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World Trust Fund (WTR)

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Tuesday 06 December, 2005

World Trust Fund

Unaudited Semi-Annual Report as at 30.09.2005

The World Trust Fund

                         THE WORLD TRUST FUND

                Société d'Investissement à Capital Fixe
                           R.C. N° B 37.154

                     Unaudited semi-annual report
                      as at September 30th, 2005


Organization of the Fund
General Information
Manager's ReviewStatements of Net Assets
Shareholders' Equity
Statements of Operations   
Statements of Changes in Net Assets     
Statistical Information about the Fund  
Statement of Changes in Shares Outstanding        
Statement of Investments and Other Net Assets     
Notes to the Financial Statements       

                       Organization of the Fund

Chairman Emeritus

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


JEREMY W. SILLEM                                      Spencer House Partners LLP
Chairman                                              15 St. James's Place
                                                      U.K.-London, SW1A, 1NP

J. MURRAY LOGAN *                                     L-R Global Partners L.P.
                                                      430 Park Avenue, 7th Floor
                                                      U.S.A.-New York, NY 10022

PHILIP R. McLOUGHLIN *,**                             200 Bridge Street
                                                      U.S.A.-Chatham, Mass 02633

ALEXANDER E. ZAGOREOS                                 Lazard Asset Management, LLC
                                                      30 Rockefeller Plaza
                                                      U.S.A.-New York, NY 10020

JOHN M. HIGNETT *                                     Schroder Income Growth Fund Plc
                                                      Via Privata A, Bifani 3
                                                      Italy-16038 Santa Margherita Ligure

Registered Office                                     11 rue Aldringen
                                                      L-1118 Luxembourg

Manager                                               Alexander E. Zagoreos
                                                      Kun Deng, CFA
                                                      Lazard Asset Management, LLC
                                                      30 Rockefeller Plaza
                                                      U.S.A.-New York, NY 10020
                                                      (212) 632-6971

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                                   ERNST & YOUNG
                                                      Société Anonyme
                                                      6 rue Jean Monnet
                                                      L-2180 Luxembourg

*   Member of the Audit Committee
** Chairman of the Audit Committee

                          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 until September 30th, 2005.

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 realization 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 the quotation is published in the "Financial Times" daily under Investment
Companies. The Shares are also listed on the Luxembourg Stock Exchange.

9. Effective October 1st, 2005, the functions of custodian, listing and paying
agent as well as domiciliary, registrar, transfer and administrative agent are
transferred to State Street Bank Luxembourg S.A.. Consequently the respective
functions of KREDIETRUST LUXEMBOURG S.A. and KREDIETBANK S.A. Luxembourgeoise
were terminated as of September 30th, 2005.

                          Manager's Review

For the period April 1st, 2005 to September 30th, 2005

For the six months that ended September 30th, 2005, the World Trust Fund's net
assets rose 14.2 percent, which is almost double the 7.4 percent return of its
benchmark, the MSCI World Index. For the last twelve months, the Fund's net
assets gained 41.2 percent, significantly outperforming the benchmark's return
of 18.9 percent.

(Graphic Omitted)
Source: Bloomberg, Factset

Performance (cumulative)

                                                            6 Months                 1-Year              3-Year

World Trust Fund NAV                                            14.2%                  41.2%               142.2%
World Trust Fund Price                                          13.3%                  48.3%               140.4%

MSCI World Index                                                 7.4%                  18.9%                74.6%
MSCI EAFE Index                                                  9.3%                  25.8%                93.5%
S&P 500 Index                                                    5.0%                  12.3%                59.0%

The Fund's strong performance comes primarily from its weightings in natural
resources, emerging markets, small caps, and Japan. Some investments in listed
private equity funds and in holding companies also added to the Fund's gains.
The last six months saw a narrowing of discounts, as many of the Fund's key
holdings went through restructurings that added value.

