MERRILL LYNCH
DEVELOPING
CAPITAL MARKETS
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1995
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
This report is not authorized for use as an offer of sale or
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>
Merrill Lynch
Developing
Capital Markets
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Merrill Lynch Developing Capital Markets Fund, Inc.
Asset Allocation
As a Percentage* of
Net Assets as of
March 31, 1995
A map illustrating the following percentages:
Ecuador 0.2%
Panama 0.3%
Venezuela 0.6%
Brazil 8.4%
Portugal 8.0%
Hungary 2.2%
Poland 0.3%
Czech Republic 1.7%
Greece 3.8%
Pakistan 0.1%
India 4.7%
Thailand 0.2%
<PAGE>
Singapore 0.3%
China 0.7%
Korea 6.4%
Mexico 3.3%
Peru 0.4%
Chile 0.9%
Argentina 1.2%
Morocco 2.8%
South Africa 9.3%
Turkey 4.0%
Sri Lanka 0.2%
Malaysia 4.6%
Indonesia 4.2%
Hong Kong 3.6%
Philippines 1.5%
Australia 2.2%
Taiwan 1.0%
New Zealand 0.6%
[FN]
*Total may not equal 100%.
<PAGE>
DEAR SHAREHOLDER
During the quarter ended March 31, 1995, total returns for Merrill
Lynch Developing Capital Markets Fund, Inc.'s Class A, Class B,
Class C and Class D Shares were -7.77%, -8.08%, -8.02% and -7.84%,
respectively. For the same period, the unmanaged Morgan Stanley
Capital International Emerging Markets Free Index declined 12.38%.
This outperformance of the Fund is attributed to the Fund's general
underweighting in equities, its emphasis on emerging markets of
Europe and Middle East/Africa and the reduction of investments in
Mexico early in the quarter.
Investment Outlook &
Activities
Since the end of December 1994, we took advantage of the Fund's high
cash position to find value in markets which were declining in
sympathy with Mexico. We increased our investments in South Africa,
Hong Kong and Indonesia, which corrected substantially early in the
quarter.
Over the coming months, we expect the world's major economies'
interest rates to stabilize at current or slightly higher levels. We
do not expect the US dollar to reverse its weakness substantially or
sustainably. The net effect, in our opinion, would be a prolonged
economic recovery/growth cycle, with stable inflation in the world's
major economies. This global view should be ideal for developing
countries, but we are currently more concerned about the domestic
scenarios in some of these countries and high stock valuations which
cannot be sustained without excess liquidity.
Currently, as was the case even before the start of the Mexican peso
crisis in December 1994, Merrill Lynch Developing Capital Markets
Fund, Inc. is positioned defensively. As of March 31, 1995, our cash
position was 22% of net assets; smaller markets which have lower
correlations with the US market are overweighted; value-oriented
stock selection is being emphasized; and, diversification is broad
across markets worldwide. This strategy is grounded in our belief
that short-term considerations will dominate the emerging markets
investment environment. These considerations will, in our view,
restrain a sustained rally in many of the markets in which we
invest. First, a higher risk premium will be attributed to emerging
markets, which means that investors will only pay lower valuations
for these investments. Second, interest rates in the United States
are likely to decline and in Europe, may trend higher; as a result,
there will be less of the liquidity which has driven emerging
markets to spectacular heights in recent years.
Our near-term outlook for Latin America is cautious. Interest rates
in the major markets, such as Argentina, Brazil and Mexico, are
expected to remain high in order to attract and retain capital and
to cool domestic demand.
<PAGE>
Our preferred investments are companies with excellent managements
and whose stocks are trading at low valuations. An example is
Kimberly-Clark de Mexico, S.A. de C.V., the largest producer of
paper products in Mexico. Its product line includes bathroom and
facial tissues, paper towels, napkins, diapers, feminine care
products and notebooks. With its strong brand, its dominance in its
markets and a healthy cash position, we expect Kimberly-Clark to
survive and possibly gain from the current crisis in Mexico.
The consensus expectations for rising interest rates in Europe is
already being reflected in historically low valuations in Greece,
and in the devalued currencies of Portugal and Hungary. We are
maintaining our overweighted positions in these three countries as
we expect the prolonged period of recovery in the European Union to
fuel the growth of its smaller trading partners.
We expect weakness in Asian markets. Earnings results for a number
of companies will disappoint investors, following stellar historical
growth over the past five or six years. Inflationary concerns still
have to be addressed and are aggravated by their currencies'
undervaluation relative to the weak US dollar. As a result, interest
rates in most Asian economies are expected to rise further,
independent of US Federal Reserve Board policy.
