SemiAnnual Report
_______________________
Foreign Equity Fund
April 30, 1994
_______________________
Dear Shareholders
After a promising start in January, most world markets turned weaker during
the three months ended April 30. The trigger was a reversal in U.S. monetary
policy when the Federal Reserve started to increase the fed funds rate in
February for the first time in five years. Although the Fed described its move
as a normal adjustment following a long period of monetary ease, bond markets
took fright and pulled equities down with them. Not surprisingly, the sharpest
reversals came from the markets of Southeast Asia which looked overextended
following their phenomenal performance in 1993. Given their closer monetary
and economic ties with the U.S., the markets of Latin America also corrected
sharply. European markets held up a little better and there was a sharp rally
in Italy. The most important exception to the generally weak market trend was
Japan where the rise was due entirely to the upward move of the yen against
the U.S. currency.
In the currency markets, the main feature was persistent weakness of the
dollar, which failed to react to an upward move in U.S. interest rates. The
yen was the star performer as it resumed its all time high against the U.S.
currency, but Continental European currencies were also generally firm.
Market Performance
3 Months Ended 4/30/94
____________________________________
Local Currency
Local vs. U.S. In U.S.
Currency Dollars Dollars
____________________________________
Australia -9.4% 0.6% -8.9%
France -6.2 4.2 -2.2
Germany 2.2 5.3 7.6
Hong Kong -19.8 0.0 -19.8
Italy 19.0 6.9 27.2
Japan -2.8 7.4 4.4
Netherlands -4.7 5.1 0.1
Norway -7.9 4.2 -4.1
Singapore -3.4 2.5 -1.1
Spain -10.7 4.3 -6.9
Sweden -6.7 3.6 -3.3
Switzerland -12.0 4.2 -8.3
United Kingdom -9.1 1.2 -8.1
Given this adverse background, it was impossible for the Foreign Equity
Fund to make further progress. Its return was disappointing against the Morgan
Stanley Capital International Europe, Australia and Far East (EAFE) Index,
which benefited from its high weighting in Japan, but was marginally better
than the U.S. market's.
Market Review
In the Pacific, the most important feature of the quarter was the beginning of
a more stable Japanese economy after a long period of recession. Leading
indicators are more encouraging and, with a package of stimulatory measures
now passed, a modest recovery is likely as the year progresses. Although
prospects are brighter, any recovery will be less robust than usual.
The political scene continues to show rapid and unexpected change.
Despite his popularity with the electorate, former Prime Minister Hosokawa
found the pressure of holding his coalition government together too demanding
and resigned in April. His successor is finding the job equally difficult,
especially when the Socialist Party broke away from the coalition.
Despite this political uncertainty, an economic recovery should soon be
under way and our positions in Japan focus on more cyclical stocks. Our bias
also continues to be on smaller companies which are more reasonably valued and
typically outperform as industrial production picks up.
Elsewhere in the Pacific, the picture has been one of strong economic
performance but weak stock markets. Typical has been Hong Kong where the
economy is growing but the stock market fell sharply from its highs in
January. With its currency linked directly to the U.S. dollar, the interest
rate hikes had a more direct impact on sentiment in Hong Kong, particularly
after the market's phenomenal rise at the end of 1993.
Hong Kong is still considered to be the best "play" on the economic
renaissance in China itself. We remain optimistic about the longer-term
outlook but, over the shorter term, there are signs of overheating in China's
economy and Hong Kong stocks will also remain sensitive to any further
increases in U.S. interest rates.
Turning further south, the stock markets of Malaysia and Singapore
settled down after their January falls and were broadly unchanged over the
three months under review. Both economies are showing some of the highest
economic growth rates in the region and are less influenced by events in China
itself. In Malaysia, the authorities introduced a number of measures to drain
liquidity from the system and reduce speculative activity. The economic
recovery is well advanced but GDP growth is still expected to top 8% in 1994
and inflation remains under control.
In Australia, the stock market was surprisingly resilient given the
weakness of the local bond market. Improved commodity prices have helped
sentiment and there are signs the economy has stabilised. We have increased
our positions in Australia and continue to be optimistic about New Zealand
where the economy continues to strengthen. Economic growth forecasts were
upgraded again during the quarter, and inflation and government finance
remained well under control. In addition, as an exporter of agricultural
products, New Zealand is well placed to benefit from the GATT agreement signed
in December 1993.
Turning to Europe, signs of economic recovery have started to appear,
with the UK staying ahead of the Continent. In line with the U.S. experience,
the bond markets have been savaged but, with inflation well under control, we
feel interest rates can fall much further. In Germany, signs of the economy
bottoming are now widespread although any recovery will be muted by recent tax
increases. German money supply growth remains very high but wage settlements
have moderated and Mr. Tietmeyer, the new head of the Bundesbank, has
continued a policy of modest but steady reductions in short-term interest
rates. Helped by this encouraging picture and the strength of the
deutschemark, the German market performed well in dollar terms during the
quarter.
In France, the economy continues to reflect the virtues of low
inflation, government finances in reasonable order, and an improving trade
position. Signs of recovery are harder to find than in Germany which is
perhaps why the French stock market has been more subdued. Mr. Balladur's
quest for the presidency has prompted a small shift towards more stimulatory
policies and we have added to cyclical stocks in the portfolio.
In Switzerland and in Scandinavia, the focus has been on attractively
valued companies which will benefit from wider growth internationally as well
as a domestic recovery.
The star of the European scene during the quarter was Italy where the
success of Silvio Berlusconi's alliance in the recent elections has been
greeted enthusiastically by the stock market. Perhaps it is too optimistic to
hope that the new government can break completely with Italy's bureaucratic
and corrupt past, but the prospect of tax cuts, privatisations and pro-
business policies is clearly encouraging.
In the UK, the economy shows a picture of modest recovery, improving
government finances and inflation down to modest levels. A range of small but
widespread tax increases came into force in April and there is hope that this
package will prevent the economy from racing away without extinguishing the
moderate recovery. Given this background, it is difficult to understand why
the government bond market behaved so badly, but rising yields were quick to
undermine equities. Our weighting in the UK is relatively low, and this market
has been a source of cash to finance ideas in other areas.
Stock markets in Latin America were quick to feel the impact of a rise
in U.S. interest rates. Mexico weakened first and sentiment worsened with the
assassination of Mr. Colosio the preferred successor to President Salinas. The
replacement candidate, Mr. Zedillo, is expected to continue to advocate
Salinas-style policies, but the situation will remain volatile until the
August elections.
In Brazil, attention has focused on the imminent introduction of the
Unit of Real Value (URV), which is the latest initiative to stem inflation by
pegging the exchange rate to the U.S. dollar. Politics have affected sentiment
here too with socialist candidate Mr. Lula showing strongly in opinion polls.
We remain confident that Mr. Cardoso will win the elections in the autumn and
be able to continue his stabilisation plans.
Investment Policy & Outlook
For some time now the main thrust of our policy has been to have a little
under half the portfolio in Europe, a low relative weighting in Japan,
countered by significant positions in Southeast Asia. From the beginning of
this year, we have begun a modest retreat from the Southeast Asian markets in
order to rebuild our weighting in Japan. This shift in policy needs careful
timing and, after the steady performance in Tokyo and Southeast Asia's sharp
correction, looks less compelling at the moment. In Europe, we have reduced
our UK positions in favour of Continental Europe and, following sharp
declines, we are adding to our holdings in Latin America.
Given the exceptional performance of international equities last year,
the current pause is not surprising and we remain optimistic about the
prospects for investing overseas. Despite the trend of rising U.S. interest
rates, the German central bank has continued to cut rates and this has been
rapidly mirrored in other European economies. Both Japan and Europe are well
behind the U.S. in the economic cycle and can look forward to recovering
economies and stable or falling interest rates. In Southeast Asia, the stock
markets will remain volatile but the economies will still provide the highest
rates of economic growth in the world and the stocks will continue to play
their part in a well-diversified international portfolio.
