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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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Two Portland Square, Portland, Maine 04101
<TABLE>
<S> <C>
General Information (207) 879-6200
Account Information (800) 344-8332
Fax (207) 879-6050
</TABLE>
INVESTMENT OBJECTIVE
Long term capital appreciation primarily through investments in equity
securities of emerging markets. Securities are selected on the basis of
potential for capital appreciation without regard for current income.
INVESTMENT MANAGER
Schroder Capital Management International Inc., (the 'Investment Adviser') is a
wholly-owned indirect subsidiary of Schroders plc, the London Stock Exchange
listed holding company parent of an investment banking and investment management
group of companies (the 'Schroder Group') that dates its origins to 1804. The
investment management operations of the Schroder Group are located in 18
countries worldwide, including 11 in emerging markets. The Schroder Investment
Management Group has been managing international investment portfolios since the
early years of this century. At October 31, 1995, the Schroder Investment
Management Group had over $100 billion in assets under management. At that date,
the Investment Adviser, together with its U.K. affiliate, Schroder Capital
Management International Ltd., had over $15 billion under management, of which
approximately $2.6 billion was invested in the emerging markets.
December 15, 1995
Dear Shareholder,
We are pleased to present the first annual report for the Schroder Emerging
Markets Fund Institutional Portfolio (the 'Fund'), which was launched on March
31, 1995. The Fund measures its returns against the Morgan Stanley Capital
International (MSCI) Emerging Markets Free (ex Malaysia) Index as it does not
include investments in markets which are included in developed market indices
such as Malaysia. Since inception, the Fund's net asset value rose by 6.3%
compared with the unmanaged benchmark return of 7.6%. The slight
underperformance can be partially attributed to start up costs of investing in
the first month of the Fund. Over the quarter ended July, the Fund outperformed
the benchmark, while in the most recent quarter, modestly underperformed the
benchmark.
The Fund's focus since inception has been on Asia where high levels of
economic activity are supporting corporate profits growth and domestic savings
rates are at attractive levels, thereby ensuring a pool of local capital able to
finance investment. By way of contrast, Latin America still needs to address its
chronic shortfall of domestic savings and reduce its reliance on overseas
capital, a dependency which became all too apparent in the Mexican crisis at the
end of 1994. Elsewhere in the world, we are encouraged by the steps being taken
in the former communist East European states to privatize their economies and
unleash native entrepreneurial talent. Likewise, in South Africa the smoothness
of transition by the Government of National Unity has surprised most observers
and engendered more optimism about the future of that country.
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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The painfulness of the transition to free market economies by emerging
market countries should not be underestimated. Moreover, there is no room for
complacency that the process is irrevocable. It demands constant reaffirmation
by the political leadership in these countries that a new path to prosperity is
being taken. We are encouraged by the commitment being shown and excited by the
ever-increasing choice of investment opportunities. Supported by 35 emerging
market analysts and specialists, your fund management team believes that its
investment approach which focuses on economies where policies are most
supportive of high corporate profits growth over a 3 to 5 year time horizon has
resulted in the Fund being able to benefit from a recovery in liquidity into
emerging markets in 1996.
In October, a number of resolutions were approved, details of which are
outlined in the Notes to Financial Statements on page 16. The two significant
items were the conversion of the Fund from a Maryland corporation to a Delaware
business trust and the implementation of a Core and Gateway'c' structure which
should allow the Fund to be sold with a higher degree of flexibility by third
parties such as banks thereby potentially facilitating further asset growth.
The Core and Gateway Fund Structure (commonly know as a master-feeder fund
structure) is an arrangement whereby one or more investment companies or other
collective investment vehicles sharing investment objectives, but offering their
shares through distinct distribution channels, pool their assets by investing in
a single investment company having substantially the same investment objective
and policies. This structure achieves economies of scale by allowing funds with
different shareholder-related features or distribution channels, but having the
same investment objective, policies and restrictions, to combine their
investments by investing all of their assets in the same portfolio instead of
managing them separately.
We remain optimistic about the prospects for investing in emerging markets
and thank you for your continued support and interest in the Fund.
Sincerely,
<TABLE>
<S> <C>
HERMANN C. SCHWAB LAURA E. LUCKYN-MALONE
Hermann C. Schwab Laura E. Luckyn-Malone
Chairman President
</TABLE>
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2
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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PORTFOLIO STRATEGY
At the end of October 1995, the Fund was approximately 95.9% invested in
equities and 4.1% in cash and other assets. In recent months there have been no
major strategic shifts in weightings. The Fund continues to be biased towards
the Asian growth economies with just over half the Fund invested in this region
49.3% compared to only 34.3% in the Morgan Stanley Capital International
Emerging Markets Free (ex Malaysia) Index. We believe that the Asian markets
offer the best value relative to long term growth rates. However, we can also
find attractive stock investments in Latin America, Europe and Africa. Since
inception, the Fund's NAV has risen 6.3%. Earnings growth generally remains
strong and valuations are attractive relative to the more mature industrialized
economies. We believe the Fund is ideally positioned to benefit from this growth
with a well positioned portfolio of quality companies.
