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Previous: CASTLE DENTAL CENTERS INC, S-8, 1999-07-01 |
Next: INFORMATION ARCHITECTS CORP, 10-12G/A, 1999-07-01 |
Harding, Loevner Funds, Inc.
---------------------------------------------------------------
Semiannual Report
April 30, 1999
(Unaudited)
Portfolios managed by
Harding, Loevner Management, L.P.
International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio
600 Fifth Avenue
26th Floor
New York, NY 10020
Statements of Net Assets
International Equity Portfolio................................................1
Global Equity Portfolio.......................................................4
Multi-Asset Global Portfolio..................................................7
Emerging Markets Portfolio...................................................10
Statements of Operations.....................................................13
Statements of Changes in Net Assets..........................................14
Financial Highlights.........................................................16
Notes to Financial Statements................................................20
June 22, 1999
Dear Shareholder:
Enclosed is the Semi-annual Report to Shareholders for the six-month fiscal
period ended April 30, 1999, as required by regulation.
Our regular quarterly narrative discussing developments in the calendar quarter
ended June 30, 1999 will be sent to you shortly.
Sincerely,
David R. Loevner
President
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
International Equity Portfolio-Statement of Net Assets
April 30, 1999 (Unaudited) Shares Value (1)
- --------------------------------------------------------------------------------
Long Term Investments -- 99.1%
Common Stocks -- 99.1%
Argentina-- 0.8%
Quilmes Industrial SA (Foods/Beverages) * 304,000 $ 2,736,000
----------------
Australia-- 2.9%
Rio Tinto Ltd. (Mining) 580,700 9,790,965
----------------
Canada-- 2.4%
Imperial Oil Ltd. (Oil/Gas) 384,600 8,028,525
----------------
France-- 8.9%
Air Liquide (Energy) 37,100 5,732,929
AXA Co. (Financial) 22,170 2,867,390
Bic (Manufacturing) 111,700 6,277,656
Financiere et Industrielle Gaz et Eaux (Diversified Holdings) 155,162 7,542,784
Michelin (CGDE) - Class B (Manufacturing) 168,148 7,643,719
----------------
30,064,478
----------------
Germany-- 4.4%
Allianz AG (Insurance) 17,550 5,600,338
Hoechst AG (Basic Industry) 69,000 3,275,378
SAP AG -Sponsored ADR (Technology) 97,400 3,055,925
SGL Carbon AG (Chemical) * 52,400 2,886,701
----------------
14,818,342
----------------
Hong Kong-- 6.4%
Hutchison Whampoa Ltd. (Diversified Holdings) 946,000 8,482,827
Johnson Electric Holdings (Electrical Equipment) 2,775,648 8,290,487
Li & Fung Ltd. (Distribution/Wholesale) 2,036,000 4,991,097
----------------
21,764,411
----------------
Ireland-- 1.1%
CBT Group plc-ADR (Computers) * 241,300 3,740,150
----------------
Italy-- 1.9%
Luxottica Group SpA - ADR (Optical Supplies) 399,800 6,346,825
----------------
Japan-- 14.5%
Atlantis Japan Growth Fund (Investment Company) * 532,000 4,123,000
Canon, Inc. (Office Equipment) 351,000 8,585,358
Denso Co., Ltd. (Electrical Equipment) 351,000 7,129,963
Hirose Electronics Co., Ltd. (Electrical Equipment) 106,400 9,893,115
Kurita Water Industries Ltd. (Manufacturing) 335,000 5,387,837
Mitsubishi Corp. (Distribution/Wholesale) 338,000 2,236,723
NTT Mobile Communications (Services) 1,510 8,854,079
Tokio Marine & Fire Insurance Co. (Insurance) 256,000 2,982,878
----------------
49,192,953
----------------
</TABLE>
<PAGE>
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
International Equity Portfolio-Statement of Net Assets (continued)
April 30, 1999 (Unaudited) Shares Value (1)
- -----------------------------------------------------------------------------------------------------------------------
Mexico-- 3.6%
Grupo Televisa SA (Services) * 86,000 $ 3,526,000
Kimberly Clark de Mexico SA de CV (Manufacturing) 1,310,400 5,110,986
Telefonos de Mexico - Class L, ADR (Services) 45,600 3,454,200
----------------
12,091,186
----------------
Netherlands-- 10.6%
IHC Caland NV (Transportation) 149,530 6,789,463
ING Groep NV (Financial) 151,700 9,360,606
Royal Dutch Petroleum Co. - NY Shares (Oil/Gas) 231,200 13,568,551
Wolters Kluwer NV (Publishing) 141,480 6,169,388
----------------
35,888,008
----------------
Singapore-- 8.9%
Dairy Farm International Holdings Ltd. (Food/Diversified) 6,278,000 9,291,440
DBS Local Certificates (Financial) * 1,572,000 11,308,020
Singapore Press Holdings (Publishing) 662,000 9,758,255
----------------
30,357,715
----------------
South Africa-- 1.1%
Adcock Ingram Ltd. - N Shares (Medical Devices) 47,634 134,291
Beverage & Consumer Ind. (Food/Beverages) 62,216 1,215,557
Edgars Stores Ltd. (Apparel) 6,137 31,185
LibLife Strategic Investments Ltd. (Diversified Holdings) 1,586,152 2,391,837
South Africa Breweries (Food/Beverages) * 10,419 87,094
The Premier Group Ltd. (Food/Diversified) 130,721 50,994
----------------
3,910,958
----------------
Spain-- 2.3%
Bankinter SA (Financial) 189,300 7,954,098
----------------
Sweden-- 2.4%
Investor AB - Class B (Holding Company) 179,200 8,156,102
----------------
Switzerland-- 9.7%
ABB AG Namen (Engineering) 29,630 8,660,328
Nestle SA - ADR (Foods/Beverages) 115,000 10,661,927
Novartis AG (Pharmaceuticals) 5,075 7,450,745
Union Bank of Switzerland AG (Financial) 18,509 6,297,315
----------------
33,070,315
----------------
Thailand-- 1.6%
The Siam Cement Co., Ltd. (Manufacturing/Distribution) * 180,700 5,339,639
----------------
United Kingdom-- 15.6%
British Telecommunications plc (Services) 195,100 3,282,374
Glaxo Wellcome plc - ADR (Pharmaceuticals) 117,500 6,844,375
Hays plc (Distribution) 743,000 8,273,651
Pearson plc (Multimedia) 403,400 8,594,046
Railtrack Group plc (Transportation/Rail) 315,500 6,594,314
Rentokil Initial plc (Commercial Services) 1,405,500 8,207,094
Vodafone Group plc (Services) 163,700 3,020,539
United Kingdom (continued)
WPP Group plc (Advertising) 899,500 $ 7,986,989
----------------
----------------
52,803,382
----------------
Total Common Stocks (Cost - $271,179,870) 336,054,052
----------------
Total Long Term Investments(Cost - $271,179,870) 336,054,052
----------------
Face Amount
--------------
Cash Equivalents -- 1.6% Investors Bank & Trust Company Repurchase Agreement,
4.25% due 5/03/99 in the amount of $5,605,277; Issued 04/30/99 (collateralized
by $6,810,000 par of Federal Home Loan Mortgage Corporation, 5.887% due 12/15/22
with a market value of $5,885,339) (Cost - $5,603,290)
$5,603,290
5,603,290
----------------
Total Investments-- 100.7% (Cost $276,783,160) $ 341,657,342
----------------
Other Assets, Net of Liabilities -- (0.7)%
Other assets $ 27,221,995
Other Liabilities (29,753,045)
----------------
(2,531,050)
----------------
Net Assets-- 100%
Applicable to 24,929,835 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 339,126,292
================
Net Asset Value, Offering and Redemption Price Per Share $ 13.60
================
Components of Net Assets as of April 30, 1999 were as follows:
Capital Stock at par value ($.001) $ 24,930
Capital Stock in excess of par value 281,767,317
Distributions in excess of investment income, net (534,728)
Distributions in excess of net realized gain on investments and foreign currency-related (6,976,654)
transactions
Net unrealized appreciation on investments and on assets and liabilities denominated in
foreign currencies 64,845,427
================
$ 339,126,292
================
</TABLE>
* Non-income producing security.