World markets may back and fill for a little longer, but the Foreign
Equity Fund remains fully invested, reflecting our confidence that the next
major move will be upward.
Respectfully submitted,
Martin G. Wade
President
May 24, 1994
_____________________________________________________________________________
TWENTY-FIVE LARGEST HOLDINGS
April 30, 1994
_____________________________________________________________________________
Percent of
Company Country Net Assets
_____________________________________________________________________________
Swire Pacific 'A' Hong Kong 1.6%
_____________________________________________________________________________
Telefonos de Mexico ADR (USD) Mexico 1.5
_____________________________________________________________________________
Elsevier Netherlands 1.4
_____________________________________________________________________________
Wolters Kluwer Netherlands 1.4
_____________________________________________________________________________
Generale des Eaux France 1.2
_____________________________________________________________________________
Royal Dutch Petroleum Netherlands 1.2
_____________________________________________________________________________
SIP Italy 1.0
_____________________________________________________________________________
Technology Resources Industries Malaysia 1.0
_____________________________________________________________________________
United Overseas Bank Singapore 1.0
_____________________________________________________________________________
Sandoz Switzerland 0.9
_____________________________________________________________________________
United Engineers Malaysia 0.9
_____________________________________________________________________________
Kyocera Japan 0.9
_____________________________________________________________________________
National Westminster Bank United Kingdom 0.9
_____________________________________________________________________________
Wharf Holdings Hong Kong 0.8
_____________________________________________________________________________
Roche Holdings Switzerland 0.8
_____________________________________________________________________________
Cable & Wireless United Kingdom 0.8
_____________________________________________________________________________
Fletcher Challenge New Zealand 0.8
_____________________________________________________________________________
Sumitomo Electric Japan 0.7
_____________________________________________________________________________
Caradon United Kingdom 0.7
_____________________________________________________________________________
Nippon Denso Japan 0.7
_____________________________________________________________________________
Nestle' Switzerland 0.7
_____________________________________________________________________________
Gehe Germany 0.7
_____________________________________________________________________________
Valeo France 0.7
_____________________________________________________________________________
Reed International United Kingdom 0.7
_____________________________________________________________________________
Resorts World Malaysia 0.7
_____________________________________________________________________________
Total 23.7%
_____________________________________________________________________________
_____________________________________________________________________________
INDUSTRY DIVERSIFICATION
April 30, 1994
_____________________________________________________________________________
Percent of
Net Assets
_____________________________________________________________________________
Banking 7.2%
_____________________________________________________________________________
Building Materials & Components 6.4
_____________________________________________________________________________
Media 6.1
_____________________________________________________________________________
Merchandising 5.8
_____________________________________________________________________________
Telecommunications 5.6
_____________________________________________________________________________
Health & Personal Care 5.3
_____________________________________________________________________________
Food & Household Products 5.2
_____________________________________________________________________________
Electrical & Electronics 5.1
_____________________________________________________________________________
Multi Industry 4.8
_____________________________________________________________________________
Machinery & Engineering 4.5
_____________________________________________________________________________
Chemicals 4.2
_____________________________________________________________________________
Energy Sources 4.2
_____________________________________________________________________________
Real Estate 4.0
_____________________________________________________________________________
Percent of
Net Assets
_____________________________________________________________________________
Business & Public Services 3.7%
_____________________________________________________________________________
Metals & Minerals 3.0
_____________________________________________________________________________
Entertainment/Leisure 2.5
_____________________________________________________________________________
Transport/Storage 2.5
_____________________________________________________________________________
Forestry & Paper Products 2.2
_____________________________________________________________________________
Financial Services 1.7
_____________________________________________________________________________
Automobiles 1.6
_____________________________________________________________________________
Beverage/Tobacco Manufacturing 1.6
_____________________________________________________________________________
Investment Trusts 0.4
_____________________________________________________________________________
Other Industries 4.8
_____________________________________________________________________________
Short-Term Investments 7.4
_____________________________________________________________________________
Other Assets Less Liabilities 0.2
_____________________________________________________________________________
Total Net Assets 100.0%
_____________________________________________________________________________
_____________________________________________________________________________
SECURITY CLASSIFICATION
April 30, 1994
_____________________________________________________________________________
Percent of Cost Market Value
Net Assets (000) (000)
_____________________________________________________________________________
Common Stocks, Rights & Warrants 91.5% $564,570 $657,778
_____________________________________________________________________________
Preferred Stocks 0.8 3,396 5,537
_____________________________________________________________________________
Corporate Bonds 0.1 148 154
_____________________________________________________________________________
Short-Term Investments 7.4 52,859 52,859
_____________________________________________________________________________
Total Investments 99.8 620,973 716,328
_____________________________________________________________________________
Other Assets Less Liabilities 0.2 1,546 1,743
_____________________________________________________________________________
Net Assets 100.0% $622,519 $718,071
_____________________________________________________________________________
_____________________________________________________________________________
SUMMARY OF INVESTMENTS AND CASH
April 30, 1994
_____________________________________________________________________________
Percent
of MSCI
Country Equities! Cash Total EAFE
_____________________________________________________________________________
Argentina 0.7% - 0.7% -
_____________________________________________________________________________
Australia 2.8 - 2.8 2.6%
_____________________________________________________________________________
Austria 0.1 - 0.1 0.4
_____________________________________________________________________________
Belgium 1.7 - 1.7 1.1
_____________________________________________________________________________
Brazil 0.6 - 0.6 -
_____________________________________________________________________________
Canada 0.3 - 0.3 -
_____________________________________________________________________________
Chile 0.7 - 0.7 -
_____________________________________________________________________________
Denmark 0.2 - 0.2 0.6
_____________________________________________________________________________
Finland 0.2 - 0.2 0.4
_____________________________________________________________________________
France 6.2 - 6.2 6.0
_____________________________________________________________________________
Germany 4.2 - 4.3 6.3
_____________________________________________________________________________
Hong Kong 4.9 - 4.9 3.5
_____________________________________________________________________________
Ireland - - - 0.2
_____________________________________________________________________________
Italy 3.4 - 3.3 2.6
_____________________________________________________________________________
Japan 20.8 - 20.8 45.8
_____________________________________________________________________________
Malaysia 5.5 - 5.5 2.3
_____________________________________________________________________________
Mexico 4.3 - 4.3 -
_____________________________________________________________________________
Netherlands 6.6 - 6.6 3.1
_____________________________________________________________________________
New Zealand 2.3 - 2.3 0.3
_____________________________________________________________________________
Norway 1.1 - 1.1 0.4
_____________________________________________________________________________
Portugal 0.3 - 0.3 -
_____________________________________________________________________________
Singapore 2.6 - 2.6 1.1
_____________________________________________________________________________
South Korea 0.7 - 0.7 -
_____________________________________________________________________________
Spain 1.7 - 1.7 1.8
_____________________________________________________________________________
Sweden 1.4 - 1.4 1.5
_____________________________________________________________________________
Switzerland 4.3 - 4.3 4.4
_____________________________________________________________________________
Thailand 1.5 - 1.5 -
_____________________________________________________________________________
United Kingdom 13.3 - 13.3 15.5
_____________________________________________________________________________
Short-Term Securities - 7.4% 7.4 -
_____________________________________________________________________________
Other Assets Less Liabilities- 0.2 0.2 -
_____________________________________________________________________________
Total 92.4% 7.6% 100.0% 100.0%*
_____________________________________________________________________________
* Total may not add to 100.0% due to rounding.
! Includes bonds convertible into equities.
