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Previous: DREYFUS GLOBAL GROWTH L P A STRATEGIC FUND, N-30D, 1995-09-08 |
Next: VAN KAMPEN MERRITT TAX FREE MONEY FUND, 497, 1995-09-08 |
EMERGING MARKETS
GROWTH FUND (SM)
ANNUAL REPORT
For the Year Ended June 30, 1995
SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING IN COMPANIES
OPERATING IN DEVELOPING COUNTRIES AROUND THE WORLD
FELLOW SHAREHOLDERS:
Fiscal 1995 was one of those unusual years when you could look at the numbers
and get the false impression that nothing much happened. The basic measure of
stock prices in the fund's investment universe the Morgan Stanley Capital
International Emerging Markets Free (EMF) Index* finished the 12 months ended
June 30 exactly where it began (including reinvestment). The lack of movement
in this index, however, masked wide price swings and considerable turmoil in
many markets, including a sharp selloff in Latin America following the
devaluation of the Mexican peso.
In this environment, Emerging Markets Growth Fund recorded its first ever
year-over-year decline. It was a small one: -1.2% assuming reinvestment of
income dividends totaling 63 cents a share and a $5.81 capital gain
distribution that were paid during the year. With dividends taken in cash, the
decline was -2.3%.
Even with these marginally negative 12-month results, our long-term record
remains very favorable. Since operations began in 1986, the fund has generated
a total return of 916.0% and an average compound return of 29.1% a year.
The course of events during the latter half of fiscal 1995 was dictated
largely by the peso devaluation on December 20. Prior to that, however, many
emerging markets were already showing signs of weakness following a lengthy
period in which valuations were stretched to unsustainable levels, particularly
in Asia. Except for election- related stock market rallies in Mexico and
Brazil, most markets had been rather soft since the early part of calendar
1994.
After the peso was devalued, the Mexican bolsa fell sharply and so did stock
prices elsewhere in Latin America as well as in Asia. By the middle of March
1995, both the EMF Index and the fund's share value were down about 20% and the
focus of investor attention was shifting to Argentina and other Latin American
markets.
A STRENGTHENING OF INVESTOR CONFIDENCE
At that point, the selloff ended with the announcement of an international
financial aid package for Argentina. Investors who had feared that Argentina
might be the next country to devalue became somewhat more confident that it
would be able to withstand a run on its currency. Their confidence was
reinforced a few weeks later by the re-election of President Carlos Menem, who
had promised voters a continuation of his government's restrictive,
anti-inflationary economic policies.
With the situation stabilizing in Argentina, stock prices there recovered in
March. Shortly thereafter, they firmed up in a number of other markets that had
been hit hard during the selloff, including most of the other Latin American
markets.
For the 12 months, a little over half of the fund's investments including
three of our ten largest holdings finished on the minus side. Many of our Latin
American stocks showed double-digit declines. It is worth noting that in recent
years the majority of those holdings have
*The EMF Index, which is unmanaged, tracks stock prices in 22 developing
countries with markets open to foreign investors.
[Side Bar]
<TABLE>
<CAPTION>
<S> <C>
12-MONTH RESULTS
With Dividends Reinvested (7/1/94 - 6/30/95)
EMGF................................. -1.2%
MSCI EMERGING MARKETS
FREE INDEX ....................... 0.0
</TABLE>
[End Side Bar]
served the fund very well. Last summer we reduced a number of them
substantially, including some of our Mexican positions, mainly out of concern
over the level of valuations. We also were anticipating a slight, gradual drop
in the value of the peso. However, if truth be known, we did not anticipate an
overnight devaluation or the ensuing panic.
When fiscal 1995 began on July 1, 1994, the fund's overall exposure to Latin
America was quite significant: nearly 50% of net assets; by June 30 the figure
had dropped to 35%. Part of the decrease was due to the devaluation and the
decline in the Mexican market. In addition, after the peso was devalued, all of
our Mexican positions were re-examined and several of them were reduced further
or eliminated altogether. In a few cases where we felt there was exceptional
value, we added to our holdings. Our investments in Mexico are now concentrated
in companies that have demonstrated an ability to weather an extended period of
economic difficulty.
In the latter part of the fiscal year, we also trimmed back the fund's
holdings in Brazil, while increasing them slightly in Argentina. There, for the
first time, our investments include government bonds offering yields to
maturity that are competitive with returns on stocks; we view those
PERCENT CHANGE IN KEY MARKETS (1)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Twelve months Six months
ended 6/30/95 ended 6/30/95
Expressed in Expressed in Expressedin Expressed in
U.S. Dollars Local Currency U.S. Dollars Local Currency
Argentina -17.0% -16.8% -4.9% -5.1%
Brazil 14.7 8.1 -21.0 -14.6
Chile 42.7 27.6 14.6 6.2
Colombia -19.2 -13.3 -7.4 -2.1
Greece 20.9 13.2 14.4 7.0
India -22.0 -21.9 -18.3 -18.2
Indonesia 2.7 5.4 8.6 10.0
Jordan 5.0 5.9 12.3 10.9
Malaysia 8.6 1.7 10.5 5.5
Mexico (Free)(2) -43.5 4.0 -22.5 -3.1
Pakistan -31.7 -30.8 -22.3 -21.8
Peru 44.7 46.8 12.1 14.5
Philippines (Free)(2) 4.1 -1.5 -1.4 3.2
Portugal 21.2 8.2 6.4 -2.2
South Korea(3) 7.0 .8 -1.9 -5.7
Sri Lanka -24.6 -22.8 -20.6 -19.8
Taiwan -3.5 -7.1 -22.9 -24.2
Thailand 15.7 14.1 5.0 3.2
Turkey 73.7 146.0 47.7 68.8
Venezuela (Free)(2) 6.7 -7.7 -7.9 -7.9
Emerging Markets Growth Fund -1.2 -6.5
</TABLE>
(1) Including reinvestment. All indexes are compiled by Morgan Stanley Capital
International and are unmanaged.
(2) The fund is invested in the "free" Mexican, Philippine and Venezuelan stock
markets, which consist of securities that can be purchased by investors other
than resident nationals.
(3) 20% of the market capitalization is included in the EMF Index.
bonds as equity substitutes. During the second half we also added to our
holdings in India, Indonesia and South Korea.
A BROADLY DIVERSIFIED PORTFOLIO
At fiscal year-end, the fund was invested in more than 250 companies domiciled
in over 30 countries. In terms of industries, the heaviest concentration was in
telecommunications, banking and utilities. Those three industries currently
account for more than a third of net assets. The portfolio (which appears
starting on page 7) is a blend of big-capitalization stocks and smaller,
entrepreneurial companies which we believe have the ability to prosper and make
an increasingly meaningful contribution to the fund's results in the future.
All in all, fiscal 1995 was a challenging and trying year. The correction that
came to a halt in March was a painful experience but also, in a sense, a
healthy one. It has moved us beyond the stage where securities prices in
developing countries seemed as if they could travel in only one direction up
and where almost anything associated with the term emerging markets became a
hot seller.
The correction created numerous buying opportunities which we have been
exploring. It should be kept in mind that the portfolio is managed with a
research-driven, bottom-up approach. Changes to it are made one stock at a
time rather than on the basis of regional or country weightings.
Looking ahead, we take encouragement from the fact that interest rates in many
nations including most rates in the United States have come down
substantially. Developing countries tend to be heavy users of borrowed capital,
and the rise in rates last year had a generally negative effect on their
economies and their financial markets.
It also is encouraging to be able to note that, despite the recent turmoil in
Latin America, nearly all countries in that region appear to have retained
their commitment to democracy, capitalism and open economies.
Another development that should bode well for some emerging markets is the rise
in value of the Japanese yen, which is forcing more and more Japanese companies
to shift manufacturing operations to countries where costs are lower; many of
those countries are in the fund's investment universe.
A SUBSTANTIAL INFLOW OF NEW CASH
Finally, we are pleased to report that investor interest in Emerging Markets
Growth Fund remains high. The fund now has more than 400 shareholders,
primarily institutions. Net assets on June 30 totaled $5.6 billion, up from
$4.2 billion at the start of the fiscal year. In the January-June period, the
inflow of cash exceeded $750 million. The majority of that money came in during
the six weeks prior to June 30, and it came chiefly from shareholders who have
been with the fund for some years.
Two years ago, the Board of Directors adopted a plan limiting the number of
shares that can be sold in any one calendar year to 25% of the outstanding
shares as of the prior calendar year-end. The fund has commitments for all
shares available for calendar 1995.
In addition, the plan adopted by the Board prohibits the sale of shares during
any month when cash exceeds approximately 10% of net assets as of the previous
month's end. Because of the heavy cash inflow in May, the cash position rose to
17% of net assets on May 31. In June, therefore, the fund had to be closed to
new sales. In July, the invested position reached 90% and shares were again
available for sale to those who had made commitments to purchase them.
Our recent growth has led to economies of scale that have resulted in a
reduction in the fund's ratio of expenses and non-U.S. taxes to average net
assets. As of June 30, that ratio was .94%, down from 1.04% at the beginning of
the fiscal year.
On page 6, you will find a description of Emerging Markets Growth Fund and its
adviser. We hope you find this information interesting and informative.
Sincerely,
Walter P. Stern
Chairman
Nancy Englander
President
August 11, 1995
Here are the total returns and average annual compound returns with all
distributions reinvested for periods ended June 30, 1995 Since inception on
5/30/86: +915.97%, or +29.07% a year; 5 years: +147.08%, or +19.83% a year; 12
months: -1.22%.
The figures in this report reflect past results. Share price and return will
vary, so you may have a gain or loss of principal when you sell your shares.