The Fund's approach is to target companies that offer sustainable
growth. We focus on companies that have professional management and a strong
domestic market share in their business or a powerful franchise. The primary
attraction of emerging markets is the high growth rates that they offer
relative to the developed world. We therefore search for companies, for
example, that will benefit from rising living standards and increased
infrastructure development. With our extensive network of analysts located in
11 emerging market offices around the world, we believe we can identify
inefficiently priced securities across a broad capitalization range. Current
valuations in Asia are below historical averages yet economic growth remains
strong. Having run an overweight position in the more mature North Asian
markets, particularly Korea (11% of the Fund at fiscal year end), which has
been a strong performer, we will look to reduce this in favor of the South
Asian markets of Thailand, Indonesia and the Philippines, which continue to
show robust earnings growth. The Indian weighting continues to be built up,
reflecting the country's economic strength and the quality of stock
opportunities available. In Latin America, despite the partial recovery of
markets from the Mexico 'crisis' late last year, we remain underweight. In
the case of Brazil, we feel the recovery is justified by the steps taken to
control inflation and reform the government. Brazil is the Fund's second
largest country weighting. However, we are less confident about Mexico where
the economy is suffering from continued currency turmoil and a depressed
domestic economy. Elsewhere, we continue to find valuations in Poland
attractive, whereas South Africa, despite the quality of some industrial
companies, appears fully valued.
INVESTMENT REVIEW
LATIN AMERICA
Having bottomed out in March, the Latin American markets staged a recovery
that has only recently been reversed due to continued political and economic
uncertainty. In ARGENTINA, recent tension between the Finance Minister and the
President has dampened confidence in a sustainable economic recovery. The
CHILEAN market has suffered from the threat of lower profitability in the
important electricity sector with the proposed building of a second gas pipeline
flooding the market with cheap gas.
In BRAZIL, the market has reacted favorably to expected tariff rebalancing
and possible privatization in both the electricity and telecommunication
sectors. The Fund has benefited from this with two of our largest positions in
Eletrobras and Telebras. The government has done a credible job of managing the
economy and has introduced administrative and economic reforms that should help
set the stage for continued growth.
Having partially recovered, the MEXICAN market was adversely affected
towards the Fund's fiscal year end as investors realized that the pace of
economic recovery would be slower than market optimists originally expected. The
depth of the recession has caused a loss of domestic confidence and the peso
collapsed in November to a low of P7.91 to US$1, thereby triggering an increase
in domestic interest rates. The market now better reflects the delayed pace of
the recovery that we had anticipated. However, to become attractive the currency
must stabilize, which it has yet to do. We continue to focus on exporters with
dollar revenues such as ALFA SA or companies benefiting from import substitution
such as Kimberly-Clark de Mexico SA.
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3
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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AFRICA
SOUTH AFRICA has been a strong performer in 1995 led by the industrial
sector of the market. Resource companies on the other hand, particularly gold
stocks, have been weak but these stocks are not currently held by the Fund.
Strong earnings growth of an expected 30% in 1995 and 1996 is being driven by
the country's economic recovery. Key to this recovery is the rebound in fixed
investment, up 10% in 1995, which is benefiting Barlow Limited, one of the
Fund's holdings. With sustainable economic growth unlikely to exceed 3% given
the current constraints on the economy (primarily low savings and poor
productivity) well managed growth stocks like South African Breweries Limited
look fully valued. We will continue to look for quality smaller companies, such
as Waltons Stationery Co. Ltd., a recent addition to the Fund.
EASTERN EUROPE
After a strong start to the year when the POLISH market reacted positively
to the robust performance of the economy (with growth above 5% and slowing
inflation), the uncertainty created by the Presidential elections has dampened
performance in recent months. In HUNGARY, where IMF-imposed austerity measures
have constrained economic growth and depressed corporate earnings, a few core
stocks with strong visible earnings, such as the pharmaceutical company Gedeon
Richter have supported the Budapest exchange. The CZECH economy continues to
perform well; however company earnings for many listed companies have been
disappointing. Finally, the SLOVAK market remains a victim of political
infighting which has overshadowed the robust macro-economic picture, but growth
should exceed 5% in 1995 and inflation should fall to 10%.
MEDITERRANEAN EUROPE
Mediterranean European markets have also fallen victim to political
uncertainty. In PORTUGAL, the market fell steadily ahead of elections in early
October. The majority win by the Social Democrats is expected to result in a
more consistent economic policy, thereby stabilizing the economy. Additionally,
an ambitious privatization program, which has been successfully completed,
drained liquidity from the market. In GREECE, the market has been somewhat
hampered by uncertainty regarding the succession of the Prime Minister. Despite
this, with projected company earnings growth of 20%, the Greek market has
performed well, up 8.5% over the last six months. Finally, the TURKISH market,
having started the year with a strong rally as the economy recovered from
recession brought about by the 1994 currency crisis, has weakened recently on
political concerns. Disagreements within the ruling coalition have resulted in
the need for early elections, scheduled for December 1995.
EMERGING ASIA
Emerging Asia had a weak start to the year as the markets reacted nervously
to the Mexican crisis and a tumbling US dollar. However, since the inception of
the Fund, continued strong corporate earnings and attractive valuations aided a
recovery in the markets led by KOREA, up 12.8%. The economy is growing strongly
and first half net profit results were up 42% for the market. This combined with
a further opening of foreign ownership levels to 15% on July 1 provided a good
background for positive returns. INDONESIA, up 11.5%, was encouraged by better
than expected first half results. PT Gudang Garam, one of the Fund's largest
holdings, saw net profits rise in excess of 37% for the first half of 1995. With
favorable demographics and rising per capita income we continue to emphasize the
high growth areas of consumption through our Indonesian stock selection. The
THAI market saw more modest gains, rising 5.9% over the period. Inflation has
been running above the government's official 5% target and monetary policy has
been kept tight throughout the year. This has depressed corporate profits and
led to some earnings disappointment. However, recent economic data suggest that
economic activity is moderating. With the banking sector still attractively
valued and the government continuing its long privatization program, there
remains attractive opportunity for investment. One of the Fund's positions which
has been built up recently has been Electricity Generating Public Company, the
first leg of the government privatization of the power sector. This is a play on
Thailand's robust economic activity.