We continue to emphasize steady earnings growth stocks and companies
with undervalued, high-yielding assets. An example is Korea Mobile
Telecommunications Corp., the monopoly supplier of cellular phones
in Korea. The entry of a second competitor is expected, but the loss
of its monopoly position will be compensated for by increased
cellular use. Lower prices will generate higher call volume and low
penetration of the cellular markets will ensure continued growth.
In the Middle East, we are optimistic about Turkey in light of its
declining inflation, very low earnings valuations, satisfactory
reserve levels, and a current account which turned to surplus for
the first time in 12 years.
We are studying a few companies which interest us in Africa, but
continue to view the dominant market, South Africa, as expensive.
For technical reasons, stock prices rose recently in that country,
although interest rates are rising and the growth outlook for the
year ahead remains uninspiring.
<PAGE>
In Conclusion
Our longer-term outlook is much more positive. The driving forces
behind the outperformance of emerging markets are still in place.
The primary one is superior growth, which in some countries will
come from turnarounds in the economies and in corporate earnings.
Through 1996, real gross domestic product growth in Peru, Poland and
China is projected in a range of 5%--9% per annum versus only 3% in
the United States. In addition, diversification benefits still exist
for the US investor, especially in the smaller and less-developed
markets such as Turkey, Morocco and Venezuela. Finally, development
of securities markets will continue. For example, we are now
witnessing the evolution of Argentina's local institutional investor
base and the Taiwanese market's opening to foreign investors. These
factors, the fundamental reasons for investing in emerging markets,
will continue to drive these markets in the coming years, albeit
without the benefit of excess liquidity.
We appreciate your ongoing interest in Merrill Lynch Developing
Capital Markets Fund, Inc., and we look forward to assisting you
with your financial needs.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
April 28, 1995
<PAGE>
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A Shares are presented in the
"Performance Summary" and "Average Annual Total Return" tables on
pages 4 and 5. "Aggregate Total Return" tables for Class B, Class C
and Class D Shares are also presented on page 5. Data for all of the
Fund's shares, including Class B, Class C and Class D Shares, are
presented in the "Recent Performance Results" table on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A Shares for the
12-month and 3-month periods ended March 31, 1995 and for Class B,
Class C and Class D Shares for the since inception and 3-month
periods ended March 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C>
9/1/89--12/31/89 $ 9.60 $10.13 $0.004 $0.132 + 6.97%
1990 10.13 9.04 -- 0.640 - 5.33
1991 9.04 10.89 -- 0.252 +23.35
1992 10.89 10.18 0.324 0.518 + 0.85
1993 10.18 16.80 0.278 0.069 +68.96
1994 16.80 13.90 0.653 0.447 -10.97
1/1/95--3/31/95 13.90 12.82 -- -- - 7.77
------ ------
Total $1.259 Total $2.058
Cumulative total return as of 3/31/95: +74.81%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
3/31/95 12/31/94 3/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Developing Capital Markets Fund Class A Shares $12.82 $13.90 $15.83 -15.36%(1) -7.77%
ML Developing Capital Markets Fund Class B Shares 12.74 13.86 14.54 - 8.41(1) -8.08
ML Developing Capital Markets Fund Class C Shares 12.73 13.84 16.71 -20.37(1) -8.02
ML Developing Capital Markets Fund Class D Shares 12.81 13.90 16.77 -20.17(1) -7.84
ML Developing Capital Markets Fund Class A Shares--Total Return -12.85(2) -7.77
ML Developing Capital Markets Fund Class B Shares--Total Return - 5.91(3) -8.08
ML Developing Capital Markets Fund Class C Shares--Total Return -18.12(4) -8.02
ML Developing Capital Markets Fund Class D Shares--Total Return -17.83(5) -7.84
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Class B Shares commenced operations on 7/01/94. Class C and Class D
Shares commenced operations on 10/21/94.
(1)Percent change includes reinvestment of $0.653 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.447 per share ordinary
income dividends and $0.653 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.412 per share ordinary
income dividends and $0.653 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.425 per share ordinary
income dividends and $0.653 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.442 per share ordinary
income dividends and $0.653 per share capital gains distributions.
