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<SEC-DOCUMENT>0000088053-06-001152.txt : 20060908
<SEC-HEADER>0000088053-06-001152.hdr.sgml : 20060908
<ACCEPTANCE-DATETIME>20060908125239
ACCESSION NUMBER:		0000088053-06-001152
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060908
DATE AS OF CHANGE:		20060908
EFFECTIVENESS DATE:		20060908

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NEW GERMANY FUND INC
		CENTRAL INDEX KEY:			0000858706
		IRS NUMBER:				133555471
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-CSRS
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05983
		FILM NUMBER:		061081146

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		800-437-6269

	MAIL ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LENOX FUND INC
		DATE OF NAME CHANGE:	19900115
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSRS
<SEQUENCE>1
<FILENAME>sr063006_ngf.htm
<DESCRIPTION>SEMIANNUAL REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>UNITED STATES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>WASHINGTON, D. C. 20549</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>FORM N-CSRS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>Investment Company Act file number  811-5983</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font size=2>New Germany Fund, Inc.</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2> (Exact Name of Registrant as Specified in Charter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Two International Place</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>Boston, MA  02110</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#4F4F4F"><font size=2>(Address of principal executive offices) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; (Zip code)</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Registrant&#146;s Telephone Number, including Area Code: </font><u><font size=2>(212) 454-7190</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Paul Schubert</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>345 Park Avenue</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>New York, NY 10154</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Name and Address of Agent for Service)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="193" style='border-collapse:collapse'>
    <tr >
        <td width="144" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date of fiscal year end:</font></p> </td>
        <td width="49" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>12/31</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="211" style='border-collapse:collapse'>
    <tr >
        <td width="144" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date of reporting period:</font></p> </td>
        <td width="67" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>06/30/06</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>ITEM 1.</font></B><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><B><font SIZE=2>REPORT TO STOCKHOLDERS</font></B></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


















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&lt;Page&gt;</font></p>

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&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
[GRAPHIC]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THE NEW GERMANY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
LETTER TO THE SHAREHOLDERS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; The German equity market, in line with global
trends, experienced a</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
difficult second quarter as investors started to question the
sustainability of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
economic growth on the back of further central bank tightening,
particularly in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the US. In the subsequent wave of profit-taking and withdrawal from
risk</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
positions, the performance patterns of the earlier months of the year
reversed</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and market segments associated with cyclicality suffered the most: the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
industrials, technology, financials and consumer discretionary sectors,
small</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and mid-cap stocks and stocks with sizeable emerging markets exposure.
Only</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
eight stocks in the MDAX managed to post gains in the second
quarter.(1) Among</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
them were two retailers, which benefited from the improving labor
market and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
consumer sentiment in Germany, which was fueled by the World Cup and
ahead of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the VAT increase next year. During the first half of the year, German
small and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
mid-caps managed to outperform the large caps due to a strong first
quarter and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
a rebound in the second half of June. From a valuation perspective,
German small</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and midcap stocks look attractive again, having reached levels seen in
2004. The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
earnings momentum still looks positive.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; For the six months ended June 30, 2006, the
New Germany Fund's total return</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
was 20.20% (not annualized) based on net asset value and 22.81% (not
annualized)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
based on share price. During the same period, the Fund's benchmark, the
Midcap</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Market Performance Index, returned 16.62% (not annualized).(2)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Over the course of the second quarter, the
Fund maintained its overweight</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
position in the health care sector, despite selling its position in
Qiagen.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Relative performance was boosted, in particular, by the Fund's holding
in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Sartorius, a long-term holding in the electrical equipment sector that
again</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
reported strong results. Solid sales growth helped the company realize
economies</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of scale effects, and stronger growth in the high-margin biotech
filters</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
business together with a favorable currency development contributed to
earnings</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
growth. As a result, the shares performed well despite the weak overall
market</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
environment during the second quarter. Among industrials companies, the
Fund's</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
holdings in Biopetrol and Rheinmetall detracted from relative performance
during</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the second quarter. Shares of Biopetrol, a company that is active in
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
alternative energy market, declined after the company issued a profit
warning.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The company will face margin pressure in the second half of 2006 as
customers</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
were reluctant to sign contracts ahead of changes in the regulatory
framework</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
that will provide new incentives to promote biofuels in Germany. Thus,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
short-term market visibility has worsened and Biopetrol was the biggest</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
detractor from Fund performance during the second quarter, after being
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
largest contributor to performance during the first quarter. The other
stock</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
that struggled during the second quarter was the European Aeronautic
Defence and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Space Company (EADS). Due to the Fund's underweight position in the
company,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
this development helped Fund performance against its benchmark. The
stock</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
suffered double-digit losses as the company announced in mid-June that
its</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
delivery schedule of its new A380 would be delayed by 6-7 months due to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
production issues related to the manufacture and integration of
electrical</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
systems on the aircraft. The company estimates that the total impact on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
operating earnings from 2007 through 2010 will be 2 billion euros. As a
result</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of the sell-off in the stock, the shares now trade close to book value.
Another</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
positive contributor to relative performance was Salzgitter. After
re-initiating</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
a position in the company in the first quarter, the Fund further
increased its</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
holding to take advantage of positive operational developments at the company.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
First quarter results significantly exceeded market expectations, and
additional</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
upside potential remains as the oil industry continues making</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp; FOR ADDITIONAL INFORMATION ABOUT THE FUND INCLUDING PERFORMANCE,
DIVIDENDS,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRESENTATIONS, PRESS RELEASES,
DAILY NAV AND SHAREHOLDER REPORTS,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PLEASE VISIT www.newgermanyfund.com</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1</font></p>