Fund shares are not deposits or obligations of, or insured or guaranteed by,
the U.S. government, any financial institution, the Federal Deposit Insurance
Corporation, or any other agency, entity or person. All investments are subject
to certain risks. For example, those which include common stocks are affected
by fluctuating stock prices. Investments outside the U.S. (especially those in
developing countries) are subject to additional risks, including currency
fluctuations, political and social instability, differing securities
regulations and accounting standards, limited public information, possible
changes in taxation, and periods of illiquidity. Accordingly, investors should
maintain a long-term perspective.
WHERE THE FUND'S ASSETS ARE INVESTED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Market Value
Percent of Net Assets of Holdings
--------------------------
6/30/95
06/30/93 06/30/94 06/30/95 (in
-------- -------- --------- thousands)
-------------
ASIA/PACIFIC
Australia............................ - - .1% $4,064
China................................ - .6% 1.8 100,789
Hong Kong............................ - 1.3 .0 57,312
India................................ 1.0% 2.6 5.7 317,650
Indonesia............................ 1.7 2.3 4.2 233,631
Malaysia............................. 5.3 4.1 4.3 238,155
New Zealand.......................... - .5 - -
Pakistan............................. - - 1.1 59,559
Philippines.......................... 7.8 8.2 7.6 421,626
South Korea.......................... 4.9 7.8 7.0 392,198
Sri Lanka............................ .1 .3 .2 11,748
Taiwan............................... .3 .8 .8 46,830
Thailand............................. 8.4 6.5 5.5 305,361
Vietnam.............................. - - .1 6,206
----- ----- ----- -----------
29.5 35.0 39.4 2,195,129
----- ----- ----- -----------
LATIN AMERICA
Argentina............................ 5.1 6.9 8.3 466,002
Brazil............................... 19.8 20.2 13.7 761,605
Chile................................ 3.4 3.5 2.2 124,118
Colombia............................. - 1.0 .5 25,078
Equador.............................. - - .1 5,947
Mexico............................... 16.8 17.7 7.6 422,325
Panama............................... - - .4 23,098
Peru................................. - .4 1.8 98,404
Venezuela............................ .1 .2 .1 6,949
---- ---- ---- ----------
45.2 49.9 34.7 1,933,526
---- ---- ---- ----------
EASTERN EUROPE
Czech - - .1 5,181
Republic............................
Hungary.............................. - - .0 114
Poland............................. - - .1 7,068
Russia............................... - .2 .2 10,000
Ukraine............................... - - .2 12,863
---- ---- ---- ----------
- .2 .6 35,226
---- ---- ---- ----------
OTHER MARKETS
Canada................................ - - .2 9,066
Gabon................................ .2 .1 - -
Ghana.................................. - - .4 19,565
Greece............................... 1.5 1.3 1.0 56,724
Luxembourg............................ - 1.3 1.0 56,657
Morocco............................ - - .1 3,673
Portugal............................. .3 .1 .3 19,489
South Africa ...................... - - .8 44,082
Turkey............................... 4.4 1.2 2.2 123,839
United States........................ - .1 .1 4,056
Virgin Islands....................... - .6 - -
---- ---- ---- ---------
6.4 4.7 6.1 337,151
---- ---- ---- ---------
Multi-National....................... - .2 .2 9,563
---- ---- ---- ---------
Other*............................... 3.8 2.8 1.7 95,850
---- ---- ---- ---------
Cash & Equivalents................... 15.1 7.2 17.3 965,365
---- ---- ---- ---------
TOTAL................................ 100.0% 100.0% 100.0% $5,571,810
====== ======= ======= ===========
</TABLE>
*Includes stocks in initial period of acquisition and investments in companies
that have substantial assets in developing countries and/or derive a
substantial proportion of their total revenues from either goods and services
produced in, or sales made in, developing countries. Also includes investments
in markets where the holdings represent a percentage of net assets of less than
.05%.
ABOUT THE FUND AND ITS ADVISER:
Emerging Markets Growth Fund was organized in 1986 by the International
Finance Corporation, an affiliate of the World Bank, as a vehicle for investing
in the securities of companies domiciled in developing countries. It was based
on the premise that rapid growth in those countries can create very attractive
investment opportunities. It also was felt that the availability of equity
capital would stimulate the development of capital markets and encourage
countries to liberalize their investment regulations.
An affiliate of Capital International, Inc., the fund's current investment
adviser, was selected at the outset by the IFC to manage Emerging Markets
Growth Fund from among a number of global investment management firms. The fund
started with $50 million in assets, 13 institutional shareholders and a small
portfolio of stocks representing four markets. Today it has more than $5
billion in assets, over 400 institutional and individual investors, and a
portfolio of more than 250 securities representing companies based in over 30
countries. Since operations began on May 30, 1986, the value of the fund's
shares has risen 916.0% with all distributions reinvested, or an average annual
compound return of 29.1%.
Capital International, Inc. is one of The Capital Group Companies. These
companies form one of the world's most experienced investment advisory
organizations, with roots dating back to 1931. The organization has been
involved in international investing since the 1950s.
The investment management affiliates of The Capital Group Companies employ a
value-oriented and research-driven investment approach. They maintain a global
investment intelligence network which employs more than 180 investment
professionals based on three continents. They include analysts and portfolio
counselors, born in more than two dozen countries, who speak a variety of
languages. These professionals travel millions of miles each year, keeping a
close watch on industry trends and government actions and scrutinizing
thousands of companies, including hundreds of firms based in the less-developed
countries. This research effort combines intensive company and industry
analysis with a political and macroeconomic overview, and we believe it has
given our family of companies and the funds they manage, including Emerging
Markets Growth Fund an important competitive edge.
INVESTMENT PORTFOLIO, JUNE 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EQUITY-TYPE SECURITIES
COMMON PREFERRED CONVERTIBLE PERCENT OF
INDUSTRY DIVERSIFICATION STOCKS STOCKS BONDS BONDS NET
ASSETS
Telecommunications 10.22% 3.61% - - 13.83%
Banking 10.68 0.39 0.55% - 11.62
Utilities: Electric & Gas 7.77 3.41 - 0.07 11.25
Beverages & Tobacco 3.80 0.97 - - 4.77
Metals: Steel 2.67 0.78 0.25 0.12 3.82
Energy Sources 2.51 0.69 - - 3.20
Equity Common Trusts 2.64 0.06 - - 2.70
Other Industries 24.67 2.67 1.16 2.98 31.48
-----------------------------------------------------
64.96% 12.58% 1.96% 3.17% 82.67
============================================
Short-Term Securities 17.37
Excess of liabilities over cash and (0.04)
receivables ------
Net Assets 100.00%
=======
</TABLE>
***********************
TEN LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Market Value
Acquisition of Holdings
Percent of Cost 6/30/95
Security Net Assets (in thousands)* (in
thousands)*
Centrais Electricas Brasileiras 3.24% $90,750 $180,298
Telecomunicacoes Brasileiras 2.39 61,437 133,126
Philippine Long Distance Telephone Co. 2.24 52,072 124,763
Telecom Argentina STET-France Telecom 1.9 87,517 105,984
Telefonos de Mexico 1.83 125,258 101,853
Bangkok Bank 1.74 25,468 96,714
Korea Electric Power 1.65 64,133 91,917
San Miguel 1.3 13,771 72,303
Companhia Energetica de Minas Gerais 1.18 32,970 65,590
Samsung Electronics Co. 1.11 20,313 61,185
------ -------- ----------
18.58% $573,689 $1,033,733
====== ======== ==========
</TABLE>
* These figures reflect cost blocks owned on 6/30/95.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Number of
EQUITY-TYPE SECURITIES Shares Market Percent
(common and preferred stocks or Value of Net
and convertible debentures) Principal (000) Assets
Amount
ARGENTINA - 7.45%
Alpargatas SAIC (1) 13,413,632 $5,166 .09
Astra Compania Argentina de Petroleo SA 9,792,450 14,693 .26
Banco de Galicia y Buenos Aires SA, Class B
(American Depositary Receipts) 1,343,000 21,152
Banco de Galicia y Buenos Aires SA,
7.00% convertible bond August 1, 2002 $12,365,000 8,655 .54
Banco Frances del Rio de la Plata SA 1,427,200 8,566
Banco Frances del Rio de la Plata SA