ADR American Depositary Receipt
(1) See Note 2 to Financial Statements
See Notes to Financial Statements
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Global Equity Portfolio-Statement of Net Assets
April 30, 1999 (Unaudited) Shares Value (1)
- -----------------------------------------------------------------------------------------------------------------------
Long Term Investments -- 99.2%
Common Stocks -- 98.3%
Argentina-- 0.9%
Quilmes Industrial SA (Foods/Beverages) * 25,000 $ 225,000
--------------
Australia-- 3.2%
Rio Tinto Ltd. (Mining) 50,000 843,031
--------------
France-- 4.6%
Bic (Manufacturing) 6,690 375,985
Financiere et Industrielle Gaz et Eaux (Diversified Holdings) 17,010 826,895
--------------
1,202,880
--------------
Germany-- 1.6%
Allianz AG (Insurance) 800 255,286
SAP AG -Sponsored ADR (Technology) 5,000 156,875
--------------
412,161
--------------
Hong Kong-- 9.2%
Hutchison Whampoa Ltd. (Diversified Holdings) 77,000 690,463
Jardine Strategic Holdings Ltd. (Financial Services) 350,000 864,500
Johnson Electric Holdings (Electrical Equipment) 200,000 597,373
Li & Fung Ltd. (Distribution/Wholesale) 100,000 245,142
--------------
2,397,478
--------------
Ireland-- 0.9%
CBT Group plc-ADR (Computers) * 15,000 232,500
--------------
Italy-- 1.1%
Luxottica Group SpA - ADR (Optical Supplies) 18,000 285,750
--------------
Japan-- 3.3%
Hirose Electronics Co., Ltd. (Electrical Equipment) 4,000 371,922
Mitsubishi Corp. (Distribution/Wholesale) 75,000 496,314
--------------
868,236
--------------
Mexico-- 4.0%
Grupo Televisa SA (Services) * 6,000 246,000
Kimberly Clark de Mexico SA de CV (Manufacturing) 130,000 507,042
Telefonos de Mexico - Class L, ADR (Services) 4,000 303,000
--------------
1,056,042
--------------
Netherlands-- 5.6%
Royal Dutch Petroleum Co. - NY Shares (Oil/Gas) 16,000 938,999
Wolters Kluwer NV (Publishing) 12,000 523,273
--------------
1,462,272
--------------
Singapore-- 2.1%
Singapore Press Holdings (Publishing) 37,500 552,771
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Global Equity Portfolio-Statement of Net Assets (continued)
April 30, 1999 (Unaudited) Shares Value (1)
- -----------------------------------------------------------------------------------------------------------------------
South Africa-- 0.7%
Adcock Ingram Ltd. - N Shares (Medical Devices) 2,287 $ 6,447
Beverage & Consumer Ind. (Food/Beverages) 2,987 58,365
Edgars Stores Ltd. (Apparel) 295 1,497
LibLife Strategic Investments Ltd. (Diversified Holdings) 80,000 120,636
South Africa Breweries (Food/Beverages) * 500 4,182
The Premier Group Ltd. (Food/Diversified) 6,277 2,448
--------------
193,575
--------------
Sweden-- 2.6%
Investor AB - Class B (Holding Company) 15,000 682,709
--------------
Switzerland-- 6.0%
ABB AG Namen (Engineering) 2,000 584,565
Nestle SA - ADR (Foods/Beverages) 5,000 463,562
Zuerich Allied AG (Insurance) 800 516,519
--------------
1,564,646
--------------
Thailand-- 2.3%
The Siam Cement Co., Ltd. (Manufacturing/Distribution) * 20,000 590,995
--------------
United Kingdom-- 7.5%
Pearson plc (Multimedia) 35,000 745,641
Rentokil Initial plc (Commercial Services) 95,000 554,731
WPP Group plc (Advertising) 75,000 665,952
--------------
1,966,324
--------------
United States-- 42.7%
Air Products & Chemicals, Inc. (Basic Industry) 9,000 423,000
Allied Capital Corp. (Investment Company) 47,001 846,018
AlliedSignal, Inc. (Aerospace/Defense) 11,000 646,250
American International Group (Insurance) 6,000 704,625
Aspen Technologies, Inc. (Computers) 12,000 102,750
Baxter International, Inc. (Medical Products) 12,000 756,000
Colgate-Palmolive Co. (Consumer Products) 8,500 870,719
Deere & Co. (Manufacturing) 9,000 387,000
Dover Corp. (Manufacturing) 8,000 295,500
Exxon Corp. (Oil/Gas) 7,500 622,969
Federal National Mortgage Association (Financial) 7,000 496,563
Intel Corp. (Technology) 10,000 611,875
MCI Worldcom, Inc. (Services) 2,000 164,375
Pfizer, Inc. (Pharmaceuticals) 7,000 805,438
Quintiles Transnational Corp. (Services) * 10,000 405,625
Schlumberger, Ltd. (Oil/Gas) 12,000 766,500
Sun Microsystems, Inc. (Computers) 8,000 478,500
Thermo Electron Corp. (Manufacturing) * 25,000 401,563
Wells Fargo & Co. (Financial) 11,000 475,063
Wisconsin Central Transportation Corp. (Transportation/Rail) * 25,000 461,720
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
United States (continued)
Wrigley (WM.) Jr. Co. (Foods/Confectionery) 5,000 $ 443,438
--------------
11,165,491
--------------
Total Common Stocks (Cost $20,727,616) 25,701,861
--------------
Rights and Warrants-- 0.2%
Scania AB Class B, warrants expiring 6/4/99 (Sweden) * (Cost - $0) 30,000
38,503
--------------
Face
Fixed Income -- 0.7% Amount
--------------------
United States-- 0.7%
J.P. Morgan & Co. (FRN), 5.913%, due 2/15/12 (Cost $202,226) $200,000 179,412
--------------
--------------
Total Long Term Investments (Cost $20,929,842) 25,919,776
--------------
Cash Equivalents -- 1.4%
Investors Bank & Trust Company Repurchase Agreement, 4.25% due 5/03/99 in the
amount of $374,117; Issued 4/30/99 (collateralized by $395,693 par of Federal
Home Loan Mortgage Corp., 7.574% due 10/01/25 with a
market value of $392,730) (Cost $373,984) 373,984 373,984
--------------
Total Investments-- 100.6% (Cost $21,303,826) $26,293,760
--------------
Other Assets, Net of Liabilities -- (0.6)%
Other assets $ 148,562
Other liabilities
(301,626)
--------------
(153,064)
--------------
Net Assets-- 100%
Applicable to 1,383,632 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 26,140,696
==============
Net Asset Value, Offering and Redemption Price Per Share $ 18.89
==============
Components of Net Assets as of April 30, 1999 were as follows:
Capital Stock at par value ($.001) $ 1,384
Capital Stock in excess of par value 22,111,145
Distributions in excess of investment income, net (208,752)
Distributions in excess of net realized gain on investments and foreign currency-related (750,945)
transactions
Net unrealized appreciation on investments and on assets and liabilities denominated in 4,987,864
foreign currencies
==============
$26,140,696
==============
</TABLE>
* Non-income producing security.