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&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
infrastructure improvements, driving robust growth in Salzgitter's
tubes</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
business, which supplies steel tubes to oil companies for drilling.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; The Fund purchased 155,500 of its shares in
the open market during the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
first six months of 2006.* The Fund's average discount to net asset
value</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
declined to 8.97% for the six months ending June 30, 2006, compared
with 13.87%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
for the same period last year.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; At the Fund's Annual Shareholder Meeting held
on June 20, 2006, a</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
non-binding proposal to open-end the Fund or otherwise allow
shareholders to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
realize net asset value received a vote of 35.3% of the outstanding
shares in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
favor and 24.3% against, with the remaining 40.4% not voting or
abstaining. The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Board of Directors considered this matter again at its July 14, 2006
meeting.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Board took into consideration the interests of the Fund as a continuing</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
entity. The Board confirmed its prior conclusion, stated in its 2006
proxy</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
statement, that in the absence of a demonstrable demand by new U.S.
investors to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
buy Fund shares, open-ending, large tender offers or aggressive
open-market</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
buybacks could mean that the Fund would become too small to manage and
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
expense ratio would become too large. In addition, the Board took into</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
consideration its June 2006 decision that the Fund conduct a cash
tender offer</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
if the discount from average daily net asset value of the
volume-weighted</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
average daily market price of Fund shares is greater than 10% for the
six-month</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
period July 1, 2006 through December 31, 2006. An important influence
in the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Board's deliberations was that the Fund has had superior performance in
recent</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
years (outperformance of its benchmark by 3.36% on an annualized basis
in the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
last 5 years based on market price, and a cumulative total return of
94.56% for</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the period from 6/30/01-6/30/06). Given all the above factors, the
Board</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
continues to believe that the longer-term value proposition of the Fund
and its</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
capital appreciation investment objective are well served by the
closed-end</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
format. Accordingly, the Board did not take any action, but will
continue</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
regularly to review the situation.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The sources, opinions and forecasts expressed are as of July, 2006.
There is no</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
guarantee that the views, opinions and forecasts expressed herein will
come to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
pass. This information is subject to change at any time based on market
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
other conditions and should not be construed as a recommendation for
any</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
specific security. Past performance does not guarantee future results.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; The share buy back program was suspended for a
portion of the semi-annual</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; period.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(1)&nbsp; MDAX is a total rate of return index of 50 mid-cap issues
that rank below</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the DAX. DAX is the total rate of return index
of 30 selected German blue</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; chips stocks traded on the Frankfurt stock
exchange.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(2)&nbsp; Midcap Market Performance Index is a total return index that
is composed of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; various MDAX and TecDAX issues, reflecting the
performance of the mid-caps</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; across all sectors of the Prime Segment.
TecDAX is a total return index</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; that tracks the 30 largest and most liquid
issues from the various</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; technology sectors of the Prime Segment
beneath the DAX. Index returns</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; assume reinvested dividends and, unlike Fund
returns, do not reflect any</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; fees or expenses. It is not possible to invest
directly into an index.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Sincerely,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
/s/ Christian Strenger</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ------------------------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Christian Strenger</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Chairman</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp; FOR ADDITIONAL INFORMATION ABOUT THE FUND INCLUDING PERFORMANCE,
DIVIDENDS,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRESENTATIONS, PRESS RELEASES,
DAILY NAV AND SHAREHOLDER REPORTS,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PLEASE
VISIT www.newgermanyfund.com</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
FUND HISTORY AS OF JUNE 30, 2006</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PERFORMANCE IS HISTORICAL, ASSUMES REINVESTMENT OF ALL DIVIDEND AND
CAPITAL GAIN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DISTRIBUTIONS, AND DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT
RETURNS AND</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PRINCIPAL VALUE FLUCTUATE WITH CHANGING MARKET CONDITIONS SO THAT, WHEN
SOLD,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. PLEASE VISIT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
www.newgermanyfund.com FOR THE FUND'S MOST RECENT PERFORMANCE.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
TOTAL RETURNS:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Caption&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE SIX</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MONTHS
ENDED&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE YEARS ENDED DECEMBER 31,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30,&nbsp;&nbsp;&nbsp;&nbsp;
- -----------------------------------------------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2006(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp; -----&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &lt;C&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net Asset Value(a)&nbsp;&nbsp;&nbsp;&nbsp;
20.20%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.68%&nbsp;&nbsp;&nbsp;&nbsp;
24.44%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 93.07%&nbsp;&nbsp;&nbsp;&nbsp;
(39.60)%&nbsp;&nbsp;&nbsp;&nbsp; (35.68)%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Market Value(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
22.81%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18.94%&nbsp;&nbsp;&nbsp;&nbsp;
30.50%&nbsp;&nbsp;&nbsp;&nbsp; 102.42%&nbsp;&nbsp;&nbsp;&nbsp;
(39.52)%&nbsp;&nbsp;&nbsp;&nbsp; (33.86)%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Benchmark&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
16.62%(1)&nbsp;&nbsp;&nbsp; 14.17%(1)&nbsp; 23.46%(1)&nbsp;&nbsp;
78.56%(2)&nbsp; (37.58)%(3)&nbsp; (33.46)%(4)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;/Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(a)&nbsp; Total return based on net asset value reflects changes in the
Fund's net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; asset value during each period. Total return
based on market value reflects</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; changes in market value. Each figure includes
reinvestments of dividend and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; capital gain distributions, if any. These
figures will differ depending</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; upon the level of any discount from or premium
to net asset value at which</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the Fund's shares trade during the period.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(b)&nbsp; Total returns shown for the six month period are not
annualized</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(1)&nbsp; Represents the Midcap Market Performance Index.***</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(2)&nbsp; Represents an arithmetic composite consisting of 75%
MDAX*/25% NEMAX 50**</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; from 1/1/03-3/31/03 and 100% Midcap Market
Performance Index from</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; 4/1/03-12/31/03.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(3)&nbsp; Represents 60% MDAX/40% NEMAX 50 for 1/1/02-8/31/02 and 75%
MDAX/25% NEMAX</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; 50 for 9/1/02-12/31/02.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(4)&nbsp; Represents 60% MDAX/40% NEMAX 50.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; MDAX is a total rate of return index of 50 mid-cap
issues that rank below</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the DAX. DAX is the total rate of return index
of 30 selected German blue</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; chips stocks traded on the Frankfurt stock
exchange.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
**&nbsp;&nbsp; NEMAX 50 is comprised of the 50 largest technology
issues from the Prime</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Segment that are ranked below the DAX.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
***&nbsp; Midcap Market Performance Index is a total return index that
is composed of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; various MDAX and TecDAX**** issues, reflecting
the performance of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; mid-caps across all sectors of the Prime
Segment.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
**** TecDax is a total return index that tracks the 30 largest and most
liquid</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; issues from the various technology sectors of
the Prime Segment beneath the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; DAX.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Index returns assume reinvested dividends and, unlike Fund returns, do
not</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
reflect any fees or expenses. It is not possible to invest directly
into an</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
index.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investments in funds involve risk including the loss of principal.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
This Fund is not diversified and primarily focuses its investments in
Germany,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
thereby increasing its vulnerability to developments in that country.
Investing</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in foreign securities presents certain unique risks not associated with
domestic</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
investments, such as currency fluctuation and political and economic
changes and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
market risks. This may result in greater share price volatility.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Closed-end funds, unlike open-end funds, are not continuously offered.
There is</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
a one-time public offering, and once issued, shares of closed-end funds
are sold</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in the open market through a stock exchange. Shares of closed-end funds</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
frequently trade at a discount to net asset value. The price of the
Fund's</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
shares is determined by a number of factors, several of which are
beyond the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
control of the Fund. Therefore, the Fund cannot predict whether its
shares will</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
trade at, below or above net asset value.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund has elected to not be subject to the statutory calculation,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
notification and publication requirements of the German Investment Tax
Act</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(Investmentsteuergesetz). As a result German investors in the Fund may
be</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
subject to less favorable lump-sum taxation under German law.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
STATISTICS:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net
Assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$333,882,126</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Shares
Outstanding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
24,804,698</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NAV Per
Share&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.46</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;RECORD&nbsp;
&nbsp;&nbsp;&nbsp;PAYABLE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ORDINARY&nbsp;&nbsp; LT CAPITAL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp; DATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INCOME&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GAINS&nbsp;&nbsp;&nbsp;&nbsp; TOTAL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- --------&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; ----------&nbsp;&nbsp; ------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
05/05/06&nbsp;&nbsp;
05/15/06&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$0.150&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp; $0.150</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
12/22/05&nbsp;&nbsp;
12/30/05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.410&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.410</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
05/19/05&nbsp;&nbsp; 05/27/05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.140&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.140</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
12/22/04&nbsp;&nbsp;
12/31/04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.230&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.230</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
05/06/04&nbsp;&nbsp;
05/14/04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.050&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.050</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
12/22/03&nbsp;&nbsp;
12/31/03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.022</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
07/24/03&nbsp;&nbsp;
07/30/03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;
$0.003</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
11/20/00&nbsp;&nbsp;
11/29/00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.010&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $1.30&nbsp;&nbsp;&nbsp;&nbsp; $1.310</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
09/01/00&nbsp;&nbsp;
09/15/00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$0.070&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $0.35&nbsp;&nbsp;&nbsp;&nbsp; $0.420</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
OTHER INFORMATION:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NYSE Ticker
Symbol&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GF</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NASDAQ
Symbol&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
XGFNX</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Dividend Reinvestment Plan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Voluntary Cash Purchase
Program&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Annualized Expense Ratio
(6/30/06)*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.24%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; Represents expense ratio before custody credits.
Please see &quot;Financial</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Highlights&quot; section of this report.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PORTFOLIO BY MARKET SECTOR AS OF JUNE 30, 2006 (AS % OF PORTFOLIO'S
MARKET</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
VALUE*)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[CHART]</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Energy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Telecommunication Services&nbsp;&nbsp;&nbsp; (2%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Industrials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(31%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Health
Care&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(17%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Financials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(18%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Consumer
Staples&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Consumer Discretionary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (9%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Information Technology&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (11%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Materials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(10%)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;/Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
10 LARGEST EQUITY HOLDINGS AS OF JUNE 30, 2006 (AS A % OF PORTFOLIO'S
MARKET</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
VALUE*)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;1. K + S&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.6</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;2. European Aeronautic Defence&nbsp;&nbsp; 5.6</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;3.
Fresenius&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.3</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;4.
Rheinmetall&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.0</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;5.
Puma&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;6. Salzgitter
AG&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.9</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;7. Depfa Bank
Plc&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.6</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;8. Merck
KGAA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.5</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;9. United
Internet&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.3</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
10. Deutsche
Postbank&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.0</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; Percentage (%) of market value refers to all
securities in the portfolio,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; except cash and equivalents.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Portfolio by Market Sector and 10 Largest Equity Holdings are subject
to change.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Following the Fund's fiscal first and third quarter-end, a complete
portfolio</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
holdings listing is filed with the SEC on Form N-Q. The form will be
available</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
on the SEC's Web site at www.sec.gov, and it also may be reviewed and
copied at</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the SEC's Public Reference Room in Washington, D.C. Information on the
operation</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of the SEC's Public Reference Room may be obtained by calling (800)
SEC-0330.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INTERVIEW WITH THE LEAD PORTFOLIO MANAGER -- RALF OBERBANNSCHEIDT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; QUESTION: APPROACHING THE 2007 INCREASE IN
VALUE ADDED TAXES IN GERMANY,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
WHAT MIGHT BE THE IMPACT ON THE ECONOMY AND COMPANIES?</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; ANSWER: Recent data shows an increase in
income from taxes for the German</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ministry of finance, sparking a discussion as to whether a hike in the
VAT from</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
16 to 19% is still necessary. Clearly the VAT would withdraw purchasing
power</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
from German households and would weaken an already savings oriented
domestic</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
consumer. The German government would use the money to reduce its debt
and to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
further reduce labor costs. The recent positive move in sentiment and