(American Depositary Receipts) 1,297,600 23,357 .57
BISA-Bemberg Industrial SA (1) (2)
(acquired 10/31/94, cost: $3,130,000) 3,130,000 3,130 .06
Buenos Aires Embotelladora SA, Class B
(American Depositary Receipts) 1,286,000 32,311 .58
Central Costanera SA, Class B 1,088,933 3,431 .06
Central Puerto SA, Class B 506,795 1,876
Central Puerto SA, Class B (American Depositary Receipts)
(acquired 2/27/95, cost:$755,000) (2) 51,820 959 .05
Compania Naviera Perez Companc SACFIMFA, Class B 3,660,114 15,377 .28
Hidroneuquen SA (acquired 11/11/93, cost: $26,649,000) 26,649,468 26,649 .48
(1)(2)
IRSA Inversiones y Representaciones SA 100,000 237
IRSA Inversiones y Representaciones SA
(Global Depositary Receipts) (1) 384,575 8,941 .17
Nortel Inversora SA, Class A, preferred
(American Depositary Receipts)
(acquired 11/24/92, cost:$10,760,000) (2) 1,321,820 13,099
Nortel Inversora SA, Class B, preferred
(American Depositary Receipts)
(acquired 2/27/92, cost: $27,980,000) (2) 2,034,860 30,523 .78
Sociedad Comercial del Plata SA 4,777,000 11,851 .21
Telecom Argentina STET-France Telecom SA,
Class B 9,954,072 45,305
Telecom Argentina STET-France Telecom SA,
Class B (American Depositary Shares) (1) 1,333,600 60,679 1.90
Telefonica de Argentina SA, Class B 4,000,000 10,043
Telefonica de Argentina SA, Class B
(American Depositary Shares) 2,041,300 50,522 1.09
YPF SA, Class D
(American Depositary Receipts) 972,800 18,362 .33
--------- ---------
- -
414,884 7.45
--------- ---------
- -
Australia - 0.07%
Star Mining Corp. NL 19,740,000 4,064 .07
---------
-
Brazil - 13.11%
Aracruz Celulose SA,
(American Depositary Receipts) 449,200 5,278 .09
Banco Bradesco SA, preferred nominative 2,547,387,541 21,597
Banco Bradesco SA, preferred nominative, rights
expire July 13, 1995 (1) 46,000,759 50 .40
Brasmotor SA, preferred nominative 100,675,187 18,603 .33
CBV Industria Mecanica SA, preferred nominative 87,120,000 57 -
Centrais Eletricas Brasileiras SA, preferred nominative 378,723,200 100,856
Centrais Eletricas Brasileiras SA, ordinary nominative 304,527,864 79,442 3.24
CESP-Companhia Energetica de Sao Paulo,
preferred nominative 571,589,400 22,615
CESP-Companhia Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts)
acquired 8/30/94, cost: $2,141,000) (1) (2) 124,992 1,391 .56
CESP-Companhia Energetica de Sao Paulo, ordinary
nominative 215,440,754 7,025
COFAP-Companhia Fabricadora de Pecas,
preferred nominative 575,117 4,926 .08
Companhia Cervejaria Brahma, preferred nominative 164,539,015 54,010
Companhia Cervejaria Brahma, ordinary nominative 224,483 81 .97
Companhia Cimento Portland Itau, preferred nominative 21,005,800 6,165 .11
Companhia Energetica de Minas Gerais-CEMIG,
preferred nominative 3,047,043,436 59,616
Companhia Energetica de Minas Gerais-CEMIG, preferred
nominative (American Depositary Receipts)
(acquired 9/22/94, cost: $7,886,000) (1) (2) 310,323 5,974 1.18
Companhia Siderurgica Belgo-Mineira,
preferred nominative 73,460,892 6,508
Companhia Siderurgica Belgo-Mineira,
ordinary nominative 2,086,180 207 .13
Companhia Siderurgica Belgo-Mineira Luxembourg,
ordinary nominative 2,813,639 356
Companhia Siderurgica Nacional ordinary nominative 353,842,000 8,073 .14
Companhia Suzano de Papel e Celulose
Class, B, preferred nominative 949,900 4,853 .08
Companhia Vale Do Rio Doce, preferred nominative 129,450,460 19,558 .35
GP Capital Partners, LP
(acquired 1/28/94, cost: $24,000,000) (1) (2) (3) 24,000 24,000 .43
Industrias Klabin de Papel e Celulose SA,
preferred nominative 8,453,761 11,946 .21
Iochpe-Maxion SA, preferred nominative 4,075,100 1,541 .03
Lojas Americanas SA, preferred nominative 97,709,809 2,177
Lojas Americanas SA, ordinary nominative 169,464,200 3,859 .12
Lojas Americanas SA, preferred nominative,
warrants, expire May 3, 1996 (1) 1,153,009 617
Mesbla SA, preferred nominative 79,324,845 4,742
Mesbla SA, Series 2, 13.25% convertible
bond November 1, 1996 R$25,190,000 1,491 .11
Metal Leve SA Industria e Comercio,
preferred nominative 115,884,489 3,275 .06
Petrobras Distribuidora SA-BR, preferred nominative 745,735,000 25,777 .46
Petroleo Brasileiro SA-PETROBRAS, preferred nominative 428,960,000 36,368 .65
Refrigeracao Parana SA, preferred nominative 170,197,509 331 .01
Telecomunicacoes Brasileiras SA, preferred nominative 4,042,120,168 133,126 2.39
Telecomunicacoes de Sao Paulo SA-Telesp,
preferred nominative 196,894,977 24,396
Telecomunicacoes de Sao Paulo SA-Telesp,
ordinary nominative 40,745,500 5,182 .53
Usinas Siderurgicas de Minas Gerais SA,
preferred nominative 15,503,058,000 17,525 .31
Vidrarcaria Santa Marina, ordinary nominative 1,824,372 7,535 .14
--------- ---------
- -
731,129 13.12
--------- ---------
- -
Canada - 0.16%
Abacan Resource Corp. 3,000,000 9,066 .16
--------- ---------
- -
Chile - 2.23%
Banmedica SA 4,500,000 2,049 .04
CAP SA 1,100,000 6,925 .13
Chilgener SA
(American Depositary Receipts) 1,810,457 57,256 1.03
Compania de Telecomunicaciones de Chile SA
(American Depositary Receipts) 63,700 5,184 .09
Compania Tecno Industrial SA 80,245,285 5,804 .10
Empresa Nacional de Electricidad SA
(American Depositary Receipts) 1,350,750 35,795 .64
Enersis SA 540,697 317 .01
Forestal Terranova 1,100,000 2,107 .04
Invercap SA 1,100,000 2,416 .04
Sociedad Quimica y Minera de Chile SA, Class A 1,321,300 6,265 .11
--------- ---------
- -
124,118 2.23
--------- ---------
- -
China - 1.81%
China North Industries Investment Ltd.
(acquired 9/30/94, cost: $5,727,000) (1) (2) 5,500,000 5,720 .10
China Yuchai International Ltd. (1) 1,015,500 10,282 .19
Guangdong Electric Power, Class B
(acquired 5/31/95, cost: $5,999,000) (1) (2) 10,855,000 5,471 .10
Harbin Power Equipment Co. Ltd.
(American Depositary Receipts)
(acquired 11/30/94, cost: $3,336,000) (1) (2) 99,000 3,167
Harbin Power Equipment Co. Ltd., Class H (1) 44,509,000 14,237 .31
Huaneng Power International, Class N
(American Depositary Receipts) (1) 1,099,100 20,196 .36
Maanshan Iron & Steel Co. Ltd.
(acquired 10/14/93, cost: $9,730,000) (1) (2) 32,935,500 6,896 .12
NW China Investment Ltd.
(acquired 9/22/93, cost: $6,240,000) (1) (2) 600,000 6,360 .12
Shanghai Diesel Engine Co. Ltd., Class B 5,071,000 3,144 .06
Shanghai Petrochemical Co. Ltd., Class H 71,606,600 22,443
Shanghai Petrochemical Co. Ltd., Class H
(American Depositary Receipts) 7,000 220 .40
Yizheng Chemical Fibre Co. Ltd., Class H (1) 1,408,500 492 .01
Zhenhai Refining and Chemical Co. Ltd., Class H 9,040,000 2,161 .04
--------- ---------
- -
100,789 1.81
--------- ---------
- -
Colombia - 0.45%
Banco de Bogota 1,317,898 7,790 .14
Banco de Colombia SA (Global Depositary Receipts)
(acquired 4/4/94, cost: $11,176,000) (1) (2) 880,000 6,600
Banco de Colombia SA, 5.20% convertible bond .31
February 1, 1999 (acquired 1/27/94, $14,250,000 10,688
cost: $15,571,000) (1) (2)
--------- ---------
- -
25,078 .45
--------- ---------
- -
Czech Republic - 0.09%
SPT Telecom 51,000 5,181 .09
--------- ---------
- -
Ecuador - 0.11%
La Cemento Nacional CA (Global Depositary Receipts)
(acquired 6/21/94, cost: $4,110,000) (1)(2) 25,856 5,947 .11
--------- ---------
- -
Ghana - 0.35%
Ashanti Goldfields Co. Ltd. (Global Depositary Receipts) 860,000 19,565 .35
--------- ---------
- -
Greece - 1.02%
Hellenic Bottling Co. SA 844,045 25,082 .45
Intracom SA-Hellenic Telecommunications and
Electronics Industry, preferred 20,000 469
Intracom SA-Hellenic Telecommunications and
Electronics Industry, ordinary 476,620 13,146 .24
Katselis Sons SA, ordinary 115,000 888 .02
Michaniki SA, preferred 252,540 3,219
Michaniki SA, ordinary 533,520 8,354 .21
Titan Cement Co. SA, ordinary 146,522 5,566 .10
--------- ---------
- -
56,724 1.02
--------- ---------
- -
Hong Kong - 1.03%
Consolidated Electric Power Asia Ltd. 18,460,000 42,826
Consolidated Electric Power Asia Ltd.
(American Depositary Shares)
(acquired 11/29/93, cost: $2,268,000) (1) (2) 140,000 3,248 .83
Hopewell Holdings Ltd. 2,000,000 1,693 .03
Hutchison Delta Finance Ltd.,
7.00% convertible bond October 24, 2001 (1) $2,000,000 2,159 .04
Siu-Fung Ceramics Holdings Ltd. 22,834,000 3,276 .06
Tian An China Investments Co. Ltd. 26,387,000 4,093
Tian An China Investments Co. Ltd., warrants
expire January 25, 1996 (1) 6,680,000 17 .07
--------- ---------
- -
57,312 1.03
--------- ---------
- -
Hungary - 0.00%
Graboplast Textiles Muborgyarto RT 10,000 114 -
--------- ---------
- -
India - 5.68%
East India Hotels Ltd. 639,777 8,661
East India Hotels (Global Depositary Receipts) (1) 100,000 1,563 .18
EID Parry Ltd. (Global Depositary Receipts) (1) 624,000 2,184 .04
Essar Gujarat Ltd. 3,667,000 6,891
Essar Gujarat Ltd., 5.50% convertible
Eurobonds August 5, 1998 $7,195,000 7,573 .26
Flex Industries Ltd. 393,800 2,233
Flex Industries Ltd., (1 unit = 2 shares + 1 warrant) 157,520 893 .06
Grasim Industries Ltd. 260,300 5,008
Grasim Industries Ltd.
