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Thursday 19 December, 2002

World Trust Fund

Unaudited Semi-Annual Report At September 30th, 20

Unaudited Semi-Annual Report At September 30th, 2002 

    LUXEMBOURG--(BUSINESS WIRE)--Dec. 19, 2002--


THE WORLD TRUST FUND

Societe d'Investissement a Capital Fixe 
Luxembourg 
R.C. N(degree)B 37.154

Unaudited semi-annual report at September 30th, 2002


THE WORLD TRUST FUND




2 
Contents




Organisation of the Fund......................................................................................3

General Information...........................................................................................5

Manager's Review..............................................................................................6

Statement of Net Assets......................................................................................11

Shareholders' Equity.........................................................................................11

Statement of Operations......................................................................................12

Statement of Changes in Net Assets...........................................................................13

Statistical Information about the Fund.......................................................................13

Statement of Changes in Shares Outstanding...................................................................13

Statement of Investments and Other Net Assets................................................................14

Currency Classification of the Portfolio.....................................................................16

Registered Domicile of Assets................................................................................16

Notes to the Financial Statements............................................................................17




THE WORLD TRUST FUND




3 
Organisation of the Fund


Chairman

WALTER A. EBERSTADT, OBE                         Lazard Freres & Co., LLC
                                                 30 Rockefeller Plaza
                                                 U.S.A.-NEW YORK, NY 10020


Directors

ERIC C. ELSTOB *                                 14 Fournier Street
                                                 Spitalfields
                                                 U.K.-London E1 6QE.

RAFIK FISCHER                                    Kredietbank S.A. Luxembourgeoise
                                                 43, boulevard Royal
                                                 L-2955 Luxembourg

J. MURRAY LOGAN *                                L-R Global Partners L.P.
                                                 320 Park Avenue, 28th Floor
                                                 U.S.A.-New York, NY 10022

PHILIP R. McLOUGHLIN *                           Phoenix Investment Partners Ltd
                                                 56 Prospect Street
                                                 PO Box 150480
                                                 U.S.A.-Hartford, CT 061150480

JEREMY W. SILLEM                                 Bear Stearns International Ltd
                                                 One Canada Square
                                                 U.K.-London E14 5AD

FRANCOIS A. VOSS                                 Lazard Freres
                                                 121 Boulevard Haussmann
                                                 F-75382 Paris, France

ALEXANDER E. ZAGOREOS                            Lazard Freres & Co., LLC
                                                 30 Rockefeller Plaza
                                                 U.S.A.-New York, NY 10020


Registered Office                                11 rue Aldringen
                                                 L-1118 Luxembourg

Manager                                          Lazard Asset Management
                                                 30 Rockefeller Plaza
                                                 U.S.A.-New York, NY 10020





* Member of the Audit Committee





Custodian, Listing and Paying Agent              Kredietbank S.A. Luxembourgeoise
                                                 43, boulevard Royal
                                                 L-2955 Luxembourg

Domiciliary, Registrar, Transfer                 Kredietrust Luxembourg S.A.
and Administrative Agent                         11, rue Aldringen
                                                 L-2960 Luxembourg

Independent Auditor                              Sore International s.a r.l. (formerly Andersen S.A.),
                                                 affiliate member of Ernst & Young International,
                                                 6, rue Jean Monnet
                                                 L - 2180 Luxembourg

5
General Information


1.   Unaudited semi-annual reports and audited annual reports are made
     available at the registered office of the Fund, 11, rue
     Aldringen, L-1118 Luxembourg and will be mailed to each
     registered Shareholder.

2.   The Annual General Meeting of Shareholders will be held in
     Luxembourg each year at 3 p.m. on the third Tuesday in August or
     if any such day is not a business day for banks in Luxembourg, on
     the next following business day. Notices of General Meetings
     including their agenda, time and place and containing details of
     attendance, quorum and majority requirements under Luxembourg law
     will be sent to the registered address of Shareholders not less
     than 21 days before the date of the Meeting.

3.   Annual reports (including audited accounts) will be posted to
     Shareholders not less than 21 days before the day fixed for the
     Annual General Meeting at which they are to be considered.

4.   The Fund aims to achieve capital growth through investment in a
     diversified portfolio of closed-end funds listed or traded on
     international stock exchanges and whose shares are currently
     traded at a discount to net asset value, thereby offering the
     potential for attractive financial returns.

5.   Dividends will only be paid to the extent that they are covered
     by income received from underlying investments. The Articles
     provide that dividends shall not be paid out of surpluses arising
     upon the realisation of investments.

6.       A dividend  declared but not claimed by a  Shareholder  after twelve years from the  declaration  thereof  shall lapse and
     revert to the Fund.

7.       The Net Asset Value is  expressed  in US Dollars and is  published  weekly in the << Financial  Times>>  under  Luxembourg
     Regulated Funds.

8.       The Shares of<< The World Trust Fund>> are listed on the London Stock Exchange and on the Luxembourg  Stock Exchange.  The
     quotation is published in the<< Financial Times>> daily under Investment Companies.