Other markets in Asia were weak. THE PHILIPPINES lost 0.4% as the market
suffered from a deteriorating macroeconomic environment brought about by rising
inflation and higher interest rates. In INDIA, down 9.2%, US dollar returns were
depressed by a sharp weakening of the Rupee due to a worsening government fiscal
position. Despite this, from a stock selection point of view, the market looks
attractive. For the first half of the fiscal year 1995
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4
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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net profits were up 40% for the market. We remain positive on the development of
the Indian market as the government slowly continues its program of deregulation
and liberalization. Therefore, the Fund will use market weakness to find
opportunities to invest in the high growth sectors of infrastructure,
consumption, power and telecommunications.
TAIWAN, down 27%, was the weakest regional market. Despite an attractive
macroenvironment, tensions between Taiwan and Mainland China have been strained.
This will continue to cause the market to be volatile. Accordingly, the Fund has
a low weighting in Taiwan but will continue to look for further investment
opportunities should the political outlook improve.
MANAGEMENT DISCUSSION
WHICH EASTERN EUROPEAN COUNTRY IS THE MOST ATTRACTIVE TO INVEST IN AND WHY?
Despite a volatile performance over the last quarter, the Polish market
remains the most attractive in the region. The Polish government managed to turn
the economy around relatively quickly following the fall of communism and was
the first central European country to return to positive growth in GDP. Much of
this success is credited to the adoption of the 'shock treatment' Bolcerowicz
program in 1990 which slashed subsidies, liberalized prices, set interest rates
at market levels, and took the first steps towards full currency convertability.
With GDP growth expected to top 5% in 1995 and inflation slowly coming under
control, Poland appears well on its way to economic health. Upcoming elections
should alleviate the political uncertainty and it is widely believed that the
course of economic reform will remain constant given that broad political
consensus exists among both the left and right with regard to economic policy.
To emphasize this point it should be noted that the recent reform has been
completed with a communist majority in Parliament. Although the Polish market is
relatively small, with a market capitalization of $4.1 billion, the constant
flow of new issues and an active domestic investor base make the market fairly
liquid. This, when combined with an increasingly profitable and well-managed
corporate sector and fairly valued investments makes Poland an excellent
destination for investment.
WHY IS THE FUND INVESTED SO HEAVILY IN BRAZIL?
Introduction of the Real was the first in a series of continued positive
economic policy moves by the Brazilian government. The new currency helped
stabilize inflation from over 50% on a monthly basis to a low of 0.74% for
September. Additionally, the government is moving to balance the budget by
introducing administrative reforms, has turned around a troubling trade deficit,
prevented the economy from overheating and has used reasonable trading bands
slowly to devalue the currency. On top of this, President Cardoso's
administration is busy formulating amendments to the constitution in order to
make it more business friendly while also relieving the state of much of its
financial burden. These amendments will help pave the way for privatizations,
tariff increases in the electricity and telecommunications sectors, and
continued investment flows. These factors along with Brazil's international
competitiveness have laid the foundation for a dynamic economy that we believe
offers significant appreciation potential and a wealth of investment
opportunities.
WHY DOES THE FUND INVEST IN SO FEW CHINESE COMPANIES?
Management of your Fund has taken a very conservative approach to
investment in China. Against an economic backdrop of tight credit conditions as
the Chinese government continues its fight against inflationary pressures and
attempts to slow down the rate of economic activity, there have been few
companies that have emerged unscathed. Access to debt financing through the
banking sector is limited; and access to global capital through the Chinese 'B'
share markets in Shenzhen and Shanghai even more so as those markets have fallen
by 31.8% and 12.9% from January 1 to October 31, 1995. More recently the 'H'
share index (Chinese former state owned enterprises listed in Hong Kong) has
fallen to a historical low of 690.8 compared with a level of 1067.96 at January
1 ,1995. These reflect international investors' concerns about the quality of
the underlying businesses, their management and accounting practices and level
of disclosure. Coupled with this is uncertainty about the consistency of Chinese
government policy toward the quoted sector at a time when politicians are
jostling to assume the mantle of Deng Xiaoping. Consequently, our focus on China
is predominantly through companies operating out of Hong
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5
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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Kong, which have a transparent and controlled strategy with respect to their
business opportunities on the mainland and understand that a stock market
listing incorporates a requirement of accountability to shareholders.
INVESTMENT ADVISER'S REPORT -- COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT
The following chart reflects a comparison of a change in value of a $10,000
investment in Schroder Emerging Markets Fund Institutional Portfolio ('Schroder
EMF'), including reinvested dividends and distributions, and the performance of
the Morgan Stanley EMF Index. Investment Return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Past performance
is not predictive nor a guarantee of future results.
SCHRODER EMF
VS.
MORGAN STANLEY EMF INDEX
VALUE ON 10/31/95
- -----------------
Schroder EMF $10,630
MSCI EMF Index $10,547
MSCI EMF ex-Malaysia Index $10,763
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
- ---------------------------
SCHRODER EMF MSCI EMF EMF EX-MALAYSIA*
---------------------- ------------ ----------------
<S> <C> <C> <C>
Since Inception 10.98% 9.56% 13.44%
on 3/31/95
</TABLE>
[PERFORMANCE GRAPH]
EMF
SCHRODER MSCI EMF INDEX EX-MALAYSIA
--------- ------------ -----------
3/31/95 10000 10000 10000
APR-95 10320 10449 10570
MAY-95 10930 11004 11008
JUN-95 10960 11037 11088
JUL-95 11270 11285 11339
AUG-95 10930 11019 11150
SEP-95 11000 10967 11129
OCT-95 10630 10547 10763
* The Morgan Stanley Capital International (MSCI) Emerging Markets Free (EMF)
Index is a market capitalization index composed of companies representative of
the market structure of 22 emerging countries in Europe, Latin America, and the
Pacific Basin. The MSCI EMF Index excludes closed markets and those shares which
are not purchasable by foreigners in otherwise free markets. The MSCI EMF
ex-Malaysia Index is a benchmark used by the Fund's adviser to exclude
investments in Malaysia, which may be considered a developed market. Malaysia
represented between 16.1% and 17.3% of the MSCI EMF Index during the period
reported.