(Global Depositary Receipts) 730,000 17,432 .40
Hindalco Industries Ltd. (Global Depositary Receipts) 230,000 6,555 .12
India Fund, Class B 3,306,718 6,110 .11
India Magnum Fund NV, Class B, non-voting shares (1) 20,000 920 .02
Indian Aluminum Co. Ltd.
(Global Depositary Receipts) 527,000 5,270 .09
Indian Rayon and Industries Ltd. 305,300 4,454
Indian Rayon and Industries Ltd.
(Global Depositary Receipts) (1) 96,000 1,368 .10
Indo Gulf Fertilisers and Chemicals Corp. Ltd. 2,155,200 4,085
Indo Gulf Fertilisers and Chemicals Corp. Ltd.
(Global Depositary Receipts) (1) 1,770,900 3,630 .14
I.T.C. Ltd. 1,214,600 9,362 .17
Madras Cement Ltd. 4,000 1,159 .02
Mahanagar Telephone Nigam Ltd. 10,295,500 54,109 .97
Mahindra & Mahindra Ltd. 860,650 8,909
Mahindra & Mahindra
(Global Depositary Receipts) 545,000 6,268 .27
Mastergain Scheme 33,345,500 10,621 .19
Max India Ltd. 371,150 4,315 .08
Motor Industries Co. Ltd. 97,660 18,384 .33
Nicholas Piramal India Ltd. 325,000 2,847 .05
Nippon Denro Ispat Ltd., 3.00% convertible bond April 1,
2001
(acquired 3/1/94, cost: $7,758,000) (1) (2) $8,750,000 5,250 .09
Ranbaxy Laboratories Ltd. 554,350 11,477
Ranbaxy Laboratories Ltd.
(Global Depositary Receipts) (1) 777,800 19,445 .55
Raymond Woollen Mills Ltd.
(Global Depositary Receipts) (1) 673,200 10,186 .18
SCICI Ltd. 5,294,600 11,552
SCICI Ltd., 3.50% convertible Eurobonds
April 4, 2004 $3,620,000 3,403 .27
Sundaram Finance Ltd. 76,500 924 .02
Tata Engineering and Locomotive Co. Ltd. 510,000 9,162
Tata Engineering and Locomotive Co. Ltd.
(Global Depositary Receipts)
(acquired 12/12/94, cost: $18,509,000) (1) (2) 1,246,500 24,307 .68
Tata Engineering and Locomotive Co. Ltd.,
(Global Depositary Receipts), warrants, expire March 883,000 4,194
8, 1996 (1)
United Phospherous Ltd. 366,500 7,775
United Phospherous Ltd.
(Global Depositary Receipts) (1) 55,000 1,182 .16
Videocon International Ltd. 56,100 179
Videocon International Ltd.
(Global Depositary Receipts) (1) 62,200 221 .01
Zee Telefilms Ltd. 934,200 6,636 .12
--------- ---------
- -
316,697 5.68
--------- ---------
- -
Indonesia - 4.16%
PT Astra International 11,582,400 20,553 .37
PT Bakrie & Brothers 3,727,600 11,387 .20
PT Bank Internasional Indonesia 10,141,500 31,322 .56
PT Gudang Garam 1,370,000 10,524 .19
PT Indah Kiat Pulp & Paper Corp. 33,918,550 50,284 .90
PT Indofood Sukses Makmur 10,904,450 47,027 .85
PT International Nickel Indonesia 5,069,500 10,248 .18
PT Inti Indorayan Utama, 7.00% convertible bond
May 2, 2006 (acquired 4/22/91, cost: $900,000) (2) $900,000 851
PT Inti Indorayan Utama, 7.00%
convertible Eurobonds May 2, 2006 (5) $400,000 378 .02
PT Japfa Comfeed Indonesia 700,000 487 .01
Jaya Real Property 1,300,000 3,913 .07
PT Kabelmetal Indonesia 1,200,000 2,022 .04
PT Kalbe Farma 362,000 1,659 .03
PT Mayora Indah 1,550,000 7,102 .13
PT Modern Photo Film Co. 557,000 3,028 .05
PT Pabrik Kertas Tjiwi Kimia 672,000 1,351 .03
Perusahaan Perseroan (Persero) PT Indonesian
Satellite Corp. (American Depositary Receipts) 600,500 22,969 .41
PT Praxair Indonesia (1) 142,700 27 -
PT Supreme Cable Manufacturing Corp. 811,000 2,559 .05
PT Tigaraksa Satria 1,014,400 3,463
PT Tigaraksa Satria, 12.00%
convertible bond August 14, 1997 IR 192,900 357 .07
--------- ---------
- -
231,511 4.16
--------- ---------
- -
Luxembourg - 1.02%
New Europe East Investment Fund, Class B
(acquired 6/4/93, cost: $54,500,000) (1) (2) (3) (4) 436 56,657 1.02
--------- ---------
- -
Malaysia - 4.27%
Genting Bhd. 2,347,500 23,215 .42
Genting International PLC 8,301,000 14,194 .25
IJM Corp. Bhd. 3,714,000 14,783
IJM Corp. Bhd., 7.00% convertible loan stock 1997 RM 323,857 897 .28
Leader Universal Holding Bhd. 8,920,000 31,844 .57
Malaysian International Shipping Corp. Bhd. 2,210,000 6,484 .12
Nestle (Malaysia) Sdn. Bhd. 4,765,000 36,564 .66
OYL Industries Bhd. 1,165,437 8,321 .15
Renong Bhd. 4,914,000 9,154
Renong Bhd., 2.50% convertible bond January 15, 2005
(acquired 10/20/94, cost:$2,553,000) (2) $2,550,000 2,856 .27
Renong Bhd., 2.50% convertible Eurobonds
January 15, 2005/1999 $2,855,000 3,198
Resorts World Bhd. 1,267,000 7,435 .13
Sime Darby Bhd. 16,217,000 45,251 .81
Sime UEP Properties Bhd. 3,344,000 6,930 .12
Tan Chong Motor Holdings Bhd. 680,000 776 .01
Technology Resources Industries Bhd. (1) 2,614,000 7,508 .14
UMW Holdings Bhd. 6,257,359 18,102
UMW Holdings Bhd., warrants, expire January 26, 2000 (1) 736,159 643 .34
--------- ---------
- -
238,155 4.27
--------- ---------
- -
Mexico - 7.43%
Apasco, SA de CV, Class A 4,717,226 18,748 .34
CEMEX, SA, Class A 3,090,762 10,699
CEMEX, SA, Class B 6,569,625 23,741 .85
CEMEX, SA, ordinary participation certificates 2,993,975 10,172
CEMEX, SA, Class B, 4.25% convertible bond
November 1, 1997 (acquired 9/28/94, cost $3,876,000) (2) $4,000,000 3,020
Cifra, SA de CV, Class A 8,694,000 11,982
Cifra, SA de CV, Class B 10,761,580 14,832 .75
Cifra, SA de CV, Class C 11,580,192 15,292
Embotelladores del Valle de Anahuac, SA de CV, Class B 546,000 516 .01
Gruma, SA de CV, Class B 864,960 2,467 .04
Grupo Carso, SA de CV, Class A1 4,448,300 24,380 .44
Grupo Financiero Banamex Accival, SA de CV, Class B 23,313,600 35,867
Grupo Financiero Banamex Accival, SA de CV. Class L 3,144,794 4,788
Grupo Financiero Banamex Accival, SA de CV,
7.00% convertible Eurobonds December 15, 1999 $8,300,000 5,976 .84
Grupo Financiero Banorte, SA de CV, Class C 4,070,400 5,284 .09
Grupo Industrial Maseca, SA de CV, Class B
(American Depositary Receipts) (1) 5,700 57 -
Grupo Televisa, SA, ordinary participation certificates 375,000 3,846
Grupo Televisa, SA, ordinary participation certificates
(American Depositary Receipts) 1,670,200 34,030 .68
Kimberly-Clark de Mexico, SA de CV, Class A 1,651,100 18,998 .34
Panamerican Beverages, Inc., Class A 1,389,200 41,676 .75
Sigma Alimentos, SA de CV. Class B 400,000 2,724 .05
Telefonos de Mexico, SA de CV, Class A 7,487,500 11,063
Telefonos de Mexico, SA de CV, Class L 11,231,250 16,595
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) 2,504,475 74,195 1.83
Tolmex, SA de CV, Class B2 2,285,200 8,936
Tolmex, SA de CV, Variable Capital, Class B
(American Depositary Receipts) 174 7 .16
Tubos de Acero de Mexico, SA (1) 1,012,200 4,948
Tubos de Acero de Mexico, SA
(American Depositary Receipts) (1) 1,883,200 9,298 .26
--------- ---------
- -
414,137 7.43
--------- ---------
- -
Morocco - 0.07%
Cimentirie de L'Oriental, Class A (1) 92,503 3,673 .07
--------- ---------
- -
Pakistan - 1.07%
Chakwal Cement Co. Ltd.
(Global Depositary Receipts) (1) 891,111 6,353 .12
Hub Power Co. Ltd. (Global Depositary Receipts) (1) 2,066,328 29,714 .53
Pakistan Telecommunication Corp. (Global Depositary 236,100 23,492 .42
Receipts)
(1)
--------- ---------
- -
59,559 1.07
--------- ---------
- -
Peru - 0.83%
Banco de Credito del Peru 19,522,194 34,265 .62
Ontario-Quinta A.V.V. (acquired 8/15/94, cost: $12,000,000) 11,694,441 11,694 .21
(1) (2)
--------- ---------
- -
45,959 .83
--------- ---------
- -
Philippines - 7.50%
Ayala Corp., Class B 24,135,727 26,986
Ayala Corp., Class B (Global Depositary Shares) 459,800 4,598 .57
Ayala Land, Inc., Class B 19,635,962 22,725 .41
Bacnotan Consolidated Industries, Inc., 5.50% convertible
bond
June 21, 2004 (acquired 6/8/94, cost: $4,478,000) (2) $4,500,000 4,050 .07
Benpres Holdings Corp.
