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EMERIGING MARKETS GROWTH FUND
SEMI-ANNUAL REPORT
For the Six Months Ended December 31, 1996
Seeks long-term growth of capital by investing in companies
operating in developing countries around the world
FELLOW SHAREHOLDERS:
Emerging Markets Growth Fund held its ground quite well during the six months
ended December 31. The period was marked by price weakness in a number of
markets in the fund's investment universe. The unmanaged Morgan Stanley Capital
International Emerging Markets Free (EMF) Index, which tracks stock prices in
26 developing countries, declined 4.19%. For the six months, EMGF's share value
registered a tiny gain of 0.01%, assuming reinvestment of your income dividend
of $1.03 a share and capital gain distribution of $1.02 a share that were paid
in December.
Looking back over the past 12 months, the fund also posted considerably better
results than the benchmark by which its results are typically measured, gaining
16.4% versus 6.0% for the EMF Index. The 16.4% figure slightly exceeds our
average annual compound return for the past five years (15.6%) and compares
favorably with an average annual return for the index of 12.7%. It also is
higher than the 15.2% average annual return recorded during the five-year span
by the unmanaged Standard & Poor's 500 Composite Index. This is noteworthy
because the U.S. equity market has been soaring, while the past few years have
been lackluster for emerging markets on the whole. From January 1, 1994 through
December 31, 1996 the EMF index showed a total decline of 6.8%.
Since operations began in May 1986, EMGF has generated a total return of
1,073.4% and an average compound return of 26.2% a year. During this time,
appreciation of holdings and new investments by shareholders have boosted net
assets from $50 million to more than $9 billion. Over this lengthy span, EMGF
has proven to be a rewarding investment for the patient shareholder. However,
its short-term results have reflected the volatile nature of its investment
universe. In the 42 quarters that the fund has been in operation, it has
recorded 30 increases and 12 declines; the average quarterly gain has been
12.5%; the average decline, 7.9%.
<TABLE>
<CAPTION>
<S> <C>
6-MONTH RESULTS
With Dividends Reinvested (7-1-96 - 12/31/96)
---------------------------------------------
EMGF.................................. +0.01%
MSCI EMERGING MARKETS
FREE INDEX............................ -4.19
</TABLE>
A CLOSER LOOK AT THE FIRST HALF
During the fiscal half-year, three markets where EMGF has a significant
exposure registered double-digit losses in U.S. dollar terms: South Korea
(-27.6%), India (-22.1%) and South Africa (-11.8%). Together these three
markets account for about 15% of net assets. The impact of losses in many of
our holdings in these countries was offset by gains among our holdings in other
markets that did well, including Brazil and Russia.
The Brazilian market, our largest single area of concentration (accounting for
about 15% of net assets) posted a six-month increase of 11.0% in dollar terms.
The portfolio's two largest individual holdings --Telebras (Brazil's phone
monopoly) and Eletrobras (an electric utility holding company) -- rose 9.9% and
30.6%, respectively. Between them, these two securities account for nearly 7%
of net assets.
The fund's two biggest gainers for the six-month period were telephone
companies serving major Russian cities: St. Petersburg Telephone Network
(+124.8%) and Moscow City Telephone Network (+124.0%). The third-biggest gainer
was Abacan (+107.1%), a Canadian-based oil company that operates in Russia.
Abacan accounted for 0.5% of net assets on December 31, while the two Russian
phone stocks between them also accounted for about 0.5%.
Although the price increases recorded by a few of our Russian investments were
certainly spectacular, it should be emphasized that Russia's equity market and
the infrastructure supporting it are at an early stage of development, and
share prices tend to fluctuate widely. While Russia offers many excellent
longer term investment opportunities, it may also present us with some
disappointments and unpleasant surprises along the way.
During the July-December period, we added to our holdings in Russia as well as
in Eastern Europe, Latin America and Africa, while reducing our exposure in the
Asia-Pacific region. On December 31, the fund was widely diversified, with
investments in more than 400 companies domiciled in over 30 countries.
EXTENSIVE RESEARCH
The list of our ten largest holdings (page 6) is dominated by
infrastructure-related investments, mainly phone companies and other
government-run enterprises that are in various stages of privatization.
However, many of the additions made to the portfolio in recent years -- and in
the first half of fiscal '97 -- were comparatively small, rapidly growing firms
in electronics and other industries generally unrelated to a country's
infrastructure. We expect this trend to continue.
In our search for the best investment opportunities, we draw extensively on the
global research capabilities of the fund's adviser, Capital International and
its affiliates. The Capital organization maintains one of the industry's most
extensive investment intelligence networks. It employs nearly 200 portfolio
counselors and analysts representing 31 nationalities who speak a total of 37
languages and travel the world regularly, studying companies and gathering
information on which our buy and sell decisions are made. More than 30 research
analysts are dedicated primarily to the developing countries. We believe
Emerging Markets Growth Fund's record to date demonstrates that this intensive
research effort can add value and give the fund an important competitive edge.
Sincerely,
Walter P. Stern
Chairman
Nancy Englander
President
February 7, 1997
Percent Change in Key Markets/1/
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended 12/31/96
-------------------------
Expressed in Expressed in
U.S. Dollars Local Currency
------------ --------------
Argentina +4.8% +4.8%
Brazil +11.0 +14.8
Chile -15.0 -12.1
China (Free)2 +20.6 +20.6
Colombia +7.9 +1.3
Czech Republic +0.6 -0.5
Greece +1.8 +4.3
Hungary +17.4 +26.4
India -22.1 -20.8
Indonesia +9.1 +10.7
Israel +5.1 +5.9
Jordan +7.9 +8.0
Malaysia +8.0 +9.3
Mexico (Free)2 +2.6 +6.6
Pakistan -28.6 -18.3
Peru -8.5 -3.2
Philippines (Free)2 -5.0 -4.7
Poland +4.5 +9.9
Portugal +9.5 +8.4
South Africa -11.8 -4.7
South Korea -27.6 -24.5
Sri Lanka +0.7 +2.9
Taiwan +2.4 +2.3
Thailand -36.3 -35.7
Turkey +0.3 +33.1
Venezuela +47.8 +49.9
Emerging Markets +0.01
Growth Fund
</TABLE>
1 With gross dividends reinvested. All indexes are compiled by Morgan Stanley
Capital International and are unmanaged.
2 The fund is invested in the "free" Chinese, Mexican and Philippine stock
markets, which consist of securities that can be purchased by investors other
than resident nationals.
EMGF Ranked #1
Emerging Markets Growth Fund's investment results have outpaced every other
U.S.-registered closed-end fund for the 10 years ended December 31, 1996,
according to Lipper Analytical Services. Lipper ranked EMGF #1 out of 67 such
funds. For the five years ended December 31, EMGF ranked 28th out of 273
closed-end funds; and for one year, 126th out of 506. This Lipper universe
includes several different types of closed-end funds; some invest in equities,
others in bonds. Most are focused on the industrialized countries. Some of
these funds concentrate on U.S. securities, while others invest internationally
or on a global basis.
Here are the total returns and average annual compound returns with all
distributions reinvested for periods ended December 31, 1996 -- 10 years:
+949.57%, or +26.50% a year; 5 years: +106.31%, or +15.59% a year; 12 months:
+16.37%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. 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. 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Where the Fund's Assets Are Invested
Market Value
Percent of Net Assets MSCI of Holdings
------------------------- EMF Index /1/ 12/31/96
12/31/95 6/30/96 12/31/96 12/31/96 (in thousands)
-------- ------- -------- ------------- --------------
ASIA/PACIFIC
India.............................. 7.0% 7.7% 6.6% 5.4% $593,117
Philippines........................ 7.3 6.4 6.4 3.4 577,804
South Korea........................ 7.8 5.8 4.7 4.3 429,120
Malaysia........................... 4.2 4.4 4.5 16.6 408,399
Indonesia.......................... 6.4 4.5 4.1 5.5 374,692
Taiwan............................. 2.3 2.8 3.5 8.9 316,848
Thailand........................... 4.9 3.7 2.1 4.8 189,239
China.............................. 1.4 1.2 1.4 .6 124,909
Hong Kong.......................... 1.0 .9 .6 * 58,606
Pakistan........................... 1.1 .9 .5 .6 45,322
Sri Lanka.......................... .2 .1 .1 .1 8,257
Vietnam............................ .1 .1 .1 * 6,206
---- ---- ---- ---- ----------
43.7 38.5 34.6 50.2 3,132,519
---- ---- ---- ---- ----------
LATIN AMERICA
Brazil............................. 15.5 14.8 15.2 12.3 1,374,087
Mexico............................. 9.6 10.3 9.9 8.1 894,167
Argentina.......................... 8.2 5.9 5.9 3.4 529,030
Peru............................... 1.9 2.3 3.2 1.0 289,895
Chile.............................. 2.2 1.8 1.8 3.6 164,941
Venezuela.......................... .1 .5 .5 1.1 48,577
Ecuador........................... .6 .2 .4 * 33,252
Panama............................. .8 .8 .3 * 25,734
Colombia........................... .4 .3 .3 .6 23,594
---- ---- ---- ---- ---------
39.3 36.9 37.5 30.1 3,383,277
---- ---- ---- ---- ---------
EASTERN EUROPE
Russia and former republics of the
Soviet Union /4/.................. 1.4 3.7 4.3 * 388,348
Republic of Croatia................ - .3 .6 * 53,029
Poland............................. .1 .5 .5 0.5 43,933
Bulgaria........................... - - .4 * 39,975
Hungary............................ .4 .4 .4 .4 32,099
Czech Republic..................... .1 .3 .3 1.3 30,963
---- ---- ---- ---- ----------
2.0 5.2 6.5 2.2 588,347
---- ---- ---- ---- ----------
OTHER MARKETS
South Africa ...................... 2.8 3.5 4.1 10.9 373,652
Turkey............................. 1.1 1.6 2.0 1.4 180,698
Greece............................. 1.4 1.1 1.0 1.1 92,078
Portugal........................... .3 .5 .6 2.0 58,761
Ghana.............................. .3 .4 .4 * 33,920
Morocco............................ .2 .2 .2 * 18,245
Mauritius.......................... .1 .1 .1 * 5,679
Israel............................. - - - 2.0 -
Jordan............................. - - - .1 -
United States...................... .1 - - * 2,531
---- ---- ---- ---- ----------
6.3 7.4 8.4 17.5 765,564
---- ---- ---- ---- ----------
Multi-National..................... 1.1 1.8 2.3 202,838
---- ---- ---- ----------
Other/5/........................... 1.0 .8 .5 45,945
---- ---- ---- ----------
Cash & Equivalents................. 6.6 9.4 10.2 923,709
---- ---- ---- ----------
TOTAL.............................. 100.0% 100.0% 100.0% 100.0% $9,042,199
====== ====== ====== ====== ===========
/1/ An asterisk indicates that the market is not included in the index. Source: Morgan Stanley Capital International Perspective.
/2/ In September 1996, South Korea's weighting in the Emerging Markets Free Index was increased to reflect 50% of that country's
market capitalization instead of 20%.
