nq093010eef.htm
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
_______________________________
 
Investment Company Act file number  811-04632
 
The European Equity Fund, Inc.
(Exact name of registrant as specified in charter)

345 Park Avenue
New York, NY  10154
(Address of principal executive offices)             (Zip code)
 

Paul Schubert
100 Plaza One
Jersey City, NJ 07311
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (201) 593-6408
Date of fiscal year end:  12/31
 
Date of reporting period: 9/30/10

ITEM 1.
SCHEDULE OF INVESTMENTS


THE EUROPEAN EQUITY FUND, INC.
SEPTEMBER 30, 2010 (unaudited)
 

 
 
SCHEDULE OF INVESTMENTS
 
Shares
 
Description
 
Value(a)
 
INVESTMENTS IN GERMAN
SECURITIES – 43.8%
     
   
COMMON STOCKS – 40.5%
 
   
AIRLINES – 3.8%
 
 
187,000
   
Deutsche Lufthansa*
 
$
3,441,862
   
   
AUTOMOBILES – 4.2%
 
 
60,000
   
Daimler*
   
3,804,795
   
   
CHEMICALS – 6.2%
 
 
21,000
   
Lanxess
   
1,151,962
   
 
11,000
   
Linde
   
1,433,527
   
 
16,000
   
Wacker Chemie
   
2,955,828
   
     
5,541,317
   
   
CONSTRUCTION
MATERIALS – 1.0%
 
 
18,000
   
HeidelbergCement
   
868,486
   
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 3.6%
 
 
240,000
   
Deutsche Telekom
   
3,287,225
   
   
ELECTRIC UTILITIES – 1.9%
 
 
57,000
   
E.ON
   
1,682,799
   
   
ELECTRICAL
EQUIPMENT – 2.0%
 
 
80,000
   
Tognum
   
1,773,824
   
   
INDUSTRIAL
CONGLOMERATES – 4.5%
 
 
22,000
   
Rheinmetall
   
1,456,348
   
 
25,000
   
Siemens
   
2,642,105
   
     
4,098,453
   
   
INSURANCE – 2.0%
 
 
16,000
   
Allianz
   
1,810,403
   
   
INTERNET SOFTWARE &
SERVICES – 2.0%
 
 
110,000
   
United Internet
   
1,780,649
   
   
PERSONAL PRODUCTS – 1.0%
 
 
15,000
   
Beiersdorf
   
919,260
   
   
PHARMACEUTICALS – 1.9%
 
 
24,000
   
Bayer
   
1,675,551
   
   
SOFTWARE – 4.2%
 
 
25,000
   
SAP
   
1,238,135
   
 
21,000
   
Software
   
2,539,533
   
     
3,777,668
   
 
 
 
Shares
 
Description
 
Value(a)
 
   
THRIFTS & MORTGAGE
FINANCE – 2.2%
 
 
88,000
   
Aareal Bank*
 
$
1,959,614
   
       
Total Common Stocks
(cost $31,006,173)
   
36,421,906
   
   
PREFERRED STOCKS – 3.3%
 
   
AUTOMOBILES – 1.3%
 
 
10,000
   
Volkswagen
(cost $951,062)
   
1,208,346
   
   
HOUSEHOLD PRODUCTS – 2.0%
 
 
34,000
   
Henkel & Co.
(cost $1,288,680)
   
1,828,420
   
       
Total Preferred Stocks
(cost $2,239,742)
   
3,036,766
   
       
Total Investments in German
Securities
(cost $33,245,915)
   
39,458,672
   
INVESTMENTS IN FRENCH
COMMON STOCKS – 17.5%
     
   
COMMERCIAL BANKS – 3.9%
 
 
60,000
   
Societe Generale
   
3,460,022
   
   
HEALTH CARE EQUIPMENT &
SUPPLIES – 2.3%
 
 
30,000
   
Essilor International
   
2,066,595
   
   
HOTELS, RESTAURANTS &
LEISURE – 2.0%
 
 
50,000
   
Accor
   
1,827,942
   
   
MULTI-UTILITIES – 2.4%
 
 
60,000
   
GDF Suez
   
2,150,537
   
   
OIL, GAS &
CONSUMABLE FUELS – 1.8%
 
 
32,000
   
Total
   
1,651,201
   
   
TEXTILES, APPAREL &
LUXURY GOODS – 5.1%
 
 
31,000
   
LVMH Moet Hennessy
Louis Vuitton
   
4,552,760
   
       
Total Investments in French
Common Stocks
(cost $15,378,700)
   
15,709,057
   


Shares
 
Description
 
Value(a)
 
INVESTMENTS IN SPANISH
COMMON STOCKS – 9.1%
     
   
COMMERCIAL BANKS – 4.3%
 
 
300,000
   
Banco Santander
 
$
3,815,032
   
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 4.1%
 
 
150,000
   
Telefonica
   
3,719,012
   
   
INDEPENDENT POWER
PRODUCERS & ENERGY
TRADERS – 0.7%
 
 
200,000
   
Iberdrola Renovables
   
665,525
   
       
Total Investments in Spanish
Common Stocks
(cost $5,782,232)
   