business</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
indicators possibly would mute again. It would also most likely
increase</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
inflation, a very closely monitored macro data point by equity markets.
The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
impact of this consumer burden also depends on whether companies will
be able to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
increase prices in one go. This kind of process usually takes time and
gives the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
consumer flexibility to react. Most likely we will see a preemptive
increase in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
consumption of high priced items such as cars, white ware goods and
brown ware</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
goods. Only a few German companies will be directly affected by an
increase in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
VAT. Not only the bigger DAX member corporations but also German mid-
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
small-cap stocks have increased their exposure towards other regions
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
countries. Other consumer sub-sectors like luxury goods and high-street</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
retailers in fashion would not necessarily feel the heat due to the
inelasticity</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of their end customer's demand.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; QUESTION: AS GERMAN CHANCELLOR ANGELA MERKEL
APPROACHES HER ONE-YEAR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ANNIVERSARY AT THE HELM, HAS HER COALITION GOVERNMENT BEEN ABLE TO MAKE
ANY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PROGRESS ON REFORMS?</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; ANSWER: Criticism that Ms. Merkel's reform
program seems to be stalling</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
comes on the heels of recent announcements by the government regarding
details</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
on two reform programs -- one addressing health care and the other addressing</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
corporate taxes. After months of negotiations, the coalition government
reached</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
an agreement on a watered down health care reform that economists
believe</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
results in increased labor costs for companies and lower disposable
income for</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
households without fully meeting the financial needs of the healthcare
system.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
As far as the corporate tax reform, the overall impact of the recently
announced</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
plan will be a reduction in the corporate tax rate from 39% to 29%,
resulting in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
5 billion euros of tax relief. However, this reduction will be financed
through</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
a broadening of the tax base to include interest payments, which could</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
discourage investment and is expected to increase the tax burden of
smaller</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
German companies, which tend to rely more heavily on financing. Thus,
Ms.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Merkel's government has produced some reforms, but they required
significant</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
compromise for the coalition to reach agreement.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; QUESTION: VIVIANE REDING, THE EU COMMISSIONER
FOR INFORMATION SOCIETY AND</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
MEDIA, RECENTLY UNVEILED PLANS TO REGULATE ROAMING CHARGES ON MOBILE
PHONES.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
WHAT IS THE RATIONALE BEHIND THIS MOVE TOWARD INCREASED REGULATION?</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; ANSWER: Pricing in the mobile phone market in
the EU differs significantly</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
from pricing in the US, where roaming is often included as part of a
package of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
minutes. Mobile phone users in the EU pay international roaming charges</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
averaging $1.50 per minute -- and depending on the location, the rates
can be</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
significantly higher. Someone from the UK, for example, could pay $4.00
per</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
minute to call home from as close as France. This is primarily due to
the fact</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
that different companies operate the mobile networks in the various
countries of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the EU. Companies such as Vodafone in the UK, T-Mobile in Germany, and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Telefonica in Spain charge each other wholesale prices for their
customers to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
use each other's networks. Currently, the mobile operators are not
obligated to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
pass on any reduction in wholesale prices to their customers. The plan
proposed</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
by Ms. Reding is meant to reduce prices paid by the consumer by linking
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
retail price to the wholesale price and capping the retail price at 49
euro</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
cents per minute. European mobile operators, who generate revenues of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
approximately $11 billion from roaming fees, have objected to the
proposed</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
regulation, saying that they have recently taken measures to offer
reduced</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
roaming rates to customers. The proposal's impact on mobile operators'
bottom</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
line is somewhat uncertain, as reduced per minute roaming rates could
result in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
a higher volume of calls, but is expected to be negative overall. More</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
importantly, mobile operators contend that the regulation will stifle
innovation</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and discourage investment in faster networks. This comes at a time when
EU</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
regulation also puts the brakes on incentives for fixed line network
upgrades.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The plan, which is subject to approval by the European Parliament,
could go into</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
effect within a year.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The sources, opinions and forecasts expressed are as of July, 2006.
There is no</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
guarantee that the views, opinions and forecasts expressed herein will
come to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
pass. This information is subject to change at any time based on market
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
other conditions and should not be construed as a recommendation for
any</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
specific security. Past performance does not guarantee future results.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ECONOMIC OUTLOOK</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; The recent equity market correction has put
the macroeconomic debate over</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
growth and inflation back into focus. The concerns are the same as
before in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
similar market phases: economic growth is feared to slow down more than
expected</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
as the major central banks may fight accelerating inflation more
aggressively.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Yet, evidence for such a scenario from actual data is scarce. As
expectations</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
are adjusted to reflect those concerns and investors scale down their
risks,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
particularly in the hitherto popular spread trades, the market is
clearing some</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
liquidity and momentum-driven exaggerations, providing a sound base for
advances</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
on the back of benign fundamentals: while global economic growth is
likely to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
moderate it should remain robust enough to support further earnings
growth in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the corporate sector.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Despite the volatility in the equity markets,
leading indicators in Germany</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
continue to climb (the Ifo, for example, reached a 15-year high in
June),</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
fueling optimism for potential upwards revisions to GDP growth.
Industrial</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
production has picked up, increasing 6% year-on-year in May, its
strongest</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
increase in five years. Construction has also increased strongly this
year,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
following more than 10 years of decline, while unemployment inched back
below</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
11% in June. However, retail sales have been weak, down 0.5%
year-on-year in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
May. Furthermore, pre-emptive consumption ahead of the VAT increase and
in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
connection with the World Cup tournament is not sustainable into 2007.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; We expect Euroland growth of about 2% for the
remainder of the year;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
however, for 2007 the combination of the ECB hiking cycle, a less
positive</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
export contribution to growth and fiscal consolidation from local
governments</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
could put pressure on the recent improvements. Although inflation
remains above</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the ECB's 2% target due to the impact of higher energy prices, the core
rate</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
remains contained.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; The European Central Bank (ECB) raised
interest rates by 0.50% in the first</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
half of 2006. Although we expect another 0.50% hike in the second half
of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
year, we believe that the ECB does not want to jeopardize the economic
recovery</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and that any sign of a deterioration in the economic outlook could mean
the end</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of the rate hike cycle. This will have to be balanced as energy prices
remain</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
high and optimism rises for above-trend GDP growth.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(1)&nbsp; The Ifo Business Climate Index is a closely watched indicator
of German</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; business conditions, based on a monthly survey
of about 7,000 companies. It</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; is widely seen as a barometer for economic
conditions in the whole of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Eurozone, which is a term used to describe the
11 EU countries that joined</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the third stage of EMU and adopted the euro.
The Eurozone, or Euroland</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; countries are Austria, Belgium, Finland,
France, Germany, Ireland, Italy,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Luxembourg, The Netherlands, Portugal and
Spain.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The sources, opinions and forecasts expressed are as of July, 2006.
There is no</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
guarantee that the views, opinions and forecasts expressed herein will
come to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
pass. This information is subject to change at any time based on market
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
other conditions and should not be construed as a recommendation for
any</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
specific security. Past performance does not guarantee future results.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SCHEDULE OF INVESTMENTS -- JUNE 30, 2006 (UNAUDITED)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;
SHARES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DESCRIPTION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VALUE</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENTS IN GERMAN SECURITIES - 87.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMON STOCKS - 79.2%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AEROSPACE &amp; DEFENSE - 1.4%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 145,000&nbsp;&nbsp; MTU Aero Engines Holding
Ag*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 4,814,730</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AIRPORTS, FLYING FIELDS &amp; AIRLINES - 2.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 149,400&nbsp;&nbsp; Air Berlin
PLC+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,831,193</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 90,000&nbsp;&nbsp;
Fraport+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,412,867</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,244,060</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BIOTECHNOLOGY - 0.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 160,000&nbsp;&nbsp; GPC
Biotech*+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,273,995</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CHEMICALS - 10.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 505,000&nbsp;&nbsp; GEA
Group*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,648,903</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 230,200&nbsp;&nbsp; K +
S&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
18,556,368</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 170,000&nbsp;&nbsp;
Lanxess*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,705,168</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp; Wacker Chemie
AG&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
537,761</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34,448,200</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL SERVICES &amp; SUPPLIES - 1.1%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 95,000&nbsp;&nbsp;
Interseroh+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;3,642,585</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CONSTRUCTION &amp; ENGINEERING - 1.6%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 97,200&nbsp;&nbsp; Bilfinger
Berger&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,281,073</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED FINANCIALS - 4.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 72,000&nbsp;&nbsp; AWD
Holding+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,412,848</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 140,000&nbsp;&nbsp; Deutsche
Postbank+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10,066,827</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 15,000 &nbsp;&nbsp;Interhyp
AG&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,323,025</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp; Sixt
AG&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,150,290</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,952,990</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.6%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 255,000&nbsp;&nbsp;
Mobilcom+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,459,085</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRICAL EQUIPMENT - 3.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 160,000&nbsp;&nbsp; SGL
Carbon*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,208,542</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 122,000&nbsp;&nbsp;
Solarworld+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,651,397</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10,859,939</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRONIC EQUIPMENT &amp; INSTRUMENTS - 6.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 51,460&nbsp;&nbsp;
Funkwerk+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,233,207</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 492,720&nbsp;&nbsp;
Kontron*+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,680,304</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 35,000&nbsp;&nbsp; Q Cells
AG+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,941,675</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 321,600&nbsp;&nbsp; Suess
MicroTec*+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,692,292</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 150,000&nbsp;&nbsp; Utimaco
Safeware*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 2,108,865</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 60,000&nbsp;&nbsp; Wincor
Nixdorf&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,664,766</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
22,321,109</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
HEALTHCARE PROVIDERS &amp; SERVICES - 2.1%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 156,000&nbsp;&nbsp;
Rhoen-Klinikum&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,944,531</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;HOUSEHOLD PRODUCTS - 1.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 33,161&nbsp;&nbsp;
Beiersdorf&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,993,150</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INSURANCE - 0.6%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 56,800&nbsp;&nbsp; Hannover
Ruckversicherungs+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1,985,503</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INTERNET SOFTWARE &amp; SERVICES - 3.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 760,000&nbsp;&nbsp; United
Internet&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10,947,182</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
INVESTORS - 1.2%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 55,000&nbsp;&nbsp; MPC Muenchmeyer Peterson
Cap+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,071,515</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
LIFE INSURANCE - 1.8%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 42,000&nbsp;&nbsp; AMB Generali
Holding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,958,502</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MACHINERY - 8.2%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 145,000&nbsp;&nbsp; Heidelberger
Druckmaschinen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,588,286</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 28,000&nbsp;&nbsp;
Krones+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,506,391</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 65,234&nbsp;&nbsp; Pfeiffer Vacuum
Technology+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,124,590</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 191,709&nbsp;&nbsp;
Rheinmetall&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,356,219</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
27,575,486</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
METALS &amp; MINING - 3.8%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 150,000&nbsp;&nbsp;
Salzgitter&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12,724,125</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MULTILINE RETAIL - 1.9%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 134,625&nbsp;&nbsp; Douglas
Holding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,214,959</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PHARMACEUTICALS - 9.4%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 108,000&nbsp;&nbsp;
Celesio&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,810,133</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 127,000&nbsp;&nbsp; Merck
KGAA+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11,540,860</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 50,000&nbsp;&nbsp; Schwarz
Pharma&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,484,853</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 145,000&nbsp;&nbsp; Stada
Arzneimittel+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,778,418</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
31,614,264</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;REAL ESTATE - 4.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 60,000&nbsp;&nbsp; Deutsche
Euroshop+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,171,718</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 55,000&nbsp;&nbsp; Hypo Real Estate
Holding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3,338,333</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 270,000&nbsp;&nbsp; IVG Holding
Ag*+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,150,955</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15,661,006</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;SOFTWARE - 1.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 95,000&nbsp;&nbsp;