_____________________________________________________________________________
EXCHANGE RATES TO U.S. $
April 30, 1994
_____________________________________________________________________________
Country Exchange Rate
_____________________________________________________________________________
Argentina 0.99915
_____________________________________________________________________________
Australia 1.40007
_____________________________________________________________________________
Austria 11.61750
_____________________________________________________________________________
Belgium 34.19000
_____________________________________________________________________________
Brazil 1302.30000
_____________________________________________________________________________
Canada 1.38145
_____________________________________________________________________________
Denmark 6.51000
_____________________________________________________________________________
Finland 5.37755
_____________________________________________________________________________
France 5.68100
_____________________________________________________________________________
Germany 1.65950
_____________________________________________________________________________
Hong Kong 7.72450
_____________________________________________________________________________
Ireland 0.67972
_____________________________________________________________________________
Italy 1590.97000
_____________________________________________________________________________
Japan 102.05000
_____________________________________________________________________________
Malaysia 2.67900
_____________________________________________________________________________
Mexico 3.27500
_____________________________________________________________________________
Netherlands 1.86340
_____________________________________________________________________________
New Zealand 1.73205
_____________________________________________________________________________
Norway 7.19860
_____________________________________________________________________________
Portugal 170.40000
_____________________________________________________________________________
Singapore 1.55500
_____________________________________________________________________________
South Korea 807.70000
_____________________________________________________________________________
Spain 135.15000
_____________________________________________________________________________
Sweden 7.65985
_____________________________________________________________________________
Switzerland 1.41000
_____________________________________________________________________________
Thailand 25.18000
_____________________________________________________________________________
United Kingdom .66072
_____________________________________________________________________________
_____________________________________________________________________________
TOTAL RETURN PERFORMANCE
Periods Ended April 30, 1994
_____________________________________________________________________________
Calendar
One Three Year- One Three Since
Month Months to-Date Year Years** 9/7/89**
_____________________________________________________________________________
Foreign Equity Fund* 2.74% -4.54% 0.29% 24.45% 12.82% 9.66%
_____________________________________________________________________________
TRP International
Stock Fund 2.70 -4.62 0.25 23.75 12.77 9.89
_____________________________________________________________________________
S&P "500" Index 1.28 -5.76 -2.56 5.31 9.47 9.07
_____________________________________________________________________________
MSCI EAFE Index 4.27 -0.46 7.98 16.95 9.44 3.91***
_____________________________________________________________________________
FT-A Euro
Pacific Index 4.10 0.32 9.25 16.04 8.74 3.66***
_____________________________________________________________________________
* An "institutional only" no-load mutual fund comparable to the T. Rowe
Price International Stock Fund. Total assets $718.1 million. Inception
9/7/89.
** Average Annual Compound Total Return
*** From 8/30/89.
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
STATEMENT OF NET ASSETS
Foreign Equity Fund / April 30, 1994 (Unaudited)
Value
ARGENTINA - 0.7% (000)
_____________________________________________________________________________
COMMON STOCKS
26,442 shs. Banco de Galicia Buenos Aires
ADR (USD) . . . . . . . . . . . . . . . . $ 820
27,410 Buenos Aires Embotelladora
ADR (USD). . . . . . . . . . . . . . . . 956
109,361 Perez 'B'. . . . . . . . . . . . . . . . . 547
45,640 * Sociedad Comercial del Plata . . . . . . . 247
3,343 * Sociedad Comercial del Plata
ADS (USD). . . . . . . . . . . . . . . . 181
20,770 Telefonica de Argentina ADR (USD). . . . . 1,329
37,440 YPF Sociedad Anonima ADR (USD) . . . . . . 931
_______
Total Argentina . . . . . . . . . . . . . . . . . . . . . 5,011
AUSTRALIA - 2.8%
_____________________________________________________________________________
COMMON STOCKS
786,000 ANI. . . . . . . . . . . . . . . . . . . . 1,184
321,000 Australia & New Zealand Bank Group . . . . 1,080
100,829 Broken Hill Property . . . . . . . . . . . 1,224
118,000 Commonwealth Bank of Australia . . . . . . 693
330,880 Email. . . . . . . . . . . . . . . . . . . 1,172
700,000 John Fairfax Holdings. . . . . . . . . . . 1,370
212,775 MIM. . . . . . . . . . . . . . . . . . . . 439
401,328 Mayne Nickless . . . . . . . . . . . . . . 2,379
232,352 National Australia Bank. . . . . . . . . . 1,972
268,545 News Corporation . . . . . . . . . . . . . 1,857
423,124 Nine Network . . . . . . . . . . . . . . . 1,602
184,788 Philip Burns . . . . . . . . . . . . . . . 528
556,770 Western Mining . . . . . . . . . . . . . . 2,784
440,328 Woolworths . . . . . . . . . . . . . . . . 978
_______
19,262
PREFERRED STOCK
556,000 * TNT, Cum. Cv., 8.00% . . . . . . . . . . . 905
_______
Total Australia . . . . . . . . . . . . . . . . . . . . . 20,167
AUSTRIA - 0.1%
_____________________________________________________________________________
COMMON STOCK
7,570 Oesterreische Elektrik Wirtsch . . . . . . 403
PREFERRED STOCK
6,841 Creditanstalt Bankverein . . . . . . . . . 402
_______
Total Austria . . . . . . . . . . . . . . . . . . . . . 805
BELGIUM - 1.7%
_____________________________________________________________________________
COMMON STOCKS
17,118 AG Finanz. . . . . . . . . . . . . . . . . 1,327
14,705 Delhaize Freres. . . . . . . . . . . . . . 587
5,490 Generale Banque. . . . . . . . . . . . . . 1,391
14,923 Kredietbank. . . . . . . . . . . . . . . . 3,055
120 Obourg Financiere. . . . . . . . . . . . . 93
7,620 Societe Generale de Belgique . . . . . . . 601
2,880 Solvay . . . . . . . . . . . . . . . . . . 1,398
4,060 UCB. . . . . . . . . . . . . . . . . . . . 2,785
7,570 Union Miniere. . . . . . . . . . . . . . . 574
_______
1,811
CORPORATE BOND
5,445,000 BEL Kredietbank, Cv., 5.75%, 11/30/03. . . . . 154
_______
Total Belgium . . . . . . . . . . . . . . . . . . . . . 11,965