(Global Depositary Receipts) (1) 793,210 6,346 .11
International Container Terminal Services Inc. 5,787,730 4,030
International Container Terminal Services Inc., 6.00%
convertible bond, February 19, 2000
(acquired 2/18/93, cost: $4,000,000) (2) $4,000,000 4,400 .15
JG Summit Holdings, Inc., Class B 11,056,600 3,210
JG Summit Holdings, Inc., Class B
(Global Depositary Shares) 20,000 535
JG Summit Holdings, Inc.,
3.50% convertible bond December 23, 2003 (2) $9,870,000 6,934 .25
JG Summit Holdings, Inc., 3.50% convertible Eurobonds
December 23, 2003 $4,750,000 3,337
Keppel Philippines Holding Inc., Class B 1,995,300 978 .02
Kepphil Shipyard, Inc. (1) 462,000 48 -
Manila Electric Co., Class B 979,590 7,878 .14
Metropolitan Bank and Trust Co. 1,757,735 38,272 .69
Petron Corp. 6,071,250 3,990
Petron Corp. (Global Depositary Receipts) 377,075 11,124 .27
Philippine Commercial National Bank 892,080 6,614 .12
Philippine Long Distance Telephone Co., ordinary 86,250 6,175
Philippine Long Distance Telephone Co.
(American Depositary Receipts) 1,306,305 93,727
Philippine Long Distance Telephone Co., convertible
preferred,
Series III (Global Depositary Receipts) (1) 474,000 19,315 2.24
Philippine Long Distance Telephone Co., convertible
preferred Series III (Global Depositary Shares) 87,000 5,546
Philippine National Bank 1,233,072 14,392 .26
Pilipino Telephone Corp.(acquired 6/26/92, cost: 32,504,000 25,503 .46
$10,320,000)
(1)(2)
PR Holdings, Inc., subscription rights
(acquired 7/8/92, cost: $9,835,000) (1) (2) 2,236,600 9,704 .17
San Miguel Corp., Class B 17,386,772 72,303 1.30
Universal Robina 9,092,400 4,637
Universal Robina (acquired 3/2/94, cost: $13,032,000) (1) 20,400,000 10,404 .27
(2)
--------- ---------
- -
417,761 7.50
--------- ---------
- -
Poland - 0.05%
Zywiec (Zaklady Piwowarskie w Zywcu S.A.) 40,000 3,025 .05
--------- ---------
- -
Portugal - 0.35%
Banco Comercial Portugues, SA 206,719 2,737 .05
ITI Sociedade de Investimentos Turisticos na
Ilha da Madeira SA 64,000 617 .01
Portugal Telecom, SA (American Depositary Receipts) (1) 815,000 15,485 .28
TVI-Televisao Independente SA (1) 105,500 650 .01
--------- ---------
- -
19,489 .35
--------- ---------
- -
Russian Federation - 0.18%
Russian Telecommunications Development Corp.
(acquired 12/22/93, cost: $3,800,000) (1) (2) 380,000 3,800
Russian Telecommunications Development Corp.,
non-voting ordinary (acquired 12/22/93, cost: $6,200,000) 620,000 6,200 .18
(1)(2)
--------- ---------
- -
10,000 .18
--------- ---------
- -
South Africa - 0.79%
Nedcor Ltd., units (acquired 5/23/95, cost: $8,102,000) (1) 177,000 8,717 .16
(2)
Sasol Ltd. 3,688,680 35,365 .63
--------- ---------
- -
44,082 .79
--------- ---------
- -
South Korea - 7.05%
Cheil Foods & Chemicals Inc., non-voting preferred 70,500 2,050
Cheil Foods & Chemicals Inc., ordinary 3,000 188
Cheil Foods & Chemicals Inc., 3.00%
convertible Eurobonds December 31, 2006 $2,365,000 2,743 .09
Daehan Asia Trust
(International Depositary Receipts) (1) 2,820 3,313 .06
Daehan Korea Trust
(International Depositary Receipts) 500 450 .01
Daewoo Corp. 257,738 3,229 .06
Daewoo Securities Co., Ltd. non-voting, preferred 326,350 6,456
Daewoo Securities Co., Ltd. 240,674 6,793 .24
Haitai Stores Co., Ltd. 13,401 152 -
Hanil Bank 3,227,780 37,621 .68
Hansol Paper Co. Ltd., preferred 17,263 319
Hansol Paper Co. Ltd., ordinary 80,627 3,243 .06
Hyundai Motor Co., nonvoting preferred
(Global Depositary Receipts) (1) 544,800 11,033 .20
Korea Asia Fund Ltd.
(International Depositary Receipts) (1) 300 2,888 .05
Korea Electric Power Corp. 2,250,500 86,826
Korea Electric Power Corp.
(American Depositary Receipts) 225,000 5,091 1.65
Korea First Bank 2,349,570 22,157 .40
Korea Long Term Credit Bank 349,841 10,313 .19
Korea Pacific Trust
(International Depositary Receipts) 3,000 3,825 .07
Kyongnam Bank 733,607 6,870 .12
LG Chemicals, preferred 252,000 3,789 .07
LG Electronics, non-voting preferred 167,300 3,883
LG Electronics, non-voting preferred
(Global Depositary Receipts) 256,100 2,945 .12
LG Securities, preferred 291,842 3,345
LG Securities, ordinary 2,337 41 .06
Pacific Chemical Ind. 165,440 4,189 .08
Pohang Iron & Steel Co., Ltd. 585,540 58,083
Pohang Iron & Steel Co., Ltd.
(American Depositary Receipts) 18,000 531 1.05
Samsung Co., Ltd. 29,021 731 .01
Samsung Electronics Co., Ltd. 192,704 32,248
Samsung Electronics Co., Ltd., new 40,313 6,663
Samsung Electronics Co., Ltd., non- voting preferred, new 12,515 1,182
Samsung Electronics Co., Ltd, non-voting preferred 63,241 5,973
Samsung Electronics Co. Ltd., non- voting preferred
(Global Depositary Shares) (1) 166,922 8,680 1.11
Samsung Electronics Co. Ltd., ordinary
(Global Depositary Shares) (1) 89,420 6,439
Seoul Asia Index Trust
(International Depositary Receipts) 80 960 .02
Seoul Horizon Trust 531,000 9,160 .16
Shinhan Bank 155,650 3,427 .06
Ssangyong Investment & Securities Co., Ltd. 4,000 69 -
Ssangyong Investment & Securities Co., Ltd., nonvoting 61,090 677 .01
preferred
Ssangyong Oil Refining Co., Ltd. 180,000 5,175 .09
Taihan Electric Wire Co. 134,418 4,698 .08
Yukong Ltd. 262,661 10,982
Yukong Ltd., non- voting preferred,
(Global Depositary Receipts) 257,558 2,768 .25
--------- ---------
- -
392,198 7.05
--------- ---------
- -
Sri Lanka - 0.21%
Asian Hotel Corp. 6,107,500 1,912 .03
Development Finance Corp. of Ceylon 1,258,310 9,377 .17
National Development Bank 96,200 459 .01
--------- ---------
- -
11,748 .21
--------- ---------
- -
Taiwan - 0.84%
Chia Hsin Cement Corp.
(Global Depositary Receipts) 590,300 6,641 .12
China Steel Corp.
(American Depositary Receipts) (1) 868,000 17,794
China Steel Corp .43
(Global Depositary Shares) 300,000 6,150
Hocheng Group Corp Ltd., (Global Depositary Receipts) 90,469 1,063 .02
Nan Ya Plastics Corp., 1.75% convertible bond
July 19, 2001 (acquired 7/11/94, cost: $12,873,000) (2) $13,250,000 12,687
Nan Ya Plastics Corp., 1.75% convertible Eurobond
July 19, 2001 (1) $1,000,000 957 .24
R.O.C. Taiwan Fund (1) 26,000 286 .01
Tung Ho Steel Enterprise Corp., 4.00% convertible
Eurobonds July 26, 2001 $1,070,000 1,252 .02
--------- ---------
- -
46,830 .84
--------- ---------
- -
Thailand - 5.48%
Alphatec Electronics PLC (acquired 6/26/95, cost: 520,000 9,483 .17
$8,516,000)
(2)
Ayudhya Life Assurance Co., Ltd. 159,300 1,098 .02
Bangkok Bank Ltd. 8,347,340 92,015
Bangkok Bank Ltd., 3.25% convertible bond
March 3, 2004 (acquired 8/4/94, cost: $961,000) (2) $1,000,000 1,015 1.74
Bangkok Bank Ltd., 3.25% convertible
Eurobond March 3, 2004 $3,630,000 3,684
Bangkok Metropolitan Bank Public Co. Ltd. 3,694,600 4,417 .08
Bank of Ayudhya Ltd. 6,346,240 31,120 .56
Charoen Pokphand Feedmill Co. Ltd. 1,575,600 9,578 .17
Dusit Thani Corp. Ltd. 1,485,000 1,459 .03
Electricity Generating Authority of Thailand (1) 2,014,270 6,082
Electricity Generating Authority of Thailand,
local registered (1) 22,530 66 .11
Industrial Finance Corp. of Thailand 3,225,400 8,497 .15
MBK Properties & Development Co. Ltd. 4,000,000 5,755 .10
Nakhornthai Integrated Steels Co., Ltd. 11,213,400 21,927 .39
Post Publishing Co. Ltd. 1,010,000 5,731 .10
Serm Suk Co. Ltd. 210,166 2,129
Serm Suk Co. Ltd., local registered 64,960 658 .05
Siam City Bank Ltd. 13,116,010 18,073 .32
Siam Commercial Bank, Ltd. 1,340,200 12,818 .23
Thai Farmers Bank Public Co. Ltd. 5,306,600 50,754 .91
Thai Military Bank, Ltd. 3,243,684 13,146 .24
Wattachak Public Co. Ltd.,
3.50% convertible bond December 6, 2003 $6,400,000 5,856 .11
--------- ---------
- -
305,361 5.48
--------- ---------
- -
Turkey - 2.22%
Adana Cimento Sanayii, Class A 10,060,512 5,921
Adana Cimento Sanayii, Class C 4,004,640 480 .11
Akbank Turk AS 11,107,980 2,829 .05
Arcelik AS 30,472,886 9,312 .17
Eczacibasi Ilac Sanayi ve Ticaret AS 5,706,296 1,369 .02
Ege Biracilik ve Malt Sanayii AS 12,156,496 14,308 .26
KOC Holding AS, ordinary 19,673,673 19,371 .35
Medya Holdings AS, Class C (1) 74,984,000 2,334 .04
Migros Turk 1,440,000 1,613
Migros Turk, rights, expire, December 24, 1995 (1) 720,000 790 .04
Netas Northern Electric Telekomunikasyon AS 30,690,000 10,594 .19
Turkiye Garanti Bankasi AS 98,326,514 13,354
Turkiye Garanti Bankasi AS
(American Depositary Receipts) (1) 449,000 5,388 .34
Turkiye Sise ve Cam Fabrikalari AS 89,043,312 19,348 .35
Yapi ve Kredi Bankasi AS 260,869,300 16,828 .30
--------- ---------
- -
123,839 2.22
--------- ---------
- -
Ukraine - 0.23%
JP Kenny Exploration & Production Ltd.
