<PAGE>
[PHOTO]
--------------------------------
The Latin America
Investment Fund, Inc.
..............................
ANNUAL REPORT
DECEMBER 31, 1999
--------------------------------
<PAGE>
CONTENTS
Letter to Shareholders .....................................................1
Portfolio Summary ..........................................................7
Schedule of Investments ....................................................9
Statement of Assets and Liabilities .......................................14
Statement of Operations ...................................................15
Statement of Changes in Net Assets ........................................16
Financial Highlights ......................................................18
Notes to Financial Statements .............................................20
Report of Independent Accountants .........................................26
Results of Annual Meeting of Shareholders .................................27
Tax Information ...........................................................27
Description of InvestLink-SM- Program .....................................29
Recent Developments .......................................................32
PICTURED ON THE COVER IS A BRANCH OF BANCO POPULAR ARGENTINO LOCATED IN BUENOS
AIRES, ARGENTINA.
- --------------------------------------------------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS
January 31, 2000
DEAR SHAREHOLDER:
I am writing to report on the activities of The Latin America Investment Fund,
Inc. (the "Fund") for the year ended December 31, 1999.
At December 31, 1999, the Fund's net assets were $115.6 million. The Fund's net
asset value ("NAV") was $17.55 per share (net of dividends paid of $0.50 per
share), as compared to $11.49 at December 31, 1998.
PERFORMANCE: EFFECTIVE CHOICES IN COUNTRIES AND SECURITIES
For the year ended December 31, 1999, the Fund's total return, based on NAV and
assuming reinvestment of dividends, was 58.6%. By comparison, the Morgan Stanley
Capital International Emerging Markets Free Latin America Index ("EMFLA")* rose
by 58.9% over the same period.
These figures reveal that the Fund was able to generate a return nearly
identical to that of an equity-only index despite investing a substantial
portion of assets (approximately 35%) in Latin American fixed income securities.
I note in this context that a more realistic performance benchmark would be one
that proportionately blends the returns of Latin American fixed income and
equity indices. Utilizing the Latin component of the J.P. Morgan Emerging
Markets Bond Index Plus ("EMBI+")** and EMFLA in this way, the Fund's blended
benchmark would have returned approximately 45.6% during 1999, versus the Fund's
58.6%.
I attribute the strong performance of the Fund's equity component to a
combination of effective stock selection and country allocation. We focused on
high-quality, large-capitalization names in the largest markets. Many of
these--particularly in the telecommunications, banking and media sectors--were
among the names that attracted the most buying activity in the region's vigorous
fourth-quarter rally.
- - In Mexico, we overweighted several companies in which we had great
confidence. These included Telefonos de Mexico, S.A. and Grupo Televisa S.A.,
which led the Mexican market and were (and still are) two of the Fund's
larger holdings. We also chose to overweight the banking sector, which
generally did quite well.
- - Argentine exposure benefited from our decision to underweight the market due
to our perception that the overall environment was not sufficiently
favorable, as well as our positions in selected oil and gas companies.
- - We underweighted Colombia and Venezuela for much of the year in response to
deteriorating political and macroeconomic conditions. This decision paid off,
as Colombia (-13.7%) and Venezuela (-8.7%) were the year's worst-performing
Latin American markets.
The main negative contributor to equity performance was stock selection in
Brazil. One of our Brazilian positions underperformed for much of the year,
which dampened the portfolio's overall return accordingly.
- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
The Fund's fixed income holdings, which amounted to roughly a third of the
portfolio at year-end, outperformed those of EMBI+'s Latin sub-index. Salomon
Brothers Asset Management Inc. serves as advisor to the Fund for fixed income
and took the following steps that most benefited overall return:
- - Overweighting Venezuela and Peru, which were two of the strongest Latin debt
markets, throughout the year. Security selection within Venezuela also
helped.
- - Underweighting Mexico and Argentina, which were among the weaker Latin debt
markets, for much of the year. Security selection within Argentina also
helped.
- - Selecting and purchasing Brazilian bonds that performed especially well.
1999: AN EXCITING TIME FOR LATIN AMERICA
EQUITIES. Latin America was an exciting place in which to invest during 1999.
Exciting in its economic progress. Exciting, as always, in its politics. And,
ultimately, exciting in the performance of its equity markets.
All was not rosy, though; far from it. Had the year ended with the third
quarter, this tale would have been uninspiring, to say the least. But it didn't,
and during the fourth quarter, virtually every Latin market generated positive
returns.
Among the more important drivers of quarterly equity performance in the region
were:
- - RISKY ASSETS' RETURN TO FAVOR. Relatively risky assets offering the potential
for higher returns returned to favor based on a more stable interest-rate
environment in the U.S., persistent strength in commodity prices (especially
oil) and an improving outlook for global economic growth. Investors turned
their attention to Latin America accordingly.
- - RECORD-SETTING BRAZILIAN MARKET. In local-currency terms, Brazilian stocks
exceeded their July 1997 all-time high. The market surged as a result of
receding inflationary fears; significantly higher industrial production; a
cleverly supported and strengthened currency; the almost assured attainment
of the government's primary surplus target; and compelling valuations.
- - BREAKTHROUGH IN MEXICO. After failing twice earlier in the year, the Mexican
market was able to surpass its psychological resistance level of 6,100.
Locals and foreigners alike enthusiastically applauded high liquidity levels,
an improving country risk profile and accelerating inflows of foreign direct
investment, among other factors.
All in all, a nice boom for a region that started the year with a bust. There is
still much to be achieved, however, before widespread economic recovery can
occur. But progress was there in 1999, and 2000 may well see the sun finally
rise above the horizon and shine fully upon the Southern Hemisphere.
FIXED INCOME. Conditions in Latin debt markets significantly improved over the
course of the year. Key reasons for this improvement included:
- - Improving sovereign risk profiles in major nations like Brazil and Mexico.
- --------------------------------------------------------------------------------
2
<PAGE>
LETTER TO SHAREHOLDERS
- - The increasing trend toward better economic growth throughout the developed
world and much of Asia, which typically translates into greater demand for
many of the goods and services originating in Latin America.
