RNS Number:5127T
European Exchange-Traded Fnd Co.PLC
19 December 2003
Stock Exchange Announcement
For immediate release 19 December 2003
European Exchange-Traded Fund Company plc (the "Company")
Euro STOXX 50 LDRS; STOXX 50 LDRS (the "Sub-Funds")
Re: Results for the year ended 30 September 2003.
The Board of Directors (the "Board") of the Company wish to announce the
Company's results for the year ended 30 September 2003.
Company information
The Company was incorporated on 16 December 1999 as an open-ended investment
company with variable capital under the laws of Ireland as a public limited
company pursuant to the Companies Acts, 1963 to 2001 and the European
Communities (Undertakings for Collective Investment in Transferable Securities)
Regulations, 2003, as amended.
The Company has an umbrella structure, so that different funds may be
established within the Company, subject to prior approval of the Irish Financial
Services Regulatory Authority (IFSRA). Each fund will have a separate portfolio
of assets, which will be invested in accordance with the investment objectives
and policies of that fund. Each fund will be treated as bearing its own
liabilities. However, the liabilities of any fund or funds are binding on the
Company as a whole.
As at 30 September 2003 the following funds were in existence:
Fund Base currency Listed on Exchanges
iShares DJ STOXX 50 Euro London Stock Exchange, Borsa Italiana, virt-X, SWX,
Irish Stock Exchange, Euronext Paris, Euronext
Amsterdam, Deutsche Borse
iShares DJ Euro STOXX 50 Euro London Stock Exchange, Borsa Italiana, virt-X, SWX,
Irish Stock Exchange, Euronext Paris, Euronext
Amsterdam, Deutsche Borse
All figures relating to each Fund are shown in the relevant base currency. The
financial statements of the Company are shown in euro.
These funds are traded as exchange traded funds (ETFs),which provide the
flexibility of a share with the diversification of a fund. They can be bought
and sold like any other shares listed on a stock exchange, but provide instant
exposure to many companies.
Fund review
Two Sub-Funds are in existence and approved by the Irish Financial Services
Regulatory Authority with the following investment objectives and policies:
iShares DJ STOXX 50
The investment objective of iShares DJ STOXX 50 is to track closely the Dow
Jones STOXX 50SM Index thereby allowing investors to obtain market exposure to
the companies comprising the Index through the holding of shares in this fund.
iShares DJ Euro STOXX 50
The investment objective of iShares DJ Euro STOXX 50 is to track closely the Dow
Jones Euro STOXX 50SM Index thereby allowing investors to obtain market exposure
to the companies comprising the Index through the holding of shares in the fund.
The benchmark indices for the Sub-Funds are listed below:
Fund Index
iShares DJ STOXX 50 Dow Jones STOXX 50 SM
iShares DJ Euro STOXX 50 Dow Jones Euro STOXX 50 SM
The performance of the Sub-Funds for the period under review is shown below:
Sub-Fund Launch Net Asset Value NAV per share Return since launch 1 Year return at
(NAV)
Date Launch Fund
Launch 30.09.03 Index 30.09.03
30.09.03
Million Million Fund Index
iShares DJ STOXX 50 03.04.00 Euro4.96 Euro397.84 Euro49.61 Euro23.82 -44.99% -48.26% 5.68% 6.07%
iShares DJ Euro STOXX 50 03.04.00 Euro153.59 Euro1,321.40 Euro51.20 Euro23.98 -50.03% -50.09% 11.13% 11.28%
Important events during the year
On 15 September 2003,the Company's sponsor Merrill Lynch International and the
Company 's Investment Manager Merrill Lynch Investment Managers, LLC, resigned
and Barclays Global Investors Ltd was appointed as replacement Investment
Manager and Sponsor.
On the same day,the Company 's Sub-Fund names were changed from STOXX 50 LDRS
and Euro STOXX 50 LDRS to iShares DJ STOXX 50 and iShares DJ Euro STOXX 50
respectively.
Post balance sheet events
As a result of the change of Sponsor and Investment Manager in September, the
Company made the following changes on 14 November 2003:
* The Company appointed Bank of Ireland Securities Limited as Administrator
to the Company, replacing AIB/BNY Fund Management (Ireland) Limited. The
Company also appointed The Governor and Company of the Bank of Ireland as
Custodian, replacing AIB/BNY Trust Company Limited.
* The registered office of the Company changed from Guild House, Guild
Street, IFSC, Dublin 1, Ireland to New Century House, IFSC, Mayor Street
Lower, Dublin 1,Ireland.
* The Company Secretary changed from Bradwell Limited to Bank of Ireland
Securities Services Limited.
* The Sub-Funds will pay dividends quarterly instead of semi-annually from
14 November 2003.
Market background
European Market Background Report
Global stock markets staged a recovery in the fourth quarter of 2002,with
European markets rallying from the six year-lows they hit in early October.