</TABLE>
Average Annual
Total Return--
Class A Shares*
% Return Without % Return With
Period Covered Sales Charge Sales Charge**
Year Ended 3/31/95 -12.85% -17.43%
Five Years Ended 3/31/95 + 9.02 + 7.85
Inception (9/1/89) through 3/31/95 +10.53 + 9.46
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return % Return
Class B Shares* Without CDSC With CDSC**
Period Covered
Inception (7/1/94) to 3/31/95 -5.91% -9.38%
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return % Return
Class C Shares* Without CDSC With CDSC**
Period Covered
Inception (10/21/94) to 3/31/95 -18.12% -18.87%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Period Covered
Inception (10/21/94) to 3/31/95 -17.83% -22.14%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in US Dollars)
<CAPTION>
Shares Held/ Percent of
AFRICA Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Morocco Banking 5,000 Banque Marocaine du Commerce
Exterieur $ 132,685 $ 217,613 0.0%
150,000 Wafa Bank 5,810,251 6,654,277 1.3
------------ ------------ ------
5,942,936 6,871,890 1.3
Building & 163,154 Groupe Omnium Nord Africain 6,686,860 7,042,197 1.4
Construction
Building 10,000 Les Ciments de l'Oriental 340,024 425,634 0.1
Materials
Total Investments in Morocco 12,969,820 14,339,721 2.8
<PAGE>
South Beverage 193,300 South African Breweries Ltd. 4,536,254 5,387,402 1.1
Africa 45,227 South African Breweries Ltd. (ADR)(b) 956,130 1,266,356 0.2
------------ ------------ ------
5,492,384 6,653,758 1.3
Beverages & 570,300 Rembrandt Group Ltd. 4,334,695 4,609,448 0.9
Tobacco
Mining 95,000 De Beers Consolidated Mines Ltd.
(ADR)(b) 2,201,328 2,339,375 0.5
Multi-Industry 289,400 The Morgan Stanley Africa Investment
Fund, Inc. 3,357,059 3,328,100 0.7
106,600 New South Africa Fund, Inc. 1,495,194 1,519,050 0.3
90,900 Southern Africa Fund, Inc. 1,331,240 1,272,600 0.2
------------ ------------ ------
6,183,493 6,119,750 1.2
Steel 2,413,320 South Africa Iron & Steel Industrial
Corporation, Ltd. 2,616,780 3,046,917 0.6
Transportation ZAL 87,100,000 Transnet Ltd., 15% due 10/01/1995 21,325,967 24,323,913 4.8
Total Investments in South Africa 42,154,647 47,093,161 9.3
Total Investments in Africa 55,124,467 61,432,882 12.1
EUROPE
Czech Banking 13,500 Komercni Banka 2,034,490 673,174 0.1
Republic
Electrical 9,206 Podnik Vypocetni Techniky (PVT)
Equipment (Preferred) 1,903,926 1,026,645 0.2
Food 43,000 Ceska General Food A.S. 4,520,734 4,820,255 0.9
Paper 60,807 SEPAP AS 3,025,696 2,420,998 0.5
Total Investments in the
Czech Republic 11,484,846 8,941,072 1.7
<PAGE>
Greece Banking 84,650 Ergo Bank (Registered) S.A. 3,038,469 3,560,011 0.7
Beverage 183,750 Hellenic Bottling Co. S.A. (Bearer) 2,892,532 4,552,513 0.9
Building & 48,830 Titan Cement S.A. 1,960,315 1,731,405 0.3
Construction
Financial 18,130 Etba Leasing S.A. 566,077 386,524 0.1
Services
Food 407,308 Delta Dairy S.A. (Ordinary) 8,341,550 8,144,332 1.6
45,287 Delta Dairy S.A. (Preferred) 1,170,377 863,868 0.2
------------ ------------ ------
9,511,927 9,008,200 1.8
Total Investments in Greece 17,969,320 19,238,653 3.8
Hungary Food 56,807 Pick Szeged Reszvenytarsasag
(GDS)(a) 2,947,401 2,830,125 0.6
Insurance 225,000 Pharmauti Gyogyszer es Elelmis-
zeripari Reszvenytarsasag (ADR)(b) 2,587,500 1,800,000 0.4
Retail Stores 1,142,000 FOTEX RT-Fotex Elso Amerikai-Magyar
Fotoszolgaltatasi Reszvenytarsasag 5,506,157 1,622,844 0.3
Telecommunications 26,510 Matav Reszvenytarsasag (Ordinary) 5,403,627 4,455,462 0.9
Total Investments in Hungary 16,444,685 10,708,431 2.2
Poland Appliances & 89,000 Swarzedzkie Fabryki Mebli S.A. 2,102,193 635,174 0.1
Household Durables
Banking 216,000 Wielkopolski Bank Kredytowy 1,795,589 385,387 0.1
27,000 Wielkopolski Bank Kredytowy
(Series 'C') 14,211 14,337 0.0
------------ ------------ ------
1,809,800 399,724 0.1
Electrical 150,000 Elektrim Towarzystwo Handlowe S.A. 1,916,544 497,026 0.1
Equipment
Food 40,000 International Fast Food Corp. 267,500 65,000 0.0
Total Investments in Poland 6,096,037 1,596,924 0.3
<PAGE>
Portugal Banking 352,212 Banco Comercial Portugues S.A.