ADR American Depository Receipt
FRN Floating Rate Note
(1) See Note 2 to Financial Statements
See Notes to Financial Statements
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Multi-Asset Global Portfolio-Statement of Net Assets
Face
April 30, 1999 (Unaudited) Amount Value (1)
- ----------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
Long Term Investments -- 102.3%
Common Stocks -- 63.1%
France-- 4.1%
Bic (Manufacturing) 1,050 $ 59,011
Financiere et Industrielle Gaz et Eaux (Diversified Holdings) 3,290 159,935
Michelin (CGDE) - Class B (Manufacturing) 1,200 54,550
-------------
273,496
-------------
Germany-- 2.4%
Allianz AG (Insurance) 200 63,822
Bayer AG (Chemical) 1,500 63,822
SAP AG -Sponsored ADR (Technology) 1,000 31,375
-------------
159,019
-------------
Hong Kong-- 5.0%
Hutchison Whampoa Ltd. (Diversified Holdings) 12,000 107,605
Jardine Strategic Holdings Ltd. (Financial Services) 70,000 172,900
Li & Fung Ltd. (Distribution/Wholesale) 20,000 49,028
-------------
329,533
-------------
Ireland-- 0.4%
CBT Group plc-ADR (Computers) * 1,700 26,350
-------------
Japan-- 3.2%
Atlantis Japan Growth Fund (Investment Company) * 7,000 54,250
Mitsubishi Corp. (Distribution/Wholesale) 15,000 99,263
Tokio Marine & Fire Insurance Co. (Insurance) 5,000 58,259
-------------
211,772
-------------
Mexico-- 1.7%
Kimberly Clark de Mexico SA de CV (Manufacturing) 29,000 113,109
-------------
Netherlands-- 4.3%
Royal Dutch Petroleum Co. - NY Shares (Oil/Gas) 3,800 223,012
Wolters Kluwer NV (Publishing) 1,400 61,049
-------------
284,061
-------------
Singapore-- 1.6%
DBS Local Certificates (Financial) * 15,000 107,901
-------------
Sweden-- 2.8%
Investor AB - Class B (Holding Company) 4,000 182,056
-------------
Switzerland-- 5.0%
ABB AG Namen (Engineering) 400 116,913
Nestle SA - ADR (Foods/Beverages) 1,500 139,069
Union Bank of Switzerland AG (Financial) 215 73,149
-------------
329,131
-------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Multi-Asset Global Portfolio-Statement of Net Assets (continued)
Face
April 30, 1999 (Unaudited) Amount Value (1)
- ----------------------------------------------------------------------------------------------------------------------
Thailand-- 0.6%
The Siam Cement Co., Ltd. (Manufacturing/Distribution) * 1,400 41,370
-------------
United Kingdom-- 5.7%
British Telecommunications plc-ADR (Services) 400 $ 67,100
Pearson plc (Multimedia) 3,800 80,955
Rentokil Initial plc (Commercial Services) 14,000 81,750
Rio Tinto plc (Mining) 8,500 148,484
-------------
378,289
-------------
United States-- 26.3%
Air Products & Chemicals, Inc. (Basic Industry) 1,600 75,200
Allied Capital Corp. (Investment Company) 6,500 117,000
AlliedSignal, Inc. (Aerospace/Defense) 1,800 105,750
American International Group (Insurance) 1,000 117,438
Baxter International, Inc. (Medical Products) 1,000 63,000
Colgate-Palmolive Co. (Consumer Products) 1,800 184,387
Deere & Co. (Manufacturing) 1,700 73,100
Dover Corp. (Manufacturing) 3,600 132,975
Exxon Corp. (Oil/Gas) 1,800 149,513
Federal National Mortgage Association (Financial) 900 63,844
International Business Machines Corp. (Computers) 800 167,350
Monsanto Co. (Life Sciences) 1,200 54,300
Quintiles Transnational Corp. (Services) * 1,800 73,013
Royce Micro-Cap Trust, Inc. (Investment Company) 11,266 93,649
Schlumberger, Ltd. (Oil/Gas) 1,200 76,650
Thermo Electron Corp. (Manufacturing) * 3,500 56,219
Wells Fargo & Co. (Financial) 2,500 107,969
Wisconsin Central Transportation Corp. (Transportation/Rail) * 1,900 35,091
-------------
1,746,448
-------------
Total Common Stocks (Cost $3,423,867) 4,182,535
-------------
Rights and Warrants-- 0.0%
Scania AB Class B, warrants expiring 6/4/99 (Sweden) * 2,000 2,567
Atlantis Japan Growth Fund warrants expiring 4/30/01 (Japan) * 400 330
-------------
Total Rights and Warrants (Cost $2,711) 2,897
-------------
Face
Fixed Income -- 39.2% Amount
----------------
Multinational-- 1.7%
International Bank Reconstruction & Development, 4.25%, due 9/08/05 EUR 100,000 110,329
-------------
United Kingdom-- 3.1%
Orange plc, 7.625%, due 8/01/08 EUR 125,000 142,758
UK Treasury Consols, 4.0%, due 12/29/49 GBP 50,000 64,404
-------------
207,162
-------------
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<S> <C> <C>
United States-- 34.4%
Comcast Corp., 10.625%, due 7/15/12 $100,000 $ 128,840
Fullerton Global Corp., 0.00%, due 4/02/03 175,000 180,031
GNMA, 7.00%, due 4/15/28 132,388 134,447
GNMA, 7.00%, due 6/15/09 100,680 103,419
GNMA, 7.50%, due 6/15/27 113,824 117,373
GNMA, 8.00%, due 8/15/07 9,549 9,956
GNMA, 8.50%, due 5/15/18 16,062 16,979
GNMA, 9.50%, due 9/20/20 4,791 5,115
Rockefeller Center Property CVT, 0.00%, due 12/31/00 250,000 196,249
U.S. Treasury Bond, 6.125%, due 11/15/27 250,000 258,124
U.S. Treasury Inflation Index Note, 3.504%, due 1/15/07 150,000 150,188
U.S. Treasury Inflation Index Note, 3.625%, due 4/15/28 150,000 146,165
U.S. Treasury Note, 5.625%, due 5/15/08 350,000 355,030
U.S. Treasury Note, 7.00%, due 7/15/06 250,000 273,359
U.S. Treasury Note, 7.875%, due 8/15/01 25,000 26,469
U.S. Treasury Note, 8.75%, due 8/15/00 175,000 183,038
-------------
2,284,782
-------------
Total Fixed Income (Cost $2,574,348) 2,602,273
-------------
Total Long Term Investments (Cost $6,000,926) 6,787,705
-------------
Cash Equivalents-- 1.6%
Investors Bank & Trust Company Repurchase Agreement, 4.25% due 5/3/99 in the
amount of $104,391; issued 4/30/99 (collateralized by $105,813 par of Federal
National Mortgage Association, 7.235% due 10/1/23 with a market value of $109,671) 04,354
(Cost $104,354) 104,354 104,354
Total Investments-- 103.9% (Cost $6,105,280) $ 6,892,059
-------------
Other Assets, Net of Liabilities -- (3.9)%
Other assets $ 65,869
Other Liabilities (324,020)
-------------
(258,151)
-------------
Net Assets-- 100%
Applicable to 550,262 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 6,633,908
=============
Net Asset Value, Offering and Redemption Price Per Share $ 12.06
=============
Components of Net Assets as of April 30, 1999 were as follows:
Capital Stock at par value ($.001) $ 550
Capital Stock in excess of par value 5,726,065
Undistributed investment income, net 38,008
Accumulated net realized gain on investments and foreign currency-related transactions 83,287
Net unrealized appreciation on investments and on assets and liabilities denominated in 785,998
foreign currencies
=============
$ 6,633,908
=============
</TABLE>
* Non-income producing security.