However, the continued fragile state of the German economy and geopolitical
risks, including the threat of war in Iraq and the strikes disrupting oil
production in Venezuela, weighed on equity markets in December, taking some of
the shine off the quarter 's returns. The European Central Bank's decision to
cut interest rates in December by 0.5% offered some support to the euro zone
markets.
Equity markets fell again during the first quarter of 2003,with the dominant
theme seeming to be the conflict in Iraq. European equity markets performed
particularly badly over the quarter. The European economy as a whole was being
dragged down by the stagnation in Germany and the growth rates for the euro zone
were expected to be only half that of the US this year.
In the absence of significant domestic consumer spending, the region was heavily
dependent on exports, particularly to the US. Therefore, the sharp appreciation
of the euro during the quarter was seen as particularly unhelpful. The European
Central Bank had to downgrade its own growth forecast from 1.6% to 1.0%, despite
its quarter-point interest rate cut in March 2003. Economic concerns also led
the Bank of England to cut UK interest rates at the start of February 2003 in
order to boost UK household spending and encourage investment within the
corporate sector.
European equity markets sharply reversed direction and soared upwards during the
second quarter of 2003. With the worries about the war in Iraq behind them,
investors in the UK and Europe exuberantly returned to equities in reaction to
the seemingly low levels they had fallen to, rather than responding to any
fundamental improvement in the economic or corporate environment. Although the
economic climate appeared to have improved, it remained lethargic. Consumer
confidence in Europe rebounded as the war in Iraq ended, but a much smaller
increase was recorded in Europe than in the US. In addition, confidence in the
industrial sector was weak and the euro 's strength was an ongoing hindrance to
European export orders.
There were also continuing concerns over the threat of deflation, in Germany in
particular. Despite a further 0.5% interest rate cut from the European Central
Bank in the quarter, interest rates still appeared too high for the German
economy. However, investors seemed to be taking the view that policymakers
would continue to cut interest rates to stave off deflation and encourage
economic growth.
During the third quarter of 2003, the equity market rally continued. Only in
late September did some of the steam built up during the previous six months
wear off, as concerns about the weakness of the US dollar continued to haunt
Europe 's exporters. Weaker than expected US consumer sentiment and rising oil
prices further raised concerns about the global economic revival.
The European market recovery continued to be driven more by valuation measures
than by improvements in company earnings. Following the prolonged economic
downturn and poor share price performance, many companies have taken the
opportunity to restructure their businesses to ensure that they are better
positioned to take advantage of the global economic recovery. Investors have
been rewarding such companies, believing that they are in better shape than
their depressed valuations might suggest.
In the UK, recent signs of recovery caused the equity market to turn its
attentions to the potential for interest rate rises, with the futures market
pricing in a rate rise by the end of the year and further increases expected to
follow during 2004.
The results for the year of the Company and each Sub-Fund are presented below.
European Exchange-Traded Fund Company plc
STATEMENT OF OPERATIONS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Realised losses on investments
(133,755) (155,905)
Net change in unrealised gains/(losses) on investments
231,773 (393,146)
Currency loss
(321) (36)
Income
44,984 33,789
Expenses
(6,034) (7,039)
Net Income
38,950 26,750
Dividends
(40,853) (26,269)
Increase/(Decrease) in net assets resulting from operations
95,794 (548,606)
STATEMENT OF CHANGES IN NET ASSETS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Net assets at beginning of the year
1,215,268 920,749
Increase/(Decrease) in net assets resulting from operations
95,794 (548,606)
Capital transactions
Value of assets received on share creation
589,270 961,940
Value of assets transferred on share redemption
(181,082) (118,815)
Net assets at the end of the year
1,719,250 1,215,268
STATEMENT OF NET ASSETS
As at 30 September 2003 2003 2002
Euro'000s Euro'000s
Current Assets
Investments
1,721,175 1,214,707
Debtors
1,419 1,193
Cash and bank balances
33,928 27,874
1,756,522 1,243,774
Current Liabilities (amounts falling due within 1 year)
Creditors
(2,324) (3,777)
Dividend payable
(34,948) (24,729)
(37,272) (28,506)
Total net assets
1,719,250 1,215,268
Shareholders' equity 1,719,250 1,215,268
iShares DJ STOXX 50 Fund