** Index returns do not reflect expenses, which have been deducted from the
Fund's return.
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6
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1995
INVESTMENT BY INDUSTRY
<TABLE>
<CAPTION>
INDUSTRY % OF NET ASSETS
- --------------------------------------------------------
<S> <C>
Capital Equipment 7.1%
Consumer Goods 19.3%
Energy 14.0%
Financial 18.6%
Materials 15.7%
Multi-Industry 4.0%
Services 17.2%
Cash & Other Net Assets 4.1%
------
Total 100.0%
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
- --------------------------------------------------------
<S> <C>
PT Indofoods Sukses Makmur 3.3%
Thai Farmers Bank Ltd. 2.9%
Samsung Electronics America, Inc. 2.5%
Telebras 2.3%
PT Gudang Garam 2.3%
Siam City Bank 2.1%
Electricity Generating Public Co. 2.0%
Korea Mobile Telecommunications 2.0%
Electrobras 1.7%
Pohang Iron & Steel Co., Ltd. 1.7%
------
Total 22.8%
</TABLE>
<TABLE>
<CAPTION>
COUNTRY WEIGHTINGS
COUNTRY % OF NET ASSETS
- ----------------------------------------------------------
<S> <C>
Thailand 12.3%
Brazil 11.3%
Indonesia 11.1%
Korea 10.5%
Philippines 9.5%
Mexico 6.4%
Chile 5.7%
South Africa 5.5%
Argentina 4.0%
Turkey 3.4%
China 3.4%
Portugal 3.3%
India 3.1%
Poland 2.0%
Greece 2.0%
Czech Republic 1.3%
Hungary 0.6%
Taiwan 0.4%
Venezuela 0.1%
Cash & Other Net Assets 4.1%
-------
Total 100.0%
</TABLE>
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7
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE US$
----------- ----------
<S> <C> <C>
ARGENTINA - 4.1%
COMMON STOCK
65,000 Central Costanera SA
Electricity & Gas 179,436
55,500 Compania Naviera Perez Companc
SA
Diversified Industrials 243,139
55,000 Telefonica de Argentina, SA
Communications 115,523
18,500 Transportadora De Gas ADR
Electricity & Gas 189,625
----------
727,723
----------
BRAZIL - 11.8%
COMMON STOCK
478,000 Centrais Eletricas
Brasileiras* SA-Eletrobras
Electricity & Gas 135,691
12,619,000 Telecommunicacoes Brasileiras*
SA-Telebras
Communications 418,577
PREFERRED STOCK
2,943,000 CESP-Companhia Enegetica*
de Sao Paulo
Utilities 99,457
1,101,000 Centrais Eletricas Brasileiras
SA-Eletrobras
Electricity & Gas 313,689
36,338,040 Cia Acos Espec Itabir
Construction/Building
Materials 302,282
266,250 IKPC-Industrias Klabin De
Papel E Celulose S/A
Forestry, Paper Products 249,168
289,500 Sadia-Concordia SA Industria E
Comercio
Food Producers 228,782
362,000 Telecomunicacoes do Parana*
SA-Telepar
Communications 112,925
6,500,000 Unibanco-Uniao Bco
Banks 227,774
STOCK RIGHTS
432 Telecomunicacoes do Parana
SA-Telepar-Preferred*
Communications 0
4 Telecomunicacoes do Parana
SA-Telepar-Common*
Communications 0
----------
2,088,345
----------
CHILE - 5.9%
COMMON STOCK
15,000 Banco Osorno Y La Union
Banks 202,500
CHILE (CONCLUDED)
6,000 Chilgener SA ADS
Electricity & Gas 144,000
3,500 Compania Telecomunicacion
Chile Communications 252,000
11,000 Santa Isabel S.A.*
Retailers, Food 248,875
4,500 Quimica Y Minera Chile S.A.