The World Trust Fund's investment strategy searches for discounts on a global
basis, buying closed-end funds, holding companies, and similar investments
trading at discounts that are invested in cheaply priced assets. While the asset
allocation has changed little over the past five years, the Manager has been
actively switching from narrow discounts to wider ones and engaging in hedged

Country Allocation

Geographic Allocation on the long portfolio(on a see-through basis)
(Graphic Ommitted)                                                              
                                                    As of September 30th, 2005

For the past six months, the Fund was overweight emerging markets, with an
emphasis in Asia, Europe (where the Manager is finding a number of cheap
assets), and Japan. Conversely, it was underweight the United States. The Fund
was also substantially invested in natural resources and in small caps around
the world. The Manager continued to add to the Fund's holdings in generalist
trusts, as these were trading at the wide end of their discount range.

                           Emerging Markets

Emerging markets, which the Fund has been overweight for the last few years,
rose 22.8 percent over the six-month period, continuing their outperformance
against the developed markets since the 1998 Russian crisis, when investor
sentiment toward the emerging markets bottomed. At that point in time, emerging
markets were substantially undervalued. These markets have made great progress
over the years, and their higher financial productivity is high. Company profits
rose over 90 percent for the past two years. Return on equity and profit margins
are well above those of the developed markets, and about 40 percent of the
companies in the MSCI Emerging Index trade at less than 10 times estimated 2005
earnings. Compared to most of the 1990s, the valuations the Manager is currently
seeing are even more compelling.

The Manager has been taking profits from the emerging-Europe region, which
benefited from the commodities boom and European Union integration, which has
created structural reforms yielding macroeconomic and financial improvement in
the region. More investments have been made in the Asian region, due to its low
valuations and the solid fundamentals.

Emerging Asia Relative to Emerging Europe
(Graphic Ommitted)
Source: Merrill Lynch

                          Small Cap Holdings

Global small-cap stocks have been undervalued, and small-cap closed-end funds
stood out because of their deep discounts. While continuing to favor the sector,
the Manager has been steadily taking profits. In 2000, European small-cap
companies traded at a P/E discount of 38 percent to large caps. Today they are
at a 9 percent P/E premium. Scanning the universe of companies covered by Lazard
Asset Management analysts, large-cap companies have greater financial
productivity, as indicated by ROE, but the valuation is lower.

(Graphic Ommitted)


Japan has been a persistent investment theme since 1999, and some of the best
investments the Fund has made came from Japan. In past annual and semi-annual
reports, the Manager discussed the secular changes in Japan, the domestic demand
story, and the "New Virtuous Cycle." This is the idea that companies, after
unwinding their cross holdings, have taken a cue from their shareholders and
focused on improving corporate governance, restructuring their businesses, and
thus creating shareholder value.

The Manager continues to be positive about Japan. The country is experiencing
one of the longest post-war economic expansions, and factors such as increasing
domestic demand, reflation, sustainable earnings growth, and improved corporate
governance, are all pointing to a possible doubling of the country's financial
productivity and a re-rating of the Japanese markets.

(Graphic Ommitted)
Source: Goldman Sachs

Top 5 Country Weightings

                               U.K. 25%
                               Japan 18%
                              Brazil 11%
                            South Africa 8%
                            Switzerland 7%

The Fund's U.K. weighting is largely a result of investments in the small-cap
sector, listed private equity funds, and in generalist trusts with wide

Top Ten Holdings

The current top-10 holdings of the World Trust Fund, as seen above, account for
over 49.1 percent of the Fund's portfolio. The average discount for the World
Trust Fund's holdings was 14 percent as of September 30th, 2005.

Portfolio Hedging

As previously discussed in the Fund's annual and semi-annual reports over the
past five years, the Placing Memorandum of the Fund was amended in 1998 to
permit hedging the risk of underlying holdings. As a global discount investor,
the Manager intends to capture the discount while hedging out some of the risk
of the underlying holdings. Exchange-traded funds, such as QQQQ (which tracks
the NASDAQ 100 Index), Diamonds (which tracks the Dow Jones Industrial Index),
Spyders (which tracks the S&P 500 Index), and iShares Index funds were shorted
as part of the Fund's hedging strategy. The Manager is also able to short sell
stocks, baskets of stocks, closed-end funds, and investment trusts in order to
hedge risks.