/3/ In September 1996, Taiwan was added to the Emerging Markets Free Index at 50% of its market capitalization.
/4/ Includes investments in companies incorporated outside the region which have significant operations in the region.
/5/ Includes investments in markets where the holdings represent a percentage of net assets of less than .05%. Also includes
stocks in initial period of aquisition.
</TABLE>
HERE IS A BRIEF OVERVIEW OF THE INVESTMENT LANDSCAPE
IN THE MARKETS THAT CONSTITUTE THE FUND'S
THREE LARGEST AREAS OF CONCENTRATION:
BRAZIL
We believe the Brazilian economy generally remains sound. Inflation and
the value of the real appear to be relatively stable. The upswing in stock
prices in calendar 1996 was driven by higher corporate earnings, by growing
investor interest in small capitalization issues and by further progress toward
the sale of government-owned assets. In our view, the Brazilian market might
have been even stronger had it not been for concern that President Cardoso's
efforts to amend the constitution to permit him a second term in office could
divert attention away from the task of fostering the country's economic
progress.
As stock prices moved higher during the July-December period, we took some
profits in several of our investments in Brazil, but at 15% of net assets it
remains an important market to us. We hold positions in 36 Brazilian companies
in addition to Telebras and Eletrobras. Those two stocks have been very
successful investments for the fund in the 1990s; their combined market value
on December 31 was approximately three times original acquisition cost. Both
Telebras and Eletrobras currently are benefiting from new freedom to increase
tariffs, and both are in the midst of efforts to privatize subsidiaries.
MEXICO
This is the fund's second-largest area of concentration, with about 10% of
net assets. From July through December, the Mexican market edged upward by 2.6%
in dollar terms. Currently EMGF owns shares in 16 Mexican companies. By far our
largest Mexican investment (and our third-largest holding overall) is Telefonos
de Mexico (Telmex); it fell in price for the six months by 1.7%, largely
because of fears over the impact of competition for long-distance business. We
feel those concerns are exaggerated and took advantage of the price weakness
during the period to add to our position in the stock. On December 31, our
holdings in Telmex accounted for 2.9% of net assets.
The upturn that has taken place in the Mexican economy since the 1995 peso
crisis has been driven by a cheaper currency, by productivity gains in the
manufacturing sector and by higher oil prices. The retail segment of the
economy remains stagnant, with consumers struggling to pay off debt with wages
that generally have declined in real terms. As in some other parts of Latin
America, the health of the banking system is a lingering concern, although
acquisitions and mergers are resulting in a net infusion of capital and in some
improvement in bank balance sheets. Politically, Mexico appears to be heading
toward more plurality in its government, with the PRI losing some of its
strength and power shifting increasingly to the states and municipalities.
INDIA
In India, our third-largest area of concentration, the stock market
continued to disappoint during the fiscal half-year. Our holdings there
represent about 7% of net assets and reflect investments in 34 companies.
Nearly all of them declined in price for the six months. Our largest position
in India is the phone monopoly, Mahanagar Telephone Nigam (MTNL), which fell
11.2% during the period. MTNL is the fund's fourth-largest holding, with a
market value on December 31 approximately 17% above acquisition cost.
MTNL and most other Indian stocks in EMGF's portfolio rose sharply earlier
in the 1990s when outside investors were first permitted to participate in the
local equity market. Since then, faced with a slowing economy and political
instability, the market has moved lower. As time goes by, global investment
advisers are likely to increase their presence in India, and this should have
the effect of strengthening the country's financial infrastructure and forcing
new efficiencies on the market. Meantime, share prices in India have fallen to
the extent that we believe many strong, established companies are now
substantially undervalued.
EMERGING MARKETS GROWTH FUND
Investment Portfolio, December 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
(Unaudited)
Equity-Type Securities
----------------------------------
Common Preferred Convertible Percent of
INDUSTRY DIVERSIFICATION Stocks Stocks Bonds Bonds Net Assets
- --------------------------------------------------------------------------------------------------------------
Telecommunications 10.93% 5.19% - 0.33% 16.45%
Utilities: Electric & Gas 8.38 2.06 0.03 - 10.47
Banking 7.71 0.46 0.27 - 8.44
Energy Sources 5.61 0.76 0.04 - 6.41
Beverages & Tobacco 5.43 0.76 - - 6.19
Building Materials & Components 2.45 0.27 0.04 - 2.76
Equity Common Trusts 2.57 0.14 - - 2.71
Other Industries 27.79 2.89 0.62 5.06 36.36
----- ----- ----- ----- -----
70.87% 12.53% 1.00% 5.39% 89.79%
===== ===== ==== ==== =====
Short-Term Securities 10.53
Excess of liabilities over cash and receivables (0.32)
------
Net Assets 100.00 %
=======
</TABLE>
*****
TEN LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
<S> <C> <C>
Percent of Gain/Loss
for the Year Ended
Percent of 12/31/96*
Net Assets (in U.S. Dollars)
- -----------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras (Telebras) 3.67% +9.87%
Centrais Eletricas Brasileiras (Eletrobras) 3.04 +30.63
Telefonos de Mexico 2.91 -1.69
Mahanagar Telephone Nigam 1.56 -11.19
Companhia Energetica de Minas Gerais-CEMIG 1.38 +29.05
Telecomunicacoes de Sao Paulo SA-Telesp 1.34 +5.91
LUKoil Holding 1.33 +9.04
Sasol 1.22 +9.25
Philippine Long Distance Telephone 1.17 -10.92
San Miguel 1.12 +27.87
</TABLE>
* The percent change reflects the increase or decrease in the market price per
share of equity securities held in the portfolio for the entire period. The
actual gain or loss on the total position in the fund may differ from the
percentage shown.
EMERGING MARKETS GROWTH FUND, INC.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investment Portfolio - December 31, 1996
EQUITY - TYPE SECURITIES Number of Shares Market Percent
(common and preferred stocks or Principal Value of Net
and convertible debentures) Amount (000) Assets
- ---------------------------------------------------------------- ----------------- ---------- ----------
ARGENTINA - 4.90%
Banco Bansud SA, Class B (1) 762,436 $9,136 .10
Banco de Galicia y Buenos Aires SA, Class B
(American Depositary Receipts) 2,588,318 62,767
Banco de Galicia y Buenos Aires SA, .86
7.00% convertible bond August 1, 2002 12,571,000 14,834
Banco Frances del Rio de la Plata SA 740,600 6,926
Banco Frances del Rio de la Plata SA .79
(American Depositary Receipts) 2,342,142 64,409
BI SA (acquired 10/21/93, cost: $6,130,000) (2) 6,130,000 6,130 .07
Compania Naviera Perez Companc SACFIMFA, Class B 8,774,348 61,696
Compania Naviera Perez Companc SACFIMFA, Class B .69
(American Depositary Receipts) 56,100 789
Disco SA (American Depositary Receipts) (1) 753,000 21,084 .23
Hidroneuquen SA (acquired 11/11/93, cost: $29,086,000)(1)(2) 29,086,231 29,086 .32
IRSA Inversiones y Representaciones SA 26,900 86
IRSA Inversiones y Representaciones SA .03
(Global Depositary Receipts) 90,849 2,884
Nortel Inversora SA, Class B, preferred
(American Depositary Receipts)
(acquired 11/24/92, cost:$6,180,000) (2) 893,187 11,290
Nortel Inversora SA, Class B, preferred
(American Depositary Receipts) .30
(acquired 2/27/92, cost: $23,049,000) (2) 1,676,260 15,924
Quilmes Industrial,non-voting, preferred
(American Depositary Shares) 2,150,400 19,622 .22
Sociedad Comercial del Plata SA (1) 3,638,580 9,317 .10
Telecom Argentina STET-France Telecom SA, Class B 2,800,000 11,538
Telecom Argentina STET-France Telecom SA, Class B .19
(American Depositary Shares) 136,200 5,499
Telefonica de Argentina SA, Class B 4,910,000 12,867
Telefonica de Argentina SA, Class B .80
(American Depositary Shares) 2,287,900 59,199
YPF SA, Class D (American Depositary Receipts) 701,800 17,721 .20
---------- ----------
442,804 4.90
---------- ----------
BRAZIL - 14.53%
Aracruz Celulose SA, Class B, preferred nominative
(American Depositary Receipts) 526,200 4,341 .05
Banco Bradesco SA, preferred nominative 3,497,345,005 25,349 .28
Banco Itau SA, preferred nominative 34,758,700 15,056 .17
Banco Nacional SA, preferred nominative (1) 215,940,814 -
Banco Nacional SA, ordinary nominative (1) 2,500,000 - -
Brasmotor SA, preferred nominative 141,951,974 39,420 .44
Centrais Eletricas Brasileiras SA - ELETROBRAS, preferred nominative
(American Depositary Receipts) 7,702,263 142,492
Centrais Eletricas Brasileiras SA - ELETROBRAS, ordinary nominative 16,480,000 5,901
Centrais Eletricas Brasileiras SA - ELETROBRAS, ordinary nominative
(American Depositary Receipts) 7,117,971 126,344 3.04
CESP-Companhia Energetica de Sao Paulo,
preferred nominative (1) 154,300,000 6,017
CESP-Companhia Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts) (1) 3,891,976 44,271
CESP-Companhia Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts) .77
(acquired 8/30/94, cost: $2,853,000) (1)(2) 167,104 1,901
CESP-Companhia Energetica de Sao Paulo, ordinary
nominative (1) 400,767,854 17,436
COFAP-Companhia Fabricadora de Pecas,
preferred nominative (1) 285,116 2,196 .03
Companhia Cervejaria Brahma, preferred nominative 89,222,437 48,781
.54
Companhia Cervejaria Brahma, ordinary nominative 224,483 130
Companhia Cimento Portland Itau, preferred nominative 70,447,100 24,748 .27
Companhia de Tecidos Norte de Minas-COTEMINAS,
preferred nominative 52,098,500 16,629 .18