ADR*
Chemicals 195,188
----------
1,042,563
----------
CHINA, PEOPLES REPUBLIC OF - 3.5%
COMMON STOCK
7,000 China Steel GDR*
Iron & Steel 127,260
17,000 Huaneng Power International,
Inc.*
Utilities 282,625
240,000 Shanghai Shangling Electric
Appliances Co. Ltd
Electrical Appliances 211,200
----------
621,085
----------
CZECH REPUBLIC - 1.4%
COMMON STOCK
1,940 Nafta Gbely AS
Oil 139,680
627 Tabac AS
Beverage/Tobacco
Manufacturers 105,717
----------
245,397
----------
GREECE - 2.1%
COMMON STOCK
2,400 Alfa Credit Bank
Banks 144,348
7,000 Hellenic Bottling Company SA
Beverage/Tobacco
Manufacturers 223,334
----------
367,682
----------
HUNGARY - 0.6%
COMMON STOCK
7,400 Gedeon Richter*
Pharmaceuticals 112,406
----------
INDIA - 3.3%
COMMON STOCK
11,000 Indian Hotels Co Ltd-GDR*
Leisure & Hotels 201,630
9,000 Tata Engineering and
Locomotive Company Limited
Engineering, Vehicles 191,250
CONVERTIBLE BONDS
186,000 Essar Gujarat Ltd, 5.50%, due
8/5/98
Textiles & Apparel 185,070
----------
577,950
----------
</TABLE>
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8
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
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SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE US$
-------- -----------
<S> <C> <C>
INDONESIA - 11.6%
COMMON STOCK
45,000 Dankos Laboratories
Chemicals 126,816
95,000 Hero Supermarket
Food/Grocery Products 194,517
64,000 Indocement Tunggal Prakarsa
Building Materials & Components 236,724
33,000 Jaya Real Property
Real Estate 94,088
48,000 PT Gudang Garam Beverage/Tobacco
Manufacturers 417,438
133,000 PT Indofoods Sukses Makmur
Food Producers 614,927
6,000 PT Indosat
Communications 198,750
80,000 PT Lippo Bank
Banks 162,043
----------
2,045,303
----------
KOREA, REPUBLIC OF - 11.0%
COMMON STOCK
11,000 Korea Electric Power
Corporation* ADR
Electricity & Gas 272,250
10,000 Korea Mobile Telecommunications*
Communications 368,750
5,000 L.G. Chemical Limited
Chemicals 118,277
6,349 L.G. Electronics
Electrical Appliances 272,994
3,000 Pohang Iron & Steel Company Ltd
Iron & Steel 306,822
2,024 Samsung Electronics America,
Inc.* Electrical Equipment 455,283
6,000 Shinhan Bank
Banks 140,623
----------
1,934,999
----------
MEXICO - 6.7%
COMMON STOCK
17,000 ALFA S.A. de C.V.
Retailers, General 197,620
33,000 Cemex, S.A. de C.V.
Construction/Building Materials 101,218
38,000 Empresas La Moderna SA de CV*
Beverage/Tobacco Manufacturers 132,787
31,000 Grupo Carso SA de CV*
Holdings Company 163,683
50,000 Grupo Financiero Banamax Accivl,
SA de CV
Banks 85,434
MEXICO (CONCLUDED)
8,000 Grupo Industrial Saltillo,
SA de CV
Retailers, General 103,978
18,500 Kimberly-Clark de Mexico
SA de CV
Forestry, Paper Products 240,704
42,000 Tolmex SA de CV
Construction/Building Materials 159,411
----------
1,184,835
----------
PHILIPPINES - 9.9%
COMMON STOCK
201,250 Ayala Land Incorporated
Real Estate 232,122
255,000 C & P Homes Inc*
Construction/Building Materials 164,216
32,500 Manila Electric Company
Electricity & Gas 242,407
5,000 Philippine Long Distance
Telephone Company
Communications 278,739
109,873 Philippine Savings Bank
Banks 211,213
1,037,400 SM Prime Holdings
Real Estate 279,193
63,200 San Miguel Corporation
Beverages 208,966
1,060,000 Southeast Asia Cement*
Building Materials & Components 138,562
----------
1,755,418
----------
POLAND - 2.1%
COMMON STOCK
8,400 Krosno S.A.
Construction/Building Materials 136,975
2,950 Zaklady Piwowarskie W Zywcu SA
(Zywiec)
Beverage/Tobacco Manufacturers 234,508
----------
371,483
----------
PORTUGAL - 3.4%
COMMON STOCK
11,600 Banco Espirito Santo E Comercial
de Lisboa
Banks 170,324
4,900 Estabelecimentos Jeronimo
Martins & Filho*
Retailers, Food 260,726
14,100 Semapa De Investimento E Gestao,
SGPS, S.A.*
Construction/Building Materials 135,330
2,400 Banco Espir Santo*
Banks 32,330
----------
598,710
----------
</TABLE>
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9
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SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE US$
----------- ----------
<S> <C> <C>
SOUTH AFRICA - 5.7%
COMMON STOCK
13,000 Barlow Limited
Diversified Industrials 167,549
23,000 Malbak Limited
Diversified Industrials 152,947
16,000 Rembrandt Group Ltd
Other Services & Businesses 145,885
5,000 South African Breweries Limited*
Beverage/Tobacco Manufacturers 164,190
17,000 Tiger Oats Ltd
Food Producers 277,374
36,000 Waltons Stationery Company
Limited
Computers/Communications/
Office Equip. 103,655
----------
1,011,600
----------
</TABLE>
<TABLE>
<C> <S> <C>
TAIWAN - 0.5%
CONVERTIBLE BONDS
70,000 Far East Textiles, 4.0%, due
10/7/06 Textiles & Apparel 80,500
----------
THAILAND - 12.8%
COMMON STOCK
110,000 Electricity Generating Public
Company
Electricity & Gas 375,993
46,000 Krung Thai Bank
Banks 182,830
13,000 Land & House Company Ltd
Real Estate 209,777
5,000 Siam Cement Company Ltd
Construction/Building
Materials 272,655
THAILAND (CONCLUDED)
300,000 Siam City Bank
Banks 381,559
90,000 TelecomAsia Corporation
Communications 275,437
64,000 Thai Farmers Bank Ltd
Banks 529,093
9,000 Thai Military Bank
Banks 35,413
----------
2,262,757
----------
TURKEY - 3.5%
COMMON STOCK
412,800 Adana Cimento Sanayii
Construction/Building
Materials 88,471
890,000 Global Securities*
Banks 110,979
528,400 Guney Biracilik Ve Malt
Sanayii Beverage/Tobacco
Manufacturers 110,674
589,000 Netas Telekomunik
Communications 203,698
769,332 Turk Demir Dokum Fabrikalari
AS Household Durables
Appliances 110,923
----------
624,745
----------
VENEZUELA - 0.1%
COMMON STOCK
4,000 Venezolana*
Construction/Building
Materials 22,000
----------
Total Investments 100.0%
(cost $16,604,373) 17,675,501
----------
----------
</TABLE>
* Non-income producing security
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $16,604,373) (Notes 1A and 2) $17,675,501
Cash 787,461
Receivable for dividends, tax reclaims and interest 40,804
Other receivables 275
Deferred organization costs, net 26,533
-----------
Total Assets 18,530,574
-----------
LIABILITIES:
Payable for securities purchased 22,534
Accrued advisory fees (Note 3) 236
Accrued administration fees (Note 3) 1,604
Accrued directors fees and expenses 176
Other payables and accrued expenses 82,768
