234 |
James Hardie Industries NV | 10,043 | 66,263 |
Koninklijke (Royal) KPN NV | 59,680 | 598,449 |
Koninklijke (Royal) Philips Electronics NV | 37,465 | 1,164,314 |
Koninklijke Ahold NV* | 33,843 | 253,622 |
Koninklijke Ahold NV (ADR)* | 11,830 | 89,080 |
Koninklijke DSM NV | 4,684 | 191,316 |
Oce NV | 1,190 | 17,174 |
QIAGEN NV* | 3,029 | 35,645 |
Randstad Holdings NV | 1,070 | 46,478 |
Reed Elsevier NV | 20,286 | 283,396 |
Rodamco Europe NV | 1,277 | 106,282 |
Royal Dutch Shell PLC "A" | 117,827 | 3,596,191 |
Royal Dutch Shell PLC "B" | 79,637 | 2,545,749 |
Royal Numico NV* | 4,586 | 189,919 |
SBM Offshore NV | 806 | 65,126 |
STMicroelectronics NV | 18,029 | 323,797 |
TNT NV | 11,290 | 352,868 |
Unilever NV | 16,271 | 1,114,378 |
Vedior NV | 5,399 | 80,026 |
VNU NV | 7,146 | 236,969 |
Wereldhave NV | 498 | 46,960 |
Wolters Kluwer NV | 7,862 | 158,978 |
(Cost $12,910,794) | 16,780,806 |
New Zealand 0.2% |
Auckland International Airport Ltd. | 33,452 | 45,229 |
Contact Energy Ltd. | 10,746 | 48,650 |
Fisher & Paykel Appliances Holdings Ltd. | 4,480 | 10,615 |
Fisher & Paykel Corp., Ltd. | 18,285 | 47,446 |
Fletcher Building Ltd. | 15,863 | 81,782 |
Kiwi Income Property Trust | 23,532 | 20,407 |
Sky City Entertainment Group Ltd. | 11,722 | 37,541 |
Sky Network Television Ltd.* | 4,696 | 20,202 |
Telecom Corp. of New Zealand Ltd. | 56,363 | 231,310 |
The Warehouse Group Ltd. | 3,494 | 8,470 |
Tower Ltd.* | 5,324 | 7,562 |
Vector Ltd.* | 3,419 | 6,117 |
(Cost $345,916) | 565,331 |
Norway 0.7% |
DNB NOR ASA | 20,450 | 218,156 |
Norsk Hydro ASA | 4,340 | 445,620 |
Norske Skogindustrier ASA | 5,071 | 80,581 |
Orkla ASA | 5,864 | 242,838 |
Petroleum Geo-Services ASA* | 1,800 | 55,472 |
Prosafe ASA | 900 | 38,204 |
Schibsted ASA | 1,200 | 35,737 |
Smedvig ASA "A" | 900 | 26,269 |
Statoil ASA | 20,050 | 460,455 |
Storebrand ASA | 7,950 | 68,613 |
Tandberg ASA | 3,600 | 22,029 |
Tandberg Television ASA* | 1,650 | 21,819 |
Telenor ASA | 22,400 | 219,875 |
Tomra Systems ASA | 5,300 | 37,928 |
Yara International ASA | 6,650 | 96,805 |
(Cost $1,028,537) | 2,070,401 |
Portugal 0.3% |
Banco BPI SA | 9,159 | 41,855 |
Banco Comercial Portugues SA | 60,011 | 165,540 |
Banco Espirito Santo e Comercial de Lisboa SA | 3,035 | 48,867 |
Brisa-Auto Estrada de Portugal SA | 9,427 | 79,910 |
CIMPOR-Cimentos de Portugal | 4,045 | 22,268 |
Electricidade de Portugal | 56,109 | 172,711 |
Jeronimo Martins, SGPS SA | 1,588 | 23,876 |
Portugal Telecom, SGPS SA (Registered) | 23,242 | 235,264 |
PT Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS SA | 2,832 | 32,355 |
Sonae Industria-SGPS SA* | 1,634 | 12,382 |
Sonae SGPS SA | 24,104 | 33,673 |
(Cost $658,799) | 868,701 |
Singapore 0.8% |
Ascendas Real Estate Investment Trust (REIT) | 36,750 | 43,101 |
Capitaland Ltd. | 39,750 | 82,242 |
CapitaMall Trust (REIT) | 30,300 | 40,822 |
Chartered Semiconductors Manufacturing Ltd.* | 26,400 | 20,642 |
City Developments Ltd. | 14,000 | 73,257 |
ComfortDelGro Corp., Ltd. | 64,000 | 61,588 |
Creative Technologies Ltd. | 1,000 | 8,180 |
Datacraft Asia Ltd.* | 4,000 | 4,040 |
DBS Group Holdings Ltd. | 35,513 | 352,428 |
Fraser And Neave Ltd. | 4,860 | 54,076 |
Haw Par Corp., Ltd. | 4,245 | 13,149 |
Jardine Cycle & Carriage Ltd. | 5,774 | 38,548 |
Keppel Corp. | 18,750 | 124,049 |
Keppel Land Ltd. | 1,000 | 2,201 |
Neptune Orient Lines Ltd. | 26,000 | 52,543 |
Oversea-Chinese Banking Corp., Ltd. | 72,008 | 290,171 |
Overseas Union Enterprises | 3,000 | 19,667 |
Parkway Holdings Ltd. | 9,000 | 11,422 |
SembCorp Industries Ltd. | 29,449 | 48,531 |
SembCorp Logistics Ltd. | 4,196 | 4,290 |
SembCorp Marine Ltd. | 19,000 | 31,540 |
Singapore Airlines Ltd. | 19,000 | 141,702 |
Singapore Exchange Ltd. | 25,000 | 43,605 |
Singapore Post Ltd. | 28,000 | 19,367 |
Singapore Press Holdings Ltd. | 52,758 | 136,444 |
Singapore Technologies Engineering Ltd. | 44,000 | 75,686 |
Singapore TeleCommunications Ltd. | 211,580 | 332,135 |
STATS ChipPAC Ltd.* | 36,000 | 24,034 |
Suntec Real Estate Investment Trust (REIT)* | 22,000 | 14,290 |
United OverSeas Bank Ltd. | 36,448 | 320,056 |
United Overseas Land Ltd. | 16,544 | 24,975 |