- - Strengthening prices of oil and other major global commodities, which was
good news for Latin nations like Brazil, Venezuela and Mexico, whose economic
health is closely tied to the export of commodities and related products.
We also note that much of the high leverage from hedge funds and other investors
that disproportionately hurt emerging debt markets in 1998 was wrung out of the
market by early 1999. By the time Brazil devalued its currency in
mid-January--which was widely considered one of the last of the potential
disasters that could strike the global financial system--emerging debt was thus
able to bounce back more quickly than in 1998, and any so-called "contagion
effect" from Brazil on other markets in Latin America or elsewhere was much less
severe.
PORTFOLIO STRATEGY: DEFENSIVE IN EQUITIES, MORE BULLISH IN FIXED INCOME
<TABLE>
<CAPTION>
TOP 10 EQUITY HOLDINGS, BY ISSUER* TOP 10 FIXED INCOME EXPOSURES, BY COUNTRY/REGION
<S> <C> <C> <C> <C> <C>
% OF SECURITY % OF
HOLDING COUNTRY NET ASSETS COUNTRY TYPE NET ASSETS
------- ------- ---------- ------- --------- ----------
1. Telmex Mexico 9.6 1. Argentina Sovereign 6.6
2. Telebras Brazil 6.4 2. Brazil Sovereign 5.8
3. Televisa Mexico 3.8 3. Mexico Sovereign 5.6
4. Petrobras Brazil 3.2 4. Venezuela Sovereign 4.1
5. Cemex Mexico 2.6 5. Colombia Sovereign 2.5
6. CVRD Brazil 2.6 6. Peru Sovereign 1.4
7. Tele Norte Leste Brazil 2.5 7. Panama Sovereign 1.3
8. Embratel Brazil 2.4 8. Ecuador Sovereign 1.0
9. Cifra Mexico 2.3 9. Costa Rica Sovereign 0.3
10. Tele Centro Sul Brazil 1.9 10. Latin America Corporate 0.1
----- -----
Total 37.3 Total 28.7
----- -----
----- -----
</TABLE>
- --------------
* Company names are abbreviations of those found in the Schedule of Investments.
ASSET ALLOCATION
(% of net assets)
<TABLE>
<S> <C>
Equities 66.79
Fixed Income 28.73
Private Equities 1.92
Cash & Cash Equivalents 2.56
</TABLE>
HISTORICAL EQUITIES/FIXED INCOME MIX
<TABLE>
<CAPTION>
% of net assets
Equities Fixed Income
<S> <C> <C>
12/31/96 87.16 2.7
6/30/97 90.22 9.51
12/31/97 90.25 15.23
6/30/98 70.97 23.61
12/31/98 63.43 34.72
6/30/99 63.76 33.5
12/31/99 68.71 28.73
</TABLE>
- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS
EQUITIES. I see good potential for selected Latin American equity markets to
outperform over the next 12 months, driven by regional and global economic
growth and the other factors already cited. Valuations, though somewhat high
relative to historical averages, are attractive when compared to those of many
markets elsewhere in the world.
Nonetheless, the strength of the fourth-quarter rally has led me to position the
Fund defensively at present. My largest allocations are to Mexico and Brazil,
whose respective top-down and bottom-up stories are compelling. I have also
increased exposure to Chile, whose economy appears to be on a tear. Among other
markets, I have reduced exposure to Argentina and retain only minimal positions
in the fairly illiquid and volatile markets of Colombia and Venezuela.
At the sector level, I have trimmed the Fund's holdings in telecommunications
stocks in recognition of their recent surge. Telecoms were exceptional
performers during the fourth quarter, as investors rode the wave of a global
rally. Still, there is value to be had, and I continue to overweight in this
sector compared to EMFLA. I also favor media, financials, retailers, beverages
and selected global cyclicals (I.E., cement, steel, mining, pulp and paper).
Within these sectors, large-capitalization names continue to make up the bulk of
the portfolio.
I note here that the Fund's performance in recent months additionally benefited
from selective positions in smaller-capitalization, less-liquid issues that did
very well. Our ability to invest in such names is one of the benefits of the
closed-end fund structure, and I expect to identify and pursue similar
opportunities as the region's economies stay on the road to recovery. This is
particularly true in Mexico, Brazil and Chile, where certain undervalued
small-caps are becoming more visible and more attractive to domestic and
international investors alike.
FIXED INCOME. The Fund's fixed income advisor, Salomon Brothers Asset Management
Inc., is generally optimistic about Latin debt markets in 2000 and favors
longer-term securities, whose valuations relative to U.S. Treasury bonds, it
expects to improve.
Among individual markets, Salomon Brothers Asset Management Inc.'s main approach
is to overweight (I.E., compared to EMBI+) Brazil and Venezuela, whose
debt-related fundamentals are brightest; and underweight Argentina, where
economic conditions and a heavy supply of upcoming new debt should dampen the
upside potential for bond prices. Mexican exposure is underweight for the moment
in anticipation of political uncertainty ahead of the July presidential
elections, but may increase as perceptions change.
Fixed income positions in peripheral markets like those of Colombia, Peru,
Panama and Ecuador are being treated more opportunistically.
OUTLOOK: SOLIDLY OPTIMISTIC
I am solidly optimistic about the prospects for Latin American financial
markets. Here is a brief summary of why:
- - Overall, the region's economic recovery remains intact and might even
surprise on the upside. Benefiting from an upturn in global economic growth,
regional Gross Domestic Product may grow as much as 3-4% in 2000, a major
leap from its flat growth in 1999.
Should commodity prices continue to strengthen, I would anticipate a
significantly positive impact on the economies
- --------------------------------------------------------------------------------
4
<PAGE>
LETTER TO SHAREHOLDERS
of Mexico, Peru and Chile. The latter, in fact, may grow as much as 6% in
2000, representing quite a turnaround from its recent past.
- - Conditions in the major markets are favorable. Mexico is doing well on the
economic and political fronts. Brazil should experience additional, if
gradual, reductions in interest rates, inflation there should remain benign,
the currency should remain strong and the economy should benefit from another
year of record-high foreign direct investment. The environment in Chile could
become even more exciting than it already is if laws limiting foreign
investment activity there are relaxed.