6
Manager's Review


For the period April 1st 2002 to September 30th 2002


For the six months ending September 30th, 2002, the World Trust Fund
lost 12.9% in net asset value terms, 4.6% in price terms, while the
MSCI World Index, our benchmark, dropped 25.8% and MSCI EAFE Index was
down 21.4%. For the one year ending September 30th, the Fund rose 7.1%
compared to the loss of 19.2% of the World Index.


Performance

                                                              6-month           1-year

World Trust Fund Net Asset Value                               -12.9%            7.1%
World Trust Fund Price                                         - 4.6%            1.7%

MSCI World Index                                               -25.8%          -19.2%
S&P 500 Index                                                  -28.3%          -20.5%


For the past 12 months, the Fund outperformed its benchmark every
month except June this year, when Brazil had a sell-off that spilled
over into other emerging markets. Despite the fact that our Latin
holdings were down over 20% in a single month, and there was a general
widening of discounts in emerging markets funds, World Trust Fund
underperformed the Benchmark by less than half a percent in June. The
Fund would rank in the top 4th percentile for the one year period, if
we were to compare our fund with the Lipper universe of global funds.
In the CAI Global Equity Database for the one year period, it would
also rank above the top 10 percentile, which was down 8.5%.


Discount


As the chart below shows, the Fund traded at a narrower discount than
its peers. At the end of the period, the Fund traded at a discount of
10.7%, which, with its internal discount of 21%, provides USD 1.42
worth of assets for every dollar invested in the fund.

FOR GRAPHICS PLEASE CONTACT THE WORLD TRUST FUND


Share Buybacks

The Fund continued to aggressively buy back shares to narrow
discounts. For the past six months, we bought back 160,000 shares.
Since July 2000, we repurchased 1,272,793 shares. Over 30% of the
fund's shares have been bought back since its inception. We believe
these buybacks have enhanced our net asset value and helped reduce the
discount.


Geographic Allocation

Consistent with the past two years, the Fund was overweight Europe,
Japan and emerging markets, and continued to be underweight the U.S.
relative to the MSCI World Index.

While Japan continues to disappoint global investors, we find
attractively valued Japanese smaller companies funds at deep
discounts. Europe also offers opportunities for discount, corporate
actions, undervaluation, specialized private equity and buy-outs.

The World Trust Fund continues to be heavily invested in emerging
markets, with over 30% allocated to the asset class. Our largest
investment in this area is Korea, a country which was near the brink
of bankruptcy, but successfully engineered corporate and economic
restructuring, and transformed itself from an economy reliant on
exports to one of domestic demand. Emerging markets are undervalued,
unloved, underowned, but attractive relative to developed markets in
terms of much greater financial productivity and earnings growth.

Our largest single overweight is Asia, with 40% of the fund's assets.
Over the next twenty years, Asia has striking similarities to the
postwar United States, with its baby boom and one of the most
productive periods ever. Asia is not only going to be the outsourcing
of the world's manufacturing, but the greatest mass of consumers and
savers as well, thus presenting great investment opportunities.

Top Ten Holdings

Fund                                 Weight             Discount


Merrill Lynch World Mining IT          7.9%               -13.5%
Swiss Helvetia                         6.4%               -19.6%
John Hancock Bank & Thrifts            6.2%               -16.3%
Caledonia Investment Trust             5.9%               -30.0%
Korea Fund Inc                         4.5%               -20.3%
Eurazeo                                4.4%               -37.0%
Fleming Russia Fund                    4.3%                -6.5%
Advance Developing Markets             4.3%               -12.5%
MSDW Emerging Markets                  4.2%               -15.5%
Templeton Emerging Markets             3.6%               -20.6%

Total                                 51.7%

The top 10 holdings of the World Trust Fund account for over 50% of
the fund's portfolio. Sector funds continue to dominate the top
holdings.


Corporate Actions

As discounts widen, fund restructuring increases. Many of our
closed-end fund holdings have repurchased some of their shares in the
form of tender offers, resulting in the enhancement of the net asset
value and, in most cases, reduced discounts.

Morgan Stanley Asia Pacific Fund conducted a tender offer for 15% of
the outstanding shares at 95% of net asset value. Of our holdings,
about 25% were accepted for tender.

Caledonia, one of the largest holdings, saw its shares rising 15%
after the company announced its plan to convert into an investment
trust. The company has been cutting costs aggressively to boost
returns.

Fleming Russia Fund was exploring ways to increase liquidity and
narrow discounts.

Emerging Markets Telecom Fund announced a tender offer of 15% of the
outstanding shares at a discount of 5%.


Hedging

Ever since we did our first hedge in January 2000, by shorting the
Nasdaq 100 Index Trust, an exchange-traded fund, hedging became an
integral part of the investment process. To recapture the history, the
Placing Memorandum was amended in 1998 to clarify the hedging of risk
of underlying assets. So far, index exchange-traded funds were mainly
used to hedge against the underlying exposure. In May 2002, the
Luxembourg authorities further made clear the specific vehicles that
could be used in hedging wich are - stocks, baskets of stocks,
closed-end funds and exchange-traded funds.