Venture Corp., Ltd. | 8,000 | 66,400 |
Wing Tai Holdings Ltd. | 16,333 | 14,441 |
(Cost $1,942,491) | 2,589,622 |
Spain 3.4% |
Abertis Infraestructuras SA | 6,068 | 152,730 |
Acciona SA | 871 | 97,395 |
Acerinox SA | 5,836 | 84,915 |
ACS, Actividades de Construccion y Servicios SA | 6,917 | 222,824 |
Altadis SA | 7,927 | 359,625 |
Antena 3 de Television SA | 2,684 | 63,997 |
Banco Bilbao Vizcaya Argentaria SA | 94,905 | 1,694,359 |
Banco Popular Espanol SA | 24,220 | 295,343 |
Banco Santander Central Hispano SA | 166,296 | 2,195,188 |
Cintra Concesiones de Infraestructuras de Transporte SA | 6,186 | 71,552 |
Corporacion Mapfre SA | 3,256 | 53,774 |
Ebro Puleva SA | 2,061 | 34,233 |
Endesa SA | 26,670 | 701,588 |
Fomento de Construcciones y Contratas SA | 1,152 | 65,328 |
Gamesa Corporacion Tecnologica SA | 4,068 | 59,527 |
Gas Natural SDG SA | 5,315 | 148,879 |
Grupo Ferrovial SA | 1,802 | 124,803 |
Iberdrola SA | 22,710 | 620,806 |
Iberia Lineas Aereas de Espana SA | 11,243 | 30,481 |
Indra Sistemas SA | 3,458 | 67,591 |
Industria de Diseno Textil SA | 6,259 | 204,146 |
Inmobiliaria Colonial SA | 768 | 43,534 |
Metrovacesa SA | 1,613 | 97,964 |
NH Hoteles SA | 1,973 | 30,950 |
Promotora de Informaciones SA (Prisa) | 2,251 | 38,375 |
Repsol YPF SA | 25,628 | 748,512 |
Sacyr Vallehermoso SA | 3,031 | 73,921 |
Sociedad General de Aguas de Barcelona SA "A" | 1,689 | 35,993 |
Sogecable SA* | 1,251 | 50,149 |
Telefonica Publicidad e Informacion SA | 3,881 | 32,944 |
Telefonica SA | 124,837 | 1,878,468 |
Union Fenosa SA | 6,207 | 230,962 |
Zeltia SA* | 3,485 | 24,260 |
(Cost $6,464,110) | 10,635,116 |
Sweden 2.4% |
Alfa Laval AB | 900 | 19,485 |
Assa Abloy AB "B" | 9,700 | 152,621 |
Atlas Copco AB "A" | 9,513 | 211,946 |
Atlas Copco AB "B" | 6,726 | 134,190 |
Axfood AB | 500 | 13,972 |
Billerud AB | 1,000 | 13,091 |
Capio AB* | 2,100 | 37,403 |
Castellum AB | 1,500 | 54,000 |
Electrolux AB "B" | 9,285 | 241,343 |
Eniro AB | 6,200 | 78,041 |
Fabege AB | 2,895 | 55,207 |
Gambro AB "A" | 6,300 | 68,793 |
Gambro AB "B" | 3,600 | 39,197 |
Getinge AB "B" | 6,000 | 82,699 |
Hennes & Mauritz AB "B" | 14,900 | 506,388 |
Hoganas AB "B" | 600 | 12,990 |
Holmen AB "B" | 1,900 | 62,779 |
Lundin Petroleum AB* | 3,500 | 37,007 |
Modern Times Group MTG AB "B"* | 1,200 | 50,072 |
Nordea Bank AB | 67,414 | 700,064 |
OM Hex AB* | 3,100 | 43,118 |
Oriflame Cosmetics SA (SDR) | 400 | 11,530 |
Sandvik AB | 6,400 | 298,068 |
SAS AB* | 1,500 | 19,731 |
Scania AB "B" | 3,000 | 108,566 |
Securitas AB "B" | 8,400 | 139,568 |
Skandia Forsakrings AB | 33,700 | 201,916 |
Skandinaviska Enskilda Banken AB "A" | 15,160 | 311,997 |
Skanska AB "B" | 10,600 | 161,445 |
SKF AB "B" | 12,400 | 174,032 |
SSAB Svenskt Stal AB "A" | 2,250 | 81,849 |
SSAB Svenskt Stal AB "B" | 90 | 3,047 |
Svenska Cellulosa AB "B" | 6,366 | 237,989 |
Svenska Handelsbanken AB "A" | 14,800 | 366,996 |
Swedish Match AB | 11,165 | 131,403 |
Tele2 AB "B" | 9,900 | 106,234 |
Telefonaktiebolaget LM Ericsson "B" | 456,100 | 1,567,314 |
TeliSonera AB (a) | 57,751 | 310,399 |
TeliSonera AB (a) | 1,600 | 8,619 |
Trelleborg AB "B" | 2,300 | 45,887 |
Volvo AB "A" | 2,910 | 133,513 |
Volvo AB "B" | 6,980 | 329,034 |
Wihlborgs Fastigheter AB* | 579 | 13,993 |
WM-Data AB "B" | 7,800 | 24,938 |
(Cost $3,993,157) | 7,402,474 |
Switzerland 7.0% |
ABB Ltd. (a)* | 54,498 | 528,785 |
ABB Ltd. (a)* | 7,601 | 73,671 |
Adecco SA (Registered) | 4,281 | 197,427 |
Ciba Specialty Chemicals AG (Registered) | 2,114 | 136,745 |
Clariant AG (Registered)* | 6,750 | 99,397 |
Compagnie Financiere Richemont AG "A" (Bearer) | 14,941 | 650,375 |
Credit Suisse Group (Registered) | 36,830 | 1,877,866 |
Geberit AG (Registered) | 156 | 123,466 |
Givaudan SA | 190 | 128,758 |
Holcim Ltd. (Registered) | 5,236 | 356,624 |
Kudelski SA (Bearer)* | 1,000 | 29,717 |
Kuehne & Nagel International AG (Registered) | 247 | 69,642 |
Kuoni Reisen AG (Registered) "B"* | 46 | 19,043 |
Logitech International SA (Registered)* | 2,200 | 103,383 |
Lonza Group AG (Registered) | 1,150 | 70,363 |
Micronas Semiconductor Holdings AG (Registered)* | 690 | 22,842 |
Nestle SA (Registered) | 12,313 | 3,682,515 |
Nobel Biocare Holding AG | 100 | 21,902 |