- - Latin equity markets may not be expensive when compared to their
developed-world counterparts, but they are relative to their own historical
averages. As we have seen in the U.S., however, historical averages may well
need to be adjusted upward, particularly if the recent big gains in
telecommunications and Internet-related stocks hold up over time.
- - Latin sovereign risk profiles are getting better, which should be beneficial
both to equities and fixed income. Of particular note in this regard is the
increasing probability that Mexico's debt rating will rise to
investment-grade status this year. If this occurs, it would likely have a
positive "halo"-like effect on Latin debt more widely, much as happened in
Eastern Europe when Poland earned an investment-grade rating.
As always, however, I must temper my optimism with a caveat of caution. Latin
America is--and likely will continue to be--vulnerable to negative external
developments. At present, the more notable among them include the possibility of
a hard economic landing in the U.S. and rising global interest rates. Equity
valuations in some sectors are high, furthermore, which increases the
possibility of sector-specific corrections.
Respectfully,
/s/Emily Alejos
Emily Alejos
Chief Investment Officer ***
FROM CREDIT SUISSE ASSET MANAGEMENT, LLC:
I. Effective January 12, 1999, the Fund's investment adviser, BEA Associates,
changed its name to Credit Suisse Asset Management, LLC ("CSAM"). In making
the announcement, the firm said that it expected the new name to enhance
its recognition as a global asset manager. CSAM is the investment division
of Credit Suisse Group, one of the world's largest financial organizations,
with $600 billion in assets under management.
II. All business units of Credit Suisse Group have successfully completed their
year-end processing and reported ready for business without incident. In
addition, our systems have been incident-free with no material Y2K issues.
- --------------------------------------------------------------------------------
5
<PAGE>
LETTER TO SHAREHOLDERS
III. We wish to remind shareholders whose shares are registered in their own
name that they automatically participate in the Fund's dividend
reinvestment program which is known as the InvestLink-SM- Program (the
"Program"). The Program can be of value to shareholders in maintaining
their proportional ownership interest in the Fund in an easy and convenient
way. A shareholder whose shares are held in the name of a broker/dealer or
nominee should contact the Fund's Transfer Agent for details about
participating in the Program. The Program also provides for additional
share repurchases. The Program is described on pages 29 through 31 of this
report.
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International Emerging Markets Free Latin America
Index is an unmanaged index (with no defined investment objective) of Latin
American equities that includes reinvestment of dividends, and is the exclusive
property of Morgan Stanley Capital International Inc.
** The J.P. Morgan Emerging Markets Bond Index Plus tracks total returns for
traded external debt instruments in the emerging markets. The instruments
include external-currency-denominated Brady bonds, loans and Eurobonds, as well
as U.S.-dollar local-market instruments. EMBI+ comprises a set of broker-traded
debt instruments widely followed and quoted by several market-makers.
Instruments must have a minimum of $500 million outstanding.
*** Emily Alejos, who is a Director of Credit Suisse Asset Management,
LLC("CSAM"), is primarily responsible for management of the Fund's assets. She
has served the Fund in such capacity since November 9, 1999. Ms. Alejos joined
CSAM in 1997 from Bankers Trust, where she was an emerging markets portfolio
manager. Previously, she focused on Latin American equities at G.T. Capital
Management in San Francisco. Ms. Alejos is Chief Investment Officer of the Fund.
She is also Chief Investment Officer of The Brazilian Equity Fund, Inc. and The
Latin America Equity Fund, Inc. and Investment Officer of The Chile Fund, Inc.
and The Emerging Markets Telecommunications Fund, Inc.
Peter Wilby, of Salomon Brothers Asset Management Inc. ("SBAM") is responsible
for managing the Fund's sovereign debt portfolio. Mr. Wilby, who joined SBAM in
1989, is a Senior Manager responsible for SBAM's portfolios which invest in high
yield sovereign debt and high yield corporate securities. Prior to that, Mr.
Wilby managed high yield bonds and leveraged equities in mutual funds and
institutional portfolios for Prudential Capital Management Group ("Prudential").
He had previously served as director of Prudential's credit research unit and as
a corporate and sovereign credit analyst with Prudential. Mr. Wilby is a
Chartered Financial Analyst and a Certified Public Accountant.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
PORTFOLIO SUMMARY - AS OF DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
GEOGRAPHIC ASSET BREAKDOWN
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
12/31/99 12/31/98
<S> <C> <C>
Argentina 6.61 17.74
Brazil 33.97 28.35
Chile 7.22 6.55
Colombia 2.73 2.01
Ecuador 1.01 1.33
Mexico 36.09 28.96
Panama 1.34 1.04
Peru 2.11 3.86
Venezuela 4.4 6.62
Other 2.04 1.77
Cash & Cash Equivalents 2.48 1.77
</TABLE>
SECTOR ALLOCATION
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
12/31/99 12/31/98
<S> <C> <C>
Banking 2.09 1.81
Broadcast, Radio & Television 3.79 1.85
Cement 2.63 2.15
Financial Services 2.87 0.01
Food & Beverages 8.37 6.79