CVT - Convertible Bond EUR - Euro
ADR - American Depository Receipt GBP - British Pound
GNMA - Government National Mortgage Association
See Notes to Financial Statements.
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Emerging Markets Portfolio-Statement of Net Assets
April 30, 1999 (Unaudited) Shares Value (1)
- ---------------------------------------------------------------------------------------------------------------------
Long Term Investments -- 97.2%
Common Stocks -- 97.2%
Argentina-- 7.4%
Perez Companc - ADR (Oil/Gas) 2,000 $ 25,250
Quilmes Industrial SA (Foods/Beverages) * 3,300 29,700
Telefonica de Argentina - ADR (Utilities) 700 26,161
YPF-Sociedad Anonima - ADR (Oil/Gas) 400 16,800
-----------
97,911
-----------
Brazil-- 10.9%
Banco Itau SA (Financial) 69,000 36,622
Companhia Siderurgica Nacional (Basic Industry) 900,000 19,487
Compania Brasileira de Distribuicao Grupo Pao de Acurcar (Food/Diversified) 2,000 34,875
Empresa Bras Aeronautica (Aerospace/Defense) 2,650,000 23,176
Telesp Celular SA (Services) 1,020,000 29,837
-----------
143,997
-----------
Chile-- 3.0%
Cia de Telecomunicaciones de Chile SA - ADR (Services) 1,500 39,656
-----------
Egypt-- 1.9%
Suez Cement Co. - GDR (Basic Industry) 1,500 25,617
-----------
Greece-- 2.7%
Attica Enterprises SA (Transportation) 3,300 27,896
Panafon SA (Services) * 300 8,008
-----------
35,904
-----------
Hong Kong-- 11.0%
Cafe De Coral Holdings Ltd (Restaurants) 120,000 39,481
China Telecom (Services) * 6,000 13,702
Johnson Electric Holdings (Electrical Equipment) 11,000 32,856
Li & Fung Ltd. (Distribution/Wholesale) 16,000 39,223
Varitronix International Ltd. (Technology) 12,000 20,592
-----------
145,854
-----------
Hungary-- 4.4%
Matav Rt - ADR (Services) 1,000 28,125
Otp Bank (Financial) 700 29,556
-----------
57,681
-----------
Israel-- 6.9%
ECI Telecommunications Ltd. (Technology) 600 22,125
Gilat Satellite Networks, Inc. (Technology) 650 33,800
Koor Industries Ltd. - ADR (Basic Industry) 1,650 35,475
-----------
91,400
-----------
Mexico-- 17.2%
Alfa SA (Basic Industry) 6,500 25,880
Cifra SA - ADR (Retail) 3,000 57,210
</TABLE>
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Emerging Markets Portfolio-Statement of Net Assets (continued)
April 30, 1999 (Unaudited) Shares Value (1)
- ---------------------------------------------------------------------------------------------------------------------
Mexico (continued)
Desc Sociedad de Fomento Industrial SA de CV (Basic Industry) 18,000 $ 23,012
Grupo Televisa SA - Series CPO (Services) 2,200 44,095
Kimberly Clark de Mexico SA de CV (Manufacturing) 5,000 19,502
Panamerican Beverages Inc-A (Food/Beverages) 1,250 27,734
Telefonos de Mexico - Class L, ADR (Services) 400 30,300
------------
227,733
------------
Philippines-- 2.5%
International Container Terminal Services, Inc. (Basic Industry) * 330,000 33,087
------------
Poland-- 2.8%
Debica SA ( Manufacturing) 1,400 17,203
Wielkopolski Bank Kredytowy SA (Financial) 3,500 19,154
------------
36,357
------------
Singapore-- 6.2%
Dairy Farm International Holdings Ltd. (Food/Diversified) 28,000 41,440
Natsteel Electronics Ltd (Technology) 12,000 40,330
------------
81,770
------------
South Africa-- 2.5%
South Africa Breweries (Food/Beverages) * 4,000 33,437
------------
South Korea-- 3.5%
Pohang Iron and Steel Co., Ltd. (Basic Industry) 360 30,406
South Korea Mobile Telecommunications Corp., Ltd. (Services) 15 15,704
------------
46,110
------------
Taiwan-- 6.0%
Hon Hai Precision Industry (Technology) * 3,000 16,355
President Chain Store Corp. (Food/Diversified) 5,000 15,467
Taiwan Semiconductor (Technology) * 14,000 47,382
------------
79,204
------------
Thailand-- 4.7%
Advanced Information Service plc (Services) * 4,000 42,491
Pizza Co. Ltd. (Restaurants) * 6,000 19,089
------------
61,580
------------
United Kingdom-- 3.6%
Standard Chartered plc (Financial) 2,600 47,094
------------
Total Common Stocks (Cost $1,083,255) 1,284,392
------------
Total Long Term Investments (Cost $1,083,255) 1,284,392
------------
</TABLE>
See Notes to Financial Statements
<PAGE>
Harding, Loevner Funds, Inc.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Emerging Markets Portfolio-Statement of Net Assets (continued)
Face
April 30, 1999 (Unaudited) Amount Value (1)
- ---------------------------------------------------------------------------------------------------------------------
Cash Equivalents -- 3.3%
Investors Bank & Trust Company Repurchase Agreement, 4.25% due 5/03/99 in
the amount of $43,246; Issued 4/30/99 (collateralized by $108,000 par of Federal
National Mortgage Association, 8.00% due 12/01/23 with a market value of
$45,541) (Cost $43,230)
$ 43,230 $ 43,230
Total Investments-- 100.5% (Cost $1,126,485) $1,327,622
------------
Other Assets, Net of Liabilities -- (0.5)%
Other assets $ 42,420
Other Liabilities (48,998)
------------
(6,578)
------------
Net Assets-- 100%
Applicable to 111,329 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 1,321,044
============
Net Asset Value, Offering and Redemption Price Per Share $ 11.87
============
Components of Net Assets as of April 30, 1999 were as follows:
Capital Stock at par value ($.001) $ 111
Capital Stock in excess of par value 1,114,718
Undistributed net investment income 2,611
Undistributed net realized gain on investments and foreign currency-related transactions 2,541
Net unrealized appreciation on investments and on assets and liabilities denominated in foreign 201,063
currencies
============
$ 1,321,044
============
</TABLE>
* Non-income producing security.