Nobel Biocare Holding AG (Bearer) | 624 | 137,237 |
Novartis AG (Registered) | 71,038 | 3,732,867 |
Phonak Holding AG (Registered) | 709 | 30,539 |
PSP Swiss Property AG* | 770 | 33,401 |
Rieter Holdings AG | 73 | 21,666 |
Roche Holding AG (Genusschein) | 21,176 | 3,179,502 |
Schindler Holding AG (Participating) | 104 | 41,234 |
Serono SA "B" | 200 | 159,355 |
SGS Holdings SA (Registered) | 125 | 105,399 |
SIG Holding AG (Registered) | 110 | 24,025 |
Straumann SA (Registered) | 150 | 34,759 |
Sulzer AG (Registered) | 105 | 55,614 |
Swatch Group AG (Bearer) | 1,144 | 169,765 |
Swatch Group AG (Registered) | 1,800 | 54,450 |
Swiss Re (Registered) | 9,771 | 715,323 |
Swisscom AG (Registered) | 672 | 212,102 |
Syngenta AG (Registered)* | 3,303 | 410,974 |
Synthes, Inc. | 1,526 | 171,407 |
UBS AG (Registered) | 31,584 | 3,006,855 |
Unaxis Holding AG (Registered)* | 276 | 41,566 |
Valora Holding AG (Registered)* | 90 | 17,448 |
Zurich Financial Services AG (Registered)* | 4,476 | 953,754 |
(Cost $12,986,318) | 21,501,763 |
United Kingdom 21.0% |
3i Group PLC | 16,791 | 244,834 |
Aegis Group PLC | 28,210 | 59,213 |
Alliance Unichem PLC | 8,689 | 119,670 |
AMEC PLC | 7,045 | 41,635 |
Amvescap PLC | 20,785 | 158,062 |
Anglo American PLC | 41,499 | 1,412,988 |
ARM Holdings PLC | 38,181 | 79,485 |
Arriva PLC | 5,966 | 59,791 |
Associated British Ports Holdings PLC | 9,351 | 94,439 |
AstraZeneca Group PLC | 6,372 | 311,602 |
AstraZeneca PLC | 39,910 | 1,942,539 |
Aviva PLC | 69,978 | 848,800 |
BAA PLC | 30,645 | 330,584 |
BAE Systems PLC | 95,330 | 626,129 |
Balfour Beatty PLC | 14,325 | 87,740 |
Barclays PLC | 185,622 | 1,951,307 |
Barratt Developments PLC | 8,077 | 137,019 |
BBA Group PLC | 16,408 | 92,735 |
Bellway PLC | 2,380 | 46,230 |
Berkeley Group Holdings PLC* | 4,489 | 85,806 |
BG Group PLC | 100,761 | 995,950 |
BHP Billiton PLC | 72,334 | 1,181,660 |
BOC Group PLC | 14,247 | 293,654 |
Boots Group PLC | 20,563 | 214,041 |
Bovis Homes Group PLC | 2,635 | 36,132 |
BP PLC | 606,980 | 6,464,278 |
Brambles Industries PLC | 24,199 | 173,615 |
Britannic Group PLC | 4,709 | 52,500 |
British Airways PLC* | 15,414 | 88,576 |
British America Tobacco PLC | 46,451 | 1,038,947 |
British Land Co. PLC | 15,721 | 288,332 |
British Sky Broadcasting Group PLC | 34,765 | 296,973 |
Brixton PLC | 6,007 | 44,699 |
BT Group PLC | 245,245 | 939,881 |
Bunzl PLC | 11,331 | 124,378 |
Burberry Group PLC | 9,259 | 68,460 |
Cable & Wireless PLC | 65,846 | 135,096 |
Cadbury Schweppes PLC | 59,242 | 560,083 |
Capita Group PLC | 20,424 | 146,444 |
Carnival PLC | 5,128 | 291,150 |
Cattles PLC | 8,499 | 48,145 |
Centrica PLC | 105,568 | 462,702 |
Close Brothers Group PLC | 2,533 | 39,549 |
Cobham PLC | 39,770 | 115,979 |
Compass Group PLC | 61,357 | 232,770 |
Cookson Group PLC* | 3,667 | 26,814 |
Corus Group PLC | 108,255 | 109,889 |
Daily Mail & General Trust "A" | 8,137 | 110,318 |
Davis Service Group PLC | 3,601 | 30,017 |
De Lau Rue PLC | 2,619 | 21,065 |
Diageo PLC | 86,380 | 1,252,097 |
DSG International PLC | 53,577 | 150,944 |
Electrocomponents PLC | 16,012 | 77,412 |
EMAP PLC | 7,376 | 109,518 |
EMI Group PLC | 27,224 | 113,584 |
Enterprise Inns PLC | 10,526 | 169,872 |
First Choice Holidays PLC | 9,855 | 42,389 |
FirstGroup PLC | 10,787 | 74,561 |
FKI PLC | 16,691 | 33,312 |
Friends Provident PLC | 55,115 | 179,694 |
Gallaher Group PLC | 19,882 | 300,166 |
George Wimpey PLC | 9,766 | 80,652 |
GKN PLC | 24,082 | 119,327 |
GlaxoSmithKline PLC | 169,403 | 4,281,519 |
Great Portland Estates PLC | 245 | 1,810 |
Group 4 Securicor PLC | 38,300 | 106,091 |
GUS PLC | 26,108 | 463,562 |
Hammerson PLC | 9,213 | 161,997 |
Hanson PLC | 21,281 | 233,963 |
Hays PLC | 56,416 | 121,815 |
HBOS PLC | 111,773 | 1,909,594 |
Hilton Group PLC | 48,697 | 304,552 |
HMV Group PLC | 8,717 | 27,108 |
HSBC Holdings PLC | 327,831 | 5,262,434 |
ICAP PLC | 12,399 | 86,397 |
IMI PLC | 11,801 | 102,127 |
Imperial Chemical Industries PLC | 33,910 | 193,696 |
Imperial Tobacco Group PLC | 20,617 | 616,141 |
Inchcape PLC | 1,957 | 76,802 |
InterContinental Hotels Group PLC | 12,594 | 181,903 |
Intertek Group PLC | 5,316 | 63,749 |
