This excerpt taken from the EFA DEF 14A filed May 24, 2005.
Fund Expenses and Performance of the Fund and BGFA
The Board reviewed statistical information regarding the expense ratio components, contractual advisory fees, actual advisory fees, and actual total expenses of the Fund in comparison with the same information for other funds registered under the 1940 Act objectively determined solely by Lipper Inc. (Lipper), an independent provider of investment company data, as the Funds applicable peer group (the Lipper Peer Group). The Lipper Peer Group included retail no-load or institutional pure index funds with differing investment objective classifications (e.g., regional index funds, funds that hold American Depositary Receipts rather than portfolio securities traded on foreign exchanges) and other attributes (e.g., all-inclusive management fees, at cost service providers) as well as other exchange-traded funds, including exchange-traded funds organized as unit investment trusts rather than as managed investment companies like the Fund. In addition, the Board reviewed statistical information regarding the performance of the Fund for the most recent quarter, and the one-, three- and five-year periods, ended March 31, 2005 and a comparison of the Funds performance to that of the funds in the Lipper Peer Group. In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to prepare this information. The Board noted that the funds in the Lipper Peer Group did not include a Singapore index fund or any other single-country index fund and, therefore, the statistical information did not provide meaningful direct comparisons. The Board noted that the Fund generally tracked its underlying index over the periods reflected. The Board also discussed that the advisory fee for the Fund for the most recent fiscal year was the highest of the advisory fees of the funds in the Lipper Peer Group, and that the Funds actual total expenses equaled the highest actual total expenses of the funds in the Lipper Peer Group, but noted that many of the funds in the Lipper Peer Group had either dissimilar fee structures or had substantial fee waivers and significantly larger asset bases, as well as differing investment objective classifications and other attributes (as discussed above), and therefore did not provide meaningful direct comparisons. The Board also considered that, because the Funds investment objective is to seek investment results that correspond generally to the performance, before fees and expenses, of a single-country index, with limited investor demand, the Fund is likely not to achieve consistent asset levels that would result in lower fees under the Current Advisory Agreement. The Board considered, however, that under the Proposed Advisory Agreement, because the Funds investment advisory fee rates will be applied to the aggregate assets of the Fund and other series of the Company, the Fund would be charged lower fees by BGFA. The Board also noted that, although not included in the Lipper Peer Group, the other single-country series of the Company provided a meaningful direct comparison to the Fund and the investment advisory fee rate for the Fund under the Proposed Advisory Agreement, and that the investment advisory fee rate under the Proposed Advisory Agreement would be the same as the investment advisory fee rates for most of the other single-country series of the Company. Based on this review, the Board concluded that the expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the expense levels and performance of the funds in the Lipper Peer Group were satisfactory for the purposes of approving the Proposed Advisory Agreement.