Notes to Financial Statements
Forward Foreign Cross Currency Exchange Contracts
Futures contracts
The Portfolio may enter into financial futures contracts for the delayed sale or delivery of securities or contracts
based on financial indices at a fixed price on a future date. Pursuant to margin requirements, the Portfolio deposits
either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments
are made or received by the Portfolio each day, dependent on the daily fluctuations in the value of the underlying
security, and are recorded for financial statement purposes as unrealized gains or losses by the Portfolio. There
are several risks in connection with the use of futures contracts as a hedging device. The change in value of
futures contracts primarily corresponds with the value of their underlying instruments or indices, which may not
correlate with changes in the value of hedged investments. Buying futures tends to increase the Portfolio's
exposure to the underlying instrument, while selling futures tends to decrease the Portfolio's exposure to the
underlying instrument or hedge other Portfolio investments. In addition, there is the risk that the Portfolio may not
be able to enter into a closing transaction because of an illiquid secondary market. Losses may arise if there is an
illiquid secondary market or if the counterparties do not perform under the contract's terms. The Portfolio enters
into financial futures transactions primarily to seek to manage its exposure to certain markets and to changes in
security prices and foreign currencies. Gains and losses are realized upon the expiration or closing of the futures
contracts. At December 31, 1998, the Portfolio held the following futures contracts:
At December 31, 1998 the Portfolio had segregated sufficient cash and/or securities to cover margin
requirements on open futures contracts.
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