Companhia Energetica de Minas Gerais-CEMIG,
preferred nominative (American Depositary Receipts) 3,299,629 111,775
Companhia Energetica de Minas Gerais-CEMIG,
preferred nominative (American Depositary Receipts) 1.38
(acquired 9/22/94, cost: $9,501,000) (2) 373,906 12,666
Companhia Siderurgica Belgo-Mineira, preferred nominative 13,001,892 839
.01
Companhia Siderurgica Belgo-Mineira, ordinary nominative 2,086,180 135
Companhia Suzano de Papel e Celulose, Class B,
preferred nominative(American Depositary Receipts) 246,633 1,850 .02
Companhia Vale do Rio Doce, preferred nominative
(American Depositary Receipts) 911,734 17,551 .19
Companhia Vidraria Santa Marina, ordinary nominative 2,133,072 6,673 .07
Consorcio Real Brasileiro de Administracao SA, Class F,
preferred nominative 679,000 1,320 .02
Copel, ordinary nominative (1) 154,286,000 1,634 .02
Dixie Toga, preferred nominative 1,710,000 1,300 .01
Eletropaulo-Eletricidade de Sao Paulo SA,
preferred nominative, Class B (1) 59,318,000 8,764 .10
GP Capital Partners, LP
(acquired 1/28/94, cost: $25,777,000) (1)(2)(3) 27,000 33,889 .38
Industrias Klabin de Papel e Celulose SA,
preferred nominative (American Depositary Receipts) 315,842 2,882 .03
Iochpe-Maxion SA, (American Depositary Receipts) 163,004 204 -
Lojas Americanas SA, preferred nominative 279,219,055 3,682
Lojas Americanas SA, ordinary nominative 53,594,800 709 .05
Lojas Arapua, preferred nominative
(Global Depositary Receipts) 104,000 1,924 .02
Mesbla SA, preferred nominative (1) 111,674,640 537 .01
Metal Leve SAIC, preferred nominative (1) 157,884,489 1,094 .01
Multicanal Participacoes SA, preferred nominative
(American Depositary Shares) (1) 930,000 11,916 .13
OSA SA-Organizacao, Sistemas e Aplicacoes,
preferred nominative 90,000,000 562 .01
Petroleo Brasileiro SA-PETROBRAS, preferred nominative 428,960,000 68,335 .76
Refrigeracao Parana SA, preferred nominative
(American Depositary Receipts) 410,000 4,561 .05
Rhodia-Ster SA (Global Depositary Receipts) 113,100 297 -
SA White Martins, ordinary nominative (1) 13,283,749,000 19,180 .21
Sadia Concordia SAIC, preferred nominative 1,163,000 896 .01
Souza Cruz SA, ordinary nominative 1,279,000 8,396 .09
Telecomunicacoes Brasileiras SA (Telebras),
preferred nominative 59,500,000 4,582
Telecomunicacoes Brasileiras SA (Telebras), preferred
nominative (American Depositary Receipts) 4,282,846 327,638
Telecomunicacoes Brasileiras SA (Telebras),
preferred nominative,blocked (1) 552,090 21 3.67
Telecomunicacoes de Minas Gerais SA,
ordinary nominative 64,122 8 -
Telecomunicacoes de Sao Paulo SA-Telesp,
preferred nominative 418,210,091 90,574
Telecomunicacoes de Sao Paulo SA-Telesp, 1.34
ordinary nominative (1) 140,648,944 30,408
Usinas Siderurgicas de Minas Gerais SA, preferred
nominative(American Depositary Receipts) (acquired
9/1/93; cost: $9,774,000) (2) 1,550,305 15,697 .17
---------- ----------
1,313,511 14.53
---------- ----------
CHILE - 1.82%
CAP SA 1,347,599 2,637 .03
Chilgener SA (American Depositary Receipts) 1,160,357 24,223 .27
Compania de Telecomunicaciones de Chile SA
(American Depositary Receipts) 348,700 35,262 .39
CTI Compania Tecno Industrial SA 89,965,285 2,037 .02
Empresa Nacional de Electricidad SA
(American Depositary Receipts) 1,458,009 22,599 .25
Enersis SA (American Depositary Receipts) 2,449,482 67,973 .75
Forestal Terranova SA 550,000 558 .01
Invercap SA 1,100,000 739 .01
Sociedad Quimica y Minera de Chile SA, Class A 1,277,900 5,936
Sociedad Quimica y Minera de Chile SA, Class B .09
(American Depositary Receipts) (1) 55,000 2,977
---------- ----------
164,941 1.82
---------- ----------
CHINA - 1.38%
China North Industries Investment Ltd.
(acquired 9/30/94, cost: $5,727,000) (2) 5,500,000 2,310 .03
China Yuchai International Ltd. 1,015,500 4,824 .05
Guang Dong Electric Power Development Co. Ltd., Class B 4,084,675 3,612 .04
Harbin Power Equipment Co. Ltd., Class H 41,433,000 6,750
Harbin Power Equipment Co. Ltd., Class H
(American Depositary Receipts) .09
(acquired 11/30/94, cost: $3,336,000) (2) 99,000 1,613
Huaneng Power International, Inc., Class N
(American Depositary Receipts) (1) 1,393,100 31,345 .35
Shanghai Diesel Engine Co. Ltd., Class B (1) 6,085,200 2,884 .03
Shanghai Petrochemical Co. Ltd., Class H 95,766,600 29,099
Shanghai Petrochemical Co. Ltd., Class H .32
(American Depositary Receipts) 7,000 206
Tingyi (Cayman Islands) Holding Corp. (1) 67,261,500 17,611 .19
Yizheng Chem Fibre Class H 61,366,000 14,917 .17
Zhenhai Refining & Chemical Co. Ltd., Class H (1) 25,710,000 9,474
Zhenhai Refining & Chemical Co. Ltd., Class H .11
3.0% converible bonds December 19, 2003 (1) 250,000 264
---------- ----------
124,909 1.38
---------- ----------
COLOMBIA - 0.24%
Banco de Colombia SA 52,308,556 21,576 .24
Comunicacion Celular SA, Class B, warrants, expire
November 15, 2003 (acquired 12/14/95; cost $22,000)(1)(2) 3,000 23 -
---------- ----------
21,599 .24
---------- ----------
REPUBLIC OF CROATIA - 0.59%
Pliva (Global Depositary Receipts) 1,000,555 53,029 .59
---------- ----------
53,029 .59
---------- ----------
CZECH REPUBLIC - 0.34% ---------- ----------
SPT Telecom (1) 248,400 30,963 .34
---------- ----------
ECUADOR - 0.19%
La Cemento Nacional CA (Global Depositary Receipts) 76,330 17,174 .19
---------- ----------
GHANA - 0.38%
Ashanti Goldfields Co. Ltd. (1) 691,111 8,553
Ashanti Goldfields Co. Ltd. (Global Depositary Receipts) 946,500 11,713
Ashanti Goldfields Co. Ltd., .38
5.50% exchangable note March 15, 2003 $15,970,000 13,654
---------- ----------
33,920 .38
---------- ----------
GREECE - 1.02%
Aluminum de Grece SAIC 305,840 11,410 .13
Hellenic Bottling Co. SA 1,557,645 49,960
.62
Hellenic Telecommunications Organization (OTE) 363,000 6,208
Intracom SA, preferred 9,100 139
.09
Intracom SA, ordinary 357,510 8,051
Katselis Sons SA, ordinary 45,000 244 -
Michaniki SA, preferred 252,540 1,675
.08
Michaniki SA, ordinary 652,220 5,055
Titan Cement Co. SA, ordinary 171,522 9,336 .10
---------- ----------
92,078 1.02
---------- ----------
HONG KONG - 0.65%
China-Hongkong Photo Products Holdings Ltd. 11,996,000 4,033 .04
Consolidated Electric Power Asia Ltd. 7,846,800 18,415
Consolidated Electric Power Asia Ltd.(American Depositary .22
Shares) (acquired 11/29/93, cost: $868,000) (2) 53,600 1,258
New World Infrastructure Ltd. (1) 11,468,497 33,513 .37
Siu-Fung Ceramics Holdings Ltd. 7,869,409 435
Siu-Fung Ceramics Holdings Ltd., rights, expire .01
December 2, 1996 (1) 3,147,763 -
Tian An China Investments Co. Ltd. 6,637,500 952 .01
---------- ----------
58,606 .65
---------- ----------
HUNGARY - 0.35%
Gedeon Richter Ltd. 428,000 25,028 .27
Graboplast Textiles Muborgyarto Rt. 15,200 515 .01
MOL Magyar Olaj-es Gazipari Rt.
(Global Depositary Receipts)
(acquired 11/22/95; cost: $4,618,000) (2) 570,100 6,556 .07
---------- ----------
32,099 .35
---------- ----------
INDIA - 6.55%
Asian Paints (India) Ltd. 564,600 4,548 .05
Bajaj Auto Ltd. 1,614,700 40,424
Bajaj Auto Ltd.
(Global Depositary Receipts) 36,600 1,244 .46
Bharat Forge Corp. Ltd. 3,250 8 -
Bharat Petroleum Corp. Ltd. 2,435,200 19,584 .22
Bombay Dyeing and Manufacturing Co. Ltd.
(Global Depositary Receipts) 90,000 270 -
East India Hotels Ltd. 997,165.50 11,492 .13
Essar Steel Ltd. (Formerly Essar Gujarat Ltd.) 3,367,000 1,912 .02
Flex Industries Ltd. 393,800 881
.01
Flex Industries Ltd., units (equivalent to 1 shares + 1/2 157,520 353
warrant)
Grasim Industries Ltd. 545,300 6,345
Grasim Industries Ltd. .27
(Global Depositary Receipts) 1,160,965 17,705
Hindalco Industries Ltd. 1,668,875 30,581
.57
Hindalco Industries Ltd. (Global Depositary Receipts) 869,280 21,406
Hindustan Lever Ltd. 514,500 11,369 .13
Housing Development Finance Corp. Ltd. 272,800 16,879 .19
India Fund, Class B 1,949,968 2,809 .03
Indian Aluminum Co., Ltd. 1,288,600 5,560
.13
Indian Aluminum Co., Ltd. (Global Depositary Receipts) 1,308,771 6,610
Indian Rayon and Industries Ltd. 1,019,800 8,472
Indian Rayon and Industries, Ltd. .13
(Global Depositary Receipts) 398,000 3,383
Indo Gulf Fertilisers and Chemicals Corp. Ltd. 2,155,200 1,993
Indo Gulf Fertilisers and Chemicals Corp. Ltd. .04
(Global Depositary Receipts) 1,770,900 1,594
I.T.C. Ltd. 3,586,600 33,162 .37
Madras Cements Ltd. 22,000 4,923 .05
Mahanagar Telephone Nigam Ltd. 21,971,000 141,352 1.56
Mahindra & Mahindra Ltd. 2,481,516 22,216
Mahindra & Mahindra Ltd.
(Global Depositary Receipts) 958,333 11,261
Mahindra & Mahindra Ltd.,5.0% convertible bond July 9, 2001 .44
(acquired 7/3/96; cost: $5,952,000)(2) $5,954,000 6,174
Master Gain Scheme (1) 870,500 230 -
Max India Ltd. 453,046 2,785
Max India Ltd., 12.50% nonconvertible debenture Part B,
January 4, 1998 (1) INR82,372 576
.04
Max India Ltd., 0.00% fully convertible debenture Part B, INR41,186 317
January 1997
Max India Ltd., warrants, expire January 1998 82,372 -
Motor Industries Co. Ltd. 187,355 29,872 .33
Nicholas Piramal India Ltd. 325,000 1,455 .02
Nippon Denro Ispat Ltd., 3.00% convertible Eurobonds
April 1, 2002 $1,750,000 919
Nippon Denro Ispat Ltd., 3.00% convertible bond .05
April 1, 2001,(acquired 3/1/94, cost: $6,779,000) (2) $7,000,000 3,675
Ranbaxy Laboratories Ltd. 1,216,150 19,901
Ranbaxy Laboratories Ltd. .39
(Global Depositary Receipts) 874,525 14,867
Raymond Woollen Mills Ltd. 931,800 2,971
Raymond Woollen Mills Ltd. .10
(Global Depositary Receipts) 1,083,000 6,228
SCICI Ltd. 7,941,900 5,665
SCICI Ltd., 3.50% convertible Eurobonds .11
April 1, 2004 $3,620,000 3,760
Sundaram Finance Ltd. 153,000 1,241 .01
Tata Engineering and Locomotive Co. Ltd. 1,004,400 9,552
Tata Engineering and Locomotive Co. Ltd. .51
(Global Depositary Receipts) 3,415,261 36,287
United Phospherous Ltd. 1,227,800 6,275
United Phospherous Ltd. .09
(Global Depositary Receipts) 443,264 2,216
Videocon International Ltd. 20,100 21
Videocon International Ltd.