Software&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,939,345</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; The accompanying notes are an integral part of the
financial statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;
SHARES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DESCRIPTION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VALUE</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SPECIALTY RETAIL - 1.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 130,000&nbsp;&nbsp; Hugo Boss Ag
- -Ord&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 5,534,556</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TEXTILES, APPAREL &amp; LUXURY GOODS - 3.8%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 33,000&nbsp;&nbsp;
Puma&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,818,947</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Common Stocks</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$172,975,023)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
264,280,837</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PREFERRED STOCKS - 8.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED FINANCIAL SERVICES - 0.2%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp; Sixt,
AG&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
787,310</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ELECTRICAL EQUIPMENT - 2.6%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 227,800&nbsp;&nbsp;
Sartorius&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,798,589</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;HEALTHCARE PROVIDERS &amp; SERVICES - 4.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 85,354&nbsp;&nbsp;
Fresenius&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
14,209,096</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MEDIA - 1.2%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 163,400&nbsp;&nbsp; Prosieben Sat.1
Media&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,078,675</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Preferred Stocks</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$12,160,879)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
27,873,670</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments in German Securities</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$185,135,902)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
292,154,507</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENTS IN DUTCH COMMON STOCKS - 5.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AEROSPACE &amp; DEFENSE - 5.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 640,000&nbsp;&nbsp; European Aeronautic Defence and Space
Company</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$6,414,307)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
18,461,899</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENTS IN IRISH COMMON STOCKS - 3.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DIVERSIFIED FINANCIAL SERVICES - 3.5%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 710,000&nbsp;&nbsp; Depfa Bank Plc</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost
$4,407,317)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,760,565</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENTS IN ITALIAN COMMON STOCKS - 1.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMMERCIAL BANKS - 1.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; 90,000&nbsp;&nbsp; Banca Italease*</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Cost $2,302,825)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;
4,507,986</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENTS IN SWISS COMMON STOCKS - 0.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OIL &amp; GAS EXPLORATION &amp; PRODUCTION - 0.7%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; 188,800&nbsp;&nbsp; Biopetrol Industries Ag+</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Cost
$2,661,748)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,207,943</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SECURITIES LENDING COLLATERAL - 22.6%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
75,294,612&nbsp;&nbsp; Daily Assets Fund Institutional, 5.1%++</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cost
$75,294,612)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
75,294,612</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total Investments - 121.1%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(cost
$276,216,711)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;404,387,512</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Liabilities in excess of cash and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
other assets -
(21.1)%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(70,505,386)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NET ASSETS-100.0%
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$333,882,126</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
============</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; Non-income producing security.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
+&nbsp;&nbsp;&nbsp; All or a portion of these securities were on loan.
The value of all</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; securities loaned at June 30, 2006 amounted to
$74,414,075 which is 22.3%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; of the net assets.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
++&nbsp;&nbsp; Represents collateral held in connection with securities
lending. Daily</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Assets Fund Institutional, an affiliated fund,
is managed by Deutsche Asset</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Management, Inc. The rate shown is the
annualized seven-day yield at period</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; end.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; The accompanying notes are an integral part of the
financial statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
STATEMENT OF ASSETS AND LIABILITIES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
JUNE 30, 2006 (UNAUDITED)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ASSETS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investments in securities, at value, (cost $200,922,099) --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; including $74,414,075 of securities
loaned&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$ 329,092,900</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investment in Daily Assets Institutional (cost
$75,294,612)*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 75,294,612</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Cash and foreign currency (cost
$4,987,786)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5,023,221</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Dividends
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
178,606</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Interest
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
107,715</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Foreign withholding tax refund
receivable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
141,255</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Due from insurance
provider&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
46,098</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Other
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,189</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Total assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
409,900,596</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
LIABILITIES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Payable upon return of securities
loaned&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
75,294,612</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Management fee payable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
147,474</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investment advisory fee
payable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;70,428</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Payable for Directors' fees and
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
39,520</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Accrued
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
466,436</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Total
liabilities&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
76,018,470</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NET
ASSETS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$ 333,882,126</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=============</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net assets consist of:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Paid-in capital, $.001 par (Authorized 80,000,000
shares)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ 432,298,308</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Cost of 9,944,643 shares held in
Treasury&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(95,213,277)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Distributions in excess of net investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(11,231,458)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Accumulated net realized gain (loss) on investments and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(120,177,683)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net unrealized appreciation (depreciation) of investments</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; and foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
128,206,236</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$ 333,882,126</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
=============</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net asset value per share ($333,882,126 / 24,804,698 shares</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; of common stock issued and
outstanding)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.46</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=============</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; Represents collateral on securities loaned.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; The accompanying notes are an integral part of the
financial statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
STATEMENT OF OPERATIONS (UNAUDITED)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE SIX</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MONTHS ENDED</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JUNE
30, 2006</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NET INVESTMENT INCOME</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Investment Income</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Dividends (net of foreign withholding taxes of
$672,140)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ 4,360,876</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Securities lending income, including income from Daily</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assets Fund Institutional, net of
borrower rebates&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
395,631</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;
Interest&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
24,578</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Total investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4,781,085</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Expenses</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Management
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;961,942</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Investment advisory
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
463,356</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Custodian and Transfer Agent's fees and
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
114,161</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Reports to
shareholders&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;130,460</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Directors' fees and
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
97,840</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Legal
fees&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
254,370</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Audit
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
31,660</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; NYSE listing
fee&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
780</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;
Miscellaneous&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
25,300</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Total expenses before custody
credits&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,079,869</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Less: custody
credits*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2,261)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net
expenses&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,077,608</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2,703,477</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; AND FOREIGN CURRENCY TRANSACTIONS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net realized gain (loss) on:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
25,568,755</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
330,138</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net unrealized appreciation (depreciation) during the period</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; on:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
28,947,215</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Translation of other assets and liabilities from foreign</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
currency&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
35,638</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net gain on investments and foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
54,881,746</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$57,585,223</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
===========</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; The custody credits are attributable to interest
earned on U.S. cash</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; balances held on deposit at the custodian.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; The accompanying notes are an integral part of the financial
statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
STATEMENT OF CHANGES IN NET ASSETS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Caption&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR
THE SIX</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MONTHS ENDED&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FOR THE</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YEAR ENDED</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(UNAUDITED)&nbsp;&nbsp;&nbsp;
DECEMBER 31, 2005</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -------------&nbsp;&nbsp; -----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INCREASE (DECREASE) IN NET ASSETS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Operations</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 2,703,477&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; (187,841)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net realized gain on:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
25,568,755&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 37,272,578</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
330,138&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (586,475)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net unrealized appreciation (depreciation) on investment</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; transactions during the period on:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,947,215&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3,936,151)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Translation of other assets and
liabilities from</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; foreign
currency&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
35,638&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(75,128)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net increase in net assets resulting from
operations&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
57,585,223&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 32,486,983</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Distributions to shareholders from:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net investment
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3,720,705)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (13,583,003)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Capital share transactions:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net proceeds from reinvestment of dividends</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0 and 369,273 shares,
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,762,886</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Cost of shares repurchased (155,500 and 689,500 shares,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1,807,438)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (6,651,609)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Net decrease in net assets from capital share</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1,807,438)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2,888,723)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Total increase in net
assets&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
52,057,080&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16,015,257</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NET ASSETS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Beginning of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
281,825,046&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 265,809,789</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
End of year (including distributions in excess of net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; investment income of $11,231,458 and $10,214,230, as of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; June 30, 2006 and December 31, 2005,
respectively)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$333,882,126&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $281,825,046</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;============&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
============</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;/Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp; The accompanying notes are an integral part of the
financial statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2006 (UNAUDITED)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 1. ACCOUNTING POLICIES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The New Germany Fund, Inc. (the &quot;Fund&quot;) was incorporated in
Maryland on January</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
16, 1990 as a non-diversified, closed-end management investment
company. The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund commenced investment operations on January 30, 1990.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The following is a summary of significant accounting policies followed
by the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund in the preparation of its financial statements. The preparation of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
financial statements in accordance with accounting principles generally
accepted</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in the United States of America requires management to make estimates
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
assumptions that affect the reported amounts and disclosures in the
financial</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
statements. Actual results could differ from those estimates.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SECURITY VALUATION: Investments are stated at value. All securities for
which</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
market quotations are readily available are valued at the last sales
price on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the primary exchange on which they are traded prior to the time of
valuation. If</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
no sales price is available at that time, and both bid and ask prices
are</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
available, the securities are valued at the mean between the last
current bid</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and ask prices; if no quoted asked prices are available, they are
valued at the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
last quoted bid price. All securities for which market quotations are
not</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
readily available will be valued as determined in good faith by the
Board of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Directors of the Fund. The Fund calculates its net asset value per
share at</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
11:30 a.m., New York time, in order to minimize the possibility that
events</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
occurring after the close of the securities exchanges on which the
Fund's</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
portfolio securities principally trade would require adjustment to the
closing</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
market prices in order to reflect fair value.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
recorded on the trade date. Cost of securities sold is calculated using
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
identified cost method. Dividend income is recorded on the ex-dividend
date and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
interest income is recorded on an accrual basis. Such dividend income
