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 811-5983

The New Germany 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

345 Park Avenue

New York, NY 10154-0004

(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 454-7190

Date of fiscal year end: 12/31

Date of reporting period: 03/31/08

 

ITEM 1. SCHEDULE OF INVESTMENTS

 

THE NEW GERMANY FUND
SCHEDULE OF INVESTMENTS — MARCH 31, 2008 (unaudited)

Shares   Description   Value(a)  
INVESTMENTS IN GERMAN
SECURITIES – 91.9%		      
    COMMON STOCKS – 83.2%  
    AEROSPACE &
DEFENSE – 1.3%		  
  109,084     MTU Aero Engines Holding   $ 4,620,065    
    AUTO COMPONENTS – 1.8%  
  54,448     ElringKlinger     6,099,182    
  9,245     Leoni     443,812    
      6,542,994    
    CAPITAL MARKETS – 0.9%  
  44,448     MPC Muenchmeyer Petersen
Capital		     3,142,926    
    CHEMICALS – 11.8%  
  76,166     K + S     25,000,265    
  177,760     Lanxess     7,157,208    
  50,000     Symrise*     1,295,139    
  46,364     Wacker Chemie†     9,526,906    
      42,979,518    
    COMMERCIAL BANKS – 0.9%  
  96,965     Aareal Bank†     3,173,355    
    COMPUTERS &
PERIPHERALS – 1.6%		  
  72,727     Wincor Nixdorf     5,838,037    
    CONSTRUCTION &
ENGINEERING – 6.2%		  
  74,341     Bauer     4,902,376    
  143,181     Bilfinger Berger     12,368,669    
  56,567     Hochtief     5,194,627    
      22,465,672    
    ELECTRICAL
EQUIPMENT – 13.3%		  
  145,447     Q-Cells*†     14,475,793    
  270,686     SGL Carbon*     17,143,086    
  206,957     Solarworld     9,885,955    
  304,800     Tognum*     6,703,173    
      48,208,007    
    HEALTHCARE PROVIDERS &
SERVICES – 2.8%		  
  89,693     Celesio     4,453,463    
  187,460     Rhoen Klinikum     5,571,038    
      10,024,501    

 

Shares   Description   Value(a)  
    HOUSEHOLD DURABLES – 0.5%  
  118,886     Loewe*   $ 1,989,614    
    INDUSTRIAL
CONGLOMERATES – 2.4%		  
  122,583     Rheinmetall     8,675,629    
    INSURANCE – 2.8%  
  33,938     AMB Generali Holding     5,807,575    
  80,805     Hannover Ruckversicherungs     4,224,531    
      10,032,106    
    INTERNET SOFTWARE &
SERVICES – 3.0%		  
  500,966     United Internet†     10,811,036    
    LIFE SCIENCES TOOLS &
SERVICES – 0.4%		  
  28,287     Gerresheimer*     1,427,355    
    MACHINERY – 8.5%  
  408,046     GEA Group*     13,761,062    
  92,116     Krones     7,540,303    
  298,963     Max Automation     1,973,862    
  52,714     Pfeiffer Vacuum Technology     4,866,674    
  20,000     Vossloh     2,829,674    
      30,971,575    
    METALS & MINING – 2.6%  
  54,645     Salzgitter     9,533,576    
    PERSONAL PRODUCTS – 1.9%  
  80,391     Beiersdorf†     6,782,915    
    PHARMACEUTICALS – 3.1%  
  157,563     Stada Arzneimittel     11,478,092    
    REAL ESTATE MANAGEMENT
& DEVELOPMENT – 4.1%		  
  96,965     Deutsche Euroshop     4,080,686    
  339,364     IVG Immobilien     9,521,222    
  323,204     RCM Beteiligungs*     1,274,205    
      14,876,113    
    SEMICONDUCTORS &
SEMICONDUCTOR
EQUIPMENT – 1.7%		  
  260,766     Kontron     4,207,153    
  300,255     Suess MicroTec*     1,987,146    
      6,194,299    
    SOFTWARE – 3.3%  
  157,563     Software     12,124,218    

 


6


THE NEW GERMANY FUND
SCHEDULE OF INVESTMENTS — MARCH 31, 2008 (unaudited) (continued)

Shares   Description   Value(a)  
    SPECIALTY RETAIL – 2.8%  
  64,645     Douglas Holdings†   $ 3,528,088    
  248,465     Praktiker Bau- und
Heimwerkermaerkte		     6,660,171    
      10,188,259    
    TEXTILE, APPAREL & LUXURY
GOODS – 2.0%		  
  112,318     Hugo Boss Ag-Ord     5,655,092    
  4,647     Puma†     1,794,812    
      7,449,904    
    THRIFTS & MORTGAGE
FINANCE – 0.6%		  
  29,095     Interhyp†     2,230,521    
    TRADING COMPANIES &
DISTRIBUTORS – 1.8%		  
  124,825     Kloeckner & Co.     6,405,364    
    TRANSPORTATION
INFRASTRUCTURE – 0.4%		  
  20,694     Hamburger Hafen und Logistik*     1,580,902    
    WIRELESS
TELECOMMUNICATIONS
SERVICES – 0.7%		  
  165,646     Freenet†     2,627,918    
        Total Common Stocks
(cost $178,902,584)		     302,374,471    
    PREFERRED STOCKS – 8.7%  
    HEALTHCARE EQUIPMENT
& SUPPLIES – 7.1%		  
  263,465     Fresenius     22,004,353    
  93,566     Sartorius     3,749,500    
      25,753,853    
    MEDIA – 1.6%  
  269,391     ProSieben Sat.1 Media     5,843,417    
        Total Preferred Stock
(cost $12,343,819)		     31,597,270    
        Total Investments in
German Securities
(cost $191,246,403)		     333,971,741    
INVESTMENTS IN DUTCH
COMMON STOCKS – 5.4%		      
    AEROSPACE & DEFENSE – 3.7%  
  569,645     EADS†     13,537,803    

 

Shares   Description   Value(a)  
    LIFE SCIENCES TOOLS &
SERVICES – 1.7%		  
  290,887     Qiagen*†   $ 6,033,354    
        Total Investments in Dutch
Common Stocks
(cost $13,494,796)		     19,571,157    
INVESTMENTS IN FRENCH
COMMON STOCKS – 0.2%		      
    IT SERVICES – 0.2%  
  32,325     Business & Decision*
(cost $826,247)		     870,063    
        Total Investments in Common
and Preferred Stocks – 97.5%
(cost $205,567,446)		     354,412,961    
SECURITIES LENDING
COLLATERAL – 13.3%		      
  48,351,433     Daily Assets Institutional Fund,
3.22%(b)(c)
(cost $48,351,433)		     48,351,433    
CASH EQUIVALENTS – 0.3%      
  1,004,411     Cash Management QP Trust, 2.84%(c)
(cost $1,004,411)		     1,004,411    
        Total Investments – 111.1%
(cost $254,923,290)		     403,768,805    
        Other Assets and Liabilities,
Net – (11.1%)		     (40,362,245 )  
        NET ASSETS—100.0%   $ 363,406,560    

 

*  Non-income producing securities.

†  All or a portion of these securities were on loan. The value of all securities loaned at March 31, 2008 amounted to $45,962,203 which is 12.6% of the net assets.

(a)  Values stated in US dollars.

(b)  Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

(c)  Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.


7


THE NEW GERMANY FUND MARCH 31, 2008 (unaudited)

The following is a summary of the inputs used as of March 31, 2008 in valuing the Fund's assets carried at fair value:

Valuation Inputs   Investments in
Securities at Value		  
Level 1 – Quoted Prices   $ 403,768,805    
Level 2 – Other Significant Observable Inputs     —    
Level 3 – Significant Unobservable Inputs     —    
Total   $ 403,768,805    

 

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective December 1, 2007, which governs the application of generally accepted accounting principles that require fair value measurements of the Fund's assets and liabilities. Fair value is an estimate of the price the Fund would receive upon selling a security in a timely transaction to an independent buyer in the principal or most advantageous market of the security. FAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels as follows:

• Level 1 – quoted prices in active markets for identical securities

• Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

For Level 1 inputs, the Fund uses unadjusted quoted prices in active markets for assets or liabilities with sufficient frequency and volume to provide pricing information as the most reliable evidence of fair value. The Fund's Level 2 valuation techniques include inputs other than quoted prices within Level 1 that are observable for an asset or liability, either directly or indirectly. Level 2 observable inputs may include quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active in which there are few transactions, the prices are not current, or price quotations vary substantially over time or among market participants. Inputs that are observable for the asset or liability in Level 2 include such factors as interest rates, yield curves, prepayment speeds, credit risk, and default rates for similar liabilities. For Level 3 valuation tec hniques, the Fund uses unobservable inputs that reflect assumptions market participants would be expected to use in pricing the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available and are developed based on the best information available under the circumstances. In developing unobservable inputs, market participant assumptions are used if they are reasonably available without undue cost and effort.

The Fund may record changes to valuations based on the amount that might reasonably be expected to receive for a security upon its current sale consistent with the fair value measurement objective. Each determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to the type of the security, the existence of any contractual restrictions on the security's disposition, the price and extent of public trading in similar securities of the issue or of comparable companies, quotations or evaluated prices from broker-dealers and/or pricing services, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company's financial statements, an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold, and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination, and the movement of the market in which the security is normally traded. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value determined upon sale of those investments.


8

 

 

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 New Germany Fund, Inc.

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

May 14, 2008

 

 

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.

 

Registrant:

The New Germany Fund, Inc.

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

May 14, 2008

 

 

By:

/s/Paul Schubert

 

Paul Schubert

Chief Financial Officer and Treasurer

 

Date:                                        May 14, 2008