(Registered) 4,850,549 4,962,211 1.0
77,000 Banco Totta E Acores S.A. 1,657,285 1,646,188 0.3
------------ ------------ ------
6,507,834 6,608,399 1.3
Building & 72,600 Efacec S.A. 1,363,120 875,426 0.2
Construction 72,600 Efacec S.A. (New Shares) 1,238,401 848,258 0.2
280,000 Soares da Costa S.A. 5,551,268 5,695,080 1.1
56,000 Soares da Costa S.A. (Baby Shares) 0 1,139,016 0.2
28,000 Soares da Costa S.A. (New Shares) 350,219 569,508 0.1
107,200 Sociedade de Empreitadas Somague,
S.A. 755,699 855,074 0.2
------------ ------------ ------
9,258,707 9,982,362 2.0
Retail 125,200 Jeronimo Martins S.A. 2,895,368 5,725,536 1.1
754,350 Sonae Investimentos-SGPS S.A. 16,218,946 18,270,639 3.6
19,114,314 23,996,175 4.7
------------ ------------ ------
Total Investments in Portugal 34,880,855 40,586,936 8.0
Turkey Beverage 1,708,160 Ege Biracilik Ve Malt Sanayii A.S. 472,057 1,610,318 0.3
650,000 Erciyas Biracilik Ve Malt Sanayii
A.S. 640,556 682,578 0.1
------------ ------------ ------
1,112,613 2,292,896 0.4
Building 2,502,000 Alarko Holdings A.S. 1,948,635 2,925,967 0.6
Materials 1,293,000 Cimentas Izmir Cimento Fabrikasi
T.A.S. 1,002,327 771,480 0.1
------------ ------------ ------
2,950,962 3,697,447 0.7
Food 750,000 Kerevitas Gida Sanayii Ve Ticaret A.S. 546,032 877,088 0.2
Industrial 4,373,332 Turk Siemens Kablo Ve Elektrik
Components Sanayii A.S. 826,596 1,591,726 0.3
Insurance 8,911,000 Aksigorta A.S. 2,227,750 2,339,403 0.5
Retail 1,781,000 Migros Turk A.S. 3,209,482 5,100,716 1.0
Steel 60,275,000 Izmir Demir Celik Sanayii A.S. 4,117,899 4,387,560 0.9
Total Investments in Turkey 14,991,334 20,286,836 4.0
Total Investments in Europe 101,867,077 101,358,852 20.0
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US Dollars)
<CAPTION>
LATIN Shares Held/ Percent of
AMERICA Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Automobiles 215,436 Compania Interamericana de Automo-
viles S.A. (CINA) $ 3,264,299 $ 1,110,161 0.2%
Oil & Related 1,551,800 Astra Compania Argentina de Petro-
leo S.A. 3,240,628 2,065,133 0.4
Real Estate 49,000 Inversiones y Representaciones S.A.
(GDR)(d) 1,270,753 931,000 0.2
Utilities 205,000 Transportadora de Gas del Sur S.A. 2,815,251 1,973,125 0.4
Total Investments in Argentina 10,590,931 6,079,419 1.2
Brazil Automotive 208,800 CAPCO Automotive Products Corpora-
tion S.A. 2,654,248 1,748,700 0.3
Banking 660,439,023 Banco Bradesco S.A. (Preferred) 4,497,996 4,449,506 0.9
42,567,626 Banco Nacional S.A. (Preferred) 892,993 711,041 0.1
------------ ------------ ------
5,390,989 5,160,547 1.0
Beverage 5,644,200 Companhia Cervejaria Brahma S.A. PN
(Preferred) 1,094,100 1,351,402 0.3
574,872 Companhia Cervejaria Brahma S.A.