-----------
Total Liabilities 107,318
-----------
Net Assets $18,423,256
-----------
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) 17,481,275
Accumulated undistributed net investment income 31,319
Accumulated net realized loss on investments and foreign
currency transactions (159,533)
Net unrealized appreciation of investments and foreign
currency transactions 1,070,195
-----------
Net Assets $18,423,256
-----------
-----------
Net asset value per share
($18,423,256 divided by
1,733,324 shares
outstanding) (Note 4) $10.63
--------
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD MARCH 31, 1995 - OCTOBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $19,686) $ 180,324
Interest 41,227
----------
Total Income 221,551
----------
EXPENSES:
Investment advisory fees (Note 3) 107,274
Administration fees (Note 3) 26,818
Transfer agent fees and expenses (Note 3) 7,769
Accounting services fees (Note 3) 35,667
Custodian Fees 43,239
Auditing fees 35,250
Other professional fees 708
Directors fees and expenses 360
Organization cost 3,467
Other 6,185
----------
Total Expenses 266,737
Expenses waived (95,175)
----------
Net expenses 171,562
----------
NET INVESTMENT INCOME 49,989
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized loss on investments (159,533)
Net realized loss on foreign currency transactions (18,670)
Change in unrealized appreciation on investments 1,071,129
Change in unrealized depreciation on foreign currency
transactions (934)
----------
Net realized and unrealized gain on investments and foreign
currency transactions 891,992
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 941,981
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD MARCH 31, 1995 - OCTOBER 31, 1995
<TABLE>
<S> <C>
DECREASE (INCREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 49,989
Net realized loss on investments (159,533)
Net realized loss on foreign currency transactions (18,670)
Change in unrealized appreciation on investments 1,071,129
Change in unrealized depreciation on foreign currency
transactions (934)
-----------
Net increase in net assets resulting from operations 941,981
CAPITAL SHARE TRANSACTIONS (NOTE 4) 17,481,275
-----------
INCREASE IN NET ASSETS 18,423,256
NET ASSETS:
Beginning of period --
-----------
End of period (including undistributed net investment income
of $31,319) $18,423,256
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
EMERGING MARKETS FUND Institutional Portfolio (the 'Fund') which is a
separately managed, non-diversified portfolio of Schroder Capital Funds,
Inc., an open-end management investment company, commenced operations on
March 31, 1995. The Fund invests in securities of issuers domiciled or doing
business in emerging market countries in regions such as Southeast Asia,
Latin America, and Eastern and Southern Europe, which may subject it to risks
not normally associated with investing in securities of United States
corporations. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements:
A. Portfolio securities listed on the recognized stock exchanges
are valued at the last reported trade price on the exchange on which the
securities are principally traded. Listed securities traded on recognized
stock exchanges where last trade prices are not available are valued at
mid-market prices. Securities traded in over-the-counter markets, or
listed securities for which no trade is reported on the valuation date,
are valued at the most recent reported price. Other securities and assets
for which market quotations are not readily available, are valued at fair
value as determined in good faith using methods approved by the Board of
Directors.
B. It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its 'investment company taxable income,' as defined in
the Code, and net capital gains to its shareholders. Therefore, no
Federal income tax provision is required.
C. Investment transactions are accounted for on the trade date.
Dividend income is recorded on the ex-dividend date. Interest income,
including amortization of discount or premium, is recorded as earned.
Identified cost of investments sold is used to determine gains and losses
for both financial statement and Federal income tax purposes. Foreign
dividend and interest income amounts and realized capital gains and
losses are converted to U.S. dollar equivalents using foreign exchange
rates in effect at the date of the transactions.
D. Foreign currency amounts are translated into U.S. dollars at the
mean of the bid and asked prices of such currencies against U.S. dollars
as follows: assets and liabilities at the rate of exchange at the end of
the respective period, purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such
transactions. It is not practical to isolate that portion of the results
of operations arising from changes in the exchange rates from the portion
arising from changes in the market prices of securities.
E. The Fund may enter into forward contracts to purchase or sell
foreign currencies to protect against the effect on the U.S. dollar value
of the underlying portfolio of possible adverse movements in foreign
exchange rates. Risks associated with such contracts include the movement
in value of the foreign currency relative to the U.S. dollar and the
ability of the counterparty to perform. Fluctuations in the value of such
contracts are recorded as unrealized gains or losses; realized gains or
losses include net gains or losses on contracts which have terminated by
settlement or by the Fund entering into offsetting commitments.
F. Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. Permanent book and tax basis differences relating
to shareholder distributions will result in reclassifications to paid in
capital and may affect the per share allocation between net investment
income and realized and unrealized gain or loss. Undistributed net
investment income and accumulated undistributed net realized gains or
losses may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. PURCHASES AND SALES OF SECURITIES:
The cost of securities purchased and the proceeds from sales of
securities or maturities for the period March 31, 1995 through October 31,
1995 aggregated $24,539,421 and $7,775,516 respectively.