During the period under review, the following exchange-traded funds
were shorted : Nasdaq 100 Index Trust, S&P 500 Index Trust, Dow Jones
Industrial Index Trust, Nasdaq Biotech Index Trust, Financial Index
Trust, American Technology Index Trust, Dow Jones Utilities Index
Trust, iShares Switzerland, and iShares Japan.

The hedging added substantial value, as detailed in the financial
statement that follows.

Conclusion


The combination of our successful hedging strategy, cheaply priced
equities, especially in the emerging markets, as well as wide
discounts bode well for the World Trust Fund looking forward.

Luxembourg, October 31st, 2002                                Lazard Asset Management

11
THE WORLD TRUST FUND



                  Statement of Net Assets 
                          (in USD)

                                                 6 months                                  1 year
                                            01.04.02-30.09.02                        01.04.01-31.03.02

ASSETS
Securities' portfolio at market value           87,599,777                              111,273,367
Cash at banks                                      427,870                                   36,900
Other liquid assets                             59,434,694                               26,654,623
Receivable on sales of securities                        -                                  547,650
Income receivable on portfolio                      80,889                                   61,945
Interest receivable on bank accounts                   923                                        9
                                      --------------------                      -------------------

Total assets                                                        147,544,153                            138,574,494

LIABILITIES
Bank liabilities                                         17,670,890                              9,913,157
Payable on purchases of securities                                -                                246,875
Payable on short term arrangements                       33,846,247                             17,135,596
Payable on treasury transactions                                  -                                 82,117
Payable on redemptions of shares                                  -                                469,522
Interest payable on bank accounts                            18,368                                 27,684
Expenses payable                                            274,780                                297,689
                                                --------------------                    -------------------

Total liabilities                                                   51,810,285                               28,172,640
                                                --------------------                    -------------------

NET ASSETS at the end of the period/year                            95,733,868                              110,401,854
                                                                    ==========                              ===========

Number of shares outstanding                                         6,285,335                                6,312,335
Undiluted net asset value per share                                      15.23                                    17.49


                  Shareholders' Equity Represented by
                              (in USD)

                                                        6 months                                 1 year
                                                    01.04.02-30.09.02                        01.04.01-31.03.02

Capital: 9,331,738 shares at USD 2.00                   18,663,476                            17,777,490
Share premium                                           70,220,782                            66,676,838
Legal Reserve                                            1,777,749                             1,777,749
Profit brought forward                                  93,843,825                           110,090,386
                                                                                          ---------------
                                                     ----------------

Total Capital and Reserves                                              184,505,832                         196,322,463
Cost of 3,046,403 shares held in Treasury                               -46,394,339                         -46,028,444
Repurchase of 1,159,881 warrants                                         -8,631,613                          -8,631,613
Exercise of warrants                                                              -                           4,429,930
Net realised gain/loss for the period/year                                6,414,190                         -16,246,561
Unrealised depreciation on securities                                   -44,615,964                         -18,540,771
Unrealised depreciation/appreciation                                      4,455,762                            -903,150
on short term arrangements
                                                                  -----------------                  ------------------

Total Shareholders' Equity                                               95,733,868                         110,401,854
                                                                  =================                  ==================



12
                    THE WORLD TRUST FUND



                  Statement of Operations 
                         (in USD)

                   

                                                                         6 months                     1 year
                                                                    01.04.02-30.09.02            01.04.01-31.03.02

INCOME
Dividends, net *                                                          664,989                    3,244,281
Interest on bank accounts                                                  95,445                      145,050
Other income                                                               30,155                       48,370
                                                             -------------------------    -------------------------
Total income                                                              790,589                    3,437,701                                                            
                                                             =========================    =========================                               
                                                                                          

EXPENSES
Management fees                                                           400,090                      875,978
Custodian fees                                                             15,920                       34,179
Banking charges and other fees                                             15,658                       49,960
Central administration costs                                               22,300                       46,684
Audit and supervisory fees                                                  7,652                       13,326
Other administration costs                                                 81,283                      131,815
Subscription duty                                                          25,796                       65,806
Interest paid                                                             117,199                      314,870
Other expenses                                                             26,226                       33,758
                                                                  -------------------------    ------------------------
                                                                          712,124                    1,566,376
Total expenses
                                                                  -------------------------    ------------------------

NET INVESTMENT INCOME                                                      78,465                    1,871,325
                                                                  =========================    ========================
NET REALISED GAIN / LOSS
- on portfolio                                                          6,331,979                  -18,103,237
- on foreign exchange                                                       3,746                      -14,649
                                                                  -------------------------    ------------------------

REALISED GAIN / LOSS                                                    6,414,190                  -16,246,561
                                                                  =========================    ========================
NET VARIATION OF THE UNREALISED GAIN / LOSS
- on portfolio                                                        -20,716,282                   10,297,296
                                                                  -------------------------    ------------------------