The Fund's first short sale was made in January 2000, when the Manager shorted
QQQQ, the NASDAQ 100 Index Trust, just three months before the technology bubble
peaked, in order to hedge part of the Fund's technology exposure. Over the past
six months, the Manager placed shorts on technology, the U.S. market, Japan, and

As of September 30th, 2005, the Fund has about 33 percent of its net assets in
short positions. The Manager hedged part of the Fund's exposure to technology,
energy, gold, and the U.S. market. Details are on page 18 under the note 16 to
the financial statements.

Fund Restructuring

The restructuring momentum is still strong both in the United States and Europe.
The Fund has played key roles in many of these corporate actions, which greatly
benefited performance. Some of the major restructurings are below.

-- Eurazeo - In May 2005, the company sold its stake in Lazard through the
latter's IPO on the New York Stock Exchange.

-- Greek Progress Fund - In June 2005, Eurobank, Greece's No. 3 bank, bought the
51.6 percent shares of Greek Progress that were in public hands. One share of
Eurobank was offered for every 7.9 Greek Progress shares.

-- Brazil Fund - In September 2005, the Board announced a proposal to convert
the Fund to an open-end structure in order to eliminate discounts after a failed
attempt to tender for shares.

-- Korea Fund - In July 2005, Korea Fund conducted a tender offer in the form of
in-kind securities for 50 percent of its shares, at a discount of 2 percent to
its net asset value. The Board also approved making semi-annual offers, each to
repurchase 10 percent of the Fund's shares, and went through a new manager
selection process. New directors are to be expected.


The Fund traded at a discount of 11 percent at the half-year end, down from 15.6
percent a year ago, but changed little for the past six months. Directors and
the Manager believe this discount undeserved, and will constantly explore ways
to reduce this gap between the Fund's net asset value and the share price.


The Manager's strategy of buying closed-end funds and holding companies at
tangible discounts to their underlying assets has worked well since the launch
of the World Trust Fund, nearly fifteen years ago. The last six-month period has
been one of the Fund's best half-year's of performance since inception. There
have been some important changes in the Manager's investment approach over the
years, but none more important than the use of hedging strategies to reduce
risk. This has resulted in an increased emphasis on obtaining long-term absolute
returns rather than simply seeking to outperform the benchmark.

Luxembourg, November 29th, 2005                          Lazard Asset Management


Statements of Net Assets
(in USD)

                                                    6 months ending             1 year ending
                                                    30.09.05                    31.03.05

Securities' portfolio at market value  225,456,490                   233,579,683
Cash at banks                                    1                         3,825
Cash with brokers *                     80,714,510                     9,451,525
Receivable on sales of securities                -                    31,177,324
Receivable on treasury transactions              -                     2,501,634
Income receivable on portfolio             108,077                       421,029
Other receivables                           15,847                             -
                                       ------------                --------------
Total assets                                          306,294,925                   277,135,020
Bank liabilities                         1,867,416                    41,569,315
Liabilities towards brokers                      -                     1,060,716
Short sales of securites at market
 value                                  75,112,900                    10,038,048
Payable on purchases of securities               -                    18,814,706
Payable on treasury transactions                 -                     2,488,063
Interest payable on bank accounts          169,830                         9,681
Expenses payable                         1,844,140                     4,041,412
                                       ------------                --------------
Total liabilities                                      78,994,286                    78,021,941
                                                    --------------                --------------
NET ASSETS at the End of the
 Period/Year                                          227,300,639                   199,113,079
                                                    ==============                ==============
Number of Shares outstanding                            6,161,735                     6,161,735
Net Asset Value per Share                                   36.89                         32.31

 Shareholders' Equity Represented by 
(in USD)

                                                    6 months ending               1 year ending
                                                        30.09.05                  31.03.05   