Investment & Holding Companies 2.6 2.36
Local and/or Long Distance Telephone Service 14.17 8.65
Mining 3.3 2.39
Oil & Natural Gas 3.19 8.88
Paper Products 2.9 2.72
Retail 2.81 3.15
Telecommunications 11.11 11.91
Fixed or Floating Rate Investments 28.73 34.72
Other 8.88 10.76
Cash & Cash Equivalents 2.56 1.85
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
PORTFOLIO SUMMARY - AS OF DECEMBER 31, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of
Holding Sector Country Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Telefonos de Mexico, S.A. Telecommunications Mexico 9.6
- ---------------------------------------------------------------------------------------------------------------------------
2. Republic of Argentina Fixed or Floating Rate Investments Argentina 6.6
- ---------------------------------------------------------------------------------------------------------------------------
3. Telecomunicacoes Brasileiras S.A. Local and/or Long Distance Telephone Service Brazil 6.4
- ---------------------------------------------------------------------------------------------------------------------------
4. Federal Republic of Brazil Fixed or Floating Rate Investments Brazil 5.8
- ---------------------------------------------------------------------------------------------------------------------------
5. United Mexican States Fixed or Floating Rate Investments Mexico 5.6
- ---------------------------------------------------------------------------------------------------------------------------
6. Republic of Venezuela Fixed or Floating Rate Investments Venezuela 4.1
- ---------------------------------------------------------------------------------------------------------------------------
7. Grupo Televisa S.A. Broadcast, Radio & Television Mexico 3.8
- ---------------------------------------------------------------------------------------------------------------------------
8. Petroleo Brasileiro S.A. Oil & Natural Gas Brazil 3.2
- ---------------------------------------------------------------------------------------------------------------------------
9. Cemex, S.A. de C.V. Cement Mexico 2.6
- ---------------------------------------------------------------------------------------------------------------------------
10. Companhia Vale do Rio Doce Mining Brazil 2.6
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares/Units (Note A)
- -------------------------------------------------------
<S> <C> <C>
EQUITY OR EQUITY-LINKED SECURITIES-68.71%
BRAZIL-28.18%
BANKING-1.58%
Banco Bradesco S.A. PN ...... 393,131 $ 3,084
Banco Bradesco S.A., Rights
(expiring 12/25/49)+ ....... 25,526 101
Banco do Brasil S.A., Series A,
Warrants (expiring 06/30/01)+ 11,877,000 8,613
Banco do Brasil S.A., Series B,
Warrants (expiring 06/30/06)+ 17,815,500 16,272
Banco do Brasil S.A., Series C,
Warrants (expiring 06/30/11)+ 29,692,500 30,243
Banco Itau S.A. PN .......... 20,585,957 1,766,301
------------
1,824,614
------------
CELLULAR TELECOMMUNICATIONS-0.91%
Telemig Celular S.A. PNC+ ... 132,070 2,408
Telesp Celular Participacoes
S.A. ADR ................... 24,700 1,046,662
------------
1,049,070
------------
FERTILIZER-0.02%
Serrana S.A. ON+ ............ 14,249 8,203
Serrana S.A. PN+ ............ 16,991 9,311
------------
17,514
------------
FOOD & BEVERAGES-2.02%
Companhia Brasileira de
Distribuicao Grupo Pao
de Acucar ADR .............. 29,100 940,294
Companhia Cervejaria
Brahma ADR ................. 99,400 1,391,600
------------
2,331,894
------------
LOCAL AND/OR LONG DISTANCE
TELEPHONE SERVICE-14.17%
Embratel Participacoes
S.A. ADR ................... 101,765 2,773,096
Tele Centro Sul Participacoes
S.A. ADR ................... 24,500 2,223,375
Tele Norte Leste Participacoes
S.A. ADR ................... 114,100 2,909,550
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------
<S> <C> <C>
LOCAL AND/OR LONG DISTANCE
TELEPHONE SERVICE (CONTINUED)
Telecomunicacoes Brasileiras
S.A. ADR ................... 57,900 $ 7,440,150
Telecomunicacoes de Minas
Gerais S.A. PNB ............ 132,070 5,110
Telecomunicacoes de Sao
Paulo S.A. PN .............. 42,510,599 1,030,703
------------
16,381,984
------------
MINING-2.58%
Companhia Vale do Rio
Doce ADR ................... 18,900 526,900
Companhia Vale do Rio
Doce PNA ................... 88,835 2,458,760
------------
2,985,660
------------
OIL & NATURAL GAS-3.19%
Petroleo Brasileiro S.A. PN . 14,500,000 3,692,223
------------
PAPER PRODUCTS-1.50%
Aracruz Celulose S.A. ADR ... 50,000 1,312,500
Votorantim Celulose e Papel
S.A. PN .................... 9,150,659 420,429
------------
1,732,929
------------
STEEL-0.54%
Gerdau S.A. PN .............. 23,557,025 625,927
------------
UTILITIES-1.67%
Centrais Eletricas Brasileiras
S.A. PNB ADR ............... 160,836 1,932,525
------------
TOTAL BRAZIL (Cost $21,798,615) .......... 32,574,340
------------
CHILE-7.14%
BANKING-0.51%
Banco de Credito e Inversiones 72,752 590,531
------------
CONSUMER DURABLES-0.47%
Empresas Almacenes Paris S.A. 441,229 541,385
------------
- --------------------------------------------------------------------------------
9
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
No. of Value
Description Shares (Note A)
- -------------------------------------------------------
<S> <C> <C>
ELECTRIC GENERATION-0.84%
Empresa Nacional de
Electricidad S.A. .......... 1,221,723 $ 576,556
Enersis S.A. ................ 830,623 388,852
------------
965,408
------------
ENGINEERING & CONSTRUCTION-0.29%
Besalco S.A. ................ 66,354 185,378