is</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
recorded net of unrecoverable foreign withholding tax.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SECURITIES LENDING: The Fund may lend securities to financial
institutions. The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund retains beneficial ownership of the securities it has loaned and
continues</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
to receive interest and dividends paid by the securities and to
participate in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
any changes in their market value. The Fund requires the borrowers of
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
securities to maintain collateral with the Fund consisting of liquid,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
unencumbered assets having a value at least equal to or greater than
the &quot;Margin</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Percentage&quot; to the value of the securities loaned. &quot;Margin
Percentage&quot; shall</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
mean (i) for collateral which is denominated in the same currency as
the loaned</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
securities, 102%, and (ii) for collateral which is denominated in a
currency</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
different from that of the loaned security, 105%. The Fund may invest
the cash</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
collateral into a joint trading account in an affiliated money market
fund</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
pursuant to Exemptive Orders issued by the SEC. Deutsche Asset
Management, Inc.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
receives a management fee (.03% annual effective rate as of June 30,
2006) on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the cash collateral invested in the affiliated money fund. The Fund
receives</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
compensation for lending its securities either in the form of fees or
by earning</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
interest on invested cash collateral net of fees paid to a lending
agent. Either</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the Fund or the borrower may terminate the loan. The Fund is subject to
all</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
investment risks associated with the value of any cash collateral
received,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
including, but not limited to, interest rate, credit and liquidity risk</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
associated with such investments.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are
maintained</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in United States dollars.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Assets and liabilities denominated in Euros and other foreign currency
amounts</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
are translated into United States dollars at the 11:00 a.m. mid-point
of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
buying and selling spot rates quoted by the Federal Reserve Bank of New
York.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Purchases and sales of investment securities, income and expenses are
reported</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
at the rate of exchange prevailing on the respective settlement dates
of such</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
transactions. The resultant gains and losses arising from exchange rate</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
fluctuations are identified separately in the Statement of Operations,
except</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
for such amounts attributable to investments which are included in net
realized</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and unrealized gains and losses on investments.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CONTINGENCIES: In the normal course of business, the Fund may enter
into</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
contracts with service providers that contain general indemnification
clauses.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund's maximum exposure under these arrangements is unknown as this
would</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
involve future claims that may be made against the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
13</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund that have not yet been made. However, based on experience, the Fund
expects</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the risk of loss to be remote.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
TAXES: No provision has been made for United States Federal income tax
because</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the Fund intends to meet the requirements of the United States Internal
Revenue</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Code applicable to regulated investment companies and to distribute all
of its</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
taxable income to shareholders.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
In July 2006, the Financial Accounting Standards Board (FASB) issued</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Interpretation No. 48, &quot;Accounting for Uncertainty in Income Taxes
- -- an</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
interpretation of FASB Statement No. 109&quot; (the &quot;Interpretation&quot;).
The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Interpretation establishes for the Fund a minimum threshold for
financial</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
statement recognition of the benefit of positions taken in filing tax
returns</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(including whether the Fund is taxable in certain jurisdictions), and
requires</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
certain expanded tax disclosures. The Interpretation is effective for
fiscal</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
years beginning after December 15, 2006. Management will begin to
evaluate the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
application of the Interpretation to the Fund and is not in a position
at this</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
time to estimate the significance of its impact, if any, on the Fund's
financial</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
statements.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
At December 31, 2005, the Fund had a net tax basis capital loss
carryforward of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
approximately $145,322,000, which may be applied against any realized
net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
taxable capital gains of each succeeding year until fully utilized or
until</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
12/31/2010, the expiration date, whichever occurs first.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends
and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
distributions to its shareholders on the ex-dividend date. Income and
capital</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
gain distributions are determined in accordance with United States
Federal</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
income tax regulations which may differ from accounting principles
generally</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
accepted in the United States of America. These differences, which could
be</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
temporary or permanent in nature, may result in reclassification of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
distributions; however, net investment income, net realized gains and
net assets</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
are not affected.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 2. MANAGEMENT AND INVESTMENT ADVISORY AGREEMENTS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund has a Management Agreement with Deutsche Investment Management</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
America's Inc. (the &quot;Manager&quot;).</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund has an Investment Advisory Agreement with Deutsche Asset
Management</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
International GmbH (the &quot;Investment Adviser&quot;). The Manager
and the Investment</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Adviser are affiliated companies.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Management Agreement provides the Manager with a fee, computed
weekly and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
payable monthly, at the annual rates of .65% of the Fund's average
weekly net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
assets up to $100 million, .55% of such assets in excess of $100
million and up</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
to $500 million, and .50% of such assets in excess of $500 million. The</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investment Advisory Agreement provides the Investment Adviser with a
fee,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
computed weekly and payable monthly, at the annual rates of .35% of the
Fund's</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
average weekly net assets up to $100 million and .25% of such assets in
excess</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
of $100 million. Accordingly, for the period ended June 30, 2006, the
combined</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
fee pursuant to the Management and Investment Advisory Agreements was
equivalent</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
to an annualized effective rate of .85% of the Fund's average net
assets.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Pursuant to the Management Agreement, the Manager is the corporate
manager and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
administrator of the Fund and, subject to the supervision of the Board
of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Directors and pursuant to recommendations made by the Fund's Investment
Adviser,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
determines the suitable securities for investment by the Fund. The
Manager also</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
provides office facilities and certain administrative, clerical and
bookkeeping</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
services for the Fund. Pursuant to the Investment Advisory Agreement,
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Investment Adviser, in accordance with the Fund's stated investment
objectives,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
policies and restrictions, makes recommendations to the Manager with
respect to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the Fund's investments and, upon instructions given by the Manager as
to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
suitable securities for investment by the Fund, transmits purchase and
sale</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
orders and selects brokers and dealers to execute portfolio
transactions on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
behalf of the Fund.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 3. TRANSACTIONS WITH AFFILIATES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
For the period ended June 30, 2006, Deutsche Bank AG, the German parent
of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Manager and Investment Adviser, and its affiliates received $15,734 in
brokerage</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
commissions as a result of executing agency transactions in portfolio
securities</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
on behalf of the Fund, that the board</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
14</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
determined were effected in compliance with the Fund's Rule 17e-1
procedures.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Certain officers of the Fund are also officers of either the Manager or
Deutsche</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Bank AG.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund pays each Director not affiliated with the Manager retainer
fees plus</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
specified amounts for attended board and committee meetings.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 4. PORTFOLIO SECURITIES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Purchases and sales of investment securities, excluding short-term
investments,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
for the period ended June 30, 2006, were $69,349,676 and $75,066,642,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
respectively.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 5. INVESTING IN FOREIGN MARKETS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Foreign investments may involve certain considerations and risks not
typically</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
associated with those of domestic origin as a result of, among others,
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
possibility of political and economic developments and the level of
governmental</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
supervision and regulation of foreign securities markets. In addition,
certain</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
foreign markets may be substantially smaller, less developed, less
liquid and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
more volatile than the major markets of the United States.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 6. CAPITAL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
During the period ended June 30, 2006 and the year ended December 31,
2005, the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund purchased 155,500 and 689,500 of its shares of common stock on the
open</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
market at a total cost of $1,807,438 and $6,651,609, respectively. The
weighted</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
average discount of these purchased shares comparing the purchased
price to the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
net asset value at the time of purchase was 9.0% and 12.7%,
respectively. These</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
shares are held in treasury. In addition, during the year ended
December 31,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
2005 the Fund reissued 369,273 shares held in treasury as part of the
dividend</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
reinvestment plan.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
NOTE 7. LITIGATION</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
0n June 6, 2005, Robert H. Daniels, an alleged shareholder of the Fund,
filed a</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
putative class action complaint on behalf of all Fund shareholders
against the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund and its Directors, in the Circuit Court for Baltimore City,
Maryland. This</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
litigation arises out of an attempt in 2005 by a shareholder of the
Fund to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
nominate and elect directors who were not qualified as Directors
pursuant to the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund's director qualification bylaw, which sets forth certain
eligibility</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
requirements for directors, including a requirement of relevant
experience and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
country knowledge consistent with the Fund's strategy of investment in
German</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
companies. Mr. Daniels seeks declaratory and injunctive relief, as well
as</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
attorneys' fees, experts' fees and costs.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
On July 12, 2005, the Fund and its Directors removed the case to the
United</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
States District Court for the District of Maryland. On August 26, 2005,
the Fund</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and its directors filed a motion to dismiss the complaint on various
grounds. On</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
March 29, 2006, the judge denied the motion to dismiss and litigation
has now</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
moved to the document discovery and deposition stage.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
FINANCIAL HIGHLIGHTS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Selected data for a share of common stock outstanding throughout each
of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
years indicated:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Caption&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE SIX
MONTHS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR THE YEARS ENDED DECEMBER 31,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ENDED JUNE 30,&nbsp;&nbsp;&nbsp;
- ---------------------------------------------------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2006 (UNAUDITED)&nbsp;&nbsp;&nbsp;&nbsp;
2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ------------------&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &lt;C&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Per share operating performance:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net asset value:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Beginning of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 11.29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;
10.51&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 8.72&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 4.53&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 7.50&nbsp;&nbsp; $&nbsp;
11.66</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..11(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.01)(a)&nbsp;&nbsp;&nbsp;&nbsp; (.01)(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.03)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.01)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net realized and unrealized gain (loss) on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; investments and foreign currency
transactions&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2.97)&nbsp;&nbsp;&nbsp;&nbsp; (4.22)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Increase (decrease) from investment
operations&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3.00)&nbsp;&nbsp;&nbsp;&nbsp; (4.23)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Increase resulting from share
repurchases&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..08&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .07</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Distributions from net investment
income+&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.55)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.28)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.03)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Dilution in net asset value from dividend</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;
reinvestment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.02)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..00(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..00(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------
&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;
- --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net asset value:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; End of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 13.46&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;
11.29&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp; 10.51&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 8.72&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 4.53&nbsp;&nbsp;
$&nbsp;&nbsp; 7.50</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp;&nbsp;&nbsp; ========&nbsp;&nbsp;&nbsp;&nbsp;
========&nbsp;&nbsp;&nbsp; ========&nbsp;&nbsp; ========</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Market value:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; End of
year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp; 12.39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;
10.19&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 9.05&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; 7.16&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; 3.55&nbsp;&nbsp;
$&nbsp;&nbsp; 5.87</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Total investment return for the period:++</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Based upon market
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
22.81%***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
18.94%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 30.50%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
102.42%&nbsp;&nbsp;&nbsp;&nbsp; (39.52)%&nbsp;&nbsp; (33.86)%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Based upon net asset
value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20.20%***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.68%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
24.44%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 93.07%&nbsp;&nbsp;&nbsp;&nbsp;
(39.60)%&nbsp;&nbsp; (35.68)%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Ratio to average net assets:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Total expenses before custody
credits*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.24%**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.64%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.24%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.40%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.48%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.25%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net investment income
