What is the meaning of World Equity Benchmark Shares?

Each WEBS share is a claim on a portfolio of publicly traded shares in a particular country. That portfolio corresponds more or less to the MSCI portfolio for that country. All WEBS shares are listed on the American Stock Exchange and trade in dollars. Roughly speaking, each WEBS is to an MSCI Indexes of foreign stocks what Spiders (q. V.) are to the S&P 500 Index of U. S. Stocks. Foreign Fund, Inc. Issues all WEBS shares. Any investor can create (redeem) a "Creation Unit" – i. E., a fixed number – of WEBS shares by depositing the appropriate underlying shares, plus cash expenses (WEBS shares) with an "Authorized Participant" in exchange for WEBS shares (underlying shares, less cash expenses). That makes a WEBS share like a share in an open end investment company (mutual fund). WEBS are listed and trade exactly like shares in a closed end fund and other ordinary shares. A trader can sell them whenever the American Exchange is open, and can sell them short. However, it is possible to create or redeem shares continuously, as with mutual fund shares. Any of the underlying shares may pay a dividend. The country that is the source of dividends for the underlying shares of WEBS may withhhold dividend income. Foreign Fund, Inc. Retains dividend income temporarily, deducts expenses, and distributes the remainder at least each year. The I. R. S. Treats dividends and capital gains in a manner similar to the way it treats them for a mutual fund holding foreign shares. (Funds Distributor, Inc.' World Equity Benchmark Shares'; Questions and Answsers. 1996.) WEBS and a competitive family of international mutual funds, CountryBaskets hit the market in the first half of March, 1996. (Peter C. Du Boi, "Deutsche Bank, Morgan Stanley Offer Ways to Play Foreign Indexes on U. S. Exchanges" Barron's, 3/11/96.) Apparently, WEBS won the battle in the marketplace, and Deutsche Morgan Grenfell plans to dissolve the CountryBasket funds in March, 1997. (Maureen Nevin Duffy, "Deutsche MG Dumps Baskets" Financial Trader, 3/97.).