Foreign Equity Fund
Value
BRAZIL - 0.6% (000)
_____________________________________________________________________________
COMMON STOCKS
30 shs. Brazil Fund (USD). . . . . . . . . . . . . $ 1
20,600 Cia Energetica de Sao Paulo
GDS (USD). . . . . . . . . . . . . . . . 247
22,480,000 Companhia Siderurgica Nacional . . . . . . 595
48,220 * Telebras ADR (USD) . . . . . . . . . . . . 1,676
_______
2,519
PREFERRED STOCKS & WARRANTS
558,229 Banco Bradesco . . . . . . . . . . . . . . 7
267,777 wts. * Brahma, 9/30/96 . . . . . . . . . . . . . 12
27,000,000 shs. Paranapanema Mineracao . . . . . . . . . . 487
24,000,000 Telebras . . . . . . . . . . . . . . . . . 866
600,000 Usiminas . . . . . . . . . . . . . . . . . 590
_______
1,962
Total Brazil . . . . . . . . . . . . . . . . . . . . . 4,481
CANADA - 0.3%
_____________________________________________________________________________
COMMON STOCKS
58,390 Alcan Aluminium. . . . . . . . . . . . . . 1,236
43,310 MacMillan Bloedel. . . . . . . . . . . . . 639
19,060 Royal Bank of Canada . . . . . . . . . . . 378
_______
Total Canada . . . . . . . . . . . . . . . . . . . . . 2,253
CHILE - 0.7%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
58,931 Chile Fund (USD) . . . . . . . . . . . . . 2,711
22,160 Chilectra ADR (USD). . . . . . . . . . . . 964
9,330 Compania de Telefonos de Chile
ADR (USD). . . . . . . . . . . . . . . . 891
10,123 Five Arrows Chile Fund (USD) . . . . . . . 236
9,375 Genesis Chile Fund (USD) . . . . . . . . . 253
1,875 wts. * Genesis Chile Fund, 9/30/95 (USD). . . . . 25
_______
Total Chile . . . . . . . . . . . . . . . . . . . . . 5,080
DENMARK - 0.2%
_____________________________________________________________________________
COMMON STOCKS
12,730 shs. Den Danske Bank. . . . . . . . . . . . . . 702
8,200 Teledanmark. . . . . . . . . . . . . . . . 391
14,900 * Unidanmark . . . . . . . . . . . . . . . . 524
_______
Total Denmark . . . . . . . . . . . . . . . . . . . . . 1,617
FINLAND - 0.2%
_____________________________________________________________________________
PREFERRED STOCK
20,040 Nokia. . . . . . . . . . . . . . . . . . . 1,699
FRANCE - 6.2%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
21,270 Accor. . . . . . . . . . . . . . . . . . . 2,756
19,670 CMB Packaging. . . . . . . . . . . . . . . 633
3,590 Carrefour. . . . . . . . . . . . . . . . . 2,602
6,530 Chargeurs. . . . . . . . . . . . . . . . . 1,690
19,906 Cie de St. Gobain. . . . . . . . . . . . . 2,435
13,070 Ecco . . . . . . . . . . . . . . . . . . . 1,698
18,763 Generale des Eaux. . . . . . . . . . . . . 8,534
2,686 L'Oreal. . . . . . . . . . . . . . . . . . 584
34,716 Lafarge Coppee . . . . . . . . . . . . . . 2,805
12,280 Lapeyre. . . . . . . . . . . . . . . . . . 722
640 Legrand. . . . . . . . . . . . . . . . . . 729
Statement of Net Assets (Cont'd)
Value
FRANCE - (Cont'd) (000)
_____________________________________________________________________________
22,955 shs. Peugeot. . . . . . . . . . . . . . . . . . $ 3,616
9,760 Poliet . . . . . . . . . . . . . . . . . . 752
4,052 Primagaz . . . . . . . . . . . . . . . . . 708
662 wts. * Primagaz, 6/30/95. . . . . . . . . . . . . 16
7,830 shs. Promodes . . . . . . . . . . . . . . . . . 1,501
5,500 Societe Generale de France . . . . . . . . 618
34,390 Societe Nationale Elf Aquitaine. . . . . . 2,510
40,906 Television Francaise . . . . . . . . . . . 3,413
26,090 Total. . . . . . . . . . . . . . . . . . . 1,511
20,010 Valeo. . . . . . . . . . . . . . . . . . . 4,896
_______
Total France . . . . . . . . . . . . . . . . . . . . . 44,729
GERMANY - 4.2%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
1,618 Allianz Holdings . . . . . . . . . . . . . 2,543
400 wts. * Allianz Holdings, 3/29/96 . . . . . . . . 304
3,470 shs. Ava Allgemeine Handels - Der Verbr . . . . 1,679
10,080 Bayer. . . . . . . . . . . . . . . . . . . 2,392
1,640 Bayerische Motoren Werke . . . . . . . . . 895
5,012 Deutsche Bank. . . . . . . . . . . . . . . 2,368
12,396 Gehe . . . . . . . . . . . . . . . . . . . 4,377
1,767 * Gehe, new. . . . . . . . . . . . . . . . . 608
6,740 Hoechst. . . . . . . . . . . . . . . . . . 1,481
2,280 Kaufhof Holdings . . . . . . . . . . . . . 753
13,477 Mannesmann . . . . . . . . . . . . . . . . 3,837
1,225 * Mannesmann, new. . . . . . . . . . . . . . 344
2,618 Rhon Klinikum. . . . . . . . . . . . . . . 1,641
3,049 Schering . . . . . . . . . . . . . . . . . 2,039
5,300 Veba . . . . . . . . . . . . . . . . . . . 1,641
7,232 Volkswagen . . . . . . . . . . . . . . . . 2,288
4,800 wts. * Volkswagen International Finance,
10/27/98 . . . . . . . . . . . . . . . . 600
_______
29,790
PREFERRED STOCK
257 shs. Krones Finance . . . . . . . . . . . . . . 441
_______
Total Germany . . . . . . . . . . . . . . . . . . . . . 30,231
HONG KONG - 4.9%
_____________________________________________________________________________
COMMON STOCKS
392,000 Citic Pacific. . . . . . . . . . . . . . . 1,091
15,428 * Consolidated Electric Power Asia . . . . . 23
4,604,000 Great Eagle Holdings . . . . . . . . . . . 2,712
1,196,000 Hong Kong Land Holdings. . . . . . . . . . 3,360
1,715,600 Hong Kong Telecommunications . . . . . . . 3,287
2,324,000 Hopewell Holdings. . . . . . . . . . . . . 2,076
849,000 Hutchison Whampoa. . . . . . . . . . . . . 3,490
543,955 New World Development. . . . . . . . . . . 1,669
1,595,000 Swire Pacific 'A'. . . . . . . . . . . . . 11,460
1,566,000 Wharf Holdings . . . . . . . . . . . . . . 6,041
_______
Total Hong Kong . . . . . . . . . . . . . . . . . . . . . 35,209
ITALY - 3.4%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
372 Alleanza Assicurazioni,
savings shares . . . . . . . . . . . . . 4
107,911 Assicurazioni Generali . . . . . . . . . . 3,139
216,326 Autostrade . . . . . . . . . . . . . . . . 322
726,030 Banca Fideuram . . . . . . . . . . . . . . 1,011
Foreign Equity Fund
Value
ITALY - (Cont'd) (000)
_____________________________________________________________________________
33,430 shs. Danieli & Company,
savings shares . . . . . . . . . . . . . $ 147
55,467 * Imi. . . . . . . . . . . . . . . . . . . . 457
115,580 Italcable. . . . . . . . . . . . . . . . . 828
286,716 Italcable, savings shares. . . . . . . . . 1,710
271,230 Italgas. . . . . . . . . . . . . . . . . . 1,034
18,030 Lloyd Adriatico. . . . . . . . . . . . . . 186
2,059,152 Montedison . . . . . . . . . . . . . . . . 2,033
688,416 wts. * Montedison, 12/31/95 . . . . . . . . . . . 94
688,416 * Montedison, 1/19/97. . . . . . . . . . . . 189
13,930 shs. RAS. . . . . . . . . . . . . . . . . . . . 274
71,350 RAS, savings shares. . . . . . . . . . . . 803
100,000 wts. * RAS, 12/31/95. . . . . . . . . . . . . . . 240
95,109 shs. Sasib, savings shares. . . . . . . . . . . 358
2,144,816 SIP. . . . . . . . . . . . . . . . . . . . 6,418
408,710 SIP, savings shares. . . . . . . . . . . . 1,014
711,270 Stet . . . . . . . . . . . . . . . . . . . 2,752
311,010 Stet, savings shares . . . . . . . . . . . 1,019