(Global Depositary Receipts) 62,200 67 -
Videsh Sanchar Nigam Ltd. 250,000 6,643 .07
Zee Telefilms Ltd. 934,200 2,247 .03
---------- ----------
592,280 6.55
---------- ----------
INDONESIA - 4.15%
Asia Pacific Resources International Holdings Ltd. (1) 1,217,000 6,846 .08
PT Bank Internasional Indonesia 6,138,880 6,045 .07
PT Gudang Garam 1,470,000 6,351 .07
PT Hanjaya Mandala Sampoerna 12,890,000 68,790 .76
PT Indofood Sukses Makmur 38,179,500 76,003 .84
PT Indo-Rama Synthetics 23,634,000 23,023 .25
PT International Nickel Indonesia 5,069,500 11,434 .12
PT Jaya Real Property 6,857,000 9,584 .11
PT Kabelmetal Indonesia 1,200,000 534
.01
PT Kabelmetal Indonesia, rights, expire February 19, 1997 1,200,000 25
(1)
PT Kalbe Farma 569,000 651 .01
PT Lippo Bank 34,215,000 33,331 .37
PT Mayora Indah 10,380,000 4,836 .05
PT Modern Photo Film Co. 5,049,900 16,041 .18
PT Mulia Industrindo 9,138,286 9,483 .11
PT Pabrik Kertas Tjiwi Kimia 1,640,712 1,633 .02
Perusahaan Perseroan (Persero)PT Indonesian
Satellite Corp. 300,000 826
Perusahaan Perseroan (Persero)PT Indonesian .47
Satellite Corp. (American Depositary Receipts) 1,510,600 41,353
PT PP London Sumatra (1) 5,000,000 12,918 .14
PT Praxair Indonesia (1) 142,700 32 -
PT Ramayana Lestari Sentosa (1) 3,070,000 6,632 .07
PT Sorini Corp. 250 - -
PT Tambang Timah (Persero) 11,073,500 20,168
PT Tambang Timah, Class B(Global Depositary Receipts) 836,270 15,116 .39
PT Tigaraksa Satria 2,173,140 3,037 .03
---------- ----------
374,692 4.15
---------- ----------
Malaysia - 4.52%
Arab-Malaysian Finance Bhd. 1,805,000 10,081 .11
Commerce Asset-Holding Bhd. 1,023,000 7,699 .09
Easterm & Oriental Bhd. 4,000,000 7,764 .09
Genting Bhd. 2,481,500 17,104 .19
Genting International PLC 8,972,000 21,533 .24
Guinness Anchor Bhd. 3,446,000 8,463 .09
Hap Seng Consolidated Bhd. 659,000 1,501 .02
Hong Leong Credit Bhd. 1,593,000 10,033 .11
IJM Corp. Bhd. 8,075,714 19,034 .21
IOI Corp. Bhd. 11,517,000 17,701 .20
Leader Universal Holdings Bhd. 8,920,000 18,727 .21
Malayan Banking 10,000 111 -
Malaysian Airline System Bhd. 3,520,000 9,133 .10
Nestle (Malaysia) Sdn. Bhd. 4,765,000 38,316 .42
New Straits Times Press (Malaysia) Bhd 3,769,000 21,797 .24
O.Y.L. Industries Bhd. 1,281,980 13,457 .15
Renong Bhd. 26,337,000 46,738
Renong Bhd., 2.50% convertible bond January 15, 2005
(acquired 10/20/94, cost:$2,554,000) (2) $2,550,000 2,961
Renong Bhd., 2.50% convertible Eurobonds .60
January 15, 2005 $2,000,000 2,323
Renong Bhd., warrants, expire November 21, 2000 (1) 2,189,500 1,075
Renong Bhd. Iculs, 4.00% May 21, 2001 3,503,200 1,471
Resorts World Bhd. 1,267,000 5,772 .06
Sime Darby Bhd. 16,217,000 63,917 .71
Sime UEP Properties Bhd. 3,335,000 8,587 .09
Technology Resources Industries Bhd. (1) 9,195,000 18,139 .20
UMW Holdings Bhd. 7,107,359 33,221
.39
UMW Holdings Bhd., warrants, expire January 26, 2000 (1) 692,159 1,741
---------- ----------
408,399 4.52
---------- ----------
MAURITIUS - 0.06% ---------- ----------
State Bank of Mauritius 10,927,000 5,679 .06
---------- ----------
MEXICO - 9.36%
Apasco, SA de CV 7,142,402 48,970 .54
Carso Global Telecom, SA de CV 2,734,800 6,493 .07
Cemex, SA de CV, Class A 2,956,762 10,587
Cemex, SA de CV, Class B 9,242,251 36,378
Cemex, SA de CV, ordinary participation certificates 9,505,620 34,216
Cemex, SA, Class A, ordinary participation certificates .96
(American Depositary Receipts)(acquired 6/14/93, cost: 1,183 8
$8,000) (2)
Cemex, SA de CV, Class B (American Depositary Receipts) 755,792 5,857
Cifra, SA de CV, Class A (1) 8,694,000 11,039
Cifra, SA de CV, Class B (1) 13,790,510 16,879
.64
Cifra, SA de CV, Class B (American Depositary Receipts) (1) 6,125,000 7,350
Cifra, SA de CV, Class C (1) 18,706,334 22,801
Corporacion Geo,SA de CV, Class B
(acquired 8/29/95; cost:$215,000) (1)(2) 60,568 298 -
Grupo Carso, SA de CV, Class A (1) 2,645,000 14,004 .16
Grupo Embotellador de Mexico, SA de CV, ordinary
participation certificates (Global Depositary Receipts) (1) 858,400 7,189 .08
Grupo Financiero Banamex Accival, SA de CV, Class B (1) 31,893,850 67,303
Grupo Financiero Banamex Accival, SA de CV, Class L (1) 12,656,067 24,907
Grupo Financiero Banamex Accival, SA de CV,
11.00% convertible bond July 15, 2003
(acquired 7/12/96; cost:$4,063,000) (1)(2) $4,175,000 4,264
Grupo Financiero Banamex Accival, SA de CV, 1.07
7.00% convertible Eurobonds December 15, 1999 $103,000 97
Grupo Financiero Bancomer, SA de CV., Series L
33.08% convertible subordinated debentures May 16, 2002 MXN5,750,000 770 .01
Grupo Industrial Maseca, SA de CV, Class B
(American Depositary Receipts) 5,700 109 -
Grupo Televisa, SA, ordinary participation certificates (1) 481,000 6,168
Grupo Televisa, SA, ordinary participation certificates 1.02
(American Depositary Receipts) (1) 3,361,499 86,138
Kimberly-Clark de Mexico, SA de CV, Class A 2,287,000 45,154
.52
Kimberly-Clark de Mexico, SA de CV, Class B 70,000 1,381
Panamerican Beverages Inc., Class A 2,031,400 95,222 1.05
Sigma Alimentos, SA de CV, Class B 566,100 5,053 .06
Telefonos de Mexico, SA de CV, Class A 9,137,500 15,105
Telefonos de Mexico, SA de CV, Class L 13,706,250 22,589
Telefonos de Mexico, SA de CV, Class L 2.91
(American Depositary Receipts) 6,843,575 225,838
Tubos de Acero de Mexico, SA (1) 595,600 9,415
Tubos de Acero de Mexico, SA .27
(American Depositary Receipts) (1) 904,300 14,356
---------- ----------
845,938 9.36
---------- ----------
MOROCCO - 0.20%
Banque Commerciale du Maroc 35,443 2,819 .03
Cimenterie de l'Oriental, Class A (1) 92,503 4,255 .04
ONA SA 56,000 3,339 .04
Societe des Brasseries du Maroc 20,500 3,284 .04
Wafabank, Class A 72,000 4,548 .05
---------- ----------
18,245 .20
---------- ----------
PAKISTAN - 0.50%
Chakwal Cement Co. Ltd. (Global Depositary Receipts) (1) 891,111 891 .01
Engro Chemical Pakistan Ltd. 1,145,900 3,845 .04
Hub Power Co. Ltd. (Global Depositary Receipts) (1) 1,596,528 31,532 .35
Pakistan Telecommunication Corp.
(Global Depositary Receipts) 150,900 9,054 .10
---------- ----------
45,322 .50
---------- ----------
PERU - 1.92%
Cementos Lima SA 1,087,555 15,924 .18
Compania de Minas Buenaventura SA, Class A 1,462,584 10,651
Compania de Minas Buenaventura SA, Class B 111,975 925
Compania de Minas Buenaventura SA, Class B .21
(American Depositary Receipts) (1) 423,500 7,146
Credicorp Ltd. (1) 3,513,889 65,007 .72
Minsur SA-Trabajo 1,973,451 6,845 .08
Ontario-Quinta (acquired 8/15/94, cost: $12,900,000) (2) 12,571,524 15,904 .17
Telefonica del Peru, Class B (American Depositary Receipts) 2,711,000 51,170 .56
---------- ----------
173,572 1.92
---------- ----------
PHILIPPINES - 6.26%
Ayala Corp., Class B 33,818,740 36,704
.49
Ayala Corp., Class B (Global Depositary Shares) 772,464 7,338
Ayala Land, Inc., Class B 27,428,940 31,335 .35
Bacnotan Consolidated Industries, Inc. 493,131 1,615
Bacnotan Consolidated Industries, Inc., 5.50% convertible .06
bond June 21, 2004 (acquired 6/8/94, cost: $4,481,000) (2) $4,500,000 3,870
Bank of the Philippine Islands 2,306,300 13,964 .15
Benpres Holdings Corp.