Maderas y Sinteticos S.A. ... 341,850 152,937
------------
338,315
------------
FERTILIZER-0.32%
Sociedad Quimica y Minera
de Chile S.A., Class A ..... 41,406 133,656
Sociedad Quimica y Minera
de Chile S.A., Class B ..... 75,000 236,432
------------
370,088
------------
FINANCIAL SERVICES-0.01%
Invercap S.A. ............... 12,094 5,936
------------
FOOD & BEVERAGES-1.53%
Compania Cervecerias
Unidas S.A. ................ 83,574 530,078
Embotelladora Andina
S.A. PNA ................... 121,203 366,068
Embotelladora Andina
S.A. PNB ................... 49,172 118,811
Embotelladora Arica S.A. ADR++ 75,000 750,000
------------
1,764,957
------------
FORESTRY-1.53%
Compania Chilena de
Fosforos S.A. .............. 69,033 76,233
Compania de Petroleos de
Chile S.A. ................. 262,729 1,165,480
Empresas CMPC S.A. .......... 51,504 531,811
------------
1,773,524
------------
INSURANCE-0.10%
Compania de Seguros La
Prevision Vida S.A.+ ....... 188,348 117,329
------------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
- -------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS-0.10%
Laboratorio Chile S.A. ...... 122,019 $ 111,712
------------
RETAIL-0.56%
Sociedad Anonima Comercial
e Industrial Falabella ..... 578,743 650,028
------------
STEEL-0.43%
Compania Acero del Pacifico S.A. 270,555 497,954
------------
TELECOMMUNICATIONS-0.45%
Compania de
Telecomunicaciones de
Chile S.A., Class A ........ 40,717 184,466
Compania de
Telecomunicaciones de
Chile S.A., Class B ........ 113,213 333,388
------------
517,854
------------
TOTAL CHILE (Cost $6,660,732) ............ 8,245,021
------------
COLOMBIA-0.24%
FOOD & BEVERAGES-0.24%
Bavaria S.A. (Cost $253,853) 63,239 276,565
------------
JAMAICA-0.89%
INVESTMENT & HOLDING COMPANIES-0.89%
Jamaican Assets I L.P.**++
(Cost $892,099) ............ 794,973 1,033,322
------------
MEXICO-30.52%
BROADCAST, RADIO & TELEVISION-3.79%
Grupo Televisa S.A. GDR+ .... 64,200 4,381,650
------------
CEMENT-2.63%
Cemex, S.A. de C.V. ADR+ .... 108,855 3,034,333
Cemex, S.A. de C.V. CPO ..... 2 11
------------
3,034,344
------------
- --------------------------------------------------------------------------------
10
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
No. of Value
Description Shares (Note A)
- -------------------------------------------------------
<S> <C> <C>
DIVERSIFIED OPERATIONS-1.09%
Alfa, S.A., Series A+ ....... 185,158 $ 869,607
Desc, S.A. de C.V. ADR+ ..... 23,400 391,950
------------
1,261,557
------------
FINANCIAL SERVICES-2.86%
Grupo Financiero Banamex
Accival, S.A. de C.V., Series O+ 471,000 1,888,971
Grupo Financiero Bancomer,
S.A. de C.V., Series O ..... 3,400,000 1,421,003
------------
3,309,974
------------
FOOD & BEVERAGES-4.58%
Coca-Cola Femsa S.A. ADR .... 68,345 1,200,309
Fomento Economico Mexicano,
S.A. de C.V. ADR ........... 44,380 1,974,910
Grupo Bimbo, S.A. de C.V.,
Series A+ .................. 229,914 513,212
Grupo Modelo, S.A. de C.V.,
Series C ................... 586,557 1,609,550
------------
5,297,981
------------
INVESTMENT & HOLDING COMPANIES-1.03%
Grupo Carso S.A. de C.V.,
Series A1+ ................. 237,625 1,183,736
------------
MINING-0.72%
Grupo Mexico S.A., Series B . 168,773 836,295
------------
PAPER PRODUCTS-1.40%
Kimberly-Clark de Mexico, S.A.
de C.V., Series A .......... 414,102 1,617,074
------------
RETAIL-2.25%
Cifra S.A. de C.V. ADR+ ..... 129,489 2,595,231
------------
STEEL-0.55%
Tubos de Acero de Mexico,
S.A. ADR ................... 47,200 640,150
------------
TELECOMMUNICATIONS-9.62%
Telefonos de Mexico,
S.A., Class L ADR .......... 98,800 11,115,000
------------
TOTAL MEXICO (Cost $25,961,595) .......... 35,272,992
------------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
- -------------------------------------------------------
<S> <C> <C>
PERU-0.72%
ENGINEERING & CONSTRUCTION-0.02%
Tecsur S.A.+ ................ 82,212 $ 21,558
------------
TELECOMMUNICATIONS-0.70%
Telefonica del Peru S.A. ADR 60,600 810,525
------------
TOTAL PERU (Cost $953,107) ............... 832,083
------------
VENEZUELA-0.34%
CEMENT-0.00%
Corporacion Venezolana de
Cementos, S.A.C.A.,
Shares 1 ................... 280 97
Corporacion Venezolana de
Cementos, S.A.C.A.,
Shares 2 ................... 37 12
------------
109
------------
TELECOMMUNICATIONS-0.34%
Venworld
Telecommunications**+ ...... 40,140 394,916
------------
TOTAL VENEZUELA (Cost $816,963) 395,025
------------
GLOBAL-0.68%
INVESTMENT & HOLDING COMPANIES-0.68%
Emerging Markets Ventures I
L.P.**+# (Cost $742,023) ... 711,734 785,327
------------
TOTAL EQUITY OR EQUITY-LINKED
SECURITIES (Cost $58,078,987) 79,414,675
------------
FIXED OR FLOATING RATE
INVESTMENTS-28.73%
ARGENTINA-6.61%
<CAPTION>
Par (000)
------------
<S> <C> <C>
Republic of Argentina,
Debentures, 6.8125%,
03/31/05(2)(5)(6) .......... USD 440 402,820
Republic of Argentina, Global
Note, 11.75%, 04/07/09 ..... 3,500 3,526,250
- --------------------------------------------------------------------------------
11
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Par Value
Description (000) (Note A)
- -------------------------------------------------------
<S> <C> <C>
ARGENTINA (CONTINUED)
Republic of Argentina, Global
Senior Note, 9.164%,
04/10/05(4) ................ USD 650 $ 598,000
Republic of Argentina, Note,
11.75%, 02/12/07++ ......... 2,000 1,840,000
Republic of Argentina, Series 54,
Tranche 1, Unsubordinated
Note, 8.75%, 07/10/02++ .... 1,250 1,131,250
Republic of Argentina,
Series REGS, Euro MTN,
11.75%, 02/12/07++ ......... ARS 150 138,020
------------