Invensys PLC* | 153,281 | 48,788 |
iSOFT Group PLC | 4,900 | 32,837 |
ITV PLC | 116,723 | 225,925 |
J Sainsbury PLC | 38,762 | 210,240 |
Johnson Mathey PLC | 6,101 | 148,214 |
Kelda Group PLC | 10,023 | 133,473 |
Kesa Electricals PLC | 14,930 | 66,786 |
Kingfisher PLC | 69,800 | 284,916 |
Land Securities Group PLC | 13,317 | 381,025 |
Legal & General Group PLC | 185,179 | 388,693 |
Liberty International PLC | 7,791 | 131,430 |
Lloyds TSB Group PLC | 162,910 | 1,369,201 |
LogicaCMG PLC | 32,926 | 100,411 |
London Stock Exchange PLC | 6,643 | 70,862 |
Man Group PLC | 8,296 | 272,620 |
Marconi Corp. PLC* | 6,676 | 44,422 |
Marks & Spencer Group PLC | 47,133 | 409,517 |
Meggitt PLC | 10,072 | 62,731 |
MFI Furniture Group PLC | 10,649 | 14,657 |
Misys PLC | 15,595 | 64,060 |
Mitchells & Butlers PLC | 14,424 | 103,733 |
National Express Group PLC | 3,467 | 51,329 |
National Grid PLC | 77,190 | 754,999 |
National Power PLC* | 44,214 | 182,188 |
Next PLC | 7,368 | 194,587 |
Pearson PLC | 22,847 | 270,244 |
Persimmon PLC | 7,886 | 170,684 |
Pilkington PLC | 24,287 | 62,261 |
Premier Farnell PLC | 7,443 | 22,122 |
Provident Financial PLC | 8,907 | 83,902 |
Prudential PLC | 68,153 | 644,915 |
Punch Taverns PLC | 6,342 | 92,638 |
Rank Group PLC | 16,572 | 87,176 |
Reckitt Benckiser PLC | 17,713 | 585,125 |
Reed Elsevier PLC | 36,305 | 341,047 |
Rentokil Initial PLC | 51,529 | 144,952 |
Reuters Group PLC | 40,914 | 303,040 |
Rexam PLC | 16,810 | 146,922 |
Rio Tinto PLC | 30,438 | 1,390,387 |
Rolls-Royce Group PLC* | 44,913 | 330,345 |
Royal & Sun Alliance Insurance Group PLC | 80,679 | 174,551 |
Royal Bank of Scotland Group PLC | 92,579 | 2,795,404 |
SABMiller PLC | 25,558 | 466,549 |
Schroders PLC | 4,396 | 71,852 |
Scottish & Newcastle PLC | 21,641 | 181,140 |
Scottish & Southern Energy PLC | 24,447 | 426,499 |
Scottish Power PLC | 55,522 | 519,182 |
Serco Group PLC | 16,202 | 87,599 |
Severn Trent PLC | 10,627 | 198,196 |
Signet Group PLC | 55,336 | 102,346 |
Slough Estates PLC | 12,154 | 125,152 |
Smith & Nephew PLC | 28,779 | 265,149 |
Smiths Group PLC | 16,026 | 288,411 |
SSL International PLC | 3,036 | 15,958 |
Stagecoach Group PLC | 19,880 | 39,505 |
Stolt Offshore SA* | 5,800 | 67,459 |
Tate & Lyle PLC | 13,864 | 134,293 |
Taylor Woodrow PLC | 19,387 | 126,917 |
Tesco PLC | 229,573 | 1,309,361 |
The Peninsular and Oriental Steam Navigation Co. | 21,253 | 170,397 |
The Sage Group PLC | 36,547 | 162,228 |
Tomkins PLC | 22,686 | 116,996 |
Travis Perkins PLC | 3,190 | 76,838 |
Trinity Mirror PLC | 9,763 | 96,248 |
Unilever PLC | 78,737 | 780,968 |
United Business Media PLC | 7,149 | 78,350 |
United Utilities PLC | 24,704 | 285,197 |
Vodafone Group PLC | 1,834,333 | 3,960,745 |
Whitbread PLC | 7,281 | 118,881 |
William Hill PLC | 11,248 | 103,631 |
Wolseley PLC | 16,814 | 354,374 |
WPP Group PLC | 33,945 | 367,351 |
Yell Group PLC | 21,420 | 197,717 |
(Cost $46,949,693) | 64,950,341 |
Total Common Stocks (Cost $197,267,513) | 295,354,259 |
|
Preferred Stocks 0.2% |
Belgium 0.0% |
Fortis VVPR Strip*(Cost $2) | 2,223 | 158 |
Germany 0.2% |
Fresenius Medical Care AG | 624 | 58,250 |
Henkel KGaA | 1,691 | 170,168 |
Porsche AG | 245 | 176,055 |
ProSiebensat. 1 Media AG | 2,063 | 39,933 |
RWE AG | 1,035 | 66,707 |
Volkswagen AG | 3,083 | 118,624 |
(Cost $445,569) | 629,737 |
Total Preferred Stocks (Cost $445,571) | 629,895 |
|
Cash Equivalents 1.5% |
Cash Management QP Trust, 4.26% (c) (Cost $4,547,423) | 4,547,423 | 4,547,423 |
| % of Net Assets | Value ($) |
| |
Total Investment Portfolio (Cost $202,260,507)+ | 97.3 | 300,531,577 |
Other Assets and Liabilities, Net | 2.7 | 8,281,531 |
Net Assets | 100.0 | 308,813,108 |
* Non-income producing security.+ The cost for federal income tax purposes was $208,811,417. At December 31, 2005, net unrealized appreciation for all securities based on tax cost was $91,720,160. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $101,395,925 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $9,675,765.(a) Securities with the same description are the same corporate entity but trade on different stock exchanges.(b) Affiliated issuer. This security is owned in proportion with its representation in the index.(c) Cash Management QP Trust, an affiliated fund, is managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.ADR: American Depositary Receipt