RESULT OF OPERATIONS                                                  -14,302,092                   -5,949,265

Repurchase of shares                                                     -407,062                   -9,869,187

Cancelled repurchase of shares                                             41,168                            -

Repurchase of warrants                                                          -                   -2,442,317

Exercise of warrants                                                            -                    4,429,930
                                                                 =========================    =========================                           
                                                                                                        

TOTAL VARIATION OF NET ASSETS                                         -14,667,986                  -13,830,839

TOTAL NET ASSETS AT THE BEGINNING OF THE YEAR                         110,401,854                  124,232,693
                                                                 -------------------------    -------------------------

TOTAL NET ASSETS AT THE END OF THE PERIOD/YEAR                         95,733,868                  110,401,854
                                                                 =========================    =========================
                                                                           


* Includes short and long term capital gains dividends


13
                         THE WORLD TRUST FUND



                   Satement of Changes in Net Assets
                               (in USD)

                                                           6 months                                        1 year
                                                      01.04.02-30.09.02                               01.04.01-31.03.02

Net Assets at the Beginning of the Year                                     110,401,854                     124,232,693
Net investment income                                           78,465                      1,871,325
Net realised gain/loss on sale of securities                 6,331,979                    -18,103,237
Net realised gain/loss on foreign exchange                       3,746                        -14,649
                                                                                           ----------
                                                      ----------------

Net realised gain/loss for the Period/Year                                   6,414,190                      -16,246,561
Change in unrealised depreciation/appreciation on                          -20,716,282                       10,297,296
securities
Repurchase of shares                                                          -407,062                       -9,869,187
Cancelled repurchase of shares                                                  41,168                                -
Repurchase of warrants                                                               -                       -2,442,317
Exercise of warrants                                                                 -                        4,429,930
                                                                           -----------                      -----------

Net Assets at the End of the Period/Year                                    95,733,868                      110,401,854
                                                                           ===========                      ===========




                Statistical Information about the Fund
                               (in USD)



                                              September 30th, 2002          March 31st, 2002          March 31st, 2001

Total Net Assets                                        95,733,868               110,401,854               124,232,693
Undiluted Net Asset Value per Share                          15.23                     17.49                     18.79
Diluted Net Asset Value per Share                                -                         -                     17.80




              Statement of Changes in Shares Outstanding
               For the Period ended September 30th, 2002


     Number of Shares Outstanding at the Beginning of the Period                                              6,312,335

     Number of Shares repurchased                                                                               -30,000
     Cancelled number of Shares repurchased                                                                       3,000
                                                                                                       ----------------

     Number of Shares Outstanding at the End of the Period   
                                                 6,285,335
                                                                                                       ----------------
14
                         THE WORLD TRUST FUND


               Statement of investments and other net assets
                        as at September 30th, 2002
                                (in USD)

----------------- -------------- -------------------------------------------------- ----------------- -- -------------
    Currency         Number /     Description                                    Cost         Market value         % of
                   nominal value                                                                                  total
                                                                                                                    net
                                                                                                                 assets
----------------- -------------- -------------------------------------------------- ----------------- -- -------------

INVESTMENTS IN SECURITIES
TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING
Shares
EUR                      106,165  Eurazeo                                   2,231,230           4,353,198          4.55
EUR                      745,040  Greek Progress Fd SA                      2,386,291           1,766,728          1.85
EUR                       21,500  Heineken NV                                 642,480             616,899          0.64
                                                                        -----------------   ----------------  ---------
                                                                            5,260,001           6,736,825          7.04
GBP                      871,600  3I European Technology Trust Plc            344,988              92,512          0.10
GBP                      456,020  3i Bioscience Invest Trust Plc            3,544,834           1,154,481          1.21
GBP                    2,625,000  Advance UK Trust Plc                      4,276,252           3,446,614          3.60
GBP                    1,303,675  Advance Value Real Co Ltd                 1,369,481           1,188,979          1.24
GBP                    2,782,500  Advanced Dev Markets Trust Plc            5,102,477           4,178,452          4.36
GBP                      925,000  Baillie Gifford Shin Nip Plc              1,529,088           1,327,246          1.39
GBP                      598,000  Caledonia Investments Plc                 7,432,264           5,759,491          6.02
GBP                    3,300,000  Close Finsbury Eurotech Trust Plc         4,965,015             700,526          0.73
GBP                    3,000,000  Edinburgh Dragon Trust Plc                3,018,804           2,299,708          2.40
GBP                      162,600  Electra Investment Trust Plc              1,844,556           1,182,522          1.24
GBP                    1,210,000  Finsbury Technology Trust Plc             2,668,789           1,950,231          2.04
GBP                      725,000  Finsbury Worldwide Pharmaceut Plc         2,253,325           3,277,575          3.42
GBP                    1,150,000  Fleming Japan Sm Co Inv Tr Plc            8,095,677           2,739,601          2.86
GBP                    1,000,000  Fleming Japanese Invest Trust Plc         3,211,282           2,303,639          2.41
GBP                      700,000  Impax Environmental Markets               1,000,370             506,329          0.53
GBP                    3,588,451  Merrill Lynch World Mining TST Plc        6,053,402           6,206,926          6.48
GBP                       10,000  Technology & Income Trust Ltd Conv Sh     1,082,218                 216          0.00
GBP                    2,500,000  Templeton Em Mks Inv Tr Plc               4,776,680           3,370,940          3.52
                                                                    -----------------    ----------------     ---------
                                                                           62,569,502          41,685,988         43.55
SEK                      107,300  Investor AB B                               791,613             524,120          0.55