TOTAL ARGENTINA (Cost $7,122,549) ........ 7,636,340
------------
BRAZIL-5.79%
Federal Republic of Brazil,
Bearer Bond, 5.00%,
04/15/09(4)(5)(6) .......... USD 148 110,260
Federal Republic of Brazil,
Capitalization Bond, 8.00%,
04/15/14(1)(5)(6) .......... 767 576,978
Federal Republic of Brazil,
Capitalization Debenture,
Series L, 8.00%,
04/15/14(1)(5)(6) .......... 701 527,680
Federal Republic of Brazil,
Debt Conversion Bond,
Series L-18 yr, 7.00%,
04/15/12(3)(5)(6) .......... 2,076 1,551,810
Federal Republic of Brazil,
Debt Conversion Bond,
Series L-RG, 7.00%,
04/15/12(3)(5)(6) .......... 1,926 1,439,685
Federal Republic of Brazil,
Unsubordinated Bond,
14.50%, 10/15/09 ........... 2,241 2,488,631
------------
TOTAL BRAZIL (Cost $5,987,735) ........... 6,695,044
------------
COLOMBIA-2.49%
Republic of Colombia, Global
Bond, 10.875%, 03/09/04 .... 1,400 1,438,500
Republic of Colombia, Global
Unsubordinated Bond,
7.625%, 02/15/07 ........... 200 169,500
COLOMBIA (CONTINUED)
Republic of Colombia, Global
Unsubordinated Note,
8.625%, 04/01/08 ........... USD 250 $ 220,000
Republic of Colombia, Series 9,
Euro MTN, 7.27%, 06/15/03 .. 500 455,000
Republic of Colombia, Yankee
Note, 11.442%, 08/13/05(9) . 614 592,510
------------
TOTAL COLOMBIA (Cost $2,741,903) ......... 2,875,510
------------
COSTA RICA-0.29%
Banco Central Costa Rica,
Series B, Principal Bond,
6.25%, 05/21/15(6)
(Cost $349,606) ............ 400 340,000
------------
ECUADOR-1.01%
The Republic of Ecuador, Par
Bond, 4.00%, 02/28/25(5)(7)
(Cost $1,507,426) .......... 3,400 1,168,750
------------
LATIN AMERICA-0.17%
International Wireless
Communications, Inc., Senior
Secured Note, 08/17/02*+(8)
(Cost $451,924) ............ 323 200,115
------------
MEXICO-5.58%
United Mexican States, Global
Bond, 11.375%, 09/15/16 .... 485 550,257
United Mexican States, Secured
Bond, Series W-A, 6.25%,
12/31/19(5) ................ 700 549,500
United Mexican States, Series
W-B, Par Bond, 6.25%,
12/31/19(5) ................ 6,500 5,131,100
<CAPTION>
No. of
Shares
---------
<S> <C> <C>
United Mexican States, Warrants
(expiring 02/18/00)+ ...... 2,130 213,000
------------
TOTAL MEXICO (Cost $6,091,654) ........... 6,443,857
------------
- --------------------------------------------------------------------------------
12
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Par Value
Description (000) (Note A)
- -------------------------------------------------------
<S> <C> <C>
PANAMA-1.34%
The Republic of Panama, Global
Bond, 8.875%, 09/30/27 ..... USD 405 $ 340,200
The Republic of Panama, Global
Bond, 9.375%, 04/01/29 ..... 775 739,156
The Republic of Panama, Interest
Reduction Debenture, 4.25%,
07/17/14(4)(5)(6) .......... 600 471,000
------------
TOTAL PANAMA (Cost $1,579,730) ........... 1,550,356
------------
PERU-1.39%
The Republic of Peru, Front
Loaded Interest Reduction
Bond, 3.75%,
03/07/17(4)(5)(6) .......... 2,250 1,397,813
The Republic of Peru, Past Due
Interest Bond, 4.50%,
03/07/17(4)(5)(6) .......... 300 207,750
------------
TOTAL PERU (Cost $1,572,647) ............. 1,605,563
------------
VENEZUELA-4.06%
Republic of Venezuela, Global
Bond, 13.62%, 08/15/18 ..... 2,375 2,149,375
Republic of Venezuela, Global
Bond, 9.25%, 09/15/27 ...... 200 132,000
Republic of Venezuela,
Series A, Front Loaded
Interest Reduction Debenture,
6.87%, 03/31/07(3)(5)(6) ... 2,857 2,257,132
Republic of Venezuela,
Series DL, Debt Conversion
Debenture, 7.00%,
12/18/07(3)(5)(6) .......... 190 150,476
------------
TOTAL VENEZUELA (Cost $3,793,876) ........ 4,688,983
------------
TOTAL FIXED OR FLOATING RATE
INVESTMENTS (Cost $31,199,050) .......... 33,204,518
------------
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.08%
CHILEAN MUTUAL FUNDS-0.08%
Bice Manager Investment Fund 32,904 $ 86,607
Fondo Mutuo Security Check .. 2,952 13,295
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $98,915) .......................... 99,902
------------
TOTAL INVESTMENTS-97.52%
(Cost $89,376,952) (Notes A,D) .......... 112,719,095
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES-2.48% .................... 2,865,150
------------
NET ASSETS-100.00% ....................... $115,584,245
------------
------------
- -------------------------------------------------------
</TABLE>
* Not readily marketable security.
** Restricted security, not readily marketable (See Note F).
+ Security is non-income producing.
++ SEC Rule 144A security. Such securities are traded only among "qualified
institutional buyers."
# As of December 31, 1999, the Fund committed to investing an additional
$512,889 of capital.
(1) Payment-in-kind bond; of which all or a portion of the coupon is being
capitalized at periodic intervals.
(2) Floating rate bond; rate resets based on 6-month London Interbank Offered
Rate ("LIBOR") plus 0.8125%.
(3) Floating rate bond; rate resets based on 6-month LIBOR plus 0.875%.
(4) Variable rate bond; coupon varies at periodic intervals.
(5) Brady Bond.
(6) Pro-rata sinking fund has been established.
(7) Step-up bond; coupon increases at periodic intervals.
(8) As of March 31, 1998, this investment ceased accruing interest.
(9) Floating rate note; rate resets based on the average of the Republic of
Colombia, 7.625%, 02/15/07 and the Republic of Colombia, 8.625%, 04/01/08
minus 0.375%.
ADR American Depositary Receipts.
ARS Argentine Pesos.
CPO Ordinary Participation Certificates.
GDR Global Depositary Receipts.
MTN Medium Term Note.
ON Ordinary Shares.
PN Preferred Shares.
PNA Preferred Shares, Class A.
PNB Preferred Shares, Class B.