_______
Total Italy . . . . . . . . . . . . . . . . . . . . . 24,032
JAPAN - 20.8%
_____________________________________________________________________________
COMMON STOCKS
44,000 Advantest. . . . . . . . . . . . . . . . . 1,488
139,000 Alps Electric. . . . . . . . . . . . . . . 1,934
266,000 Amada. . . . . . . . . . . . . . . . . . . 2,919
69,000 Aoyama Trading . . . . . . . . . . . . . . 3,178
266,000 Canon. . . . . . . . . . . . . . . . . . . 4,301
166,000 Citizen Watch Company. . . . . . . . . . . 1,488
224,000 Dai Nippon Screen Manufacturing. . . . . . 1,613
57,000 Daifuku Company. . . . . . . . . . . . . . 693
243,000 Daiichi Pharmaceutical . . . . . . . . . . 3,738
283,000 Daiwa House. . . . . . . . . . . . . . . . 4,243
103,000 Dowa Fire & Marine Insurance . . . . . . . 676
305 East Japan Railway . . . . . . . . . . . . 1,441
410,000 Hitachi. . . . . . . . . . . . . . . . . . 3,857
354,000 Hitachi Zosen. . . . . . . . . . . . . . . 1,859
100,000 Honda Motor Company. . . . . . . . . . . . 1,646
143,000 Inax . . . . . . . . . . . . . . . . . . . 1,513
78,000 Ito-Yokado . . . . . . . . . . . . . . . . 4,089
74,000 Kawada Industries. . . . . . . . . . . . . 834
124,000 Kokuyo . . . . . . . . . . . . . . . . . . 2,855
520,000 Komatsu. . . . . . . . . . . . . . . . . . 4,627
100,000 Komori . . . . . . . . . . . . . . . . . . 2,685
394,000 Kuraray. . . . . . . . . . . . . . . . . . 4,286
100,000 Kyocera. . . . . . . . . . . . . . . . . . 6,271
177,000 Makita Electric Works. . . . . . . . . . . 3,573
61,000 Marui. . . . . . . . . . . . . . . . . . . 1,004
266,000 Matsushita Electric Industries . . . . . . 4,353
155,000 Mitsubishi . . . . . . . . . . . . . . . . 1,807
698,000 Mitsubishi Heavy Industries. . . . . . . . 4,617
388,000 Mitsui Fudosan . . . . . . . . . . . . . . 4,677
133,000 Mitsui Petrochemical Industries. . . . . . 1,062
66,000 Murata Manufacturing . . . . . . . . . . . 2,846
169,000 NEC. . . . . . . . . . . . . . . . . . . . 1,871
100,000 National House . . . . . . . . . . . . . . 1,823
266,000 Nippon Denso . . . . . . . . . . . . . . . 5,031
Statement of Net Assets (Cont'd)
Value
JAPAN - (Cont'd) (000)
_____________________________________________________________________________
117,000 shs. Nippon Hodo. . . . . . . . . . . . . . . . $ 2,121
1,031,000 Nippon Steel . . . . . . . . . . . . . . . 3,506
144,000 Pioneer Electronic . . . . . . . . . . . . 3,683
50,000 Sangetsu . . . . . . . . . . . . . . . . . 1,823
78,000 Sankyo . . . . . . . . . . . . . . . . . . 1,766
357,000 Sekisui Chemical . . . . . . . . . . . . . 3,638
277,000 Sekisui House. . . . . . . . . . . . . . . 3,447
19,600 Seven-Eleven Japan . . . . . . . . . . . . 1,454
290,000 Sharp. . . . . . . . . . . . . . . . . . . 4,717
166,000 Shinetsu Chemical. . . . . . . . . . . . . 3,400
35,400 Sony . . . . . . . . . . . . . . . . . . . 1,998
382,000 Sumitomo . . . . . . . . . . . . . . . . . 3,695
376,000 Sumitomo Electric. . . . . . . . . . . . . 5,306
147,000 Sumitomo Forestry. . . . . . . . . . . . . 2,996
46,000 TDK. . . . . . . . . . . . . . . . . . . . 2,064
73,000 Taisho Pharmaceutical. . . . . . . . . . . 1,452
370,000 Teijin . . . . . . . . . . . . . . . . . . 1,849
265,000 Tokio Marine & Fire Insurance. . . . . . . 3,376
77,000 Yurtec . . . . . . . . . . . . . . . . . . 1,909
_______
Total Japan . . . . . . . . . . . . . . . . . . . . . 149,098
MALAYSIA - 5.5%
_____________________________________________________________________________
COMMON STOCKS, RIGHTS & WARRANTS
2,051,000 Affin Holdings . . . . . . . . . . . . . . 3,353
319,000 Aokam Perdana. . . . . . . . . . . . . . . 3,096
1,595,000 Berjaya Sports Toto. . . . . . . . . . . . 2,858
809,000 Commerce Asset Holdings. . . . . . . . . . 2,869
211,333 wts. * Commerce Asset Holdings, 6/27/98 . . . . . 282
104,000 shs. Development & Commercial Bank. . . . . . . 219
2,879,000 MBF Capital. . . . . . . . . . . . . . . . 2,923
1,125,500 Magnum . . . . . . . . . . . . . . . . . . 2,647
2,120,000 Renong . . . . . . . . . . . . . . . . . . 2,880
864,000 Resorts World. . . . . . . . . . . . . . . 4,838
1,672,000 Technology Resources Industries. . . . . . 7,177
1,450,000 United Engineers . . . . . . . . . . . . . 6,333
1,110,000 rts. * United Engineers . . . . . . . . . . . . . 23
_______
Total Malaysia . . . . . . . . . . . . . . . . . . . . . 39,498
MEXICO - 4.3%
_____________________________________________________________________________
COMMON STOCKS
7,701 shs. Cemex 'A'. . . . . . . . . . . . . . . . . 167
68,516 Cemex 'B'. . . . . . . . . . . . . . . . . 1,496
38,560 Cifra 'C'. . . . . . . . . . . . . . . . . 103
1,601,162 Cifra ADR (USD). . . . . . . . . . . . . . 4,579
116,716 Desc 'B' . . . . . . . . . . . . . . . . . 741
135,332 Fomentos Economico Mexicano 'B'. . . . . . 651
144,987 Grupo Embotellador de Mexico . . . . . . . 2,006
537,009 Grupo Financiero Bancomer 'C'. . . . . . . 695
56,895 Grupo Financiero Bancomer
ADS (USD). . . . . . . . . . . . . . . . 1,550
483,071 Grupo Industrial Maseca. . . . . . . . . . 835
43,080 * Grupo Televisa GDS (USD) . . . . . . . . . 2,262
45,189 Panamerican Beverages ADR (USD). . . . . . 1,565
181,244 Telefonos de Mexico ADS (USD). . . . . . . 10,693
300,368 Tolmex 'B' . . . . . . . . . . . . . . . . 3,655
_______
Total Mexico . . . . . . . . . . . . . . . . . . . . . 30,998
Foreign Equity Fund
Value
NETHERLANDS - 6.6% (000)
_____________________________________________________________________________
COMMON STOCKS
51,418 shs. ABN Amro . . . . . . . . . . . . . . . . . $ 1,700
14,220 AMEV . . . . . . . . . . . . . . . . . . . 552
42,358 Ahold. . . . . . . . . . . . . . . . . . . 1,080
25,941 Akzo . . . . . . . . . . . . . . . . . . . 3,114
76,278 CSM. . . . . . . . . . . . . . . . . . . . 2,661
112,224 Elsevier . . . . . . . . . . . . . . . . . 10,069
76,070 International Nederlanden Groep. . . . . . 3,168
10,184 Nutricia . . . . . . . . . . . . . . . . . 440
81,581 Polygram . . . . . . . . . . . . . . . . . 3,358
77,190 Royal Dutch Petroleum. . . . . . . . . . . 8,463
29,315 Unilever . . . . . . . . . . . . . . . . . 3,258
167,343 Wolters Kluwer . . . . . . . . . . . . . . 9,744
_______
47,607
PREFERRED STOCK
10,797 International Nederlanden Groep. . . . . . 47
_______
Total Netherlands . . . . . . . . . . . . . . . . . . . . . 47,654
NEW ZEALAND - 2.3%
_____________________________________________________________________________
COMMON STOCKS & RIGHTS
1,113,500 Air New Zealand 'B'. . . . . . . . . . . . 3,150
44,391 Brierley Investments . . . . . . . . . . . 34
1,382,497 Carter Holt Harvey . . . . . . . . . . . . 2,945
172,800 Fernz. . . . . . . . . . . . . . . . . . . 783
17,280 rts. * Fernz. . . . . . . . . . . . . . . . . . . 43
2,131,000 shs. Fletcher Challenge . . . . . . . . . . . . 4,146
1,025,750 Fletcher Challenge,
Forests Division . . . . . . . . . . . . 1,480
133,125 Independent Newspapers . . . . . . . . . . 434
531,200 Telecom Corporation of New Zealand . . . . 1,543