(Warrants)(c) 14,956 775 0.0
------------ ------------ ------
1,109,056 1,352,177 0.3
Electrical 17,753,900 Light--Servicios de Eletricidade S.A. 6,393,851 5,239,180 1.0
Equipment
Food 11,020,000 Bombril S.A. PN (Preferred) 255,679 263,842 0.1
Mining 23,957,000 Companhia Vale do Rio Doce S.A. PN
(Preferred) 2,236,502 3,241,398 0.6
Oil & Related 46,963,333 Petroleo Brasileiro S.A. (Preferred) 6,380,127 3,268,606 0.6
Paper & Forest 2,500,000 MelPaper S.A. (Preferred) 1,631,371 835,189 0.2
Products
<PAGE>
Retail 1,500,000 Mesbla S.A. (Preferred) 350,350 148,664 0.0
Steel 6,965,300,000 Usinas Siderorgicas de Minas Gerais--
Usiminas S.A. (Preferred) 5,005,054 7,989,150 1.6
Telecommunications 135,500 Telecomunicacoes Brasileiras S.A.--
Telebras (ADR)(b) 5,629,998 3,590,750 0.7
53,142,632 Telecomunicacoes Brasileiras S.A.--
Telebras ON 1,682,509 1,236,839 0.2
119,040,591 Telecomunicacoes Brasileiras S.A.--
Telebras PN (Preferred) 5,311,183 3,207,998 0.6
------------ ------------ ------
12,623,690 8,035,587 1.5
Utilities 4,242,400 Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) 1,180,141 812,575 0.2
260,000 Companhia Energetica de Minas
Gerais S.A.(CEMIG) (ADR)(b) 6,240,000 4,875,000 1.0
------------ ------------ ------
7,420,141 5,687,575 1.2
Total Investments in Brazil 51,451,058 42,970,615 8.4
Chile Apparel 6,800,201 Bata Chile S.A. 1,920,913 1,181,176 0.2
Broadcasting & 4,751,441 Editorial Lord Cochrane S.A. 2,687,332 1,615,254 0.3
Publishing
Telecommunications 28,000 Compania de Telefonos de Chile S.A.
(ADR)(b) 3,037,806 1,869,000 0.4
Total Investments in Chile 7,646,051 4,665,430 0.9
Ecuador Building 4,825 La Cemento Nacional C.A. 1,449,510 1,206,250 0.2
Materials
Total Investments in Ecuador 1,449,510 1,206,250 0.2
Mexico Building 167,000 Cementos Mexicanos, S.A. de C.V.
Materials (Class B) (ADR)(b) 1,509,987 365,880 0.1
Financial 155,250 Banca Quadrum, S.A. de C.V. (ADR)(b) 2,012,895 640,406 0.1
Services
Food 1,600,000 Grupo Herdez, S.A. de C.V. 'A' 1,450,009 437,004 0.1
Health & 125,000 Kimberly-Clark de Mexico, S.A. de
Personal Care C.V. 2,069,659 1,026,065 0.2
<PAGE>
Leisure 810,650 Grupo Carso, S.A. de C.V. 'A' 6,799,551 3,529,482 0.7
262,000 Grupo Carso, S.A. de C.V. (ADR)(b) 3,738,688 2,227,000 0.4
------------ ------------ ------
10,538,239 5,756,482 1.1
Metals 82,700 Grupo Simec, S.A. de C.V. (ADR)(b) 1,464,457 444,513 0.1
Retail 2,375,000 Cifra, S.A. de C.V. 'C' 4,796,743 2,880,690 0.6
287,800 Grupo Empresarial Fenix, S.A. de C.V.
(ELEKTRA) 'L' Shares 2,404,684 574,755 0.1
------------ ------------ ------
7,201,427 3,455,445 0.7
Telecommunications 160,450 Telefonos de Mexico, S.A. de C.V.
(ADR)(b) 11,229,807 4,572,825 0.9
Total Investments in Mexico 37,476,480 16,698,620 3.3
Panama Beverage 54,750 Panamerican Beverages, Inc. (Class A) 1,654,974 1,430,344 0.3
Total Investments in Panama 1,654,974 1,430,344 0.3
Peru Banking 138,774 Banco de Credito de Peru S.A. 94,494 226,219 0.0
51,550 Banco Wiese Limitado S.A. (ADR) (b) 493,750 360,850 0.1
------------ ------------ ------
588,244 587,069 0.1
Mining 513,331 Southern Peru Copper Corp. S.A. 2,086,477 1,757,718 0.3
35,008 Southern Peru Copper Corp. S.A.
