UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
_______________________________
Investment Company Act file number: 811-04632
The European Equity Fund, Inc.
(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154-0004
(Address of principal executive offices) (Zip code)
Paul Schubert
345 Park Avenue
New York, NY 10154-0004
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 250-3220
Date of fiscal year end: 12/31
Date of reporting period: 3/31/2018
| ITEM 1. | SCHEDULE OF INVESTMENTS |
The European Equity Fund, Inc.
Schedule of Investments as of March 31, 2018 (Unaudited)
| Shares | Value ($) | |
| Common Stocks 98.2% | ||
| Germany 20.3% | ||
| Aerospace & Defense 1.9% | ||
| MTU Aero Engines AG | 10,000 | 1,682,093 |
| Capital Markets 3.2% | ||
| Deutsche Boerse AG | 20,000 | 2,719,875 |
| Chemicals 2.0% | ||
| Evonik Industries AG | 48,000 | 1,690,356 |
| Health Care Providers & Services 2.8% | ||
| Fresenius SE & Co KGaA | 32,000 | 2,441,887 |
| Insurance 2.4% | ||
| Allianz SE (Registered) | 9,000 | 2,029,578 |
| Internet & Direct Marketing Retail 2.5% | ||
| Zalando SE 144A* | 39,000 | 2,123,421 |
| Personal Products 2.4% | ||
| Beiersdorf AG | 18,000 | 2,036,660 |
| Software 3.1% | ||
| SAP SE | 26,000 | 2,716,457 |
| Total Germany (Cost $14,908,082) | 17,440,327 | |
| Sweden 13.6% | ||
| Commercial Services & Supplies 2.9% | ||
| Securitas AB "B" | 147,000 | 2,487,941 |
| Electronic Equipment, Instruments & Components 0.8% | ||
| Hexagon AB "B" | 11,000 | 651,439 |
| Household Products 2.4% | ||
| Essity AB "B"* | 74,000 | 2,037,467 |
| Machinery 6.4% | ||
| Alfa Laval AB | 76,000 | 1,788,999 |
| SKF AB "B" | 105,000 | 2,137,535 |
| Volvo AB "B" | 88,000 | 1,599,704 |
| 5,526,238 | ||
| Oil, Gas & Consumable Fuels 1.1% | ||
| Lundin Petroleum AB | 38,000 | 950,987 |
| Total Sweden (Cost $10,357,768) | 11,654,072 | |
| Netherlands 10.5% | ||
| Banks 2.8% | ||
| ING Groep NV | 141,000 | 2,375,218 |
| Beverages 3.1% | ||
| Heineken NV | 25,000 | 2,683,602 |
| Oil, Gas & Consumable Fuels 3.0% | ||
| Royal Dutch Shell PLC "B" | 82,000 | 2,619,224 |
| Semiconductors & Semiconductor Equipment 1.6% | ||
| ASML Holding NV | 7,000 | 1,378,443 |
| Total Netherlands (Cost $7,049,950) | 9,056,487 | |
| France 10.1% | ||
| Aerospace & Defense 1.1% | ||
| Thales SA | 8,000 | 973,253 |
| Shares | Value ($) | |
| Commercial Services & Supplies 2.4% | ||
| Edenred | 60,000 | 2,083,434 |
| Construction & Engineering 2.3% | ||
| Vinci SA | 20,000 | 1,964,901 |
| Health Care Equipment & Supplies 4.3% | ||
| BioMerieux | 11,500 | 947,407 |
| Essilor International SA | 20,000 | 2,695,283 |
| 3,642,690 | ||
| Total France (Cost $6,874,161) | 8,664,278 | |
| Switzerland 9.6% | ||
| Building Products 2.1% | ||
| Geberit AG (Registered) | 4,000 | 1,764,043 |
| Capital Markets 2.4% | ||
| Partners Group Holding AG | 2,841 | 2,105,983 |
| Life Sciences Tools & Services 1.0% | ||
| Lonza Group AG (Registered)* | 3,498 | 822,457 |
| Metals & Mining 1.9% | ||
| Glencore PLC* | 330,000 | 1,637,825 |
| Technology Hardware, Storage & Peripherals 2.2% | ||
| Logitech International SA (Registered) | 52,000 | 1,898,016 |
| Total Switzerland (Cost $5,815,373) | 8,228,324 | |
| Denmark 8.9% | ||
| Chemicals 3.2% | ||
| Chr Hansen Holding A/S | 32,000 | 2,750,247 |
| Electric Utilities 2.7% | ||
| Orsted A/S 144A | 35,000 | 2,263,280 |
| Pharmaceuticals 3.0% | ||
| Novo Nordisk A/S "B" | 53,000 | 2,601,039 |
| Total Denmark (Cost $7,017,143) | 7,614,566 | |
| United Kingdom 6.4% | ||
| Metals & Mining 2.6% | ||
| Randgold Resources Ltd (ADR) | 27,000 | 2,227,843 |
| Trading Companies & Distributors 1.6% | ||
| Ashtead Group PLC | 50,000 | 1,360,716 |
| Wireless Telecommunication Services 2.2% | ||
| Vodafone Group PLC | 700,000 | 1,907,163 |
| Total United Kingdom (Cost $6,034,496) | 5,495,722 | |
| Italy 5.4% | ||
| Banks 2.5% | ||
| Intesa Sanpaolo SpA | 600,000 | 2,178,974 |
| Diversified Telecommunication Services 2.9% | ||
| Telecom Italia SpA* | 2,650,000 | 2,512,257 |
| Total Italy (Cost $4,324,530) | 4,691,231 | |
| Ireland 4.6% | ||
| Airlines 2.3% | ||
| Ryanair Holdings PLC* | 100,000 | 1,968,590 |
| Food Products 2.3% | ||
| Kerry Group PLC "A" | 20,000 | 2,020,233 |
| Total Ireland (Cost $3,291,343) | 3,988,823 | |
| Shares | Value ($) | ||
| Belgium 3.3% | |||
| Banks 3.3% | |||