291,000 * Trust Bank . . . . . . . . . . . . . . . . 353
337,125 Wilson & Horton. . . . . . . . . . . . . . 1,684
_______
Total New Zealand . . . . . . . . . . . . . . . . . . . . . 16,595
NORWAY - 1.1%
_____________________________________________________________________________
COMMON STOCKS
27,560 Bergesen 'A' . . . . . . . . . . . . . . . 609
23,690 Kvaerner Industier 'A' . . . . . . . . . . 1,191
97,470 Norsk Hydro. . . . . . . . . . . . . . . . 3,290
76,296 Orkla 'A'. . . . . . . . . . . . . . . . . 2,491
35,100 Saga Petroleum 'B' . . . . . . . . . . . . 385
_______
Total Norway . . . . . . . . . . . . . . . . . . . . . 7,966
PORTUGAL - 0.3%
_____________________________________________________________________________
COMMON STOCK
22,812 Jeronimo Martins . . . . . . . . . . . . . 1,847
SINGAPORE - 2.6%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
470,000 DBS Land . . . . . . . . . . . . . . . . . 1,445
576,000 Far East Levingston Shipbuilding . . . . . 2,426
24,000 Jurong Shipyard. . . . . . . . . . . . . . 230
357,000 Keppel . . . . . . . . . . . . . . . . . . 2,617
181,250 Keppel, loan stock . . . . . . . . . . . . 199
180,250 wts. * Keppel, 6/30/97. . . . . . . . . . . . . . 603
274,000 shs. Overseas Union Enterprises . . . . . . . . 1,322
188,000 Sembawang Shipyard . . . . . . . . . . . . 1,511
Statement of Net Assets (Cont'd)
Value
SINGAPORE - (Cont'd) (000)
_____________________________________________________________________________
95,800 shs. Singapore Press. . . . . . . . . . . . . . $ 1,571
768,025 United Overseas Bank . . . . . . . . . . . 6,668
91,534 wts. * United Overseas Bank, 6/17/97. . . . . . . 374
_______
Total Singapore . . . . . . . . . . . . . . . . . . . . . 18,966
SOUTH KOREA - 0.7%
_____________________________________________________________________________
COMMON STOCKS
12,240 shs. * Hanil Securities . . . . . . . . . . . . . 215
20,400 Korea Electric Power . . . . . . . . . . . 707
14,000 Pohang Iron & Steel. . . . . . . . . . . . 1,411
42,600 Samsung Electronics GDS (USD). . . . . . . 2,758
_______
Total South Korea . . . . . . . . . . . . . . . . . . . . . 5,091
SPAIN - 1.7%
_____________________________________________________________________________
COMMON STOCKS
6,700 Argentaria Corporation Bancaria
de Espana. . . . . . . . . . . . . . . . 290
5,015 Banco Popular Espanol. . . . . . . . . . . 581
24,520 Banco Santander. . . . . . . . . . . . . . 1,074
89,390 Centros Commerciales Pryca . . . . . . . . 1,276
57,979 ENDESA . . . . . . . . . . . . . . . . . . 2,866
14,480 FOSCA. . . . . . . . . . . . . . . . . . . 1,602
11,808 Gas Natural. . . . . . . . . . . . . . . . 978
69,680 Repsol . . . . . . . . . . . . . . . . . . 2,315
86,723 Telefonica de Espana . . . . . . . . . . . 1,174
_______
Total Spain . . . . . . . . . . . . . . . . . . . . . 12,156
SWEDEN - 1.4%
_____________________________________________________________________________
COMMON STOCKS
9,100 Asea 'A' . . . . . . . . . . . . . . . . . 755
174,565 Astra 'B'. . . . . . . . . . . . . . . . . 3,487
19,810 Atlas Copco 'B'. . . . . . . . . . . . . . 1,371
25,410 Electrolux 'B' . . . . . . . . . . . . . . 1,347
22,920 Esselte 'B'. . . . . . . . . . . . . . . . 359
18,670 Hennes & Mauritz 'B' . . . . . . . . . . . 921
36,680 Sandvik 'B'. . . . . . . . . . . . . . . . 589
10,220 Scribona 'B' . . . . . . . . . . . . . . . 67
16,660 Stora Kopparberg 'B' . . . . . . . . . . . 896
_______
Total Sweden . . . . . . . . . . . . . . . . . . . . . 9,792
SWITZERLAND - 4.3%
_____________________________________________________________________________
COMMON STOCKS & WARRANTS
5,030 BBC Brown Boveri . . . . . . . . . . . . . 4,602
2,585 CS Holdings. . . . . . . . . . . . . . . . 1,107
2,181 Ciba Geigy . . . . . . . . . . . . . . . . 1,295
650 Landis & Gyr . . . . . . . . . . . . . . . 408
1,350 wts. * Landis & Gyr, 2/15/95. . . . . . . . . . . 3
6,016 shs. Nestle . . . . . . . . . . . . . . . . . . 5,005
1,258 Roche Holdings . . . . . . . . . . . . . . 5,996
2,515 Sandoz . . . . . . . . . . . . . . . . . . 6,617
984 Sulzer Winterthur. . . . . . . . . . . . . 697
6,170 Swiss Bank . . . . . . . . . . . . . . . . 1,715
3,612 Union Bank of Switzerland. . . . . . . . . 3,013
_______
Total Switzerland . . . . . . . . . . . . . . . . . . . . . 30,458
Foreign Equity Fund
Value
THAILAND - 1.5% (000)
_____________________________________________________________________________
COMMON STOCKS
55,000 shs. Advanced Information Service . . . . . . . $ 2,044
219,200 Bangkok Bank . . . . . . . . . . . . . . . 1,654
114,000 Bangkok Land . . . . . . . . . . . . . . . 407
310,000 Bank of Ayudhya. . . . . . . . . . . . . . 930
21,000 Land & House . . . . . . . . . . . . . . . 479
33,000 Loxley . . . . . . . . . . . . . . . . . . 653
38,000 Siam Cement. . . . . . . . . . . . . . . . 1,654
117,800 Siam Commercial Bank . . . . . . . . . . . 734
165,000 Siam Pulp & Paper. . . . . . . . . . . . . 459
228,500 Thai Farmers Bank. . . . . . . . . . . . . 1,180
30,000 United Communications Industry . . . . . . 698
_______
Total Thailand . . . . . . . . . . . . . . . . . . . . . 10,892
UNITED KINGDOM - 13.3%
_____________________________________________________________________________
COMMON STOCKS
485,440 Abbey National . . . . . . . . . . . . . . 3,203
274,000 Argos. . . . . . . . . . . . . . . . . . . 1,514
485,200 Argyll Group . . . . . . . . . . . . . . . 1,682
1,536,530 Asda Group . . . . . . . . . . . . . . . . 1,279
82,000 BAA. . . . . . . . . . . . . . . . . . . . 1,214
379,200 British Gas. . . . . . . . . . . . . . . . 1,641
232,000 British Petroleum. . . . . . . . . . . . . 1,359
863,200 Cable & Wireless . . . . . . . . . . . . . 5,905
337,444 Cadbury Schweppes. . . . . . . . . . . . . 2,452
955,350 Caradon. . . . . . . . . . . . . . . . . . 5,133
412,125 Clyde Petroleum. . . . . . . . . . . . . . 262
285,000 Coats Viyella. . . . . . . . . . . . . . . 1,031
220,750 David S. Smith . . . . . . . . . . . . . . 1,838
324,840 East Midlands Electricity. . . . . . . . . 2,709
143,000 Eastern Electricity. . . . . . . . . . . . 1,255
221,000 First National Finance . . . . . . . . . . 248
338,650 Glaxo Holdings . . . . . . . . . . . . . . 2,957
631,000 Grand Metropolitan . . . . . . . . . . . . 4,508
520,000 Guinness . . . . . . . . . . . . . . . . . 3,762
89,000 Heath. . . . . . . . . . . . . . . . . . . 516
164,576 Heywood Williams Group . . . . . . . . . . 1,006
245,300 Hillsdown Holdings . . . . . . . . . . . . 628
404,300 John Laing . . . . . . . . . . . . . . . . 2,099
424,977 Kingfisher . . . . . . . . . . . . . . . . 3,711
467,000 Ladbroke Group . . . . . . . . . . . . . . 1,308
314,670 London Electricity . . . . . . . . . . . . 2,686
904,490 National Westminster Bank. . . . . . . . . 6,174
149,600 * Polly Peck International . . . . . . . . . 7
246,960 RTZ. . . . . . . . . . . . . . . . . . . . 3,143
445,000 Rank Organisation. . . . . . . . . . . . . 2,898
380,570 Reed International . . . . . . . . . . . . 4,864
