<PAGE>
SCHRODER ASIAN GROWTH FUND, INC.
THIRD QUARTER 1997
The Fund's net asset value per share was $14.05 on July 31, 1997, a rise of
9.8% over the quarter. The closing price of the Fund's shares on the New York
Stock Exchange was $12.50, a rise of 9.9% over the quarter.
The investment strategy of the Fund continues to be to maintain a core
portfolio of well managed, fast growing, quality companies that are benefiting
from the long-term growth trends in each country and the region as a whole.
During the quarter, performance among the region's markets was diverse --
those of North Asia generally outperformed those of South East Asia. The
currency crisis, initially limited to Thailand in June, broadened out to affect
the currencies of the Philippines, Indonesia and Malaysia in July. This spread
was reflected in the disappointing stock market performances seen in those
markets. In comparison, Japan performed strongly, aided by the yen's
appreciation against the U.S. dollar. Korea and Taiwan also performed well due
to improving export prospects.
Positive investor sentiment supported the Hong Kong S.A.R. market. This
sentiment was partly due to the smooth handover to China, evidenced by strong
liquidity flows from the mainland, and partly due to offshore investors being
attracted to Hong Kong S.A.R.'s strong economic fundamentals relative to other
South East Asian markets. The turnaround in China's economic outlook continues
to provide support to corporate profits in Hong Kong S.A.R., and the Fund's
portfolio holdings are focused on well-managed Hong Kong S.A.R. based companies
with exposure to China. Over the quarter the Fund purchased CHEUNG KONG
INFRASTRUCTURE, a building materials and toll roads company with expanding
operations in China, and took profits on CHINA RESOURCES, a brewing and
warehousing concern.
The rebound in the Japanese market over the period resulted from improving
investor confidence and a strong recovery in corporate earnings. A sharp rebound
in the yen in May further boosted dollar returns. The improvement in confidence
allowed for some rationalization of holdings with an increased focus on some
larger stocks where earnings visibility is comparatively good. Purchases
included BRIDGESTONE, the tire maker, which announced good semi-annual results,
and TAKEDA CHEMICAL, a pharmaceutical company, which witnessed strong sales
growth of gastric ulcer and prostate cancer drugs.
The emerging markets of South East Asia were very depressed for the quarter.
The volatility in Thailand ultimately spilled over into Indonesia, the
Philippines, and neighboring Malaysia. In Thailand, the financial and currency
crisis depressed the market. However, the market rallied following the
government's announcement that the baht would be floated and that the
International Monetary Fund would provide assistance. The consequent devaluation
of the Thai currency placed significant competitive pressure on other regional
currencies. Higher interest rates caused investor concern about the outlook for
economic activity and prospects for corporate earnings growth.
Until currency stability returns to the region Fund management believes that
interest rates and inflation prospects will be higher than otherwise expected.
However, Fund management believes that in the longer term the outlook for net
exports is positive and as interest rates fall the corporate environment will
improve.
The Fund management team, consisting of Louise Croset and Heather Crighton,
work closely with the Schroder Investment Group analysts based in ten offices
throughout Asia. Donald Farguharson, who is responsible for investment
management in the Japanese market, assists Ms. Croset and Ms. Crighton. The
focus of the Fund remains on bottom-up stock picking which drives country
allocation.