(loss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
..80%****&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.07)%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(.08)%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .05%&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;(.46)%&nbsp;&nbsp;&nbsp;&nbsp; (.06)%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; Portfolio
turnover&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
40.74%**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
51.70%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
58.42%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 86.07%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
98.55%&nbsp;&nbsp;&nbsp;&nbsp; 86.65%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Net assets at end of year (000's
omitted)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$333,882&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$281,825&nbsp;&nbsp;&nbsp;&nbsp; $265,810&nbsp;&nbsp;&nbsp;&nbsp; $230,587
&nbsp;&nbsp;&nbsp;$124,504&nbsp;&nbsp; $212,650</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(a)&nbsp; Based on average shares outstanding during the period.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(b)&nbsp; Amount is less than $.005 per share.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
+&nbsp;&nbsp;&nbsp; For U.S. tax purposes, total distributions
consisted of:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Ordinary
income&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;$&nbsp;&nbsp; (.15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; (.55)&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; (.28)&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; (.03)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; Long term capital
gains&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp; (.15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
(.55)&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; (.28)&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;
(.03)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp;&nbsp;&nbsp;
- --------&nbsp;&nbsp;&nbsp; --------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;/Table&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
++&nbsp;&nbsp; Total return based on net asset value reflects changes
in the Fund's net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; asset value during each period. Total return
based on market value reflects</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp; &nbsp;&nbsp;changes in market value. Each figure includes
reinvestments of dividend and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; capital gain distributions, if any. These
figures will differ depending</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; upon the level of any discount from or premium
to net asset value at which</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the Fund's shares trade during the period.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; The custody credits are attributable to interest
earned on U.S. cash</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; balances. The ratio of total expenses after
custody credits to average net</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; assets are 1.24%, 1.63%, 1.24%, 1.39%, 1.47%,
and 1.25% for 2006, 2005,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; 2004, 2003, 2002 and 2001, respectively</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
**&nbsp;&nbsp; Annualized</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
***&nbsp; Not Annualized</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
**** Not Annualized. The ratio for the six months ended June 30, 2006
has not</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; been annualized since the Fund believes it
would not be appropriate because</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the Fund's dividend income is not earned
ratably throughout the fiscal</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; year.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
16</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE NEW GERMANY FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
REPORT OF STOCKHOLDERS' MEETING (UNAUDITED)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Annual Meeting of Stockholders of The New Germany Fund, Inc. was
held on</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
June 20, 2006. At the Meeting, the following matters were voted upon by
the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
stockholders (the resulting votes are presented below):</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
1.&nbsp;&nbsp; To elect three Directors to serve for a term of three
years until their</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; successors are elected and qualify.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WITHHELD</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- --------&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; --------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Dr. Franz Wilhelm Hopp&nbsp;&nbsp; 7,684,106&nbsp;&nbsp;&nbsp; 755,254</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Ernst-Ulrich Matz&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,680,710&nbsp;&nbsp;&nbsp; 758,650</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Dr. Frank Tromel&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,682,706&nbsp;&nbsp;&nbsp; 756,654</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
2.&nbsp;&nbsp; To ratify the appointment by the Audit Committee and the
Board of Directors</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; of PricewaterhouseCoopers LLP, an independent
registered public accounting</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; firm, as independent auditors for the fiscal
year ending December 31, 2006.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp; ABSTAIN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;----------&nbsp;&nbsp;
- -------&nbsp;&nbsp; -------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
14,522,575&nbsp;&nbsp; 372,599&nbsp;&nbsp; 296,338</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
3.&nbsp;&nbsp; The vote to approve a stockholder proposal to terminate
the investment</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; advisory agreement between the Fund and
Deutsche Asset Management</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; International GmbH.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp;&nbsp; ABSTAIN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; ---------&nbsp;&nbsp; -------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6,393,816&nbsp;&nbsp; 7,339,241&nbsp;&nbsp; 544,472</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
4.&nbsp;&nbsp; The vote to approve a proposal that stockholders may
make nominations</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; notwithstanding the Fund's director
qualification Bylaw.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp;&nbsp; ABSTAIN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; ---------&nbsp;&nbsp; -------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7,343,410&nbsp;&nbsp; 7,376,666&nbsp;&nbsp; 471,437</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
5.&nbsp;&nbsp; The vote to approve a stockholder proposal to request
that stockholders of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; the Fund be afforded an opportunity to realize
net asset value for their</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; shares as soon as practicable.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NUMBER OF VOTES:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ----------------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp;&nbsp; ABSTAIN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- ---------&nbsp;&nbsp; ---------&nbsp;&nbsp; -------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8,766,761&nbsp;&nbsp; 6,026,898&nbsp;&nbsp; 397,852</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PROXY VOTING</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
A description of the Fund's policies and procedures for voting proxies
for</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
portfolio securities and information about how the Fund voted proxies
relating</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
to its portfolio securities during the 12 month period ended June 30 is</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
available on our web site -- www.newgermanyfund.com -- (click on the
&quot;proxy</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
voting record&quot; link in the left hand tool bar) or on the SEC's web
site at</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
www.sec.gov. To obtain a written copy of the Fund's policies and
procedures</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
without charge, upon request, call us toll free at 1-800-437-6269.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
17</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[THIS PAGE INTENTIONALLY LEFT BLANK.]</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
EXECUTIVE OFFICES</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
345 PARK AVENUE, NEW YORK, NY 10154</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
MANAGER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTMENT ADVISER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DEUTSCHE ASSET MANAGEMENT INTERNATIONAL GMBH</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CUSTODIAN AND TRANSFER AGENT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INVESTORS BANK &amp; TRUST COMPANY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
LEGAL COUNSEL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SULLIVAN &amp; CROMWELL LLP</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PRICEWATERHOUSECOOPERS LLP</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTORS AND OFFICERS</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CHRISTIAN H. STRENGER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CHAIRMAN AND DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
JOHN A. BULT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
RICHARD R. BURT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
JOHN H. CANNON</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
RICHARD KARL GOELTZ</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DR. FRANZ WILHELM HOPP</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ERNST-ULRICH MATZ</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DR. FRANK TROMEL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ROBERT H. WADSWORTH</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
WERNER WALBROL</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PETER ZUHLSDORFF</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DIRECTOR</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
MICHAEL CLARK*</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PRESIDENT AND CHIEF EXECUTIVE OFFICER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PAUL H. SCHUBERT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CHIEF FINANCIAL OFFICER AND TREASURER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ELISA METZGER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CHIEF LEGAL OFFICER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
PHILIP GALLO</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
CHIEF COMPLIANCE OFFICER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SCOTT MCHUGH**</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ASSISTANT TREASURER</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
DAVID GOLDMAN**</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SECRETARY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
JOHN MILLETTE**</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
ASSISTANT SECRETARY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
46057 (8/06)</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- ----------</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
*&nbsp;&nbsp;&nbsp; Effective June 15, 2006.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
**&nbsp;&nbsp; Effective July 14, 2006.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VOLUNTARY CASH PURCHASE PROGRAM</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AND DIVIDEND REINVESTMENT PLAN</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The Fund offers stockholders a Voluntary Cash Purchase Program and
Dividend</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Reinvestment Plan (&quot;Plan&quot;) which provides for optional cash
purchases and for</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the automatic reinvestment of dividends and distributions payable by
the Fund in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
additional Fund shares. Plan participants may invest as little as $100
in any</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
month and may invest up to $36,000 annually. The Plan has been amended
to allow</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
current shareholders, who are not already participants in the Plan, and
first</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
time investors to enroll in the Plan by making an initial cash deposit
of at</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
least $250 with the plan agent. Share purchases are combined to receive
a</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
beneficial brokerage fee. A brochure is available by writing or
telephoning the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
plan agent:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investors Bank &amp; Trust Company</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholder Services</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
P.O. Box 642, OPS 22</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Boston, MA 02117-0642</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tel. 1-800-437-6269</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
This report, including the financial statements herein, is transmitted
to the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
shareholders of The New Germany Fund, Inc. for their information. This
is not a</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
prospectus, circular or representation intended for use in the purchase
of</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
shares of the Fund or any securities mentioned in this report. The
information</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
contained in the letter to the shareholders, the interview with the
chief</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
investment officer and the report from the investment adviser and
manager in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
this report is derived from carefully selected sources believed
reasonable. We</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
do not guarantee its accuracy or completeness, and nothing in this
report shall</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
be construed to be a representation of such guarantee. Any opinions
expressed</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
reflect the current judgment of the author, and do not necessarily
reflect the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
opinion of Deutsche Bank AG or any of its subsidiaries and affiliates.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Notice is hereby given in accordance with Section 23(c) of the
Investment</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Company Act of 1940 that the Fund may purchase at market prices from
time to</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
time shares of its common stock in the open market.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Comparisons between changes in the Fund's net asset value per share and
changes</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in the MDAX, NEMAX 50 and Midcap Market Performance indices should be
considered</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
in light of the Fund's investment policy and objectives, the
characteristics and</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
quality of the Fund's investments, the size of the Fund and variations
in the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
foreign currency/dollar exchange rate.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund shares are not FDIC-insured and are not deposits or other
obligations of,</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
or guaranteed by, any bank. Fund shares involve investment risk,
including</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
possible loss of principal.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[GF LISTED NYSE(R) LOGO]</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;Copies of this report, monthly fact sheets and other information
are available</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
at: www.newgermanyfund.com</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
For latest net asset value, schedule of the Fund's largest holdings,
dividend</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
data and shareholder inquiries, please call 1-800-GERMANY in the U.S.
or</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
617-443-6918 outside of the U.S.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&lt;Page&gt;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SUMMARY OF GENERAL INFORMATION</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THE FUND</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The New Germany Fund, Inc. is a non-diversified, actively-managed
Closed-End</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund listed on the New York Stock Exchange with the symbol
&quot;GF&quot;. The Fund seeks</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
long-term capital appreciation primarily through investment in
middle-market</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
German equities. It is managed and advised by wholly-owned subsidiaries
of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Deutsche Bank Group.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
SHAREHOLDER INFORMATION</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Prices for the Fund's shares are published daily in the New York Stock
Exchange</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Composite Transactions section of newspapers. Net asset value and
market price</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
information are published each Monday in THE WALL STREET JOURNAL and
THE NEW</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
YORK TIMES, and each Saturday in BARRON'S and other newspapers in a table
called</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&quot;Closed End Funds&quot;. Daily information on the Fund's net asset
value is available</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
from NASDAQ (symbol XGFNX). It is also available by calling:
1-800-GERMANY (in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
the U.S.) or 617-443-6918 (outside of the U.S.). In addition, a
schedule of the</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Fund's largest holdings, dividend data and general shareholder
information may</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
be obtained by calling these numbers.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
The foregoing information is also available on our Website:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
www.newgermanyfund.com.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
THERE ARE THREE CLOSED-END FUNDS INVESTING IN EUROPEAN EQUITIES MANAGED
BY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
WHOLLY-OWNED SUBSIDIARIES OF THE DEUTSCHE BANK GROUP:</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- -&nbsp;&nbsp;&nbsp; The European Equity Fund, Inc.--investing primarily
in equity or</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; equity-linked securities of companies
domiciled in European countries that</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; utilize the Euro currency.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- -&nbsp;&nbsp;&nbsp; The New Germany Fund, Inc.--investing primarily in
the middle market German</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; companies and up to 20% elsewhere in Western
Europe (with no more than 10%</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; in any single country).</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
- -&nbsp;&nbsp;&nbsp; The Central Europe and Russia Fund, Inc.--investing
primarily in Central</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp; European and Russian companies.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
Please consult your broker for advice on any of the above or call
1-800-GERMANY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
(in the U.S.) or 617-443-6918 (outside of the U.S.) for shareholder
reports.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
These funds are not diversified and focus their investments in certain</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
geographical regions, thereby increasing their vulnerability to
developments in</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
that region. Investing in foreign securities presents certain unique
risks not</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
associated with domestic investments, such as currency fluctuation, political</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
and economic changes, and market risks. This may result in greater
share price</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
volatility.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
20958</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[GRAPHIC]</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THE NEW GERMANY</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FUND, INC.</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SEMI-ANNUAL REPORT</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;</font></p>