185,000 Rolls Royce. . . . . . . . . . . . . . . . 566
331,000 Sears. . . . . . . . . . . . . . . . . . . 601
373,990 Shell Transport & Trading. . . . . . . . . 4,092
748,560 Smithkline Beecham, equity units . . . . . 3,999
110,000 South Western Electricity. . . . . . . . . 966
103,888 Spring Ram . . . . . . . . . . . . . . . . 95
579,000 T & N. . . . . . . . . . . . . . . . . . . 2,134
412,903 Tesco. . . . . . . . . . . . . . . . . . . 1,306
Statement of Net Assets (Cont'd)
Value
UNITED KINGDOM - (Cont'd) (000)
_____________________________________________________________________________
1,235,080 shs. Tomkins. . . . . . . . . . . . . . . . . . $ 4,767
376,620 United Newspapers. . . . . . . . . . . . . 3,568
_______
95,086
PREFERRED STOCK
42,000 First National Finance,
Cum. Cv., 7.00%. . . . . . . . . . . . . . 93
_______
Total United Kingdom . . . . . . . . . . . . . . . . . . . . . 95,179
SHORT-TERM INVESTMENTS - 7.4%
_____________________________________________________________________________
COMMERCIAL PAPER
$ 5,000,000 BNP US Finance,
3.38%, 7/8/94. . . . . . . . . . . . . . 4,914
10,000,000 Caisse des Depots, 3.63%,
5/12 - 5/18/94 . . . . . . . . . . . . . 9,970
3,000,000 Citizens Utility Company,
3.20%, 5/3/94. . . . . . . . . . . . . . 2,976
5,000,000 Corporate Asset Funding,
3.13%, 5/4/94. . . . . . . . . . . . . . 4,951
8,295,000 Federal Home Loan Bank,
3.55%, 5/2/94. . . . . . . . . . . . . . 8,293
5,000,000 New South Wales Treasury,
3.18%, 5/9/94. . . . . . . . . . . . . . 4,947
5,000,000 Nynex Corporation,
3.75%, 5/19/94 . . . . . . . . . . . . . 4,974
7,000,000 Societe Generale Canada,
3.30%, 7/11/94 . . . . . . . . . . . . . 6,883
3,000,000 Western Australia Treasury,
3.375%, 7/27/94. . . . . . . . . . . . . 2,951
_______
50,859
OTHER
2,000,000 Corporate Asset Funding, Floating Rate
Medium-Term Notes,
3.72%, 12/12/94. . . . . . . . . . . . . 2,000
_______
Total Short-Term Investments . . . . . . . . . . . . . . . . . 52,859
_____________________________________________________________________________
Total Investments in Securities - 99.8%
(Cost-$620,973) . . . . . . . . . . . . . . . . 716,328
Other Assets Less Liabilities - 0.2% . . . . . . . . 1,743
Net Assets Consisting of:
Accumulated net investment income -
net of distributions . . . . . . . . . . . . . . . $ 2,462
Accumulated realized gains/losses -
net of distributions . . . . . . . . . . . . . . . 18,817
Unrealized appreciation of investments . . . . . . . 95,552
Paid-in-capital applicable to 51,750,554 shares
of $0.01 par value capital stock outstanding;
1,000,000,000 shares authorized. . . . . . . . . . . 601,240
________
Net Assets - 100.0% . . . . . . . . . . . . . . . . $718,071
_________
_________
Net Asset Value Per Share. . . . . . . . . . . . . . $13.88
______
______
* - Non-income producing
(BEL) - Belgian franc denominated
(DEM) - German deutschemark denominated
(FRF) - French franc denominated
(GBP) - British sterling denominated
(JPY) - Japanese yen denominated
(NLG) - Netherland guilder denominated
(USD) - U.S. dollar denominated
The accompanying notes are an integral part of these financial statements.
_____________________________________________________________________________
STATEMENT OF OPERATIONS
Foreign Equity Fund / Six Months Ended April 30, 1994 (Unaudited)
_____________________________________________________________________________
Amounts in Thousands
INVESTMENT INCOME
Income
Dividends (net of foreign taxes of $577). . . . . $ 3,982
Interest. . . . . . . . . . . . . . . . . . . . . 787
_______
Total income. . . . . . . . . . . . . . . . . . . $ 4,769
Expenses
Investment management fees. . . . . . . . . . . . 2,083
Custodian and accounting fees & expenses. . . . . 262
Shareholder servicing fees & expenses . . . . . . 78
Registration fees & expenses. . . . . . . . . . . 48
Legal & auditing fees . . . . . . . . . . . . . . 17
Directors' fees & expenses. . . . . . . . . . . . 8
Prospectus & shareholder reports. . . . . . . . . 2
Miscellaneous expenses. . . . . . . . . . . . . . 5
_______
Total expenses. . . . . . . . . . . . . . . . . . 2,503
_______
Net investment income. . . . . . . . . . . . . . . . 2,266
_______
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain
Securities. . . . . . . . . . . . . . . . . . . . 19,502
Foreign currency transactions . . . . . . . . . . 551
_______
Net realized gain . . . . . . . . . . . . . . . . . 20,053
Change in unrealized appreciation or depreciation
Securities. . . . . . . . . . . . . . . . . . . . 9,312
Other assets and liabilities denominated
in foreign currencies . . . . . . . . . . . . . . (615)
_______
Change in unrealized appreciation
or depreciation . . . . . . . . . . . . . . . . . 8,697
_______
Net gain on investments. . . . . . . . . . . . . . . 28,750
_______
INCREASE IN NET ASSETS FROM OPERATIONS . . . . . . . $31,016
_______
_______
The accompanying notes are an integral part of these financial statements.
_____________________________________________________________________________
STATEMENT OF CHANGES IN NET ASSETS
Foreign Equity Fund (Unaudited)
_____________________________________________________________________________
Six Months Ten Months Year
Ended Ended Ended
April 30, October 31, December 31,
1994 1993* 1992
__________ ___________ ____________
Amounts in Thousands
_____________________________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income . . . . . . . . . . $ 2,266 $ 4,866 $ 2,813
Net realized gain on investments. . . . . 20,053 7,964 2,203
Change in unrealized appreciation or
depreciation of investments . . . . . . . 8,697 92,464 (12,676)
________ ________ ________
Increase (decrease) in net assets from
operations. . . . . . . . . . . . . . . . 31,016 105,294 (7,660)
________ ________ ________
Distributions to shareholders
Net investment income . . . . . . . . . . (3,387) - (4,204)
Net realized gain on investments. . . . . (7,904) - (2,336)
________ ________ ________
Decrease in net assets from distributions
to shareholders . . . . . . . . . . . . . (11,291) - (6,540)
________ ________ ________
Capital share transactions
Sold 18,803, 18,423, and 10,947
shares. . . . . . . . . . . . . . . . . . 260,774 209,581 114,053
Distributions reinvested of 532, 0,
and 367 shares. . . . . . . . . . . . . . 7,219 - 3,699
Redeemed 4,318, 5,474, and
934 shares. . . . . . . . . . . . . . . . (59,036) (64,465) (9,768)
________ ________ ________
Increase in net assets from capital
share transactions. . . . . . . . . . . . 208,957 145,116 107,984
________ ________ ________
Net equalization . . . . . . . . . . . . . - - 1,373
________ ________ ________
Total increase . . . . . . . . . . . . . . 228,682 250,410 95,157
NET ASSETS
Beginning of period . . . . . . . . . . . 489,389 238,979 143,822
________ ________ ________
End of period . . . . . . . . . . . . . . $718,071 $489,389 $238,979
________ ________ ________
________ ________ ________
* The Fund's fiscal year-end was changed to October 31.