For Federal income tax purposes, the tax basis of investment securities
owned at October 31, 1995 was $16,604,373. The aggregate gross unrealized
appreciation for all securities in which there was an excess of market value
over tax cost was $2,003,304 and aggregate gross unrealized depreciation for
all securities in which there was an excess of tax cost over market value was
$932,176.
3. RELATED PARTIES:
For the period March 31, 1995 through October 31, 1995, remunerations
to related parties were paid or accrued in the following amounts:
<TABLE>
<CAPTION>
Earned Waived Net
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Capital Management International, Inc.
(Investment Adviser) $107,274 $87,947 $19,327
Schroder Fund Advisors Inc.
(Administrator and Distributor) 26,818 7,228 19,590
Forum Financial Corp.
(Fund Accountant and Transfer Agent) 43,436 -- 43,436
-------- ------- -------
$177,528 $95,175 $82,353
-------- ------- -------
-------- ------- -------
</TABLE>
The Fund retains Schroder Capital Management International, Inc.
('SCMI') to act as adviser for the Fund. SCMI manages the investment and
reinvestment of the assets included in the Fund's portfolio and continuously
reviews, supervises and administers the Fund's investments. It is the
responsibility of SCMI to make decisions relating to the Fund's investments
and to place purchase and sale orders regarding such investments with brokers
or dealers selected at its discretion. For its services as Investment
Adviser, SCMI receives a monthly fee equal on an annual basis to 1.00% of the
average daily net assets of the Fund. On behalf of the Fund, Schroder Capital
Funds, Inc. has entered into an Administrative Services Contract with
Schroder Fund Advisors Inc. ('Schroder Advisors'). Pursuant to the agreement,
Schroder Advisors provides certain management and administrative services
necessary to the Fund's operations. For these services, Schroder Advisors
receives a fee payable monthly at an annual rate of 0.25% of the average
daily net assets of the Fund.
The Fund bears all costs of its operations other than those
specifically assumed by the Adviser or Administrator and Distributor.
Expenses directly attributable to a fund within Schroder Capital Funds, Inc.,
are charged to that fund. Other expenses are allocated proportionately among
the funds in relation to the net assets of each fund.
Forum Financial Corp. serves as the Fund's transfer agent and dividend
disbursing agent and is compensated for those services by the Fund in the
amount of $12,000 per year plus certain shareholder account fees. Forum
Financial Corp. also performs portfolio accounting for the Fund and is
compensated for those services by the Fund in the amount of $36,000 per year,
plus certain amounts based upon the number and types of portfolio
transactions.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARES:
At October 31, 1995 the Fund has one class of common stock ($0.01 par
value per share) of which 5,000,000 shares are authorized and 1,733,324 are
outstanding. Transactions in the Fund's capital shares for the period March 31,
1995 through October 31, 1995 were as follows:
<TABLE>
<CAPTION>
Number
of
Shares Amount
<S> <C> <C>
- -------------------------------------------------------------------------------------
Shares sold 1,733,324 $17,481,275
</TABLE>
5. FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
March 31, 1995*
through
October 31, 1995
<S> <C>
- ---------------------------------------------------------------------------------
Net Asset Value, beginning of period $10.00
-------
Investment operations:
Net investment income .02
Net realized and unrealized gain on investments 0.61
-------
Total from investment operations 0.63
Net Asset Value, end of period $10.63
-------
Total return 6.30%
-------
-------
Ratio/supplementary data:
Net assets, end of year (thousands) 18,423
Ratio of expenses to average net assets 1.58%(a)(b)
Ratio of net investment income to average net assets 0.46%(a)
Portfolio turnover rate 44.10%
</TABLE>
* Commencement of operations.
(a) Annualized.
(b) During the period, various fees and expenses were waived and reimbursed,
respectively. Had such waiver and reimbursement not occurred, the ratio
of expenses to average net assets would have been: 2.45%(a)
6. SUBSEQUENT EVENT
Shareholders of Schroder Capital Funds, Inc. ( the 'Company') have
approved the reorganization of the Company from a Maryland corporation into a
Delaware business trust under the name Schroder Capital Funds (Delaware).
This reorganization will occur on or about January 9, 1996. As a Delaware
business trust, the
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Trust's operations will be governed by its Trust Instrument and applicable
Delaware law rather than by the Articles of Incorporation, By-Laws and
Maryland law which presently govern the Company's operations.
Effective November 1, 1995, the Fund restructured its method of doing
business and now seeks to achieve its investment objective by investing all
of its investable assets in a separate portfolio of Schroder Capital Funds.
Schroder Capital Funds is registered as an open-end, management investment
company under the Act. The Adviser and Forum perform substantially similar
services for each portfolio of Schroder Capital Funds as they do for the
Fund.
* * * *
SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED)
There was a special meeting of the shareholders of Schroder Capital
Funds, Inc. (the 'Company'), including shareholders of the Fund, on October
23, 1995. At the special meeting, shareholders of the Company re-elected the
current directors of the Company, approved the reorganization of the Company
as a Delaware business trust under the name Schroder Capital Funds (Delaware)
and approved the conversion of the Fund to a Core and Gateway'r' structure.
Of 1,733,324 shares outstanding of the Fund as of the record date for the
special meeting, 1,311,520 were present in person or by proxy.
The first matter about which the Fund's shareholders voted was the
reelection of the Company's directors: Peter E. Guernsey, Ralph E. Hansmann,
John I. Howell, Laura E. Luckyn-Malone, Clarence F. Michalis, Hermann C.