REIT: Real Estate Investment Trust
SDR: Swedish Depositary Receipt
At December 31, 2005, open futures contracts purchased were as follows:
Futures | Expiration Date | Contracts | Aggregate Face Value ($) | Value ($) | Unrealized Appreciation (Depreciation) ($) |
DJ Euro Stoxx 50 Index
| 3/17/2006 | 123 | 5,152,636 | 5,224,834 | 72,198 |
FTSE 100 Index
| 3/17/2006 | 31 | 2,948,122 | 2,995,324 | 47,202 |
Hang Seng Stock Index
| 1/26/2006 | 3 | 296,538 | 287,052 | (9,486) |
SPI 200 Index
| 3/16/2006 | 7 | 589,543 | 606,439 | 16,896 |
TOPIX Index
| 3/9/2006 | 23 | 3,117,056 | 3,205,198 | 88,142 |
Total net unrealized appreciation on futures | 214,952 |
The accompanying notes are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities as of December 31, 2005 |
Assets |
Investments:
Investments in securities, at value (cost $197,713,084) | $ 295,984,154 |
Investment in Cash Management QP Trust (cost $4,547,423) | 4,547,423 |
Total investments in securities, at value (cost $202,260,507)
| 300,531,577 |
Foreign currency, at value (cost $7,411,773)*
| 7,400,966 |
Unrealized appreciation on forward foreign currency exchange contracts
| 3,831 |
Dividends receivable
| 322,514 |
Interest receivable
| 14,836 |
Receivable for variation margin on open futures contracts
| 557,568 |
Foreign taxes recoverable
| 143,230 |
Other assets
| 17,102 |
Total assets
| 308,991,624 |
Liabilities |
Net payable on closed forward foreign currency exchange contracts
| 2,271 |
Unrealized depreciation on forward foreign currency exchange contracts
| 42,066 |
Accrued management fee
| 40,619 |
Other accrued expenses and payables
| 93,560 |
Total liabilities
| 178,516 |
Net assets | $ 308,813,108 |
* Includes foreign currency of $6,072,411 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, 2005 |
Investment Income |
Dividends (net of foreign tax withheld of $849,765)
| $ 7,955,359 |
Interest — Cash Management QP Trust
| 145,018 |
Interest — Cash Management Fund Institutional
| 65,139 |
Interest
| 18,313 |
Total Income
| 8,183,829 |
Expenses:
Management fee
| 740,005 |
Administrative fee
| 297,928 |
Auditing
| 57,648 |
Legal
| 31,094 |
Trustees' fees and expenses
| 11,901 |
Other
| 66,162 |
Total expenses before expense reductions
| 1,204,738 |
Expense reductions
| (167,551) |
Total expenses after expense reductions
| 1,037,187 |
Net investment income (loss) | 7,146,642 |
Realized and Unrealized Gain (Loss) on Investment Transactions |
Net realized gain (loss) from:
Investments
| (2,488,900) |
Futures
| 2,563,507 |
Foreign currency related transactions
| (520,619) |
| (446,012) |
Net unrealized appreciation (depreciation) during the period on:
Investments
| 32,576,511 |
Futures
| (400,027) |
Foreign currency related transactions
| (603,393) |
| 31,573,091 |
Net gain (loss) on investment transactions | 31,127,079 |
Net increase (decrease) in net assets resulting from operations | $ 38,273,721 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets |
| Years Ended December 31, |
Increase (Decrease) in Net Assets | 2005 | 2004 |
Operations:
Net investment income
| $ 7,146,642 | $ 4,901,513 |
Net realized gain (loss) on investment transactions
| (446,012) | 3,574,237 |
Net unrealized appreciation (depreciation) during the period on investment transactions
| 31,573,091 | 38,124,603 |
Net increase (decrease) in net assets resulting from operations
| 38,273,721 | 46,600,353 |
Capital transactions in shares of beneficial interest:
Proceeds from capital invested
| 83,218,351 | 69,541,220 |
Value of capital withdrawn
| (97,648,828) | (61,957,229) |
Redemption fees
| 1,210 | — |
Net increase (decrease) in net assets from capital transactions in shares of beneficial interest
| (14,429,267) | 7,583,991 |
Increase (decrease) in net assets
| 23,844,454 | 54,184,344 |
Net assets at beginning of period
| 284,968,654 | 230,784,310 |
Net assets at end of period
| $ 308,813,108 | $ 284,968,654 |
The accompanying notes are an integral part of the financial statements.