USD                       11,900  Altin AG Reg                                417,110             452,200          0.47

                                                                    -----------------    ----------------     ---------
Total shares                                                               69,038,226          49,399,133         51.61
Investment funds
GBP                    1,208,059  Technology & Income Trust Ltd             2,624,060               7,124          0.01

USD                       26,056  Egypt (The) Trust SICAF Reg Sh              218,511             165,716          0.17
USD                      165,196  Emerging Mks Telecomm Fd Inc              1,708,480             910,230          0.95
USD                      104,000  Europe Fd Inc                             1,818,743             737,360          0.77
USD                      400,825  European Warrant Fd Inc (The)             6,823,904             753,551          0.79
USD                      209,300  Fleming Russia Securities 
                                  Fd PTG Red Pref                           3,599,178           4,497,334          4.70
USD                      147,204  France Growth Fd Inc                      1,976,134             778,709          0.81
USD                      195,906  Italy Fd Inc                              2,889,440           1,106,869          1.16
USD                      830,000  John Hancock Bank&Thrift Opp.             6,739,919           6,308,000          6.59
USD                      326,500  Korea (The) Fd Inc                        4,744,230           4,404,485          4.60
USD                      274,855  MS Asia Pacific Fd Inc                    2,689,088           1,978,956          2.07
USD                      510,000  Morgan Stanley Inst Fd 
                                  Emerging Mks Fd                           4,915,670           3,988,200          4.17
USD                      252,500  Morgan Stanley Inst Fd Latin 
                                  American Fd Inc                           2,559,967           1,749,825          1.83
USD                       78,400  New Germany Fd Inc                          569,184             252,448          0.26
USD                      102,700  Spain Fd Inc                              1,658,368             631,605          0.66
USD                      623,000  Swiss Helvetia Fd Inc                     8,116,743           5,812,590          6.07
USD                       10,000  Value Catalyst Fd Ltd                     1,000,000             948,000          0.99
                                                                    -----------------    ----------------     ---------
                                                                           52,027,559          35,023,878         36.59
                                                                    -----------------    ----------------     ---------
Total investment funds                                                     54,651,619          35,031,002         36.60


                         THE WORLD TRUST FUND




                           Statement of investments and other net assets (continued)
                                          as at September 30th, 2002
                                                   (in USD)

----------------- -------------- -------------------------------------------------- ----------------- -- -------------
    Currency         Number /     Description                                        Cost     Market value         % of
                   nominal value                                                                                  total
                                                                                                                    net
                                                                                                                 assets
----------------- -------------- -------------------------------------------------- ----------------- -- -------------

Warrants and rights
EUR                       71,400  Wendel Investissement B de sousc 31.03.03       260,420             705          0.00

GBP                    3,383,929  Templeton Em Mks Tr Plc Wts 94/30.09.04       1,557,585         186,237          0.19

USD                      300,000  Baring Emerging Euro Trust Plc Wts (USD1)       498,470         472,500          0.49
                                  31.08.04

                                                                        -----------------    --------------   ---------
Total warrants and rights                                                       2,316,475         659,442          0.68
OTHER TRANSFERABLE SECURITIES
Investment funds
USD                        1,500  Baltic Fd I LP                               1,500,149          945,000          0.99
USD                      149,300  Foreign&Colonial Emerg East Fd                       0                0          0.00
USD                        8,600  JF Japan OTC Fd Inc Idr repr 100 Shares      4,709,272        1,565,200          1.63
                                                                        -----------------    --------------   ---------
Total investment funds                                                         6,209,421        2,510,200          2.62
                                                                        -----------------    --------------   ---------
TOTAL INVESTMENTS IN SECURITIES                                              132,215,741       87,599,777         91.51
CASH AT BANKS                                                                                     427,870          0.45
OTHER NET ASSETS/(LIABILITIES)                                                                  7,706,221          8.04
                                                                                             --------------   ---------
TOTAL                                                                                          95,733,868        100.00
                                                                                             ==============   =========

16
                         THE WORLD TRUST FUND

                   
               Currency Classification of the Portfolio
                       as at September 30th, 2002
                      (in percentage of net assets)


Pound Sterling                                                                 43.75 %
US Dollar                                                                      40.17 %
Euro                                                                            7.04 %
Swedish Krona                                                                   0.55 %
                                                                            -------------
  TOTAL                                                                        91.51 % (*)
                                                                            =============





                     Registered Domicile of Assets
                      as at September 30th, 2002
                     (in percentage of net assets)