Schwab and Mark J. Smith. The Fund's shareholders voted with the other
shareholders of the Company with respect to this matter. Each of the shares
of the Fund present at the special meeting was voted in favor of reelection
of the current directors of the Company. There were no shares voted against
reelection, and no abstentions or broker non-votes.
The second matter about which the Fund's shareholders voted was the
reorganization of the Company from a Maryland corporation into a Delaware
business trust. The Fund's shareholders voted with the other shareholders of
the Company with respect to this matter. Each of the shares of the Fund
present at the special meeting was voted in favor of reorganization of the
Company as a Delaware business trust. There were no shares voted against the
reorganization, and no abstentions or broker non-votes.
The final matter about which the shareholders of the Fund voted was the
conversion of the Fund to a Core and Gateway structure pursuant to which the
Fund would adopt a new investment policy permitting the Fund to invest all of
its assets in a portfolio of Schroder Capital Funds with the same investment
objective and policies as the Fund. Each of the shares of the Fund present at
the special meeting was voted in favor of conversion of the Fund to a Core
and Gateway structure. There were no shares voted against such conversion,
and no abstentions or broker non-votes.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SPECIAL 1995 TAX INFORMATION (UNAUDITED)
The Fund intends to pass through the credit for taxes paid in
foreign countries during its fiscal year ended October 31, 1995. In
accordance with current tax laws, the foreign income and foreign tax per
share (for a share outstanding on October 31, 1995) is as follows:
<TABLE>
<CAPTION>
COUNTRY DIVIDENDS FOREIGN TAX
- ------------------------------------------------
<S> <C> <C>
Argentina 0.0020 0.0000
Austria 0.0004 0.0000
Brazil 0.0037 0.0021
Chile 0.0016 0.0032
China 0.0023 0.0000
Columbia 0.0001 0.0000
Greece 0.0018 0.0000
Hong Kong 0.0008 0.0000
Hungary 0.0001 0.0000
India 0.0002 0.0001
Indonesia 0.0028 0.0018
Luxembourg 0.0005 0.0002
Mexico 0.0018 0.0000
Philippines 0.0005 0.0006
Poland 0.0005 0.0003
Portugal 0.0021 0.0016
S. Africa 0.0010 0.0005
Thailand 0.0025 0.0010
Turkey 0.0037 0.0000
Uruguay 0.0005 0.0000
Venezuela 0.0000 0.0000
--------- -----------
Total 0.0289 0.0114
--------- -----------
--------- -----------
</TABLE>
The pass through of foreign tax credit will affect only those
shareholders of the fund who are holders on the dividend record date in
December 1995. Accordingly, shareholders will receive more detailed
information along with their form 1099-DIV in January 1996.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors
of the Schroder Emerging Markets Fund Institutional Portfolio:
We have audited the accompanying statement of assets and liabilities
of the Schroder Emerging Markets Institutional Portfolio (a separately
managed portfolio of Schroder Capital Funds, Inc.), including the schedule of
investments, as of October 31, 1995, and the related statement of operations
for the period from March 31, 1995 to October 31, 1995, the statement of
changes in net assets, and the financial highlights for the period from March
31, 1995 to October 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Schroder Emerging Markets Fund Institutional Portfolio as of
October 31, 1995, the results of its operations, the changes in its net
assets and the financial highlights for the period from March 31, 1995 to
October 31, 1995 in conformity with generally accepted accounting principles.
COOPERS & LYBRAND, L.L.P.
Boston, Massachusetts
December 27, 1995
- --------------------------------------------------------------------------------
19
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
DIRECTORS
Peter E. Guernsey
Ralph E. Hansmann
John I. Howell
Laura E. Luckyn-Malone
Clarence F. Michalis
Hermann C. Schwab
Mark J. Smith
OFFICERS
Hermann C. Schwab
Chairman of the Board
Laura E. Luckyn-Malone
President
Robert G. Davy
Vice President
Richard Foulkes
Vice President
John Y. Keffer
Vice President
Jane Lucas
Vice President
Catherine A. Mazza
Vice President
Mark J. Smith
Vice President
Fariba Talebi
Vice President
John Troiano
Vice President
Ira L. Unschuld
Vice President
Robert Jackowitz
Treasurer
Margaret H. Douglas-Hamilton
Secretary
Thomas G. Sheehan
Assistant Treasurer
Assistant Secretary
David I. Goldstein
Assistant Treasurer
Assistant Secretary
Gerardo Machado
Assistant Secretary
Barbara Gottlieb
Assistant Secretary
- --------------------------------------------------------------------------------
<PAGE>
INVESTMENT ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue
New York, New York 10019
ADMINISTRATOR & DISTRIBUTOR
Schroder Fund Advisors, Inc.
787 Seventh Avenue
New York, New York 10019
CUSTODIAN
The Chase Manhattan Bank, N.A.
Global Custody Division
Woolgate House, Coleman Street
London EC2P 2HD, United Kingdom
ACCOUNTING, TRANSFER AND DIVIDEND
DISBURSING AGENT
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
COUNSEL
Jacobs Persinger & Parker
77 Water Street
New York, New York 10005
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
This report is for the information of the shareholders
of the Schroder Emerging Markets Fund Institutional
Portfolio. Its use in connection with any offering of
the Fund's shares is authorized only in case of a
concurrent or prior delivery of the Fund's current
prospectus.
[SCHRODERS LOGO]
Schroder
Emerging
Markets
Fund Institutional
Portfolio
ANNUAL REPORT
October 31, 1995
Schroder Capital Funds, Inc.