(Rights)(e) 0 0 0.0
------------ ------------ ------
2,086,477 1,757,718 0.3
Total Investments in Peru 2,674,721 2,344,787 0.4
Venezuela Utilities 2,923,616 C.A. La Electricidad de Caracas
S.A.I.C.A.--S.A.C.A. 4,407,191 3,103,443 0.6
Total Investments in Venezuela 4,407,191 3,103,443 0.6
Total Investments in Latin America 117,350,916 78,498,908 15.3
MIDDLE
EAST
Pakistan Electrical 699,752 Karachi Electric Supply Corp. Ltd. 647,536 527,382 0.1
Equipment
Total Investments in Pakistan 647,536 527,382 0.1
Total Investments in the Middle East 647,536 527,382 0.1
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US Dollars)
<CAPTION>
PACIFIC
BASIN/ Shares Held/ Percent of
ASIA Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Merchandising 303,850 Amway Asia Pacific Ltd. $ 8,779,737 $ 11,318,413 2.2%
Total Investments in Australia 8,779,737 11,318,413 2.2
China Appliances & 8,935,500 Shenzhen China Bicycles Co.
Household Durables (Holdings) Ltd. 'B' 4,685,279 3,548,081 0.7
Total Investments in China 4,685,279 3,548,081 0.7
Hong Automotive 5,974,000 Sime Darby (Hong Kong) Ltd. 8,222,988 6,490,539 1.3
Kong
Financial 18,647,000 Winton Holdings Ltd. 5,892,662 4,678,934 0.9
Services
Food 21,439,000 C.P. Pokphand Co. Ltd. (Ordinary) 5,782,063 6,377,766 1.3
Textiles 7,640,000 United Success International
Holdings Ltd. 1,018,305 602,781 0.1
Total Investments in Hong Kong 20,916,018 18,150,020 3.6
India Broadcasting & 888,600 Videocon International Ltd.
Publishing (ADR) (b) 7,773,607 2,781,318 0.5
Building & 31,250 The Associated Cement Co. Ltd. 2,499,847 3,781,847 0.7
Construction
Chemicals 355,500 Mardia Chemical Ltd. 1,545,509 1,443,511 0.3
Energy 661,000 Bombay Suburban Electric Supply
Co. Ltd. 3,601,257 3,326,051 0.7
333,000 Cochin Refinery Ltd. 2,604,742 2,465,685 0.5
------------ ------------ ------
6,205,999 5,791,736 1.2
<PAGE>
Financial 1,218,000 Industrial Credit & Investment
Services Corporation of India, Ltd. 4,939,862 4,751,752 0.9
Metals 50 Hindalco Industries Ltd. (Ordinary) 938 1,417 0.0
Recreation & 20,000 Suraj Diamonds Ltd. 51,165 50,955 0.0
Consumer Goods
Tobacco 95,250 Indian Tobacco Co. Ltd. (I.T.C.)
(GDR)(d) 1,381,125 738,187 0.1
Utilities 667,500 Kec International Ltd. 5,050,805 4,889,331 1.0
Total Investments in India 29,448,857 24,230,054 4.7
Indonesia Banking 2,166,500 P.T. Bank Bali 6,040,765 4,067,635 0.8
Broadcasting & $ 745,000 P.T. Surya Citra Television, 4% due
Publishing 7/01/1997 (Convertible) 745,000 737,550 0.1
Energy Equipment 1,502,000 P.T. Kabelmetal Indonesia 2,028,572 2,383,594 0.5
& Services 1,045,700 P.T. Supreme Cable Manufacturing Corp. 3,006,269 2,898,230 0.6
------------ ------------ ------
5,034,841 5,281,824 1.1
Telecommunications 147,420 P.T. Indonesian Satellite (ADR)(b) 5,600,335 5,196,555 1.0
Tobacco 1,074,000 P.T. Gudang Garam 6,045,592 6,001,341 1.2
Total Investments in Indonesia 23,466,533 21,284,905 4.2
Korea Automotive 55,107 Dong Ah Tire Industries 2,989,649 4,272,183 0.8
Food 29,390 Lotte Confectionery Corp. 3,401,600 4,206,729 0.8
Telecommunications 20,257 Korea Mobile Telecommunications Corp. 11,026,169 15,862,648 3.1
Utilities 233,470 Korea Electric Power Corp. 7,911,201 8,460,566 1.7
Total Investments in Korea 25,328,619 32,802,126 6.4
Malaysia Banking 2,737,000 Public Bank BHD 'Foreign' (Malaysia) 6,484,063 4,784,473 0.9
353,000 Public Bank BHD 'Foreign' (Singapore) 780,370 615,436 0.1
------------ ------------ ------
7,264,433 5,399,909 1.0
<PAGE>
Broadcasting 1,725,000 Sistem Televisyen Malaysia BHD 5,065,560 3,615,780 0.7
Food 438,000 Nestle (Malaysia) BHD 2,836,136 2,892,861 0.6
Newspaper/ 1,256,000 New Straits Times Press BHD 5,118,753 3,402,650 0.7