United Kingdom                                                                 43.00 %
United States of America                                                       31.72 %
Jersey                                                                          4.70 %
France                                                                          4.55 %
Cayman Islands                                                                  2.62 %
Greece                                                                          1.85 %
Guernsey                                                                        1.24 %
The Netherlands                                                                 0.64 %
Sweden                                                                          0.55 %
Switzerland                                                                     0.47 %
Luxembourg (Grand Duchy of)                                                     0.17 %
                                                                           -------------
TOTAL                                                                           91.51 %(*)
                                                                           =============


(*) includes leverage

17
                         THE WORLD TRUST FUND
           
                   Notes to the Financial Statements
                         September 30th, 2002

                                 

NOTE 1 - GENERAL

The World Trust Fund (The Fund) is an investment company with limited
liability organised as a << societe anonyme >> under the laws of the
Grand Duchy of Luxembourg and qualified as a << societe
d'investissement a capital fixe >> under the law of March 30th, 1988
regarding undertakings for collective investments and Article 72-3 of
the law of August 10th, 1915 regarding commercial companies.

The Fund has been incorporated in Luxembourg on June 20th, 1991 for an
unlimited duration. The Fund's Articles have been published in the <<
Memorial, Recueil des Societes et Associations >> and they have been
filed with the Registrar of the Luxembourg District Court, where
copies thereof may be obtained. In addition, a legal notice concerning
the issue of the shares is on file with the Registrar of the
Luxembourg District Court.

The Fund's investment objective is to achieve long term capital
appreciation through investments in closed-end funds whose shares are
listed or traded on international exchanges and at a discount to net
asset value.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

a)    Presentation of Accounts

      The financial statements are presented in accordance with the
Luxembourg regulations relating to investments funds. The Fund keeps
its books and records in USD.

b)    Valuation

      1) The Net Asset Value per Share is calculated in accordance
         with Article 22 of the Articles on each Valuation Date (as
         defined in the Articles).

         The Net Asset Value per Share will be determined by dividing
         the Net Assets of the Fund being the value of its assets less
         liabilities, by the number of Shares then in issue.

      2) In calculating the Net Asset Value, income and expenditures
         are treated as accruing from day to day and the Articles
         provide, inter alia, that :

          (i) securities which are quoted or dealt in on any stock
              exchange or other regulated market will be valued at the
              settlement or closing price on the last full business
              day on which such exchange or market was open for
              trading preceding the applicable Valuation Date;

         (ii) if securities are quoted, listed, traded or dealt in on
              more than one stock exchange or regulated market the
              Directors may select for the purposes of valuation the
              stock exchange or regulated market which they consider
              provides the fairest criterion of value for the relevant
              securities;

         (iii)if securities are not quoted or dealt in on any stock
              exchange or regulated market or if, with respect to
              securities quoted or dealt in on any stock exchange or
              dealt in on any regulated market, the price as
              determined pursuant to paragraph (i) above is in the
              opinion of the Directors, not representative of the fair
              market value of the relevant securities, the value of
              such securities will be determined by reference to their
              reasonably foreseeable sales price determined prudently
              and in good faith by and under the direction of the
              Directors.

      3) Average Cost : purchases of securities are recorded at cost.
         Realised gains or losses on securities sold are computed on
         an average cost basis.

      4) The value of cash in hand or on deposit, bills and notes
         payable on presentation, accounts due, prepaid expenses and
         dividends and interest declared and fallen due but not yet
         received consists of the nominal value of such assets,
         except, however, in the event that it seems improbable that
         such value can be realised, in which event the value is
         determined by deducting a sum which the Board of Directors of
         the Fund considers appropriate to reflect the realisable
         value of such assets.

5)        Foreign currencies: monetary assets and liabilities
          denominated in foreign currencies in the Statement of Net
          Assets are translated into USD at the rates of exchange
          ruling at the date of the report. Transactions in foreign
          currencies are recorded in USD based on the exchange rates
          in effect at the date of the transaction.

The following significant exchange rates have been applied for the conversion as of the date of the report :

                                                                                        USD
             1     EUR               Euro                                               0.9880500
             1     GBP               Pound Sterling                                     1.5724500
             1     SEK               Swedish Krona                                      0.1078283
             1     TWD               New Taiwanese Dollar                               0.0286779

c)    Income Recognition

      Interest and dividend income is recorded on an accrual basis,
      net of any withholding taxes in the relevant country.


NOTE 3 - ADVISORY AND PERFORMANCE RELATED FEES

An advisory fee of 0.75% per annum will be calculated each quarter on
the basis of the average weekly Net Asset Value during the relevant
quarter and will be paid quarterly in arrears to Lazard Asset
Management, the Manager.