Capital: 9,331,738 Shares at USD 2.00        18,663,476                   18,663,476
Share Premium                                70,220,782                   70,220,782
Legal Reserve                                 1,866,348                    1,866,348
Profit brought forward                       98,467,434                   87,869,554
                                           -------------                -------------
Total Capital and Reserves                                189,218,040                   178,620,160
Cost of 3,170,003 Shares held in Treasury                 -48,963,066                   -48,963,066
Repurchase of 1,334,756 Warrants                           -8,631,613                    -8,631,613
Net realized profit for the Period/Year                    12,997,109                    10,597,880
Unrealized appreciation on securities                      84,295,529                    67,500,343
Unrealized depreciation on Short Sales of
 Securities                                                -1,615,360                       -10,625
                                                        --------------               ---------------
Total Shareholders' Equity                                227,300,639                   199,113,079
                                                        ==============               ===============

* consisting primarily of proceeds from short sale and margin for short
positions. See Note 16 on page 19.

The accompanying notes are an integral part of these financial statements


Statement of Operations  (continued)
from April 1st, 1998 to March 31st, 1999
(in USD)
The accompanying notes are an integral part of these financial statements


Statements of Operations
 (in USD)

                                                                     6 months ending       1 year ending
                                                                     30.09.05              31.03.05

Dividends, net                                                      1,218,968             2,978,831
Interest on bank accounts                                              26,835                 3,147
Other income                                                           15,887             1,743,100
                                                          --------------------  --------------------
Total income                                                        1,261,690             4,725,078
                                                          ====================  ====================
Management fees                                                       764,613             1,302,308
Performance fees                                                    1,303,363             3,576,944
Custodian fees                                                         30,034                52,012
Banking charges and other fees                                         29,449                50,660
Central administration costs *                                         25,026                52,699
Audit and supervisory fees                                             26,376                23,377
Other administration costs **                                          91,262               122,442
Subscription duty                                                      52,461                86,779
Interest paid                                                         395,522               745,735
Other expenses                                                         35,527                95,514
                                                          --------------------  --------------------
Total expenses                                                      2,753,633             6,108,470
                                                          --------------------  --------------------
NET INVESTMENT INCOME                                              -1,491,943            -1,383,392
                                                          ====================  ====================
- on portfolio                                                     14,486,730            11,962,946
- on foreign exchange                                                   2,322                18,326
                                                          --------------------  --------------------
REALIZED GAIN                                                      12,997,109            10,597,880
                                                          ====================  ====================
- on portfolio                                                     15,190,451            20,114,213
                                                          --------------------  --------------------
RESULT OF OPERATIONS                                               28,187,560            30,712,093
Repurchase of Shares                                                        -            -1,917,427
                                                          ====================  ====================
TOTAL VARIATION OF NET ASSETS                                      28,187,560            28,794,666
TOTAL NET ASSETS AT THE BEGINNING OF THE PERIOD/YEAR              199,113,079           170,318,413
                                                          --------------------  --------------------
TOTAL NET ASSETS AT THE END OF THE PERIOD/YEAR                    227,300,639           199,113,079
                                                          ====================  ====================

* including administrative agent fees, transfer agent fees and domiciliary fees,

** including legal fees, telecommunications fees, etc
The accompanying notes are an integral part of these financial statements


as at March 31st, 1999
(in USD)
The accompanying notes are an integral part of these financial statements


The accompanying notes are an integral part of these financial statements

Statements of Changes in Net Assets
(in USD)

                                                  6 months ending               1 year ending
                                                  30.09.05                      31.03.05

 Net Assets at the Beginning of the
  Period/Year                                           199,113,079                   170,318,413
Net investment income                     -1,491,943                    -1,383,392
Net realized gain on sale of securities   14,486,730                    11,962,946
Net realized gain on foreign exchange          2,322                        18,326
                                        -------------                 -------------
Net realized gain for the Period/Year                    12,997,109                    10,597,880
Change in unrealized appreciation on
 securities                                              15,190,451                    20,114,213
Repurchase of Shares                                              -                    -1,917,427
                                                     ---------------               ---------------
Net Assets at the End of the Period/Year                227,300,639                   199,113,079
                                                     ===============               ===============