<p class=MsoNormal><font size=3 face="Times New Roman">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JUNE 30, 2006</font></p>

</div>










<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="248" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 2.</font></B></p> </td>
        <td width="136" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>CODE OF ETHICS.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="196" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="402" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 3.</font></B></p> </td>
        <td width="291" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>AUDIT COMMITTEE FINANCIAL EXPERT.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="196" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="445" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 4.</font></B></p> </td>
        <td width="333" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>PRINCIPAL ACCOUNTANT FEES AND SERVICES.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="196" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="437" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 5.</font></B></p> </td>
        <td width="325" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>AUDIT COMMITTEE OF LISTED REGISTRANTS</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="197" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="101" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not Applicable</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="326" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 6.</font></B></p> </td>
        <td width="215" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>SCHEDULE OF INVESTMENTS</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="197" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="101" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not Applicable</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 7. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="196" style='border-collapse:collapse'>
    <tr >
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="100" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Not applicable.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 8. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Portfolio Manager Team Disclosure </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The names of the persons primarily responsible for the day-to-day management of the Fund&#146;s portfolio and their business experience during at least the past five years are set forth below.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Ralf Oberbannscheidt, Director</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Joined Deutsche Asset Management in 1999 and the fund in 2006.</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Prior to that, served as senior portfolio manager for Global Equities and Global Sector head of Telecommunications, after 3 years of experience, including portfolio management at SEB Enskilda, Luxemberg and various positions at Dresdner Bank AG, Germany</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Master&#146;s degree in business administration from the University of Trier, MBA International Business, MIIS Monterey, USA, completed bank training at Dresdner Bank, Duesseldorf</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Petra Pflaum, CEFA</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Senior Fund Manager Equities; joined the Fund in 2000.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Director, Deutsche Asset Management, Frankfort (since 2006); Prior thereto Vice President, Deutsche Asset Management (2001-2006).</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Portfolio Manager for German and European small and mid caps and equity analyst for German local companies as well as a member of the European small and mid cap committee.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Roles and Responsibilities</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Fund is managed by a team of investment professionals employed by the Investment Manager and the Investment Advisor, who collaborate to develop and implement the Fund&#146;s investment strategy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Investment Advisor&#146;s portfolio managers make recommendations to the Investment Manager&#146;s portfolio managers with respect to the Fund&#146;s investments; the Investment Manager&#146;s portfolio managers determine which securities are suitable for the Fund&#146;s investment. Upon instructions given by the Investment Manager&#146;s portfolio managers as to which securities are suitable for investment, the Investment Advisor&#146;s portfolio managers transmit purchase and sale orders and select brokers and dealers to execute portfolio transactions on the Fund&#146;s behalf.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#0000FF"><font face="Arial" size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font face="Arial" size=2>Compensation of Portfolio Managers </font></b></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Fund has been advised that the Investment Manager and Investment Advisor seek to offer its investment professionals competitive short-term and long-term compensation.  Portfolio managers and research professionals are paid (i) base salaries, which are linked to job function, responsibilities and financial services industry peer comparison, and (ii) variable compensation, which are linked to investment performance, individual contributions to the team and DWS Scudder&#146;s and Deutsche Bank&#146;s financial results.  Variable compensation may include a cash bonus incentive and participation in a variety of long-term equity programs (usually in the form of Deutsche Bank equity). </font></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Bonus and long-term incentives comprise a greater proportion of total compensation as an investment professional&#146;s seniority and compensation levels increase.  Top performing investment professionals earn a total compensation package that is highly competitive, including a bonus that is a multiple of their base salary.  The amount of equity awarded under the long-term equity programs is generally based on the individual&#146;s total compensation package and may comprise from 0%-40% of the total compensation award.  As incentive compensation increases, the percentage of compensation awarded in Deutsche Bank equity also increases.  Certain senior investment professionals may be subject to a mandatory diverting of a portion of their equity compensation into proprietary mutual funds that they manage.  </font></p>