(Global Depositary Receipts) (1) 2,293,210 16,626 .18
C&P Homes, Inc. 38,993,850 20,047 .22
Fil-Estate Land, Inc. 9,000,000 7,883 .09
Fortune Cement Corp. 22,579,000 11,393 .13
HI Cement Corp. 24,600,000 8,150 .09
International Container Terminal Services, Inc. 8,681,595 4,546
International Container Terminal Services, Inc., 6.00%
convertible bond February 19, 2000 (acquired 2/18/93, cost: .11
$4,000,000) (1)(2) $4,000,000 5,200
JG Summit Holdings, Inc., Class B 39,516,600 11,136
JG Summit Holdings, Inc., Class B
(Global Depositary Shares) 20,000 530
JG Summit Holdings, Inc., 3.50% convertible
Eurobonds December 23, 2003 $5,400,000 4,050
JG Summit Holdings, Inc.,
3.50% convertible bond December 23, 2003 .26
(acquired 12/9/93, cost: $9,870,000) (2) $9,870,000 7,402
Keppel Philippines Holdings, Inc., Class B (1) 272,084 31 -
Manila Electric Co., Class B 2,850,467 23,338 .26
Metropolitan Bank and Trust Co. 2,280,612 56,451 .62
Petron Corp. 7,589,062 2,572
Petron Corp. (Global Depositary Receipts) 309,543 4,334 .08
Philippine Airlines Inc. (1) 30,934,106 5,890 .07
Philippine Commercial International Bank, Inc. 1,066,200 14,008 .15
Philippine Long Distance Telephone Co., ordinary 86,250 4,746
Philippine Long Distance Telephone Co.
(American Depositary Receipts) 1,591,305 81,156
Philippine Long Distance Telephone Co., convertible preferred, 1.17
Series II (Global Depositary Receipts) 484,000 15,246
Philippine Long Distance Telephone Co., convertible
preferred, Series III (Global Depositary Shares) 87,000 4,437
Philippine National Bank (1) 919,071 10,937 .12
Pilipino Telephone Corp. (1) 3,095,100 2,622 .03
PR Holdings, Inc., subscription rights (aquired 7/8/92,
cost: $9,835,000) (1)(2) 2,236,600 2,822 .03
San Miguel Corp., Class B 23,048,048 101,812 1.12
SM Prime Holdings, Inc. 74,867,000 19,387 .21
Southeast Asia Cement Holdings, Inc. (1) 68,088,782 7,908 .09
Universal Robina Corp. 29,809,400 16,742 .18
---------- ----------
566,228 6.26
---------- ----------
POLAND - 0.49%
Bank Inicjatyw Gospodarczych BIG SA 5,237,365 7,314 .08
Bank Rozwoju Eksportu SA 574,000 17,235 .20
Kety SA (Zaklady Metali Lekkich)(1) 26,670 1,955 .02
Polifarb Wroclaw 1,294,778 7,324 .08
Zaklady Piwowarskie w Zywcu SA 217,611 10,105 .11
---------- ----------
43,933 .49
---------- ----------
PORTUGAL - 0.65%
Portugal Telecom ,SA 913,000 26,035
Portugal Telecom, SA (American Depositary Receipts) 951,500 26,880 .59
TELECEL - Comunicacoes Pessoais, SA (1) 87,800 5,608 .06
TVI-Televisao Independente, SA (1) 105,500 238 -
---------- ----------
58,761 .65
---------- ----------
RUSSIA AND FORMER REPUBLICS OF THE SOVIET UNION - 4.23%
Ao Torgovy Dom Gum (Russian Depoitary Trust Certificate) 280 7,840 .09
Gez Investments Holding Ltd.,Class A
(aquired 9/11/95,cost: $230,000) (1)(2) 2,870 390
Gez Investments Holding Ltd.,Class B .24
(aquired 9/11/95,Cost: $12,623,000) (1)(2) 157,793 21,420
Global Tele-Systems Ltd., warrants, expire February 2, 2001
(acquired 2/2/96, cost:$0) (1)(2) 1,944,444 8,944 .10
Irkutskenergo (Russian Depositary Trust Certificate) (1) 40 1,140 .01
JKX Oil & Gas PLC (1) 6,138,140 12,106
JKX Oil & Gas PLC 7.00% convertible bond June 30, 2001 .16
(acquired 6/6/96; cost: $2,000,000) (1)(2) 2,000,000 2,000
Kamaz (1) 3,615,000 4,392 .05
LUKoil Holding (Russian Depositary Trust Certificate) 60 3,488
1.33
LUKoil Holding (American Depositary Receipts) 2,519,900 117,175
Moscow City Telephone Network (MGTS) (Russian
Depositary Trust Certificate) 961 33,635 .37
Mosenergo Power Generation and Electrification
Amalgamation (Russian Depositary Trust Certificate) 1,900 19,190
Mosenergo Power Generation and Electrification .86
Amalgamation (American Depositary Shares) 1,921,900 58,618
New Century Capital Partners, LP
(acquired 12/7/95,cost: $13,243,000) (1)(2)(3) 13,125,000 13,243 .15
Nizhny-Non Svyaz (Russian Depositary Trust Certificate) 70 3,885 .04
Ramco Energy PLC 810,000 14,239 .16
RAO Gazprom (American Depositary Receipts)
(acquired 10/21/96, cost:$32,037,000) (1)(2) 1,909,800 33,899 .37
Russian Telecommunications Development Corp.
(acquired 12/22/93, cost: $3,800,000) (1)(2) 380,000 3,800
Russian Telecommunications Development Corp., .11
nonvoting ordinary(acquired 12/22/93, cost: $6,200,000)(1)(2) 620,000 6,200
St. Petersburg Telephone Network 12,913,020 13,559 .15
Star Mining Corp. NL (1) 19,740,000 1,646 .02
Xavier Corp. (1) 1,350,000 2,110 .02
---------- ----------
382,919 4.23
---------- ----------
SOUTH AFRICA - 4.13%
African Oxygen Ltd. 2,286,743 7,825 .08
Bidvest Group Ltd. 1,252,280 6,494 .07
Gold Fields of South Africa Ltd. 200,000 5,518 .06
Hudaco Industries 682,000 2,735 .03
International Pepsi-Cola Bottler Investments
(aquired 12/18/95,cost:$10,000,000) (1)(2)(3) 100,000 10,000 .11
Iscor Ltd. 33,949,251 24,249 .27
JD Group 2,083,078 9,801 .11
Malbak Ltd. 9,109,400 39,937 .44
Metro Cash and Carry Ltd. 7,320,800 24,267 .27
MIH Holdings Ltd. (1) 1,852,000 7,921 .09
Nasionale Pers Beperk, Class N 930,000 8,602 .10
Nedcor Ltd. 83,700 1,146
Nedcor Ltd. (Global Depositary Receipts) 1,245,931.84 17,053
Nedcor Ltd., warrants, expire September 30, 1997 (1) 306,934 767 .21
Rembrandt Group Ltd. 1,927,000 17,205 .19
Sage Group Ltd. 1,570,000 6,379 .07
Sasol Ltd. 9,323,576 110,663 1.22
South Africa Capital Growth Fund, LP, Class A
(acquired 8/25/95,cost:$1,900,000) (1)(2)(3) 1,900 1,900
South Africa Capital Growth Fund, LP, Class D .17
(acquired 8/25/95,cost:$13,650,000) (1)(2)(3) 13,650 13,650
South African Breweries Ltd. 2,270,528 57,540 .64
---------- ----------
373,652 4.13
---------- ----------
SOUTH KOREA - 4.75%
Anam Industrial Co., Ltd. 270,213 3,464 .04
Daegu Bank, Ltd. 275,000 3,261 .04
Daehan Asia Trust (International Depositary Receipts) 2,820 2,820 .03
Daehan Korea Trust (International Depositary Receipts) 500 288 -
Daewoo Corp. 257,738 1,973 .02
Daewood Securities Co., Ltd., nonvoting preferred 421,270 3,050
.32
Daewood Securities Co., Ltd.,ordinary (1) 2,023,742 26,183
Haitai Stores Co., Ltd. 16,747 128 -
Hanil Bank 4,983,280 34,306 .38
Housing & Commercial Bank New 13,610 212 -
Hyundai Motor Co. 278,340 7,268
Hyundai Motor Co., nonvoting preferred .18
(Global Depositary Receipts) 1,169,800 8,715
Kookmin Bank 901,600 14,649 .16
Korea Electric Power Corp. 2,974,790 86,860
Korea Electric Power Corp.
(American Depositary Receipts) 54,500 1,117
Korea Electric Power Corp., 1.01
5.0% convertible bond August 1, 2001 (1) $3,000,000 3,026
Korea First Bank (1) 1,852,680 9,412 .10
Korea Industrial Leasing Co., Ltd. 241,000 2,317 .03
Korea Long Term Credit Bank 349,841 6,141 .07
Korea Mobile Telecommunications Corp. 31,374 32,264 .36
Korea Pacific Trust (International Depositary Receipts) (1) 3,000 3,225 .04
Korea Zinc Co. Ltd. 279,000 5,299 .06
Kyongnam Bank 733,607 7,837 .09
LG Chemical Ltd., preferred 330,000 2,096 .02
LG Electronics Inc., nonvoting preferred 442,500 3,099
LG Electronics Inc. 34,244 435
LG Electronics Inc., non-voting preferred .07
(Global Depositary Receipts) 731,600 2,469
LG Electronics Inc.