                Statistical Information about the Fund
                               (in USD)

                                       September 30th, 2005    March 31st, 2005    March 31st, 2004

Total Net Assets                               227,300,639         199,113,079         170,318,413
Net Asset Value per Share                            36.89               32.31               27.32

              Statement of Changes in Shares Outstanding
               For the Period ended September 30th, 2005

  Number of Shares Outstanding at the Beginning of the Period                        6,161,735

  Number of Shares repurchased                                                               -

  Number of Shares Outstanding at the End of the Period                              6,161,735


       Statement of Investments and Other Net Assets (continued)
                         September 30th, 2005
                               (in USD)

The accompanying notes are an integral part of these financial statements.


Statement of Investments and Other Net Assets
September 30th, 2005
(in USD)
The accompanying notes are an integral part of these financial statements. 

Currency   Number /    Description                                    Cost       Market value    % of
         nominal value                                                                           total

EUR             86,176 Eurazeo                                       1,544,400      8,860,670      3.90
EUR            819,544 Greek Progress Fd SA Reg Sh                   2,386,696      3,101,938      1.36
EUR            100,000 RHJ Intl SA                                   2,504,906      2,410,800      1.06
                                                                  -------------  -------------  --------
                                                                     6,436,002     14,373,408      6.32
GBP             31,213 3I European Tec Trust Plc                         9,909              0      0.00
GBP            975,000 Advance UK Trust Plc                          1,654,450      2,935,350      1.29
GBP          1,780,523 Advanced Dev Markets Trust Plc                3,494,294      8,028,899      3.53
GBP            925,000 Baillie Gifford Shin Nip Plc                  1,529,088      3,545,431      1.56
GBP            385,000 Brunner Investment Trust Plc                  1,557,661      2,393,064      1.05
GBP          2,064,000 Edinburgh Dragon Trust Plc                    2,075,403      4,051,361      1.78
GBP            200,818 Electra Investment Trust Plc                  2,889,046      3,952,447      1.74
GBP          1,800,000 F&C Smaller Co Plc                            5,119,746     10,981,454      4.82
GBP          2,300,000 Fidelity Japanese Values Plc                  2,541,655      3,843,509      1.69
GBP          1,325,000 Finsbury Technology Trust Plc                 3,115,607      5,154,740      2.27
GBP          1,400,000 Fleming Japan Sm Co Inv Tr Plc                9,113,388      6,962,878      3.06
GBP          1,274,000 Foreign & Colonial Invest                     4,657,728      5,249,206      2.31
GBP            625,000 Henderson EuroTrust Plc                       2,184,924      4,415,349      1.94
GBP            900,000 Intl Biotechnology Trust Plc                  1,689,327      1,718,836      0.76
GBP          1,000,000 Invesco English Intl Trust Plc                3,287,441      4,951,380      2.18
GBP            793,500 JPM Fleming Em Mks Inv Tr Plc                 2,564,981      3,907,872      1.72
GBP            533,491 JPM Fleming Russian Sec Plc                     649,023      2,834,913      1.25
GBP            320,000 JPM Fleming US Disc Inv Tr Plc                3,350,793      4,405,314      1.94
GBP          1,000,000 JPMorgan Fleming Jap Inv Trust Plc            3,211,282      4,650,761      2.05
GBP          2,955,451 ML World Mining TST Plc                       4,992,479     16,515,019      7.26
GBP          1,899,000 Pacific Assets Trust Plc                      1,690,655      2,401,039      1.06
GBP          1,200,000 Schroder Japan Growth Fd Plc                  1,640,920      2,408,493      1.06
GBP            600,000 Scottish Mrtge Inv Trust Plc                  2,379,063      4,549,080      2.00
GBP          2,022,300 Templeton Em Mks Inv Tr Plc                   4,586,516      8,636,364      3.80
GBP          5,679,400 Throgmorton Trust Plc                         9,454,278     15,039,643      6.61
                                                                  -------------  -------------  --------
                                                                    79,439,657    133,532,402     58.73
HKD            182,000 China Mengniu Dairy Co Ltd                       92,577        150,151      0.07
HKD            272,000 China Netcom Group Corp Ltd                     296,416        468,086      0.21
                                                                  -------------  -------------  --------
                                                                       388,993        618,237      0.28
SEK            427,600 Investor AB B                                 4,775,481      6,661,469      2.93