8,199,569
   
INVESTMENTS IN DUTCH
COMMON STOCKS – 7.9%
     
   
CHEMICALS – 2.1%
 
 
36,000
   
Koninklijke DSM
   
1,846,546
   
   
DIVERSIFIED FINANCIAL
SERVICES – 2.2%
 
 
195,000
   
ING Groep*
   
2,025,444
   
   
ENERGY EQUIPMENT &
SERVICES – 2.3%
 
 
110,000
   
SBM Offshore
   
2,086,932
   
   
FOOD PRODUCTS – 1.3%
 
 
40,000
   
Unilever
   
1,197,017
   
       
Total Investments in Dutch
Common Stocks
(cost $6,689,177)
   
7,155,939
   
INVESTMENTS IN SWISS
COMMON STOCKS – 6.6%
     
   
ELECTRICAL EQUIPMENT – 1.6%
 
 
70,000
   
ABB*
   
1,483,980
   
   
INSURANCE – 2.4%
 
 
9,000
   
Zurich Financial Services
   
2,121,711
   
   
METALS & MINING – 2.6%
 
 
120,000
   
Xstrata
   
2,302,751
   
       
Total Investments in Swiss
Common Stocks
(cost $5,114,254)
   
5,908,442
   
 
 
 
Shares
 
Description
 
Value(a)
 
INVESTMENTS IN BRITISH
COMMON STOCKS – 4.5%
 
   
COMMERCIAL BANKS – 3.5%
 
 
2,000,000
   
Lloyds Banking Group*
 
$
2,335,521
   
 
1,100,000
   
Royal Bank of Scotland*
   
818,173
   
     
3,153,694
   
   
COMMERCIAL SERVICES &
SUPPLIES – 1.0%
 
 
35,000
   
Aggreko
   
865,737
   
   
Total Investments in British
Common Stocks
(cost $3,417,161)
   
4,019,431
   
INVESTMENTS IN FINNISH
COMMON STOCKS – 3.8%
 
   
AUTO COMPONENTS – 1.7%
 
 
45,000
   
Nokian Renkaat
   
1,547,182
   
   
CONSTRUCTION &
ENGINEERING – 1.0%
 
 
38,000
   
Yit
   
901,953
   
   
MACHINERY – 1.1%
 
 
22,000
   
Metso
   
1,009,535
   
   
Total Investments in Finnish
Common Stocks
(cost $2,880,250)
   
3,458,670
   
INVESTMENTS IN DANISH
COMMON STOCKS – 2.4%
 
   
CHEMICALS – 1.1%
 
 
50,000
   
Christian Hansen Holding*
   
1,011,137
   
   
ELECTRICAL EQUIPMENT – 1.3%
 
 
30,000
   
Vestas Wind Systems*
   
1,132,034
   
   
Total Investments in Danish
Common Stocks
(cost $2,784,322)
   
2,143,171
   
INVESTMENTS IN ITALIAN
COMMON STOCKS – 2.0%
 
   
COMMERCIAL BANKS – 2.0%
 
 700,000
 
UniCredit
(cost $1,422,533)
   
1,789,521
   
 

Shares
 
Description
 
Value(a)
 
INVESTMENTS IN NORWEGIAN
COMMON STOCKS – 1.0%
 
   
FOOD PRODUCTS – 1.0%
 
 
1,000,000
   
Marine Harvest
(cost $817,928)
 
$
881,481
   
INVESTMENTS IN BELGIAN
COMMON STOCKS – 0.9%
 
   
DIVERSIFIED FINANCIAL
SERVICES – 0.9%
 
 
37,000
   
KBC Ancora*
(cost $917,201)
   
811,556
   
   
Total Investments in Common and
Preferred Stocks – 99.5%
(cost $78,449,673)**
   
89,535,509
   
   
Other Assets and Liabilities,
Net – 0.5%
   
444,463
   
   
NET ASSETS – 100.0%
 
$
89,979,972
   
 
 
For information on the Fund's policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual financial statements.
 
  *  Non-income producing security.
 
  **  The cost for federal income tax purposes was $79,031,380. At September 30, 2010, net unrealized appreciation for all securities based on tax cost was $10,504,129. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $16,486,438 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $5,982,309.
 
  (a)  Value stated in US dollars.
 
 

 
Fair Value Measurements
 
 
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
 
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund's investments.
 
Category
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Common Stocks and/or Other Equity Investments(b)
 
Germany
 
$
39,458,672
   
$
   
$
   
$
39,458,672
   
France
   
15,709,057
     
     
     
15,709,057
   
Spain
   
8,199,569
     
     
     
8,199,569
   
Netherlands
   
7,155,939
     
     
     
7,155,939
   
Switzerland
   
5,908,442
     
     
     
5,908,442
   
United Kingdom
   
4,019,431
     
     
     
4,019,431
   
Finland
   
3,458,670
     
     
     
3,458,670
   
Denmark
   
2,143,171
     
     
     
2,143,171
   
Italy
   
1,789,521
     
     
     
1,789,521
   
Norway
   
881,481
     
     
     
881,481
   
Belgium
   
811,556
     
     
     
811,556
   
Total
 
$
89,535,509
   
$
   
$
   
$
89,535,509
   
 
There have been no transfers in and out of Level 1 and Level 2 fair value measurements during the period ended September 30, 2010.
 
(b)  See Schedule of Investments for additional detailed categorizations.
 



ITEM 2.
CONTROLS AND PROCEDURES
   
 
(a)The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
   
 
(b)There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.
   
ITEM 3.
EXHIBITS
   
 
Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.



 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:
The European Equity Fund, Inc.
   
By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
November 23, 2010


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
November 23, 2010
   
   
   
By:
/s/Paul Schubert
Paul Schubert
Chief Financial Officer and Treasurer
   
Date:
November 23, 2010