(Global Depositary Receipts) 13,488 77
LG Securities Ltd., preferred (1) 590,460 3,329
.20
LG Securities Co., Ltd. (1) 1,441,648 14,716
Pacific Chemical Industrial Co. Ltd. 165,440 3,279 .04
Pohang Iron & Steel Co., Ltd. 564,710 32,294
Pohang Iron & Steel Co., Ltd. .37
(American Depositary Receipts) 71,000 1,438
Samsung Electronics Co., Ltd., nonvoting preferred 115,193 3,113
Samsung Electronics Co., Ltd. 673,841 40,160
Samsung Electronics Co., Ltd., nonvoting preferred .63
(Global Depositary Shares) 631,768 10,765
Samsung Electronics Co., Ltd.,
(Global Depositary Shares) 89,820 3,420
Seoul Asia Index Trust (International Depositary Receipts) 80 660 .01
Shinhan Bank 926,120 14,790 .16
Ssangyong Investment & Securities, Co., Ltd., nonvoting preferred (1) 61,090 333 -
SsangYong Oil Refining Co. Ltd. 135,000 2,964 .03
Yukong Ltd. 1,333,764 25,330
Yukong Chf, warrants, expire June 18, 1999 (1) 10,000 538 .29
---------- ----------
429,120 4.75
---------- ----------
SRI LANKA - 0.09%
Asian Hotel Corp. (1) 12,215,000 2,154 .03
Development Finance Corp. of Ceylon 1,258,310 5,770 .06
National Development Bank of Sri Lanka 96,200 333 -
---------- ----------
8,257 .09
---------- ----------
TAIWAN - 3.50%
Acer Computer International Ltd. 1,639,500 2,820 .03
Acer Inc. (1) 17,418,065 32,009
Acer Inc. .54
(Global Depositary Receipts) 1,799,000 16,731
Acer Peripherals 8,916,100 17,034 .19
Advance Semiconductor Engineering, Inc. (1) 19,407,600 37,431
Advance Semiconductor Engineering, Inc. .61
(Global Depositary Receipts) 1,798,300 17,488
Asia Corporate Partners Fund, Class B
(acquired 3/12/96; cost: $20,027,000) (1)(2)(3) 40,000 20,000 .22
China Steel Corp. 13,700,000 12,863
China Steel Corp. (American Depositary Receipts) .23
(acquired 5/21/92; cost: $6,354,000) (2) 407,000 8,166
INVENTEC (1) 2,195,000 13,339 .15
PRIMAX ELECTRONICS 5,467,985 12,038 .13
Seres Capital (Cayman Islands)
(acquired 3/12/96; cost:$25,000) (1)(2) 1.66 25
Seres Capital (Cayman Islands), nonvoting -
(acquired 3/12/96; cost: $125,000) (1)(2) 8.34 125
Siliconware Precision Industries Co., Ltd. (1) 6,483,800 13,685
Siliconware Precision Industries Co., Ltd. .22
(Global Depositary Receipts) (1) 547,840 6,081
Taiwan American Fund, nonvoting preferred (1) 600,000 8,400 .09
Taiwan Opportunities Fund Ltd., Series C (1) 200,092 2,226 .02
Taiwan Semiconductor Manufacturing Co. Ltd. (1) 32,344,800 66,502 .74
Ton Yi Industrial Corp. (1) 7,166,062 8,918 .10
U-Ming Marine Transport Corp. 1,687,750 1,640 .02
Unicap Electronics (1) 230,000 460 -
Wus Printed Circuit Co., Ltd. 4,089,000 7,812 .09
Yangming Marine Transport Corp. 8,346,000 11,055 .12
---------- ----------
316,848 3.50
---------- ----------
THAILAND - 2.09%
Alphatec Electronics PCL 791,000 6,077 .07
Ayudhya Jardine CMG Life Assurance 84,547 310 -
Bangkok Bank PCL 4,898,660 47,376
Bangkok Bank PCL, 3.25% convertible bond
March 3, 2004 (acquired 8/4/94, cost: $968,000) (2) $1,000,000 975
Bangkok Bank PCL, 3.25% convertible
Eurobonds March 3, 2004 3,630,000 3,539 .57
Bank of Ayudhya Public Co. Ltd. 4,667,300 11,012 .12
Charoen Pokphand Feedmill Public Co. Ltd. 1,575,600 5,714 .06
Dusit Thani PCL 990,000 1,081 .01
Electricity Generating Authority of Thailand 10,397,747 28,384 .31
Industrial Finance Corp. of Thailand 4,996,000 13,541 .15
KR Precision 1,299,100 8,866 .10
Nakhornthai Integrated Steels Co., Ltd. 11,213,400 4,920 .06
Post Publishing PCL 2,525,000 5,416 .06
Serm Suk PLC 210,166 4,098
.06
Serm Suk PLC, local registered 64,960 942
Siam City Bank PCL 1,681,855 1,574 .02
Siam Commercial Bank Public Co.Ltd. 832,100 6,036 .07
Swedish Motors Corp. Public Co. Ltd. 1,608,100 2,947 .03
Thai Farmers Bank PCL 2,683,610 16,744
.19
Thai Farmers Bank PCL, warrants, expire September 15, 2002 (1) 461,450 436
Thai Glass Industries PCL 1,272,200 4,366 .05
Thai Military Bank PCL 4,243,684 8,357 .09
Wattachak Public Co. Ltd.,
3.50% convertible bond December 6, 2003 $6,400,000 6,528 .07
---------- ----------
189,239 2.09
---------- ----------
TURKEY - 2.00%
Adana Cimento Sanayii TAS, Class A 63,984,854 3,427
.04
Adana Cimento Sanayii, TAS Class C 25,469,510 306
Brisa 3,227,000 1,445 .02
Ege Biracilik ve Malt Sanayii AS 37,745,919 8,103 .09
Is Bankasi AS 55,377,300 8,565 .10
Koc Holding AS, ordinary 121,496,692 21,315 .24
Migros Turk TAS 22,412,650 27,421 .30
Netas Northern Electric Telekomunikasyon AS 33,819,300 7,651 .08
Petrol Ofisi AS 51,000,000 13,656 .15
Trakya Cam Sanayii AS 345,570,525 17,551 .19
Turkiye Garanti Bankasi AS 39,871,618 1,802
Turkiye Garanti Bankasi AS (American Depositary Receipts)
(acquired 10/29/93; cost: $526,000)(2) 322,056 1,482 .04
Turkiye Sise ve Cam Fabrikalari AS 322,957,548 34,294 .38
Yapi ve Kredi Bankasi AS 1,350,954,270 33,680 .37
---------- ----------
180,698 2.00
---------- ----------
UNITED STATES - 0.03%
Freeport-McMoRan Copper & Gold Inc., Class A 90,000 2,531 .03
VIETNAM - 0.07%
Vietnam Frontier Fund
(acquired 7/21/94, cost: $3,000,000) (1)(2) 291,300 3,000 .03
Vietnam Investment Fund, preferred, units
(acquired 8/4/94, cost: $3,206,000) (1)(2)(3) 30 3,206
Vietnam Investment Fund, ordinary, units .04
(acquired 8/4/94, cost: less than $1,000) (1)(2)(3) 6 -
---------- ----------
6,206 .07
---------- ----------
MULTI NATIONAL - 1.95%
Abacan Resource Corp. (1) 5,170,000 44,718 .49
Armada Gold Corp., Class A (1) 2,600,000 2,391
Armada Gold Corp., warrants, expire February 18, 1997 .06
(acquired 10/21/96, cost:$2,750,000)(1)(2) 2,000,000 2,700
Co Financiere pour l'Europe Centrale SA (Global Depositary 54,495 1,313 .01
Receipts)
Diamondworks Ltd.,warrants, expire April 4, 1997
(acquired 12/5/96, cost:$2,209,000)(1)(2) 1,500,000 2,189 .02
Dragon Oil Placement (1) 203,600,000 4,365 .06
Emerging Markets Gold Fund, preferred
(acquired 1/28/94; cost: $7,876,000) (2)(3) 79,560 7,876
Emerging Markets Gold Fund, ordinary .12
(acquired 1/28/94; cost $96,000) (1)(2)(3) 76,500 3,193
New Asia East Investment Fund, Class A (1)(2)(3)
(acquired 5/23/96, cost:$2,936,000) (1)(2)(3) 293,600 2,929
New Asia East Investment Fund, Class B, non-voting (1)(2)(3) .47
(acquired 5/23/96, cost:$40,064,000)(1)(2)(3) 4,006,400 39,972
New Europe East Investment Fund, Class B
(acquired 6/4/93, cost $54,500,000) (1)(2) 436 60,796 .67
Sutton Resources Ltd (1) 345,900 4,154
Sutton Resources Ltd., warrants, expire September 30,1998 .05
(acquired 3/21/96, cost:$0) (1)(2) 155,000 311
Timbuktu Gold (1) 148,380 206 -
--------- -------
177,113 1.95
MISCELLANEOUS - 0.51% ---------- ----------
Equity-type securities in initial period of acquisition 105,131,361 45,945 .51
---------- ----------
TOTAL EQUITY-TYPE SECURITIES (cost: $6,303,318,000) ---------- ----------
7,631,210 84.40
---------- ----------
Principal Market Percent
Amount Value of Net
BOND & NOTES (000) (000) Assets
- ---------------------------------------------------------------- -------------- ---------- ----------
ARGENTINA - 0.96%
Republic of Argentina
9.25% February 23, 2001 6,000 6,105 .07
Republic of Argentina
11.00% October 9, 2006 31,500 33,012 .36
Republic of Argentina Bocon PIK
4.674% April 1, 2001 (4) ARP2,000 1,629 .02
Republic of Argentina Bocon PIK
4.674% April 1, 2007 (4) ARP41,550 24,688 .27
Republic of Argentina Bearer Bond Series L 6.625%
March 31, 2005 (4) $14,945 13,025 .15
Republic of Argentina Eurobonds Series L
5.25% March 31, 2023 (4) 12,250 7,767 .09
---------- ----------
86,226 .96
---------- ----------
BRAZIL - 0.67%
Comtel Brasileira Ltda. 10.75% September 26, 2004
(acquired 9/18/96, cost:$2,400,000)(2) 2,400 2,481 .03
Federal Republic of Brazil Capitalization Bond PIK
8.00% April 15, 2014 13,217 9,780 .11
Federal Republic of Brazil Bond Series EI-L
6.50% April 15, 2006 (4) 1,750 1,529 .03
Federal Republic of Brazil Debt Conversion Bond Series L
Frn .65625% April 15, 2012 1,750 1,330 .01
Federal Republic of Brazil Debt Conversion Bond Series LI
6.5625% April 15, 2012 24,000 18,240 .20
Multicanal Participacoes SA Class B
12.625% June 18, 2004 10,300 11,111 .12
MYDFA Trust 6.6875% September 15, 2007
(acquired 10/2/96, cost:$14,443,000)(2) 17,000 14,569 .16
Tevecap SA 12.625% November 26, 2004
(acquired 11/21/96, cost:$1,500,000)(2) 1,500 1,536 .01
---------- ----------
60,576 .67
---------- ----------
BULGARIA - 0.44%
Republic of Bulgaria Interest Arrears Bond
6.6875% July 28, 2011 17,600 9,064 .10
Republic of Bulgaria Front Loaded Interest Reduction Bond
Series A 2.25% July 28, 2012 80,550 30,911 .34
---------- ----------
39,975 .44
---------- ----------
COLUMBIA - 0.02%
Comunicacion Cellular SA
0%/13.125% November 15, 2003 (1)(5) 3,000 1,995 .02
---------- ----------
ECUADOR - 0.18%
Republic of Ecuador Discount Bond
6.50% February 28, 2005 (4) 3,250 2,259 .03
Republic of Ecuador Past Due Interest Bonds
6.50% February 27, 2015 (4) 22,470 13,819 .15
---------- ----------
16,078 .18
---------- ----------
INDIA - 0.01%
Flex Industries Ltd. 13.50% December 31, 2004 INR 29,929 837 .01
---------- ----------
MEXICO - 0.53%
Grupo Televisa, SA
0%/13.25% May 15, 2008 (1)(5) $3,000 1,995 .02
Tubos de Acero de Mexico, SA
13.75% December 8, 1999
(acquired 11/23/94, cost: $3,707,000)(2) 3,750 4,275 .05
United Mexican States Discount Bonds Series A
UNIT 6.45313% December 31, 2019 1,750 1,509 .02
United Mexican States Discount Bonds Series B
UNIT 6.375% December 31, 2019(4) 1,750 1,509 .02
United Mexican States Discount Bonds Series C
UNIT 6.375% December 31, 2019(4) 3,750 3,234 .03
United Mexican States Discount Bond Series D
6.35156% December 31, 2019 1,000 863 .01
United Mexican States Government Bond
7.5625% August 6, 2001 (acquired 7/29/96,
cost: $4,977,000) (2)(4) 5,000 5,011 .05
United Mexican States Government Bond
11.375% September 15, 2016 12,045 12,599 .14
United Mexican States Government Bond
11.50% May 15, 2026 3,330 3,520 .04
United Mexican States Government Bond
9.75% February 6, 2001 13,250 13,714 .15
---------- ----------
48,229 .53
---------- ----------
PANAMA - 0.28%
Republic of Panama Interest Reduction Bond 3.50% due
July 17, 2014 (acquired 11/8/95, cost: $14,742,000)(2)(4) 26,114 18,149 .20
Republic of Panama Past Due Interest Bond 6.75% due
July 17, 2016 (acquired 6/21/96, cost:$6,371,000)(2)(4) 9,693 7,585 .08
---------- ----------
25,734 .28
---------- ----------
PERU - 1.29%
Republic of Peru /Agent-Bankers Trust Company/
Loan Participation Agreements
(Participation-Citibank, NA.) (1)(4)(6)(7) 11,739 6,813
Republic of Peru /Agent-Chemical Bank/
Loan Participation Agreements
(Participation-Citibank, NA)(1)(4)(6)(7) 3,544 2,082
Republic of Peru/Agent-Chemical Bank/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(4)(6)(7) 4,085 2,380
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Citibank, NA)(1)(4)(6)(7) 23,554 13,090
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(4)(6)(7) 44,026 25,615
Republic of Peru/Agent-Citibank, NA/
Loan Participation Agreements
(Participation-Salomon Brothers) (1)(4)(6)(7) 22,129 11,722
Republic of Peru/Agent-Morgan Guaranty Trust NA/
Loan Participation Agreements
(Participation-Chase Manhattan Bank, NA) (1)(4)(6)(7) 491 297
Republic of Peru/Agent-Morgan Guaranty Trust/NA/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(4)(6)(7) 32,233 19,041
Republic of Peru/Agent-Wells Fargo Bank
Loan Participation Agreements
(Participation-Citibank, NA) (1)(4)(6)(7) 21,476 12,584
Republic of Peru/Agent-Wells Fargo Bank/
Loan Participation Agreements
(Participation-Morgan Guaranty Trust, NA) (1)(4)(6)(7) 38,941 22,699 1.29
---------- ----------
116,323 1.29
---------- ----------
PHILIPPINES - 0.13%
Republic of Philippines Front Loaded Interest Reduction
Bond Series B 5.00% due June 1, 2008 12,250 11,576 .13
---------- ----------
11,576 #REF!