Financial Highlights
Years Ended December 31, | 2005 | 2004 | 2003 | 2002 | 2001 |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions)
| 309 | 285 | 231 | 137 | 141 |
Ratio of expenses before expense reductions (%)
| .40 | .39 | .40 | .44 | .42 |
Ratio of expenses after expense reductions (%)
| .35 | .35 | .35 | .35 | .35 |
Ratio of net investment income (loss) (%)
| 2.40 | 2.03 | 2.04 | 1.88 | 1.73 |
Portfolio turnover rate (%)
| 16 | 12 | 6 | 10 | 26 |
Total investment return (%)a,b
| 13.62 | 19.47 | 36.50 | (16.58) | — |
a Total investment return would have been lower had certain expenses not been reduced.
b Total investment return for the Portfolio was derived from the performance of the Institutional Class of the DWS EAFE® Equity Index Fund.
|
Notes to Financial Statements
A. Significant Accounting Policies
The EAFE® Equity Index Portfolio (the "Portfolio"), a series of the DWS 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 or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies as well as Cash Management Fund Institutional and Cash Management QP Trust are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trustees. The Portfolio may use a fair valuation model to value international equity securities in order to adjust for events which may occur between the close of the foreign exchange and the close of the New York Stock exchange.
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.
Taxes. The Portfolio is considered a partnership under the Internal Revenue Code. Therefore, no federal income tax provision is necessary. Additionally, based on the Portfolio's understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which it invests, the Portfolio will provide for foreign taxes, and where appropriate, deferred foreign taxes.
Contingencies. In the normal course of business, the Portfolio may enter into contracts with service providers that contain general indemnification clauses. The Portfolio's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet been made. However, based on experience, the Portfolio expects the risk of loss to be remote.
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, 2005, purchases and sales of investment securities (excluding short-term investments) aggregated $44,380,048 and $49,642,819, respectively.
C. Related Parties
DWS Scudder 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 Corporation ("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 net assets, computed and accrued daily and payable monthly.
Northern Trust Investments, N.A. ("NTI"), an indirect subsidiary of Northern Trust Corporation, serves as sub-advisor to the Fund and is paid by the Advisor for its services. 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, 2005, the Advisor and Administrator maintained the annual 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, 2005, the Advisor waived a portion of its advisory fee aggregating $160,686 and the amount charged aggregated $579,319, 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, 2005, the Administrator Service Fee was $297,762, of which $25,048 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 Lead Trustee of the Board and the Chairman of each committee of the Board receives additional compensation for his/her services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Cash Management QP Trust. Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Cash Management QP Trust (the "QP Trust") and other affiliated funds managed by the Advisor. The QP Trust seeks to provide as high a level of income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay its advisor a management fee for the affiliated funds' investments in the QP Trust.
Other. The Portfolio may invest in Cash Management Fund Institutional, an open-end management investment company managed by DeAM, Inc.
D. Expense Reductions
For the year ended December 31, 2005, the Advisor agreed to reimburse the Portfolio $6,699, which represents a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider.
In addition, the Portfolio has entered into an agreement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Portfolio's custodian expenses. During the year ended December 31, 2005, the Administrator Service Fee was reduced by $166 for custodian credits earned.
E. Forward Foreign Currency Exchange Contracts
As of December 31, 2005, the Fund had the following open forward foreign currency exchange contracts:
Contracts to Deliver | | In Exchange For | | Settlement Date | Unrealized Appreciation (US$) |
EUR
| 419,254 |
| USD
| 500,000 |
| 1/27/2006 | 2,883 |
GBP
| 115,709 |
| USD
| 200,000 |
| 1/27/2006 | 948 |
Total unrealized appreciation | 3,831 |
Contracts to Deliver | | In Exchange For | | Settlement Date | Unrealized Depreciation (US$) |
AUD
| 274,046 |
| USD
| 200,000 |
| 1/27/2006 | (716) |
USD
| 2,150,000 |
| EUR
| 1,807,832 |
| 1/27/2006 | (6,422) |
USD
| 1,700,000 |
| GBP
| 978,820 |
| 1/27/2006 | (16,160) |
USD
| 1,648,961 |
| JPY
| 193,797,948 |
| 1/27/2006 | (18,768) |
Total unrealized depreciation | (42,066) |
Currency Abbreviations |
AUD Australian Dollar
EUR Euro
GBP British Pound
JPY Japanese Yen
USD United States Dollar
|
F. Line of Credit
The Portfolio and several other affiliated funds (the "Participants") share in a $1.1 billion revolving credit facility administered by JP Morgan Chase Bank for temporary or emergency purposes, including the meeting of withdrawal requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. 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.
