Ishr Stx Eu 50 Regulatory News (EUN)

31 May 2005 17:18

European Exchange-Traded Fnd Co.PLC31 May 2005 European Exchange-Traded Fund Company plc Un-audited Interim Report and Financial Statements For the six months ended 31 March 2005 Background The Directors of European Exchange-Traded Fund Company plc ("the Company") aredelighted to announce the Company's results for the period ended 31 March 2005.The Directors at their meeting on the 27 March 2005 approved the interim reportand accounts for the Company. Extracts of the accounts are given below. Thefull English text is available, free of charge, from the Company's head officeor the Investment Manager, on request. Company Information The Company was incorporated on 16 December 1999 as an open-ended InvestmentCompany with variable capital under the laws of Ireland as a public limitedcompany pursuant to the Companies Acts, 1963 to 2001 and the EuropeanCommunities (Undertakings for Collective Investment in Transferable Securities)Regulations, 2003, as amended ("UCITS Regulation"). The Company has an umbrella structure, so that different funds may beestablished within the Company, subject to prior approval of the Irish FinancialServices Regulatory Authority (IFSRA). Each fund will have a separate portfolioof assets, which will be invested in accordance with the investment objectivesand policies of that Fund. Each Fund will be treated as bearing its ownliabilities. However, the liabilities of any Fund or Funds are binding on theCompany as a whole. As at 31 March 2005 the following Funds were in existence: Fund Base currency Listed on exchangesiShares DJ STOXX 50 • Borsa Italiana, Frankfurt Stock Exchange (Xetra), Euronext Amsterdam, Euronext Paris, Irish Stock Exchange, London Stock Exchange, SWX Swiss Exchange, Virt-XiShares DJ Euro STOXX 50 • Borsa Italiana, Frankfurt Stock Exchange (Xetra), Euronext Amsterdam, Euronext Paris, Irish Stock Exchange, London Stock Exchange, SWX Swiss Exchange, Virt-X All figures relating to each Fund are shown in the relevant base currency. Thefinancial statements of the Company are shown in Euro. These Funds are traded as ETFs, which provide the flexibility of a share withthe diversification of a Fund. They can be bought and sold like any other shareslisted on a stock exchange, and provide instant exposure to many companies. Report of the Investment Manager Fund review Two Funds have been established and approved by the IFSRA with the followinginvestment objectives and policies: iShares DJ STOXX 50 The investment objective of iShares DJ STOXX 50 is to track closely the DowJones STOXX 50 IndexSM, thereby allowing investors to obtain market exposure tothe companies comprising the index through the holding of shares in the Fund. iShares DJ Euro STOXX 50 The investment objective of iShares DJ Euro STOXX 50 is to track closely the DowJones EURO STOXX 50 IndexSM, thereby allowing investors to obtain marketexposure to the companies comprising the index through the holding of shares inthe Fund. The performance of the Funds for the year under review is shown below:Fund Launch Net asset value NAV per share Return since Six month TER* Effective date (NAV) launch return TER** 31/03/05 at at 31/02 at at 30/ six months six months launch /054 launch 09/04 to to Million Million Fund Index Fund Index 31/03/05 31/03/05iShares DJ STOXX 03/04/ €4.96 €574.41 €49.61 €28.60 -36.64% -35.52% 8.42% 8.57% 0.35 0.1550 2000iShares DJ Euro 03/04/ €153.59 • €51.20 €30.60 -34.59% -34.63% 12.48% 12.53% 0.35 0.15STOXX 50 2000 2,331.75 Past performance will not necessarily be repeated and is no guarantee of futurereturns. * Total expense ratio The total expense ratio (TER%) shown above expresses thesum of all operating expenses charged to the Fund's assets as a percentage ofthe average fund assets during the year. The additional costs incurred by thefund on the purchase and sale of investments are not included in the expenseratio. ** Effective TER is defined as the net of the fund's management fee (0.35%) andsecurities lending income received by the fund. For a period of two years from16 February 2005, the fund and the Investment Manager of the fund have agreedthat this amount will be capped at 0.15%. Important events during the period Reduction of the Effective Total Expense Ratio for iShares DJ STOXX 50 On 16 February 2005, iShares DJ STOXX 50 Fund reduced its effective totalexpense ratio (Effective TER) from 0.25% to 0.15%. Effective TER is defined asthe net of the funds management fee (0.35%) and securities lending incomereceived by the fund. For a period of two years the fund and the investmentmanager of the fund have agreed the amount will remain capped at 0.15%, at whichpoint it will be reviewed. Re-Constitution of Board of Directors The United Kingdom Financial Services Authority (FSA) published consultationpaper CP164 in January 2003 that set out proposed changes to UK listing rulesfor investment companies. Following the consultation, the FSA made changes tothe listing rules in September 2003 that came into effect on various