(acquired 2/10/95, cost: $9,750,000) (1) (2) 4,250,000 12,863 .23
--------- ---------
- -
United States - 0.07%
Atlantic Tele Network (1) 270,700 2,200 .04
Freeport-McMoRan Copper & Gold Inc., Class A 90,000 1,856 .03
--------- --------
4,056 .07
--------- ---------
- -
Venezuela - 0.12%
Compania de Inmuebles Y Valores Caracas (1) 72,655,270 - -
Fabrica Nacional de Cementos SACA 14,531,054 1,410 .02
Mavesa SA (American Depositary Receipts)
(acquired 10/28/93, cost: $6,690,000) (2) 861,341 2,369 .04
Venezolana de Cementos, SACA 1,484,902 2,096 .04
Venezolana de Prerreducidos Caroni CA
(Global Depositary Shares) 179,000 1,074 .02
--------- ---------
- -
6,949 .12
--------- ---------
- -
Vietnam - 0.11%
Vietnam Frontier Fund
(acquired 7/21/94, cost: $3,000,000) (1) (2) (3) 291,300 3,000 .05
Vietnam Investment Fund (Singapore) Ltd., preferred, units
(acquired 8/4/94, cost: $3,206,000) (1) (2) (3) 30 3,206
Vietnam Investment Fund (Singapore) Ltd., ordinary, units
(acquired 8/4/94, cost: less than $1,000) (1) (2) (3) 6 - .06
--------- ---------
- -
6,206 .11
--------- ---------
- -
Multi National - 0.17%
Emerging Markets Gold Fund
(acquired 1/28/94, cost: $9,563,000) (1) (2) (3) 9,563 9,563 .17
--------- -------
Miscellaneous - 1.72%
Equity-type securities in initial period of acquisition 95,850 1.72
--------- ---------
- -
TOTAL EQUITY-TYPE SECURITIES - -
(cost: $3,580,889,000) 4,430,139 79.51
--------- ---------
- -
BONDS AND NOTES
Argentina - 0.91%
Republic of Argentina Bocon PIK
7.268% April 1, 2001 (5) $60,770 33,285 .60
Republic of Argentina Bocon PIK
5.861% April 1, 2001 (5) ARP 20,430 6,678 .12
Republic of Argentina Bocon
5.861% April 1, 2007 ARP 51,000 5,958 .10
Republic of Argentina Eurobond Series L
7.3125% March 31, 2005 (5) $8,450 5,197 .09
--------- ---------
- -
51,118 .91
--------- ---------
- -
Brazil - 0.55%
Federal Republic of Brazil Capitalization Bond PIK
8.00% April 15, 2014 10,404 5,111 .09
Federal Republic of Brazil Debt Conversion Bond Series LI
7.3125% April 15, 2012 (5) 45,750 23,790 .43
Republic of Minas Gerais Series A
7.875% February 10, 1999 1,500 1,185 .02
Republic of Minas Gerais Series B
8.250% February 10, 2000 500 390 .01
--------- ---------
- -
30,476 .55
--------- ---------
- -
India - 0.02%
Flex Industries W/W 13.50% December 31, 2004 INR 7,876 953 .02
--------- ---------
- -
Indonesia - 0.04%
Tjiwi Kimia International Finance Co.
13.25% bond August 1, 2001 2,000 2,120 .04
--------- ---------
- -
Mexico - 0.15%
Tubos de Acero de Mexico,
13.75% December 8, 1999 7,500 6,628 .12
United Mexican States MYRA (multi-year restructuring
agreement)/Agent-Citibank, NA/Loan Participation
Agreements
(Participation-Salomon Brothers, Inc.) (1) (5) (6) (7) 750 521 .01
United Mexican States MYRA (multi-year restructuring
agreement)/
Agent-International Mexican Bank Ltd./
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1) (5) (6) (7) 1,495 1,039 .02
--------- ---------
- -
8,188 .15
--------- ---------
- -
Panama - 0.41%
Republic of Panama 7.25% May 10, 2002 1,750 1,339 .02
Republic of Panama/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Citibank, NA) (1) (5) (6) (7) 71,580 21,759 .39
--------- ---------
- -
23,098 .41
--------- ---------
- -
Peru - 0.94%
Republic of Peru/Agent-Bankers Trust Company/
Loan Participation Agreements
(Participation-Citibank, NA) (1)(5)(6)(7) 10,764 3,019 .05
Republic of Peru/Agent-Chemical Bank/
Loan Participation Agreements
(Participation-Citibank, NA)(1)(5)(6)(7) 3,544 1,006 .02
Republic of Peru/Agent-Chemical Bank/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(5)(6)(7) 4,085 1,150 .02
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Salomon Brothers) (1)(5)(6)(7) 20,278 5,505 .10
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Citibank, NA) (1)(5)(6)(7) 20,970 5,997 .11
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(5)(6)(7) 41,364 12,437 .22
Republic of Peru/Agent-Morgan Guaranty Trust/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(5)(6)(7) 8,720 2,444 .04
Republic of Peru/Agent-Wells Fargo Bank
Loan Participation Agreements
(Participation-Citibank, NA) (1)(5)(6)(7) 20,657 5,851 .11
Republic of Peru/Agent-Wells Fargo Bank
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(5)(6)(7) 35,534 10,005 .18
Republic of Peru/Agent-J.P. Morgan/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(5)(6)(7) 17,719 5,031 .09
--------- ---------
- -
52,445 .94
Philippines - 0.07%
Subic Power Corp. 9.50% December 28, 2008 (1) 2,793 2,577 .05
Subic Power Corp. 9.50% Eurobonds
December 28, 2008 (1) 1,397 1,288 .02
--------- ---------
- -
3,865 .07
Poland - 0.07%
Poland Eurobonds 7.125% October 27, 2024 (5) 5,250 4,043 .07
--------- ---------
- -
TOTAL BONDS AND NOTES (cost: $168,501,000) 176,306 3.16
SHORT-TERM SECURITIES
CORPORATE SHORT-TERM NOTES - 11.00%
ABN AMRO North America Finance Inc. 5.92%-5.94%
due 7/11-7/12/95 39,600 $39,529 .71
Bayer Corp 5.84%-5.98% due 7/25-8/7/95 100,000 99,485 1.79
Canadian Imperial Holdings, Inc. 5.92%-5.96% due 38,400 38,264 .69
7/20-7/24/95
Deutsche Bank Financial Inc. 5.88%-5.94% due 7/5-7/7/95 53,000 52,944 .95
Exxon Imperial U.S. Inc. 5.85%-5.97% due 7/6-8/7/95 63,111 62,913 1.13
National Australia Funding (Delaware) Inc. 5.92%-5.95% due 67,000 66,934 1.20
7/6/95
Panasonic Finance Inc. 5.93%-5.95% due 7/14-7/21/95 28,000 27,906 .50
RTZ America, Inc. 5.94%-6.07% due 7/6-7/26/95 27,800 27,733 .50
Siemens Corp. 5.94% due 7/18/95 25,000 24,926 .45
SmithKline Beecham 5.93%-5.95% due 7/6-7/17/95 65,000 64,863 1.16
Sony Capital Corp 5.95%-6.20% due 7/3-7/19/95 21,800 21,771 .39
Toyota Motor Credit Corp. 5.94%-5.95% due 7/12-7/17/95 49,000 48,886 .88
Unilever Capital Corp. 5.84%-5.96% due 7/10-8/29/95 36,600 36,487 .65
--------- ---------
- -
612,641 11.00
--------- ---------
- -
Certificates of Deposit - 3.81%
Abbey National Treasury Services PLC Eurocertificates
6.02% due 7/19/95 25,000 25,000 .45
Banque Nationale de Paris 5.89%-6.02% due 7/5-8/8/95 75,000 75,000 1.34
Societe Generale 5.99%-6.05% due 7/5-8/11/95 64,700 64,700 1.16
Swiss Bank Corp. 5.80%-6.01% due 7/21-8/7/95 48,000 48,000 .86
--------- ---------
- -
212,700 3.81
--------- ---------
- -
Non-U.S. Government Short -Term Obligations - 0.94%
Polish Government Treasury Bills due 4/18-5/22/96 PLZ 14,200 4,931 .09
Turkish Government Treasury Bills due 12/6/95-1/5/96 TRL 2,914,545 47,301 .85
--------- ---------
- -
52,232 .94
--------- ---------
- -
Non-U.S. Currency - 1.62%
Chilean Peso CHP 14,768,663 39,562 .71
New Taiwanese Dollar N$ 1,313,403 50,856 .91
--------- ---------
- -
90,418 1.62
--------- ---------
- -
TOTAL SHORT-TERM SECURITIES (cost: $965,662,000) 967,991 17.37
--------- ---------
- -
TOTAL INVESTMENT SECURITIES (cost: $4,715,052,000) 5,574,436 100.04
Excess of liabilities over cash and receivables 2,626 .04
--------- ---------
- -
NET ASSETS $5,571,81 100.00
0
========= =========
= =
</TABLE>
(1) Non-income producing securities.