USD            254,000 ASA (Bermuda) Ltd                             9,671,111     11,884,660      5.22
USD            117,000 Brazil Fd Inc                                 4,603,248      5,803,200      2.55
                                                                  -------------  -------------  --------
                                                                    14,274,359     17,687,860      7.77
                                                                  -------------  -------------  --------
Total shares                                                       105,314,492    172,873,376     76.03
Undertakings for collective investment
GBP            932,000 Advance Focus Fund Ltd Red Pref               1,996,143      1,845,874      0.81
GBP            550,000 Close Enhanced Commodit Fd Ltd                1,049,801      1,113,618      0.49
GBP            342,200 F&C Colo Em Mks Inv Trust Plc                   388,428        650,514      0.29
GBP            325,000 Invesco Japan Discov Trust Plc                  511,044        686,783      0.30
GBP            425,000 Invesco Perpet Eur Inv Tr Plc                 1,166,685      1,193,084      0.52
GBP            500,000 Oryx Intl Growth Fd Ltd                       1,828,471      2,298,855      1.01
                                                                  -------------  -------------  --------
                                                                     6,940,572      7,788,728      3.42
USD            100,000 Advance Umbrella Fd Plc Emerging Markets A    1,003,750      1,133,000      0.50
USD            126,971 Emerging Mks Telecom Fd Inc                   1,276,191      1,429,693      0.63
USD             48,000 Europe Fd Inc                                   839,420        557,280      0.25
USD            236,326 Latin America Discovery Fd                    2,416,622      6,437,520      2.83
USD            284,255 MS Asia Pacific Fd Inc                        2,764,476      4,184,234      1.84
USD            720,900 MS Emerging Markets Fd Inc                    7,320,440     15,571,440      6.84
USD          84,851.24 Martin Currie Abs Ret Fds Ltd China             999,998      1,081,378      0.48
USD                600 Saffron Fd Inc                                        0              5      0.00
USD            140,000 Scudder Gl Commodit St Fd Inc                 2,047,728      2,325,400      1.02
USD            623,000 Swiss Helvetia Fd Inc                         8,116,743      9,276,470      4.08
USD            186,400 Taiwan Fd Inc                                 2,117,479      2,520,128      1.11
USD                370 The Egypt Trust Dist 1                            3,050          8,417      0.00
                                                                  -------------  -------------  --------
                                                                    28,905,897     44,524,965     19.58
                                                                  -------------  -------------  --------
Total undertakings for collective investment                        35,846,469     52,313,693     23.00
Warrants and rights
EUR                    Greek Progress Fd SA Droits de sousc
               745,040  14.10.05                                             0        269,421      0.12
                                                                  -------------  -------------  --------
Total warrants and rights                                                    0        269,421      0.12
GBP            656,020 3i Bioscience Invest Trust Plc                        0              0      0.00
                                                                  -------------  -------------  --------
Total shares                                                                 0              0      0.00
Undertakings for collective investment
USD              1,500 Baltic Fd I LP                                        0              0      0.00
USD            195,906 Italy Fd Inc                                          0              0      0.00
                                                                  -------------  -------------  --------
Total undertakings for collective investment                                 0              0      0.00
                                                                  -------------  -------------  --------
TOTAL INVESTMENTS IN SECURITIES                                    141,160,961    225,456,490     99.15
Undertakings for collective investment
USD           -234,700 Central Fd of Canada Ltd A Non voting        -1,284,527     -1,326,055     -0.58
USD            -61,700 Diamonds Trust Units Ser 1                   -6,515,248     -6,524,775     -2.87
USD           -544,400 Nasdaq-100 Trust Ser I                      -21,378,640    -21,482,024     -9.45
USD            -85,800 SPDR Trust Ser 1                            -10,540,089    -10,556,832     -4.64
USD                    Select Sector SPDR (The) Trust Energy
              -210,900  Select Sector Fd                           -10,120,668    -11,325,330     -4.98
USD                    Select Sector SPDR (The) Trust Technology
              -208,100  Select Sector Fd                            -4,313,732     -4,349,290     -1.91
USD           -291,700 Semiconductors Holdrs Trust                 -10,743,182    -10,775,398     -4.74
                                                                  -------------  -------------  --------
Total undertakings for collective investment                       -64,896,086    -66,339,704    -29.17
Investment certificates
USD                    Internet Holders Trust Certif Lk Internet
              -142,700  Bskt 31.12.39                               -8,601,454     -8,773,196     -3.86
                                                                  -------------  -------------  --------
Total investment certificates                                       -8,601,454     -8,773,196     -3.86
                                                                  -------------  -------------  --------
TOTAL SHORT SALES OF SECURITIES                                    -73,497,540    -75,112,900    -33.03
CASH AT BANKS                                                                               1      0.00
OTHER NET ASSETS/(LIABILITIES)                                                     76,957,048     33.88
                                                                                 -------------  --------
TOTAL                                                                             227,300,639    100.00
                                                                                 =============  ========