STATEMENT OF OPERATIONS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Realised losses on investments
(29,683) (38,575)
Net change in unrealised gains/(losses) on investments
37,994 (104,253)
Currency loss
(318) (36)
Income
11,714 9,191
Expenses
(1,694) (2,521)
Net Income
10,020 6,670
Dividend
(10,367) (6,532)
Increase/(Decrease) in net assets resulting from operations
7,646 (142,726)
STATEMENT OF CHANGES IN NET ASSETS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Net assets at beginning of the year
360,870 293,494
Increase/(Decrease) in net assets resulting from operations
7,646 (142,726)
Capital transactions
Value of assets received on share creation
51,160 224,070
Value of assets transferred on share redemption
(21,838) (13,968)
Net assets at the end of the year
397,838 360,870
STATEMENT OF NET ASSETS
As at 30 September 2003 2003 2002
Euro'000s Euro'000s
Current Assets
Investments
398,068 360,692
Debtors
1,419 1,180
Cash and bank balances
5,704 5,016
405,191 366,888
Current Liabilities (amounts falling due within 1 year)
Creditors
(506) (1,026)
Dividend payable
(6,847) (4,992)
(7,353) (6,018)
Total net assets
397,838 360,870
Shareholders' equity 397,838 360,870
Shares in issue
16,700,000 15,600,000
Net asset value per share Euro 23.82 Euro 23.13
iShares DJ Euro STOXX 50 Fund
STATEMENT OF OPERATIONS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Realised losses on investments
(104,072) (117,330)
Net change in unrealised gains/(losses) on investments
193,779 (288,893)
Currency loss
(3) -
Income
33,270 24,598
Expenses
(4,340) (4,518)
Net Income
28,930 20,080
Dividend
(30,486) (19,737)
Increase/(Decrease) in net assets resulting from operations
88,148 (405,880)
STATEMENT OF CHANGES IN NET ASSETS
For the year ended 30 September 2003 2003 2002
Euro'000s Euro'000s
Net assets at beginning of the year
854,398 627,255
Increase/(Decrease) in net assets resulting from operations
88,148 (405,880)
Capital transactions
Value of assets received on share creation
538,110 737,870
Value of assets transferred on share redemption
(159,244) (104,847)
Net assets at the end of the year
1,321,412 854,398
STATEMENT OF NET ASSETS
As at 30 September 2003 2003 2002
Euro'000s Euro'000s
Current Assets
Investments
1,323,107 854,015
Debtors
- 13
Cash and bank balances
28,224 22,858
1,351,331 876,886
Current Liabilities (amounts falling due within 1 year)
Creditors
(1,818) (2,751)
Dividend payable
(28,101) (19,737)
(29,919) (22,488)
Total net assets
1,321,412 854,398
Shareholders' equity 1,321,412 854,398
Shares in issue
55,100,000 38,700,000
Net asset value per share Euro 23.98 Euro 22.08
Dividends
The following dividends were paid or proposed during the period:
Fund Ex-date Record date Pay date Dividend rate Type
Euro per share
iShares DJ STOXX 50 01 Oct 2003 30 Sept 2003 03 Nov 2003 0.41 Final
01 Apr 2003 31 Mar 2003 01 May 2003 0.20 Interim
01 Oct 2002 30 Sept 2002 01 Nov 2002 0.32 Final
iShares DJ Euro STOXX 50 01 Oct 2003 30 Sept 2003 03 Nov 2003 0.51 Final
01 Apr 2003 31 Mar 2003 01 May 2003 0.05 Interim
01 Oct 2002 30 Sept 2002 01 Nov 2002 0.51 Final
Regulatory information
Barclays Global Investors Limited is authorised and regulated by the Financial
Services Authority (FSA). European Exchange-Traded Fund Company plc ("the
Company") is not regulated by the FSA, it is authorised by the Irish Financial
Services Regulatory Authority. Most of the protections provided by the UK
regulatory system do not apply to its operation, and compensation will not be
available under the UK Financial Services Compensation Scheme on its default.
European Exchange-Traded Fund Company plc is an investment company with variable
capital incorporated in Ireland. It is a recognised scheme for the purposes of
the Financial Services and Markets Act 2000. Any subscription to any fund is
made on the basis of the Fund prospectus which is available from the Investment
Manager at: iShares Business Development Team, Barclays Global Investors
Limited, Murray House, 1 Royal Mint Court, London EC3N 4HH.
Index disclaimers
In respect of iShares DJ STOXX 50 Fund and iShares DJ EURO STOXX 50 Fund (the "
STOXX Funds"), "Dow Jones ","STOXX ","Dow Jones EURO STOXX 50 Index ","Dow Jones
STOXX 50 Index " are trademarks and/or service marks of Dow Jones &Company, Inc.
and/or STOXX Limited and have been licensed for use for certain purposes by the
European Exchange-Traded Fund Company plc. The STOXX Funds are funds of the
European Exchange-Traded Fund Company plc, are based on the Dow Jones STOXX 50
TM Index and Dow Jones EURO STOXX 50 TM Index respectively and are not
sponsored, endorsed, sold or promoted by Dow Jones or STOXX, and neither Dow
Jones nor STOXX makes any representation regarding the advisability of trading
in the STOXX Funds.
Contact Details
Goodbody Stockbrokers Ciara Bollard
++353 1 64 19414
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
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