The Manager is also entitled to a performance related fee payable
yearly from the second anniversary (i.e. from June 21st, 1993) of the
Fund onwards which will be calculated as follows :

      (i)  5% of the amount by which the undiluted Net Asset Value has
           exceeded by 5% or more but less than 10% per annum the
           compound growth rate of the Morgan Stanley Capital
           International World Index with net reinvested dividends, in
           USD (the << Index >>) during the two preceding years; and

      (ii) 10% of the amount by which the undiluted Net Asset Value
           has exceeded by 10% or more but less than 15% per annum the
           compound growth rate of the Index during the two preceding
           years; and

      (iii)15% of the amount by which the undiluted Net Asset Value
           has exceeded by 15% or more but less than 20% per annum the
           compound growth rate of the Index during the two preceding
           years; and

      (iv) 20% of the amount by which the undiluted Net Asset Value
           has exceeded by 20% or more per annum the compound growth
           rate of the Index during the two preceding years; subject
           to the growth in the Index during the two year period being
           positive. In the event that the Index is not available at
           each Valuation Date, the Fund shall use its best efforts to
           estimate this index by reference to the MSCI World Index
           without reinvested dividends. Certain adjustments may be
           necessary in the event that actual performance at each
           anniversary date differs from those amounts previously
           accrued. As of the date of the report, no performance
           related fee has been recorded.

Out of its fees, the Manager will pay its own expenses and those of
any investment advisers retained by it.


NOTE 4 - TAXES

As a Luxembourg investment company, under present laws the Fund is not
subject to income taxes in Luxembourg. Irrecoverable taxes may be
withheld at the source on dividends and interest received on
investment securities.

According to the law of March 30th, 1988, the Fund is subject to
Luxembourg subscription duty (<< taxe d'abonnement >>) at the rate of
0.06% per annum of its Net Assets, such tax being payable quarterly on
the basis of the Total Net Assets of the Fund at the end of the
relevant quarter. However the value of investments in other investment
companies already subject to Luxembourg subscription duty is not
subjet to this tax anymore. From January 1st, 2002 the tax rate of
0.06 percent was brought down to 0.05 percent per annum.


NOTE 5 - REPURCHASES OF SHARES

The Fund may repurchase Shares up to 10% of the issued capital of the
Fund and Warrants when the Shares are trading at a discount to the Net
Asset Value per Share. The repurchase of Shares is granted by
Shareholders on an annual basis; however, Shareholders and
Warrantholders do not have the right to require the Fund to repurchase
their Shares or Warrants. Shares repurchased may then be resold at a
future date when a premium to the Net Asset Value per Share may be
obtained or may be cancelled by way of a reduction of issued capital.
Such transactions will take place on a stock exchange,
over-the-counter market or other regulated market on which the Shares
and Warrants are traded. Whilst it is intended that this policy should
have the effect of reducing the discount to Net Asset Value at which
the Shares trade, it is not intended to maintain the Share price of
the Fund at Net Asset Value.

Until the date of the report, the Fund has repurchased following
Shares on the London Stock Ex-change:

      Prior to March 31st, 2002       total repurchase             3,019,403 Shares   USD            46,028,444
      April 5th, 2002                 cancelled repurchase            -3,000 Shares   USD               -41,168
      July 17th, 2002                 repurchase                      10,000 Shares   USD               141,533
      July 30th, 2002                 repurchase                      20,000 Shares   USD               265,530
                                                                                               -----------------
                                                                                      USD            46,394,339
These Shares are held in Treasury.


NOTE 6 - REPURCHASE OF WARRANTS

The balance of the Warrants has been converted in Shares in agreement
with the prospectus.

NOTE 7 - CAPITAL

The Fund was incorporated with an authorised share capital of USD
30,000,000 represented by 15,000,000 shares of a par value of USD 2
each.

The initial subscribed capital amounted to USD 45,000 and was
represented by 4,500 Units (each Unit consists of five Shares and one
Warrant).

All Units have been fully paid in cash of USD 45,000 together with
total issue premiums of USD 180,000.

On September 27th, 1991 the Board of Directors decided to increase the
capital to USD 17,777,490 by the issue of 8,866,245 additional Shares
and 1,773,249 additional Warrants attached thereto, against payment in
cash of a total of USD 17,732,490 and a total share premium of USD
66,496,837.50. This increase was approved by notarial deed dated
October 18th, 1991.

The Warrantholders could exercise their subscription rights in any of
the years 1996 to 2001 inclusive. Each Warrant gave the right to
subscribe to one Share at a price of USD 10.

By a resolution of the meeting of the Board of Directors dated June
6th, 2002 the Board decided to increase the capital by creation of
442,993 new shares of USD 2 each, with a share premium of USD
3,543,944. All the 442,993 shares had been entirely subscribed and
fully paid in cash, so that the amount of USD 4,429,930 is available
to the corporation.

The Fund is required by Luxembourg law to transfer five percent of its
yearly net profits to a non distributable legal reserve until such
reserve amounts to ten percent of the Fund's nominal share capital,
this reserve is not available for dividend distribution.


NOTE 8 - FORMATION EXPENSES

The formation expenses have been amortised over a period of 5 years.


NOTE 9 - CUSTODIAN FEES

The Custodian will receive, under the terms of the Custodian
Agreement, fees for its services at rates to be agreed from time to
time between the Fund and the Custodian in accordance with Luxembourg
practice.