ADR American Depositary Receipt
(1) See Note 2 to Financial Statements
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
- -------------------------------------------------------------------------------
Statement of Operations
Six Months Ended April 30, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
International Global Equity Multi-Asset Emerging
Equity Portfolio Global Markets
Portfolio Portfolio Portfolio*
--------------- --------------- -------------- -------------
Investment Income
Interest $ 203,304 $ 32,440 $ 84,118 $ 1,305
Dividends (net of withholding taxes of $354,565,
$10,452, $2,284 and $441, respectively) 2,272,733 188,078 37,842 10,031
-------------- ------------ ----------- ----------
Total investment income 2,476,037 220,518 121,960 11,336
-------------- ------------ ----------- ----------
Expenses
Investment advisory fees 1,268,776 135,171 32,375 6,213
Administration fees 253,755 20,276 4,856 738
Custodian fees 152,348 17,061 6,946 9,573
Directors' fees and expenses 29,052 2,298 558 84
Shareholder record keeping fees 20,146 7,233 2,458 1,331
Printing and postage 11,348 898 218 33
Audit fees 10,500 11,000 10,500 10,500
Legal fees 9,078 728 241 26
Organizational costs 7,282 6,388 1,578 --
State registration filing fees 6,167 4,000 1,467 750
Insurance expense 5,142 407 65 15
Other fees and expenses 7,026 755 347 258
-------------- ------------ ----------- ----------
Total operating expenses 1,780,620 206,215 61,609 29,521
Waiver of investment advisory fee (Note 3) (89,072) (37,251) (21,141) (20,796)
Total expenses 1,691,548 168,964 40,468 8,725
-------------- ------------ ----------- ----------
Investment income, net 784,489 51,554 81,492 2,611
-------------- ------------ ----------- ----------
Realized and unrealized gain (loss) on investments and
foreign currency-related transactions
Net realized gain (loss) from investments (5,089,231) 14,916 83,394 3,297
Net realized gain (loss) from foreign
currency-related transactions (143,506) (23,241) 1,515 (756)
Net unrealized appreciation (depreciation) on 63,554,553 4,138,786 463,008 201,136
investments
Net unrealized appreciation (depreciation) on
translation of assets and liabilities denominated (83,468) (5,051) (1,182) (73)
in foreign currencies
-------------- ------------ ----------- ----------
Realized and unrealized gain (loss) on
investments and foreign currency-related 58,238,348 4,125,410 546,735 203,604
transactions
-------------- ------------ ----------- ----------
Net increase in net assets resulting from operations
$ 59,022,837 $ 4,176,964 $ 628,227 $ 206,215
============== ============ =========== ==========
</TABLE>
* For the period from November 9, 1998
(commencement of operations) to April 30, 1999
See Notes to Financial Statements
<PAGE>
Harding, Loevner Funds, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
International Equity Portfolio Global Equity Portfolio
--------------------------------- --------------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
1999 October 31, 1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
-------------- --------------- -------------- --------------
Increase (Decrease) in Net Assets
from Operations
Investment income, net $ 784,489 $ 4,272,224 $ 51,554 $ 499,821
Net realized gain (loss) from investments,
in kind redemptions and foreign
currency-related transactions (5,232,737) (1,323,216) (8,325) 9,885,812
Net unrealized appreciation (depreciation)
on investments and on translation of
assets and liabilities denominated in 63,471,085 (1,207,070) 4,133,735 (13,011,022)
foreign currencies
------------- ------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations 59,022,837 1,741,938 4,176,964 (2,625,389)
------------- ------------- ------------ ------------
Distributions to Shareholders from:
Investment income, net 5,059,466 3,375,872 -- 820,550
Net realized gain from investments and
foreign currency-related transactions 337,112 877,148 -- 6,491,751
In excess of net realized gain from
investments and foreign currency-related -- 1,323,152 -- --
transactions
------------- ------------- ------------ ------------
Total distributions 5,396,578 5,576,172 -- 7,312,301
------------- ------------- ------------ ------------
Capital Share Transactions, Net (See Note 6) (40,556,271) (57,413,729) (8,799,764) (24,180,948)
Net increase (decrease) in net assets 13,069,988 (61,247,963) (4,622,800) (34,118,638)
Net Assets
Beginning of period 326,056,304 387,304,267 30,763,496 64,882,134
------------- ------------- ------------ ------------
End of period $339,126,292 $326,056,304 $26,140,696 $30,763,496
============= ============= ============ ============
Undistributed (Distributions in excess of)
Invesment Income, Net $ (534,728) $ 3,740,249 $ (208,752) $ (260,306)
============= ============= ============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
Harding, Loevner Funds, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Emerging Markets
Multi-Asset Global Portfolio Portfolio
----------------------------- --------------------
For the Period from
Six Months Ended November 9, 1998*
April 30, 1999 Year Ended to
(Unaudited) October 31, April 30, 1999
1998 (Unaudited)
-------------------------------- ---------------------
Increase (Decrease) in Net Assets from Operations
Investment income, net $ 81,492 $ 155,102 $ 2,611
Net realized gain (loss) from investments and foreign
currency-related transactions 84,909 81,404 2,541
Net unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities denominated in 461,826 51,959 201,063
foreign currencies
----------- ------------ -----------
Net increase in net assets resulting from operations 628,227 288,465 206,215
----------- ------------ -----------
Distributions to Shareholders from:
Investment income, net (168,496) 121,883 --
Net realized gain from investments and foreign currency-related
transactions (85,013) 96,112 --
----------- ------------ -----------
Total distributions (253,509) 217,995 --
----------- ------------ -----------
Capital Share Transactions, Net (See Note 6) (68,031) 1,081,521 1,114,829
Net increase in net assets 306,687 1,151,991 1,321,044
Net Assets
Beginning of period 6,327,221 5,175,230 --
----------- ------------ -----------
End of period $6,633,908 $6,327,221 $1,321,044
=========== ============ ===========
Undistributed Investment Income, Net $ 38,008 $ 125,012 $ 2,611
=========== ============ ===========
</TABLE>
* Commencement of operations
See Notes to Financial Statements
<PAGE>
Harding, Loevner Funds, Inc.