Notes to the Financial Statements  (continued)
September 30th, 2005

                         THE WORLD TRUST FUND

                   Notes to the Financial Statements
                         September 30th, 2005


The World Trust Fund (the "Fund") is an investment company with limited
liability organized as a « société anonyme » under the laws of the Grand Duchy
of Luxembourg and qualified as a "société d'investissement à 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.
As from March 22nd, 2004 the CSSF approved the amended Placing Memorandum
(February 2004) which is only valid if accompanied by the Addendum dated April
2002 in order that the Fund is subject to the Luxembourg law December 20th, 2002
regarding undertakings for collective investments with effect from February
13th, 2004.

The Fund has been incorporated in Luxembourg on June 20th, 1991 for an unlimited
duration. The Fund's articles of incorporation (the "Articles") have been
published in the "Mémorial, Recueil des Sociétés 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.


a)   Presentation of Accounts

The financial statements are presented in conformity with the legal and
regulatory requirements in Luxembourg 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 is 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 are 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. Realized 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 realized, 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 applicable at the date of the

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

        1   EUR          Euro                                  1.2054000
        1   GBP          Pound Sterling                        1.7683500
        1   HKD          Hong Kong Dollar                      0.1289067
        1   SEK          Swedish Krona                         0.1292842

c)   Income Recognition

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


A management fee of 0.75% per annum is calculated each quarter on the basis of
the average weekly Net Asset Value during the relevant quarter and is paid
quarterly in arrears to Lazard Asset Management LLC, the Manager.

The Manager is also entitled to a performance related fee payable yearly which
is calculated as follows :

(i) 5% of the amount by which the Net Asset Value has exceeded by 5% or more but
less than 10% per annum the compound growth rate of the MSCI World Index during
the two preceding years; and

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

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

(iv) 20% of the amount by which the Net Asset Value has exceeded by 20% or more
per annum the compound growth rate of the MSCI World Index during the two
preceding years;

subject to the growth in the MSCI World Index during the two year period being

The Board of Directors of the Fund resolved as of March 30th, 2004 with the
approval of the CSSF to change the due date of calculation of the performance
fee from July 1st (the date of the commencement of the Investment Management
Agreement) to March 31st, end of the fiscal year, after the financial report is

The accrued performance fee for the period from April 1st, 2005 to September
30th, 2005 amounts to USD 1,303,363.