NOTE 10 - DIRECTORS' FEES

Each of the Directors shall be paid a fee for his services at such a
rate (if any) as the Board of Directors shall determine provided that
the aggregate of such fees shall not exceed USD 60,000 per annum or
such higher amount as may from time to time be determined by the
Shareholders in General Meeting. The Directors may also be paid all
reasonable travelling, hotel and other expenses properly incurred by
them in the course of their duties relating to the Fund.


NOTE 11 - COMMITMENTS

As of the date of the report, the Fund was not engaged in any
outstanding foreign exchange contracts and in any outstanding currency
option.

NOTE 12 - BENEFICIAL AND NON-BENEFICIAL INTEREST OF THE DIRECTORS IN THE SHARE CAPITAL

As of the date of the report,  the  beneficial  and  non-beneficial  interests  of the  Directors  in the share
capital are the following :

                                                Beneficial                            Non-Beneficial
                                                  Shares                                  Shares
Walter A. Eberstadt                                31,000                                  72,000
Eric C. Elstob                                      1,000                                       -
Rafik E. H. Fischer                                     -                                       -
J. Murray Logan                                         -                                       -
Philip R. McLoughlin                                    -                                       -
Jeremy W. Sillem                                   12,300                                   2,540
Francois A. Voss                                    2,500                                       -
Alexander E. Zagoreos                              44,575                                     425


NOTE 13 - DIRECTORS' INTEREST IN SIGNIFICANT CONTRACTS

Alexander E. Zagoreos is a Managing Director of Lazard Freres & Co.,
LLC which, through its division Lazard Asset Management, serves as an
investment manager for the Fund. Walter A. Eberstadt is a limited
Managing Director of Lazard Freres & Co, LLC, and Francois A. Voss is
a Managing Director of Lazard and Managing Director of Lazard Freres,
Paris which may be considered affiliated with Lazard Freres & Co., LLC
through certain common partners.


NOTE 14 - SUBSTANTIAL SHAREHOLDING

As of the date of the report, the Directors of the World Trust Fund
were aware of the following interests in the shares of the Fund :

                                                                                              Percentage
                                                                        Shares             of Issued Capital

Clients of Lazard Freres & Lazard Asset Management                      1,486,325               23.6%

All issued shares of the Fund are on deposit with a registered
clearing house and, accordingly, with the exception of those
shareholdings of which the Directors have been notified, the Directors
are not in a position to state the exact size of any shareholdings in
the Fund.


Note 15 - Short term arrangements

The fund has entered the following arrangements :

                  Number /                                                                                % of
  Currency      nominal value                Description                  Receipt     Market value   total net assets

     USD              -390,700  Nasdaq-100 Trust                           -9,841,938       -8,107,025        -8.47
     USD               -42,000  iShares Inc MSCI Switzerland Index           -506,542         -445,620        -0.47
                                Fund
     USD               -40,600  IShare Trust Dow Jones U.S. Utilities      -2,026,669       -1,874,502        -1.96
                                Sector Index Fund
     USD              -128,800  iShare Trust Nasdaq Biotechnology          -6,348,152       -5,957,000        -6.22
                                Index Fund
     USD              -100,000  IShares Inc MSCI Japan Index Fund            -799,976         -733,000        -0.76

     USD              -250,000  Select Sector SPDR (The) Trust             -5,787,825       -5,227,500        -5.46
                                Financial Select Sector Fund
     USD              -350,000  Select Sector SPDR (The) Trust             -5,177,342       -4,140,500        -4.33
                                Technology Select Sector Fund
     USD               -90,000  Standard & Poor's Depositary Receipts      -7,813,564       -7,361,100        -7.69
                                                                                                            
                                                                        --------------     ------------    ---------             
                                                                          -38,302,009      -33,846,247       -35.36

The short term arrangements represent -35.36% of the total net asset
value.

As briefly discussed in the Manager's Comments, the Placing Memorandum
of the World Trust Fund was amended in July 1998 to permit the hedging
of risk of underlying assets. It is the manager's intention to only
use the shorting of exchange-traded funds or other representative
exchange-traded equity instruments to hedge the underlying exposure.

Neither futures nor options will be used.

Note 16 - Changes of the investment portfolio

The changes of the investment portfolio are available at the
registered office of the Fund without any fee.

Note 17 - Addenda to the placing memorandUM

The Board of Directors of the Fund has resolved on the October 23rd,
1998 to amend the Placing Memorandum mainly:

o    to allow the hedging of risks  connected  to the  evolution  of stock  markets to the  fullest  extent
     permitted by the Luxembourg regulations, and
o    to emphasise the manager's intent to make active use of the
     Fund's voting rights to participate in matters pertaining to the
     orientation and policies of closed-end funds in which it invests.

The addendum is dated June 1999 and is part of the Placing Memorandum
dated July 2nd, 1991 and may not be distributed without such Placing
Memorandum.
*T

   Short Name: World Trust Fund
   Category Code: IR
   Sequence Number: 00001456
   Time of Receipt (offset from UTC): 20021218T121802+0000