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio
For the
Six Months For For For the For For
Ended the Year the Year Ended Ten Months the Year the Period
April 30, Ended Oct. 31, 1997 Ended Ended Ended
1999 Oct. 31, 1998 Oct. 31, Dec. 31, 1995 Dec. 31, 1994*
(Unaudited) 1996
--------------------------------------------------------------------------------------
Per Share Data
Net asset value, beginning of period $ 11.62 $ 11.79 $ 11.61 $ 10.77 $ 9.71 $10.00
Increase (Decrease) in Net Assets from
Operations
Investment income, net 0.03 0.14 0.13 0.08 0.10 0.04
Net realized and unrealized gain
(loss) on investments and foreign
currency-related transactions 2.14 (0.13) 0.05(a) 0.97 1.06 (0.29)
---------- --------- --------- ---------- --------- -------
Net increase (decrease) from investment
operations 2.17 0.01 0.18 1.05 1.16 (0.25)
---------- --------- --------- ---------- --------- -------
Distributions to Shareholders from:
Investment income, net 0.16 0.11 0.00(b) 0.08 0.10 0.03
Excess of investment income, net 0.02 -- -- 0.03 -- --
Net realized gain from investments
and foreign currency-related 0.01 0.03 -- 0.10 -- --
transactions
Excess of net realized gain on
investments and foreign
currency-related transactions -- 0.04 -- -- -- 0.01
---------- --------- --------- ---------- --------- -------
Total distributions 0.19 0.18 -- 0.21 0.10 0.04
---------- --------- --------- ---------- --------- -------
Net asset value, end of period $ 13.60 $ 11.62 $ 11.79 $ 11.61 $ 10.77 $ 9.71
========== ========= ========= ========== ========= =======
Total Return 18.86%(c) 0.06% 1.57% 9.81%(c) 11.99% (2.47)%(c)
Ratios/Supplemental Data
Net assets, end of period (000's) $ 339,126 $326,056 $387,304 $ 241,357 $ 67,727 $8,904
Ratio of net operating expenses to
average net assets 1.00%(d) 1.00 % 1.00 % 1.00%(d) 0.99% 0.95%(d)
Ratio of investment income, net to
average net assets 0.46%(d) 1.14 % 1.07 % 1.29%(d) 1.30% 1.13%(d)
Decrease reflected in above expense
ratios due to waiver of
investment advisory and
administration fees, and 0.05%(d) 0.04 % 0.06 % 0.14%(d) 0.54% 1.33%(d)
reimbursement of other expenses
Portfolio turnover 19%(c) 33% 31% 17%(c) 28% 27%(c)
</TABLE>
* For the period from May 11, 1994 (commencement of operations) to
December 31, 1994.
(a) Includes the effect of net realized gains prior to a significant
increase in shares outstanding.
(b) Rounds to less than $0.01.
(c) Not annualized
(d) Annualized
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
- --------------------------------------------------------- ----------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Global Equity Portfolio
-------------------------------------------------
For the Six
Months Ended For the Year For the
April 30, 1999 Ended Period Ended
(Unaudited)(a) Oct. 31, 1998 Oct. 31, 1997*
--------------------------------------------------
Per Share Data
Net asset value, beginning of period $ 16.16 $ 18.70 $ 17.58(b)
-------- --------- ---------
Increase (Decrease) in Net Assets from Operations
Investment income, net 0.03 0.20 0.19
Net realized and unrealized gain (loss) on investments and
foreign currency-related transactions 2.70 (0.55) 0.94
-------- --------- ---------
Net increase (decrease) from investment operations 2.73 (0.35) 1.13
-------- --------- ---------
Distributions to Shareholders from:
Investment income, net -- 0.25 0.01
Net realized gain from investments and foreign currency-related
transactions -- 1.94 --
-------- --------- ---------
Total distributions -- 2.19 0.01
-------- --------- ---------
Net asset value, end of period $ 18.89 $ 16.16 $ 18.70
======== ========= =========
Total Return 16.89%(c) (2.46)% 6.45%(c)
Ratios/Supplemental Data
Net assets, end of period (000's) $26,141 $ 30,763 $ 64,882
Ratio of net operating expenses to average net assets 1.25%(d) 1.25% 1.25%(d)
Ratio of investment income, net to average net assets 0.38 %(d) 0.86% 1.05%(d)
Decrease reflected in above expense ratios due to waiver of
investment advisory and reimbursement of other expenses 0.28%(d) 0.11% 0.12%(d)
Portfolio turnover 19%(c) 67% 39%(c)
</TABLE>
* Commencement of Operations was December 1, 1996 following a tax free merger
with GELP which was formed on September 27, 1991.
(a) Net investment income per share was computed using average shares
outstanding.
(b)The begining net asset value of the Portfolio was equal to the total Net
Asset Value, as converted, of the outstanding Partnership Units of Harding,
Loevner Management, L.P.'s- Global Equity Limited Partnership ("GELP") as of
November 30, 1996 (See Note 8 to Financial Statements).
(c) Not annualized
(d) Annualized
See Notes to Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
- ----------------------------------------------------- --------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Multi-Asset Global Portfolio
For the Six For the
Months Ended For theYear Period
April 30, 1999 Ended Ended
(Unaudited) Oct. 31, 1998 Oct. 31, 1997*
-----------------------------------------------
Per Share Data
Net asset value, beginning of period $ 11.41 $ 11.26 $10.00
-------- -------- -------
Increase in Net Assets
from Operations
Investment income, net 0.14 0.52 0.25
Net realized and unrealized gain on investments and foreign
currency-related transactions 0.96 0.09 1.04
-------- -------- -------
Net increase from investment operations 1.10 0.61 1.29
-------- -------- -------
Distributions to Shareholders from:
Investment income, net 0.30 0.26 0.03
Net realized gain from investments and foreign currency-related 0.15 0.20 --
transactions
-------- -------- -------
Total distributions 0.45 0.46 0.03
-------- -------- -------
Net asset value, end of period $ 12.06 $ 11.41 $11.26
======== ======== =======
Total Return 9.84%(a) 5.53% 12.92%
Ratios/Supplemental Data
Net assets, end of period (000's) $ 6,634 $ 6,327 $5,175
Ratio of net operating expenses to average net assets 1.25%(b) 1.25% 1.25%
Ratio of investment income, net to average net assets 2.52 %(b) 2.58% 2.50%
Decrease reflected in above expense ratios due to waiver of
investment advisory and reimbursement of other expenses 0.65%(b) 0.71% 0.92%
Portfolio turnover 16%(a) 29% 36%
</TABLE>
* Commencement of Operations was November 1, 1996.
(a) Not annualized
(b) Annualized
See Notes To Financial Statements.
<PAGE>
Harding, Loevner Funds, Inc.
- --------------------------------------------------------- ---------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Emerging Markets
Portfolio
-------------------------
For the Period Ended
April 30, 1999*
(Unaudited)
-------------------------
Per Share Data
Net asset value, beginning of period $10.00
-------
Increase (Decrease) in Net Assets from Operations
Investment income, net 0.03
Net realized and unrealized gain on investments and foreign currency-related 1.84
transactions
-------
Net increase from investment operations 1.87
-------
Distributions to Shareholders from:
-------
Total distributions --
-------
Net asset value, end of period $11.87
=======
Total Return 18.70%(a)
Ratios/Supplemental Data
Net assets, end of period (000's) $1,321
Ratio of net operating expenses to average net assets 1.75%(b)
Ratio of investment income, net to average net assets 0.52%(b)
Decrease reflected in above expense ratios due to waiver of investment advisory and
administration fees, and reimbursement of other expenses 4.15%(b)
Portfolio turnover 18%(a)
</TABLE>
* Commencement of Operations was November 9, 1998
(a) Not annualized
(b) Annualized
See Notes to Financial Statements.