The accompanying notes are an integral part of these financial statements.
_____________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS
Foreign Equity Fund / April 30, 1994 (Unaudited)
_____________________________________________________________________________
Note 1 - Significant Accounting Policies
_____________________________________________________________________________
Institutional International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The Foreign Equity Fund (the Fund), a
diversified, open-end management investment company, is the sole portfolio
currently established by the Corporation.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (including NASDAQ) are valued at the last quoted sales price at the
time the valuations are made. A security which is listed or traded on more
than one exchange is valued at the quotation on the exchange determined to be
the primary market for such security. Other equity securities and those listed
securities that are not traded on a particular day are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors, or by persons delegated by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and
are valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the Fund's net asset value per share, all
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at the mean of the bid and offer prices of such currencies
against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
Fund, as authorized by the Board of Directors.
B) Currency translation - Foreign currency amounts are translated into U.S.
dollars at prevailing exchange rates as follows: assets and liabilities at the
rate of exchange at the end of the respective period, purchases and sales of
securities and income and expenses at the rate of exchange prevailing on the
dates of such transactions. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a component
of such gains or losses.
C) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Dividend income and distributions to
shareholders are recorded by the Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations which may differ from generally accepted accounting
principles. Effective January 1, 1993, the Fund discontinued its practice of
equalization.
Note 2 - Financial Instruments
_____________________________________________________________________________
As a part of its investment program, the Fund engages in the following
activities, the nature and risk of which are set forth more fully in the
Fund's Prospectus and Statement of Additional Information.
A) Emerging Markets - The Fund has investments in securities of companies
located in emerging markets. Future economic or political developments could
adversely affect the liquidity or value, or both, of such securities.
B) Forward Currency Exchange Contracts - At April 30, 1994, the Fund was a
party to various forward currency exchange contracts under which it is
obligated to exchange currencies at specified future dates. Risks arise from
the possible inability of counterparties to meet the terms of their contracts
and from movements in currency values. Outstanding contracts at April 30,
1994, are as follows:
Unrealized
Contract to Apprec.
Value ________________________________ (Deprec.)
Date Receive Deliver in USD Counterparty
_______ ______________ _______________ ________ ______________________
5/94 JPY 553,808 FRF 30,870 11 Chase Manhattan Bank
5/94 JPY 1,056,181 NLG 18,979 193 Chase Manhattan Bank
5/94 JPY 1,109,562 DEM 17,790 184 Chase Manhattan Bank
6/94 USD 6,976 GBP 4,742 (191) Chase Manhattan Bank
Net unrealized appreciation of $197,000 on these contracts at April 30, 1994,
is included in the accompanying financial statements, of which $388,000
relates to appreciated contracts and $191,000 to depreciated contracts.
Notes to Financial Statements (Cont'd)
C) Other - Purchases and sales of portfolio securities, other than short-term
and U.S. Government securities, aggregated $235,269,000 and $66,042,000,
respectively, for the six months ended April 30, 1994.
Note 3 - Federal Income Taxes
_____________________________________________________________________________
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At April 30, 1994, the aggregate cost of investments for federal income
tax and financial reporting purposes was $620,973,000 and net unrealized
appreciation aggregated $95,355,000, of which $ 105,199,000 related to
appreciated investments and $9,844,000 to depreciated investments.
Note 4 - Related Party Transactions
_____________________________________________________________________________
The Fund is managed by Rowe Price-Fleming International, Inc. (Price-Fleming)
which is owned by T. Rowe Price Associates, Inc. (Price Associates), Robert
Fleming Holdings Limited, and Jardine Fleming Holdings Limited under a joint
venture agreement. The investment management agreement between the Fund and
Price-Fleming (the Manager) provides for an annual investment management fee,
computed daily and paid monthly, equal to 0.70% of average daily net assets.
During the six months ended April 30, 1994, the Fund, in the ordinary
course of business, paid commissions of $100,000 to, and placed security
purchase and sale orders aggregating $24,471,000 with, certain affiliates of
the Manager in connection with the execution of various portfolio transactions
at the direction of Price-Fleming.
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of Price Associates. TRPS provides
transfer and dividend disbursing agent functions and shareholder services for
all accounts. RPS provides subaccounting and recordkeeping services for
certain retirement accounts invested in the Fund. Price Associates, under a
separate agreement, calculates the daily share price and maintains the
financial records of the Fund. For the six months ended April 30, 1994, the
Fund incurred fees totalling approximately $126,000 for these services
provided by related parties. At April 30, 1994, these investment management
and service fees payable were $423,000.
_____________________________________________________________________________
FINANCIAL HIGHLIGHTS
Foreign Equity Fund (Unaudited)
_____________________________________________________________________________
For a share outstanding throughout each period
______________________________________________________
From
Six Ten Sept. 7, 1989
Months Months Commencement
Ended Ended Year Ended Dec.31, of Operations)
April 30,Oct. 31, ____________________ to
1994 1993# 1992 1991 1990 Dec. 31, 1989
_______ _______ _______ _______ ______ _____________
NET ASSET VALUE,
BEGINNING OF PERIOD $13.32 $10.05 $10.73 $ 9.54 $10.62 $10.00
______ ______ ______ ______ ______ ______
Investment Activities
Net investment income 0.02 0.13 0.17 0.18o 0.23*o 0.05*
Net realized and
unrealized gain (loss) 0.84 3.14 (0.57) 1.28 (1.10) 0.61
______ ______ ______ ______ ______ ______
Total from Investment
Activities 0.86 3.27 (0.40) 1.46 (0.87) 0.66
______ ______ ______ ______ ______ ______
Distributions
Net investment income (0.09) - (0.18) (0.18) (0.21) (0.04)
Net realized gain (0.21) - (0.10) (0.09) - -
______ ______ ______ ______ ______ ______
Total Distributions (0.30) - (0.28) (0.27) (0.21) (0.04)
______ ______ ______ ______ ______ ______
NET ASSET VALUE,
END OF PERIOD $13.88 $13.32 $10.05 $10.73 $9.54 $10.62
______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return 6.5% 32.5% (3.7)% 15.4% (8.2)% 6.6%
Ratio of Expenses to
Average Net Assets 0.84%! 0.86%! 0.99% 1.00%o 1.01%*o .10%!*
Ratio of Net Investment
Income to Average Net
Assets 0.75%! 1.65%! 1.49% 1.64% 2.23% 1.43%!
Portfolio Turnover
Rate 23.7%! 27.4%! 35.1% 46.7% 44.6% 13.80%!
Net Assets, End of Period
(in thousands) $718,071 $489,389 $238,979$143,822 $83,645 $50,252
# The Fund's fiscal year-end was changed to October 31.
* Excludes expenses in excess of a 1.10% voluntary expense limitation in
effect through February 28, 1990.
o Excludes expenses in excess of a 1.00% voluntary expense limitation in
effect from March 1, 1990 through December 31, 1991.
! Annualized.