Publishing
Steel 2,706,000 Maruichi (Malaysia) Steel Tube BHD 6,417,204 8,187,028 1.6
Total Investments in Malaysia 26,702,086 23,498,228 4.6
New Transportation 1,700,000 Ports of Auckland Ltd. 2,117,611 2,949,874 0.6
Zealand
Total Investments in New Zealand 2,117,611 2,949,874 0.6
Philip- Multi-Industry 530,500 Benpres Holdings Corp. 4,969,875 4,111,375 0.8
pines
Telecommunications $ 3,500,000 Philippine Long Distance Telephone
Co.,10.625% due 6/02/2004 3,578,750 3,360,000 0.7
Total Investments in the Philippines 8,548,625 7,471,375 1.5
Singapore Banking 269,269 United Overseas Bank Ltd. (Warrants)(c) 844,529 1,307,224 0.3
Total Investments in Singapore 844,529 1,307,224 0.3
Sri Building & 262,500 Lankan Tiles 337,398 307,887 0.1
Lanka Construction
Diversified 90,625 Aitken Spence 518,247 339,042 0.1
Total Investments in Sri Lanka 855,645 646,929 0.2
Taiwan Merchandising 244,873 Hocheng Group Corp. (ADR)(b) 6,742,166 5,325,988 1.0
Total Investments in Taiwan 6,742,166 5,325,988 1.0
Thailand Appliances & 205,400 Karat Sanitary Ware Co., Ltd. 1,169,865 788,556 0.2
Household Durables
Total Investments in Thailand 1,169,865 788,556 0.2
Total Investments in the Pacific
Basin/Asia 159,605,570 153,321,773 30.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US Dollars)
<CAPTION>
Face Percent of
Amount Investments Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Commercial $ 20,000,000 ANZ (Delaware), Inc., 5.95% due
Paper* 5/15/1995 $ 19,854,556 $ 19,854,556 3.9%
20,000,000 Ciesco L.P., 5.97% due 5/11/1995 19,867,333 19,867,333 3.9
26,006,000 General Electric Capital Corp., 6.25%
due 4/03/1995 25,996,970 25,996,970 5.1
20,000,000 Matterhorn Capital Corp., 5.96% due
4/26/1995 19,917,222 19,917,222 3.9
------------ ------------ ------
85,636,081 85,636,081 16.8
Commercial THB 167,000,000 Finance One Co., Ltd., 13%++ due
Paper*-- 6/27/1995 6,551,852 6,587,141 1.3
Foreign P.T. Bakrie & Brothers:
IDR 4,000,000,000 17%++ due 7/25/1995 1,706,447 1,694,890 0.3
3,000,000,000 17.50%++ due 7/25/1995 1,279,835 1,271,167 0.2
8,000,000,000 P.T. Duta Anggada Realty, 17.50%++ due
8/30/1995 3,437,177 3,435,918 0.7
P.T. Indah Kiat Pulp & Paper Corp.:
2,000,000,000 15.50%++ due 6/09/1995 875,067 868,577 0.2
3,000,000,000 15.75%++ due 6/09/1995 1,312,601 1,302,865 0.3
------------ ------------ ------
15,162,979 15,160,558 3.0
Foreign Mexican Cetes (Certificados de la
Government Tesoreria de la Federacion):
Obligations* MXN 1,881,680 96%++ due 4/20/1995 338,353 264,976 0.1
811,470 96.875%++ due 4/27/1995 132,962 112,653 0.0
27,510,490 44.70%++ due 8/24/1995 4,139,231 3,097,548 0.6
------------ ------------ ------
4,610,546 3,475,177 0.7
US Government $ 7,000,000 Federal National Mortgage
& Agency Association,5.90% due 4/19/1995 6,979,350 6,979,350 1.4
Obligations*
Total Investments in Short-Term
Securities 112,388,956 111,251,166 21.9
<PAGE>
Total Investments $546,984,522 506,390,963 99.6
=============
Other Assets Less Liabilities 1,998,245 0.4
------------ ------
Net Assets $508,389,208 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $347,944,764 and
27,150,252 shares outstanding $ 12.82
============
Class B--Based on net assets of $133,105,722 and
10,447,635 shares outstanding $ 12.74
============
Class C--Based on net assets of $13,191,498 and
1,036,454 shares outstanding $ 12.73
============
Class D--Based on net assets of $14,147,224 and
1,104,734 shares outstanding $ 12.81
============
<FN>
*Commercial Paper, certain Foreign Government and US Government &
Agency Obligations are traded on a discount basis; the interest
rates shown are the discount rates paid at the time of purchase by
the Fund.