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


The Board of Directors and the Investment Manager concurred with the CSSF that
the additional amount of USD 1,681,369, provisioned as of March 31st, 2004, not
be included in the performance fee. This amount was canceled and was registered
under the caption "other income" in the statement of operations in the report.


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 December 20th, 2002, the Fund is subject to Luxembourg
subscription duty ("taxe d'abonnement") at the rate of 0.05% 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 subject to this tax anymore.


On a yearly basis, the Fund may repurchase Shares up to 10% of the issued
capital of the Fund 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 do not have the right to require the Fund to
repurchase their Shares. 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 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

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

Prior to March 31st, total USD 2005 repurchase 3,170,003 Shares 48,963,066

These Shares are held in Treasury.


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 8,888,745 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 balance of the Warrants has been converted into Shares in accordance with
the prospectus.

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.


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


The Custodian receives, 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.


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 150,000 per annum (in respect of the resolution
of the Annual General Meeting held on August 16th, 2005) 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 traveling, hotel and other
expenses properly incurred by them in the course of their duties relating to the


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


As of the date of the report, the Fund had no commitment by securities lending.


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
                           --------------------------     --------------------------
John Hignett                                  38,100                              0
J. Murray Logan                                1,000                              0
Philip R. McLoughlin                               0                              0
Jeremy W. Sillem                              12,300                          2,540
Alexander E. Zagoreos                         57,755                              0


Alexander E. Zagoreos is a Managing Director of Lazard Asset Management LLC,
which serves as an investment manager for the Fund.


As of the date of the report, the Directors of the Fund were aware of the
following interests of over 5% in the Shares of the Fund:

                                                       Shares           Percentage
                                                                     of Issued Capital
Lazard Clients                                          2,059,584               33.43%

RIT Capital Partners PLC                                1,150,000               18.58%

Lehman Brothers International (Europe)                    444,323                7.21%

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, or that the shareholders publicly announced their
positions, the Directors are not in a position to state the exact size of any
Shareholdings in the Fund.


The Fund has entered the following arrangements:

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

USD          -234,700  Central Fd of Canada Ltd A Non voting     -1,284,527   -1,326,055    -0.58
USD           -61,700  Diamonds Trust Units Ser 1                -6,515,248   -6,524,775    -2.87
USD          -544,400  Nasdaq-100 Trust Ser I                   -21,378,640  -21,482,024    -9.45
USD           -85,800  SPDR Trust Ser 1                         -10,540,089  -10,556,832    -4.64
USD                    Select Sector SPDR (The) Trust Energy
             -210,900   Select Sector Fd                        -10,120,668  -11,325,330    -4.98
USD                    Select Sector SPDR (The) Trust
             -208,100   Technology Select Sector Fd              -4,313,732   -4,349,290    -1.91
USD          -291,700  Semiconductors Holdrs Trust              -10,743,182  -10,775,398    -4.74
USD                    Internet Holders Trust Certif Lk
             -142,700   Internet Bskt 31.12.39                   -8,601,454   -8,773,196    -3.86
                                                                ------------ ------------ --------
                                                                -73,497,540  -75,112,900   -33.03

As of the date of the report the short sales of securities represented -33.03%
of the total Net Asset Value.

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.


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


In accordance with the circular resolution of June 30th, 2005, the Board of
Directors of the Fund confirms the fiscal status of the Fund as OUT of the scope
of the European Directive 2003/48/EC on taxation of savings income in the form
of interest payments.


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

-- to allow the hedging of risks connected to the evolution of stock markets to
the fullest extent permitted by the Luxembourg regulations, and

-- to emphasize 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.

The Board of Directors of the Fund has resolved to amend and complete this
addendum mainly:

-- to allow, for hedging purposes, the selling of short indices, shares of
exchange-traded funds or Closed-end Funds, baskets of stocks and stocks, short
sales not exceeding 100% of the Fund's net assets.

The addendum is dated April 2002, replaces the one dated June 1999 and is part
of the Placing Memorandum dated July 2nd, 1991 and may not be distributed
without such Placing Memorandum.

a d v e r t i s e m e n t