G. Regulatory Matters and Litigation
Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds' advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.
With respect to the lawsuits, based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.
With respect to the regulatory matters, Deutsche Asset Management ("DeAM") has advised the funds as follows:
DeAM expects to reach final agreements with regulators early in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.
Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999-2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.
There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM's practices during 2001-2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors' payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors' procedures regarding non-cash compensation regarding entertainment provided to such associated persons. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
H. Subsequent Events
On January 13, 2006, DWS EAFE® Equity Index Fund, formerly a feeder fund in a master-feeder structure, received all of its assets and assumed all liabilities from the master portfolio, EAFE® Equity Index Portfolio, and converted to a stand-alone fund. The master portfolio closed after the conversion of the feeder fund.
Effective February 6, 2006, Scudder Investments changed its name to DWS Scudder and Scudder funds were renamed DWS funds.
Report of Independent Registered Public Accounting Firm
To the Trustees of DWS 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, 2005, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in Note H, "Subsequent Events", effective January 13, 2006, the Portfolio ceased operations.
Boston, Massachusetts
March 1, 2006 | PricewaterhouseCoopers LLP |
Investment Management Agreement Approval
The DWS EAFE® Equity Index Fund (the "Fund"), a series of the DWS Advisor Funds II (the "Trust"), invests all of its assets in the EAFE® Equity Index Portfolio (the "Portfolio") in order to achieve its investment objectives. The Board of Trustees of the Portfolio, which is also the Board of Trustees of the Trust, approved the continuation of the current investment management agreement with Deutsche Asset Management, Inc. (the "Advisor") and the current sub-advisory agreement between the Advisor and Northern Trust Investments, N.A. (the "Sub-Advisor") in September 2005. In terms of the process the Trustees followed prior to approving the contract, shareholders should know that:
At the present time, all but one of the Portfolio's and the Fund's Trustees are independent of the Advisor and its affiliates.
The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate part or all of several meetings to contract review matters.
The Trustees regularly meet privately with their independent counsel (and, as needed, other advisors) to discuss contract review and other matters.
The fee paid to the Sub-Advisor is paid by the Advisor out of its fee and not directly by the Fund.
The Advisor or the Sub-Advisor and their predecessors have managed the Portfolio since inception, and the Trustees believe that a long-term relationship with a capable, conscientious advisor is in the best interest of shareholders. As you may know, the Advisor is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Trustees believe that there are significant advantages to being part of a global asset management business with extensive investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.
Shareholders may focus only on fund performance and fees, but the Portfolio's Trustees consider these and many other factors, including the quality and integrity of the Advisor's and Sub-Advisor's personnel and back-office operations, fund valuations, and compliance policies and procedures. The Trustees noted that the Advisor has also implemented new, forward-looking policies and procedures in many important areas, such as those involving brokerage commissions and so-called "soft dollars," even when not obligated to do so by law or regulation.
In determining to approve the continuation of the Portfolio's current investment management agreement, the Trustees considered factors that it believes relevant to the interests of shareholders, including:
The investment management fee schedule for the Portfolio, including (i) comparative information provided by Lipper regarding investment management fee rates paid to other investment advisors by similar funds and (ii) fee rates paid to the Advisor by similar funds and institutional accounts advised by the Advisor. With respect to management fees paid to other investment advisors by similar funds, the Trustees noted that the fee rate paid by the Portfolio was lower than the median (1st quartile) of the applicable Lipper universe as of December 31, 2004. The Board gave only limited consideration to fees paid by similar institutional accounts advised by the Advisor, in light of the material differences in the scope of services provided to mutual funds as compared to those provided to institutional accounts. The Board concluded that the fee schedule in effect for the Portfolio represented reasonable compensation in light of the nature, extent and quality of the services being provided to the Portfolio, the performance of the Portfolio and fees paid by similar funds.
The extent to which economies of scale would be realized as the Portfolio grows. In this regard, the Board noted that the Portfolio's investment management fee schedule includes no fee breakpoints but that its total assets are less than $300 million. The Board concluded that the Fund's fee schedule is appropriate given current asset levels.
The total operating expense of the Fund relative to the Fund's peer group as determined by Lipper. In this regard, the Board noted that the total expenses of the Fund (Institutional Class shares) for the year ended December 31, 2004 were lower than the median (1st quartile) of the applicable Lipper universe. The Board also considered the expense limitations agreed to by the Advisor that serve to ensure that the Fund's total operating expenses would be competitive relative to the applicable Lipper universe.
The investment performance of the Fund and the Advisor relative to industry peer groups. The Board noted that for the one- and five-year periods ended June 30, 2005, the Fund's (Institutional Class shares) performance was in the 3rd quartile, and for the three-year period was in the 2nd quartile, of the applicable Lipper universe. The Board also observed that the Fund underperformed its benchmark for the one-, three- and five-year periods. The Board recognized that the Advisor has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.
The nature, extent and quality of the advisory services provided by the Advisor and Sub-Advisor. The Board considered extensive information regarding the Advisor and Sub-Advisor, including the Advisor's and Sub-Advisor's personnel, particularly those personnel with responsibilities for providing services to the Portfolio, resources, policies and investment processes. The Board also considered the terms of the current investment management agreement and sub-advisory agreement, including the scope of services provided under the agreements. In this regard, the Board concluded that the quality and range of services provided by the Advisor and Sub-Advisor have benefited, and should continue to benefit, the Fund and its shareholders.