++Represents the yield to maturity on this zero coupon issue.
(a)Global Depositary Shares (GDS).
(b)American Depositary Receipts (ADR).
(c)Warrants entitle the Fund to purchase a predetermined number of
shares of Common Stock. The purchase price and number of shares are
subject to adjustment of certain conditions until the expiration
date.
(d)Global Depositary Receipts (GDR).
(e)The rights may be exercised until 4/18/1995.
</TABLE>
<PAGE>
PORTFOLIO CHANGES
For the Quarter Ended March 31, 1995
Additions
Banca Quadrum, S.A. de C.V. (ADR)
*Bank of Seoul
Cochin Refinery Ltd.
Industrial Credit & Investment Corporation
of India, Ltd.
Matav Reszvenytarsasag (Ordinary)
P.T. Kabelmetal Indonesia
P.T. Supreme Cable Manufacturing Corp.
Rembrandt Group Ltd.
South Africa Iron & Steel Industrial
Corporation, Ltd.
*South Africa Iron & Steel Industrial
Corporation, Ltd. (Rights)
South African Breweries Ltd. (ADR)
Southern Peru Copper Corp. S.A. (Rights)
Suraj Diamonds Ltd.
Turk Siemens Kablo Ve Elektrik Sanayii A.S.
Wielkopolski Bank Kredytowy (Series 'C')
<PAGE>
Deletions
ASA Ltd.
Ayudhya Insurance Co. 'Foreign'
Baltic International USA, Inc.
Banco de Galicia y Buenos Aires S.A.
Banco de Galicia y Buenos Aires
S.A. (ADR)
Banco Frances del Rio de la Plata S.A.
Bangkok Bank, Ltd. 'Foreign'
Bangkok Land Company Ltd.
Bank of Punjab
*Bank of Seoul
Bank of Seoul (New Shares)
Bau Holding AG
Bombay Suburban Electric Supply Co. Ltd.,
Convertible Debentures, 15% due
3/01/1995
Cementos Mexicanos, S.A. de C.V. (Class B)
Choong Wae Pharmaceutical Corp.
Choong Wae Pharmaceutical Corp.
(New Shares)
Commerce Asset--Holdings BHD
Creditanstalt--Bankverein AG
D.B. Group Ltd.
Energie--Versorgung Niederosterreich
AG (EVN)
Grupo Embotellador de Mexico, S.A. de C.V.
Grupo Financiero Bancomer, S.A. de C.V.
(ADR)
Grupo Simec, S.A. de C.V. (Ordinary)
Grupo Situr, S.A. de C.V. (ADR)
Grupo Situr, S.A. de C.V. 'B' (Ordinary)
Grupo Tribasa, S.A. de C.V. (ADR)
Hanyang Securities Corp.
Hanyang Securities Corp. (Rights)
Hindalco Industries Ltd. (GDS)
Hong Kong Land Holdings Ltd. (Warrants)
IJM Corp. BHD
Jardine Matheson Holdings, Ltd.
Jenbacher Transportsysteme AG
Mardia Chemical Ltd. (Rights)
Michaniki S.A.
Sanyo Universal Electric Co., Ltd.
Servicios Financieros Quadrum, S.A. de C.V.
(ADR)
Shinsegae Department Store
Sime Darby BHD
*South Africa Iron & Steel Industrial
Corporation, Ltd. (Rights)
Telecom Argentina Stet--France
Telecom S.A.
Telecom Argentina Stet--France
Telecom S.A. (ADR)
Tolmex, S.A. de C.V. 'B'
Uniao Cervejaria S.A. (UNICER)
Unternehmensgruppe OMV AG
Vitro, S.A. de C.V.
Vitro, S.A. de C.V. (ADR)
Western Paques (India) Ltd.
Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR)
<PAGE>
[FN]
*Added and deleted in the same quarter.
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of March 31, 1995 Net Assets
Sonae Investimentos--SGPS S.A. 3.6%
Korea Mobile Telecommunications Corp. 3.1
Amway Asia Pacific Ltd. 2.2
Korea Electric Power Corp. 1.7
Maruichi (Malaysia) Steel Tube BHD 1.6
Delta Dairy, S.A. (Ordinary) 1.6
Usinas Siderorgicas de Minas Gerais--Usiminas S.A.
(Preferred) 1.6
Groupe Omnium Nord Africain 1.4
Wafa Bank 1.3
Sime Darby (Hong Kong) Ltd. 1.3
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Grace Pineda, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Gobal Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, New York 11245
<PAGE>
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