<p style=' margin-bottom:14pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>To evaluate its investment professionals, the Investment Manager and Investment Advisor use a Performance Management Process.  Objectives evaluated by the process are related to investment performance and generally take into account peer group and benchmark related data.  The ultimate goal of this process is to link the performance of investment professionals with client investment objectives and to deliver investment performance that meets or exceeds clients&#146; risk and return objectives.  When determining total compensation, the Investment Manager and Investment Advisor consider a number of quantitative and qualitative factors such as: </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>DWS Scudder performance and the performance of Deutsche Asset Management, quantitative measures which include 1, 3 and 5 year pre-tax returns versus benchmark (such as the benchmark used in the prospectus) and appropriate peer group, taking into consideration risk targets.  Additionally, the portfolio manager&#146;s retail/institutional asset mix is weighted, as appropriate for evaluation purposes.</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Qualitative measures include adherence to the investment process and individual contributions to the process, among other things.  In addition, the Advisor assesses compliance, risk management and teamwork skills.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Other factors, including contributions made to the investment team as well as adherence to compliance, risk management, and "living the values" of the Advisor, are part of a discretionary component which gives management the ability to reward these behaviors on a subjective basis through bonus incentives.  </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In addition, the Investment Manager and Investment Advisor analyze competitive compensation levels through the use of extensive market data surveys.  Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine overall compensation to promote good sustained investment performance.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font face="Arial" size=2>Fund Ownership of Portfolio Managers</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The following table shows the dollar range of shares owned beneficially and of record by each member of the Fund&#146;s portfolio management team in the Fund including investments by their immediate family members sharing the same household and amounts invested through retirement and deferred compensation plans.   This information is provided as of the Fund&#146;s most recent fiscal year end.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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            <p  align=center style='text-align:center;line-height:normal'><b><font  face="Arial" size=2>Name of</font></b><u><b><font  face="Arial" size=2> </font></b></u><br>  <b><font face="Arial" size=2>Portfolio Manager</font></b><u></u></p>  </td>
        <td width="149" valign=bottom style='border:solid black 1.0pt;border-color:gray;  border-left:none;padding:0in 3.0pt 0in 3.0pt;height:28.2pt'>
            <p  align=center style='text-align:center;line-height:normal'><b><font  face="Arial" size=2>Dollar Range of</font></b></p>
<p  align=center style='text-align:center;line-height:normal'><b><font  face="Arial" size=2>Fund Shares Owned</font></b><u></u></p>  </td> </tr>
    <tr style='height:13.7pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray;  border-top:none;padding:0in 3.0pt 0in 3.0pt;height:13.7pt'>
            <p  style='line-height:normal;page-break-after:avoid;  '><font face="Arial"  size=2>Ralf  Oberbannscheidt</font></p>  </td>
        <td width="149" valign=top style='border-top:none;border-left:  none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;    padding:0in 3.0pt 0in 3.0pt;height:  13.7pt'>
            <p  style='margin-top:0in;page-break-after:avoid'><font face="Arial" size=2>0</font></p>  </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font face="Arial" size=2>Petra Pflaum</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.5pt'>
        <td width="160" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="149" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 3.0pt 0in 3.0pt;height:14.5pt'>
            <p  style='margin-top:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font face="Arial" size=2>Conflicts of Interest</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In addition to managing the assets of the Fund, the Fund&#146;s portfolio managers may have responsibility for managing other client accounts of the Investment Manager and Investment Advisor or its affiliates.  The tables below show, for each portfolio manager, the number and asset size of (1) SEC registered investment companies (or series thereof) other than the Fund, (2) pooled investment vehicles that are not registered investment companies and (3) other accounts (e.g., accounts managed for individuals or organizations) managed by each portfolio manager.  The tables also show the number of performance based fee accounts, as well as the total assets of the accounts for which the advisory fee is based on the performance of the account.  This information is provided as of the Fund&#146;s most recent fiscal year end.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Other SEC Registered Investment Companies Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="99" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of  Registered Investment Companies </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Registered Investment Companies</font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of Investment Company Accounts with Performance Based Fee</font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr>
    <tr >
        <td width="139" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font face="Arial" size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="99" valign=top style='border-top:none;border-left:none; border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>2</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$828,623,419</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="139" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font face="Arial" size=2>Petra Pflaum</font></p> </td>
        <td width="99" valign=top style='border-top:none;border-left:none; border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="139" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="99" valign=top style='border-top:none;border-left:none; border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="139" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="99" valign=top style='border-top:none;border-left:none; border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="139" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="99" valign=top style='border-top:none;border-left:none; border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Other Pooled Investment Vehicles Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="590" style='border-collapse:collapse; '>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of Pooled Investment Vehicles</font></b></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Pooled Investment Vehicles</font></b></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of Pooled Investment Vehicle Accounts with Performance-Based Fee </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font face="Arial" size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font face="Arial" size=2>Petra Pflaum</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="590" style='border-collapse:collapse; '>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>Other Accounts Managed:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="590" style='border-collapse:collapse; '>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Name of Portfolio Manager</font></b></p> </td>
        <td width="96" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of Other Accounts</font></b></p> </td>
        <td width="131" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Other Accounts</font></b></p> </td>
        <td width="113" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Number of Other Accounts with Performance- Based Fee </font></b></p> </td>
        <td width="112" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=2>Total Assets of Performance- Based Fee Accounts</font></b></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal;page-break-after:avoid'><font face="Arial" size=2>Ralf Oberbannscheidt</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='line-height:normal'><font face="Arial" size=2>Petra Pflaum</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>2</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$118,852,826</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="138" valign=top style='border:solid black 1.0pt;border-color:gray; border-top:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="113" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="112" valign=top style='border-top:none;border-left: none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In addition to the accounts above, an investment professional may manage accounts in a personal capacity that may include holdings that are similar to, or the same as, those of the funds.  The Investment Manager and Investment Advisor have in place a Code of Ethics that is designed to address conflicts of interest and that, among other things, imposes restrictions on  the ability of portfolio managers and other &#147;access persons&#148; to invest in securities that may be recommended or traded in the funds and other client accounts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Real, potential or apparent conflicts of interest may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account, including the following: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Certain investments may be appropriate for the Fund and also for other clients advised by the Investment Manager and Investment Advisor, including other client accounts managed by the Fund&#146;s portfolio management team.  Investment decisions for the Fund and other clients are made with a view to achieving their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. A particular security may be bought or sold for only one client or in different amounts and at different times for more than one but less than all clients. Likewise, because clients of the Investment Manager and Investment Advisor may have differing investment strategies, a particular security may be bought for one or more clients when one or more other clients
are selling the security. The investment results achieved for the Fund may differ from the results achieved for other clients of the Investment Manager and Investment Advisor.  In addition, purchases or sales of the same security may be made for two or more clients on the same day.  In such event, such transactions will be allocated among the clients in a manner believed by the Investment Manager and Investment Advisor to be most equitable to each client, generally utilizing a pro rata allocation methodology.  In some cases, the allocation procedure could potentially have an adverse effect or positive effect on the price or amount of the securities purchased or sold by the Fund.  Purchase and sale orders for the Fund may be combined with those of other clients of the Investment Manager and Investment Advisor in the interest of achieving the most favorable net results to the Fund and the other clients.  </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
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        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>To the extent that a portfolio manager has responsibilities for managing multiple client accounts, a portfolio manager will need to divide time and attention among relevant accounts. The Investment Manager and Investment Advisor attempt to minimize these conflicts by aligning its portfolio management teams by investment strategy and by employing similar investment models across multiple client accounts.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>In some cases, an apparent conflict may arise where the Investment Manager and Investment Advisor have an incentive, such as a performance-based fee, in managing one account and not with respect to other accounts it manages.  The Investment Manager and Investment Advisor will not determine allocations based on whether it </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font face="Arial" size=2>receives a performance-based fee from the client.   Additionally, the Investment Manager and Investment Advisor have in place supervisory oversight processes to periodically monitor performance deviations for accounts with like strategies. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Investment Manager and Investment Advisor are owned by Deutsche Bank AG, a multi-national financial services company.  Therefore, the Investment Manager and Investment Advisor are affiliated with a variety of entities that provide and/or engage in commercial banking, insurance, brokerage, investment banking, financial advisory, broker-dealer activities (including sales and trading), hedge funds, real estate and private equity investing, in addition to the provision of investment management services to institutional and individual investors.  Since Deutsche Bank AG, its affiliates, directors, officers and employees (the &#147;Firm&#148;) are engaged in businesses and have interests other than managing asset management accounts; such other activities involve real, potential or apparent conflicts of interest.   These interests and activities include potential advisory, transactional and
financial activities and other interests in securities and companies that may be directly or indirectly purchased or sold by the Firm for its clients&#146; advisory accounts.  These are considerations of which advisory clients should be aware and which may cause conflicts that could be to the disadvantage of the Investment Manager and Investment Advisor&#146;s advisory clients.  The Investment Manager and Investment Advisor have instituted business and compliance policies, procedures and disclosures that are designed to identify, monitor and mitigate conflicts of interest and, as appropriate, to report them to the Fund&#146;s Board of Directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 9. </font></B></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="649" style='margin-left:4.55pt;border-collapse:collapse'>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:solid black 1.0pt;border-bottom:none;border-right:none;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-bottom:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(a)</font></p> </td>
        <td width="96" nowrap valign=bottom style='border-top: solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(b)</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-bottom:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(c)</font></p> </td>
        <td width="132" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(d)</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Period</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Total Number of</font><br> <font face="Arial" size=2>Shares</font><br> <font face="Arial" size=2>Purchased*</font></p> </td>
        <td width="96" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Average Price</font><br> <font face="Arial" size=2>Paid per Share</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Total Number of</font><br> <font face="Arial" size=2>Shares Purchased</font><br> <font face="Arial" size=2>as Part of Publicly</font><br> <font face="Arial" size=2>Announced Plans</font><br> <font face="Arial" size=2>or Programs</font></p> </td>
        <td width="132" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Maximum Number of</font><br> <font face="Arial" size=2>Shares that May Yet</font><br> <font face="Arial" size=2>Be Purchased Under</font><br> <font face="Arial" size=2>the Plans or Programs</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>January 1 through January 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>65,300</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$10.76</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>February 1 through February 28</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>40,200</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$11.97</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>March 1 through March 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>50,000</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$12.48</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>April 1 through April 30</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$0.00</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>May 1 through May 31</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$0.00</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style=' border-left:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>June 1 through June 30</font></p> </td>
        <td width="108" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>0</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$0.00</font></p> </td>
        <td width="120" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:none;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style=' border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td>
        <td width="132" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='border-top:none; border-left:solid black 1.0pt;border-bottom:solid black 1.0pt; border-right:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Total </font></p> </td>
        <td width="108" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>155,500</font></p> </td>
        <td width="96" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$11.62</font></p> </td>
        <td width="120" nowrap valign=bottom style='border:solid black 1.0pt;border-color:gray; border-top:none;padding: 0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td>
        <td width="132" nowrap valign=bottom style='border-top:none; border-left:none;border-bottom:solid black 1.0pt;border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>n/a</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="193" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td  nowrap colspan="3" valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>* All shares were purchased in open market transactions.</font></p> </td>
        <td width="120" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="549" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 10.</font></B></p> </td>
        <td width="437" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Nominating Committee will consider nominee candidates properly submitted by stockholders in accordance with applicable law, the Fund's Articles of Incorporation or By-laws, resolutions of the Board and the qualifications and procedures set forth in the Nominating Committee Charter and this proxy statement. A stockholder or group of stockholders seeking to submit a nominee candidate (i) must have beneficially owned at least 5% of the Fund's common stock for at least two years, (ii) may submit only one nominee candidate for any particular meeting of stockholders, and (iii) may submit a nominee candidate for only an annual meeting or other meeting of stockholders at which directors will be elected. The stockholder or group of stockholders must provide notice of the proposed nominee pursuant to the requirements found in the Fund's By-laws.  Generally, this notice must be received not less than 90 days </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>nor more than 120 days prior to the first anniversary of the date of mailing of the notice for the preceding year's annual meeting. Such notice shall include the specific information required by the Fund's By-laws. The Nominating Committee will evaluate nominee candidates properly submitted by stockholders on the same basis as it considers and evaluates candidates recommended by other sources.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="337" style='border-collapse:collapse'>
    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 11.</font></B></p> </td>
        <td width="225" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>CONTROLS AND PROCEDURES.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(a) </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>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.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(b) </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>There have been no changes in the registrant's internal control over financial reporting that occurred during the registrant's last half-year (the registrant's second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


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    <tr >
        <td width="16" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>ITEM 12.</font></B></p> </td>
        <td width="87" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=2>EXHIBITS.</font></B></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(a)(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>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.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>&nbsp;</font></p>











<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Form N-CSRS Item F</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>SIGNATURES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Registrant: </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="339" style='border-collapse:collapse'>
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        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael G. Clark</font></p> </td>
        <td  width="16">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>President</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Registrant: </font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="339" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="131" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael G. Clark</font></p> </td>
        <td  width="16">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>President</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="317" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="315" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Paul Schubert</font></p> </td>
        <td  width="15">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:0.5in;text-align:left;'><font size=2>Chief Financial Officer and Treasurer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="317" style='border-collapse:collapse'>
    <tr >
        <td width="192" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>
        <td width="125" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>





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<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>cert-ngf.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
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<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img1.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>President</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Form N-CSRS Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Michael G. Clark, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The New Germany Fund, a series of New Germany Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Michael G. Clark</font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>President</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'>
<img src="img2.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Chief Financial Officer and Treasurer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Form N-CSRS Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Paul Schubert, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The New Germany Fund, a series of New Germany Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Paul Schubert </font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>Chief Financial Officer and Treasurer</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<DOCUMENT>
<TYPE>EX-99.906CERT
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<DESCRIPTION>906 CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>

<div style='width:600;'>



<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img1.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>President</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Section 906 Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Michael G. Clark, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The New Germany Fund, a series of New Germany Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge and pursuant to 18 U.S.C. &sect; 1350, the periodic report on Form N-CSRS (the &#147;Report&#148;) fully complies with the requirements of &sect; 13 (a) or &sect;15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Michael G. Clark</font></u></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Michael G. Clark </font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>President</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><img src="img2.gif"><br> <b><font face="Arial" size=4></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:12pt;text-align:left;'><b><font size=2>Chief Financial Officer and Treasurer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Section 906 Certification under Sarbanes Oxley Act</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Paul Schubert, certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report, filed on behalf of The New Germany Fund, a series of New Germany Fund, Inc., on Form N-CSRS;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge and pursuant to 18 U.S.C. &sect; 1350, the periodic report on Form N-CSRS (the &#147;Report&#148;) fully complies with the requirements of &sect; 13 (a) or &sect;&nbsp;15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:5.4pt;border-collapse:collapse'>
    <tr style='page-break-inside:avoid;height:16.5pt'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>August 29, 2006</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/Paul Schubert</font></u></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:3pt'><font size=2>Paul Schubert </font></p>  </td> </tr>
    <tr style='page-break-inside:avoid;height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:5pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:5pt'><font color="#454545"><font size=2>Chief Financial Officer and Treasurer</font></font></p>  </td> </tr>
    <tr style='page-break-inside:avoid; height:16.5pt'>
        <td width="276" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="288" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The New Germany Fund, a series of New Germany Fund, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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