(2) Purchased in a private plament transaction; resale to the public may
require registration, and no right to demand registration under U.S. law
exists. As of June 30, 1995, the total
market value and cost of such securities was $391,421,000 and $382,180,000,
respectively,
and the market value represented 7.03% of net assets.
(3) Includes an unfunded capital commitment representing a binding commitment
made by the fund which may be paid in the future.
(4) A Luxembourg-based, closed-end investment fund seeking long-term capital
appreciation through investments in Eastern and Central Europe and the former
Soviet Union, and for which
Capital International, Inc. serves as the investment adviser.
(5) Coupon rate may change periodically.
(6) Security is currently in default.
(7) Participation interests were acquired through the financial institution
indicated parenthetically.
Non-U.S. Currency Symbols:
ARP - Argentine Peso
CHP - Chilean Peso
INR - Indian Rupee
IR - Indonesian Rupiah
NT$ - New Taiwanese Dollar
PLZ - Polish Zloty
R$ - Brazilian Real
TRL - Turkish Lira
See Notes to Financial Statements
EQUITY-TYPE SECURITIES ADDED TO THE
PORTFOLIO SINCE DECEMBER 31, 1994
-----------------------------------
Abacan Resource
Alphatec Electronics
Benpres Holdings
Central Costanera
Central Puerto
Cimenterie de l'Oriental
Compania de Inmuebles y Valores Caracas
Electricity Generating Authority of Thailand
Freeport-McMoran Copper & Gold
Grupo Financiero Banorte
Guangdong Electric Power
Hindalco Industries
Hocheng
Huaneng Power International
Jaya Real Property
JP Kenny Exploration & Production
Madras Cement
PT Mayora Indah
Migros Turk
PT Modern Photo Film
National Development Bank
Nedcor
Netas Northern Electric Telekomunikasyon AS
Portugal Telecom
PT Praxair Indonesia
Raymond Woolen Mills
Refrigeracao Parana
Shinhan Bank
Sigma Alimentos
Sime UEP Properties
Sociedad Comercial del Plata
SPT Telecom
Ssangyong Investment & Securities
SsangYong Oil Refining
Star Mining
Tata Engineering and Locomotive
Technology Resources Industries
TVI-Televisao Independente
Turkiye Sise ve Cam Fabrikalari
Yapi ve Kredi Bankasi
Zhenhai Refining & Chemical
Zywiec (Zaklady Piwowarskie w Zywcu SA)
EQUITY-TYPE SECURITIES ELIMINATED FROM THE
PORTFOLIO SINCE DECEMBER 31, 1994
------------------------------------------
A.G. Petzetakis
Ayudhya Insurance
Banco do Braxil
Banque Indosuez Lux Sivensa
PT Barito Pacific Timber
Carter Holt Harvey
Ceramica Carabobo
Coca-Cola FEMSA
Compania de Cemento Argos
Elf Gabon
Fomento Economico Mexicano
Formosa Growth Fund
Global Mark International*
Grupo Embotellador de Mexico
Grupo Financiero Bancomer
Grupo Financiero Serfin
Grupo Industrial Durango
Hellas Can-Packaging Manufacturers
Hylsamex
Interag
Ipako
Kia Motors
Korea Fund
Leong Hup Holdings
Mannesmann
MBf Capital
Oriental Holdings
President Enterprises
Ripasa SA Celulose e Papel
PT Semen Cibinong
PT Semen Gresik
PT Sepanjang Surya Gas
Tenaga Nasional
United Communication Industry
*Global Mark International's convertible debentures were
exchanged for holdings in PT Indofood Sukses Makmur.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Statement of Assets and Liabilities
at June 30, 1995 (dollars in thousands)
-----------------------------------------------------------------------------------------------
Assets:
Investment securities at market
(cost: $4,715,052) ............... $5,574,436
Cash ............................... 2,148
Non-U.S. taxes receivable 478
Receivables for--
Sales of investments ............. $39,439
Dividends and accrued interest ... 50,750 90,189
---------------- ----------------
5,667,251
Liabilities:
Payables for--
Purchases of investments ......... 53,277
Unfunded capital commitments 37,508
Management services .............. 3,111
Accrued expenses ................. 1,545 95,441
---------------- ----------------
Net Assets at June 30, 1995 --
Equivalent to $52.36 per share on
106,420,215 shares of $0.01 par value
capital stock outstanding (authorized
capital stock -- 200,000,000 shares)......... $5,571,810
============
Statement of Operations (dollars in thousands)
for the Year Ended June 30, 1995
Investment Income:
Income:
Dividends ........................ $81,640
Interest ......................... 50,169 $131,809
----------------
Expenses:
Management services fee .......... 34,286
Custodian fee .................... 9,696
Registration statement and prospectus 512
Taxes other than federal
income tax ..................... 123
Auditing and legal fees .......... 120
Reports to shareholders .......... 10
Other expenses ................... 938 45,685
---------------- ----------------
Income before non-U.S. taxes........ 86,124
Non-U.S. taxes...................... (1,109)
----------------
Net investment income .............. 85,015
----------------
Realized Gain and Unrealized
Depreciation on Investments:
Realized gain before non-U.S. taxes..... 333,308
Non-U.S. taxes...................... (27,954)
----------------
Net realized gain .................. 305,354
Net change in unrealized appreciation:
Beginning of year ................ 1,369,217
End of year ...................... 859,160
----------------
Net unrealized depreciation ...... (510,057)
Non-U.S. taxes.. 23,100 (486,957)
---------------- ----------------
Net realized gain and unrealized
depreciation on investments ............. (181,603)
----------------
Net Decrease in Net Assets Resulting
from Operations .................... ($96,588)
==============
Statement of Changes in Net Assets
(dollars in thousands)
Year Ended June 30, 1995
1995 1994
---------------- ----------------
Operations:
Net investment income .............. $85,015 $33,606
Net realized gain on investments ... 305,354 272,998
Net unrealized appreciation (depreciation)
on investments ................... (486,957) 611,134
---------------- ----------------
Net increase (decrease)in net assets
resulting from operations ...... (96,588) 917,738
---------------- ----------------
Dividends and Distributions Paid
to Shareholders:
Dividends from net
investment income ................ (61,624) (32,744)
Distributions from net realized
gain on investments .............. (456,090) (71,721)
---------------- ----------------
Total dividends and
distributions .................. (517,714) (104,465)
---------------- ----------------
Capital Share Transactions:
Proceeds from shares sold:
26,840,022 and 11,985,661 shares, respectively 1,502,619 681,214
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
8,593,036 and 1,727,157 shares,
respectively ...................... 513,177 101,629
---------------- ----------------
Net increase in net assets
resulting from capital share
transactions ................... 2,015,796 782,843
---------------- ----------------
Total Increase in Net Assets 1,401,494 1,596,116
Net Assets:
Beginning of year .................. 4,170,316 2,574,200
---------------- ----------------
End of year (including excess distributions
over net investment income: $2,410 and $2,495,
respectively) $5,571,810 $4,170,316
========== ==========
</TABLE>
**************************
Notes to Financial Statements
1. Emerging Markets Growth Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as a closed-end, diversified management
investment company. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Equity-type securities are stated at market value based upon closing sales
prices reported on recognized securities exchanges on the last business day of
the year or, in the absence of any sales, upon last reported bid prices on that
date. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the authority of
the Board of Directors as the primary market. Equity-type securities traded
primarily in the over-the-counter market are valued at the last available sale
prior to the time of valuation, or, lacking any sales, at the last reported bid
price. Bonds and notes are valued at prices obtained from a bond-pricing
service provided by a major dealer in bonds, when such prices are available;
however, in circumstances where the investment adviser deems it appropriate to
do so, such securities will be valued at the mean of their representative
quoted bid and asked prices or, if such prices are not available, at the mean
of such prices for securities of comparable maturity, quality, and type.
Short-term securities with original or remaining maturities in excess of 60
days are valued at the mean of their quoted bid and asked prices. Short-term
securities with 60 days or less to maturity are amortized to maturity based on
their cost to the fund if acquired within 60 days of maturity or, if already
held by the fund on the 60th day, based on the value determined on the 61st
day. Securities for which market quotations are not readily available
(including restricted securities which are subject to limitations as to their
sale), or which are not deemed to represent market value, are valued at fair
value as determined in good faith by the Valuation Committee of the Board of
Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities, cash balances, and other assets and liabilities
denominated in non-U.S. currencies are recorded in the financial statements
after translation into U.S. dollars utilizing rates of exchange on the last
business day of the year. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are calculated at the rates
of exchange prevailing on the respective dates of such transactions. Gains and
losses that arise from changes in exchange rates are not segregated from gains
and losses that arise from changes in market prices of investments. The
effects on net investment income arising from changes in exchange rates are
also not segregated.
