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New York, July 18, 2005 -- The Germany Fund, Inc. (GER) announced today that its board of directors has approved an expansion of the Fund's investment objective and fundamental policies to include equities of companies in all European countries using the Euro currency. Under the new investment focus, which remains subject to stockholder approval, the Fund will invest at least 80% of its net assets in equity and equity-linked securities of companies domiciled in countries utilizing the Euro currency. These currently consist of the following 12 countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. In connection with the change, the Fund will change its benchmark to the MSCI EMU (European Economic and Monetary Union) Index, an unmanaged index, which consists approximately of 320 stocks in these 12 countries. The minimum 80% of the Fund's net assets in these countries may be invested in companies of all sizes. The Fund's benchmark MSCI-EMU index includes 157 stocks considered to be large capitalization and representing 88% of the market capitalization of the index. In connection with the investment changes, the Fund will also change its name to reflect its new focus. The remaining 20% of the Fund's net assets may be invested in other European countries.
Stockholder approval for the investment changes will be sought at a special meeting to be held in the Fall. The board of directors has also approved a self-tender offer by the Fund for 20% of the outstanding shares at a price of 95% of the net asset value per share, conditioned on stockholder approval of the investment changes. The tender offer would commence within two months after stockholder approval.
The Germany Fund, Inc. is a non-diversified, closed-end investment company. The Fund currently seeks long-term capital appreciation investing primarily in large capitalization equity securities trading on the German stock exchanges. Its shares are listed on the New York Stock Exchange under the symbol "GER".
The MSCI EMU (European Economic and Monetary Union) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance within EMU.
The Fund is not diversified and may focus its investments in certain geographic regions, thereby increasing its vulnerability to developments in that region. Investing in foreign securities presents certain unique risks not associated with domestic investments, such as currency fluctuation, political and economic change, and market risks. This may result in greater share price volatility.
Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering, and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the Fund's shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value. |