| KBC Group NV (Cost $1,908,100) | 33,000 | 2,869,591 | |
| Spain 3.3% | |||
| Banks 1.0% | |||
| Bankinter SA | 84,000 | 863,061 | |
| Hotels, Restaurants & Leisure 2.3% | |||
| NH Hotel Group SA | 248,000 | 1,947,047 | |
| Total Spain (Cost $2,670,661) | 2,810,108 | ||
| Luxembourg 2.2% | |||
| Multiline Retail 2.2% | |||
| B&M European Value Retail SA (Cost $1,684,234) | 340,000 | 1,866,313 | |
| Total Common Stocks (Cost $71,935,841) | 84,379,842 | ||
| Contracts | Value ($) | ||
| Put Options Purchased 0.3% | |||
| Exchange-Traded Index Options Contracts | |||
| Deutsche Boerse AG German Stock Index, Counterparty RBS, Expiration Date 6/15/2018, Strike Price EUR 10,000, Notional Amount EUR 50,000,000 (Cost $358,804) |
1,000 | 246,535 | |
| Shares | Value ($) | ||
| Cash Equivalents 0.9% | |||
| Deutsche Central Cash Management Government Fund, 1.64% (Cost $760,845) (a) | 760,845 | 760,845 | |
| %
of Net Assets |
Value ($) | ||
| Total Investment Portfolio (Cost $73,055,490) | 99.4 | 85,387,222 | |
| Other Assets and Liabilities, Net | 0.6 | 477,381 | |
| Net Assets | 100.0 | 85,864,603 | |
For information on the Fund’s policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent semi-annual or annual financial statements.
A summary of the Fund’s transactions with affiliated Underlying Deutsche Funds during the period ended March 31, 2018 are as follows:
| Value ($) at 12/31/2017 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/ (Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) |
Capital Gain Distributions ($) |
Number of shares at 3/31/2018 |
Value ($) at 3/31/2018 |
| Cash Equivalents 0.9% | ||||||||
| Deutsche Central Cash Management Government Fund, 1.64% (a) | ||||||||
| 271,114 | 10,521,944 | 10,032,213 | - | - | 6,887 | - | 760,845 | 760,845 |
| 271,114 | 10,521,944 | 10,032,213 | - | - | 6,887 | - | 760,845 | 760,845 |
| * | Non-income producing security. | ||
| (a) | Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end. | ||
| 144A | : | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. | |
| ADR | : | American Depositary Receipt | |
| RBS | : | The Royal Bank of Scotland Plc |
| For purposes of its industry concentration policy, the Fund classifies issuers of portfolio securities at the industry sub-group level. Certain of the categories in the above Schedule of Investments consist of multiple industry sub-groups or industries. |
| Fair Value Measurements | ||||
| Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk associated with investing in those securities. | ||||
| The following is a summary of the inputs used as of March 31, 2018 in valuing the Fund’s investments. | ||||
| Assets | Level 1 | Level 2 | Level 3 | Total | ||||
| Common Stocks (b) | ||||||||
| Germany | $ | 17,440,327 | $ | — | $ | — | $ | 17,440,327 |
| Sweden | 11,654,072 | — | — | 11,654,072 | ||||
| Netherlands | 9,056,487 | — | — | 9,056,487 | ||||
| France | 8,664,278 | — | — | 8,664,278 | ||||
| Switzerland | 8,228,324 | — | — | 8,228,324 | ||||
| Denmark | 7,614,566 | — | — | 7,614,566 | ||||
| United Kingdom | 5,495,722 | — | — | 5,495,722 | ||||
| Italy | 4,691,231 | — | — | 4,691,231 | ||||
| Ireland | 3,988,823 | — | — | 3,988,823 | ||||
| Belgium | 2,869,591 | — | — | 2,869,591 | ||||
| Spain | 2,810,108 | — | — | 2,810,108 | ||||
| Luxembourg | 1,866,313 | — | — | 1,866,313 | ||||
| Short-Term Instruments (b) | 760,845 | — | — | 760,845 | ||||
| Derivatives (c) | ||||||||
| Purchased Options | 246,535 | — | — | 246,535 | ||||
| Total | $ | 85,387,222 | $ | — | $ | — | $ | 85,387,222 |
| There have been no transfers between fair value measurement levels during the period ended March 31, 2018. |
| (b) See Schedule of Investments for additional detailed categorizations. |
| (c) Derivatives include value of options purchased. |
| ITEM 2. | CONTROLS AND PROCEDURES |
| (a) The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. | |
| (b) There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. | |
| ITEM 3. | EXHIBITS |
| Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Registrant: | The European Equity Fund, Inc. |
| By: |
/s/Hepsen Uzcan Hepsen Uzcan President |
| Date: | May 23, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: |
/s/Hepsen Uzcan Hepsen Uzcan President |
| Date: | May 23, 2018 |
| By: |
/s/Paul Shubert Paul Shubert Chief Financial Officer and Treasurer |
| Date: | May 23, 2018 |