Unfunded capital commitments represent agreements which obligate the fund to
meet capital calls in the future. Payment would be made when a capital call
is requested. Capital calls can only be made if and when certain
requirements have been fulfilled; thus, the timing of such capital calls
cannot be readily determined. Unfunded capital commitments are recorded at
the amount that would be paid when and if capital calls are made.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian
bank. The custodian fee of $9,696,000 includes $446,000 that was paid by
these credits rather than in cash.
2. Investing in securities of issuers in a variety of developing countries
involves certain special investment risks, which may include investment and
repatriation restrictions, currency volatility, government involvement in the
private sector, limited investor information, shallow securities markets,
certain local tax law considerations, and limited regulation of the securities
markets.
Dividend income, and interest income, net realized gain and net unrealized
gain, of the fund derived in Chile are subject to certain non-U.S. taxes at
rates of 20% and 35%, respectively. Net realized gain and net unrealized gain
of the fund derived in India are subject to certain non-U.S. taxes at a rate of
10%. The fund provides for such non-U.S. taxes on investment income, net
realized gain, and net unrealized gain.
3. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of June 30, 1995, net unrealized appreciation on investments for federal
income tax purposes aggregated $846,804,000, net of accumulated deferred taxes
totaling $4,167,000 on net unrealized appreciation of Chilean and Indian
securities, of which $1,266,959,000 related to appreciated securities and
$420,155,000 related to depreciated securities. During the year ended June 30,
1995, the fund realized, on a tax basis, a net capital gain of $301,338,000 on
securities transactions. The cost of portfolio securities for federal income
tax purposes was $4,723,465,000 at June 30, 1995.
4. The fee of $34,286,000 for management services was paid pursuant to an
agreement with Capital International, Inc. (CII), with which certain officers
and Directors of the fund are affiliated. The Investment Advisory and Service
Agreement provides for monthly fees, accrued weekly, based on an annual rate of
0.90% on the first $400 million of the fund's net assets; 0.80% of such assets
in excess of $400 million but not exceeding $1 billion; 0.70% of such assets in
excess of $1 billion but not exceeding $2 billion; 0.65% of such assets in
excess of $2 billion but not exceeding $4 billion; 0.625% of such assets in
excess of $4 billion but not exceeding $6 billion; 0.60% of such assets in
excess of $6 billion but not exceeding $8 billion; 0.58% of such assets in
excess of $8 billion but not exceeding $11 billion; and 0.56% of such assets in
excess of $11 billion. CII is owned by Capital Group International, Inc.,
which is a wholly owned subsidiary of The Capital Group Companies, Inc.
5. As of June 30, 1995, accumulated undistributed net realized gain on
investments was $105,603,000 and additional paid-in capital was
$4,612,560,000. The fund made purchases and sales of investment securities,
excluding short-term securities, of $1,966,143,000 and $1,067,577,000,
respectively, during the year ended June 30, 1995.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended June 30, 1995, such non-U.S. taxes were $10,377,000. Net realized
currency losses on dividends, interest, withholding taxes reclaimable, and
sales of non-U.S. bonds were $168,000 for the year ended June 30, 1995.
In accordance with SOP 93-2, the fund reclassified $23,306,000 from
undistributed net investment income to additional paid-in capital and
$24,141,000 from additional paid-in capital to undistributed net realized gains
for the year ended June 30, 1995.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 30
1995 1994 1993 1992 1991
------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $58.75 $44.95 $38.64 $32.73 $32.81
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
NET INVESTMENT INCOME ...... .87 .53 .62 .55 .83
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
BEFORE NON-U.S. TAXES ..... (.79) 15.29 7.33 8.87 3.89
NON-U.S. TAXES ................ (.03) (.39) .06 (.28 ) (.38 )
-------- -------- ------- ------- -------
TOTAL INCOME FROM INVESTMENT
OPERATIONS.............. .05 15.43 8.01 9.14 4.34
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME .................... (.63) (.49) (.56) (.56) (.92)
DISTRIBUTIONS FROM NET REALIZED
GAIN................. (5.81) (1.14) (1.14) (2.67) (3.50)
-------- -------- ------- ------- -------
TOTAL DISTRIBUTIONS ....... (6.44) (1.63) (1.70) (3.23) (4.42)
-------- -------- ------- ------- -------
NET ASSET VALUE, END OF YEAR .. $52.36 $58.75 $44.95 $38.64 $32.73
======= ======= ======= ======== =======
TOTAL RETURN .................... (1.22)% 34.33% 21.55% 18.08%
29.73%
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF YEAR (IN MILLIONS) $5,572 $4,170 $2,574 $1,561 $703
RATIO OF EXPENSES TO AVERAGE NET .91% 1.00% 1.01% 1.11% 1.18%
ASSETS
RATIO OF EXPENSES AND NON-U.S. TAXES
TO AVERAGE NET ASSETS ........... .94% 1.04% 1.07% 1.18% 1.31%
RATIO OF NET INCOME TO AVERAGE
NET ASSETS .......... 1.70% .91% 1.82% 1.84% 2.78%
PORTFOLIO TURNOVER RATE ............ 23.75% 18.13% 11.97% 16.03% 26.38%
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Emerging Markets Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of Emerging Markets Growth Fund (the
"Fund") at June 30, 1995, the results of its operations, the changes in its net
assets, and the per-share data and ratios for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based
upon our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1995 by correspondence with the
custodian and brokers and application of alternative auditing procedures where
confirmations from brokers were not received, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE
Los Angeles, California
August 10, 1995
TAX INFORMATION (UNAUDITED)
The fund makes an election under the Internal Revenue Code Section 853 to pass
through foreign taxes paid by the fund to its shareholders. The total amount
of foreign taxes passed through to shareholders for the year ended June 30,
1995 totals $0.58450 per share.
None of the distributions paid by the fund from investment income earned in the
year ended June 30, 1995 qualifies for the corporate dividends-received
deduction. None of the dividends paid to shareholders was derived from
interest on direct U.S. Treasury obligations.
This information is given to meet certain requirements of the Internal Revenue
Code and should not be used by shareholders for preparing their income tax
returns. for tax return preparation purposes, please refer to the annual
information on the taxability of distributions supplied by the fund.
BOARD OF DIRECTORS
Issa Al-Sowaidi, Abu Dhabi, United Arab Emirates Director,
Abu Dhabi Investment Authority
R. Michael Barth, Washington, D.C.
Director of Controller's and Budgeting Department,
International Finance Corporation
Robert B. Egelston, Los Angeles, California
Vice Chairman of the Board of the fund
Former Chairman of the Board,
The Capital Group Companies, Inc.
Nancy Englander, Los Angeles, California
President of the fund
Senior Vice President, Capital International, Inc.
David I. Fisher, Los Angeles, California
Vice Chairman of the Board of the fund
Chairman of the Board,
The Capital Group Companies, Inc.
Beverly L. Hamilton, Los Angeles, California
President, ARCO Investment Management Company
Marinus W. Keijzer, Zeist, Netherlands
Chief Economist & Strategist, Pensioenfonds PGGM
Hugh G. Lynch, New York, New York
Managing Director, International Investments,
General Motors Investment Management Corporation
Helmut Mader, Frankfurt, Germany
Senior Vice President, Deutsche Bank AG
Teresa E. Martini, Berkeley Heights, New Jersey
Vice President, International Equity,
AT&T Corporation
John G. McDonald, Stanford, California
The IBJ Professor of Finance,
Graduate School of Business, Stanford University
James K. Peterson, Stamford, Connecticut
Director of Investment Management,
IBM Retirement Fund
William Robinson, Gouvieux, France
Director, Aga Khan Fund for Economic Development
Patricia A. Small, Oakland, California
The Associate Treasurer,
The Regents of the University of California
Walter P. Stern, New York, New York
Chairman of the Board of the fund
Chairman of the Board,
Capital Group International, Inc.
OTHER OFFICERS
Roberta A. Conroy, Los Angeles, California
Vice President and Secretary of the fund
Assistant General Counsel,
The Capital Group Companies, Inc.
Hartmut Giesecke, Singapore
Vice President of the fund
Chairman of the Board and Director,
Capital International K.K. and
Senior Vice President and Director,
Capital International, Inc.
Thomas W. Trimborn, London, England
Vice President of the fund
Vice President, Capital International, Inc.
Shaw B. Wagener, Los Angeles, California
Vice President of the fund
Executive Vice President and Director,
Capital International, Inc.
Steven N. Kearsley, Los Angeles, California
Treasurer of the fund
Vice President and Treasurer,
Capital Research and Management Company
Michael A. Felix, Los Angeles, California
Assistant Treasurer of the fund
Vice President, Capital International, Inc.
[Side Bar]
Audrey A. Curtis resigned from the Board of Directors
effective March 31, 1995. She had been a member of the Board since 1989.
The Directors wish to thank her for her contributions to the fund.
James K. Peterson was elected to the Board of Directors
June 1, 1995. Mr. Peterson previously served on the Board from June 2, 1986
to June 15, 1989.
[End Side Bar]
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL INTERNATIONAL, INC.
11100 Santa Monica Boulevard, 15th Floor
Los Angeles, California 90025-3302
135 South State College Boulevard
Brea, California 92621-5804
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Jorden Burt & Berenson
1025 Thomas Jefferson Street N.W.
Washington, D.C. 20007-0805
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
This report is for the information of shareholders of Emerging Markets Growth
Fund, but it may also be used as sales literature when preceded or accompanied
by the current prospectus, which gives details about charges, expenses,
investment objectives and operating policies of the fund.
Printed in USA JA/WS/2700
(c) 1995 Emerging Markets Growth Fund, Inc.
Lit. No. EMGF-011-0895 (NLS)
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