PNC Preferred Shares, Class C.
USD United States Dollars.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements. 13
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $89,376,952) (Note A) .................................. $112,719,095
Cash (including $34,766 of foreign currencies with a cost of $34,769) (Note A) ..... 1,891,802
Receivables:
Interest ........................................................................ 961,657
Investments sold ................................................................ 371,859
Dividends ....................................................................... 287,630
Prepaid expenses and other assets .................................................. 4,639
------------
Total Assets ....................................................................... 116,236,682
------------
LIABILITIES
Payables:
Investment advisory fees (Note B) ............................................... 288,103
Administration fees (Note B) .................................................... 44,186
Other accrued expenses .......................................................... 269,011
Chilean repatriation taxes (Note A) ............................................. 51,137
------------
Total Liabilities .................................................................. 652,437
------------
NET ASSETS (applicable to 6,587,139 shares of common stock outstanding) (Note C) ... $115,584,245
------------
------------
NET ASSET VALUE PER SHARE ($115,584,245 DIVIDED BY 6,587,139) ...................... $ 17.55
------------
------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value; 6,587,139 shares issued and outstanding
(100,000,000 shares authorized) ................................................... $ 6,587
Paid-in capital .................................................................... 117,453,301
Accumulated net realized loss on investments and foreign currency related
transactions ...................................................................... (25,214,671)
Net unrealized appreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies ................. 23,339,028
------------
Net assets applicable to shares outstanding ........................................ $115,584,245
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
14 See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends ........................................................................ $ 1,623,099
Interest ......................................................................... 4,491,651
Less: Foreign taxes withheld ..................................................... (182,618)
------------
Total Investment Income .......................................................... 5,932,132
------------
Expenses:
Investment advisory fees (Note B) ................................................ 1,190,690
Administration fees (Note B) ..................................................... 175,513
Audit and legal fees ............................................................. 138,437
Custodian fees ................................................................... 90,320
Accounting fees .................................................................. 80,763
Printing ......................................................................... 79,634
Directors' fees .................................................................. 52,000
Transfer agent fees .............................................................. 32,452
NYSE listing fees ................................................................ 16,170
Insurance ........................................................................ 10,392
Other ............................................................................ 16,743
Brazilian taxes (Note A) ......................................................... 29,417
------------
Total Expenses ................................................................... 1,912,531
Less: Fee waivers (Note B) ....................................................... (114,434)
------------
Net Expenses ................................................................... 1,798,097
------------
Net Investment Income ............................................................ 4,134,035
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments ...................................................................... 2,475,138
Foreign currency related transactions ............................................ (583,431)
Net change in unrealized depreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies ................. 34,738,713
------------
Net realized and unrealized gain on investments and foreign currency
related transactions .............................................................. 36,630,420
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................... $ 40,764,455
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements. 15
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended
December 31,
--------------------------------
1999 1998
----------- -----------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income $ 4,134,035 $ 3,439,779
Net realized gain/(loss) on investments and foreign currency
related transactions 1,891,707 (25,228,498)
Net change in unrealized appreciation/(depreciation) in value of
investments and translation of other assets and liabilities denominated
in foreign currencies 34,738,713 (27,737,482)
------------ ------------
Net increase/(decrease) in net assets resulting from operations 40,764,455 (49,526,201)
------------ ------------
Dividends to shareholders (Note A):
Net investment income (3,293,569) (3,566,312)
------------ ------------
Capital share transactions (Note C):
Proceeds from 78,479 shares issued in reinvestment of dividends -- 1,069,270
Cost of 1,338,000 shares and 26,100 shares repurchased, respectively (Note G) (12,985,948) (235,428)
------------ ------------
Net increase/(decrease) in net assets resulting from capital
share transactions (12,985,948) 833,842
------------ ------------
Total increase/(decrease) in net assets 24,484,938 (52,258,671)
------------ ------------
NET ASSETS
Beginning of year 91,099,307 143,357,978
------------ ------------
End of year $115,584,245 $ 91,099,307
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
16 See accompanying notes to financial statements.
<PAGE>
This page left intentionally blank.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period ............................. $11.49 $18.21 $19.07
-------- -------- --------
Net investment income .................. 0.59 0.43 0.11
Net realized and unrealized
gain/(loss) on investments
and foreign currency
related transactions ................. 5.44 (6.71)++ 1.66
-------- -------- --------
Net increase/(decrease) in
net assets resulting from
operations ............................ 6.03 (6.28) 1.77
-------- -------- --------
Dividends and distributions
to shareholders:
Net investment income ................ (0.50) (0.45) (0.21)
Net realized gain on
investments and foreign
currency related
transactions ........................ -- -- (2.42)
In excess of net realized
gains ............................... -- -- --
-------- -------- --------
Total dividends and
distributions to
shareholders .......................... (0.50) (0.45) (2.63)
-------- -------- --------
Anti-dilutive impact due to
capital shares repurchased ............ 0.53 0.01 --
Dilutive impact due to
capital share rights
offering .............................. -- -- --
-------- -------- --------
Net asset value, end of
period ................................ $17.55 $11.49 $18.21
-------- -------- --------
-------- -------- --------
Market value, end of period ............ $13.063 $8.188 $14.313
-------- -------- --------
-------- -------- --------
Total investment return (a) ............ 65.69% (39.56)% 8.21%
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) ......................... $115,584 $91,099 $143,358
Ratio of expenses to average
net assets (c) ........................ 1.89% 2.39% 2.46%
Ratio of expenses to average
net assets, excluding fee
waivers ............................... 2.01% 2.51% 2.58%
Ratio of expenses to average
net assets, excluding taxes ........... 1.85% 1.80% 1.68%
Ratio of net investment
income to average net
assets ................................ 4.33% 2.91% 0.53%
Portfolio turnover rate ................ 115.42% 172.62% 124.98%
</TABLE>
- -------------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.31 per share.
+ Based on average shares outstanding.
++ Includes a $0.05 per share decrease to the Fund's net asset value per share
resulting from the dilutive impact of shares issued pursuant to the Fund's
automatic dividend reinvestment program.