---------- ----------
RUSSIAN FEDERATION - 0.06%
Vneshekonombank/A 8.00%
December 15, 2020 (1) DEM10,000 5,429 .06
---------- ----------
10,000 5,429 .06
VENEZUELA - 0.54%
Republic of Venezuela (Front Loaded Interest Reduction
Bond) Series A Eurobonds 6.625% March 31, 2007 (4) $2,750 2,458 .03
Republic of Venezuela (Front Loaded Interest Reduction
Bond) Series B Eurobonds 6.4375% March 31, 2007 (4) 750 670 .01
Republic of Venezuela Debt Conversion Bond
6.50% December 18, 2007 (4) 51,500 45,449 .50
---------- ----------
48,577 .54
MULTI NATIONAL - 0.28%
Global Telesystems Group Loan 10.00% February 1, 2001
(acquired 2/2/96, cost; $25,820,000)(2) 27,985 25,725 .28
---------- ----------
TOTAL BONDS AND NOTES (cost: $417,472,000) 487,280 5.39
---------- ----------
SHORT-TERM SECURITIES
CORPORATE SHORT-TERM NOTES - 9.37%
ABN AMRO North America Finance Inc. 5.29% due 1/21/97 50,000 49,846 .55
Barclays U.S. Funding Corp.5.28% due 1/22/97 54,100 53,924 .60
Canada Bills CP 5.23% - 5.36% due 1/22-2/14/97 35,200 34,977 .39
Canadian Wheat Board 5.30%-5.40% due 2/19-3/13/97 22,900 22,664 .25
Commonwealth BK CP 5.295% due 1/8/97 30,000 29,965 .33
Commonwealth Bank of Australia 5.34% due 2/12/97 15,000 14,904 .16
Daimler-Benz North America Corp. 5.30%-5.53% due 1/27-3/6/97 39,100 38,804 .43
Elec De France CP 5.28%-5.29% due 1/28-2/6/97 64,100 63,822 .71
France Telecom 5.31% due 1/14/97 14,423 14,393 .16
Glaxo Wellcome PLC 5.30%-5.31% due 1/21-2/11/97 26,500 26,387 .29
Halifax Building Society 5.40%-5.45% due 1/3-1/10/97 71,200 71,130 .79
Heinz (H.J.) Co. 5.30%-5.40% due 1/9-1/28/97 33,100 33,011 .36
International Lease Finance Corp. 5.29%-5.45% due 1/29-2/7/97 43,300 43,065 .48
Mobile Australia Finance Co. 5.30% due 2/28/97 62,200 61,634 .68
National Australia Funding (Delaware) Inc., 5.28%-5.41% due 103,400 103,293 1.14
1/2-1/9/97
RTZ America Inc.5.30%-5.40% due 2/10-3/19/97 35,300 35,042 .39
SmithKline Beecham PLC 5.27% due 1/24-1/28/97 16,500 16,436 .18
Societe Generale N.A. Inc. 5.29% due 1/15/97 8,900 8,880 .10
Sony Capital Corp. 5.31% -5.47% due 1/13-2/12/97 65,300 65,095 .72
Svenska Handelsbanken Group 5.30%-5.33% due 1/17-3/17/97 27,000 26,753 .29
Toyota Motor Credit Corp. 5.30%-5.32% due 2/3-2/14/97 33,700 33,501 .37
---------- ----------
847,526 9.37
---------- ----------
NON-U.S. GOVERNMENT SHORT -TERM OBLIGATIONS - 0.50%
Certificados de la Tesoreria due 7/31-9/4/97 MXN 6,071,657 6,574 .07
Credit Suisse First Boston, Structured Note linked to ruble-
denominated, Russian government security interest rates
due 2/12/97 $38,774 6,675 .07
Mesbla SA Series 2
13.25% convertible bond February 1, 1997 (1) R$ 35,460,000 138 -
Polish Government Treasury Bills due 1/15-5/21/97 PLZ 62,100,000 21,216 .23
United Mexican States Government Bond
10.8047% July 21, 1997 (4) $10,500 10,758 .13
---------- ----------
45,361 .50
NON-U.S. CURRENCY - 0.66%
Chilean Peso CHP4,770,671,371 11,249 .12
New Taiwanese Dollar NT$ 1,330,699,484 48,424 .54
---------- ----------
59,673 .66
---------- ----------
TOTAL SHORT-TERM SECURITIES (cost:$953,905,000) 952,560 10.53
---------- ----------
TOTAL INVESTMENT SECURITIES (cost: $7,674,695,000) 9,071,050 100.32
Excess of liabilities over cash and receivables 28,851 .32
---------- ----------
NET ASSETS $9,042,199 100.00
========== ==========
</TABLE>
1. Non- income-producing securities.
2. Purchased in a private placement transaction: resale to the public may
require registration, and no right to demand registration under U.S. law
exists. As of December 31, 1996, the total market value and cost of such
securities was $536,087,000 and $497,671,000, respectively, and the market
value represented 5.93% of net assets. Such securities, excluding convertible
bonds and American Depositary Receipts, are valued at fair value.
3. Includes an unfunded capital commitment representing a binding commitment
made by the fund which may be paid in the future.
4. Coupon rate may change periodically.
5. Represents a zero coupon bond which will convert to a coupon-bearing
security at a later date.
6. Participation interests were acquired through the financial instituition
indicated parenthetically.
7. Security is currently in default.
NON-U.S. CURRENCY SYMBOLS:
ARP - Argentine Peso
CHP - Chilean Peso
DEM- German Deutsche Mark
INR - Indian Rupee
MXN -Mexican Peso
MYR - Malaysian Dollar
NT$ - New Taiwanese Dollar
PLZ - Polish Zloty
R$ - Brazilian Real
See Notes to Financial Statements
EMERGING MARKETS GROWTH FUND
<TABLE>
<CAPTION>
<S> <C>
EQUITY-TYPE SECURITIES ADDED TO THE EQUITY-TYPE SECURITIES ELIMINATED FROM THE
PORTFOLIO SINCE JUNE 30, 1996 PORTFOLIO SINCE JUNE 30, 1996
- ------------------------------------------------------------------------------------------
Acer Computer International AECI
Acer Peripherals Alpargatas
African Oxygen Bangkok Metropolitan Bank
Anam Industry Cementos Norte Pacasmayo
Bank of the Philippine Islands Cheil Foods & Chemicals
Bharat Petroleum Chernogorneft
Brisa Chia Hsin Cement
Carso Global Telecom Compania de Inmuebles y Valores Caracas
Cie Financiere pour l'Europe Centrale Fabrica Nacional de Cementos
Consorcio Real Brasileiro de Administracao Golden Shamrock Mines
Copel Gruma
Diamondworks Grupo Financiero Banorte
Dragon Oil Placement Hocheng
Eletropaulo-Electricidade de Sao Paulo India Magnum Fund
Engro Chemical Pakistan Korea Asia Fund
Fil-Estate Land Maanshan Iron & Steel
Global Tele-Systems Malaysian International Shipping
Grupo Embotellador de Mexico Mavesa
Hap Seng Consolidated MBK Properties & Development
Housing & Commercial Bank Mecanica Pesada
Hudaco Industries Morgan Stanley Perqs (Telebras)
Inventec Petrobras Distribuidora
Irkutskenergo PT Astra International
Is Bankasi PT Bakrie & Brothers
JD Group PT Fajar Surya Wisesa
Kety SA (Zaklady Metali Lekkich) PT Japfa Comfeed Indonesia
Kookmin Bank PT Supreme Cable Manufacturing
KR Precision R.O.C Taiwan Fund
Malayan Banking Siderca
Multicanal Participacoes Sin-Yih Ceramic
Nasionale Pers Beperk Venezolana de Cementos
Nizhny-Non Svyaz Want Want Holdings
Philippine Airlines
Polifarb Wroclaw
PT PP London Sumatra
Primax Electronics
PT Ramayana Lestari Sentosa
Ramco Energy
RAO Gazprom
SM Prime Holdings
Sociedad Comercial del Plata
South African Breweries
St. Petersburg Telephone Network
TELECEL - Comunicacoes Pessoais
Telefonica del Peru
Timbuktu Gold
Trakya Cam Sanayii
Unicap Electronics
Wus Printed Circuit
Xavier
Yizheng Chemical Fibre
</TABLE>
***
EMERGING MARKETS GROWTH FUND
<TABLE>
<CAPTION>
<S> <C> <C>
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
at December 31, 1996 (dollars in thousands)(Unaudited)
ASSETS:
Investment securities at market
(cost: $7,674,695) $9,071,050
Cash 3,559
Receivables for--
Sales of investments $13,625
Sales of fund's shares 15,312
Open forward currency contracts 99
Dividends and accrued interest 46,281 75,317
----------------- ------------------
9,149,926
------------------
Liabilities:
Non-U.S. taxes payable 767
Payables for--
Purchases of investments 15,800
Unfunded capital commitments 80,770
Management services 4,863
Accrued expenses 5,527 106,960
----------------- ------------------
107,727
------------------
Net Assets at December 31, 1996 --
Equivalent to $55.46 per share on
163,038,108 shares of $0.01 par value
capital stock outstanding (authorized
capital stock -- 200,000,000 shares) $9,042,199
==============
STATEMENT OF OPERATIONS
at December 31, 1996 (dollars in thousands)(Unaudited)
Investment Income:
Income:
Dividends $56,059
Interest 93,642 $149,701
-----------------
Expenses:
Management services fee 28,261
Custodian fee 4,870
Registration statement and prospectus 541
Auditing and legal fees 150
Reports to shareholders 4
Other expenses 505 34,331
----------------- ------------------
Income before non-U.S. taxes 115,370
Non-U.S. taxes (271)
------------------
Net investment income 115,099
------------------
Realized Gain and Unrealized
Depreciation on Investments:
Realized gain before non-U.S. taxes 217,883
Non-U.S. taxes (251)
-----------------
Net realized gain 217,632
Net change in unrealized appreciation
on investments (326,460)
Net unrealized depreciation on open forward
currency contracts (195)
-----------------
Net unrealized depreciation (326,655)
Non-U.S. taxes 8,746 (317,909)
----------------- ------------------
Net realized gain and unrealized
depreciation on investments (100,277)
------------------
Net Increase in Net Assets Resulting
from Operations $14,822
==============
Statement of Changes in Net Assets (dollars in thousands)
Six Months Ended Year Ended
December 31, 1996/1/ June 30, 1996
-------------------- ------------------
Operations:
Net investment income $115,099 $167,366
Net realized gain on investments 217,632 55,275
Net unrealized appreciation (depreciation)
on investments (317,909) 781,427
------------------ ------------------
Net increase in net assets
resulting from operations 14,822 1,004,068
------------------ ------------------
Dividends and Distributions Paid
to Shareholders:
Dividends from net
investment income (161,634) (169,255)
Distributions from net realized
gain on investments (160,065) (140,664)
------------------ ------------------
Total dividends and
distributions (321,699) (309,919)
------------------ ------------------
Capital Share Transactions:
Proceeds from shares sold:
10,444,995 and 34,530,418 shares, respectively 586,185 1,882,259
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
5,813,269 and 5,829,211 shares,
respectively 312,231 302,442
------------------ ------------------
Net increase in net assets
resulting from capital share
transactions 898,416 2,184,701
------------------ ------------------
Total Increase in Net Assets 591,539 2,878,850
Net Assets:
Beginning of period 8,450,660 5,571,810
------------------ ------------------
End of period (including excess distributions
over net investment income: $50,484 and $3,949,
respectively $9,042,199 $8,450,660
================== ===============
</TABLE>
/1/Unaudited
See Notes to Financial Statements
EMERGING MARKETS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 fund's investment objective is to seek long-term
capital growth through investment in developing country equity securities. The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Equity-type securities traded on a national securities exchange (or
reported on the NASDAQ national market) and securities traded in the
over-the-counter market are stated at the last reported sales price on the day
of valuation; other securities, and securities for which no sale was reported
on that date, are stated at the last quoted bid price. 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. 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 prices for securities of comparable maturity, quality, and type.