dates in2004 and 2005. One such change was the implementation of a new rule stating that investmentmanagement companies are allowed no more than one director on its Board ofDirectors that is affiliated with the management company. Additionally,independent directors must make up a majority of the board of an investmentmanagement company. As a result, Mr. Richard Keatinge, who serves as Director to iShares plc, andMr. Duncan Walker, who is a Managing Director at Barclays Global Investors,resigned as Directors of the Company effective 24 March 2005. The Boardappointed Mr. Vincent Dodd and Mr. William Roberts Directors to the Company on24 March 2005. The Irish Financial Services Regulatory Authority subsequentlyapproved Messrs. Dodd and Roberts' appointments in April 2005. Remuneration of Directors of European Exchange-Traded Fund Company plc The fees payable to Independent Directors of European Exchange-Traded FundCompany plc were increased to £14,000 per Director per annum, payable in Euros(1). The increase took effect as of the beginning of the Company's fiscal year,which was 1 October 2004. An 'Independent Director' is defined as any person who is not affiliated withthe manager or investment manager to iShares plc (Barclays Global Investors,Ireland and Barclay Global Investors Limited, respectively), its affiliates orsubsidiaries. European market background report European equities participated in the global equity market bounce that occurredduring the fourth quarter of 2004. This was despite European exporters having toadjust to a very strong euro, which was the result of a very weak US dollar inthe fourth quarter. Parts of the European economy, most notably Germany, remained stubbornlydepressed as 2004 drew to a close. Unemployment remained high, consumer spendingwas still relatively subdued and growth was weak by recent standards. Reforms inEurope to encourage job creation are slowly being pursued in countries such asGermany and Italy. However, they will take years to feed through to the economyand in the short term only make consumers more reluctant to spend. Continental European equities outperformed other developed equity markets duringthe first three months of 2005. Much of the continent remained subdued with theGerman and Italian economies shrinking in the last quarter of 2004, and withunemployment at depressingly high levels. However, there were bright spotsincluding the French economy that enjoyed something of a recovery. Meanwhile, corporate profit growth was strong as European firms have grown theirsales but without adding labour, thus boosting profit margins. In addition,there has been an improvement in parts of the export sector and the euro zoneStability and Growth Pact - a constraint on the ability of many governments tocut taxes and/or raise spending - was effectively abandoned. The main area of weakness during the early part of 2005 was the subdued retailsector, which was a victim of high euro zone unemployment rates. Efforts to makeboth the labour market and the service sector more dynamic are still in theirinfancy and have encountered political resistance. European Exchange Traded-Fund Company plc Statement of operations (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000sIncome 19,129 13,936Expenses (4,849) (3,721)Net operating income 14,280 10,215Realised losses on investments 3,272 (3,062)Realised gains on futures contracts 301 (120)Net change in unrealised gains on investments 296,269 254,626Net change in unrealised losses on futures contracts 3 (33)Currency gains/(losses) 20 9Dividends (14,244) (2,982)Increase in net assets resulting from operations 299,901 258,653 Statement of changes in net assets (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000s Net assets at beginning of the year 2,690,277 1,719,250Increase in net assets resulting from operations 299,901 258,653Capital transactionsValue of assets received on share creation 132,252 726,154Value of assets transferred on share redemption (222,078) - Net assets at the end of the year 2,900,352 2,704,057 There are no recognised gains or losses arising in the period other than theincrease in net assets attributable to shareholders of the Company disclosedabove. In arriving at the results for the financial period, all amounts aboverelate to continuing operations. Statement of net assets (unaudited) As at As at 31.03.05 31.03.04As at 31 March 2005 •'000s •'000s Current assetsInvestments at market value 2,898,439 2,695,628Debtors and other receivables 3,206 5,695Cash and bank balances 8,835 65,795Total assets 2,910,480 2,767,118Current liabilities (amounts falling due within 1 year)Creditors (824) (63,061)Dividend payable (9,304) -Total liabilities (10,128) (63,061)Total net assets 2,900,352 2,704,057Shareholders' equity 2,900,352 2,704,057 iShares DJ STOXX 50 Statement of operations (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000sIncome 6,294 4,930Expenses (896) (805)Net operating income 5,398 4,124Realised losses on investments (6,299) (232)Realised gains on futures contracts 16 (47)Net