/s/ Louise Croset
Louise Croset
PRESIDENT
- - - -------------------------------------------
PERFORMANCE
NET ASSET VALUE VS. SHARE PRICE FROM
INCEPTION TO JULY 31, 1997
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SHARE PRICE NAV
<S> <C> <C>
31-Dec 15.750 14.01
07-Jan-94 15.375 13.71
14-Jan 15.250 13.32
21-Jan 15.000 13.42
28-Jan 15.000 13.47
04-Feb 15.000 13.50
11-Feb 14.375 13.63
18-Feb 13.750 13.45
25-Feb 13.000 13.45
04-Mar 12.875 13.04
11-Mar 13.500 12.97
18-Mar 13.125 12.63
25-Mar 12.000 12.54
01-Apr 11.250 12.47
08-Apr 11.875 12.44
16-Apr 11.750 12.85
22-Apr 12.250 12.73
29-Apr 12.000 12.93
06-May 11.875 12.77
13-May 12.375 12.91
20-May 12.625 13.08
27-May 13.000 13.20
03-Jun 13.750 13.06
10-Jun 13.000 13.15
17-Jun 13.000 13.07
24-Jun 12.000 12.99
01-Jul 11.875 12.98
08-Jul 12.000 12.89
15-Jul 12.250 13.19
22-Jul 12.125 13.15
29-Jul 12.250 13.12
05-Aug 12.000 13.57
12-Aug 12.750 13.66
19-Aug 13.250 13.84
26-Aug 13.250 13.74
02-Sep 13.625 14.06
09-Sep 13.000 14.12
16-Sep 12.750 14.06
23-Sep 12.375 13.82
30-Sep 12.250 13.52
07-Oct 11.750 13.60
14-Oct 12.500 13.78
21-Oct 11.875 13.78
28-Oct 12.000 13.70
04-Nov 11.750 13.76
11-Nov 11.375 13.42
18-Nov 11.130 13.46
25-Nov 10.875 12.88
02-Dec 10.750 12.64
09-Dec 9.875 12.36
16-Dec 10.625 12.53
23-Dec 10.500 12.84
30-Dec 10.250 12.83
06-Jan-95 10.750 12.55
13-Jan 10.500 11.84
20-Jan 10.250 11.86
27-Jan 10.125 11.54
03-Feb 10.500 11.82
10-Feb 10.750 12.05
17-Feb 10.250 12.04
24-Feb 10.000 11.79
03-Mar 9.875 12.04
10-Mar 9.625 11.83
17-Mar 10.000 11.73
24-Mar 9.750 11.81
31-Mar 10.250 12.03
07-Apr 10.125 12.05
13-Apr 10.125 12.03
21-Apr 10.500 12.03
28-Apr 10.125 11.91
05-May 10.375 12.04
12-May 11.125 12.72
19-May 11.500 12.81
26-May 11.625 13.00
02-Jun 11.375 13.18
09-Jun 11.500 13.06
16-Jun 11.125 12.92
23-Jun 11.250 12.95
30-Jun 11.125 12.79
07-Jul 11.625 13.04
14-Jul 12.000 13.56
21-Jul 11.250 13.31
28-Jul 11.250 13.31
04-Aug 11.375 13.26
11-Aug 11.500 13.06
18-Aug 11.375 12.88
25-Aug 11.250 12.95
31-Aug 11.000 12.96
07-Sep 10.875 12.83
14-Sep 11.000 12.99
21-Sep 11.125 13.03
28-Sep 11.250 13.02
05-Oct 11.250 13.09
12-Oct 11.375 12.96
19-Oct 11.750 12.94
26-Oct 11.250 12.70
02-Nov 11.250 12.50
09-Nov 10.750 12.31
16-Nov 10.250 11.91
23-Nov 10.750 12.07
30-Nov 10.500 12.37
07-Dec 10.875 12.85
14-Dec 12.250 12.73
21-Dec 12.375 12.88
28-Dec 12.125 12.97
04-Jan-96 13.375 13.54
11-Jan 13.000 13.46
18-Jan 13.250 13.52
25-Jan 13.375 13.83
01-Feb 13.375 14.06
08-Feb 13.625 14.15
15-Feb 13.500 14.21
22-Feb 13.125 14.22
29-Feb 12.625 13.97
07-Mar 12.500 13.94
14-Mar 12.000 13.44
21-Mar 12.500 13.82
28-Mar 12.625 13.90
04-Apr 12.750 14.12
11-Apr 12.750 14.03
18-Apr 12.875 14.32
25-Apr 12.875 14.35
02-May 12.750 14.52
09-May 12.875 14.38
16-May 13.125 14.31
23-May 12.875 14.28
30-May 12.625 14.30
06-Jun 12.750 14.39
13-Jun 12.875 14.18
20-Jun 12.875 14.27
27-Jun 13.125 14.27
04-Jul 13.000 14.34
11-Jul 12.750 14.17
18-Jul 12.625 14.08
25-Jul 12.250 13.74
01-Aug 12.375 13.68
08-Aug 12.125 13.77
15-Aug 12.250 13.62
22-Aug 12.250 13.79
29-Aug 12.125 13.68
05-Sep 12.000 13.52
12-Sep 12.125 13.45
19-Sep 12.000 13.67
26-Sep 12.000 13.65
03-Oct 11.875 13.68
10-Oct 11.875 13.37
17-Oct 12.260 13.33
24-Oct 12.000 13.35
31-Oct 12.000 13.15
07-Nov 11.625 13.390
14-Nov 11.750 13.590
21-Nov 11.875 13.660