Short-term securities with original or remaining maturities in excess of 60
days, including forward currency contracts, are valued at the mean of their
quoted bid and asked prices. 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. 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.
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
and premiums on securities purchased are amortized over the life of the
respective securities. Dividends and distributions paid to shareholders are
recorded on the ex-dividend date.
Investment securities, cash balances, and other assets and liabilities,
including forward currency contracts, 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 period. 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.
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 $4,870,000 includes $86,000 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%. Dividend and interest income of the fund derived in
Pakistan is subject to non-U.S. taxes at a rate of 43%. 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 December 31, 1996, net unrealized appreciation on investments,
excluding forward currency contracts, for federal income tax purposes
aggregated $1,361,135,000, net of accumulated deferred taxes totaling $145,000
on net unrealized appreciation of Chilean securities, of which $2,136,593,000
related to appreciated securities and $775,458,000 related to depreciated
securities. During the six months ended December 31, 1996, the fund realized,
on a tax basis, a net capital gain of $219,808,000 on securities transactions.
The cost of portfolio securities, excluding forward currency contracts, for
federal income tax purposes was $7,709,770,000 at December 31, 1996.
4. The fee of $28,261,000 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 December 31, 1996, accumulated undistributed net realized gain on
investments was $88,625,000 and additional paid-in capital was $7,617,609,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,583,344,000 and $903,940,000, respectively, during
the six months ended December 31, 1996.
Dividend and interest income is recorded net of non-U.S. taxes paid. For
the six months ended December 31, 1996, such non-U.S. taxes were $6,978,000.
Net realized currency losses on dividends, interest, withholding taxes
reclaimable, and purchases and sales of non-U.S. equity-type securities and
bonds were $6,755,000 for the six months ended December 31, 1996.
The fund may enter into forward currency contracts, which represent
agreements to exchange currencies of different countries at specified future
dates at specified rates. The fund purchased forward currency contracts to
hedge the foreign exchange exposure in certain securities held by the fund
which are pegged to or denominated in various non-U.S. currencies. The forward
currency contracts protect the fund against movements in these currencies
against the U.S. dollar. The fund's use of forward currency contracts involves
market risk in excess of the amount recognized in the statement of assets and
liabilities. The contracts are recorded in the statement of assets and
liabilities at their net unrealized value. The face or contract amount in U.S.
dollars reflects the total exposure the fund has in that particular contract.
Losses may arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from the possible
movements in non-U.S. exchange rates and securities values underlying these
instruments. At December 31, 1996, the fund had outstanding forward currency
contracts to sell non-U.S. currencies as follows:
NON-U.S. CURRENCY SALE CONTRACTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Contract Amount U.S. Valuationat 12/31/96
--------------------------------- ------------------------------------
Non-U.S. U.S. Amount (Depreciation)
- ---------------------- -------------- -------------- ---------------- -------------
French francs
expiring 1/15/97 FF4,862,000 $ 949,000 $ 939,000 $ 10,000
German deutschemarks
expiring 1/15-3/10/97 DEM15,265,000 10,096,000 9,943,000 153,000
Pound sterling
expiring 1/15/97 Pound964,000 1,515,000 1,653,000 (138,000)
Swiss francs
expiring 1/15/97 SFR1,209,000 979,000 905,000 74,000
--------------
$ 99,000
==============
</TABLE>
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year
Six Months ended
Ended June 30
12/31/96 /1/ 1996 1995 1994 1993 1992
Net Asset Value, Beginning of
Period $57.57 $52.36 $58.75 $44.95 $38.64 $32.73
-------- -------- -------- -------- ------- -------
Income from Investment
Operations:
Net investment income .75 1.30 .87 .53 .62 .55
Net realized and unrealized
gain (loss) on investments
before non-U.S. taxes (.88) 6.49 (.79) 15.29 7.33 8.87
Non-U.S. taxes .07 (.01) (.03) (.39) .06 (.28)
-------- -------- -------- -------- ------- -------
Total income (loss) from
investment operations (.06) 7.78 .05 15.43 8.01 9.14
-------- -------- -------- -------- ------- -------
Less Distributions:
Dividends from net
investment income (1.03) (1.30) (.63) (.49) (.56) (.56)
Distributions from net
realized gains (1.02) (1.27) (5.81) (1.14) (1.14) (2.67)
-------- -------- -------- -------- ------- -------
Total distributions (2.05) (2.57) (6.44) (1.63) (1.70) (3.23)
-------- -------- -------- -------- ------- -------
Net Asset Value, End of Period $55.46 $57.57 $52.36 $58.75 $44.95 $38.64
======= ======= ======= ======= ======= =======
Total Return 0.01% /2/ 15.49% (1.22)% 34.33% 21.55% 29.73%
Ratios/Supplemental Data:
Net assets, end of period
(in millions) $9,042 $8,451 $5,572 $4,170 $2,574 $1,561
Ratio of expenses to average
net assets .40% /2/ .84% .91% 1.00% 1.01% 1.11%
Ratio of expenses and non-U.S.
taxes to average net assets .40% /2/ .85% .94% 1.04% 1.07% 1.18%
Ratio of net income to average
net assets 1.34% /2/ 2.54% 1.70% .91% 1.82% 1.84%
Average commissions paid per share /3/ $0.12 $0.10 $0.02 $0.01 $0.02 $0.02
Portfolio turnover rate 11.68% /2/ 17.78% 23.75% 18.13% 11.97% 16.03%
</TABLE>
1 Unaudited
2 Based on operations for the period shown and, accordingly, not representative
of a full year's operations.
3 Brokerage commissions paid on portfolio transactions increase the cost of
securities purchased or reduce the proceeds of securities sold and are not
separately reflected in the fund's statement of operations. Shares traded on a
principal basis (without commissions), such as fixed-income transactions, are
excluded. Generally, non-U.S. commissions are lower than U.S. commissions when
expressed as cents per share but higher when expressed as a percentage of
transactions because of the lower per-share prices of many non-U.S. securities.
BOARD OF DIRECTORS
Khalil Foulathi, Abu Dhabi, United Arab Emirates,
Executive Director, Evaluation and Followup Department,
Abu Dhabi Investment Authority
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
Raymond Kanner, Lawrence, New York
Senior Investment Manager
IBM Retirement Funds
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
Director, Deutsche Bank AG
Teresa E. Martini, Berkeley Heights, New Jersey
Vice President, Public Equities,
AT&T Investment Management Corporation
John G. McDonald, Stanford, California
The IBJ Professor of Finance,
Graduate School of Business, Stanford University
William Robinson, Gouvieux, France
Director, Aga Khan Fund for Economic Development
Patricia A. Small, Oakland, California
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
Shaw B. Wagener, Los Angeles, California
Executive Vice President of the fund
Executive Vice President and Director,
Capital International, Inc.
Roberta A. Conroy, Los Angeles, California
Senior 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.
Steven N. Kearsley, Brea, California
Vice President of the fund
Vice President and Treasurer,
Capital Research and Management Company
Peter C. Kelly, Los Angeles, California
Vice President of the fund
Senior Counsel, The Capital Group Companies, Inc.
Victor D. Kohn, Los Angeles, California
Vice President of the fund
Executive Vice President,
Capital Research International
Nancy J. Kyle, New York, New York
Vice President of the fund
Senior Vice President, International,
Capital Guardian Trust Company
Michael A. Felix, Brea, California
Treasurer of the fund
Vice President, Capital International, Inc.
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 92821-5804
CUSTODIAN OF ASSETS
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, D.C. 20005-1208
James K. Peterson resigned from the Board of Directors effective October 4,
1996. He had been a member of the Board since 1995 and previously from 1986 to
1989. The Directors wish to thank him for his contributions to the fund.
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/3364
(c) 1997 Emerging Markets Growth Fund, Inc.
Lit. No. EMGF-013-0297(NLS)
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