change in unrealised gains on investments 44,005 45,346Net change in unrealised losses on futures contracts 4 (22)Currency gains/(losses) 28 10Dividends (5,417) (902)Increase in net assets resulting from operations 37,735 48,278 Statement of changes in net assets (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000s Net assets at beginning of the year 508,609 397,838Increase in net assets resulting from operations 37,735 48,278Capital transactionsValue of assets received on share creation 82,857 56,925Value of assets transferred on share redemption (54,305) -Net assets at the end of the year 574,896 503,041 There are no recognised gains or losses arising in the period other than theincrease in net assets attributable to shareholders of the Company. In arrivingat the results for the financial period, all amounts above relate to continuingoperations. Statement of net assets (unaudited) As at As at 31.03.05 31.03.04As at 31 March 2005 •'000s •'000s Current assetsInvestments at market value 574,835 499,485Debtors and other receivables 2,681 3,075Cash and bank balances 1,731 856Total assets 579,247 503,416Current liabilities (amounts falling due within 1 year)Creditors (162) (375)Dividend payable (4,189) -Total liabilities (4,351) (375)Total net assets 574,896 503,041Shareholders' equity 574,896 503,041 Shares in issue 20,100,000 18,800,000Net asset value per share (2003: €20.97) 28.60 26.76 iShares DJ Euro STOXX 50 Statement of operations (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000sIncome 12,835 9,006Expenses (3,953) (2,916)Net operating income 8,882 6,090Realised losses on investments 9,571 (2,830)Realised gains on futures contracts 285 (73)Net change in unrealised gains on investments 252,264 209,280Net change in unrealised losses on futures contracts (1) (11)Currency gains/(losses) (8) (1)Dividends (8,827) (2,080)Increase in net assets resulting from operations 262,166 210,375 Statement of changes in net assets (unaudited) Six months Six months to 31.03.05 to 31.03.04For the six months ended 31 March 2005 •'000s •'000s Net assets at beginning of the year 2,181,668 1,321,412Increase in net assets resulting from operations 262,166 210,375Capital transactionsValue of assets received on share creation 49,395 669,229Value of assets transferred on share redemption (167,773) -Net assets at the end of the year 2,325,456 2,201,016 There are no recognised gains or losses arising in the period other than theincrease in net assets attributable to shareholders of the Company. In arrivingat the results for the financial period, all amounts above relate to continuingoperations. Statement of net assets (unaudited) As at As at 31.03.05 31.03.04As at 31 March 2005 •'000s •'000s Current assetsInvestments at market value 2,323,604 2,196,143Debtors and other receivables 525 2,620Cash and bank balances 7,104 64,939Total assets 2,331,233 2,263,702Current liabilities (amounts falling due within 1 year)Creditors (662) (62,686)Dividend payable (5,115) -Total liabilities (5,777) (62,686)Total net assets 2,325,456 2,201,016Shareholders' equity 2,325,456 2,201,016 Shares in issue 76,000,000 78,700,000Net asset value per share (2003: €20.39) 30.60 27.97 Index Disclaimers "Dow Jones", "STOXX", "Dow Jones Euro STOXX 50 Indexsm" are trademarks and/orservice marks of Dow Jones & Company, Inc. and/or STOXX Limited and have beenlicensed for use or certain purposes by the European Exchange-Traded FundCompany plc. The funds of European Exchange-Traded Fund Company plc: iShares DJSTOXX 50 and iShares DJ Euro STOXX 50, based on the Dow Jones STOXX 50sm Indexand Dow Jones Euro STOXX 50sm Index respectively, are not sponsored, endorsed,sold or promoted by Dow Jones or STOXX, and neither Dow Jones nor STOXX makesany representation regarding the advisability of trading in the funds. Regulatory Information European Exchange-Traded Fund Company plc is not regulated by the UK FinancialServices Authority (FSA), it is authorised by the Irish Financial ServicesRegulatory Authority. Most of the protections provided by the UK regulatorysystem do not apply to its operation, and compensation will not be availableunder the UK Financial Services Compensation Scheme on its default. EuropeanExchange-Traded Fund Company plc (EETFCo.) is an investment company withvariable capital incorporated in Ireland. EETFCo. is a recognised scheme for thepurposes of the Financial Services and Markets Act 2000. Any subscriptions toany prospectus which is available from the Investment Manager at iSharesBusiness Development Team, Barclays Global Investors Limited, Murray House, OneRoyal Mint Court, London EC3N 4HH. (c) 2005 European Exchange-Traded Fund Company. All rights reserved. iShares isa registered trademark of Barclays Global Investors N.A. All other trademarks,servicemarks or registered trademarks are the property of their respectiveowners iShares(R) from BARCLAYS GLOBAL INVESTORS This announcement has been issued through the Companies Announcement Service of the Irish Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange