HARDING LOEVNER FUNDS INC, 485APOS, 1999-11-19

HARDING LOEVNER FUNDS INC
485APOS, 1999-11-19

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<PAGE>

As filed with the Securities and Exchange Commission
on November 19, 1999
File Nos. 333-09341, 811-7739
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ______ [_]

Post-Effective Amendment No. 5 [X]
-----

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 7
--- [X]
- --------------------------------------------------------------------------------

HARDING, LOEVNER FUNDS, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

200 Clarendon Street, 18/th/ Floor
Boston, Massachusetts 02116
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: 1-877-435-8105

Susan C. Mosher, Esq.
Investors Bank & Trust Company
200 Clarendon Street, 18/th/ Floor
Boston, Massachusetts 02116
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)

With a copy to:
Jack Murphy, Esq.
Dechert Price & Rhoads
1775 Eye Street, N.W.,
Washington, D.C. 20006-2401
(legal counsel for the Fund)
- --------------------------------------------------------------------------------

Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.

It is proposed that this filing will become effective:

/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/ / On (date) pursuant to paragraph (a) (1)
/ / 75 days after filing, pursuant to paragraph (a) (2)
/ / on (date) pursuant to paragraph (a) (2) of rule 485.
<PAGE>

HARDING, LOEVNER FUNDS, INC.

[LOGO]

HARDING . LOEVNER

Prospectus

January __, 2000

Portfolios managed by
Harding, Loevner Management, L.P.

International Equity Portfolio

Global Equity Portfolio

Multi-Asset Global Portfolio

Emerging Markets Portfolio

P.O. Box 9130
Boston, MA 02117-9130
Telephone: 877-435-8105
Fax: 617-927-8400

As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is complete, nor has it judged
the investment merit of the securities offered. It is a criminal offense to
state otherwise.
<PAGE>

<TABLE>
Table Of Contents
<S> <C>
International Equity Portfolio 2

Global Equity Portfolio 4

Multi-Asset Global Portfolio 7

Emerging Markets Portfolio 9

Investment Strategies and Risks 12

Management of the Fund 17

Shareholder Information 18

Distribution of Fund Shares 22

Financial Highlights 22

Availability of Additional Information about the Fund 23
</TABLE>

1
<PAGE>

International Equity Portfolio

. Investment Goal
The International Equity Portfolio seeks long-term capital appreciation
through investments in equity securities of companies based outside the United
States.

. Principal Investment Strategy
The International Equity Portfolio comprises equity securities of companies
based outside the U.S. in developed markets as well as established companies
in emerging markets. Harding, Loevner Management, L.P. ("Harding Loevner")
seeks to compose a portfolio of companies it deems to be well managed,
financially strong, growing and competitive. These fundamental attributes are
the foundation of Harding Loevner's stock selection criteria. Harding Loevner
believes that insights gained through the careful study of individual
companies are more valuable than forecasts of aggregate stock market
direction. The International Equity Portfolio invests in the common stock of
companies based in at least three countries and may also invest in short-term
or other debt securities, including debt securities rated below investment
grade. Portfolio turnover has averaged around 30% since inception.

. Principal Risks
As with any mutual fund, you could lose money on your investment in the
International Equity Portfolio. Your investment is subject to the following
principal risks:

. Market Risk: Investments in the International Equity Portfolio may lose
value due to a downturn in the stock market as a whole.

. Foreign Investment Risk: Securities issued by foreign entities involve
added risks not associated with U.S. investments. These risks include
the possibility of changes in foreign currency exchange rates,
additional taxation and political, economic, social, or diplomatic
instability. There may also be less publicly available information
about a foreign issuer.

. Emerging Market Risk: Emerging market securities involve unique risks,
such as exposure to economies less diverse and mature than that of the
U.S. or more established foreign markets. Economic or political
instability may cause larger price changes in emerging market
securities than other foreign securities.

. Debt Securities Risk: Debt securities may lose value due to unfavorable
fluctuations in the level of interest rates or due to a decline in the
creditworthiness of the issuer.

. High Risk/High Yield Securities: Investments in high risk/high yield
securities, such as debt securities rated below investment grade, carry
the risk that the securities may default on the payment of principal
and interest.

. Futures, Options and Forward Contracts: The use of futures, options and
forward contracts may expose the Portfolio to additional investment
risks and transaction costs.

. Portfolio Performance
The bar chart and table below show how the International Equity Portfolio (the
"Portfolio") has performed in the past and provide an indication of the risks
of investing in the Portfolio. Both assume that all dividends and
distributions will be reinvested in the Portfolio. How the Portfolio has
performed in the past does not necessarily show how it will perform in the
future.

2
<PAGE>

International Equity Portfolio

[PLOT POINTS TO COME]

The best calendar quarter return during the period shown above was ____% in
the _____ quarter of ____; the worst was ____% in the _____ quarter of ____.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
One Year Five Years Since Portfolio's Inception+
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
International Equity Portfolio
- ----------------------------------------------------------------------------------------------------------
MSCI All Country World ex-U.S. Index
- ----------------------------------------------------------------------------------------------------------
Lipper International Equity Fund Index
- ----------------------------------------------------------------------------------------------------------
</TABLE>

+Includes predecessor fund performance (Inception Date: May 11, 1994). On
October 31, 1996, the Portfolio received the net assets of the AMT Capital Fund,
Inc. - Harding Loevner International Equity Portfolio pursuant to an agreement
and plan of reorganization dated October 14, 1996.

In the table above, the Portfolio's average annual total return for the periods
shown is compared to the MSCI All Country World ex-U.S. Index, an index of
equity securities issued outside the United States compiled by Morgan Stanley
Capital International and calculated by applying full market capitalization
weights (price multiplied by the number of shares outstanding) for the
constituent securities, and the Lipper International Equity Fund Index, an
index of international equity mutual funds compiled by Lipper Analytical
Services, Inc.

.Portfolio Fees and Expenses:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):
There are no fees or sales loads charged to your account when you buy or sell
Portfolio shares.

3
<PAGE>

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

---------------------------------------
Management Fee 0.75%
---------------------------------------
Distribution (12b-1) Fee None
---------------------------------------
Other Expenses 0.29%
----
---------------------------------------

Total Annual Fund
Operating Expenses 1.04%*
====
---------------------------------------

*Until further notice to shareholders, Harding Loevner has voluntarily agreed
to cap the total annual fund operating expenses at 1.00% (on an annualized
basis) of the average daily net assets of the Portfolio.

.Example
This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Portfolio for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
the Portfolio's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

1 year 3 years 5 years 10 years

Global Equity Portfolio

.Investment Goal
The Global Equity Portfolio seeks long-term capital appreciation through
investments in equity securities of companies based both inside and outside
the United States.

.Principal Investment Strategy
The Global Equity Portfolio comprises equity securities of companies based in
the U.S. and other developed markets, as well as established companies in
emerging markets. Harding Loevner seeks to compose a portfolio of companies
it deems to be well managed, financially strong, growing and competitive.
These fundamental attributes are the foundation of Harding Loevner's stock
selection criteria. Harding Loevner believes that insights gained through the
careful study of individual companies are more valuable than forecasts of
aggregate stock market direction. The Global Equity Portfolio invests in the
common stock of companies based in at least three countries (one of which may
be the United States) and may also invest in short-term or other debt
securities, including debt securities rated below investment grade. Portfolio
turnover has averaged around 30% since inception.

.Principal Risks
As with any mutual fund, you could lose money on your investment in the
Global Equity Portfolio. Your investment is subject to the following
principal risks:

. Market Risk: Investments in the Global Equity Portfolio may lose value
due to a downturn in the stock market as a whole.

4
<PAGE>

. Debt Securities Risk: Debt securities may lose value due to
unfavorable fluctuations in the level of interest rates or due to a
decline in the creditworthiness of the issuer.

. High Risk/High Yield Securities: Investments in high risk/high yield
securities, such as debt securities rated below investment grade,
carry the risk that the securities may default on the payment of
principal and interest.

. Futures, Options and Forward Contracts: The use of futures, options
and forward contracts may expose the Portfolio to additional
investment risks and transaction costs.

. Portfolio Performance
The bar chart and table below show how the Global Equity Portfolio (the
"Portfolio") has performed in the past and provide an indication of the risks
of investing in the Portfolio. Both assume that all dividends and
distributions will be reinvested in the Portfolio. How the Portfolio has
performed in the past does not necessarily show how it will perform in the
future.

Global Equity Portfolio

[PLOT POINTS TO COME]

The best calendar quarter return during the period shown above was ____% in the
_____ quarter of ____; the worst was ____% in the _____ quarter of ____.

5
<PAGE>

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
One Year Since Portfolio's Inception+
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Global Equity Portfolio
- ------------------------------------------------------------------------------------------------------
MSCI All Country World Index
- ------------------------------------------------------------------------------------------------------
Lipper Global Equity Fund Index
- ------------------------------------------------------------------------------------------------------
</TABLE>

+The Portfolio commenced operations on December 1, 1996, following a tax-free
merger with Harding Loevner Global Equity LP.

In the table above, the Portfolio's average annual total return for the periods
shown is compared to the MSCI All Country World Index, an index of global
equity securities compiled by Morgan Stanley Capital International and
calculated by applying full market capitalization weights (price multiplied by
the number of shares outstanding) for the constituent securities, and the
Lipper Global Equity Fund Index, an index of global equity mutual funds
compiled by Lipper Analytical Services, Inc.

.Portfolio Fees and Expenses:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):
There are no fees or sales loads charged to your account when you buy or sell
Portfolio shares.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

----------------------------------------------------------
Management Fee 1.00%
----------------------------------------------------------
Distribution (12b-1) Fee None
----------------------------------------------------------
Other Expenses 0.36%
----
----------------------------------------------------------

Total Annual Fund 1.36%*
Operating Expenses ====
----------------------------------------------------------

*Until further notice to shareholders, Harding Loevner has voluntarily agreed to
cap the total annual fund operating expenses at 1.25% (on an annualized basis)
of the average daily net assets of the Portfolio.

.Example
This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

1 year 3 years 5 years 10 years

6
<PAGE>

Multi-Asset Global Portfolio

.Investment Goal
The Multi-Asset Global Portfolio seeks long-term capital appreciation and a
growing stream of current income through investments in equity and debt
securities of companies based both inside and outside the United States and
debt securities of the United States and foreign governments and their
agencies and instrumentalities.

.Principal Investment Strategy
The Multi-Asset Global Portfolio combines global fixed income and equity
securities in an attempt to achieve higher current income and greater
stability of principal than may be achieved with equity securities alone.
Harding Loevner seeks to compose a portfolio of companies it deems to be well
managed, financially strong, growing and competitive. These fundamental
attributes are the foundation of Harding Loevner's stock selection criteria.
Harding Loevner believes that insights gained through the careful study of
individual companies are more valuable than forecasts of aggregate stock
market direction. The Multi-Asset Global Portfolio invests in equity and debt
securities of companies and debt securities of governments based in at least
three countries (one of which may be the United States), including debt
securities rated below investment grade. Portfolio turnover has averaged
around 30% since inception.

.Principal Risks
As with any mutual fund, you could lose money on your investment in the Multi-
Asset Global Portfolio. Your investment is subject to the following principal
risks:

. Market Risk: Investments in the Multi-Asset Global Portfolio may lose
value due to a downturn in the stock market as a whole.

. Foreign Investment Risk: Securities issued by foreign entities involve
added risks not associated with U.S. investments. These risks include
the possibility of changes in foreign currency exchange rates, additional
taxation and political, economic, social, or diplomatic instability.
There may also be less publicly available information about a foreign
issuer.

. Debt Securities Risk: Debt securities may lose value due to unfavorable
fluctuations in the level of interest rates or due to a decline in the
creditworthiness of the issuer.

. Futures, Options and Forward Contracts: The use of futures, options and
forward contracts may expose the Portfolio to additional investment risks
and transaction costs.

.Portfolio Performance
The bar chart and table below show how the Multi-Asset Global Portfolio (the
"Portfolio") has performed in the past and provide an indication of the risks
of investing in the Portfolio. Both assume that all dividends and

7
<PAGE>

distributions will be reinvested in the Portfolio. How the Portfolio has
performed in the past does not necessarily show how it will perform in the
future.

Multi-Asset Global Portfolio

[PLOTS POINTS TO COME]

The best calendar quarter return during the period shown above was ____% in
the _____ quarter of ____; the worst was ____% in the _____ quarter of ____.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
One Year Since Portfolio's Inception+
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Multi-Asset Global Portfolio
- ------------------------------------------------------------------------------------------------------
Old Constructed Global Balanced Index
- ------------------------------------------------------------------------------------------------------
New Constructed Global Balanced Index
- ------------------------------------------------------------------------------------------------------
Lipper Global Flexible Fund Index
- ------------------------------------------------------------------------------------------------------
</TABLE>

+The Portfolio commenced operations on November 1, 1996.

In the table above, the Portfolio's average annual total return for the periods
shown is compared to (i) the Old Constructed Global Balanced Index, which is
comprised of the weighted sum of 60% Financial Times World Equity Index, an
index of global equity mutual funds compiled by the Financial Times, and 40%
Salomon World Government Bond Index, an index of government debt securities
compiled by Salomon Brothers, Inc., (ii) the New Constructed Global Balanced
Index, which is comprised of the weighted sum of 60% MSCI All Country World
Index, an index of global equity securities compiled by Morgan Stanley Capital
International and calculated by applying full market capitalization weights
(price multiplied by the number of shares outstanding) for the constituent
securities, and 40% Salomon World Government Bond Index, and (iii) the Lipper
Global Flexible Fund Index, an index of multi-asset global mutual funds
compiled by Lipper Analytical Services, Inc. Harding Loevner no longer uses
the Old Constructed Global Balanced Index as a benchmark for the Portfolio.

.Portfolio Fees and Expenses:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):
There are no fees or sales loads charged to your account when you buy or sell
Portfolio shares.

8
<PAGE>

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

-------------------------------------------------------------------
Management Fee 1.00%
-------------------------------------------------------------------
Distribution (12b-1) Fee None
-------------------------------------------------------------------
Other Expenses 0.96%
----
-------------------------------------------------------------------

Total Annual Fund Operating Expenses 1.96%*
====
-------------------------------------------------------------------

.Example
This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

1 year 3 years 5 years 10 years

Emerging Markets Portfolio

.Investment Goal
The Emerging Markets Portfolio seeks long-term capital appreciation through
investments in equity securities of companies based in developing markets
outside the United States.

.Principal Investment Strategy
The Emerging Markets Portfolio comprises equity securities of companies whose
primary activities are located in emerging, or recently emerged, markets.
Harding Loevner seeks to compose a portfolio of companies it deems to be well
managed, financially strong, growing and competitive. These fundamental
attributes are the foundation of Harding Loevner's stock selection criteria.
Harding Loevner believes that insights gained through the careful study of
individual companies are more valuable than forecasts of aggregate stock market
direction. Emerging markets offer investment opportunities that may benefit
from long-term trends in demographics, deregulation, outsourcing and relocation
in developing countries. The Emerging Markets Portfolio invests in the common
stock of companies based in at least three emerging markets countries and may
also invest in short-term or other debt securities, including debt securities
rated below investment grade. Portfolio turnover has averaged around 40% since
inception.

.Principal Risks
As with any mutual fund, you could lose money on your investment in the
Emerging Markets Portfolio. Your investment is subject to the following
principal risks:

9
<PAGE>

. Market Risk: Investments in the Emerging Markets Portfolio may lose value
due to a downturn in the stock market as a whole.

. Foreign Investment Risk: Securities issued by foreign entities involve
added risks not associated with U.S. investments. These risks include
the possibility of changes in foreign currency exchange rates, additional
taxation and political, economic, social, or diplomatic instability.
There may also be less publicly available information about a foreign
issuer.

. Debt Securities Risk: Debt securities may lose value due to unfavorable
fluctuations in the level of interest rates or due to a decline in the
creditworthiness of the issuer.

. Futures, Options and Forward Contracts: The use of futures, options and
forward contracts may expose the Portfolio to additional investment risks
and transaction costs.

.Portfolio Performance
The bar chart and table below show how the Emerging Markets Portfolio (the
"Portfolio") has performed in the past and provide an indication of the risks
of investing in the Portfolio. Both assume that all dividends and
distributions will be reinvested in the Portfolio. How the Portfolio has
performed in the past does not necessarily show how it will perform in the
future.

Emerging Markets Portfolio

[PLOT POINTS TO COME]

The best calendar quarter return during the period was ____% in the _____
quarter of ____; the worst was ____% in the _____ quarter of ____.

10
<PAGE>

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
One Year Since Portfolio's Inception+
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
Emerging Markets Portfolio
- -------------------------------------------------------------------------------------------------------
MSCI Emerging Markets Free Index
- -------------------------------------------------------------------------------------------------------
Lipper Emerging Markets Fund Index
- -------------------------------------------------------------------------------------------------------
</TABLE>

+The Portfolio commenced operations on November 9, 1998.

In the table, the Portfolio's average annual total return for the periods shown
is compared to the MSCI Emerging Markets Free Index, an index of equity
securities spanning 28 emerging markets compiled by Morgan Stanley Capital
International and calculated by applying full market capitalization weights
(price multiplied by the number of shares outstanding) for the constituent
securities, and the Lipper Emerging Markets Fund Index, an index of emerging
market equity mutual funds compiled by Lipper Analytical Services, Inc.

.Portfolio Fees and Expenses:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):
There are no fees or sales loads charged to your account when you buy or sell
Portfolio shares.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

--------------------------------------------------------
Management Fee 1.25%
--------------------------------------------------------
Distribution (12b-1) Fee None
--------------------------------------------------------
Other Expenses 0.75%
----
--------------------------------------------------------

Total Annual Fund 2.00%*
Operating Expenses ====
--------------------------------------------------------

*Until further notice to shareholders, Harding Loevner has voluntarily agreed to
cap the total annual fund operating expenses at 1.75% (on an annualized basis)
of the average daily net assets of the Portfolio.

.Example
This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

1 year 3 years 5 years 10 years

11
<PAGE>

Investment Strategies and Risks

Harding, Loevner Funds, Inc. (the "Fund") is a no-load, open-end management
investment company that currently has four separate diversified portfolios
(each, a "Portfolio"), each of which has distinct investment objectives and
policies. There is no assurance that a Portfolio will achieve its investment
objective.

Investment Process

Harding Loevner's investment process for each of the Portfolios is designed to
identify quality companies as a first step before progressing to test whether
the share price offers an investment opportunity. Harding Loevner reviews a
broad universe of companies to determine whether they meet their four
fundamental business criteria. Companies must be determined by Harding Loevner
to (1) be well-managed, (2) be financially strong, (3) be experiencing growth
and (4) possess competitive advantages.

Harding Loevner devotes incrementally more resources as it goes deeper into the
process of researching promising candidates. Harding Loevner's proprietary "QQ"
is a system for evaluating 10 competitive and financial company characteristics.
This framework facilitates comparisons across geographic and industry sectors
and, together with management interviews, provides insight into a company's
prospects and risk profile.

Once convinced of the quality of a company, Harding Loevner raises the intensity
of monitoring and introduces valuation tests, which serve as aids to judgment
rather than rigid decision-making tools. Harding Loevner's investment
professionals, all experienced analysts with an average of 18 years of global
industrial sector responsibilities, participate as a team in portfolio
decisions.

Harding Loevner seeks to construct a model portfolio comprised of superior
companies that are under-priced relative to their estimate of the companies'
intrinsic value. Harding Loevner attempts to manage portfolio risk through
prudent diversification across dimensions of geography, industry sector,
currency, and size. A Portfolio usually holds 35-75 investments in 15-25
markets. An investment is sold, in whole or part, when fundamentals deteriorate
or the portfolio can be improved.

The investment objective, policies and risks of each Portfolio are detailed
below. Except as otherwise indicated, the Fund's Board of Directors may change
the investment policies at any time to the extent that such changes are
consistent with the investment objective of the applicable Portfolio. However,
each Portfolio's investment objective is fundamental and may not be changed
without a majority vote of the Portfolio's outstanding shares, which is defined
as the lesser of (a) 67% of the shares of the applicable Portfolio present or
represented if the holders of more than 50% of the shares are present or
represented at the shareholders' meeting, or (b) more than 50% of the shares of
the applicable Portfolio (a "majority vote").

International Equity Portfolio

The International Equity Portfolio's investment objective is to seek long-term
capital appreciation through investments in equity securities of companies based
outside the United States.

The Portfolio invests at least 65% of its total assets in common stocks,
securities convertible into such common stocks (including American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs")), closed-end
investment companies, and rights and warrants issued by companies that are based
outside the United States. The Portfolio may invest in forward foreign currency
exchange contracts, equity derivative securities such as options on common
stocks and options, futures and options on futures on foreign common stock
indices. The Portfolio also may invest in securities of U.S. companies which
derive, or are expected to derive, a significant portion of their revenues from
their foreign operations, although under normal circumstances not more than 15%
of the Portfolio's total assets

12
<PAGE>

will be invested in securities of U.S. companies. The Portfolio also may invest
up to 35% of its total assets in debt securities of domestic and foreign
issuers, including such instruments as corporate bonds, debentures, notes,
commercial paper, short-term notes, medium-term notes, variable rate notes and
other similar corporate debt instruments.

The Portfolio may invest up to 20% of its total assets in convertible securities
and debt securities which are rated below investment-grade, that is, rated below
Baa by Moody's Investors Service, Inc. ("Moody's") or below BBB by Standard &
Poor's Corporation ("Standard & Poor's," or "S&P"), "junk bonds" and in unrated
securities judged to be of equivalent quality as determined by Harding Loevner.

The Portfolio will invest broadly in the available universe of common stocks of
companies domiciled in at least three countries in the following groups: (1)
Europe, including Austria, Belgium, Denmark, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, and the
United Kingdom; (2) the Pacific Rim, including Australia, Hong Kong, Japan,
Malaysia, New Zealand, and Singapore; (3) Canada; and (4) countries with
"emerging markets," generally considered under the Morgan Stanley Capital
International definition to include all markets except Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland, the United Kingdom, and the United States. At least 65% of total
assets will be denominated in at least three currencies other than the U.S.
dollar. For purposes of compliance with this restriction, ADRs will be
considered to be denominated in the currency of the country where the securities
underlying the ADRs are traded.

Harding Loevner does not hedge foreign currency exposure, except on rare
occasions when it has a strong view on the prospects for a particular currency
or when hedging is desirable to improve portfolio diversification. Currency
hedging is done through the use of forward contracts or options.

Portfolio Turnover. Portfolio turnover will depend on factors such as
- ------------------
volatility in the markets that the Portfolio invests in, or the variability of
cash flows into and out of the Portfolio. Portfolio turnover has averaged
around 30% since inception.

Global Equity Portfolio

The Global Equity Portfolio's investment objective is to seek long-term capital
appreciation through investments in equity securities of companies based both
inside and outside the United States.

The Portfolio invests at least 65% of its total assets in common stocks,
securities convertible into such common stocks (including ADRs and EDRs),
closed-end investment companies, and rights and warrants issued by companies
that are based both inside and outside the United States. The Portfolio may
invest in forward foreign currency exchange contracts, equity derivative
securities such as options on common stocks and options, futures and options on
futures on foreign common stock indices. The Portfolio also may invest up to
35% of its total assets in debt securities of domestic and foreign issuers,
including such instruments as corporate bonds, debentures, notes, commercial
paper, short-term notes, medium-term notes, variable rate notes and other
similar corporate debt instruments.

The Portfolio may invest up to 20% of its total assets in convertible securities
and debt securities that are rated below investment-grade.

13
<PAGE>

International definition to include all markets except Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland, the United Kingdom, and the United States. At least 65% of total
assets will be denominated in at least three currencies including the U.S.
dollar. For purposes of compliance with this restriction, ADRs will be
considered to be denominated in the currency of the country where the securities
underlying the ADRs are traded.

Multi-Asset Global Portfolio

The Multi-Asset Global Portfolio seeks long-term capital appreciation and a
growing stream of current income through investments in equity and debt
securities of companies based both inside and outside the United States and debt
securities of the United States and foreign governments and their agencies and
instrumentalities.

The Multi-Asset Global Portfolio invests in common stocks, securities
convertible into such common stocks (including ADRs and EDRs), closed-end
investment companies, debt securities and rights and warrants issued by
companies that are based both inside and outside the United States, and debt
securities of the United States and foreign governments and their agencies and
instrumentalities. The Portfolio may invest in forward foreign currency exchange
contracts, equity derivative securities such as options on common stocks and
options, futures and options on futures on foreign common stock indices. The
Portfolio's investments in debt securities may include such instruments as
corporate bonds, debentures, notes, commercial paper, short-term notes, medium-
term notes, variable rate notes and other similar corporate debt instruments.

The Portfolio may invest up to 20% of its total assets in convertible securities
and debt securities that are rated below investment-grade.

The Portfolio will invest broadly in the available universe of equity and debt
securities of companies and debt securities of governments and their agencies
and instrumentalities domiciled in at least three countries, including the
United States. While the Portfolio will generally emphasize equity investments,
the allocation of the Portfolio among equity, fixed income and cash equivalent
investments may range widely, and will vary over time according to Harding
Loevner's current assessment of the relative risk and potential return of
alternative investments. At least 65% of total assets will be denominated in at
least three currencies including the U.S. dollar. For purposes of compliance
with this restriction, ADRs will be considered to be denominated in the currency
of the country where the securities underlying the ADRs are traded.

14
<PAGE>

Emerging Markets Portfolio

The Emerging Market Portfolio's investment objective is to seek long-term
capital appreciation through investments in equity securities of companies based
in developing markets outside the United States.

The Portfolio invests at least 65% of its total assets in common stocks,
securities convertible into such common stocks (including ADRs and EDRs),
closed-end investment companies, and rights and warrants issued by companies
that are based in developing markets outside the United States. The Portfolio
may invest in forward foreign currency exchange contracts, equity derivative
securities such as options on common stocks and options, futures and options on
futures on foreign common stock indices. The Portfolio also may invest in
securities of U.S. companies which derive, or are expected to derive, a
significant portion of their revenues from their foreign operations, although
under normal circumstances not more than 15% of the Portfolio's total assets
will be invested in securities of U.S. companies. The Portfolio also may invest
up to 35% of its total assets in debt securities of domestic and foreign
issuers, including such instruments as corporate bonds, debentures, notes,
commercial paper, short-term notes, medium-term notes, variable rate notes and
other similar corporate debt instruments.

The Portfolio may invest up to 20% of its total assets in convertible
securities and debt securities that are rated below investment-grade.

The Portfolio will invest broadly in the available universe of common stocks of
companies domiciled in one of at least three countries with "emerging markets,"
generally considered under the Morgan Stanley Capital International definition
to include all markets except Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and
the United States. At least 65% of total assets will be denominated in at least
three currencies other than the U.S. dollar. For purposes of compliance with
this restriction, ADRs will be considered to be denominated in the currency of
the country where the securities underlying the ADRs are traded.

Risks Associated With the Fund's Investment Policies and Techniques

The principal risks of investing in a Portfolio and the circumstances reasonably
likely to cause the value of your investment to decline are described below. The
share price of a Portfolio will change daily based on changes in the value of
the securities that a Portfolio holds. Please note that there are other
circumstances that are not described here which could cause the value of your
investment to decline, and which could prevent the Portfolio from achieving its
investment objective.

Foreign Investments. Securities issued by foreign governments, foreign
- -------------------
corporations, international agencies and obligations of foreign banks involve
risks not associated with securities issued by U.S. entities. Changes in
foreign currency exchange rates may affect the value of investments of a
Portfolio. With respect to certain foreign countries, there is the possibility
of expropriation of assets, confiscatory taxation and political or social
instability or diplomatic developments that could affect investment in those
countries. There may be less publicly available information about a foreign
financial instrument than about a United States instrument and foreign entities
may not be subject to accounting, auditing and financial reporting standards and
requirements comparable to those of United

15
<PAGE>

States entities. A Portfolio could encounter difficulties in obtaining or
enforcing a judgment against the issuer in certain foreign countries. In
addition, certain foreign investments may be subject to foreign withholding or
other taxes, although the Portfolio will seek to minimize such withholding taxes
whenever practical. Investors may be able to deduct such taxes in computing
their taxable income or to use such amounts as credits against their United
States income taxes if more than 50% of the Portfolio's total assets at the
close of any taxable year consist of stock or securities of foreign
corporations. Ownership of unsponsored ADRs may not entitle the Portfolio to
financial or other reports from the issuer to which it would be entitled as the
owner of sponsored ADRs. See also "Shareholder Information-Tax Considerations"
below.

Emerging Markets Securities. The risks of investing in foreign securities may
- ---------------------------
be intensified in the case of investments in issuers domiciled or doing
substantial business in emerging markets or countries with limited or developing
capital markets. Security prices and currency valuations in emerging markets
can be significantly more volatile than in the more developed nations of the
world, reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets may have
relatively unstable governments, present the risk of sudden adverse government
action and even nationalization of businesses, restrictions on foreign
ownership, or prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries. The economies of
countries with emerging markets may be predominantly based on only a few
industries, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme debt burdens or volatile inflation
rates. Local securities markets may trade a small number of securities and may
be unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible at
times. Transaction settlement and dividend collection procedures may be less
reliable in emerging markets than in developed markets. Securities of issuers
located in countries with emerging markets may have limited marketability and
may be subject to more abrupt or erratic price movements.

Derivatives and Hedging. The Portfolios may engage in hedging and other
- -----------------------
strategic transactions and certain other investment practices that may entail
certain risks.

Derivatives involve special risks, including possible default by the other party
to the transaction, illiquidity and, to the extent Harding Loevner's view as to
certain market movements is incorrect, the risk that the use of Derivatives
could result in greater losses than if they had not been used. Use of put and
call options could result in losses to a Portfolio, force the purchase or sale
of portfolio securities at inopportune times or for prices higher or lower than
current market values or cause the Portfolio to hold a security it might
otherwise sell. The use of options and futures transactions entails certain
special risks. In particular, the variable degree of correlation between price
movements of futures contracts and price movements in the related portfolio
position of a Portfolio could create the possibility that losses on the
Derivative will be greater than gains in the value of the Portfolio's position.
The loss from investing in futures transactions that are unhedged or uncovered,
is potentially unlimited. In addition, futures and options markets could be
illiquid in some circumstances and certain over-the-counter options could have
no markets. A Portfolio might not be able to close out certain positions
without incurring substantial losses. To the extent a Portfolio utilizes
futures and options transactions for hedging, such transactions should tend to
minimize the risk of loss due to a decline in the value of the hedged position
and, at the same time, limit any potential gain to the Portfolio that might
result from an increase in value of the position. Finally, the daily variation
margin requirements for futures contracts create a greater ongoing potential
financial risk than would the purchase of options, in which case the exposure is
limited to the cost of the initial premium and transaction costs. Losses
resulting from the use of Derivatives will reduce the Portfolio's net asset
value, and possibly income, and the losses may be greater than if Derivatives
had not been used. Additional information regarding the risks and special
considerations associated with Derivatives appears in the Statement of
Additional Information (the "SAI"), available by following the instructions at
the back of this Prospectus.

High Yield/High Risk Securities. Each Portfolio may invest up to 20% of its
- -------------------------------
total assets in convertible securities and debt securities rated lower than Baa
by Moody's or BBB by S&P, or of equivalent quality as determined by Harding

16
<PAGE>

Loevner (commonly referred to as "junk bonds"). The lower the ratings of such
debt securities, the greater their risks render them like equity securities.
Each Portfolio may invest up to 10% of its total assets in securities rated B or
lower by Moody's or S&P, or of equivalent quality, but may not invest in
securities rated C by Moody's or D by S&P, or the equivalent, which may be in
default with respect to payment of principal or interest.

Illiquid and Restricted Securities. Each Portfolio may invest up to 15% of the
- ----------------------------------
value of its net assets in illiquid securities. Illiquid securities are
securities which may not be sold or disposed of in the ordinary course of
business within seven days at approximately the value at which a Portfolio has
valued the investments, and include securities with legal or contractual
restrictions on resale, time deposits, repurchase agreements having maturities
longer than seven days and securities that do not have readily available market
quotations. In addition, a Portfolio may invest in securities that are sold in
private placement transactions between their issuers and their purchasers and
that are neither listed on an exchange nor traded over-the-counter. These
factors may have an adverse effect on the Portfolio's ability to dispose of
particular securities and may limit a Portfolio's ability to obtain accurate
market quotations for purposes of valuing securities and calculating net asset
value and to sell securities at fair value. If any privately placed securities
held by a Portfolio are required to be registered under the securities laws of
one or more jurisdictions before being resold, the Portfolio may be required to
bear the expenses of registration.

Repurchase Agreements. In the event the other party to a repurchase agreement
- ---------------------
becomes subject to a bankruptcy or other insolvency proceeding or such party
fails to satisfy its obligations thereunder, a Portfolio could (i) experience
delays in recovering cash or the securities sold (and during such delay the
value of the underlying securities may change in a manner adverse to the
Portfolio) or (ii) lose all or part of the income, proceeds or rights in the
securities to which the Portfolio would otherwise be entitled.

Management of the Fund

Investment Adviser

Harding Loevner serves as investment adviser to the Fund. Subject to the
direction and authority of the Fund's Board of Directors, Harding Loevner
provides investment advisory services to each Portfolio pursuant to Investment
Advisory Agreements, each dated October 14, 1996. Under the Investment Advisory
Agreements, Harding Loevner is responsible for providing investment research and
advice, determining which portfolio securities shall be purchased or sold by
each Portfolio of the Fund, purchasing and selling securities on behalf of the
Portfolios and determining how voting and other rights with respect to the
portfolio securities of the Portfolios are exercised in accordance with each
Portfolio's investment objective, policies, and restrictions. Harding Loevner
also provides office space, equipment and personnel necessary to manage the
Portfolios.

Harding Loevner, established in 1989, is a registered investment adviser that
specializes in global investment management for private investors and
institutions. As of December 31, 1999, Harding Loevner had approximately $__
billion in assets under management. Harding Loevner is located at 50 Division
Street, Suite 401, Somerville, NJ 08876. Harding Loevner manages assets for
several other registered investment companies.

Harding Loevner bears the expense of providing the above services to the Fund.
For its services, Harding Loevner receives an advisory fee from each of the
Portfolios, as set forth in the table below.

17
<PAGE>

---------------------------------------------------------------------------
Portfolio Fee (as a % of average daily net assets)
---------------------------------------------------------------------------
International Equity Portfolio 0.75%
---------------------------------------------------------------------------
Global Equity Portfolio 1.00%
---------------------------------------------------------------------------
Multi-Asset Global Portfolio 1.00%
---------------------------------------------------------------------------
Emerging Markets Portfolio 1.25%
---------------------------------------------------------------------------

The advisory fee paid by each Portfolio is higher than that charged by most
funds which invest primarily in U.S. securities, but not necessarily higher than
the fees charged to funds with investment objectives similar to those of the
Portfolios.

Portfolio Managers

Daniel D. Harding, CFA, (responsible for global portfolio management and multi-
asset global portfolio management), co-founder of Harding Loevner and a director
of its general partner, is the firm's chief investment officer, with overall
responsibility for investment policy. Dan served for twelve years as a senior
investment manager with Rockefeller & Co., investment adviser to the Rockefeller
family and related institutions. As manager of the family's flagship equity,
fixed income and balanced fund portfolios, he set investment strategy and
provided investment counseling to family members, trusts and private businesses.
In this capacity he also spearheaded the diversification of the firm's
investments into overseas markets. Dan is a Chartered Financial Analyst and a
Chartered Investment Counselor.

Simon Hallett, CFA, (responsible for international portfolio management), is a
director of the firm's general partner, chairman of the investment committee and
a senior portfolio manager. Simon has managed global portfolios for individuals
and institutions since 1979. In 1984 Simon joined Jardine Fleming Investment
Management, one of Asia's largest and most respected investment management
companies. Simon's ultimate position at Jardine Fleming was director in charge
of a team of six portfolio managers investing in the markets of Southeast and
North Asia for a diverse clientele comprising European pension plans,
governments, and private clients, Rockefeller & Co. among them. He joined
Harding Loevner in 1991.

G. "Rusty" Johnson III, CFA, (responsible for emerging markets portfolio
management), a principal of the firm, is the research manager and a member of
the investment committee. In 1987 he joined Jardine Fleming Research to
concentrate on Asian equities. After three years in Hong Kong and two years in
Bangkok, Rusty moved to Jardine Fleming's parent company, Robert Fleming, in New
York as an institutional broker of Asian equities. He spent an additional year
in institutional equity sales in New York with Peregrine Securities before
joining Harding Loevner in 1994.

Shareholder Information

Determination of Net Asset Value

The "net asset value" per share of each Portfolio is calculated as of the close
of business on days when the New York Stock Exchange is open for business, (a
"Business Day"). Each Portfolio determines its net asset value per share by
subtracting that Portfolio's liabilities (including accrued expenses and
dividends payable) from the total value of the Portfolio's investments and other
assets and dividing the result by the total outstanding shares of the Portfolio.

For purposes of calculating each Portfolio's net asset value, securities are
valued as follows:

18
<PAGE>

. all portfolio securities for which over-the-counter ("OTC") market
quotations are readily available are valued at their last sale price, or
if there are no trades, at the latest bid price;

. deposits and repurchase agreements are valued at their cost plus accrued
interest unless Harding Loevner determines in good faith, under
procedures established by and under the general supervision of the
Fund's Board of Directors, that such value does not approximate the fair
value of such assets;

. U.S. securities listed or traded on an exchange are valued at their last
sale price on that exchange, or if there are no trades, at the mean
between the latest bid and asked prices;

. Non-U.S. securities listed or traded on an exchange are valued at their
last sale price on that exchange on the current day, or if there are no
trades on that day, at the most recent sale price available on that
exchange;

. securities that are traded both in the OTC market and on a stock
exchange will be valued according to the broadest and most
representative market;

. short-term obligations with maturities of 60 days or less are valued at
amortized cost, which constitutes fair value as determined by the Fund's
Board of Directors. Amortized cost involves valuing an instrument at its
original cost to the Portfolio and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the
instrument; and

. the value of other assets for which market quotations are not readily
available will be determined in good faith by Harding Loevner at fair
value under procedures established by and under the general supervision
of the Fund's Board of Directors. Quotations of foreign securities
denominated in a foreign currency are converted to a U.S. dollar-
equivalent at exchange rates obtained from an automated pricing service
at 11:00 EST at the bid price, except for the Royal Currencies (United
Kingdom, Ireland, European Currency Unit, Australia and New Zealand),
which are valued at the ask price.

Purchase and Redemption of Shares

Purchases. There is no sales charge imposed by the Fund. The minimum initial
investment in any Portfolio of the Fund is $100,000; additional purchases or
redemptions may be of any amount. Institutions may satisfy the minimum
investment by aggregating their fiduciary accounts. Each Portfolio reserves the
right to waive the minimum initial investment. When a shareholder's account
balance falls below $100,000 due to redemption, a Portfolio may close the
account. Such shareholders will be notified if the minimum account balance is
not being maintained and will be allowed 60 days to make additional investments
before the account is closed.

The Fund has authorized one or more brokers to accept purchase orders on its
behalf. Such brokers are authorized to designate other intermediaries to accept
purchase orders on a Portfolio's behalf. A Portfolio will be deemed to have
received a purchase order when an authorized broker or, if applicable, a
broker's authorized agent accepts the order. Share purchase orders placed
through an authorized broker or the broker's authorized designee will be priced
at the Net Asset Value next computed after they are accepted by an authorized
broker or the broker's authorized designee. With respect to purchases of
Portfolio shares through certain brokers: 1) a broker may charge transaction
fees, 2) duplicate mailings of Fund material to shareholders who reside at the
same address may be eliminated, and 3) the minimum initial investment through
certain brokers may be less than a direct purchase with a Portfolio.

The offering of shares of a Portfolio is continuous and purchases of shares of a
Portfolio may be made on any Business Day. The Portfolios offer shares at a
public offering price equal to the net asset value next determined after receipt
of a purchase order.

Purchases of shares must be made by wire transfer of Federal funds. AMT Capital
Securities, L.L.C. ("AMT Capital") serves as exclusive distributor of shares of
the Fund's Portfolios. Share purchase orders are effective on the date when AMT
Capital receives a completed Account Application Form (and other required
documents) and Federal

19
<PAGE>

funds become available to the Fund in the Fund's account with Investors Bank &
Trust Company (the "Transfer Agent") as set forth below. The shareholder's bank
may impose a charge to execute the wire transfer. The wiring instructions are:

Investors Bank & Trust Company, Boston, MA
ABA#: 011-001-438
Account Name: AMT Capital Securities, L.L.C. - Fund Purchase Account
Account #: 933333333
Reference: Harding, Loevner Funds, Inc. - (designate Portfolio)

In order to purchase shares on a particular Business Day, a purchaser must call
the Transfer Agent at 1-877-435-8105 as soon as possible, but no later than 4:00
p.m. Eastern Standard Time, to inform the Fund of the incoming wire transfer and
must clearly indicate which Portfolio is to be purchased. If Federal funds are
received by the Fund that same day, the order will be effective on that day. If
the Fund receives notification after the above-mentioned cut-off times, or if
the Transfer Agent does not receive Federal funds, such purchase order shall be
executed as of the date that Federal funds are received.

The Fund reserves the right in its sole discretion (i) to suspend or modify the
offering of a Portfolio's shares, (ii) to reject purchase orders, and (iii) to
modify or eliminate the minimum initial investment in Portfolio shares.
Purchase orders may be refused if, for example, they are of a size that could
disrupt management of a Portfolio.

Redemptions. The Fund will redeem all full and fractional shares of a Portfolio
upon request of shareholders. The redemption price is the net asset value per
share next determined after receipt by the Transfer Agent of proper notice of
redemption as described below. If the Transfer Agent receives such notice by
the close of business (normally 4:00 p.m. Eastern Standard Time) on any
Business Day, the redemption will be effective on the date of receipt. Payment
will be made by wire within one to seven days from the date of receipt. If the
notice is received on a day that is not a Business Day or after the above-
mentioned cut-off times, the redemption notice will be deemed received as of the
next Business Day.

The Fund has authorized one or more brokers to accept, on its behalf, redemption
orders. Such brokers are authorized to designate other intermediaries to accept
redemption orders on the Fund's behalf. A Portfolio will be deemed to have
received a redemption order when an authorized broker or, if applicable, a
broker's authorized agent accepts the order. Share redemption orders placed
through an authorized broker or the broker's authorized designee will be priced
at the Portfolio's Net Asset Value next computed after they are accepted by an
authorized broker or the broker's authorized designee.

There is no charge imposed by the Fund to redeem shares of the Fund; however, a
shareholder's bank may impose its own wire transfer fee for receipt of the wire.
Redemptions may be executed in any amount requested by the shareholder up to the
amount such shareholder has invested in the Fund.

To redeem shares, a shareholder or any authorized agent (so designated on the
Account Application Form) must provide the Transfer Agent with the dollar or
share amount to be redeemed, the account to which the redemption proceeds should
be wired (which account shall have been previously designated by the shareholder
on its Account Application Form), the name of the shareholder and the
shareholder's account number. Shares that are redeemed prior to the record date
do not receive dividends.

A shareholder may change its authorized agent, the address of record or the
account designated to receive redemption proceeds at any time by writing to
Investors Bank with a signature guaranteed by a national bank which is a member
firm of any national or regional securities exchange (a "Signature Guarantee").
If the guarantor institution belongs to a Medallion Signature Program, it must
use the specific Medallion "Guaranteed" stamp. Notarized signatures are not
sufficient. Further documentation may be required when Investors Bank deems it
appropriate.

20
<PAGE>

A shareholder may request redemption by calling the Transfer Agent at 1-877-435-
8105. Telephone redemption is made available to shareholders of the Fund on the
Account Application Form. The Fund or the Transfer Agent employ reasonable
procedures designed to confirm that instructions communicated by telephone are
genuine. If either the Fund or the Transfer Agent does not employ such
procedures, it may be liable for losses due to unauthorized or fraudulent
instructions. The Fund or the Transfer Agent may require personal
identification codes and will only wire funds through pre-existing bank account
instructions. No bank instruction changes will be accepted via telephone.

Exchange Privilege. Shares of each Portfolio may be exchanged for shares of
another Portfolio based on the respective net asset values of the shares
involved in the exchange, assuming that shareholders wishing to exchange shares
reside in states where these mutual funds are qualified for sale. The Fund's
Portfolio minimum amounts of $100,000 would still apply. An exchange order is
treated the same as a redemption (on which any taxable gain or loss may be
realized) followed by a purchase. Investors who wish to make exchange requests
should telephone the Transfer Agent 1-877-435-8105.

Dividends

Each Portfolio will declare and pay a dividend from its net investment income,
and distributions from its realized net short-term and net long-term capital
gains, if any, at least annually by automatically reinvesting (unless a
shareholder has elected to receive cash) such dividends and distributions,
short-term or long-term capital gains in additional shares of the Portfolio at
the net asset value on the ex-date of the dividends or distributions.

Tax Considerations

The following discussion is for general information only. An investor should
consult with his or her own tax adviser as to the tax consequences of an
investment in a Portfolio, including the status of distributions from each
Portfolio under applicable state or local law.

Federal Income Taxes. Each Portfolio intends to distribute all of its taxable
income by automatically reinvesting such amount in additional shares of the
Portfolio and distributing those shares to its shareholders, unless a
shareholder elects on the Account Application Form, to receive cash payments for
such distributions. Shareholders receiving distributions from the Fund in the
form of additional shares will be treated for federal income tax purposes as
receiving a distribution in an amount equal to the fair market value of the
additional shares on the date of such a distribution.

Dividends paid by a Portfolio from its investment company taxable income
(including interest and net short-term capital gains) will be taxable to a U.S.
shareholder as ordinary income, whether received in cash or in additional Fund
shares. Distributions of net capital gains (the excess of net long-term capital
gains over net short-term capital losses) are generally taxable to shareholders
at the applicable capital gains rates, regardless of how long they have held
their Portfolio shares. If a portion of a Portfolio's income consists of
dividends paid by U.S. corporations, a portion of the dividends paid by the
Portfolio may be eligible for the corporate dividends-received deduction.

A distribution will be treated as paid on December 31 of the current calendar
year if it is declared by a Portfolio in October, November or December with a
record date in any such month and paid by the Portfolio during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. Each Portfolio will
inform shareholders of the amount and tax status of all amounts treated as
distributed to them not later than 60 days after the close of each calendar
year.

21
<PAGE>

The foregoing discussion is only a brief summary of the important federal tax
considerations generally affecting the Fund and its shareholders. No attempt is
made to present a detailed explanation of the federal, state or local income tax
treatment of the Fund or its shareholders, and this discussion is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Fund should consult their tax advisers with specific reference to their own
tax situation.

State and Local Taxes. A Portfolio may be subject to state, local or foreign
taxation in any jurisdiction in which the Portfolio may be deemed to be doing
business.

Portfolio distributions may be subject to state and local taxes. Distributions
of a Portfolio which are derived from interest on obligations of the U.S.
Government and certain of its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states. Shareholders should
consult their own tax advisers regarding the particular tax consequences of an
investment in a Portfolio.

Shareholder Inquiries

Inquiries concerning the Fund may be made by writing to Harding, Loevner Funds,
Inc., c/o Investors Bank & Trust, 200 Clarendon Street, OPS 22, Boston,
Massachusetts 02117-9130 or by calling the Fund (toll-free) at 1-877-435-8105.

Distribution of Fund Shares

Shares of the Fund are distributed by AMT Capital pursuant to a Distribution
Agreement (the "Distribution Agreement") dated as of May 29, 1998 between the
Fund and AMT Capital. No fees are payable by the Fund pursuant to the
Distribution Agreement.

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years, or, if shorter, the period of a
Portfolio's operations. Certain information reflects financial results for a
single share of a Portfolio. The total returns in the table represent the rate
that an investor would have earned or lost on an investment in a Portfolio
(assuming reinvestment of all dividends and distributions.) This information
has been audited by Ernst & Young LLP, whose report, along with the Fund's
financial statements, are included in the annual report, which is available by
following the instructions on the back cover of this Prospectus.

[To be filed by amendment]

22
<PAGE>

Availability of Additional Information About the Fund

The SAI, dated January 3, 2000, containing additional information about the
Fund, has been filed with the Securities and Exchange Commission (the
"Commission") and is incorporated by reference into this Prospectus. In the
Fund's annual report, you will find a discussion of the market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year.

The SAI and the Fund's annual report are available upon request, free of charge,
by calling 1-877-435-8105, or by writing to the following address:

Harding, Loevner Funds, Inc.
C/o Investors Bank & Trust
200 Clarendon Street, OPS 22
Boston, MA 02116

The SAI is also available on Harding Loevner's Internet site at
http://www.hardingloevner.com.

Information about the Fund (including the SAI and the Fund's annual report) can
be reviewed and copied at the Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-800-SEC-0330. Reports and other information
about the Fund are also available on the Commission's Internet site at
http://www.sec.gov or by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. A duplication fee will be applied to written
requests and needs to be paid at the time your request is submitted.

23
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Harding, Loevner Funds, Inc.

International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of the Fund, dated January __, 2000, (the
"Prospectus"), which has been filed with the Securities and Exchange Commission
(the "SEC") and can be obtained, without charge, by writing to Harding, Loevner
Funds, Inc. at 200 Clarendon Street, OPS 22, Boston, Massachusetts 02116, or by
calling the Fund toll-free at 1-877-435-8105. This Statement of Additional
Information incorporates by reference the Prospectus.

January __, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Organization of the Fund.................................................. 3

Supplemental Investment Techniques........................................ 3

Discussion of Supplemental Risks.......................................... 10

Investment Restrictions................................................... 13

Management of the Fund.................................................... 14

Control Persons and Principal Holders of Securities....................... 16

Investment Adviser........................................................ 19

Distribution of Fund Shares............................................... 20

Administrator............................................................. 20

Portfolio Transactions.................................................... 21

Capital Stock Information................................................. 22

Net Asset Value........................................................... 22

Tax Considerations........................................................ 22

Shareholder Information................................................... 27

Calculation of Performance Data........................................... 27

Transfer Agent............................................................ 28

Custodian................................................................. 28

Independent Auditors...................................................... 28

Counsel................................................................... 28

Financial Statements...................................................... 28

Appendix - Ratings Descriptions........................................... 29
</TABLE>

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<PAGE>

ORGANIZATION OF THE FUND

Harding, Loevner Funds, Inc. (the "Fund") is a no-load, open-end management
investment company established as a Maryland corporation on July 31, 1996.
Harding, Loevner Management, L.P. (Harding Loevner) serves as investment adviser
to the Fund. The Fund currently has four separate diversified portfolios, each
of which has distinct investment objectives and policies. There is no sales
charge for purchase of shares. Shares of each Portfolio may be purchased through
AMT Capital Securities, LLC ("AMT Capital"), the Fund's distributor. The
minimum initial investment in any Portfolio is $100,000. Additional investments
or redemptions may be of any amount.

SUPPLEMENTAL INVESTMENT TECHNIQUES

Information concerning the Portfolios' supplemental investment techniques is set
forth below.

Zero Coupon and Discount Debt Securities. The Emerging Markets Portfolio and
- ----------------------------------------
the Multi-Asset Global Portfolio may invest in zero coupon securities and
convertible debt or other debt securities acquired at a discount. A portion of
the Portfolio's sovereign debt securities may be acquired at a discount. The
Portfolio will purchase such securities only to the extent consistent with the
Portfolio's investment objectives.

Foreign Governments and International and Supranational Agency Securities. The
- -------------------------------------------------------------------------
Portfolios may purchase debt obligations issued or guaranteed by foreign
governments or their subdivisions, agencies and instrumentalities, and debt
obligations issued or guaranteed by international agencies and supranational
entities.

Convertible Securities. The Portfolios may invest in convertible preferred and
- ----------------------
debt securities which are securities that may be converted into or exchanged
for, at either a stated price or stated rate, underlying shares of common stock.
Convertible securities have general characteristics similar to both fixed-income
and equity securities. Although to a lesser extent than with fixed-income
securities generally, the market value of convertible fixed income securities
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stocks and therefore also will react to
variations in the general market for equity securities. A unique feature of
convertible securities is that as the market price of the underlying common
stock declines, convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common stock
increases, the prices of the convertible securities tend to rise as a reflection
of the value of the underlying common stock. While no securities investments are
without risk, investments in convertible securities generally entail less risk
than investments in common stock of the same issuer.

Foreign Currency Transactions. The Portfolios do not hedge foreign currency
- -----------------------------
exposure, except on rare occasions when Harding Loevner has a strong view on the
prospects for a particular currency or when hedging is desirable to improve
portfolio diversification. Each Portfolio will conduct its currency
transactions either on a spot (cash) basis at the rate prevailing in the
currency exchange market, or through entering into forward contracts to purchase
or sell currency. A forward currency contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. The use of forward currency contracts
does not eliminate fluctuations in the underlying prices of the securities, but
it does establish a rate of exchange that can be achieved in the future. In
addition, although forward currency contracts limit the risk of loss due to a
decline in the value of the hedged currency, at the same time, they also limit
any potential gain that might result should the value of the currency increase.
Each Portfolio will segregate cash

3
<PAGE>

or liquid portfolio securities in an amount at all times equal to or exceeding
their commitment with respect to contracts that are not part of a designated
hedge.

U.S. Treasury and other U.S. Government and Government Agency Securities. Each
- ------------------------------------------------------------------------
Portfolio may purchase securities issued by or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities and supported
by the full faith and credit of the United States ("U.S. Government
Securities"). Each Portfolio also may purchase securities issued by a U.S.
Government-sponsored enterprise or federal agency that is supported either by
its ability to borrow from the U.S. Treasury (e.g., Student Loan Marketing
Association) or by its own credit standing (e.g., Federal National Mortgage
-
Association). U.S. Government Securities include instruments issued by the U.S.
Treasury, including bills, notes and bonds. These instruments are direct
obligations of the U.S. Government and, as such, are backed by the full faith
and credit of the United States. They differ primarily in their interest rates,
the lengths of their maturities and the dates of their issuances. In addition,
U.S. Government Securities include securities issued by instrumentalities of the
U.S. Government, such as the Government National Mortgage Association ("GNMA"),
which are also backed by the full faith and credit of the United States. U.S.
Government Agency Securities include instruments issued by instrumentalities
established or sponsored by the U.S. Government, such as the Student Loan
Marketing Association ("SLMA"), the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). While
these securities are issued, in general, under the authority of an Act of
Congress, the U.S. Government is not obligated to provide financial support to
the issuing instrumentalities.

Inflation-Indexed Securities. Each Portfolio may invest in securities with a
- ----------------------------
nominal return linked to the inflation rate from bond markets worldwide such as
the U.S. Treasury Department's "inflation-protection" issues. The initial
issues are ten-year notes which are issued quarterly. Other maturities will be
added at a later date. The principal is adjusted for inflation (payable at
maturity) and the semi-annual interest payments equal a fixed percentage of the
inflation-adjusted principal amount. The inflation adjustments are based upon
the Consumer Price Index for Urban Consumers ("CPI-U"). These securities may
also be eligible for coupon stripping under the U.S. Treasury "STRIPS" program.

Corporate Debt Instruments. Each Portfolio may purchase commercial paper,
- --------------------------
short-term notes and other obligations of U.S. and foreign corporate issuers
meeting the Portfolio's credit quality standards (including variable rate
notes). Other than the allowable 20% of a Portfolio's total assets invested in
below-investment grade convertible and other debt securities, all investments in
corporate debt instruments will be rated at least "BBB" or "A-1" (in the case of
commercial paper) by Standard & Poor's Rating Service ("S&P"), "Baa" or "P-1"
(in the case of commercial paper) by Moody's Investors Service, Inc.
("Moody's"), or of comparable quality as determined by Harding Loevner.

Bank Obligations. The Fund limits its investments in U.S. (domestic) bank
- ----------------
obligations to obligations of U.S. banks that in Harding Loevner's opinion meet
sufficient creditworthiness criteria. Domestic bank obligations are defined as
instruments issued by: U.S. (domestic) banks; U.S. branches of foreign banks,
if such branches are subject to the same regulation as U.S. banks; and foreign
branches of U.S. banks. However, Harding Loevner must determine that the
investment risk associated with investing in instruments issued by such branches
is the same as that of investing in instruments issued by the U.S. parent bank,
in that the U.S. parent bank would be unconditionally liable in the event that
the foreign branch failed to pay on its instruments. The Fund limits its
investments in foreign bank obligations to obligations of foreign banks
(including U.S. branches of foreign banks) that, in the opinion of Harding
Loevner, are of an investment quality comparable to obligations of U.S. banks in
which each Portfolio may invest. Each Portfolio may invest in obligations of
domestic and foreign banks, including time deposits, certificates of deposit,
bankers' acceptances, letters of credit, bank notes, deposit notes, Eurodollar
or Yankeedollar time deposits, Eurodollar or Yankeedollar certificates of
deposit, variable rate notes, loan participations, variable amount master demand
notes and custodial receipts. Other than the allowable 20% of a Portfolio's
total assets invested in below-investment grade convertible and other debt
securities, all investments in bank obligations will be rated "A" by Thomson
Bankwatch or similarly rated by Fitch IBCA, Inc., or of comparable quality as
determined by Harding Loevner.

4
<PAGE>

Brady Bonds. Each Portfolio, subject to limitations, may invest in "Brady
- ------------
Bonds," which are debt securities issued or guaranteed by foreign governments in
exchange for existing external commercial bank indebtedness under a plan
announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989. Brady
Bonds may be collateralized or uncollateralized, are issued in various
currencies (primarily the U.S. dollar) and are actively traded in the over-the-
counter secondary market.

Each Portfolio may invest in either collateralized or uncollateralized Brady
Bonds. U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed
rate par bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time and is adjusted at regular intervals
thereafter. Brady Bonds which have been issued to date are rated BB or B by S&P
or Ba or B by Moody's or, in cases in which a rating by S&P or Moody's has not
been assigned, are generally considered by Harding Loevner to be of comparable
quality.

Derivatives. The Portfolios are authorized to use various hedging and
- -----------
investment strategies described below to hedge broad or specific market
movements, or to seek to increase the Portfolios' income or gains. The
Portfolios may purchase and sell (or write) exchange-listed and over-the-counter
("OTC") put and call options on securities, financial futures contracts, equity
indices and other financial instruments and enter into financial futures
contracts (collectively, these transactions are referred to in this Statement of
Additional Information as "Derivatives").

Derivatives may be used to attempt to protect against possible changes in the
market value of securities held or to be purchased by a Portfolio resulting from
securities market movements to protect the Portfolio's unrealized gains in the
value of its securities, to facilitate the sale of those securities for
investment purposes, to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities or to seek
to enhance the Portfolio's income or gain. The Portfolios may use any or all
types of Derivatives at any time; no particular strategy will dictate the use of
one type of transaction rather than another, as use of any Derivatives will be a
function of numerous variables, including market conditions. The ability of a
Portfolio to utilize Derivatives successfully will depend on, in addition to the
factors described above, Harding Loevner's ability to predict pertinent market
movements, which cannot be assured. These skills are different from those needed
to select the Portfolio's securities. The Portfolios are not "commodity pools"
(i.e., pooled investment vehicles which trade in commodity futures contracts and
options thereon and the operator of which is registered with the Commodity
Futures Trading Commission (the "CFTC")) and Derivatives involving futures
contracts and options on futures contracts will be purchased, sold or entered
into only for bona fide hedging purposes, provided that a Portfolio may enter
into such transactions for purposes other than bona fide hedging if, immediately
thereafter, the sum of the amount of its initial margin and premiums on open
contracts and options would not exceed 5% of the liquidation value of the
Portfolio's portfolio, provided, further, that, in the case of an option that is
in-the-money, the in-the-money amount may be excluded in calculating the 5%
limitation. The use of certain Derivatives will require that the Portfolio
segregate cash, liquid high grade debt obligations or other assets to the extent
the Portfolio's obligations are not otherwise "covered" through ownership of the
underlying security or financial instrument.

Futures Contracts. The Portfolios may use stock index futures contracts
- -----------------
("futures contracts") as a hedge against the effects of changes in the market
value of the stocks comprising the relevant index. In managing its cash flows,
a Portfolio may also use futures contracts as a substitute for holding the
designated securities underlying the futures contract. A futures contract is an
agreement to purchase or sell a specified amount of designated securities for a
set price at a specified future time. At the time the Portfolio enters into a
futures transaction, it is required to make a performance deposit ("initial
margin") of cash or liquid securities in a segregated account in the name of the
futures broker. Subsequent payments of "variation margin" are then made on a
daily basis, depending on the value of the

5
<PAGE>

futures position which is continually marked to market. The Portfolios will
segregate cash, U.S. Government securities or other liquid obligations in an
amount sufficient to meet its obligations under these transactions.

If the Portfolio enters into a short position in a futures contract as a hedge
against anticipated adverse market movements and the market then rises, the
increase in the value of the hedged securities will be offset in whole or in
part, by a loss on the futures contract. If instead the Portfolio purchases a
futures contract as a substitute for investing in the designated underlying
securities, the Portfolio will experience gains or losses that correspond
generally to gains or losses in the underlying securities. The latter type of
futures contract transactions permits the Portfolio to experience the results of
being fully invested in a particular asset class, while maintaining the
liquidity needed to manage cash flows into or out of the Portfolio (e.g.,
purchases and redemptions of Portfolio shares). Under normal market conditions,
futures contracts positions may be closed out on a daily basis.

U.S. futures contracts have been designed by exchanges which have been
designated as "contracts markets" by the CFTC, and must be executed through a
futures commission merchant, or brokerage firm, that is a member of the relevant
contract market. Futures contracts trade on a number of exchange markets and,
through their clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange. The Portfolios may
also enter into futures contracts that are based on securities that would be
eligible investments for the Portfolios. The Portfolios may enter into
contracts that are denominated in currencies other than the U.S. dollar.

Although futures contracts by their terms call for the actual delivery or
acquisition of securities or currency, in most cases the contractual obligation
is fulfilled before the date of the contract without having to make or take
delivery of the securities or currency. The offsetting of a contractual
obligation is accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for delivery in the
same month. Such a transaction, which is effected through a member of an
exchange, cancels the obligation to make or take delivery of the securities or
currency. Since all transactions in the futures market are made, offset, or
fulfilled through a clearinghouse associated with the exchange on which the
contracts are traded, a Portfolio will incur brokerage fees when it purchases or
sells futures contracts.

At the time a futures contract is purchased or sold, a Portfolio must allocate
in cash or securities, an initial margin. Initial margin on U.S. exchanges may
range from approximately 3% to approximately 15% of the value of the securities
or commodities underlying the contract. Under certain circumstances, however,
such as periods of high volatility, the Portfolio may be required by an exchange
to increase the level of its initial margin payment. Additionally, initial
margin requirements may be increased generally in the future by regulatory
action. An outstanding futures contract is valued daily and the payment in cash
of a "variation margin" generally will be required, a process known as "marking
to the market." Each day the Portfolio will be required to provide (or will be
entitled to receive) variation margin in an amount equal to any decline (in the
case of a long futures position) or increase (in the case of a short futures
position) in the contract's value from the preceding day.

Stock Index Options. The Portfolios may purchase or sell options on stock
- -------------------
indices on U.S. and foreign exchanges or in the over-the-counter markets. An
option on a stock index permits the purchaser of the option, in return for the
premium paid, the right to receive from the seller cash equal to the difference
between the closing price of the index and the exercise price of the option. The
Portfolios will segregate cash or other liquid portfolio securities in an amount
sufficient to meet its obligations under these transactions.

Repurchase Agreements. Each Portfolio may enter into repurchase agreements
- ---------------------
under which a bank or securities firm (that is a dealer in U.S. Government
Securities reporting to the Federal Reserve Bank of New York) agrees, upon
entering into the contract, to sell U.S. Government Securities to a Portfolio
and repurchase such securities from the Portfolio at a mutually agreed-upon
price and date. Repurchase agreements will generally be restricted to those that
mature within seven days. Securities subject to repurchase agreements will be
held by the Company's custodian, sub-custodian or in the Federal
Reserve/Treasury book-entry system. The Portfolios will engage in such
transactions with

6
<PAGE>

parties selected on the basis of such party's creditworthiness and will enter
into repurchase agreements only with financial institutions which are deemed by
Harding Loevner to be in good financial standing. Repurchase agreements may be
characterized as loans secured by the underlying securities. Such transactions
afford an opportunity for the Portfolio to earn a return on available cash at
minimal market risk, although the Portfolio may be subject to various delays and
risks of loss if the vendor becomes subject to a proceeding under the U.S.
Bankruptcy Code or is otherwise unable to meet its obligation to repurchase. The
securities underlying a repurchase agreement will be marked to market every
business day so that the value of such securities is at least equal to the value
of the repurchase price thereof, including the accrued interest thereon.

Reverse Repurchase Agreements. Each Portfolio may enter into reverse repurchase
- -----------------------------
agreements under which a primary or reporting dealer in U.S. Government
securities purchases U.S. Government Securities from a Portfolio and the
Portfolio agrees to repurchase the securities at an agreed-upon price and date.
The difference between the amount the Portfolio receives for the securities and
the amount it pays on repurchase is deemed to be a payment of interest. The
Fund will maintain for each Portfolio a segregated custodial account containing
cash or other appropriate liquid, unencumbered securities having an aggregate
value at least equal to the amount of such commitments to repurchase, including
accrued interest, and will subsequently monitor the account to ensure such
equivalent value is maintained until payment is made. Reverse repurchase
agreements will generally be restricted to those that mature within seven days.
The Portfolios will engage in such transactions with parties selected on the
basis of such party's creditworthiness. Reverse repurchase agreements involve
the risk that the market value of the portfolio securities sold by a Portfolio
may decline below the price of the securities at which the Portfolio is
obligated to repurchase them. Reverse repurchase agreements create leverage, a
speculative factor, and will be considered as borrowings for the purposes of
limitations on borrowings.

Warrants. The Portfolios may invest up to 10% of the value of their total
- --------
assets (valued at the lower of cost or market) in warrants for equity
securities, which are securities permitting, but not obligating, their holder to
subscribe for other equity securities. Warrants do not carry with them the right
to dividends or voting rights with respect to the securities that they entitle
their holder to purchase, and they do not represent any rights in the assets of
the issuer. As a result, an investment in warrants may be considered more
speculative than certain other types of investments. In addition, the value of a
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to its
expiration date.

When-Issued Securities. The Portfolios may purchase securities on a firm
- ----------------------
commitment basis, including when-issued securities. Securities purchased on a
firm commitment basis are purchased for delivery beyond the normal settlement
date at a stated price and yield. Such securities are recorded as an asset and
are subject to changes in value based upon changes in the general level of
interest rates. The Portfolios will only make commitments to purchase securities
on a firm commitment basis with the intention of actually acquiring the
securities but may sell them before the settlement date if it is deemed
advisable.

When a Portfolio purchases securities on a when-issued or forward commitment
basis, the Portfolio will maintain in a segregated account cash and liquid,
unencumbered securities having a value (determined daily) at least equal to the
amount of the Portfolio's purchase commitments. In the case of a forward
commitment to sell portfolio securities, the Portfolio will hold the portfolio
securities themselves in a segregated account while the commitment is
outstanding. These procedures are designed to ensure that the Portfolio will
maintain sufficient assets at all times to cover its obligations under when-
issued purchases and forward commitments.

Borrowing. Each Portfolio may borrow money temporarily from banks when (i) it
- ---------
is advantageous to do so in order to meet redemption requests, (ii) a Portfolio
fails to receive transmitted funds from a shareholder on a timely basis, (iii)
the custodian of the Fund fails to complete delivery of securities sold or (iv)
a Portfolio needs cash to facilitate the settlement of trades made by the
Portfolio. In addition, each Portfolio may, in effect, lend securities by
engaging in

7
<PAGE>

reverse repurchase agreements and may, in effect, borrow money by doing so.
Securities may be borrowed by engaging in repurchase agreements. See "Investment
Restrictions."

Securities Lending. Although, the Fund has no current plans to do so, each
- ------------------
Portfolio is authorized to lend securities from its investment portfolios, with
a value not exceeding 33 1/3% of its total assets, to banks, brokers and other
financial institutions if it receives collateral in cash, U.S. Government
Securities or other liquid investments which will be maintained at all times in
an amount equal to at least 102% of the current market value of the loaned
securities. The loans will be terminable at any time by the Fund and the
relevant Portfolio will then receive the loaned securities within five days.
During the period of such a loan, the Portfolio receives the income on the
loaned securities and a loan fee and may thereby increase its total return. A
Portfolio continues to receive interest or dividends on the securities loaned
and simultaneously earns either interest on the investment of the cash
collateral or fee income if the loan is otherwise collateralized. However, a
Portfolio normally pays lending fees and related expenses from the interest or
dividends earned on invested collateral. Should the borrower of the securities
fail financially, there is a risk of delay in recovery of the securities or loss
of rights in the collateral. However, loans are made only to borrowers which are
approved by the Board of Directors and are deemed by Harding Loevner to be of
good financial standing. A Portfolio may invest cash collateral it receives in
connection with a loan of securities in securities of the U.S. Government and
its agencies and other high quality short-term debt instruments. For purposes
of complying with each Portfolio's investment policies and restrictions,
collateral received in connection with securities loans will not be deemed an
asset of a Portfolio unless otherwise required by law.

Foreign Currency Hedging. The Portfolios may enter into forward foreign
- ------------------------
currency contracts (a "forward contract") and may purchase and write (on a
covered basis) exchange-traded or over-the-counter options on currencies,
foreign currency futures contracts, and options on foreign currency futures
contracts primarily to protect against a decrease in the U.S. dollar equivalent
value of its foreign currency portfolio securities or the payments thereon that
may result from an adverse change in foreign currency exchange rates. The
Portfolios may at times hedge all or some portion of their currency exchange
risk. Conditions in the securities, futures, options, and foreign currency
markets will determine whether and under what circumstances a Portfolio will
employ any of the techniques or strategies described below and in the section of
the Prospectus entitled "Descriptions of Investments." A Portfolio's ability to
pursue certain of these strategies may be limited by applicable regulations of
the CFTC and the federal tax requirements applicable to regulated investment
companies (see "Tax Considerations").

Forward Contracts. Sale of currency for dollars under a forward contract
- -----------------
establishes a price for the currency in dollars. Such a sale insulates returns
from securities denominated in that currency from exchange rate fluctuations to
the extent of the contract while the contract is in effect. A sale contract
will be advantageous if the currency falls in value against the dollar and
disadvantageous if it increases in value against the dollar. A purchase
contract will be advantageous if the currency increases in value against the
dollar and disadvantageous if it falls in value against the dollar.

The Portfolios may use forward contracts to insulate existing security positions
against exchange rate movement ("position hedges") or to insulate proposed
transactions against such movement ("transaction hedges"). For example, to
establish a position hedge, a forward contract on a foreign currency might be
sold to protect against the decline in the value of that currency against the
dollar. To establish a transaction hedge, a foreign currency might be purchased
on a forward basis to protect against an anticipated increase in the value of
that currency against the dollar.

Options on Foreign Currencies. The Portfolios may purchase and sell (or write)
- -----------------------------
put and call options on foreign currencies to protect against a decline in the
U.S. dollar-equivalent value of their portfolio securities or payments due
thereon or a rise in the U.S. dollar-equivalent cost of securities that they
intend to purchase. A foreign currency put option grants the holder the right,
but not the obligation, at a future date to sell a specified amount of a foreign
currency to its counterparty at a predetermined price. Conversely, a foreign
currency call option grants the holder the right, but not the obligation, to
purchase at a future date a specified amount of a foreign currency at a
predetermined price.

8
<PAGE>

Options on Futures Contracts. The Portfolios may purchase or sell options on
- ----------------------------
futures contracts as an alternative to buying or selling futures contracts.
Options on futures contracts are similar to options on the security underlying
the futures contracts except that options on stock index futures contracts give
the purchaser the right to assume a position at a specified price in a stock
index futures contract at any time during the life of the option. The
Portfolios will segregate cash, U.S. Government securities or other liquid
obligations in an amount sufficient to meet its obligations under these
transactions.

Depending on the pricing of the option compared to either the price of the
futures contract upon which it is based or the price of the underlying
securities or currency, it may or may not be less risky than ownership of the
futures contract or the underlying securities or currency. As with the purchase
of futures contracts, when a Portfolio is not fully invested it may purchase a
call option on a futures contract to hedge against a market advance due to
declining interest rates or a change in foreign exchange rates.

The writing of a call option on a futures contract constitutes a partial hedge
against declining prices of the security or foreign currency which is
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the exercise price, the Portfolio will retain
the full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Portfolio's portfolio holdings. The
writing of a put option on a futures contract constitutes a partial hedge
against increasing prices of the security or foreign currency which is
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Portfolio will
retain the full amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Portfolio intends to
purchase. If a put or call option the Portfolio has written is exercised, the
Portfolio will incur a loss that will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the value
of its portfolio securities and changes in the value of its futures positions,
the Portfolio's losses from existing options on futures may to some extent be
reduced or increased by changes in the value of portfolio securities. The
purchase of a put option on a futures contract is similar in some respects to
the purchase of protective put options on portfolio securities.

Restrictions on the Use of Futures Contracts and Options on Futures Contracts.
- -----------------------------------------------------------------------------
Regulations of the CFTC applicable to the Portfolios require that all of the
Portfolios' futures and options on futures transactions constitute bona fide
hedging transactions, except that a transaction need not constitute a bona fide
hedging transaction entered into for other purposes if, immediately thereafter,
the sum of the amount of initial margin deposits on a Portfolio's existing
futures positions and premiums paid for related options would not exceed 5% of
the value of the Portfolio's total assets.

Illiquid Securities. Although each of the Portfolios may invest up to 15% of
- -------------------
the value of its net assets in illiquid assets, it is not expected that any
Portfolio will invest a significant portion of its assets in illiquid
securities. All repurchase agreements and time deposits maturing in more than
seven days are treated as illiquid assets. A Portfolio also may purchase
securities that are not registered under the Securities Act of 1933, as amended
(the "1933 Act"), but which can be sold to qualified institutional buyers in
accordance with Rule 144A under the 1933 Act ("Rule 144A securities"). Rule 144A
securities generally must be sold to other qualified institutional buyers. A
Portfolio also may invest in commercial paper issued in reliance on the so-
called "private placement" exemption from registration afforded by Section 4(2)
of the 1933 Act ("Section 4(2) paper"). Section 4(2) paper is restricted as to
disposition under the federal securities laws, and generally is sold to
institutional investors such as the Portfolio who agree that they are purchasing
the paper for investment and not with a view to public distribution. Any resale
by the purchaser must be in an exempt transaction. Section 4(2) paper normally
is resold to other institutional investors like the Portfolio through or with
the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. If a particular investment in
Rule 144A securities, Section 4(2) paper or private placement securities is not
determined to be liquid, that investment will be included within the 15%
limitation on investment in illiquid securities. Not all Rule 144A securities
can be deemed liquid; Harding Loevner will monitor the liquidity of such
restricted securities under the supervision of the Board of Directors.

9
<PAGE>

DISCUSSION OF SUPPLEMENTAL RISKS

Information concerning risks associated with certain of the Portfolios'
investments is set forth below.

Creditworthiness. In general, certain obligations which the Portfolios may
- ----------------
invest in are subject to credit risks such as the loss of credit ratings or
possible default. After purchase by a Portfolio of the Fund, a security may
cease to be rated or its rating may be reduced below the minimum required for
purchase by the Fund. Neither event will require a sale of such security by the
Portfolio. However, Harding Loevner will consider such event in its
determination of whether a Portfolio should hold the security. To the extent
that the ratings given by S&P or Moody's may change as a result of changes in
such organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for investments in accordance with the
investment policies contained in the Prospectus and in this Statement of
Additional Information.

Foreign Bank Obligations. Obligations of foreign banks involve somewhat
- ------------------------
different investment risks than those affecting obligations of United States
banks, including the possibilities that their liquidity could be impaired
because of future political and economic developments, that their obligations
may be less marketable than comparable obligations of United States banks, that
a foreign jurisdiction might impose withholding taxes on interest income payable
on those obligations, that foreign deposits may be seized or nationalized, that
foreign governmental restrictions such as exchange controls may be adopted that
might adversely affect the payment of principal and interest on those
obligations and that the selection of those obligations may be more difficult
because there may be less publicly available information concerning foreign
banks or the accounting, auditing and financial reporting standards, practices
and requirements applicable to foreign banks may differ from those applicable to
United States banks. Foreign banks generally are not subject to examination by
any United States government agency or instrumentality. Also, investments in
commercial banks located in several foreign countries are subject to additional
risks due to the combination in such banks of commercial banking and diversified
securities activities.

High Yield/High Risk Debt Securities. Each Portfolio may invest up to 20% of
- ------------------------------------
its assets in convertible securities and debt securities which are rated below
investment-grade. Below investment grade securities carry a high degree of risk
(including the possibility of default or bankruptcy of the issuers of such
securities), generally involve greater volatility of price and risk of principal
and income, and may be less liquid, than securities in the higher rating
categories, and are considered speculative. The lower the ratings of such debt
securities, the greater their risks render them like equity securities. The
market value of lower-rated debt securities tends to reflect individual
corporate developments to a greater extent than do higher-rated securities,
which react primarily to fluctuations in the general level of interest rates.
Lower-rated debt securities also tend to be more sensitive to general economic
conditions than are higher-rated debt securities. See "Ratings Descriptions" in
this Statement of Additional Information for a more complete description of the
ratings assigned by ratings organizations and their respective characteristics.

Economic downturns have disrupted in the past, and could disrupt in the future,
the high yield market and have impaired the ability of issuers to repay
principal and interest. Also, an increase in interest rates would have a
greater adverse impact on the value of such obligations than on comparable
higher quality debt securities. During an economic downturn or period of rising
interest rates, highly leveraged issues may experience financial stress which
would adversely affect their ability to service their principal and interest
payment obligations. Prices and yields of high yield securities will fluctuate
over time and, during periods of economic uncertainty, volatility of high yield
securities may adversely affect a Portfolio's net asset value. In addition,
investments in high yield zero coupon or pay-in-kind bonds, rather than income-
bearing high yield securities, may be more speculative and may be subject to
greater fluctuations in value due to changes in interest rates.

The trading market for high yield securities may be thin to the extent that
there is no established retail secondary market or because of a decline in the
value of such securities. A thin trading market may limit the ability of a
Portfolio to accurately value high yield securities in its portfolio and to
dispose of those securities. Adverse publicity and investor

10
<PAGE>

perceptions may decrease the values and liquidity of high yield securities.
These securities also may involve special registration responsibilities,
liabilities and costs. Prices for below investment-grade securities may also be
affected by legislative and regulatory developments.

Credit quality in the high yield securities market can change suddenly and
unexpectedly, and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it
is the policy of Harding Loevner not to rely exclusively on ratings issued by
established credit rating agencies, but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of a
Portfolio's investment objective by investment in such securities may be more
dependent on Harding Loevner's credit analysis than is the case for higher
quality bonds. Should the rating of a portfolio security be downgraded, Harding
Loevner will determine whether it is in the best interest of the Portfolio to
retain or dispose of such security.

Foreign Currency Hedging. The success of currency hedging will depend on the
- ------------------------
ability of Harding Loevner to predict exchange rate fluctuations. Predicting
such fluctuations is extremely difficult and thus the successful execution of a
hedging strategy is highly uncertain. An incorrect prediction will cause poorer
Portfolio performance than would otherwise be the case. Forward contracts that
protect against anticipated losses have the corresponding effect of canceling
possible gains if the currency movement prediction is incorrect.

Precise matching of forward contract amounts and the value of portfolio
securities is generally not possible because the market value of the protected
securities will fluctuate while forward contracts are in effect. Adjustment
transactions are theoretically possible but time consuming and expensive, so
contract positions are likely to be approximate hedges, rather than perfect
hedges.

The cost to a Portfolio of engaging in foreign currency forward contracts will
vary with factors such as the foreign currency involved, the length of the
contract period, and the market conditions then prevailing, including general
market expectations as to the direction of the movement of various foreign
currencies against the U.S. dollar. Furthermore, Harding Loevner may not be
able to purchase forward contracts with respect to all of the foreign currencies
in which a Portfolio's securities may be denominated. In those circumstances
the correlation between the movements in the exchange rates of the subject
currency and the currency in which the portfolio security is denominated may not
be precise. Moreover, if the forward contract is entered into in an over-the-
counter transaction, as will usually be the case, the Portfolio generally will
be exposed to the credit risk of its counterparty. If the Portfolio enters into
such contracts on a foreign exchange, the contract will be subject to the rules
of that foreign exchange. Foreign exchanges may impose significant restrictions
on the purchase, sale, or trading of such contracts, including the imposition of
limits on price moves. Such limits may significantly affect the ability to
trade such a contract or otherwise to close out the position and could create
potentially significant discrepancies between the cash and market value of the
position in the forward contract. Finally, the cost of purchasing forward
contracts in a particular currency will reflect, in part, the rate of return
available on instruments denominated in that currency. The cost of purchasing
forward contracts to hedge portfolio securities that are denominated in
currencies that in general yield high rates of return may thus tend to reduce
that rate of return toward the rate of return that would be earned on assets
denominated in U.S. dollars.

Futures Contracts. Futures contracts entail special risks. Among other things,
- -----------------
the ordinary spreads between values in the cash and futures markets, due to
differences in the character of these markets, are subject to distortions
relating to: (1) investors' obligations to meet additional variation margin
requirements; (2) decisions to make or take delivery, rather than entering into
offsetting transactions; and (3) the difference between margin requirements in
the securities markets and margin deposit requirements in the futures market.
The possibility of such distortion means that a correct forecast of general
market or foreign exchange rate trends still may not result in a successful
transaction.

11
<PAGE>

Although the Fund believes that the use of such contracts and options thereon
will benefit the Portfolios, if predictions about the general direction of
securities market movements or foreign exchange rates are incorrect, a
Portfolio's overall performance would be poorer than if it had not entered into
any such contracts or purchased or written options thereon.

A Portfolio's ability to establish and close out positions in futures contracts
and options on futures contracts will be subject to the development and
maintenance of a liquid market. Although a Portfolio generally will purchase or
sell only those futures contracts and options thereon for which there appears to
be a liquid market, there is no assurance that a liquid market on an exchange
will exist for any particular futures contract or option thereon at any
particular time. Where it is not possible to effect a closing transaction in a
contract to do so at a satisfactory price, the Portfolio would have to make or
take delivery under the futures contract or, in the case of a purchased option,
exercise the option. In the case of a futures contract that a Portfolio has
sold and is unable to close out, the Portfolio would be required to maintain
margin deposits on the futures contract and to make variation margin payments
until the contract is closed.

Under certain circumstances, exchanges may establish daily limits in the amount
that the price of a futures contract or related option contract may vary either
up or down from the previous day's settlement price. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day and therefore does not limit potential losses because
the limit may prevent the liquidation of unfavorable positions. Futures or
options contract prices could move to the daily limit for several consecutive
trading days with little or no trading and thereby prevent prompt liquidation of
positions and subject some traders to substantial losses.

Buyers and sellers of foreign currency futures contracts are subject to the same
risks that apply to the use of futures generally. In addition, there are risks
associated with foreign currency futures contracts and their use as hedging
devices similar to those associated with forward contracts on foreign
currencies. Further, settlement of a foreign currency futures contract must
occur within the country issuing the underlying currency. Thus, a Portfolio
must accept or make delivery of the underlying foreign currency in accordance
with any U.S. or foreign restrictions or regulations regarding the maintenance
of foreign banking arrangements by U.S. residents and may be required to pay any
fees, taxes or charges associated with such delivery that are assessed in the
country of the underlying currency.

Options on Foreign Currency. As in the case of other types of options, the
- ---------------------------
benefit to a Portfolio deriving from the purchase of foreign currency options
will be reduced by the amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the direction or to the
extent anticipated, the Portfolio could sustain losses on transactions in
foreign currency options that would require them to forego a portion or all of
the benefits of advantageous changes in such rates.

A Portfolio may write options on foreign currencies for hedging purposes. For
example, where the Portfolio anticipates a decline in the dollar value of
foreign currency denominated securities due to adverse fluctuations in exchange
rates it could, instead of purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an anticipated
increase in the dollar costs of securities to be acquired, a Portfolio could
write a put option on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow the Portfolio to hedge such
increased costs up to the amount of the premium. As in the case of other types
of options, however, the writing of a foreign currency option will constitute
only a partial hedge up to the amount of the premium, and only if rates move in
the expected direction. If this movement does not occur, the option may be
exercised and the Portfolio would be required to purchase or sell the underlying
currency at a loss which may not be fully offset by the amount of the premium.
Through the writing of options on foreign currencies, the Portfolio also may be
required to forego all or a portion of the benefits that might otherwise have
been obtained from favorable movements in exchange rates.

12
<PAGE>

Options on Futures Contracts. The amount of risk a Portfolio assumes when it
- ----------------------------
purchases an option on a futures contract is the premium paid for the option
plus related transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value of
the option purchased. Options on foreign currency futures contracts may involve
certain additional risks. Trading options on foreign currency futures contracts
is relatively new. The ability to establish and close out positions in such
options is subject to the maintenance of a liquid secondary market. To mitigate
this problem, a Portfolio will not purchase or write options on foreign currency
futures contracts unless and until, in Harding Loevner's opinion, the market for
such options has developed sufficiently that the risks in connection with such
options are not greater than the risks in connection with transactions in the
underlying foreign currency futures contracts. Compared to the purchase or sale
of foreign currency futures contracts, the purchase of call or put options
thereon involves less potential risk to the Portfolio because the maximum amount
at risk is the premium paid for the option (plus transaction costs). However,
there may be circumstances when the purchase of a call or put option on a
foreign currency futures contract would result in a loss, such as when there is
no movement in the price of the underlying currency or futures contract, when
use of the underlying futures contract would not result in a loss.

INVESTMENT RESTRICTIONS

Fundamental. The following fundamental investment restrictions apply to each
Portfolio and may be changed with respect to a particular Portfolio only by the
majority vote of that Portfolio's outstanding shares (which for this purpose and
under the Investment Company Act of 1940, as amended (the "1940 Act"), means the
lesser of (i) 67% of the shares represented at a meeting at which more than 50%
of the outstanding shares are represented or (ii) more than 50% of the
outstanding shares). Accordingly, no Portfolio may:

(a) invest more than 5% of its total assets in securities of any one issuer,
other than securities issued by the U.S. Government, its agencies and
instrumentalities, or purchase more than 10% of the voting securities of any one
issuer, with respect to 75% of a Portfolio's total assets;

(b) invest more than 25% of its total assets in the securities of companies
primarily engaged in any one industry other than the U.S. Government, its
agencies or instrumentalities. Finance companies as a group are not considered
a single industry for purposes of this policy;

(c) borrow money, except through reverse repurchase agreements or from a bank
for temporary or emergency purposes in an amount not exceeding one third of the
value of its total assets nor will the Portfolios borrow for leveraging
purposes. In addition, although not a fundamental policy, the Portfolios will
repay any money borrowed before any additional portfolio securities are
purchased. See number (1) below for a further description regarding reverse
repurchase agreements;

(d) purchase or sell real estate (other than marketable securities representing
interests in, or backed by, real estate and securities of companies that deal in
real estate or mortgages) or real estate limited partnerships, or purchase or
sell physical commodities or contracts relating to physical commodities; or

(e) purchase or retain the securities of any open-end investment companies.

The above percentage limits are based upon current asset values at the time of
the applicable transaction; accordingly, a subsequent change in asset or
security values will not affect a transaction which was in compliance with the
investment restrictions at the time such transaction was effected.

13
<PAGE>

Supplemental. In addition, none of the Portfolios may:

(1) issue senior securities (other than with respect to borrowing through the
use of reverse repurchase agreements or from a bank for temporary or emergency
purposes as set forth in the Prospectus under "Investment Restrictions.");

(2) make loans, except (a) through the purchase of all or a portion of an issue
of debt securities in accordance with its investment objective, policies and
limitations, or (b) by engaging in repurchase agreements with respect to
portfolio securities, or (c) by lending securities to other parties, provided
that no securities loan may be made, if, as a result, more than 33 1/3% of the
value of its total assets would be lent to other parties;

(3) underwrite securities of other issuers;

(4) invest in companies for the purpose of exercising control or management;

(5) invest directly in interests in oil, gas or other mineral exploration or
development programs or mineral leases; or

(6) invest more than 10% of its total assets in warrants.

Whenever an investment policy or limitation states a maximum percentage of a
Portfolio's assets that may be invested in any security or other asset or sets
forth a policy regarding quality standards, such standard or percentage
limitation shall be determined immediately after and as a result of the
Portfolio's acquisition of such security or other asset. Accordingly, any later
increase or decrease in a percentage resulting from a change in values, net
assets or other circumstances will not be considered when determining whether
that investment complies with the Portfolio's investment policies and
limitations.

Each Portfolio's investment objectives and other investment policies not
designated as fundamental in this Statement of Additional Information are non-
fundamental and may be changed at any time by action of the Board of Directors.
Although a non-fundamental policy, each Portfolio may not purchase securities on
margin or make short sales, unless, by virtue of its ownership of other
securities, it has the right to obtain securities equivalent in kind and amount
to the securities sold and, if the right is conditional, the sale is made upon
the same conditions, except that the Fund may obtain such short-term credits as
may be necessary for the clearance of purchases and sales of securities.

MANAGEMENT OF THE FUND

Overall responsibility for management and supervision of the Fund rests with the
Board of Directors. The Directors approve all significant agreements between
the Fund and the persons and companies that furnish services to the Fund.

The individuals listed below are the officers and directors of the Fund. An
asterisk (*) has been placed next to the name of each director who is an
"interested person" of the Fund, as such term is defined in the 1940 Act, by
virtue of his or her affiliation with the Fund or Harding Loevner.

14
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------

Position with the Principal Occupation
Name, Address and Age Fund During Past Five Years
- --------------------- ---- ----------------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
R. Kelly Doherty Director Caymen Partners (private investment vehicle),
41 Post Road Director, 2/99 - present; Bankers Trust
Bernardsville, NJ 07924 Company, 1982 - 1/99, Vice Chairman,
Age, 41 1997-1/99.
- ---------------------------------------------------------------------------------------------------------------
Jane A. Freeman Director Rockefeller & Co., Investment Manager, 1988 -
c/o Scientific Learning 8/99; Scientific Learning (Neuroscience
1995 University Avenue Software), Treasurer and Vice President,
Berkeley, CA 94704 Finance & Business Development, 9/99 -
Age, 45 present.
- ---------------------------------------------------------------------------------------------------------------
Samuel R. Karetsky Director European Investors Inc., Managing Director
European Investors Inc. 11/98 - present; Samuel R. Karetsky L.L.C.
667 Madison Avenue, 16/th/ Floor (Consulting), 3/97 - 10/98; Morgan Stanley &
New York, NY 10021 Co., Managing Director, 6/95 - 3/97;
Age, 54 OFFITBANK, Managing Director, 4/90-6/95.
- ---------------------------------------------------------------------------------------------------------------
Carl W. Schafer Director The Atlantic Foundation (Oceanographic
66 Witherspoon Street Research), President, 1990-present.
Princeton, NJ 08542
Age, 63
- ---------------------------------------------------------------------------------------------------------------
David R. Loevner* Director, President Harding, Loevner Management, L.P., President
Harding, Loevner Management, L.P. and Chairman of the and CEO, 7/89 - present.
50 Division Street, Suite 401 Board
Somerville, NJ 08876
Age, 45
- ---------------------------------------------------------------------------------------------------------------
Susan C. Mosher Secretary Investors Bank & Trust Company, Director,
Investors Bank & Trust Company 1995 - present.
200 Clarendon Street
Boston, MA 02116
Age, 44
- ---------------------------------------------------------------------------------------------------------------
Richard Reiter Assistant Secretary Harding, Loevner Management, L.P. Product
Harding, Loevner Management, L.P. Information Manager, 4/96-present;
50 Division Street, Suite 401 HarrisTrust, Associate Vice President,
Somerville, NJ 08876 4/91-4/96.
Age, 34
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

15
<PAGE>

<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Timothy F. Osborne Treasurer Investors Bank & Trust Company, Director,
Investors Bank & Trust Company 1997 - present; Manager, 1995 -1997.
200 Clarendon Street
Boston, MA 02116
Age, 33
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

No employee of Harding Loevner or Investors Bank & Trust Company ("Investors
Bank") receives any compensation from the Fund for acting as an officer or
director of the Fund. The Fund pays each director who is not a director, officer
or employee of Harding Loevner, Investors Bank, or any of their affiliates, a
fee of $1,000 for each meeting attended, and each of the Directors receives an
annual retainer of $10,000 which is paid in quarterly installments at the end of
each quarter. Directors and officers of the Fund collectively owned less than
1% of the Fund's outstanding shares as of October 31, 1999.

By virtue of the responsibilities assumed by Harding Loevner, Investors Bank and
AMT Capital and their affiliates under their respective agreements with the
Fund, the Fund itself requires no employees in addition to its officers.

Director's Compensation Table for the period ended October 31, 1999

<TABLE>
<CAPTION>
Director Aggregate Compensation Pension or Estimated Total Compensation
From Registrant Retirement Benefits Annual benefits From Registrant and
Accrued As Part of Upon Retirement Fund Complex Paid
Fund Expenses to Directors
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David R. Loevner $0 $0 $0 $0
- --------------------------------------------------------------------------------------------------------------------------
R. Kelly Doherty /1/ $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------
Jane A. Freeman $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------
Samuel R. Karetsky $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------
Carl W. Schafer $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------
James C. Brady III /2/ $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

/1/ This director was appointed on September 9, 1999.

/2/ This director's resignation was accepted by the Board on June 10, 1999.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following shareholders may be deemed "control persons" of the Fund as such
term is defined in the 1940 Act in that they own more than 25% of the shares of
the Portfolios as indicated as of October 31, 1999:

16
<PAGE>

Multi-Asset Global Portfolio

<TABLE>
<CAPTION>
Amount and Nature of Percent of
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ----------
<S> <C> <C> <C>
Common Stock, Edgmont Consultants (Defined Benefit Plan Direct Ownership 49.79%
$.001 per Share and Money Purchase Plan) 308 French Road,
Newtown Square, PA 19073

Common Stock, Harding, Loevner Management, L.P. (Profit Direct Ownership 33.82%
$.001 per Share Sharing Thrift Plan and Investment Adviser's
Account), 50 Division Street, Suite 401,
Somerville, NJ 08876
</TABLE>

Emerging Markets Portfolio

<TABLE>
<CAPTION>
Amount and Nature of Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership Portfolio
- -------------- ------------------------------------ --------- ---------
<S> <C> <C> <C>
Common Stock, Harding, Loevner Management, L.P. (Profit Direct Ownership 48.18%
$.001 per Share Sharing Thrift Plan and Investment Adviser's
Account), 50 Division Street, Suite 401,
Somerville, NJ 08876
</TABLE>

As of October 31, 1999, the following persons held 5 percent or more of the
outstanding shares of the Portfolios as indicated and may be deemed principal
holders of the Fund:

International Equity Portfolio

<TABLE>
<CAPTION>
Amount and Nature of Beneficial Percent of
------------------------------- ----------
Title of Class Name and Address of Beneficial Owner Ownership Portfolio
- -------------- ------------------------------------ --------- ---------
<S> <C> <C> <C>
Common Stock, Wilmington Trust Company Agent for Longwood Direct Ownership 12.17%
$.001 per Share Gardens, Inc., PO Box 8882, Wilmington, DE
19899

Common Stock, National Gallery of Art, Sixth and Direct Ownership 11.09%
$.001 per Share Constitution Ave., N.W., Washington, DC
20565

Common Stock, NationsBanc Montgomery Securities LLC Direct Ownership 8.44%
$.001 per Share Custody Account for the Exclusive Benefit of
Customers, 600 Montgomery Street, San
Francisco, CA 94111
</TABLE>

17
<PAGE>

<TABLE>
<S> <C> <C> <C>
Common Stock, Public Welfare Foundation, Inc., 2600 Direct Ownership 7.08%
$.001 per Share Virginia Avenue NW, Washington, DC 20037

Common Stock, Bankers Trust Co., FBO Principia Corp., 500 Direct Ownership 6.55%
$.001 per Share Washington Ave., Suite 1010,
St. Louis, MO 63102
</TABLE>

Global Equity Portfolio

<TABLE>
<CAPTION>
Amount and Nature of Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership Portfolio
- -------------- ------------------------------------ --------- ---------
<S> <C> <C> <C>
Common Stock, Edward & Darlene Lowe Charitable Remainder Direct Ownership 21.43%
$.001 per Share Unitrust, P.O. Box 385 Cassopolis, MI 49031

Common Stock, Katherine H. Olmstead, 158 Hobart Road Direct Ownership 14.57%
$.001 per Share Chesnut Hill, MA 02167

Common Stock, Ann S. Bowers Separate Property Trust c/o Direct Ownership 13.32%
$.001 per Share the Noyce Foundation, 450 Sheridan Avenue
Palo Alto, CA 94306

Common Stock, Peoples Two Ten c/o Summit Bank, PO Box 821, Direct Ownership 8.88%
$.001 per Share Hackensack, NJ 07602

Common Stock, Lois E. Loevner, 308 French Road, Newtown Direct Ownership 5.26%
$.001 per Share Square, PA 19073
</TABLE>

Emerging Markets Portfolio

Amount and Nature of Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership Portfolio
- -------------- ------------------------------------ --------- ---------
<S> <C> <C> <C>
Common Stock, Alan & Susan Rothenberg Revocable Trust 42 Direct Ownership 13.47%
$.001 per Share Seventh Avenue, San Francisco, CA 94118

Common Stock, David R. Loevner, 73 Westcott Road, Direct Ownership 8.92%
$.001 per Share Princeton, NJ 08540
</TABLE>

18
<PAGE>

<TABLE>
<S> <C> <C> <C>
Common Stock, McCurry Companies, 1779 Tribute Road, Direct Ownership 8.92%
$.001 per Share Suite C, PO Box 838, Sacramento,CA 95812

Common Stock, Jane Hallett, 207 Russell Road, Princeton, Direct Ownership 6.69%
$.001 per Share NJ 08540

Common Stock, Tucker Anthony Inc. Custodian FBO Winton Direct Ownership 6.69%
$.001 per Share Tolles IRA, 21 Lincoln Street, Glen Ridge,
NJ 07028
</TABLE>

INVESTMENT ADVISER

Harding Loevner provides investment advisory services to the Fund. The terms of
the investment advisory agreements (the "Advisory Agreements") between the Fund,
on behalf of each Portfolio, and Harding Loevner obligate Harding Loevner to
provide investment advisory and portfolio management services to the Portfolios.
Harding Loevner is a registered investment adviser organized in 1989. Harding
Loevner provides investment advisory services to private investors and
institutions.

The Advisory Agreements are effective for successive annual periods, so long as
such continuance is specifically approved at least annually by (a) the Board of
Directors or (b) the vote of a "majority" (as defined in the 1940 Act) of a
Portfolio's outstanding shares voting as a single class; provided, that in
either event the continuance is also approved by at least a majority of the
Board of Directors who are not "interested persons" (as defined in the 1940 Act)
of the Fund by vote cast in person at a meeting called for the purpose of voting
on such approval.

The Advisory Agreements are terminable without penalty on not less than 60 days'
notice by the Board of Directors or by a vote of the holders of a majority of
the relevant Portfolio's outstanding shares voting as a single class, or upon
not less than 60 days' notice by Harding Loevner. Each of the Advisory
Agreements will terminate automatically in the event of its "assignment" (as
defined in the 1940 Act).

Harding Loevner pays all of its own expenses arising from the performance of its
obligations under the Advisory Agreements. Under its Advisory Agreements,
Harding Loevner also pays all executive salaries and expenses of the Directors
and Officers of the Fund who are employees of Harding Loevner or its affiliates,
and office rent of the Fund. Subject to the expense reimbursement provisions
described in the Prospectus for each Portfolio under "Portfolio Fees and
Expenses," other expenses incurred in the operation of the Fund are borne by the
Fund, including, without limitation, investment advisory fees and administration
fees, brokerage commissions, interest, fees and expenses of independent
attorneys, auditors, custodians, accounting agents, transfer agents, taxes, cost
of stock certificates and any other expenses (including clerical expenses) of
issue, sale, repurchase or redemption of shares, expenses of registering and
qualifying shares of the Fund under federal and state laws and regulations,
expenses of printing and distributing reports, notices and proxy materials to
existing shareholders, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of annual and special
shareholders' meetings, expense of printing and distributing prospectuses, fees
and expenses of Directors of the Fund who are not employees of Harding Loevner
or its affiliates, membership dues in the Investment Company Institute,
insurance premiums and extraordinary expenses such as litigation expenses. Fund
expenses directly attributable to a Portfolio are charged to that Portfolio;
other expenses are allocated proportionately among all the Portfolios in
relation to the net assets of each Portfolio.

19
<PAGE>

For the last three fiscal years ended October 31, 1999, the amount of advisory
fees paid by each Portfolio was as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
International Equity Fund Gross Waiver Net
Year ended 10/31/97 $2,652,732 $(212,334) $2,440,398
Year ended 10/31/98 2,814,194 (151,856) 2,662,338
Year ended 10/31/99

Global Equity Portfolio Gross Waiver Net
Year ended 10/31/97 $ 639,251 $ (76,638) $ 562,613
Year ended 10/31/98 584,574 (66,988) 517,586
Year ended 10/31/99

Multi-Asset Global Portfolio Gross Waiver Net
Year ended 10/31/97 $ 45,226 $ (41,402) $ 3,824
Year ended 10/31/98 60,125 (42,875) 17,250
Year ended 10/31/99

Emerging Markets Portfolio* Gross Waiver Net
Year ended 10/31/97 N/A N/A N/A
Year ended 10/31/98 N/A N/A N/A
Year ended 10/31/99
</TABLE>

*Commencement of Operations was November 9, 1998

DISTRIBUTION OF FUND SHARES

Shares of the Fund are distributed by AMT Capital pursuant to a Distribution
Agreement (the "Distribution Agreement") between the Fund and AMT Capital. AMT
Capital's address is AMT Capital Securities, L.L.C., 600 Fifth Avenue, 26th
Floor, New York, New York 10020. The Fund and AMT Capital have agreed to
indemnify one another against certain liabilities. AMT Capital furnishes the
services of its personnel to carry out its obligations under the Distribution
Agreement at its own expense and without cost to the Fund. The Distribution
Agreement will remain in effect from year to year and will continue for
successive annual periods only if its continuance is approved annually by a
majority of the Board of Directors who are not parties to such agreements or
"interested persons" of any such party and either by votes of a majority of the
Directors or a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund.

ADMINISTRATOR

Pursuant to its terms, the administration agreement (the "Administration
Agreement") between the Fund and Investors Bank as Administrator requires
Investors Bank to provide certain accounting, clerical and bookkeeping services,
Blue Sky, corporate secretarial services and assistance in the preparation and
filing of tax returns and

20
<PAGE>

reports to shareholders and the SEC. The Administration Agreement will remain in
effect until June 2002 and will automatically continue unless terminated on
notice. The following chart sets forth administrative fees paid by each
Portfolio. Prior to June 10, 1999, Investors Capital Services, Inc. served as
Administrator to the Fund.

For the last three fiscal years ended October 31, 1999, the amount of
administration fees paid by each Portfolio was as follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
Portfolio October 31, 1999 October 31, 1998 October 31, 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity Portfolio $562,839 $530,546
Global Equity Portfolio 87,686 95,888
Multi-Asset Global Portfolio 9,019 6,774
Emerging Markets Portfolio* N/A N/A
</TABLE>

*Commencement of Operations was November 9, 1998

PORTFOLIO TRANSACTIONS

The Advisory Agreements authorize Harding Loevner to select the brokers or
dealers that will execute the purchases and sales of investment securities for
each of the Fund's Portfolios and Harding Loevner to use reasonable efforts to
obtain the best available price and the most favorable execution with respect to
all transactions for the Portfolios. Harding Loevner will consider the full
range and quality of services offered by the executing broker or dealer when
making these determinations. Neither Harding Loevner nor any of its officers,
affiliates, or employees will act as principal or receive any compensation from
the Portfolios in connection with the purchase or sale of investments for the
Portfolios.

Some securities considered for investment by the Fund's Portfolios also may be
appropriate for other clients advised by Harding Loevner. If the purchase or
sale of securities consistent with the investment policies of a Portfolio and
one or more of these other clients advised by Harding Loevner is considered at
or about the same time, transactions in such securities will be allocated among
the Portfolio and clients in a manner deemed fair and reasonable by Harding
Loevner, as the case may be. Although there is no specified formula for
allocating such transactions, the various allocation methods used by Harding
Loevner, and the results of such allocations, are subject to periodic review by
the Board of Directors.

Brokers are selected on a basis of their overall assistance in terms of
execution capabilities and research services, provided that their commission
schedules are competitive with other firms providing similar services.

No trades will be executed with Harding Loevner, its affiliates, officers or
employees acting as principal or agent for others, although such entities and
persons may be trading contemporaneously in the same or similar securities,
except Harding Loevner may effect cross-trades provided that they are conducted
at market price and absent any commission.

21
<PAGE>

For the last three fiscal years ended October 31, 1999, the amount of brokerage
commissions paid by each Portfolio was as follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
Portfolio October 31, 1999 October 31, 1998 October 31, 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity Portfolio $695,309 $794,431
Global Equity Portfolio 148,242 82,629
Multi-Asset Global Portfolio 5,196 6,256
Emerging Markets Portfolio* N/A N/A
</TABLE>

*Commencement of Operations was November 9, 1998.

CAPITAL STOCK INFORMATION

The authorized capital stock of the Fund consists of 2,500,000,000 shares with
$.001 par value, allocated as follows: (i) 500,000,000 shares to the
International Equity Portfolio; (ii) 500,000,000 shares to the Global Equity
Portfolio; (iii) 500,000,000 shares to the Emerging Markets Portfolio; (iv)
500,000,000 shares to the Multi-Asset Global Portfolio and (v) 500,000,000
shares not yet allocated to any Portfolio. Holders of shares of a Portfolio have
one vote for each dollar, and a proportionate fraction of a vote for each
fraction of a dollar, of net asset value held by a shareholder. All shares
issued and outstanding are fully paid and non-assessable, transferable, and
redeemable at net asset value at the option of the shareholder. Shares have no
preemptive or conversion rights. The Board of Directors of the Fund, under
Maryland General Corporation Law, is authorized to establish more than one class
of shares for each portfolio of the Fund.

The shares of the Fund have non-cumulative voting rights, which means that the
holders of more than 50% of the shares voting for the election of Directors can
elect 100% of the Directors if they choose to do so, and, in such event, the
holders of the remaining less than 50% of the shares voting for the election of
Directors will be unable to elect any person or persons to the Board of
Directors.

NET ASSET VALUE

As used in the Prospectus, "Business Day" refers to those days when the New York
Stock Exchange is open for business, which is Monday through Friday except for
holidays. As of the date of this Statement of Additional Information, such
holidays are: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.

TAX CONSIDERATIONS

The following summary of tax consequences, which does not purport to be
complete, is based on U.S. federal tax laws and regulations in effect on the
date of this Statement of Additional Information, which are subject to change by
legislative or administrative action.

Qualification as a Regulated Investment Company. Each Portfolio has qualified
- -----------------------------------------------
and intends to continue to qualify to be treated as a regulated investment
company ("RIC") under the Internal Revenue Code of 1986, as amended (the
"Code"). Each of the Portfolios qualified as a RIC for the period ended October
31, 1999. To qualify as a RIC, a Portfolio must, among other things, (a) derive
at least 90% of its gross income each taxable year from dividends,

22
<PAGE>

interest, payments with respect to securities loans and gains from the sale or
other disposition of securities or foreign currencies, or other income derived
from its business of investing in securities (the "Qualifying Income
Requirement"); (b) diversify its holdings so that, at the end of each quarter of
the Portfolio's taxable year, (i) at least 50% of the market value of the
Portfolio's assets is represented by cash and cash items (including
receivables), U.S. Government securities, securities of other RICs and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of the value of
the Portfolio's total assets and not greater than 10% of the outstanding voting
securities of such issuer and (ii) not more than 25% of the value of the
Portfolio's total assets is invested in the securities of any one issuer (other
than U.S. Government securities or the securities of other RICs); and (c)
distribute at least 90% of its investment company taxable income (which
includes, among other items, dividends, interest and net short-term capital
gains in excess of net long-term capital losses) each taxable year.

If for any taxable year a Portfolio does not qualify as a RIC, all of its
taxable income will be taxed to the Portfolio at corporate rates. For each
taxable year that the Portfolio qualifies as a RIC, it will not be subject to
federal income tax on that part of its investment company taxable income and net
capital gains (the excess of net long-term capital gain over net short-term
capital loss) that it distributes to its shareholders. In addition, to avoid a
nondeductible 4% federal excise tax, the Portfolio must distribute during each
calendar year an amount equal to at least the sum of 98% of its ordinary income
(not taking into account any capital gains or losses) determined on a calendar
year basis, 98% of its capital gains in excess of capital losses determined in
general on an October 31 year-end basis, and any undistributed amounts from
previous years.

Distributions. Each Portfolio's automatic reinvestment of its taxable
- -------------
investment income, net short-term capital gains and net long-term capital gains
in additional shares of the Portfolio and distribution of such shares to
shareholders will be taxable to the Portfolio's shareholders. In general, such
shareholders will be treated as if such income and gains had been distributed to
them by the Portfolio and then reinvested by them in shares of the Portfolio,
even though no cash distributions have been made to shareholders. The automatic
reinvestment of taxable investment income and net realized short-term capital
gains of the Portfolio will be taxable to the Portfolio's shareholders as
ordinary income. If a portion of a Portfolio's income consists of dividends
paid by U.S. corporations, a portion of the dividend paid by the Portfolio may
be eligible for the corporate dividend received deduction. A distribution will
be treated as paid on December 31 of the current calendar year if it is declared
by a Portfolio in October, November or December with a record date in such a
month and paid by the Portfolio during January of the following calendar year.
Such distributions will be taxable to the shareholders in the calendar year in
which the distributions are declared, rather than in the year in which the
distributions are received. Each Portfolio will inform shareholders of the
amount and tax status of all amounts treated as distributed to them not later
than 60 days after the close of each calendar year.

Sale of Shares. Upon the sale or other disposition of shares of a Portfolio, or
- --------------
upon receipt of a distribution in complete liquidation of a Portfolio, a
shareholder generally will realize a capital gain or loss which will be long-
term or short-term, generally depending upon the shareholder's holding period
for the shares. Any loss realized on the sale or exchange will be disallowed to
the extent the shares disposed of are replaced (including shares acquired
pursuant to a dividend reinvestment plan) within a period of 61 days beginning
30 days before and ending 30 days after disposition of the shares. In such a
case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss. Any loss realized by the shareholder on a disposition of
Portfolio shares held by the shareholder for six months or less will be treated
as a long-term capital loss to the extent of any distributions of net capital
gains deemed received by the shareholder with respect to such shares.

Zero Coupon Securities. Investments by a Portfolio in zero coupon securities
- ----------------------
(other than tax-exempt zero coupon securities) will result in income to the
Portfolio equal to a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each year that the
securities are held, even though the Portfolio receives no cash interest
payments. This income is included in determining the amount of income which the
Portfolio must distribute to maintain its status as a RIC and to avoid the
payment of federal income tax and the 4% excise tax.

23
<PAGE>

Backup Withholding. A Portfolio may be required to withhold U.S. federal income
- ------------------
tax at the rate of 31% of all amounts deemed to be distributed as a result of
the automatic reinvestment by the Portfolio of its income and gains in
additional shares of the Portfolio and, all redemption payments made to
shareholders who fail to provide the Portfolio with their correct taxpayer
identification number or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
will be credited against a shareholder's U.S. federal income tax liability.
Corporate shareholders and certain other shareholders are exempt from such
backup withholding.

Tax Treatment of Hedging Transactions. The taxation of equity options and over-
- -------------------------------------
the-counter options on debt securities is governed by the Code section 1234.
Pursuant to Code section 1234, the premium received by a Portfolio for selling a
put or call option is not included in income at the time of receipt. If the
option expires, the premium is short-term capital gain to the Portfolio. If the
Portfolio enters into a closing transaction, the difference between the amount
paid to close out its position and the premium received is short-term capital
gain or loss. If a call option written by the Portfolio is exercised, thereby
requiring the Portfolio to sell the underlying security, the premium will
increase the amount realized upon the sale of such security and any resulting
gain or loss will be a capital gain or loss, and will be long-term or short-term
depending upon the holding period of the security. With respect to a put or
call option that is purchased by a Portfolio, if the option is sold, any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is long-term or short-term,
depending upon the holding period of the option. If the option is exercised,
the cost of the option, in the case of a call option, is added to the basis of
the purchased security and, in the case of a put option, reduces the amount
realized on the underlying security in determining gain or loss.

Certain options, futures, and forward contracts in which a Portfolio may invest
are "section 1256 contracts." Gains and losses on section 1256 contracts
generally are treated as 60% long-term (taxed at the 20% long-term capital gains
rate) and 40% short-term capital gains or losses ("60/40 treatment"), regardless
of the Portfolio's actual holding period for the contract. Also, a section 1256
contract held by the Portfolio at the end of each taxable year (and generally,
for the purposes of the 4% excise tax, on October 31 of each year) must be
treated as if the contract had been sold at its fair market value on that day
("mark to market treatment"), resulting in unrealized gains and losses being
treated as though they were realized. Foreign currency gain or loss (discussed
below) arising from section 1256 contracts may, however, be treated as ordinary
income or loss.

Generally, hedging transactions undertaken by a Portfolio may result in
"straddles" for federal income tax purposes. The straddle rules may affect the
character of gains or losses realized by the Portfolio. In addition, losses
realized by the Portfolio on positions that are part of a straddle may be
deferred under the straddle rules rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Further, the Portfolio may be required to capitalize, rather than
deduct currently, any interest expense on indebtedness incurred or continued to
purchase or carry any positions that are part of a straddle. Because only a few
regulations implementing the straddle rules have been promulgated, the tax
consequences to the Portfolio of engaging in hedging transactions are not
entirely clear. Hedging transactions may increase the amount of short-term
capital gain realized by a Portfolio which is taxed as ordinary income when
distributed to shareholders.

The Portfolio may make one or more of the elections available under the Code
that are applicable to straddles. If the Portfolio makes any of the elections,
the amount, character, and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections
may accelerate the recognition of gains or losses from the affected straddle
positions.

Because the straddle rules may affect the amount, character, and timing of gains
or losses from the positions that are part of a straddle, the amount of
Portfolio income that is distributed to members and that is taxed to them as
ordinary income or long-term capital gain may be increased or decreased as
compared to a Portfolio that did not engage in such hedging transactions.

24
<PAGE>

Tax Treatment of Foreign Currency-Related Transactions. Gains or losses
- ------------------------------------------------------
attributable to fluctuations in exchange rates that occur between the time a
Portfolio accrues receivables or liabilities denominated in a foreign currency
and the time the Portfolio actually collects such receivables, or pays such
liabilities, generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of certain options, futures, and forward contracts and
on disposition of debt securities denominated in a foreign currency, gains or
losses attributable to fluctuations in the value of foreign currency between the
date of acquisition of the security or contract and the date of disposition also
are treated as ordinary gain or loss. These gains or losses, referred to under
the Code as "Section 988" gains or losses, may increase or decrease the amount
of the Portfolio's investment company taxable income to be distributed to
members as ordinary income.

Tax Treatment of Passive Foreign Investment Companies. Each Portfolio may
- -----------------------------------------------------
invest in the stock of "passive foreign investment companies" ("PFICs") if such
stock is a permissible investment. A PFIC is a foreign corporation - other than
a "controlled foreign corporation" as to which a Portfolio is a U.S.
shareholder, that in general meets either of the following tests: (1) at least
75% of its gross income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of passive income. If a
Portfolio invests in stock of certain foreign investment companies, the
Portfolio may be subject to U.S. federal income taxation on a portion of any
"excess distribution" with respect to, or gain from the disposition of, such
stock. The tax would be determined by allocating on a pro rata basis such
distribution or gain to each day of the Portfolio's holding period for the
stock. The distribution or gain so allocated to any taxable year of the
Portfolio, other than the taxable year of the excess distribution or
disposition, would be taxed to the Portfolio at the highest ordinary income rate
in effect for such year, and the tax would be further increased by an interest
charge to reflect the value of the tax deferral deemed to have resulted from the
ownership of the foreign company's stock. Any amount of distribution or gain
allocated to the taxable year of the distribution or disposition would be
included in the Portfolio's investment company taxable income and, accordingly,
would not be taxable to the Portfolio to the extent distributed by the Portfolio
as a dividend to its shareholders.

A Portfolio may be able to make an election, in lieu of being taxable in the
manner described above, to include annually in income its pro rata share of the
ordinary earnings and net capital gain of any foreign investment company in
which it invests, regardless of whether it actually received any distributions
from the foreign company. These amounts would be included in the Portfolio's
investment company taxable income and net capital gain which, to the extent
distributed by the Portfolio as ordinary or capital gain dividends, as the case
may be, would not be taxable to the Portfolio. In order to make this election,
the Portfolio would be required to obtain certain annual information from the
foreign investment companies in which it invests, which in many cases may be
difficult to obtain.

Alternatively, each Portfolio may elect to "mark-to-market" its stock in any
PFIC. "Marking to market," in this context, means including in ordinary income
each taxable year, the excess, if any, of the fair market value of a PFIC's
stock over a Portfolio's adjusted basis therein as of the end of that year.
Pursuant to the election, a Portfolio also would be allowed to deduct (as an
ordinary, not capital, loss) the excess, if any, of its adjusted basis in PFIC
stock over the fair market value thereof as of the taxable year end, but only to
the extent of any net mark-to-market gains with respect to that stock included
by the Portfolio for prior taxable years. A Portfolio's adjusted basis in each
PFIC's stock with respect to which it makes this election will be adjusted to
reflect the amounts of income included and deductions taken under the election.

Foreign Shareholders. U.S. taxation of a shareholder who, as to the United
- --------------------
States, is a non-resident alien individual, a foreign trust or estate, foreign
corporation, or foreign partnership ("foreign shareholder") depends on whether
the income from the Portfolio is "effectively connected" with a U.S. trade or
business carried on by such shareholder.

If the income from a Portfolio is not "effectively connected" with a U.S. trade
or business carried on by the foreign shareholder, deemed distributions by the
Portfolio of investment company taxable income will be subject to a U.S. tax of
30% (or lower treaty rate), which tax is generally withheld from such
distributions. Deemed distributions of capital

25
<PAGE>

gain dividends and any gain realized upon redemption, sale or exchange of shares
will not be subject to U.S. tax at the rate of 30% (or lower treaty rate) unless
the foreign shareholder is a nonresident alien individual who is physically
present in the U.S. for more than 182 days during the taxable year and meets
certain other requirements. However, this 30% tax on capital gains of non-
resident alien individuals who are physically present in the United States for
more than the 182-day period only applies in exceptional cases because any
individual present in the United States for more than 182 days during the
taxable year is generally treated as a resident for U.S. federal income tax
purposes. In that case, such individual would be subject to U.S. federal income
tax on the individual's worldwide income at the graduated rates applicable to
U.S. citizens, rather than the 30% U.S. tax. In the case of a foreign
shareholder who is a non-resident alien individual, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% of deemed
distributions of net capital gains and redemption payments unless the foreign
shareholder certifies his or her non-U.S. status under penalties of perjury or
otherwise establishes an exemption. See "Backup Withholding" above.

If the income from a Portfolio is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then deemed distributions of
investment company taxable income and capital gain dividends and any gain
realized upon the redemption, sale or exchange of shares of the Portfolio will
be subject to U.S. federal income tax at the graduated rates applicable to U.S.
citizens or domestic corporations. Foreign corporate shareholders may also be
subject to the branch profits tax imposed by the Code.

The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders are advised to consult their own advisers with respect to the
particular tax consequences to them of an investment in a Portfolio.

Foreign Withholding Taxes. Income received by a Portfolio from sources within
- -------------------------
foreign countries may be subject to withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. If more than 50% of the value of a Portfolio's
total assets at the close of its taxable year consists of securities of foreign
corporations, the Portfolio will be eligible and may elect to "pass through" to
the Portfolio's shareholders the amount of foreign taxes paid by the Portfolio.
Pursuant to this election, a shareholder will be required to include in gross
income (in addition to dividends actually received) its pro rata share of the
foreign taxes paid by the Portfolio, and may be entitled either to deduct its
pro rata share of the foreign taxes in computing its taxable income or to use
the amount as a foreign tax credit against its U.S. federal income tax
liability, subject to limitations. Each shareholder will be notified within 60
days after the close of the Portfolio's taxable year whether the foreign taxes
paid by the Portfolio will "pass through" for that year. If a Portfolio is not
eligible to make the election to "pass through" to its shareholders its foreign
taxes, the foreign taxes it pays will reduce its investment company taxable
income and distributions by the Portfolio will be treated as U.S. source income.

Generally, a credit for foreign taxes is subject to the limitation that it may
not exceed the shareholder's U.S. tax attributable to its foreign source taxable
income. For this purpose, if the pass-through election is made, the source of
the Portfolio's income flows through to its shareholders. With respect to the
Portfolios, gains from the sale of securities will be treated as derived from
U.S. sources and certain currency fluctuation gains, including fluctuation gains
from foreign currency denominated debt securities, receivables and payables,
will be treated as ordinary income derived from U.S. sources. The limitation on
the foreign tax credit is applied separately to foreign source passive income
(as defined for purposes of the foreign tax credit), including the foreign
source passive income passed through by the Portfolios. Shareholders who are
not liable for federal income taxes will not be affected by any such "pass
through" of foreign tax credits.

Other Taxes. A Portfolio may be subject to state, local or foreign taxes in any
- -----------
jurisdiction in which the Portfolio may be deemed to be doing business. In
addition, shareholders of a Portfolio may be subject to state, local or foreign
taxes on distributions from the Portfolio. In many states, Portfolio
distributions which are derived from interest on certain U.S. Government
obligations may be exempt from taxation.

26
<PAGE>

Shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in a Portfolio.

SHAREHOLDER INFORMATION

Certificates representing shares of a particular Portfolio will not be issued to
shareholders. Investors Bank, the Fund's Transfer Agent, will maintain an
account for each shareholder upon which the registration and transfer of shares
are recorded, and any transfers shall be reflected by bookkeeping entry, without
physical delivery. Detailed confirmations of each purchase or redemption are
sent to each shareholder. Monthly statements of account are sent which include
shares purchased as a result of a reinvestment of Portfolio distributions.

The Transfer Agent will require that a shareholder provide requests in writing,
accompanied by a valid signature guarantee form, when changing certain
information in an account (i.e., wiring instructions, telephone privileges,
etc.).

The Fund reserves the right to waive the minimum initial investment in any
Portfolio.

The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order with
respect to shares of a Portfolio by making payment in whole or in part in
readily marketable securities chosen by the Fund and valued as they are for
purposes of computing the Portfolio's net asset value (redemption-in-kind). If
payment is made in securities, a shareholder may incur transaction expenses in
converting these securities to cash. The Fund has elected, however, to be
governed by Rule 18f-1 under the 1940 Act as a result of which the Fund is
obligated to redeem shares with respect to any one shareholder during any 90-day
period, solely in cash up to the lesser of $250,000 or 1% of the net asset value
of a Portfolio at the beginning of the period.

CALCULATION OF PERFORMANCE DATA

Each of the Portfolios may, from time to time, include "total return" in
advertisements or reports to shareholders or prospective investors. Quotations
of average annual total return will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a Portfolio of the
Fund over periods of 1, 5 and 10 years (up to the life of the Portfolio),
calculated pursuant to the following formula which is prescribed by the SEC:

P(1 + T)/n/ = ERV

Where:
P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period.

All total return figures assume that all dividends are reinvested when paid.

27
<PAGE>

The total return as defined above for the Fund's Portfolios for the one and five
year period ended October 31, 1999 (as applicable), and since the commencement
of operations of each Portfolio (annualized) to October 31, 1999, are as
follows:

<TABLE>
<CAPTION>
One Year Five Years Life of Portfolio Inception
<S> <C> <C> <C> <C>
International Equity Portfolio % % %* 5/11/94
Global Equity Portfolio % n/a %* 12/1/96
Multi-Asset Global Portfolio % n/a %* 11/1/96
Emerging Markets Portfolio % n/a %* 11/09/98
*Annualized
</TABLE>

TRANSFER AGENT

Investors Bank, 200 Clarendon Street, P.O. Box 9130, Boston, MA, 02117-9130,
serves as transfer agent, dividend disbursing agent and agent in connection with
any accumulation, open-account or similar plans provided to the shareholders of
the Fund.

CUSTODIAN

Investors Bank, 200 Clarendon Street, P.O. Box 9130, Boston, MA, 02117-9130,
serves as the custodian of the Fund's Portfolio securities and cash.

INDEPENDENT AUDITORS

Ernst & Young LLP, independent auditors, 787 Seventh Avenue, New York, New York
10019, serve as auditors of the Fund and perform annual audits of the Fund's
financial statements.

COUNSEL

Dechert Price & Rhoads, 1775 Eye Street, N.W., Washington, DC 20006, serves as
counsel to the Fund.

FINANCIAL STATEMENTS

The Fund's audited Financial Statements, including the Financial Highlights, for
the period ended October 31, 1999, appearing in the Annual Report to
Shareholders and the report thereon of Ernst & Young, LLP, independent auditors,
appearing therein are hereby incorporated by reference in this Statement of
Additional Information. The Annual Report to Shareholders is delivered with
this Statement of Additional Information to shareholders requesting this
Statement of Additional Information.

28
<PAGE>

APPENDIX - RATINGS DESCRIPTIONS

Standard & Poor's Rating Service

AAA. Bonds rated AAA are highest grade debt obligations. This rating indicates
an extremely strong capacity to pay principal and interest.

AA. Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

A. Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.

BBB. Bonds rated BBB are regarded as having adequate capacity to pay interest or
principal. Although these bonds normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and principal.

BB and Lower. Bonds rated BB, B, CCC, CC, C and D are regarded, on balance, as
predominately speculative with respect to the issuer's capacity to pay interest
and principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and D the highest degree of speculation. While
such bonds may have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

The ratings AA to D may be modified by the addition of a plus or minus sign to
show relative standing within the major rating categories.

A-1. Standard & Poors Commercial Paper ratings are current assessments of the
likelihood of timely payments of debts having original maturity of no more than
365 days. The A-1 designation indicates the degree of safety regarding timely
payment is very strong.

A-2. Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.

Moody's Investors Service, Inc.

Aaa. Bonds are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than the Aaa securities.

29
<PAGE>

A. Bonds which are rated A possess many favorable investment attributes and may
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa. Baa rated bonds are considered medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present, but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba. Bonds which are rated Ba are judged to have speculative elements because
their future cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class, because the protection of interest and
principal payments may be very moderate and not well safeguarded.

B and Lower. Bonds which are rated B generally lack characteristics of a
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the security over any long period of time may be
small. Bonds which are rated Caa are of poor standing. Such securities may be
in default of there may be present elements of danger with respect to principal
or interest. Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. Bonds which are rated C are the lowest rated class of
bonds and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through C in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

Moody's ratings for state and municipal and other short-term obligations will be
designated Moody's Investment Grade ("MIG"). This distinction is in recognition
---
of the differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower are uppermost in importance in short-
term borrowing, while various factors of the first importance in long-term
borrowing risk are of lesser importance in the short run.

MIG-1. Notes bearing this designation are of the best quality enjoying strong
protection from established cash flows of funds for their servicing or from
established and broad-based access to the market for refinancing, or both.

MIG-2. Notes bearing this designation are of favorable quality, with all
security elements accounted for, but lacking the undeniable strength of the
previous grade. Market access for refinancing, in particular, is likely to be
less well established.

P-1. Moody's Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. The designation "Prime-1" or "P-1" indicates the
highest quality repayment capacity of the rated issue.

P-2. Issuers have a strong capacity for repayment of short-term promissory
obligations.

30
<PAGE>

Thomson BankWatch, Inc.

A. Company possess an exceptionally strong balance sheet and earnings record,
translating into an excellent reputation and unquestioned access to its natural
money markets. If weakness or vulnerability exists in any aspect of the
company's business, it is entirely mitigated by the strengths of the
organization.

A/B. Company is financially very solid with a favorable track record and no
readily apparent weakness. Its overall risk profile, while low, is not quite as
favorable as companies in the highest rating category.

Fitch IBCA, Inc.

Long-term ratings:

Investment Grade

AAA - Highest credit quality. `AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA - Very high credit quality. `AA' ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A - High credit quality. `A' ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered strong.
This capacity may, nevertheless, be more vulnerable to changes in circumstances
or in economic conditions than is the case for higher ratings.

BBB - Good credit quality. `BBB' ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

BB - Speculative. `BB' ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B - Highly speculative. `B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C - High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A `CC' rating indicates that default of some
kind appears probable. `C' ratings signal imminent default.

DDD, DD, D - Default. The ratings of obligations in this category are based on
their prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. 'DDD' obligations

31
<PAGE>

have the highest potential for recovery, around 90%-100% of outstanding amounts
and accrued interest. 'DD' indicates potential recoveries in the range of 50%-
90%, and 'D' the lowest recovery potential, i.e., below 50%.

Short-term ratings:

F1 - Highest credit quality. Indicates the Best capacity for timely payment of
financial commitments; may have an added "+" to denote any exceptionally strong
credit feature.

F2 - Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the case
of the higher ratings.

F3 - Fair credit quality. The capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.

B - Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C - High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D - Default. Denotes actual or imminent payment default.

32
<PAGE>

Part C: OTHER INFORMATION

Item 23. Exhibits

(a) Articles of Incorporation, dated July 31, 1996 (previously filed as Exhibit
(1) to Registrant's Registration Statement on Form N-1A, File Nos. 333-09341,
811-07739) are incorporated herein by reference.

(b) By-laws (previously filed as Exhibit (2) to Registrant's Registration
Statement on Form N-1A, File Nos. 333-09341, 811-07739) are incorporated herein
by reference.

(d)(1) Advisory Agreement, dated October 14, 1996, between the Registrant
(International Equity Portfolio) and Harding, Loevner Management, L.P.
(previously filed as Exhibit 5(a) to Pre-Effective Amendment No.1 to
Registrant's Registration Statement on Form N-1A, File Nos. 333-09341, 811-
07739) is incorporated herein by reference.

(d)(2) Advisory Agreement, dated October 14, 1996, between the Registrant
(Global Equity Portfolio) and Harding, Loevner Management, L.P. (previously
filed as Exhibit 5(b) to Pre-Effective Amendment No.1 to Registrant's
Registration Statement on Form N-1A, File Nos. 333-09341, 811-07739) is
incorporated herein by reference.

(d)(3) Advisory Agreement, dated October 14, 1996, between the Registrant
(Multi-Asset Global Portfolio) and Harding, Loevner Management, L.P. (previously
filed as Exhibit 5(c) to Pre-Effective Amendment No.1 to Registrant's
Registration Statement on Form N-1A, File Nos. 333-09341, 811-07739) is
incorporated herein by reference.

(d)(4) Advisory Agreement, dated October 14, 1996, between the Registrant
(Emerging Markets Portfolio) and Harding, Loevner Management, L.P. (previously
filed as Exhibit 5(d) to Pre-Effective Amendment No.1 to Registrant's
Registration Statement on Form N-1A, File Nos. 333-09341, 811-07739) is
incorporated herein by reference.

(e)(1) Distribution Agreement, dated October 14, 1996, between Registrant and
AMT Capital Services, Inc. (previously filed as Exhibit 6(a) to Pre-Effective
Amendment No.1 to Registrant's Registration Statement on Form N-1A, File Nos.
333-09341, 811-07739) is incorporated herein by reference.

(e)(2) Distribution Agreement, dated May 29, 1998, between Registrant and AMT
Capital Securities, L.L.C. (previously filed as Exhibit 6(b) to Pre-Effective
Amendment No.3 to Registrant's Registration Statement on Form N-1A, File Nos.
333-09341, 811-07739) is incorporated herein by reference.

(f) Not applicable.

(g)(1) Form of Custodian Agreement, dated October 28, 1996, between Registrant
and Investors Bank & Trust Company (previously filed as Exhibit 8 to Pre-
Effective Amendment No.1 to Registrant's Registration Statement on Form N-1A,
File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(g)(2) Custodian Agreement, dated June 10, 1999, between Registrant and
Investors Bank & Trust Company, is filed herewith.
<PAGE>

(h)(1) Administration Agreement, dated October 14, 1996, between Registrant and
AMT Capital Services, Inc. (previously filed as Exhibit 9(a) to Pre-Effective
Amendment No.1 to Registrant's Registration Statement on Form N-1A, File Nos.
333-09341, 811-07739) is incorporated herein by reference.

(h)(2) Form of Transfer Agency Agreement, dated October 28, 1996, between
Registrant and Investors Bank & Trust Company (previously filed as Exhibit 9(b)
to Pre-Effective Amendment No.1 to Registrant's Registration Statement on Form
N-1A, File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(h)(3) Administration Agreement, dated May 29, 1998, between Registrant and
Investors Capital Services, Inc. (previously filed as Exhibit 9(c) to Pre-
Effective Amendment No.3 to Registrant's Registration Statement on Form N-1A,
File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(h)(4) Administration Agreement, dated June 10, 1999, between Registrant and
Investors Bank & Trust Company, is filed herewith.

(h)(5) Transfer Agency and Service Agreement, dated June 10, 1999, between
Registrant and Investors Bank & Trust Company, is filed herewith.

(i) Opinion and Consent of Dechert Price & Rhoads (previously filed as Exhibit
10 to Pre-Effective Amendment No.1 to Registrant's Registration Statement on
Form N-1A, File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(j)(1) Consent of Ernst & Young to be filed by amendment.

(j)(2) Power of Attorney filed herewith.

(k) None.

(l)(1) Share Purchase Agreement, dated October 14, 1996, between Registrant and
David R. Loevner for the International Equity Portfolio (previously filed as
Exhibit 13(a) to Pre-Effective Amendment No.1 to Registrant's Registration
Statement on Form N-1A, File Nos. 333-09341, 811-07739) is incorporated herein
by reference.

(l)(2) Share Purchase Agreement, dated October 14, 1996, between Registrant and
David R. Loevner for the Emerging Markets Portfolio (previously filed as Exhibit
13(b) to Pre-Effective Amendment No.1 to Registrant's Registration Statement on
Form N-1A, File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(l)(3) Share Purchase Agreement, dated October 14, 1996, between Registrant and
David R. Loevner for the Multi-Asset Global Portfolio (previously filed as
Exhibit 13(c) to Pre-Effective Amendment No.1 to Registrant's Registration
Statement on Form N-1A, File Nos. 333-09341, 811-07739) is incorporated herein
by reference.

(l)(4) Share Purchase Agreement, dated October 14, 1996, between Registrant and
David R. Loevner for the Global Equity Portfolio (previously filed as Exhibit
13(d) to Pre-Effective Amendment No.1 to Registrant's Registration Statement on
Form N-1A, File Nos. 333-09341, 811-07739) is incorporated herein by reference.

(m) None.

(n) None.
<PAGE>

Item 24. Persons Controlled by or Under Common Control with Registrant

None.

Item 25. Indemnification

The Registrant shall indemnify directors, officers, employees and agents of the
Registrant against judgments, fines, settlements and expenses to the fullest
extent allowed, and in the manner provided, by applicable federal and Maryland
law, including Section 17(h) and (i) of the Investment Company Act of 1940 (the
"1940 Act"). In this regard, the Registrant undertakes to abide by the
provisions of Investment Company Act Releases No. 11330 and 7221 until amended
or superseded by subsequent interpretation of legislative or judicial action.

Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, Registrant understands that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

Item 26. Business and Other Connections of the Investment Adviser

Harding, Loevner Management, LP (the "Investment Adviser") is a company
organized under the laws of New Jersey State and it is an investment adviser
registered under the Investment Advisers Act of 1940 (the "Advisers Act").

The list required by this Item 26 of officers and directors of the Investment
Adviser, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by the Investment Adviser pursuant to the Advisers Act
(SEC File No. 801-36845).

Item 27. Principal Underwriter

(a) In addition to the Registrant, AMT Capital Securities, L.L.C. currently acts
as distributor to FFTW Funds, Inc., SAMCO Funds, Inc., and TIFF Investment
Program, Inc. AMT Capital Securities, L.L.C. is registered with the Securities
and Exchange Commission as a broker/dealer and is a member of the National
Association of Securities Dealers, Inc.

(b) For each Director or officer of AMT Capital Securities, L.L.C.

<TABLE>
<CAPTION>
Name and Principal Positions & Offices with Positions & Offices
Business Address Distributor with Registrant
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Alan M. Trager Director, Chairman and None
600 Fifth Avenue Treasurer
26th Floor
New York, NY 10020
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Arthur Goetchius President None
600 Fifth Avenue
26th Floor
New York, NY 10020
- ------------------------------------------------------------------------------------------
Carla E. Dearing Vice President None
600 Fifth Avenue
26th Floor
New York, NY 10020
- ------------------------------------------------------------------------------------------
</TABLE>

Item 28. Location of Accounts and Records

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act, and the rules thereunder are maintained at the offices of
the Investment Adviser, the Custodian and the Administrator.

Harding, Loevner Management, L.P.
50 Division Street, Suite 401
Somerville, N.J. 08876

Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02117-9130

Item 29. Management Services

Not applicable.

Item 30 Undertakings.

Registrant hereby undertakes to call a meeting of shareholders for the purpose
of voting upon the question of removal of one or more of the Registrant's
directors when requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of common stock and, in connection with such
meeting, to assist in communications with other shareholders in this regard, as
provided under Section 16(c) of the 1940 Act.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Somerville, State of New Jersey on the 19th day of November, 1999.

HARDING, LOEVNER FUNDS, INC.

By: */s/ David R. Loevner
---------------------
David R. Loevner, President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement had been signed below by the following
persons in the capacities indicated on the 19th day of November, 1999.

<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>

*/s/ David R. Loevner Director and President
- ---------------------
David R. Loevner

/s/ Timothy F. Osborne Treasurer
- ----------------------
Timothy F. Osborne

*/s/ Jane A. Freeman Director
- --------------------
Jane A. Freeman

*/s/ Carl W. Schafer Director
- --------------------
Carl W. Schafer

*/s/ Samuel R. Karetsky Director
- -----------------------
Samuel R. Karetsky

*/s/ R. Kelly Doherty Director
- ---------------------
R. Kelly Doherty

/s/ Susan C. Mosher
- -------------------
* Attorney-in-Fact

</TABLE>
<PAGE>

HARDING, LOEVNER FUNDS, INC.

EXHIBIT INDEX

No. Exhibit
--- -------

(g)(2) Custodian Agreement
(h)(4) Administration Agreement
(h)(5) Transfer Agency and Service Agreement
(j)(2) Power of Attorney

<PAGE>

Exhibit (g)(2)

CUSTODIAN AGREEMENT

AGREEMENT made as of the 1st day of June, 1999 by and between Harding,
Loevner Funds, Inc., a corporation organized under the laws of Maryland (the
"Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the
"Bank").

The Fund, an open-end management investment company, on behalf of the
portfolios/series listed on Appendix A hereto (as such Appendix A may be amended
---------- ----------
from time to time) (each a "Portfolio" and collectively, the "Portfolios"),
desires to place and maintain all of its Portfolio Securities and cash in the
custody of the Bank. The Bank has at least the minimum qualifications required
by Section 17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") to
act as custodian of the Portfolio Securities and cash of the Fund, and has
indicated its willingness to so act, subject to the terms and conditions of this
Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:

1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
------------------------
custodian of its Portfolio Securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix B
----------
hereto.

2. Definitions. Whenever used herein, the terms listed below will have
-----------
the following meaning:

2.1 Authorized Person. Authorized Person will mean any of the persons
-----------------
duly authorized to give Proper Instructions or otherwise act on behalf of the
Fund by appropriate resolution of its Board, and set forth in a certificate as
required by Section 4 hereof.

2.2 Board. Board will mean the Board of Directors of the Fund.
-----

2.3 Security. The term security as used herein will have the same
--------
meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing, and
futures, forward contracts and options thereon.
<PAGE>

2.4 Portfolio Security. Portfolio Security will mean any security
------------------
owned by the Fund.

2.5 Officers' Certificate. Officers' Certificate will mean, unless
---------------------
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.

2.6 Book-Entry System. Book-Entry System shall mean the Federal
-----------------
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.

2.7 Depository. Depository shall mean The Depository Trust Company
----------
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.

2.8 Proper Instructions. Proper Instructions shall mean (i)
-------------------
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
The Bank shall act upon and comply with any subsequent Proper Instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act, the Fund shall give the Bank specific Proper Instructions as to
the action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Board accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communication
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing that such procedures afford adequate
safeguards for the Fund's assets.

3. Separate Treatment of Portfolios. If the Fund has more than one series
--------------------------------
or portfolio, the Bank will segregate the assets of each series or portfolio to
which this Agreement relates into a separate account for each such series or
portfolio containing the assets of such series or portfolio (and all investment
earnings thereon). Unless the context otherwise requires, any reference in this
Agreement to any actions to be taken by the Fund shall be deemed to refer to the
Fund acting on behalf of one or more of its series, any reference in this
Agreement to any assets of the Fund, including, without limitation, any
Portfolio Securities and cash and earnings thereon, shall be deemed to refer
only to assets of the applicable series, any duty or obligation of

2
<PAGE>

the Bank hereunder to the Fund shall be deemed to refer to duties and
obligations with respect to such individual series and any obligation or
liability of the Fund hereunder shall be binding only with respect to such
individual series, and shall be discharged only out of the assets of such
series.

4. Certification as to Authorized Persons. The Secretary or Assistant
--------------------------------------
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
(i) the names and signatures of the Authorized Persons and (ii) the names of the
members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or Assistant
Secretary of the Fund will sign a new or amended certification setting forth the
change and the new, additional or omitted names or signatures. The Bank will be
entitled to rely and act upon any Officers' Certificate given to it by the Fund
which has been signed by Authorized Persons named in the most recent
certification received by the Bank.

5. Custody of Cash. As custodian for the Fund, the Bank will open and
---------------
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit account
upon which the Bank reserves the right to require seven (7) days notice prior to
withdrawal of cash from such an account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding shares of common stock of the
Fund, notification from the Fund's transfer agent as provided in Section 7,
requesting such payment, designating the payee or the account or accounts to
which the Bank will release funds for deposit, and stating that it is for a
purpose permitted under the terms of this Section 5, specifying the applicable
subsection, the Bank will make payments of cash held for the accounts of the
Fund, insofar as funds are available for that purpose, only as permitted in
subsections 5.1-5.9 below.

5.1 Purchase of Securities. Upon the purchase of securities for the
----------------------
Fund, against contemporaneous receipt of such securities by the Bank or against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction report in the case of Book Entry Paper (as
that term is defined in Section 6.6 hereof)) of purchase of the securities
received by the Bank before such payment is made, as confirmed in the Proper
Instructions received by the Bank before such payment is made.

3
<PAGE>

5.2 Redemptions. In such amount as may be necessary for the
-----------
repurchase or redemption of common shares of the Fund offered for repurchase or
redemption in accordance with Section 7 of this Agreement.

5.3 Distributions and Expenses of Fund. For the payment on the
----------------------------------
account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, distribution fees, fees of the Bank for its services hereunder
and reimbursement of the expenses and liabilities of the Bank as provided
hereunder, fees of any transfer agent, fees for legal, accounting, and auditing
services, or other operating expenses of the Fund.

5.4 Payment in Respect of Securities. For payments in connection with
--------------------------------
the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Fund held by or to be delivered to the Bank.

5.5 Repayment of Loans. To repay loans of money made to the Fund,
------------------
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;

5.6 Repayment of Cash in connection with Securities Lending. To repay
-------------------------------------------------------
the cash delivered to the Fund for the purpose of collateralizing the obligation
to return to the Fund certificates borrowed from the Fund representing Portfolio
Securities, but only upon redelivery to the Bank of such borrowed certificates.

5.7 Foreign Exchange Transactions.
-----------------------------

(a) For payments in connection with foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery
(collectively, "Foreign Exchange Agreements")which may be entered into by the
Bank on behalf of the Fund upon the receipt of Proper Instructions, such Proper
Instructions to specify the currency broker or banking institution (which may be
the Bank, or any other subcustodian or agent hereunder, acting as principal)
with which the contract or option is made, and the Bank shall have no duty with
respect to the selection of such currency brokers or banking institutions with
which the Fund deals or for their failure to comply with the terms of any
contract or option.

(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party acting
on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of the
Fund on the Bank's books.

5.8 Other Authorized Payments. For other authorized transactions of
-------------------------
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making

4
<PAGE>

any such payment the Bank will also receive a certified copy of a resolution of
the Board signed by an Authorized Person (other than the Person certifying such
resolution) and certified by its Secretary or Assistant Secretary, naming the
person or persons to whom such payment is to be made, and either describing the
transaction for which payment is to be made and declaring it to be an authorized
transaction of the Fund, or specifying the amount of the obligation for which
payment is to be made, setting forth the purpose for which such obligation was
incurred and declaring such purpose to be a proper corporate purpose.

5.9 Termination: Upon the termination of this Agreement as
-----------
hereinafter set forth pursuant to Section 8 and Section 18 of this Agreement.

6. Securities.
----------

6.1 Segregation and Registration. Except as otherwise provided
----------------------------
herein, and except for securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive and
hold pursuant to the provisions hereof, in a separate account or accounts and
physically segregated at all times from those of other persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
account of the Fund. All such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. Subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise directed
by Proper Instructions or an Officers' Certificate), in the name of a registered
nominee of the Bank as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, and will execute and deliver all
such certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.

The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.

6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
------------------
will vote any of the Portfolio Securities held hereunder, except in accordance
with Proper Instructions or an Officers' Certificate. The Bank will promptly
execute and deliver, or cause to be executed and delivered promptly, to the Fund
all notices, proxies and proxy soliciting materials delivered to the Bank with
respect to such Portfolio Securities, such proxies to be executed by the
registered holder of such Portfolio Securities (if registered otherwise than in
the name of the Fund), but without indicating the manner in which such proxies
are to be voted.

6.3 Corporate Action. If at any time the Bank is notified that an
----------------
issuer of any Portfolio Security has taken or intends to take a corporate action
(a "Corporate Action") that affects the rights, privileges, powers, preferences,
qualifications or ownership of a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which Corporate Action requires an affirmative response or action on
the part of the holder of such Portfolio Security (a "Response"), the Bank shall
notify the Fund promptly of the Corporate Action, the Response

5
<PAGE>

required in connection with the Corporate Action and the Bank's deadline for
receipt from the Fund of Proper Instructions regarding the Response (the
"Response Deadline"). The Bank shall forward to the Fund via telecopier and/or
overnight courier all notices, information statements or other materials
relating to the Corporate Action promptly after receipt of such materials by the
Bank.

(a) The Bank shall act upon a required Response only after
receipt by the Bank of Proper Instructions from the Fund no later than 5:00 p.m.
on the date specified as the Response Deadline and only if the Bank (or its
agent or subcustodian hereunder) has actual possession of all necessary
securities, consents and other materials no later than 5:00 p.m. on the date
specified as the Response Deadline.

(b) The Bank shall have no duty to act upon a required Response
if Proper Instructions relating to such Response and all necessary securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. on the date specified as the Response Deadline.
Notwithstanding, the Bank may, in its sole discretion, use its best efforts to
act upon a Response for which Proper Instructions and/or necessary securities,
consents or other materials are received by the Bank after 5:00 p.m. on the date
specified as the Response Deadline, it being acknowledged and agreed by the
parties that any undertaking by the Bank to use its best efforts in such
circumstances shall in no way create any duty upon the Bank to complete such
Response prior to its expiration.

(c) In the event that the Fund notifies the Bank of a Corporate
Action requiring a Response and the Bank has received no other notice of such
Corporate Action, the Response Deadline shall be 48 hours prior to the Response
expiration time set by the depository processing such Corporate Action.

(d) Section 14.3(e) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by a Selected Foreign Sub-
Custodian.

6.4 Book-Entry System. Provided (i) the Bank has received a certified
-----------------
copy of a resolution of the Board specifically approving deposits of Fund assets
in the Book-Entry System, and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:

(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for its customers;

(b) The records of the Bank (and any such agent) with respect to
the Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other securities deposited in the Account and shall at all times during the
regular business hours of the Bank (or such agent) be open for inspection by
duly authorized officers, employees or agents of the Fund. Where

6
<PAGE>

securities are transferred to the Fund's account, the Bank shall also, by book
entry or otherwise, identify as belonging to the Fund a quantity of securities
in a fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve
Bank;

(c) The Bank (or its agent) shall pay for securities purchased
for the account of the Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund upon (i) receipt of advice from the
Book-Entry System that such Portfolio Securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Bank (or its
agent) to reflect such payment and transfer for the account of the Fund. The
Bank (or its agent) shall transfer securities sold or loaned for the account of
the Fund upon:

(i) receipt of advice from the Book-Entry System that
payment for securities sold or payment of the initial cash collateral against
the delivery of securities loaned by the Fund has been transferred to the
Account; and

(ii) the making of an entry on the records of the Bank (or
its agent) to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Book-Entry System of transfers of securities for
the account of the Fund shall identify the Fund, be maintained for the Fund by
the Bank and shall be provided to the Fund at its request. The Bank shall send
the Fund a confirmation, as defined by Rule 17f-4 of the 1940 Act, of any
transfers to or from the account of the Fund; and

(d) The Bank will promptly provide the Fund with any report
obtained by the Bank or its agent on the Book-Entry System's accounting system,
internal accounting control and procedures for safeguarding securities deposited
in the Book-Entry System.

6.5 Use of a Depository. Provided (i) the Bank has received a
-------------------
certified copy of a resolution of the Board specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:

(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and remit
to the Bank on behalf of the Fund all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof;

(b) Registration of Portfolio Securities may be made in the name
of any nominee or nominees used by such Depository;

(c) Payment for securities purchased and sold may be made through
the clearing medium employed by such Depository for transactions of participants
acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the securities to or for the account of the Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the securities to or for the

7
<PAGE>

account of the Fund; and upon any sale of Portfolio Securities, delivery of the
securities will be made only against payment therefor or, in the event Portfolio
Securities are loaned, delivery of securities will be made only against receipt
of the initial cash collateral to or for the account of the Fund; and

(d) The Bank shall use its best efforts to provide that:

(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to the
Bank upon its request;

(ii) Proxy materials received by a Depository with respect
to Portfolio Securities deposited with such Depository are forwarded immediately
to the Bank for prompt transmittal to the Fund;

(iii) Such Depository promptly forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;

(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and duties
hereunder as may be necessary for the Fund to comply with the recordkeeping
requirements under Section 31(a) of the 1940 Act and the rules thereunder; and

(v) Such Depository delivers to the Bank all internal
accounting control reports, whether or not audited by an independent public
accountant, as well as such other reports as the Fund may reasonably request in
order to verify the Portfolio Securities held by such Depository.

6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
---------------------------------------------
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that the Fund has purchased such Issuer's Book-Entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a book-
entry agreement (the "Issuers"). In maintaining procedures for Book-Entry Paper,
the Bank agrees that:

(a) The Bank will maintain all Book-Entry Paper held by the Fund
in an account of the Bank that includes only assets held by it for customers;

(b) The records of the Bank with respect to the Fund's purchase
of Book-Entry Paper through the Bank will identify, by book-entry, commercial
paper belonging to the Fund which is included in the Book-Entry System and shall
at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Fund;

8
<PAGE>

(c) The Bank shall pay for Book-Entry Paper purchased for the
account of the Fund upon contemporaneous (i) receipt of advice from the Issuer
that such sale of Book-Entry Paper has been effected, and (ii) the making of an
entry on the records of the Bank to reflect such payment and transfer for the
account of the Fund;

(d) The Bank shall cancel such Book-Entry Paper obligation upon
the maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been transferred to the Fund, and (ii) the making of
an entry on the records of the Bank to reflect such payment for the account of
the Fund; and

(e) The Bank will send to the Fund such reports on its system of
internal accounting control with respect to the Book-Entry Paper as the Fund may
reasonably request from time to time.

6.7 Use of Immobilization Programs. Provided (i) the Bank has
------------------------------
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated by
a bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and
(ii) for each year following such approval the Board has reviewed and approved
the arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such bank acting as a subcustodian hereunder.

6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
--------------
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to the Fund and that the books of the Bank identify the European Branch holding
such Portfolio Securities. Notwithstanding any other provision of this Agreement
to the contrary, except as stated in the first sentence of this subsection 6.8,
the Bank shall be under no other duty with respect to such Eurodollar CDs
belonging to the Fund.

6.9 Options and Futures Transactions.
--------------------------------

(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.

(i) The Bank shall take action as to put options ("puts")
and call options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of any
agreement entered into upon receipt of Proper Instructions among the Bank, any
broker-dealer registered with the National Association of Securities Dealers,
Inc. (the "NASD"), and, if necessary, the Fund, relating to the compliance with
the rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations.

(ii) Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or is
maintaining adequate margin, if required, with any broker in connection with any
option, nor shall the Bank be under duty or

9
<PAGE>

obligation to present such option to the broker for exercise unless it receives
Proper Instructions from the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or withdrawn
from a Segregated Account (as defined in subsection 6.10 below). The Bank
specifically, but not by way of limitation, shall not be under any duty or
obligation to: (i) periodically check or notify the Fund that the amount of such
collateral held by a broker or held in a Segregated Account is sufficient to
protect such broker or the Fund against any loss; (ii) effect the return of any
collateral delivered to a broker; or (iii) advise the Fund that any option it
holds, has or is about to expire. Such duties or obligations shall be the sole
responsibility of the Fund.

(b) Puts, Calls and Futures Traded on Commodities Exchanges

(i) The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Fund in accordance with the
provisions of any agreement entered into upon the receipt of Proper Instructions
among the Fund, the Bank and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund.

(ii) The responsibilities of the Bank as to futures, puts and
calls traded on commodities exchanges, any Futures Commission Merchant account
and the Segregated Account shall be limited as set forth in subparagraph (a)(ii)
of this Section 6.9 as if such subparagraph referred to Futures Commission
Merchants rather than brokers, and Futures and puts and calls thereon instead of
options.

6.10 Segregated Account. The Bank shall upon receipt of Proper
------------------
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund.

(a) Cash and/or liquid Portfolio Securities may be transferred
into a Segregated Account upon receipt of Proper Instructions in the following
circumstances:

(i) in accordance with the provisions of any agreement
among the Fund, the Bank and a broker-dealer registered under the Exchange Act
and a member of the NASD or any Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered Contract Market, or of
any similar organizations regarding escrow or other arrangements in connection
with transactions by the Fund;

(ii) for the purpose of segregating cash or liquid
securities in connection with options purchased or written by the Fund or
commodity futures purchased or written by the Fund;

(iii) for the deposit of liquid Portfolio Securities, having
a market value (marked to market on a daily basis) at all times equal to not
less than the aggregate purchase

10
<PAGE>

price due on the settlement dates of all the Fund's then outstanding forward
commitment or "when-issued" agreements relating to the purchase of Portfolio
Securities and all the Fund's then outstanding commitments under reverse
repurchase agreements entered into with broker-dealer firms;

(iv) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;

(v) for other proper corporate purposes, but only, in the
case of this clause (v), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the executive committee of
the Board signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such Segregated
Account and declaring such purposes to be proper corporate purposes.

(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:

(i) with respect to assets deposited in accordance with
the provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;

(ii) with respect to assets deposited pursuant to (a)(iii)
or (a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued agreements for the purchase of
Portfolio Securities and under reverse repurchase agreements;

(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;

(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of Portfolio Securities or
reverse repurchase agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in the
Segregated Account;

(v) for delivery upon settlement of a forward commitment
or when-issued agreement for the sale of Portfolio Securities; or

(vi) with respect to assets deposited pursuant to (a)(v)
above, in accordance with the purposes of such account as set forth in Proper
Instructions.

6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
--------------------------------------
receipt of Proper Instructions relating to the purchase by the Fund of interest-
bearing fixed-term and call deposits, transfer cash, by wire or otherwise, in
such amounts and to such bank or banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Fund appropriate notation as to the amount of each such deposit, the
banking

11
<PAGE>

institution with which such deposit is made (the "Deposit Bank"), and shall
retain such forms of advice or receipt evidencing the deposit, if any, as may be
forwarded to the Bank by the Deposit Bank. Such deposits shall be deemed
Portfolio Securities of the Fund and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect of
other Portfolio Securities of the Fund.

6.12 Transfer of Securities. The Bank will transfer, exchange,
----------------------
deliver or release Portfolio Securities held by it hereunder, insofar as such
Portfolio Securities are available for such purpose, provided that any such
transfer, exchange, delivery or release under this Section will be made only
upon receipt of Proper Instructions. The Proper Instructions shall state that
such transfer, exchange or delivery is for a purpose permitted under the terms
of this Section 6.12, and shall specify the applicable subsection, or describe
the purpose of the transaction with sufficient particularity to permit the Bank
to ascertain the applicable subsection. After receipt of such Proper
Instructions, the Bank will transfer, exchange, deliver or release Portfolio
Securities only in the following circumstances:

(a) Upon sales of Portfolio Securities for the account of the
Fund, against contemporaneous receipt by the Bank of payment therefor in full,
or against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale received by the Bank before such payment is made,
as confirmed in the Proper Instructions received by the Bank before such payment
is made;

(b) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided, however, that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for failure
to so tender in a timely manner unless such Proper Instructions are received by
the Bank at least two business days prior to the date required for tender, and
unless the Bank (or its agent or subcustodian hereunder) has actual possession
of such Security at least two business days prior to the date of tender;

(d) For the purpose of redeeming in-kind shares of the Fund upon
authorization from the Fund;

(e) In the case of option contracts owned by the Fund, for
presentation to the endorsing broker;

(f) When such Portfolio Securities are called, redeemed or
retired or otherwise become payable;

12
<PAGE>

(g) For the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the Fund by
any bank, including the Bank; provided, however, that such Portfolio Securities
will be released only upon payment to the Bank for the account of the Fund of
the moneys borrowed, provided further, however, that in cases where additional
collateral is required to secure a borrowing already made, and such fact is made
to appear in the Proper Instructions, Portfolio Securities may be released for
that purpose without any such payment. In the event that any pledged Portfolio
Securities are held by the Bank, they will be so held for the account of the
lender, and after notice to the Fund from the lender in accordance with the
normal procedures of the lender and any loan agreement between the fund and the
lender that an event of deficiency or default on the loan has occurred, the Bank
may deliver such pledged Portfolio Securities to or for the account of the
lender;

(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the fair
market value of such security, as set forth in the Proper Instructions received
by the Bank before such payment is made;

(i) for the purpose of delivering securities lent by the Fund to
a bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such securities
entered into by the Fund;

(j) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the Bank
will also receive a certified copy of resolutions of the Board, signed by an
authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and

(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 16 of this Agreement.

As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.

7. Redemptions. In the case of payment of assets of the Fund held by the
-----------
Bank in connection with redemptions and repurchases by the Fund of outstanding
common shares, the Bank will rely on notification by the Fund's transfer agent
of receipt of a request for redemption and certificates, if issued, in proper
form for redemption before such payment is made. Payment shall be made in
accordance with the Articles of Incorporation or Declaration of Trust and By-
laws of the Fund (the "Articles"), from assets available for said purpose.

8. Merger, Dissolution, etc. of Fund. In the case of the following
---------------------------------
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to

13
<PAGE>

another investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities held
by it under this Agreement and disburse cash only upon the order of the Fund set
forth in an Officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees through
the end of the then current term of this Agreement, and disbursements and
expenses of the Bank, this Agreement will terminate and the Bank shall be
released from any and all obligations hereunder.

9. Actions of Bank Without Prior Authorization. Notwithstanding anything
-------------------------------------------
herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following actions without
prior authorization or instruction of the Fund or the transfer agent:

9.1 Endorse for collection and collect on behalf of and in the name
of the Fund all checks, drafts, or other negotiable or transferable instruments
or other orders for the payment of money received by it for the account of the
Fund and hold for the account of the Fund all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio Securities
held thereunder;

9.2 Present for payment all coupons and other income items held by it
for the account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the account of the Fund;

9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.

9.4 Execute as agent on behalf of the Fund all necessary ownership
and other certificates and affidavits required by the Internal Revenue Code or
the regulations of the Treasury Department issued thereunder, or by the laws of
any state, now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
The Bank will execute and deliver such certificates in connection with Portfolio
Securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;

9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of the Fund; and

9.6 Exchange interim receipts or temporary securities for definitive
securities.

10. Collections and Defaults. The Bank will use reasonable efforts to
------------------------
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of

14
<PAGE>

any call for redemption, offer of exchange, right of subscription,
reorganization or other proceedings affecting such Portfolio Securities. If
Portfolio Securities upon which such income is payable are in default or payment
is refused after due demand or presentation, the Bank will notify the Fund in
writing of any default or refusal to pay within two business days from the day
on which it receives knowledge of such default or refusal.

11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terms and conditions of this Agreement, and in compliance with
the applicable rules and regulations of the 1940 Act. The books and records of
the Bank pertaining to its actions under this Agreement and reports by the Bank
or its independent accountants concerning its accounting system, procedures for
safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors employed by
the Fund and will be preserved by the Bank in the manner and in accordance with
the applicable rules and regulations under the 1940 Act. The Bank acknowledges
that all records maintained by the Bank on behalf of the Fund remain the
property of the Fund and shall be surrendered by the Bank upon any termination
of this Agreement. The Bank shall preserve, for the periods prescribed in Rule
31a-2 under the 1940 Act and as otherwise may be required by law, the records
required to be maintained by Rule 31a-1 under the 1940 Act.

The Bank shall perform fund accounting and shall keep the books of account
and render statements or copies from time to time as reasonably requested by the
Treasurer or any executive officer of the Fund.

The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.

12. Fund Evaluation and Performance Calculation
-------------------------------------------

12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
---------------
directed by the Board, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board, the net asset value and the public offering price of a share of capital
stock of the Fund, such determination to be made in accordance with the
provisions of the Articles and By-laws of the Fund and the Prospectus and
Statement of Additional Information relating to the Fund, as they may from time
to time be amended, and any applicable resolutions of the Board at the time in
force and applicable; and promptly to notify the Fund, the proper exchange and
the NASD or such other persons as the Fund may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) the manner of accrual of the liabilities of the Fund
and in respect of liabilities of the Fund not appearing on its books of account
kept by the Bank, (ii) reserves, if any, authorized by the Board or that no such
reserves have been authorized, (iii) the source of the quotations to be used in
computing the net asset value, (iv) the value to be assigned to any security for
which no price quotations are available, and (v) the method of computation of
the public offering price on the basis of the net asset value of the shares, and
the Bank shall not be responsible for any loss

15
<PAGE>

occasioned by such reliance or for any good faith reliance on any quotations
received from a source pursuant to (iii) above.

12.2 Performance Calculation. The Bank will compute the performance
------------------------
results of the Fund (the "Performance Calculation") in accordance with the
provisions of Release No. 33-6753 and Release No. IC-16245 (February 2, 1988)
(the "Releases") promulgated by the Securities and Exchange Commission, and any
subsequent amendments to, published interpretations of or general conventions
accepted by the staff of the Securities and Exchange Commission with respect to
such releases or the subject matter thereof ("Subsequent Staff Positions"),
subject to the terms set forth below:

(a) The Bank shall compute the Performance Calculation for the
Fund for the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the Fund.

(b) In performing the Performance Calculation, the Bank will
derive the items of data necessary for the computation from the records it
generates and maintains for the Fund pursuant Section 11 hereof. The Bank shall
have no responsibility to review, confirm, or otherwise assume any duty or
liability with respect to the accuracy or correctness of any such data supplied
to it by the Fund, any of the Fund's designated agents or any of the Fund's
designated third party providers.

(c) At the request of the Bank, the Fund shall provide, and the
Bank shall be entitled to rely on, written standards and guidelines to be
followed by the Bank in interpreting and applying the computation methods set
forth in the Releases or any Subsequent Staff Positions as they specifically
apply to the Fund. In the event that the computation methods in the Releases or
the Subsequent Staff Positions or the application to the Fund of a standard or
guideline is not free from doubt or in the event there is any question of
interpretation as to the characterization of a particular security or any aspect
of a security or a payment with respect thereto (e.g., original issue discount,
participating debt security, income or return of capital, etc.) or otherwise or
as to any other element of the computation which is pertinent to the Fund, the
Fund or its designated agent shall have the full responsibility for making the
determination of how the security or payment is to be treated for purposes of
the computation and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to make
independent determinations with respect to any item which is covered by this
Section, and shall not be responsible for its computations made in accordance
with such determinations so long as such computations are mathematically
correct.

(d) The Fund shall keep the Bank informed of all publicly
available information and of any non-public advice, or information obtained by
the Fund from its independent auditors or by its personnel or the personnel of
its investment adviser, or Subsequent Staff Positions related to the
computations to be undertaken by the Bank pursuant to this Agreement and the
Bank shall not be deemed to have knowledge of such information (except as
contained in the Releases) unless it has been furnished to the Bank in writing.

16
<PAGE>

13. Additional Services. The Bank shall perform the additional services
-------------------
for the Fund as are set forth on Appendix C hereto. Appendix C may be amended
---------- ----------
from time to time upon agreement of the parties to include further additional
services to be provided by the Bank to the Fund, at which time the fees set
forth in Appendix B shall be appropriately increased, if necessary.
----------

14. Duties of the Bank.
------------------

14.1 Performance of Duties and Standard of Care. In performing its
------------------------------------------
duties hereunder and any other duties listed on any Schedule hereto, if any, the
Bank will be entitled to receive and act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will be without
liability for any action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice. The Bank
agrees that it will perform all of its obligations and duties under this
Agreement in accordance with applicable law, including laws against
discrimination.

The Bank will be under no duty or obligation to inquire into and will
not be liable for:

(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;

(b) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are sold;

(c) the legality of an issue or sale of any common shares of the
Fund or the sufficiency of the amount to be received therefor;

(d) the legality of the repurchase of any common shares of the
Fund or the propriety of the amount to be paid therefor;

(e) the legality of the declaration of any dividend by the Fund
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; and

(f) any property or moneys of the Fund unless and until received
by it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.

Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of the Fund are such as may properly be held by the Fund
under the provisions of its Articles, By-laws, any federal or state statutes or
any rule or regulation of any governmental agency.

14.2 Agents and Subcustodians with Respect to Property of the Fund
-------------------------------------------------------------
Held in the United States. The Bank may employ agents of its own selection in
- -------------------------
the performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed by
one or more affiliates of the Bank.

17
<PAGE>

Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such subcustodian
meets at least the minimum qualifications required by Section 17(f)(1) of the
1940 Act to act as a custodian of the Fund's assets with respect to property of
the Fund held in the United States. The Bank shall have no liability to the Fund
or any other person by reason of any act or omission of any such subcustodian
and the Fund shall indemnify the Bank and hold it harmless from and against any
and all actions, suits and claims, arising directly or indirectly out of the
performance of any subcustodian. Upon request of the Bank, the Fund shall assume
the entire defense of any action, suit, or claim subject to the foregoing
indemnity. The Fund shall pay all fees and expenses of any subcustodian.

14.3 Duties of the Bank with Respect to Property of the Fund Held
------------------------------------------------------------
Outside of the United States.
- ----------------------------

(a) Appointment of Foreign Custody Manager.
--------------------------------------

(i) If the Fund has appointed the Bank Foreign Custody
Manager (as that term is defined in Rule 17f-5 under the 1940 Act), the Bank's
duties and obligations with respect to the Fund's Portfolio Securities and other
assets maintained outside the United States shall be, to the extent not set
forth herein, as set forth in the Delegation Agreement between the Fund and the
Bank (the "Delegation Agreement").

(ii) If the Fund has appointed any other person or entity
Foreign Custody Manager, the Bank shall act only upon Proper Instructions from
the Fund with regard to any of the Fund's Portfolio Securities or other assets
held or to be held outside of the United States, and the Bank shall be without
liability for any Claim (as that term is defined in Section 15 hereof) arising
out of maintenance of the Fund's Portfolio Securities or other assets outside of
the United States. The Fund also agrees that it shall enter into a written
agreement with such Foreign Custody Manager that shall obligate such Foreign
Custody Manager to provide to the Bank in a timely manner all information
required by the Bank in order to complete its obligations hereunder. The Bank
shall not be liable for any Claim arising out of the failure of such Foreign
Custody Manager to provide such information to the Bank.

(b) Segregation of Securities. The Bank shall identify on its
-------------------------
books as belonging to the Fund the Foreign Portfolio Securities held by each
foreign sub-custodian (each an "Eligible Foreign Custodian") selected by the
Foreign Custody Manager, subject to receipt by the Bank of the necessary
information from such Eligible Foreign Custodian if the Foreign Custody Manager
is not the Bank.

(c) Access of Independent Accountants of the Fund. If the Bank is
---------------------------------------------
the Fund's Foreign Custody Manager, upon request of the Fund, the Bank will use
its best efforts to arrange for the independent accountants of the Fund to be
afforded access to the books and records of any foreign banking institution
employed as an Eligible Foreign Custodian insofar as such books and records
relate to the performance of such foreign banking institution with regard to the
Fund's Portfolio Securities and other assets.

18
<PAGE>

(d) Reports by Bank. If the Bank is the Fund's Foreign Custody
---------------
Manager, the Bank will supply to the Fund the reports required under the
Delegation Agreement.

(e) Transactions in Foreign Custody Account. Transactions with
---------------------------------------
respect to the assets of the Fund held by an Eligible Foreign Custodian shall be
effected pursuant to Proper Instructions from the Fund to the Bank and shall be
effected in accordance with the applicable agreement between the Foreign Custody
Manager and such Eligible Foreign Custodian. If at any time any Foreign
Portfolio Securities shall be registered in the name of the nominee of the
Eligible Foreign Custodian, the Fund agrees to hold any such nominee harmless
from any liability by reason of the registration of such securities in the name
of such nominee.

Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for Foreign Portfolio Securities received for
the account of the Fund and delivery of Foreign Portfolio Securities maintained
for the account of the Fund may be effected in accordance with the customary
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.

In connection with any action to be taken with respect to the
Foreign Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights, exchange
rights, conversion rights or tender rights, or any other action in connection
with any other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank by the
Eligible Foreign Custodian, and shall promptly forward to the applicable
Eligible Foreign Custodian any instructions, forms or certifications with
respect to such Rights, and any instructions relating to the actions to be taken
in connection therewith, as the Bank shall receive from the Fund pursuant to
Proper Instructions. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the determination of
whether any action proposed to be taken with respect to such Rights by the Fund
or by the applicable Eligible Foreign Custodian will comply with all applicable
terms and conditions of any such Rights or any applicable laws or regulations,
or market practices within the market in which such action is to be taken or
omitted.

(f) Tax Law. The Bank shall have no responsibility or liability
-------
for any obligations now or hereafter imposed on the Fund or the Bank as
custodian of the Fund by the tax laws of any jurisdiction, and it shall be the
responsibility of the Fund to notify the Bank of the obligations imposed on the
Fund or the Bank as the custodian of the Fund by the tax law of any non-U.S.
jurisdiction, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting. The sole responsibility of the Eligible Foreign Custodian with regard
to such tax law shall be to use reasonable efforts to assist the Fund with
respect to any claim for exemption or refund under the tax law of jurisdictions
for which the Fund has provided such information.

19
<PAGE>

14.4 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.

14.5 Fees and Expenses of the Bank. The Fund will pay or reimburse
-----------------------------
the Bank from time to time for any transfer taxes payable upon transfer of
Portfolio Securities made hereunder, and for all necessary proper disbursements,
expenses and charges made or incurred by the Bank in the performance of this
Agreement (including any duties listed on any Schedule hereto, if any) including
any indemnities for any loss, liabilities or expense to the Bank as provided
above. For the services rendered by the Bank hereunder, the Fund will pay to the
Bank such compensation or fees at such rate and at such times as shall be agreed
upon in writing by the parties from time to time. Such fees do not include out-
of-pocket disbursements (as delineated on any such schedule, or such other
expenses as may be specifically approved for reimbursement by the Fund in
writing ) of the Bank, for which the Bank shall be entitled to bill the Fund
separately and for which the Fund shall reimburse the Bank.

14.6 Advances by the Bank. The Bank may, in its sole discretion,
--------------------
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with advanced
funds, result in an overdraft (due to insufficiencies of the Fund's account with
the Bank, or for any other reason) this Agreement deems any such overdraft or
related indebtedness a loan made by the Bank to the Fund payable on demand. Such
overdraft shall bear interest at the current rate charged by the Bank for such
loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
security interest to the extent of any overdraft or indebtedness and to the
extent required by law, in and to any property at any time held by it for the
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any overdraft or indebtedness, together with
interest due thereon, against any balance of account standing to the credit of
the Fund on the Bank's books.

15. Representations and Warranties of the Bank. The Bank represents and
-------------------------------------------
warrants to the Fund that:

(a) The Bank is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts.

(b) The Bank is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.

(d) The Bank has and will continue to have access to the necessary
facilities, equipment and personnel to perform it duties and obligations under
this Agreement.

20
<PAGE>

(e) The Bank has at least the minimum qualifications required by
Section 17(f)(1) of the 1940 Act to act as custodian of the Portfolio Securities
and cash of the Fund.

16. Representations and Warranties of the Fund. The Fund represents and
------------------------------------------
warrants to the Bank that:

(a) The Fund is a corporation duly organized and existing and in
good standing under the laws of the State of its incorporation as set forth in
the preamble hereto.

(b) The Fund is empowered under applicable laws and by its Articles
and By-Laws to enter into and perform this Agreement.

(d) The Fund is a open-end investment company registered under the
1940 Act.

17. Limitation of Liability.
-----------------------

(a) The Bank and its directors, officers, employees and agents
(collectively, the "Indemnified Parties") shall not be liable to the Company or
any third party for, and the Company shall indemnify the Indemnified Parties
against and hold them harmless from, any and all losses, claims, damages,
liabilities or expenses (including reasonable legal fees and expenses)
(collectively, "Losses") arising in connection with the performance of the
Bank's obligations and duties under this Agreement, except Losses resulting from
willful misfeasance, bad faith or negligence in the Bank's performance of such
obligations and duties, or by reason of the Bank's reckless disregard thereof.
Without limiting the foregoing, neither the Bank nor the Indemnified Parties
shall be liable to the Company for, and the Bank and the Indemnified Parties
shall be indemnified by the Company against, any and all Losses resulting from
any of the following:

(i) Any act or omission by the Bank or any Indemnified Party in
good faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, telegram, telecopier, notice,
request, certificate or other instrument reasonably believed by the Bank to
genuine;

(ii) Any act or omission of any subcustodian selected by or at the
direction of the Fund;

(iii) Any act or omission of any Foreign Custody Manager other
than the Bank or any act or omission of any Eligible Foreign Custodian if the
Bank is not the Foreign Custody Manager;

(iv) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not been
registered in the name of the Bank or its nominee;

21
<PAGE>

(v) Any Corporate Action requiring a Response for which the Bank
has not received Proper Instructions or obtained actual possession of all
necessary Securities, consents or other materials by 5:00 p.m. on the date
specified as the Response Deadline;

(vi) Any act or omission of any European Branch of a U.S. banking
institution that is the issuer of Eurodollar CDs in connection with any
Eurodollar CDs held by such European Branch; or

(vii) Information relied on in good faith by the Bank and supplied
by any Authorized Person in connection with the calculation of (i) the net asset
value and public offering price of the shares of capital stock of the Fund or
(ii) the Performance Calculation;

provided, however, that this sentence shall not apply to any Losses resulting
from the willful misfeasance, bad faith or negligence of the Bank or any
Indemnified Party in the performance of such obligations and duties or by reason
of its or their reckless disregard thereof.

(b) The Bank may apply to the Fund at any time for instructions and
may consult counsel for the Fund, or its own counsel, and with accountants and
other experts with respect to any matter arising in connection with its duties
hereunder, and the Bank shall not be liable or accountable for any action taken
or omitted by it in good faith in accordance with such instruction, or with the
opinion of such counsel, accountants, or other experts. The Bank shall not be
liable for any act or omission taken or not taken in reliance upon any document,
certificate or instrument which it reasonably believes to be genuine and to be
signed or presented by the proper person or persons. The Bank shall not be held
to have notice of any change of authority of any officers, employees, or agents
of the Fund until receipt of written notice thereof has been received by the
Bank from the Fund.

(c) In the event the Bank is unable to perform, or is delayed in
performing, its obligations under the terms of this Agreement because of causes
reasonably beyond its control, including acts of God, strikes, legal constraint,
government actions, war, emergency conditions, interruption of electrical power
or other utilities, equipment or transmission failure or damage, the Bank shall
not be liable to the Fund for any damages resulting from such failure to perform
or delay in performance, from such causes; provided, however, that the Bank
shall be liable for any Losses resulting from the failure of the Bank's
proprietary software systems to be Y2K compliant.

(d) Notwithstanding anything to the contrary in this Agreement, in
no event shall the Bank be liable to the Fund for special, incidental or
consequential damages, even if advised of the possibility of such damages, under
any provision of this Agreement or for any act or failure to act hereunder as
contemplated by this Agreement, except as a result of willful misfeasance, bad
faith or gross negligence.

(e) Notwithstanding anything to the contrary in this Agreement, in
no event shall the Fund be liable to the Bank for special, incidental or
consequential damages, even if advised of the possibility of such damages, under
any provision of this Agreement or for any act or failure to act hereunder as
contemplated by this Agreement, except as a result of willful misfeasance, bad
faith or gross negligence.

22
<PAGE>

(f) Promptly after the receipt by any party hereto entitled to
indemnification hereunder ("Indemnified Person") of notice of any claim or the
commencement of any action or proceeding by a third party, such Indemnified
Person will, if a claim with respect thereto is to be made against one or more
other parties hereto (the "Indemnifying Persons") pursuant to Section 17(a),
give each of them (if they are then in existence) written notice of such claim
or the commencement of such action or proceeding, provided that failure of the
Indemnified Person to give reasonably prompt notice of any claim or claims shall
not release, waive or otherwise affect the obligations under this Section 17 of
the Indemnifying Persons with respect thereto except to the extent that they can
demonstrate actual loss or prejudice as a result of such failure. Unless the
Indemnified Persons reasonably believe that the Indemnifying Persons will be
unable or not required to fully indemnify the Indemnified Persons for any such
claim, action or proceeding, the Indemnifying Persons or any of them may elect
to defend against such claim or defend such action or proceeding, at their sole
cost and expense, and in such event the Indemnified Persons shall, at their sole
expense, have the right to participate in (but not control) the defense through
counsel chosen by the Indemnified Persons. So long as the Indemnifying Persons
(i) are in good faith so defending, or (ii) are not given the opportunity to so
defend pursuant to the preceding sentence, as the case may be, the Indemnified
Persons shall not compromise or settle any such claim without the prior written
consent of each of the Indemnifying Persons, which consent shall not be
unreasonably withheld or delayed. If the Indemnifying Persons cannot or do not
so elect to defend or do not continue to do so in good faith in accordance with
the terms of this Section 17(f), the Indemnified Persons may defend such claim
or defend such action or proceeding in such manner as the Indemnified Persons
may deem appropriate, including, but not limited to, settling such claim or
action or proceeding (after giving notice of the same to each of the
Indemnifying Persons) on such terms as the Indemnified Persons may deem
appropriate, and the Indemnifying Persons will promptly indemnify the
Indemnified Persons in accordance with the provisions of Section 17(a). Each
party hereto shall cooperate in the defense of any third party claim, action or
proceeding that is subject to indemnification under this Section 17. Should any
expense be involved (other than a nominal expense) in giving such cooperation,
the Indemnifying Persons shall defray such expense.

18. Termination of Agreement.
------------------------

18.1(a) The term of this Agreement shall be three years commencing
upon the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered by the non-renewing party to the other
party no later than one hundred and twenty days prior to the expiration of the
Initial Term or any Renewal Term, as the case may be.

Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term or any Renewal Term in the event the other party
violated any material provision of this Agreement, provided that the violating
party has not cured such violation within sixty (60) days after written notice
from the non-violating party of such violation.

(b) At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties under this Agreement.

23
<PAGE>

(c) In the event a majority of non-interested directors of the
Fund determines that the performance of the Bank under this Agreement has been
unsatisfactory when considered in light of industry standards, or has been
adverse to the interests of the Fund's shareholders, the Bank shall have sixty
(60) days after receipt of written notice to such effect to correct its
performance. If such corrective action is not taken or is not reasonably
satisfactory to such directors, this Agreement may be terminated by the Fund on
ten days prior notice.

18.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. If
the Fund does not select a successor custodian within ninety (90) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subsection 16.3, deliver the Portfolio Securities and cash of the
Fund held by the Bank to a bank or trust company of the Bank's own selection
which meets the requirements of Section 17(f)(1) of the 1940 Act and has a
reported capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held as the property of the Fund under terms similar to those
on which they were held by the Bank, whereupon such bank or trust company so
selected by the Bank will become the successor custodian of such assets of the
Fund with the same effect as though selected by the Board. Thereafter, the Bank
shall be released from any and all obligations under this Agreement.

18.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
In that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfactory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.

18.4 The Fund shall reimburse the bank for any expenses reasonably
incurred by the Bank in connection with the termination of this Agreement, as
agreed to in writing by the Fund, which agreement shall not be unreasonably
withheld.

19. Notices. All notices or other communications required or permitted to
-------
be given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given when personally received by the intended
recipient or (i) when delivered by messenger or overnight delivery service (with
confirmation of receipt), (ii) when delivered via e-mail or telecopier (and
immediately confirmed by mail) or (iii) three (3) business days after having
been mailed by first class registered or certified mail, return receipt
requested, postage prepaid, addressed to the applicable party at its address set
forth below or such other or

24
<PAGE>

additional address(es) designated by the applicable party to the other party by
notice hereunder (with notice of change of address not being valid until
actually received).

If to the Fund:

Harding, Loevner Funds, Inc.
50 Division Street, Suite 401
Somerville, NJ 08876
Fax #: 908-218-1915
Attention: Ric Reiter

With a copy to:

Jack Murphy
Dechert Price & Rhoads
1775 I Street, N.W.
Washington D.C. 20006
Fax #: 202-261-3333

If to the Bank:

Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, MA 02117-9130
Fax #: 617-330-6033
Attention: Carol Lowd, Senior Director, Client Management
With a copy to: Andrew S. Josef, Assistant General Counsel

20. Confidentiality. All books, records, information and data pertaining
---------------
to the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.

21. Use of Name. The Fund shall not use the name of the Bank or any of
-----------
its affiliates in any prospectus, sales literature or other material relating to
the Fund in a manner not approved by the Bank prior thereto in writing; provided
however, that the approval of the Bank shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or any
state securities authority or any other appropriate regulatory, governmental or
judicial authority; provided further, that in no event shall such approval be
----------------
unreasonably withheld or delayed.

22. Amendments. This Agreement may not be altered or amended, except by
----------
an instrument in writing, executed by both parties.

25
<PAGE>

23. Parties. This Agreement will be binding upon and shall inure to the
-------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 18 hereof will not be deemed to
be an assignment within the meaning of this provision.

24. Captions. The captions of this Agreement are included for convenience
--------
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

25. Governing Law. This Agreement and all performance hereunder will be
-------------
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.

26. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

27. Entire Agreement. This Agreement, together with its Appendices,
----------------
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.

28. Limitation of Liability. The Bank agrees that the obligations assumed
-----------------------
by the Fund hereunder shall be limited in all cases to the assets of the Fund
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Fund.

29. Several Obligations of the Portfolios. This Agreement is an agreement
-------------------------------------
entered into between the Bank and the Fund with respect to each Portfolio. With
respect to any obligation of the Fund on behalf of any Portfolio arising out of
this Agreement, the Bank shall look for payment or satisfaction of such
obligation solely to the assets of the Portfolio to which such obligation
relates as though the Bank had separately contracted with the Fund by separate
written instrument with respect to each Portfolio.

30. Indemnification by the Bank. The Bank shall indemnify and hold the
---------------------------
Fund harmless from and against any and all losses, damages, costs, charges,
legal fees, payments, expenses and liability arising out of or attributed to any
action or failure or omission to act by the Bank as a result of the Bank's lack
of good faith, gross negligence, willful misconduct, knowing violation of law or
fraud.

[Remainder of Page Intentionally Left Blank]

26
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.

HARDING, LOEVNER FUNDS, INC.

By: /s/ David R. Loevner
------------------------------
Name: David R. Loevner
Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Andrew M. Nesvet
------------------------------
Name: Andrew M. Nesvet
Title: Senior Director

27
<PAGE>

Appendices
----------

Appendix A......................... Portfolios

Appendix B......................... Fee Schedule

Appendix C......................... Additional Services

28
<PAGE>

Appendix A

Harding, Loevner Funds, Inc.
- ----------------------------

International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio

<PAGE>

Exhibit (h)(4)

ADMINISTRATION AGREEMENT

WHEREAS, the Fund is a registered investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), consisting of the separate
portfolios listed on Appendix A hereto (as such Appendix A may be amended from
---------- ----------
time to time) (each a "Portfolio" and collectively, the "Portfolios"); and

WHEREAS, the Fund desires to retain the Bank to render certain
administrative services to the Fund and the Bank is willing to render such
services;

NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:

1. Appointment. The Fund hereby appoints the Bank to act as
------------
Administrator of the Fund on the terms set forth in this Agreement. The Bank
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.

2. Delivery of Documents. The Fund has furnished the Bank with copies
----------------------
properly certified or authenticated of each of the following:

(a) Resolutions of the Fund's Board of Directors authorizing the
appointment of the Bank to provide certain administrative services to the Fund
and approving this Agreement;

(b) The Fund's incorporating documents filed with the State of
Maryland on July 31, 1996 and all amendments thereto (the "Articles");

(d) The Fund's material agreements with all service providers which
include any investment advisory agreements, sub-investment advisory agreements,
custody agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");

(e) The Fund's most recent Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act and all amendments thereto;

(f) The Fund's most recent prospectus and statement of additional
information (the "Prospectus"); and

(g) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Bank in the proper performance of its
duties hereunder.
<PAGE>

The Fund will immediately furnish the Bank with copies of all
amendments of or supplements to the foregoing. Furthermore, the Fund will notify
the Bank as soon as possible of any matter which the Fund is aware would
materially affect the performance by the Bank of its services under this
Agreement.

3. Duties of Administrator.
------------------------

(a) Subject to the supervision and direction of the Board of
Directors of the Fund, the Bank, as Administrator, will assist in conducting
various aspects of the Fund's administrative operations and undertakes to
perform the services described in Appendix B hereto. The Bank may, from time to
----------
time, perform additional and/or modified duties and functions which shall be set
forth in an amendment to such Appendix B executed by both parties. At such
----------
time, the fee schedule included in Appendix C hereto shall be appropriately
----------
amended, if necessary.

(b) In performing all services under this Agreement, the Bank shall
act in conformity with the Fund's Articles and By-Laws and the 1940 Act, as the
same may be amended from time to time, and the investment objectives, investment
policies and other practices and policies set forth in the Fund's Registration
Statement, as the same may be amended from time to time. Notwithstanding any
item discussed herein, the Bank has no discretion under this Agreement over the
Fund's assets or choice of investments. Not in limitation of the foregoing, the
Bank will perform all of its obligations under this Agreement in accordance with
applicable law.

4. Duties of the Fund.
-------------------

(a) The Fund is solely responsible (through its transfer agent or
otherwise) for (i) providing timely and accurate reports ("Daily Sales Reports")
which will enable the Bank as Administrator to monitor the total number of
shares sold in each state on a daily basis and (ii) identifying any exempt
transactions ("Exempt Transactions") which are to be excluded from the Daily
Sales Reports.

(b) The Fund agrees to make its legal counsel reasonably available to
the Bank for such counsel's legal opinion with respect to any matter of law
arising in connection with the Bank's duties hereunder, and the Fund further
agrees that the Bank shall be entitled to rely on such legal opinion without
further investigation on the part of the Bank.

5. Fees and Expenses.
------------------

(a) For the services to be rendered and the facilities to be
furnished by the Bank, as provided for in this Agreement, the Fund will
compensate the Bank in accordance with the fee schedule attached as Appendix C
----------
hereto. Such fees do not include out-of-pocket disbursements (as delineated on
such attached fee schedule, or such other expenses as may be specifically
approved for reimbursement by the Fund in writing ) of the Bank, for which the
Bank shall be entitled to bill the Fund separately and for which the Fund shall
reimburse the Bank.

(b) The Bank shall not be required to pay any expenses incurred by
the Fund.

2
<PAGE>

6. Representations and Warranties of the Bank. The Bank represents and
-------------------------------------------
warrants to the Fund that:

(a) The Bank is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts.

(b) The Bank is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.

(d) The Bank has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.

7. Representations and Warranties of the Fund. The Fund represents and
-------------------------------------------
warrants to the Bank that:

(a) The Fund is a corporation duly organized and existing and in good
standing under the laws of the State of its incorporation as set forth in the
preamble hereto.

(b) The Fund is empowered under applicable laws and by its Articles
and By-Laws to enter into and perform this Agreement.

(d) The Fund is a open-end investment company registered under the
1940 Act.

8. Records. The Bank acknowledges that all records maintained by the
--------
Bank on behalf of the Fund remain the property of the Fund and shall be
surrendered by the Bank upon any termination of this Agreement. The Bank shall
preserve, for the periods prescribed in Rule 31a-2 under the 1940 Act and as
otherwise may be required by law, the records required to be maintained by Rule
31a-1 under the 1940 Act.

9. Indemnification by the Bank. The Bank shall indemnify and hold the
----------------------------
Fund harmless from and against any and all losses, damages, costs, charges,
legal fees, payments, expenses and liability arising out of or attributed to any
action or failure or omission to act by the Bank as a result of the Bank's lack
of good faith, gross negligence, willful misconduct, knowing violation of law or
fraud.

10. Limitation of Liability.
------------------------

(a) The Bank and its directors, officers, employees and agents
(collectively, the "Indemnified Parties") shall not be liable to the Fund or any
third party for, and the Fund shall indemnify the Indemnified Parties against
and hold them harmless from, any and all losses, claims, damages, liabilities or
expenses (including reasonable legal fees and expenses) (collectively, "Losses")
arising in connection with the performance of the Bank's obligations and

3
<PAGE>

duties under this Agreement, except Losses resulting from willful misfeasance,
bad faith or negligence in the Bank's performance of such obligations and
duties, or by reason of the Bank's reckless disregard thereof. Without limiting
the foregoing, neither the Bank nor the Indemnified Parties shall be liable to
the Fund for, and the Bank and the Indemnified Parties shall be indemnified by
the Fund against, any and all Losses resulting from any of the following:

(i) Any act or omission of the Fund, including, but not limited to,
inaccurate Daily Sales Reports and misidentification of Exempt Transactions;

(ii) Any act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement, any officer's certificate
signed by any two officers of the Fund, or any resolution of the Board of the
Fund; or

(iii) The offer or sale of Shares by the Fund in violation of (x) any
requirement under the federal securities laws or regulations; (y) any
requirement under the securities laws or regulations of any state; or (z) any
stop order or other determination or ruling by any federal or state agency with
respect to the offer or sale of such Shares;

4
<PAGE>

(e) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Fund be liable to the Bank for special, incidental or
consequential damages, even if advised of the possibility of such damages, under
any provision of this Agreement or for any act or failure to act hereunder as
contemplated by this Agreement, except as a result of willful misfeasance, bad
faith or gross negligence.

(f) Promptly after the receipt by any party hereto entitled to
indemnification hereunder ("Indemnified Person") of notice of any claim or the
commencement of any action or proceeding by a third party, such Indemnified
Person will, if a claim with respect thereto is to be made against one or more
other parties hereto (the "Indemnifying Persons") pursuant to Section 10(a),
give each of them (if they are then in existence) written notice of such claim
or the commencement of such action or proceeding, provided that failure of the
Indemnified Person to give reasonably prompt notice of any claim or claims shall
not release, waive or otherwise affect the obligations under this Section 10 of
the Indemnifying Persons with respect thereto except to the extent that they can
demonstrate actual loss or prejudice as a result of such failure. Unless the
Indemnified Persons reasonably believe that the Indemnifying Persons will be
unable or not required to fully indemnify the Indemnified Persons for any such
claim, action or proceeding, the Indemnifying Persons or any of them may elect
to defend against such claim or defend such action or proceeding, at their sole
cost and expense, and in such event the Indemnified Persons shall, at their sole
expense, have the right to participate in (but not control) the defense through
counsel chosen by the Indemnified Persons. So long as the Indemnifying Persons
(i) are in good faith so defending, or (ii) are not given the opportunity to so
defend pursuant to the preceding sentence, as the case may be, the Indemnified
Persons shall not compromise or settle any such claim without the prior written
consent of each of the Indemnifying Persons, which consent shall not be
unreasonably withheld or delayed. If the Indemnifying Persons cannot or do not
so elect to defend or do not continue to do so in good faith in accordance with
the terms of this Section 10(f), the Indemnified Persons may defend such claim
or defend such action or proceeding in such manner as the Indemnified Persons
may deem appropriate, including, but not limited to, settling such claim or
action or proceeding (after giving notice of the same to each of the
Indemnifying Persons) on such terms as the Indemnified Persons may deem
appropriate, and the Indemnifying Persons will promptly indemnify the
Indemnified Persons in accordance with the provisions of Section 10(a). Each
party hereto shall cooperate in the defense of any third party claim, action or
proceeding that is subject to indemnification under this Section 10. Should any
expense be involved (other than a nominal expense) in giving such cooperation,
the Indemnifying Persons shall defray such expense.

11. Termination of Agreement.
-------------------------

(a) The term of this Agreement shall be three years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered by the non-renewing party to the other
party no later than one hundred and twenty days prior to the expiration of the
Initial Term or any Renewal Term, as the case may be.

5
<PAGE>

(c) In the event a majority of non-interested directors of the Fund
determines that the performance of the Bank under this Agreement has been
unsatisfactory when considered in light of industry standards, or has been
adverse to the interests of the Fund's shareholders, the Bank shall have sixty
(60) days after receipt of written notice to such effect to correct its
performance. If such corrective action is not taken or is not reasonably
satisfactory to such directors, this Agreement may be terminated by the Fund on
ten days prior notice.

12. Notices. All notices or other communications required or permitted to
--------
be given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given when personally received by the intended
recipient or (i) when delivered by messenger or overnight delivery service (with
confirmation of receipt), (ii) when delivered via e-mail or telecopier (and
immediately confirmed by mail) or (iii) three (3) business days after having
been mailed by first class registered or certified mail, return receipt
requested, postage prepaid, addressed to the applicable party at its address set
forth below or such other or additional address(es) designated by the applicable
party to the other party by notice hereunder (with notice of change of address
not being valid until actually received).

If to the Fund:

Harding, Loevner Funds, Inc.
50 Division Street, Suite 401
Somerville, NJ 08876
Fax #: 908-218-1915
Attention: Ric Reiter

With a copy to:

Jack Murphy
Dechert Price & Rhoads
1775 I Street, N.W.
Washington D.C. 20006
Fax #: 202-261-3333

If to the Bank:

6
<PAGE>

13. Confidentiality. All books, records, information and data pertaining
----------------
to the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.

14. Use of Name. The Fund shall not use the name of the Bank or any of
------------
its affiliates in any prospectus, sales literature or other material relating to
the Fund in a manner not approved by the Bank prior thereto in writing; provided
however, that the approval of the Bank shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or any
state securities authority or any other appropriate regulatory, governmental or
judicial authority; provided further, that in no event shall such approval be
----------------
unreasonably withheld or delayed.

15. Amendments. This Agreement may not be altered or amended, except by
-----------
an instrument in writing, executed by both parties.

16. Parties. This Agreement will be binding upon and shall inure to the
--------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 11 hereof will not be deemed to
be an assignment within the meaning of this provision.

17. Captions. The captions of this Agreement are included for convenience
---------
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

18. Governing Law. This Agreement and all performance hereunder will be
--------------
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.

19. Counterparts. This Agreement may be executed in any number of
-------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

20. Entire Agreement. This Agreement, together with its Appendices,
-----------------
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.

21. Limitation of Liability. The Bank agrees that the obligations assumed
------------------------
by the Fund hereunder shall be limited in all cases to the assets of the Fund
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Fund.

7
<PAGE>

22. Several Obligations of the Portfolios. This Agreement is an agreement
-------------------------------------
entered into between the Bank and the Fund with respect to each Portfolio. With
respect to any obligation of the Fund on behalf of any Portfolio arising out of
this Agreement, the Bank shall look for payment or satisfaction of such
obligation solely to the assets of the Portfolio to which such obligation
relates as though the Bank had separately contracted with the Fund by separate
written instrument with respect to each Portfolio.

[Remainder of Page Intentionally Left Blank]

8
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.

HARDING, LOEVNER FUNDS, INC.

By: /s/ David R. Loevner
----------------------------------
Name: David R. Loevner
Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Andrew M. Nesvet
----------------------------------
Name: Andrew M. Nesvet
Title: Senior Director

9
<PAGE>

Appendices
----------

Appendix A........................................... Portfolios

Appendix B........................................... Services

Appendix C........................................... Fee Schedule
<PAGE>

Appendix A

Harding, Loevner Funds, Inc.
- ----------------------------

International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio

<PAGE>

Exhibit (h)(5)

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the 1st day of June, 1999 by and between Harding,
Loevner Funds, Inc., a corporation organized under the laws of Maryland (the
"Company"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company
(the "Bank").

WHEREAS, the Company is an open-end management investment company having
the portfolios/series listed on Appendix A hereto (as such Appendix A may be
---------- ----------
amended from time to time);

WHEREAS, the Company desires to appoint the Bank as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities,
and the Bank desires to accept such appointment;

WHEREAS, the Bank is duly registered as a transfer agent as provided in
Section 17A(c) of the Securities Exchange Act of 1934, as amended (the "1934
Act");

WHEREAS, the Company is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;

WHEREAS, the Company intends to initially offer shares in the series listed
on Appendix A hereto (such series, together with all other series subsequently
----------
established by the Company and made subject to this Agreement in accordance with
Section 17, being herein referred to as the "Fund(s)");

NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the Company and the Bank agree as follows:

1. Terms of Appointment; Duties of the Bank.
----------------------------------------

1.1 Subject to the terms and conditions set forth in this Agreement, the
Company on behalf of the Funds hereby employs and appoints the Bank to act, and
the Bank agrees to act, as transfer agent for each of the Fund(s)' authorized
and issued shares of common stock ("Shares"), dividend disbursing agent and
agent in connection with any accumulation, open-account or similar plans
provided to the shareholders of the Company ("Shareholders") and set out in the
currently effective prospectus and statement of additional information, as each
may be amended from time to time, (the "Prospectus") of the Company, including
without limitation any periodic investment plan or periodic withdrawal program.
The Bank agrees that it will perform all of its obligations and duties under
this Agreement in accordance with applicable law.

1.2 The Bank agrees that it will perform the following services:

(a) In connection with procedures established from time to time by
agreement between the Company and the Bank, the Bank shall:
<PAGE>

(i) Receive for acceptance orders for the purchase of Shares
and promptly deliver payment and appropriate documentation therefor to the
custodian of the Company appointed by the Board of Directors of the Company (the
"Custodian");

(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate Shareholder account;

(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;

(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;

(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;

(vi) Prepare and transmit payments for dividends and
distributions declared by the Company on behalf of a Fund;

(vii) Create and maintain all necessary records including those
specified in Article 10 hereof, in accordance with all applicable laws, rules
and regulations, including but not limited to records required by Section 31(a)
of the Investment Company Act of 1940, as amended (the "1940 Act"), and those
records pertaining to the various functions performed by it hereunder. All
records shall be available for inspection and use by the Company. Where
applicable, such records shall be maintained by the Bank for the periods and in
the places required by Rule 31a-2 under the 1940 Act;

(viii) Make available during regular business hours all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Company, or any person retained by the Company. Upon
reasonable notice by the Company, the Bank shall make available during regular
business hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Company, or any
person retained by the Company;

(ix) Record the issuance of Shares of the Company and maintain,
pursuant to Rule 17Ad-10(e) under the 1934 Act, a record of the total number of
Shares of the Company which are authorized, based upon data provided to it by
the Company, and issued and outstanding. The Bank shall also provide the Company
on a regular basis with the total number of Shares which are authorized and
issued and outstanding and shall have no obligation, when recording the issuance
of Shares, to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions shall be the
sole responsibility of the Company.

2
<PAGE>

(b) In addition to and not in lieu of the services set forth in the
above paragraph (a) or in any Schedule hereto, the Bank shall: (i) perform all
of the customary services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program); including but not limited to maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on all accounts, including nonresident alien
accounts, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, responding to Shareholder telephone calls and Shareholder
correspondence, preparing and mailing activity statements for Shareholders, and
providing Shareholder account information; and (ii) provide a system which will
enable the Company to monitor the total number of shares sold in each State. The
Company shall (i) identify to the Bank in writing those transactions and assets
to be treated as exempt from blue sky reporting for each State and (ii) verify
the establishment of transactions for each State on the system prior to
activation and thereafter monitor the daily activity for each State. The
responsibility of the Bank for a Fund's blue sky state registration status is
solely limited to the initial establishment of transactions subject to blue sky
compliance by such Fund(s) and the reporting of such transactions to the Fund(s)
as provided above.

(c) Additionally, the Bank shall utilize a system to identify all
share transactions which involve purchase and redemption orders that are
processed at a time other than the time of the computation of net asset value
per share next computed after receipt of such orders, and shall compute the net
effect upon the Fund(s) of such transactions so identified on a daily and
cumulative basis.

2. Sale of Company Shares.
----------------------

2.1 Whenever the Company shall sell or cause to be sold any Shares of a
Fund, the Company shall deliver or cause to be delivered to the Bank a document
duly specifying: (i) the name of the Fund whose Shares were sold; (ii) the
number of Shares sold, trade date, and price; (iii) the amount of money to be
delivered to the Custodian for the sale of such Shares and specifically
allocated to such Fund; and (iv) in the case of a new account, a new account
application or sufficient information to establish an account.

2.2 The Bank will, upon receipt by it of a check or other payment
identified by it as an investment in Shares of one of the Funds and drawn or
endorsed to the Bank as agent for, or identified as being for the account of,
one of the Funds, promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the investment. The Bank will
notify the Company, or its designee, and the Custodian of all purchases and
related account adjustments.

2.3 Under procedures as established by mutual agreement between the
Company and the Bank, the Bank shall issue to the purchaser or its authorized
agent such Shares, computed to

3
<PAGE>

the nearest three decimal points, as he is entitled to receive, based on the
appropriate net asset value of the Funds' Shares, determined in accordance with
the prospectus and any applicable federal law or regulation. In issuing Shares
to a purchaser or its authorized agent, the Bank shall be entitled to rely upon
the latest directions, if any, previously received by the Bank from the
purchaser or its authorized agent concerning the delivery of such Shares.

2.4 The Bank shall not be required to issue any Shares of the Company
where it has received a written instruction from the Company or written
notification from any appropriate federal or state authority that the sale of
the Shares of the Fund(s) in question has been suspended or discontinued, and
the Bank shall be entitled to rely upon such written instructions or written
notification.

2.5 Upon the issuance of any Shares of any Fund(s) in accordance with
foregoing provisions of this Section, the Bank shall not be responsible for the
payment of any original issue or other taxes, if any, required to be paid by the
Company in connection with such issuance.

2.6 The Bank may establish such additional rules and regulations
governing the transfer or registration of Shares as it may deem advisable and
consistent with such rules and regulations generally adopted by transfer agents,
or with the written consent of the Company, any other rules and regulations.

3. Returned Checks. In the event that any check or other order for the
---------------
transfer of money is returned unpaid for any reason, the Bank will take such
steps as the Bank may, in its discretion, deem appropriate to protect the
Company from financial loss or as the Company or its designee may instruct.
Provided that the standard procedures, as agreed upon from time to time, between
the Company and the Bank, regarding purchases and redemptions of Shares, are
adhered to by the Bank, the Bank shall not be liable for any loss suffered by a
Fund as a result of returned or unpaid purchase or redemption transactions.
Legal or other expenses incurred to collect amounts owed to a Fund as a
consequence of returned or unpaid purchase or redemption transactions shall be
an expense of that Fund.

4. Redemptions. Shares of any Fund may be redeemed in accordance with the
-----------
procedures set forth in the Prospectus of the Company and the Bank will duly
process all redemption requests.

5. Transfers and Exchanges. The Bank is authorized to review and process
-----------------------
transfers of Shares of each Fund, exchanges between Funds on the records of the
Funds maintained by the Bank, and exchanges between the Company and any other
entity as may be permitted by the Prospectus of the Company. If Shares to be
transferred are represented by outstanding certificates, the Bank will, upon
surrender to it of the certificates in proper form for transfer, and upon
cancellation thereof, countersign and issue new certificates for a like number
of Shares and deliver the same. If the Shares to be transferred are not
represented by outstanding certificates, the Bank will, upon an order therefor
by or on behalf of the registered holder thereof in proper form, credit the same
to the transferee on its books. If Shares are to be exchanged for Shares of
another Fund, the Bank will process such exchange in the same manner as a
redemption and sale

4
<PAGE>

of Shares, except that it may in its discretion waive requirements for
information and documentation.

6. Right to Seek Assurances. The Bank reserves the right to refuse to transfer
------------------------
or redeem Shares until it is satisfied that the requested transfer or redemption
is legally authorized, and it shall incur no liability for the refusal, in good
faith, to make transfers or redemptions which the Bank, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no basis for
any claims adverse to such transfer or redemption. The Bank may, in effecting
transfers, rely upon the provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as the same may be
amended from time to time, which in the opinion of legal counsel for the Company
or the Bank's own legal counsel, do not require certain documents in connection
with the transfer or redemption of Shares of any Fund, and the Company shall
indemnify the Bank for any act done or omitted by it in reliance upon such laws
or opinions of counsel of the Company or of the Bank.

7. Distributions.
-------------

7.1 The Company will promptly notify the Bank of the declaration of any
dividend or distribution. The Company shall furnish to the Bank a resolution of
the Board of Directors of the Company certified by the Secretary (a
"Certificate"): (i) authorizing the declaration of dividends on a specified
periodic basis and authorizing the Bank to rely on oral instructions or a
Certificate specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined and the amount payable per
share to Shareholders of record as of such record date and the total amount
payable to the Bank on the payment date; or (ii) setting forth the date of the
declaration of any dividend or distribution by a Fund, the date of payment
thereof, the record date as of which Shareholders entitled to payment shall be
determined, and the amount payable per share to the Shareholders of record as of
that date and the total amount payable to the Bank on the payment date.

7.2 The Bank, on behalf of the Company, shall instruct the Custodian to
place in a dividend disbursing account funds equal to the cash amount of any
dividend or distribution to be paid out. The Bank will calculate, prepare and
mail checks to (at the address as it appears on the records of the Bank), or
(where appropriate) credit such dividend or distribution to the account of, Fund
Shareholders, and maintain and safeguard all underlying records.

7.3 The Bank will replace lost checks at its discretion and in conformity
with regular business practices.

7.4 The Bank will maintain all records necessary to reflect the crediting
of dividends which are reinvested in Shares of the Company, including without
limitation daily dividends.

7.5 The Bank shall not be liable for any improper payments made in
accordance with a resolution of the Board of Directors of the Company.

5
<PAGE>

7.6 If the Bank shall not receive from the Custodian sufficient cash to
make payment to all Shareholders of the Company as of the record date, the Bank
shall, upon notifying the Company, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is provided to the Bank
and shall not be liable for any claim arising out of such withholding.

8. Other Duties. In addition to the duties expressly provided for herein, the
------------
Bank shall perform such other duties and functions and shall be paid such
amounts therefor as may from time to time be agreed to in writing.

9. Taxes. It is understood that the Bank shall file such appropriate
-----
information returns concerning the payment of dividends and capital gain
distributions and tax withholding with the proper Federal, State and local
authorities as are required by law to be filed by the Company and shall withhold
such sums as are required to be withheld by applicable law.

10. Books and Records.
-----------------

10.1 The Bank shall maintain confidential records showing for each
Shareholder's account the following: (i) names, addresses and tax identification
numbers; (ii) numbers of Shares held; (iii) historical information (as available
from prior transfer agents) regarding the account of each Shareholder, including
dividends paid and date and price of all transactions on a Shareholder's
account; (iv) any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings; (vi) any capital gain or
dividend reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a Shareholder's account;
(vii) certificate numbers and denominations for any Shareholders holding
certificates; (viii) any information required in order for the Bank to perform
the calculations contemplated or required by this Agreement; and (ix) such other
information and data as may be required by applicable law.

10.2 Any records required to be maintained by Rule 31a-1 under the 1940
Act will be preserved for the periods prescribed in Rule 31a-2 under the 1940
Act. Such records may be inspected by the Company during regular business hours
upon reasonable notice. The Bank may, at its option at any time, and shall
forthwith upon the Company's demand, turn over to the Company and cease to
retain in the Bank's files, records and documents created and maintained by the
Bank in performance of its service or for its protection. At the end of the six-
year retention period, such documents will either be turned over to the Company,
or destroyed in accordance with the Company's authorization. The Bank
acknowledges that all records maintained by the Bank on behalf of the Company
remain the property of the Company and shall be surrendered by the Bank at the
request of the Company upon the termination of this Agreement.

10.3 Procedures applicable to the services to be performed hereunder may
be established from time to time by agreement between the Fund(s) and the Bank.
The Bank shall have the right to utilize any shareholder accounting and
recordkeeping systems which, in its opinion, qualifies to perform any services
to be performed hereunder. The Bank shall keep

6
<PAGE>

records relating to the services performed hereunder, in the form and manner as
it may deem advisable.

11. Fees and Expenses.
-----------------

11.1 For performance by the Bank pursuant to this Agreement, the Fund(s)
agree to pay the Bank an annual maintenance fee for each Shareholder account as
set out in the initial fee schedule attached as Appendix B hereto. Such fees
----------
and out-of-pocket expenses and advances identified under Section 11.2 below may
be changed from time to time subject to mutual written agreement between the
Fund(s) and the Bank.

11.2 In addition to the fee paid under Section 11.1 above, the Fund(s)
agree to reimburse the Bank for out-of-pocket expenses or advances incurred by
the Bank for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by the Bank at the request or with the consent of
the Fund(s) including, without limitation, any equipment or supplies which the
Company specifically orders or requires the Bank to purchase, will be reimbursed
by the Fund(s).

11.3 The Fund(s) agree to pay all fees and reimbursable expenses within
thirty days following the mailing of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to the Bank by the Fund(s) at least seven
(7) days prior to the mailing date of such materials. Any waiver or extension by
the Bank of the thirty and seven day time periods enumerated in this section
11.3 shall not constitute a dismissal of any monies due under this Agreement nor
shall such waiver or extension apply to any future monies due to the Bank
hereunder.

12. Representations and Warranties of the Bank.
------------------------------------------

The Bank represents and warrants to the Company that:

12.1 The Bank is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.

12.2 The Bank is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.

12.3 All requisite corporate proceedings have been taken to authorize the
Bank to enter into and perform this Agreement.

12.4 The Bank has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.

12.5 The Bank is duly registered as a transfer agent as provided in
Section 17A(c) of the 1934 Act.

7
<PAGE>

13. Representations and Warranties of the Company.
---------------------------------------------

The Company represents and warrants to the Bank that:

13.1 The Company is a corporation duly organized and existing and in good
standing under the laws of the State of its incorporation as set forth in the
preamble hereto.

13.2 The Company is empowered under applicable laws and by its charter
documents and by-laws to enter into and perform this Agreement.

13.3 All proceedings required by said charter documents and by-laws have
been taken to authorize the Company to enter into and perform this Agreement.

13.4 The Company is a open-end investment company registered under the
1940 Act.

13.5 A registration statement on Form N-1A (including a prospectus and
statement of additional information) under the Securities Act of 1933 and the
1940 Act is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Company being offered for sale.

13.6 When Shares are hereafter issued in accordance with the terms of the
Prospectus, such Shares shall be validly issued, fully paid and nonassessable by
the Fund(s).

14. Indemnification by the Bank. The Bank shall indemnify and hold the Fund(s)
---------------------------
harmless from and against any and all losses, damages, costs, charges, legal
fees, payments, expenses and liability arising out of or attributed to any
action or failure or omission to act by the Bank as a result of the Bank's lack
of good faith, gross negligence, willful misconduct, knowing violation of law or
fraud.

15. Covenants of the Company and the Bank.
-------------------------------------

15.1 The Company shall promptly furnish to the Bank the following:

(a) A certified copy of the resolution of the Directors of the
Company authorizing the appointment of the Bank and the execution and delivery
of this Agreement.

(b) A copy of the charter documents and by-laws of the Company and
all amendments thereto.

(c) Copies of each vote of the Directors designating authorized
persons to give instructions to the Bank, and a Certificate providing specimen
signatures for such authorized persons.

(d) Certificates as to any change in any officer or Director of the
Company.

8
<PAGE>

(e) If applicable a specimen of the certificate of Shares in each
Fund of the Company in the form approved by the Directors, with a Certificate as
to such approval.

(f) Specimens of all new certificates for Shares, accompanied by the
Directors' resolutions approving such forms.

(g) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by the
Company.

(h) A list of all Shareholders of the Fund(s) with the name, address
and tax identification number of each Shareholder, and the number of Shares of
the Fund(s) held by each, certificate numbers and denominations ( if any
certificates have been issued), lists of any account against which stops have
been placed, together with the reasons for said stops, and the number of Shares
redeemed by the Fund(s).

(i) Copies of the Fund(s) registration statement on Form N-1A (if
applicable) as amended and declared effective by the Securities and Exchange
Commission and all post-effective amendments thereto.

(j) Such other certificates, documents or opinions, as the Bank may
deem necessary or appropriate for the Bank in the proper performance of its
duties hereunder.

15.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Company for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.

15.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act and the Rules thereunder, the Bank agrees
that all such records prepared or maintained by the Bank relating to the
services to be performed by the Bank hereunder are the confidential property of
the Company and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered to the Company on and in
accordance with its request.

15.4 The Bank and the Company agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.

15.5 In case of any requests or demands for the inspection of the
Shareholder records of the Company, the Bank will endeavor to notify the Company
and to secure instructions from an authorized officer of the Company as to such
request or demand. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be subject to enforcement or other action by any court or regulatory body
for the failure to exhibit the Shareholder records to such person.

9
<PAGE>

16. Additional Funds. In the event that the Company establishes one or more
----------------
series of Shares in addition to the series listed on Appendix A hereto with
----------
respect to which it desires to have the Bank render services as transfer agent
under the terms hereof, it shall so notify the Bank in writing, and if the Bank
agrees in writing to provide such services, such series of Shares shall become
a Fund hereunder and Appendix A shall be appropriately amended.
----------

17. Limitation of Liability.
-----------------------

(i) Any act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement (including actions taken or
omitted to be taken by the Bank or its agents or subcontractors in good faith in
reliance on, or use by the Bank or its agents or subcontractors of, information,
records and documents which (x) are received by the Bank or its agents or
subcontractors and furnished to such party by or on behalf of the Fund(s), (y)
have been prepared and/or maintained by the Fund(s) or any other person or firm
on behalf of the Fund(s), or (z) were received by the Bank or its agents or
subcontractors from a prior transfer agent); any officer's certificate signed by
any two officers of the Company; or any resolution of the Board of the Company;
or

(ii) The offer or sale of Shares by the Company in violation of (x)
any requirement under the federal securities laws or regulations; (y) any
requirement under the securities laws or regulations of any state; or (z) any
stop order or other determination or ruling by any federal or state agency with
respect to the offer or sale of such Shares;

(b) The Bank may apply to the Company at any time for instructions
and may consult counsel for the Company, or its own counsel, and with
accountants and other experts with respect to any matter arising in connection
with its duties hereunder, and the Bank shall not be liable or accountable for
any action taken or omitted by it in good faith in accordance with such
instruction, or with the opinion of such counsel, accountants, or other experts.
The Bank shall not be liable for any act or omission taken or not taken in
reliance upon any document, certificate or instrument which it reasonably
believes to be genuine and to be signed or presented by the proper person or
persons. The Bank shall not be held to have notice of any change of

10
<PAGE>

authority of any officers, employees, or agents of the Company until receipt of
written notice thereof has been received by the Bank from the Company.

(c) In the event the Bank is unable to perform, or is delayed in
performing, its obligations under the terms of this Agreement because of causes
reasonably beyond its control, including acts of God, strikes, legal constraint,
government actions, war, emergency conditions, interruption of electrical power
or other utilities, equipment or transmission failure or damage, the Bank shall
not be liable to the Company for any damages resulting from such failure to
perform or delay in performance, from such causes; provided, however, that the
Bank shall be liable for any Losses resulting from the failure of the Bank's
proprietary software systems to be Y2K compliant.

(d) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank be liable to the Company for special, incidental or
consequential damages, even if advised of the possibility of such damages, under
any provision of this Agreement or for any act or failure to act hereunder as
contemplated by this Agreement, except as a result of willful misfeasance, bad
faith or gross negligence.

(e) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Company be liable to the Bank for special, incidental or
consequential damages, even if advised of the possibility of such damages, under
any provision of this Agreement or for any act or failure to act hereunder as
contemplated by this Agreement, except as a result of willful misfeasance, bad
faith or gross negligence.

11
<PAGE>

such terms as the Indemnified Persons may deem appropriate, and the Indemnifying
Persons will promptly indemnify the Indemnified Persons in accordance with the
provisions of Section 17(a). Each party hereto shall cooperate in the defense of
any third party claim, action or proceeding that is subject to indemnification
under this Section 17. Should any expense be involved (other than a nominal
expense) in giving such cooperation, the Indemnifying Persons shall defray such
expense.

18. Termination of Agreement.
------------------------

(b) At any time after the termination of this Agreement, the Company
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties under this Agreement.

(c) In the event a majority of non-interested directors of the Company
determines that the performance of the Bank under this Agreement has been
unsatisfactory when considered in light of industry standards, or has been
adverse to the interests of the Company's shareholders, the Bank shall have
sixty (60) days after receipt of written notice to such effect to correct its
performance. If such corrective action is not taken or is not reasonably
satisfactory to such directors, this Agreement may be terminated by the Company
on ten days prior notice.

18.2 Should the Company exercise its right to terminate, all reasonable
out-of-pocket expenses associated with the movement of records and material will
be borne by the Company. Additionally, the Bank reserves the right to recover
from the Company any other reasonable expenses associated with such termination
as may be agreed by the Bank and the Company.

19. Notices. All notices or other communications required or permitted to be
-------
given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given when personally received by the intended
recipient or (i) when delivered by messenger or overnight delivery service (with
confirmation of receipt), (ii) when delivered via e-mail or telecopier (and
immediately confirmed by mail) or (iii) three (3) business days after having
been mailed by first class registered or certified mail, return receipt
requested, postage prepaid, addressed to the applicable party at its address set
forth below or such other or additional address(es) designated by the applicable
party to the other party by notice hereunder (with notice of change of address
not being valid until actually received).

12
<PAGE>

If to the Fund:

Harding, Loevner Funds, Inc.
50 Division Street, Suite 401
Somerville, NJ 08876
Fax #: 908-218-1915
Attention: Ric Reiter

With a copy to:

Jack Murphy
Dechert Price & Rhoads
1775 I Street, N.W.
Washington D.C. 20006
Fax #: 202-261-3333

If to the Bank:

20. Confidentiality. All books, records, information and data pertaining to
----------------
the business of the other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain confidential, and
shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.

21. Use of Name. The Company shall not use the name of the Bank or any of its
-----------
affiliates in any prospectus, sales literature or other material relating to the
Company in a manner not approved by the Bank prior thereto in writing; provided
however, that the approval of the Bank shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or any
state securities authority or any other appropriate regulatory, governmental or
judicial authority; provided further, that in no event shall such approval be
----------------
unreasonably withheld or delayed.

22. Amendments. This Agreement may not be altered or amended, except by an
----------
instrument in writing, executed by both parties.

23. Parties. This Agreement will be binding upon and shall inure to the
-------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Company
without the written consent of the Bank or by the Bank without the written
consent of the Company, authorized and approved by its Board; and provided

13
<PAGE>

further that termination proceedings pursuant to Section 18 hereof will not be
deemed to be an assignment within the meaning of this provision.

24. Captions. The captions of this Agreement are included for convenience of
--------
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.

25. Governing Law. This Agreement and all performance hereunder will be
-------------
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.

28. Limitation of Liability. The Bank agrees that the obligations assumed by
-----------------------
the Company hereunder shall be limited in all cases to the assets of the Company
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Company.

29. Several Obligations of the Funds. This Agreement is an agreement entered
--------------------------------
into between the Bank and the Company with respect to each Fund. With respect
to any obligation of the Company on behalf of any Fund arising out of this
Agreement, the Bank shall look for payment or satisfaction of such obligation
solely to the assets of the Fund to which such obligation relates as though the
Bank had separately contracted with the Company by separate written instrument
with respect to each Fund.

[Remainder of Page Intentionally Left Blank]

14
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and the year first above written.

HARDING, LOEVNER FUNDS, INC.

By: /s/ David R. Loevner
----------------------------------
Name: David R. Loevner
Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Andrew M. Nesvet
----------------------------------
Name: Andrew M. Nesvet
Title: Senior Director

15
<PAGE>

Appendices
----------

Appendix A ..................................... Series or Funds

Appendix B ..................................... Fee Schedule

16
<PAGE>

Appendix A

Harding, Loevner Funds, Inc.
- ----------------------------

International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio

<PAGE>

HARDING, LOEVNER FUNDS, INC.
POWER OF ATTORNEY

The undersigned directors of Harding, Loevner Funds, Inc. (the "Fund"),
hereby constitute and appoint Susan C. Mosher, Secretary of the Fund, and
Timothy F. Osborne, Treasurer of the Fund, and each of them severally, acting
alone without the other, his or her true and lawful attorney-in-fact with
authority to execute in the name of each such person, and to file with the
Securities and Exchange Commission, together with any exhibits thereto and other
documents therewith, the Registration Statement of the Fund on Form N-1A and any
and all amendments (including without limitation post-effective amendments) to
such Registration Statement necessary or advisable to enable such Registration
Statement to comply with the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, any rules and regulations and
requirements of the Securities and Exchange Commission in respect thereof, which
amendments may make such changes in such Registration Statement as the aforesaid
attorney-in-fact executing the same deems appropriate.

Signature Title Date
- --------- ----- ----

/s/ David R. Loevner Director and September 9, 1999
- ----------------------
David R. Loevner President

/s/ Jane A. Freeman Director November 1, 1999
- ----------------------
Jane A. Freeman

/s/ Samuel R. Karetsky Director September 9, 1999
- ----------------------
Samuel R. Karetsky

/s/ Carl W. Schafer Director September 9, 1999
- ----------------------
Carl W. Schafer

/s/ R.K. Doherty Director September 9, 1999
- ----------------------
R. Kelly Doherty