UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

_______________________________

Investment Company Act file number: 811-04632

The European Equity Fund, Inc.

(Exact name of registrant as specified in charter)

 

345 Park Avenue
New York, NY 10154-0004

(Address of principal executive offices) (Zip code)

 

Paul Schubert

345 Park Avenue

New York, NY 10154-0004

(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 250-3220

Date of fiscal year end: 12/31

Date of reporting period: 3/31/2018

 

ITEM 1. SCHEDULE OF INVESTMENTS

 

 

The European Equity Fund, Inc.

 

Schedule of Investments                                                                             as of March 31, 2018 (Unaudited)

 

 

  Shares Value ($)
Common Stocks  98.2%
Germany  20.3%
Aerospace & Defense 1.9%    
MTU Aero Engines AG 10,000 1,682,093
     
Capital Markets 3.2%    
Deutsche Boerse AG 20,000 2,719,875
     
Chemicals 2.0%    
Evonik Industries AG 48,000 1,690,356
     
Health Care Providers & Services 2.8%    
Fresenius SE & Co KGaA 32,000 2,441,887
     
Insurance 2.4%    
Allianz SE (Registered) 9,000 2,029,578
     
Internet & Direct Marketing Retail 2.5%    
Zalando SE 144A* 39,000 2,123,421
     
Personal Products 2.4%    
Beiersdorf AG 18,000 2,036,660
     
Software 3.1%    
SAP SE 26,000 2,716,457
Total Germany (Cost $14,908,082)   17,440,327
     
Sweden  13.6%
Commercial Services & Supplies 2.9%    
Securitas AB "B" 147,000 2,487,941
     
Electronic Equipment, Instruments & Components 0.8%    
Hexagon AB "B" 11,000 651,439
     
Household Products 2.4%    
Essity AB "B"* 74,000 2,037,467
     
Machinery 6.4%    
Alfa Laval AB 76,000 1,788,999
SKF AB "B" 105,000 2,137,535
Volvo AB "B" 88,000 1,599,704
    5,526,238
Oil, Gas & Consumable Fuels 1.1%    
Lundin Petroleum AB 38,000 950,987
Total Sweden (Cost $10,357,768)   11,654,072
     
Netherlands  10.5%
Banks 2.8%    
ING Groep NV 141,000 2,375,218
     
Beverages 3.1%    
Heineken NV 25,000 2,683,602
     
Oil, Gas & Consumable Fuels 3.0%    
Royal Dutch Shell PLC "B" 82,000 2,619,224
     
Semiconductors & Semiconductor Equipment 1.6%    
ASML Holding NV 7,000 1,378,443
Total Netherlands (Cost $7,049,950)   9,056,487
     
France  10.1%
Aerospace & Defense 1.1%    
Thales SA 8,000 973,253
     

 

  Shares Value ($)
Commercial Services & Supplies 2.4%    
Edenred 60,000 2,083,434
     
Construction & Engineering 2.3%    
Vinci SA 20,000 1,964,901
     
Health Care Equipment & Supplies 4.3%    
BioMerieux 11,500 947,407
Essilor International SA 20,000 2,695,283
    3,642,690
Total France (Cost $6,874,161)   8,664,278
     
Switzerland  9.6%
Building Products 2.1%    
Geberit AG (Registered) 4,000 1,764,043
     
Capital Markets 2.4%    
Partners Group Holding AG 2,841 2,105,983
     
Life Sciences Tools & Services 1.0%    
Lonza Group AG (Registered)* 3,498 822,457
     
Metals & Mining 1.9%    
Glencore PLC* 330,000 1,637,825
     
Technology Hardware, Storage & Peripherals 2.2%    
Logitech International SA (Registered) 52,000 1,898,016
Total Switzerland (Cost $5,815,373)   8,228,324
     
Denmark  8.9%
Chemicals 3.2%    
Chr Hansen Holding A/S 32,000 2,750,247
     
Electric Utilities 2.7%    
Orsted A/S 144A 35,000 2,263,280
     
Pharmaceuticals 3.0%    
Novo Nordisk A/S "B" 53,000 2,601,039
Total Denmark (Cost $7,017,143)   7,614,566
     
United Kingdom  6.4%
Metals & Mining 2.6%    
Randgold Resources Ltd (ADR) 27,000 2,227,843
     
Trading Companies & Distributors 1.6%    
Ashtead Group PLC 50,000 1,360,716
     
Wireless Telecommunication Services 2.2%    
Vodafone Group PLC 700,000 1,907,163
Total United Kingdom (Cost $6,034,496)   5,495,722
     