The costs of the services to, and profits realized by, the Advisor and its affiliates from their relationships with the Portfolio and the Fund. The Board reviewed information concerning the costs incurred and profits realized by the Advisor during 2004 from providing investment management services to the Portfolio and, separately, to the entire DWS fund complex, and reviewed with the Advisor the cost allocation methodology used to determine its profitability. In analyzing the Advisor's costs and profits, the Board also reviewed the fees paid to, and services provided to the Fund by, the Advisor and its affiliates with respect to administrative services, fund accounting, shareholder servicing and distribution. As part of this review, the Board considered information provided by an independent accounting firm engaged to review the Advisor's cost allocation methodology and calculations. The Board concluded that the Portfolio's investment management fee schedule represented reasonable compensation in light of the costs incurred by the Advisor and its affiliates in providing services to the Portfolio and the Fund. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited, the Advisor's overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided by the Advisor and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available.
The practices of the Advisor and Sub-Advisor regarding the selection and compensation of brokers and dealers executing portfolio transactions for the Portfolio, including the Advisor's and Sub-Advisor's soft dollar practices. In this regard, the Board observed that the Advisor had voluntarily terminated the practice of allocating brokerage commissions to acquire research services from third-party service providers. The Board indicated that it would continue to monitor the Portfolio's trading activities to ensure that the principle of "best price and execution" remains paramount in the portfolio trading process.
The Advisor's and Sub-Advisor's commitment to, and record of, compliance including its written compliance policies and procedures. In this regard, the Board considered the Advisor's commitment to indemnify the Fund against any costs and liabilities related to lawsuits or regulatory actions making allegations regarding market timing, revenue sharing, fund valuation or other subjects arising from or relating to pending regulatory inquiries. The Board also considered the significant attention and resources dedicated by the Advisor to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of the Advisor's chief compliance officer, who reports to the Board; (ii) the large number of compliance personnel who report to the Advisor's chief compliance officer; and (iii) the substantial commitment of resources by the Advisor to compliance matters.
Deutsche Bank's commitment to restructuring and growing its US mutual fund business. The Board considered recent and ongoing efforts by Deutsche Bank to restructure its US mutual fund business to improve efficiency and competitiveness and to reduce compliance and operational risk. The Board considered assurances received from Deutsche Bank that it would commit the resources necessary to maintain high quality services to the Portfolio and the Fund and its shareholders as long as they remained in existence and while various organizational initiatives are being implemented. The Board also considered Deutsche Bank's strategic plans for investing in the growth of its US mutual fund business and the potential benefits to the Fund's shareholders.
Based on all of the foregoing, the Board determined to continue the Portfolio's current investment management agreement and sub-advisory agreement, and concluded that the continuation of the agreements was in the best interests of shareholders. In reaching this conclusion the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, many of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the current agreement.
Account Management Resources
|
Automated Information Lines | InvestorACCESS (800) 972-3060 Personalized account information, information on other DWS funds and services via touchtone telephone and for Classes A, B, and C only, the ability to exchange or redeem shares.
|
Web Site | www.dws-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 DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.
|
For More Information | (800) 621-1048 To speak with a DWS Scudder service representative.
|
Written Correspondence | DWS Scudder PO Box 219356
Kansas City, MO 64121-9356
|
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at 1-800-621-1048.
|
Principal Underwriter | If you have questions, comments or complaints, contact:
DWS Scudder Distributors, Inc. 222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
|
| Institutional Class |
Nasdaq Symbol | BTAEX
|
CUSIP Number | 233370 105
|
Fund Number | 558
|
Notes
Notes
Notes
Notes
Notes
Notes
Notes
As of the end of the period, December 31, 2005, DWS Advisor Funds II has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer.
There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2.
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. Graham E. Jones. 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. |
DWS 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 independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. 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 Independent Registered Public Accounting Firm Billed to the Fund
Fiscal Year
Ended
December 31, | Audit Fees Billed to Fund | Audit-Related
Fees Billed to Fund | Tax Fees Billed to Fund | All
Other Fees Billed to Fund |
2005 | $17,100 | $225 | $0 | $0 |
2004 | $15,300 | $185 | $8,735 | $0 |
The above “Audit- Related Fees” were billed for agreed upon procedures performed and the above "Tax Fees" were billed for professional services rendered for tax compliance and tax return preparation.
Services that the Fund’s Independent Registered Public Accounting Firm 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.
Fiscal Year
Ended
December 31, | Audit-Related
Fees Billed to Adviser and Affiliated Fund Service Providers | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All
Other Fees Billed to Adviser and Affiliated Fund Service Providers |
2005 | $268,900 | $197,605 | $0 |
2004 | $431,907 | $0 | $0 |
The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed-upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with consultation services and agreed-upon 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.
Fiscal Year
Ended
December 31, | Total
Non-Audit Fees Billed to Fund (A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) | Total of (A), (B)
and (C) |
2005 | $0 | $197,605 | $104,635 | $302,240 |
2004 | $8,735 | $0 | $253,272 | $262,007 |
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. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
| ITEM 6. | SCHEDULE OF INVESTMENTS |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
The Nominating and Governance Committee evaluates and nominates Board member candidates. Fund shareholders may also submit nominees that will be considered by the Committee when a Board vacancy occurs. Submissions should be mailed to the attention of the Secretary of the Fund, One South Street, Baltimore, MD 21202.
| ITEM 11. | 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) | There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last half-year (the registrant’s second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. |
(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: | DWS EAFE Equity Index Fund, a series of DWS Advisor Funds II |
By: | /s/Vincent J. Esposito |
| Vincent J. Esposito | |
President
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: | DWS EAFE Equity Index Fund, a series of DWS Advisor Funds II |
By: | /s/Vincent J. Esposito |
| Vincent J. Esposito | |
President
By: | /s/Paul Schubert |
| Paul Schubert | |
Chief Financial Officer and Treasurer