27-Nov 12.250 13.730
05-Dec 12.125 13.570
12-Dec 11.750 13.380
19-Dec 12.000 13.300
26-Dec 11.750 13.420
31-Dec 11.875 13.740
02-Jan-97 12.000 13.730
09-Jan 12.625 13.650
16-Jan 12.500 13.830
23-Jan 12.500 13.740
30-Jan 12.250 13.640
06-Feb 12.250 13.720
13-Feb 12.125 13.620
20-Feb 12.250 13.660
27-Feb 12.000 13.690
06-Mar 12.375 13.600
13-Mar 12.250 13.440
20-Mar 12.375 13.140
27-Mar 11.875 13.230
03-Apr 11.375 12.830
10-Apr 11.375 12.820
17-Apr 11.250 12.850
24-Apr 11.250 13.150
01-May 11.375 12.870
08-May 11.500 13.060
15-May 11.250 13.010
22-May 11.500 13.280
29-May 11.750 13.600
05-Jun 12.500 13.920
12-Jun 12.500 13.450
19-Jun 12.250 13.950
26-Jun 12.688 14.160
03-Jul 12.938 14.380
10-Jul 12.813 13.880
17-Jul 12.500 13.850
24-Jul 12.188 13.820
31-Jul 12.500 14.050
</TABLE>
COUNTRY RETURNS
IN U.S. DOLLARS (1)
<TABLE>
<CAPTION>
QUARTER (2)
<S> <C>
HONG KONG S.A.R. 25.8
JAPAN 15.7
MALAYSIA -10.3
SINGAPORE 2.0
INDIA 15.9
PHILIPPINES -9.4
KOREA 5.8
INDONESIA -0.4
CHINA 14.9
THAILAND -11.3
TAIWAN 18.2
</TABLE>
(1) Morgan Stanley Capital International Country Index
(2) May 1, 1997 to July 31, 1997
- - - -------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
% Net
As of July 31, 1997 Assets
<S> <C> <C>
1. HUTCHISON WHAMPOA - HONG KONG S.A.R. PORT OPERATOR 4.6%
AND CONGLOMERATE
2. CITIC PACIFIC LTD. - HONG KONG S.A.R. CONGLOMERATE 4.2%
3. GUANGDONG INVESTMENTS - HONG KONG S.A.R. HOLDING 3.9%
COMPANY
4. SUN HUNG KAI PROPERTIES LTD. - HONG KONG S.A.R. 3.8%
REAL ESTATE DEVELOPER
5. CHINA RESOURCES ENTERPRISE LTD. - 3.3%
HONG KONG S.A.R. REAL ESTATE, BREWING AND
WAREHOUSING COMPANY
6. CHEUNG KONG (HOLDINGS) LTD. - HONG KONG S.A.R. 3.0%
REAL ESTATE COMPANY
7. HUANENG POWER INTERNATIONAL LTD. - CHINESE POWER 2.8%
PLANT OPERATOR
8. SWIRE PACIFIC LTD. - HONG KONG S.A.R. AVIATION AND 2.8%
PROPERTY COMPANY
9. SINGAPORE PRESS HOLDINGS LTD. - SINGAPOREAN 2.1%
PUBLISHING COMPANY
10. RHB CAPITAL BERHAD - MALAYSIAN BANK 2.0%
</TABLE>
<PAGE>
- - - -------------------------------------------
DIVERSIFICATION
SECTOR BREAKDOWN
TOP 5 AS OF JULY 31, 1997
<TABLE>
<CAPTION>
% OF
INDUSTRY PORTFOLIO
<S> <C>
Services 20.3%
Real Estate 16.5%
Capital Equipment 13.8%
Multi-Industry 13.0%
Finance 12.9%
</TABLE>
GEOGRAPHIC BREAKDOWN
AS OF JULY 31, 1997
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Hong Kong S.A.R./China 36.3%
Japan 14.1%
Malaysia 12.1%
Singapore 10.7%
India 5.7%
Philippines 4.9%
Korea 4.5%
Indonesia 4.1%
Thailand 2.8%
Taiwan 0.4%
Cash 4.4%
</TABLE>
NYSE Symbol: SHF
Past performance is not predictive of future performance.
The financial information included herein regarding the Fund is taken from the
records of the Fund without examination by independent accountants who do not
express an opinion thereon. Other information is from public sources or
estimates of Schroder Capital Management International Inc., the Fund's
investment adviser, and its affiliates.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report is sent to shareholders of the Fund for their information. It is not
a prospectus, circular or representation intended for use in the purchase or
sale of shares of the Fund or of any securities mentioned in the report.
- - - -------------------------------------------------------------
SCHRODER
ASIAN GROWTH FUND, INC.
Third Quarter
Report
July 31, 1997