Italy  5.4%
Banks 2.5%    
Intesa Sanpaolo SpA 600,000 2,178,974
     
Diversified Telecommunication Services 2.9%    
Telecom Italia SpA* 2,650,000 2,512,257
Total Italy (Cost $4,324,530)   4,691,231
     
Ireland  4.6%
Airlines 2.3%    
Ryanair Holdings PLC* 100,000 1,968,590
     
Food Products 2.3%    
Kerry Group PLC "A" 20,000 2,020,233
Total Ireland (Cost $3,291,343)   3,988,823
 

 

  Shares Value ($)
Belgium 3.3%
Banks 3.3%    
KBC Group NV (Cost $1,908,100) 33,000 2,869,591
     
Spain  3.3%
Banks 1.0%    
Bankinter SA 84,000 863,061
     
Hotels, Restaurants & Leisure 2.3%    
NH Hotel Group SA 248,000 1,947,047
Total Spain (Cost $2,670,661)   2,810,108
     
Luxembourg 2.2%
Multiline Retail 2.2%    
B&M European Value Retail SA (Cost $1,684,234) 340,000 1,866,313
Total Common Stocks (Cost $71,935,841)   84,379,842
     
     
  Contracts Value ($)
Put Options Purchased 0.3%
Exchange-Traded Index Options Contracts
Deutsche Boerse AG German Stock Index, Counterparty RBS,
       Expiration Date 6/15/2018, Strike Price EUR 10,000,
       Notional Amount EUR 50,000,000 (Cost $358,804)
1,000 246,535
     
  Shares Value ($)
Cash Equivalents  0.9%
Deutsche Central Cash Management Government Fund, 1.64% (Cost $760,845) (a) 760,845 760,845
     
     
  % of Net
Assets
Value ($)
Total Investment Portfolio (Cost $73,055,490) 99.4 85,387,222
Other Assets and Liabilities, Net 0.6 477,381
Net Assets 100.0 85,864,603
       

  

For information on the Fund’s policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual financial statements.

 

A summary of the Fund’s transactions with affiliated Underlying Deutsche Funds during the period ended March 31, 2018 are as follows:

Value ($)
at
12/31/2017
Purchases
Cost
($)
Sales
Proceeds
($)
Net
Realized
Gain/
(Loss)
($)
Net
Change in
Unrealized
Appreciation
(Depreciation)
($)
Income
($)
Capital
Gain
Distributions
($)
Number
of shares
at
3/31/2018
Value ($)
at
3/31/2018
Cash Equivalents 0.9%
Deutsche Central Cash Management Government Fund, 1.64% (a)
271,114   10,521,944   10,032,213 - - 6,887 - 760,845 760,845
271,114   10,521,944   10,032,213 - - 6,887 - 760,845 760,845

 

 

*     Non-income producing security.
(a)     Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.
144A :   Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
ADR :   American Depositary Receipt
RBS :   The Royal Bank of Scotland Plc

 

 

For purposes of its industry concentration policy, the Fund classifies issuers of portfolio securities at the industry
sub-group level.  Certain of the categories in the above Schedule of Investments consist of multiple industry sub-groups or industries.

 

 

Fair Value Measurements
 
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk associated with investing in those securities.
 
The following is a summary of the inputs used as of March 31, 2018 in valuing the Fund’s investments.  
         

Assets Level 1 Level 2 Level 3 Total
  Common Stocks (b)  
Germany $ 17,440,327 $ $ $ 17,440,327
Sweden   11,654,072       11,654,072
Netherlands   9,056,487       9,056,487
France   8,664,278       8,664,278
Switzerland   8,228,324       8,228,324
Denmark   7,614,566       7,614,566
United Kingdom   5,495,722       5,495,722
Italy   4,691,231       4,691,231
Ireland   3,988,823       3,988,823
Belgium   2,869,591       2,869,591
Spain   2,810,108       2,810,108
Luxembourg   1,866,313       1,866,313
Short-Term Instruments (b) 760,845 760,845
Derivatives (c)        
Purchased Options 246,535 246,535
Total $ 85,387,222  $ —   $ —   $ 85,387,222 

 

There have been no transfers between fair value measurement levels during the period ended March 31, 2018.
 
(b) See Schedule of Investments for additional detailed categorizations.
(c) Derivatives include value of options purchased.

 

ITEM 2. 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 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.
   
ITEM 3. EXHIBITS
   
  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.

 

 

 

 

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: The European Equity Fund, Inc.
   
By:

/s/Hepsen Uzcan

Hepsen Uzcan

President

   
Date: May 23, 2018

 

 

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.

 

 

By:

/s/Hepsen Uzcan

Hepsen Uzcan

President

   
Date: May 23, 2018
   
   
   
By:

/s/Diane Kenneally

Diane Kenneally

Chief Financial Officer

   
Date: May 23, 2018