Harding, Loevner Funds, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
April 30, 1999
- --------------------------------------------------------------------------------
1. Organization
Harding, Loevner Funds, Inc. (the "Fund") was organized as a Maryland
corporation on July 31, 1996 and is registered under the Investment Company Act
of 1940, as amended, as an open-end diversified management investment company.
The Fund currently has four Portfolios, all of which were active as of April 30,
1999. The four active Portfolios are: International Equity Portfolio
("International Equity"); Global Equity Portfolio ("Global Equity"); Multi-Asset
Global Portfolio ("Multi-Asset Global"), and Emerging Markets Portfolio
("Emerging Markets"). The investment objective of each portfolio is as follows:
International Equity - to seek long-term capital appreciation through
investments in equity securities of companies based outside the United States;
Global Equity to seek long-term capital appreciation through investments in
equity securities of companies based both in and outside the United States;
Multi-Asset Global - to seek long-term capital appreciation and a growing stream
of current income through investments in equity and debt securities of companies
based both in and outside the United States and debt securities of the United
States and foreign governments and their agencies and instrumentalities;
Emerging Markets Portfolio - to seek long-term capital appreciation through
investments in equity securities of companies based in developing markets
outside the United States.
International Equity, previously the HLM International Equity Portfolio of
the AMT Capital Fund, Inc. (the "AMT Capital Portfolio"), commenced
investment operations on May 11, 1994. Effective as of the close of
business on October 31, 1996, the AMT Capital Portfolio merged into
International Equity pursuant to shareholder approval of the tax-free
reorganization. Global Equity commenced operations on December 1,
1996 following the acquisition of net assets of Harding, Loevner
Management, L.P.'s - Global Equity L.P. ("GELP"), a limited partnership,
in a tax free reorganization. Multi-Asset Global commenced
operations on November 1, 1996. Emerging Markets commenced operations
on November 9, 1998. The Fund is managed by Harding, Loevner
Management, L.P. (the "Investment Adviser").
2. Summary of Significant Accounting Policies
Securities
All securities transactions are recorded on a trade date basis. Interest income
and expenses are recorded on an accrual basis. Dividend income is recorded on
the ex-dividend date. The Fund amortizes discount or accretes premium on a daily
basis to interest income. The Fund uses the specific identification method for
determining gain or loss on sales of securities.
Income Tax
It is the policy of each Portfolio of the Fund to qualify as a regulated
investment company, if such qualification is in the best interest of its
shareholders, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from substantially all Federal income and excise taxes.
Valuation
All investments in the Fund are valued daily at their market price, which
results in unrealized gains or losses. Securities traded on an exchange are
valued at their last sales price on that exchange. Securities for which no sales
are reported are valued at the latest bid price obtained from a quotation
reporting system or from established market makers. Repurchase agreements are
valued at their amortized cost plus accrued interest. Securities for which
market quotations are not readily available are valued by the Board of
Directors. As of April 30, 1999, there were no securities in the Fund which
required valuation by the Board of Directors.
Expenses
The costs incurred by the Fund in connection with the organization and initial
registration of shares are being amortized on a straight-line basis by the Fund
over a sixty-month period. The unamortized balance of organizational expenses at
April 30, 1999 was $77,302.
Expenses directly attributed to a specific Portfolio of the Fund are charged to
that Portfolio's operations; expenses not directly attributable to a specific
Portfolio are allocated among the Portfolios either equitably or based on their
average daily net assets.
Dividends to Shareholders
It is the policy of the Fund to declare dividends from net
investment income annually. Net short-term and long-term capital
gains distributions for the Portfolios, if any, normally are
distributed on an annual basis.
<PAGE>
Harding, Loevner Funds, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
April 30, 1999
- --------------------------------------------------------------------------------
2. Summary of Significant Accounting
Policies (continued)
Dividends from net investment income and distributions from net realized gains
from investment transactions have been determined in accordance with income tax
regulations and may differ from net investment income and realized gains
recorded by the Portfolios for financial reporting purposes. Differences result
primarily from foreign currency transactions and timing differences related to
recognition of income, and gains and losses from investment transactions. To the
extent that any differences which are permanent in nature result in
overdistributions to shareholders, the amount of the overdistribution is
reclassified within the capital accounts based on its federal tax basis
treatment. Temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
distributions in excess of net investment income and net realized capital gains,
respectively. To the extent that they exceed net investment income and net
realized gains for tax purposes, they are reported as returns of capital.
Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked prices of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at exchange rates prevailing when accrued. The Fund does
not isolate that portion of the results of operations resulting from changes in
foreign exchange rates on investments from the fluctuations arising from changes
in market prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized gains and losses from foreign currency-related transactions arise
from sales of foreign currency, currency gains or losses realized between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Portfolio's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation or depreciation on
translation of assets and liabilities denominated in foreign currencies arise
from changes in the value of assets and liabilities other than investments in
securities at the period end, resulting from changes in the exchange rate. At
April 30, 1999, International Equity, Global Equity, Multi-Asset Global and
Emerging Markets had balances of $8,590, $2,070, ($781) and ($57), respectively,
representing net unrealized appreciation/(depreciation) related to the changes
in the exchange rate in the value of other assets and liabilities excluding
foreign currency, forward foreign currency contracts, and investments.
Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
3. Investment Advisory Agreement and
Affiliated Transactions
The Fund's Board of Directors has approved investment advisory agreements (the
"Agreements") with the Investment Adviser. In addition, the Fund has an
administration agreement with Investors Capital Services, Inc. (formerly AMT
Capital Services, Inc.), which assists in managing and supervising all aspects
of the Portfolios other than investment advisory activities. The advisory fee
and administration fees are computed daily at an annual rate of 0.75% and 0.15%,
respectively, of the average daily net assets of International Equity, 1.00% and
0.15%, respectively, for each of Global Equity and Multi-Asset Global , and
1.25% and 0.15%, respectively, for Emerging Markets. The Investment Adviser has
voluntarily agreed to reduce its fee to the extent that aggregate expenses
(exclusive of brokerage commissions, other investment expenses, interest on
borrowings, taxes and extraordinary expenses) exceed an annual rate of 1.00%,
1.25%, 1.25%, and 1.75% respectively, of the average daily net assets of
International Equity, Global Equity, Multi-Asset Global and Emerging Markets.
Directors' fees of $31,992 were accrued for the six months ended April 30, 1999
to directors who are not employees of the Investment Adviser.
4. Investment Transactions
Purchase cost and proceeds from sales of investment securities, other than
short-term investments, for the six months ended April 30, 1999, were as follows
for each of the Portfolios:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Purchase Cost of Proceeds from Sales of
Portfolio Investment Securities Investment Securities
- ------------------------------------------------------------------------------------------------------
International Equity $ 62,768,447 $ 89,457,953
Global Equity 5,278,737
13,531,058
Multi-Asset Global 1,368,645 1,046,830
A
Emerging Markets 1,254,711 174,753
</TABLE>
The cost of investments for Federal income tax purposes and the components of
net unrealized appreciation on investments at April 30, 1999, for each of the
Portfolios were as follows:
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized Unrealized
Portfolio Appreciation Depreciation Net Cost
- -----------------------------------------------------------------------------------------------------------------------------------
International Equity $ 78,192,150 $ 13,317,968 $ 64,874,182 $ 276,783,160
Global Equity 5,630,270 642,406 4,987,864 21,303,826
Multi-Asset Global 995,812 209,033 786,779 6,105,280
Emerging Markets 225,945 24,808 201,137 1,126,485
</TABLE>
5. Forward Foreign Exchange Contracts
The Portfolios, on occasion, enter into forward foreign exchange contracts in
order to hedge their exposure to changes in foreign currency exchange rates on
their foreign portfolio holdings. A forward foreign exchange contract is a
commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the cost of the original contracts and the closing of such contracts is included
in net realized gains or losses on foreign currency-related transactions.
Fluctuations in the value of forward foreign exchange contracts are recorded for
book purposes as unrealized appreciation or depreciation on assets and
liabilities denominated in foreign currencies by the Portfolio. The Portfolios
are also exposed to credit risk associated with counter party nonperformance on
these forward foreign exchange contracts which is typically limited to the
unrealized gain on each open contract.
The Portfolios enter into foreign currency transactions on the spot markets in
order to pay for foreign investment purchases or to convert to dollars the
proceeds from foreign investment sales or coupon interest receipts.
International Equity had open foreign currency transactions to sell currency on
the spot markets as of April 30, 1999 as follows:
<TABLE>
<S> <C> <C> <C> <C>
In Exchange For Net Unrealized
Settlement Deliver (in U.S. dollars) Appreciation
Date (Depreciation)
-------------------------------------------------------------------------------------------------------
5/03/99 Australian Dollar
860,537 $ 570,113 $ (8,526)
5/06/99 British Pounds
1,439,399 2,319,430 2,176
5/03/99 Euro
430,259 455,478 1,193
5/04/99 Euro
1,030,570 1,091,046 3,110
5/28/99 Euro
1,435,193 1,521,848 4,193
5/07/99 Japanese Yen
266,573,657 2,235,134 (465)
5/03/99 Swedish Krona
3,366,507 400,124 1,137
5/05/99 Singapore Dollar
1,400,711 826,354 (2,018)
</TABLE>
Forward Foreign Exchange Contracts (continued)
<TABLE>
<S> <C> <C> <C> <C>
In Exchange For Net Unrealized
Settlement Deliver (in U.S. dollars) Appreciation
Date (Depreciation)
-------------------------------------------------------------------------------------------------------
5/04/99 Thai Baht
10,236,025 275,978 (2,872)
5/04/99 South African Rand
2,485,780 407,020 2,364
5/03/99 Swiss Franc
1,648,481 1,083,109 6,076
------------------------- -------------------------
$ 11,185,634 $ 6,368
</TABLE>
There were no open foreign currency transactions to buy or sell currency on the
spot markets as of April 30, 1999 for Global Equity, Multi-Asset Global, or
Emerging Markets.
6. Capital Share Transactions
Transactions in capital stock for
International Equity were as follows for the periods indicated:
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
-------------------------------------- ---------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 803,228 $ 9,977,310 2,961,007 $ 36,281,392
Shares issued related to
reinvestment of dividends 341,566 4,266,161 356,184 4,099,676
-------------------------------------------------------------------------------
1,144,797 14,243,471 3,317,191 40,381,068
Shares redeemed 4,285,791 54,799,742 8,083,995 97,794,797
-------------------------------------- ---------------------------------------
Net (decrease) increase (3,140,997) $ (40,556,271) (4,766,804) $ (57,413,729)
====================================== =======================================
</TABLE>
Transactions in capital stock for Global Equity were as follows for the period
indicated:
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
-------------------------------------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 1,217 $ 21,034 48,580 $ 861,141
Shares issued related to reinvestment
of dividends -- -- 414,700 7,049,903
------------------------------------------------------------------------------
1,217 21,034 463,280 7,911,044
Shares redeemed 521,226 8,820,798 2,030,092 32,091,992
------------------------------------------------------------------------------
Net (decrease) increase (520,009) $ (8,799,764) (1,566,812) $ (24,180,948)
==============================================================================
</TABLE>
Transactions in capital stock for Multi-Asset Global were as follows for the
period indicated:
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
-------------------------------------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 23,159 $ 262,400 111,544 $ 1,261,314
Shares issued related to reinvestment
of dividends 21,881 249,664 19,604 217,995
-------------------------------------------------------------------------------
45,040 512,064 131,148 1,479,309
Shares redeemed 49,281 580,095 36,232 397,788
-------------------------------------------------------------------------------
Net (decrease) increase (4,241) $ (68,031) 94,916 $ 1,081,521
===============================================================================
</TABLE>
<PAGE>
Transactions in capital stock for Emerging Markets were as follows for the
period indicated:
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------
Period from November 9, 1998 *
to April 30, 1999
(Unaudited)
---------------------------------------
Shares Amount
- -------------------------------------------------------------------------------------
Shares sold 111,329 $ 1,114,829
Shares issued related to reinvestment
of dividends -- --
---------------------------------------
-- --
Shares redeemed -- --
---------------------------------------
Net increase 111,329 $ 1,114,829
=======================================
</TABLE>
* Commencement of Operations
7. Repurchase and Reverse Repurchase
Agreements
Each Portfolio may enter into repurchase agreements under which a bank or
securities firm that is a primary or reporting dealer in U.S. Government
securities agrees, upon entering into a contract, to sell such securities to a
Portfolio and repurchase such securities from such Portfolio at a mutually
agreed upon price and date.
Each Portfolio also is permitted to enter into reverse repurchase agreements
under which a primary or reporting dealer in U.S. Government securities
purchases securities from a Portfolio and such Portfolio agrees to repurchase
the securities at an agreed upon price and date.
Each Portfolio may engage in repurchase and reverse repurchase transactions with
parties selected on the basis of such party's creditworthiness. Securities
purchased subject to repurchase agreements must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Portfolio will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Portfolio maintains the right to sell the underlying securities
at market value and may claim any resulting loss against the seller. When a
Portfolio engages in reverse repurchase agreement transactions, such Portfolio
will maintain, in a segregated account with its custodian, liquid securities
equal in value to those subject to the agreement.
<PAGE>
OFFICERS & DIRECTORS AND OTHER PERTINENT INFORMATION
OFFICERS AND DIRECTORS
Jane A. Freeman
Director of the Fund
Samuel R. Karetsky
Director of the Fund
Carl W. Schafer
Director of the Fund
David R. Loevner
President and Director
of the Fund
Susan C. Mosher
Secretary of the Fund
Timothy F. Osborne
Treasurer of the Fund
Richard Reiter
Assistant Secretary
of the Fund
INVESTMENT ADVISER
Harding, Loevner Management, L.P.
50 Division Street, Suite 401
Somerville, NJ 08876
DISTRIBUTOR
AMT Capital Securities, L.L.C.
600 Fifth Avenue, 26th Floor
New York, NY 10020
ADMINISTRATOR, CUSTODIAN AND FUND ACCOUNTING AGENT
Investors Bank & Trust Company
P.O. Box 9130
Boston, MA 02117
TRANSFER AND DIVIDEND
DISBURSING AGENT
Investors Bank & Trust Company
P.O. Box 9130
Boston, MA 02117
LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street, N.W
Washington, D.C. 20006-2401
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
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