(a) Total investment return at market value is based on the changes in market
price of a share during the period and assumes reinvestment of dividends
and distributions, if any, at actual prices pursuant to the Fund's dividend
reinvestment program. Total investment return does not reflect brokerage
commissions or initial underwriting discounts and has not been annualized.
(b) Annualized.
(c) Ratios reflect actual expenses incurred by the Fund. Amounts are net of fee
waivers and inclusive of taxes.
- --------------------------------------------------------------------------------
18 See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
For the Years Ended December 31, August 1, 1990*
-------------------------------------------------------------------- through
1996 1995 1994 1993 1992 1991 December 31, 1990
-------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period ............................. $17.09 $20.18 $25.73 $25.36 $26.05 $14.24 $13.64**
-------- -------- -------- -------- -------- -------- -------
Net investment income .................. 0.28 0.19 0.09+ 0.08 0.24 0.61 0.29
Net realized and unrealized
gain/(loss) on investments
and foreign currency
related transactions ................. 1.93 (3.09) 1.29 10.18 1.51 14.66 0.58
-------- -------- -------- -------- -------- -------- -------
Net increase/(decrease) in
net assets resulting from
operations ............................ 2.21 (2.90) 1.38 10.26 1.75 15.27 0.87
-------- -------- -------- -------- -------- -------- -------
Dividends and distributions
to shareholders:
Net investment income ................ (0.23) -- (0.07) (0.22) -- (0.63) (0.27)
Net realized gain on
investments and foreign
currency related
transactions ........................ -- (0.19) (4.33) (8.61) (2.44) (2.83) --
In excess of net realized
gains ............................... -- -- -- (0.04) -- -- --
-------- -------- -------- -------- -------- -------- -------
Total dividends and
distributions to
shareholders .......................... (0.23) (0.19) (4.40) (8.87) (2.44) (3.46) (0.27)
-------- -------- -------- -------- -------- -------- -------
Anti-dilutive impact due to
capital shares repurchased ............ -- -- -- -- -- -- --
Dilutive impact due to
capital share rights
offering .............................. -- -- (2.53) (1.02) -- -- --
-------- -------- -------- -------- -------- -------- -------
Net asset value, end of
period ................................ $19.07 $17.09 $20.18 $25.73 $25.36 $26.05 $14.24
-------- -------- -------- -------- -------- -------- -------
-------- -------- -------- -------- -------- -------- -------
Market value, end of period ............ $15.750 $14.750 $18.750 $31.500 $24.375 $26.500 $11.125
-------- -------- -------- -------- -------- -------- -------
-------- -------- -------- -------- -------- -------- -------
Total investment return (a) ............ 8.26% (20.34)% (26.63)% 89.45% 2.35% 167.96% (18.35)%
-------- -------- -------- -------- -------- -------- -------
-------- -------- -------- -------- -------- -------- -------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) ......................... $150,007 $134,290 $156,673 $140,458 $102,259 $104,435 $57,081
Ratio of expenses to average
net assets (c) ........................ 1.70% 2.00% 2.02% 2.06% 2.61% 2.30% 3.27%(b)
Ratio of expenses to average
net assets, excluding fee
waivers ............................... 1.82% 2.12% -- -- -- -- --
Ratio of expenses to average
net assets, excluding taxes ........... -- 1.78% 1.72% -- 2.31% -- --
Ratio of net investment
income to average net
assets ................................ 1.47% 1.10% 0.63% 1.45% 1.15% 2.85% 5.10%(b)
Portfolio turnover rate ................ 50.21% 38.71% 77.81% 70.17% 55.40% 82.39% 52.49%
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Latin America Investment Fund, Inc. (the "Fund") was incorporated in
Maryland on April 17, 1990 and commenced investment operations on August 1,
1990. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the last sales price or lacking any sales, at the
closing price last quoted for the securities (but if bid and asked quotations
are available, at the mean between the current bid and asked prices). Securities
that are traded over-the-counter are valued at the mean between the current bid
and the asked prices, if available. All other securities and assets are valued
at fair value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of not readily marketable securities. At December 31,
1999, the Fund held 2.09% of its net assets in securities valued in good faith
by the Board of Directors with an aggregate cost of $2,903,005 and fair value of
$2,413,680. The net asset value per share of the Fund is calculated on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At December 31, 1999, the interest
rate was 3.50%, which resets on a daily basis. Amounts on deposit are generally
available on the same business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
At December 31, 1999, the Fund had a capital loss carryforward of $23,556,041 of
which $22,881,266 expires in 2006 and $674,775 expires in 2007.
For U.S. federal income tax purposes, realized foreign currency losses and net
realized capital losses from investments incurred after October 31, 1999, within
the Fund's current fiscal year, are deemed to arise on the first day of the
following fiscal year. The Fund incurred and elected to defer such losses of
$42,115 and $1,243,892, respectively.
Income received by the Fund from sources within Latin America may be subject to
withholding and other taxes imposed by Latin American countries. Also, certain
Latin American countries impose taxes on funds remitted or repatriated from such
countries.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the year
ended December 31, 1999, the Fund incurred no such expense.
From January 23, 1997 through January 22, 1999, Brazil imposed a 0.20%
CONTRIBUCAO PROVISORIA SOBRE MOVIMENTACAOES FINANCIERAS ("CPMF") tax that
applied to most debit transactions carried out by financial institutions.
Effective January 23, 1999, the CPMF tax expired and was reinstated on June 17,
1999 for a period of three years. The tax is assessed at a rate of 0.38% for the
initial year and will drop to 0.30% for the remaining two years. For the year
ended December 31, 1999, the Fund incurred $29,417 of such expense.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and U.S. federal
income tax reporting purposes.
Net currency gains or losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation in value of investments and translation of
other assets and liabilities denominated in foreign currencies.
Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders, substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryforwards, if any.
Dividends and distributions to shareholders are recorded by the Fund on the
ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
At December 31, 1999, the Fund reclassified within the composition of net assets
permanent book/tax differences from accumulated net realized loss on investments
and foreign currency related transactions relating to foreign currency losses of
$613,449 and from distributions in excess of net investment income of $577,918
to paid-in-capital.
OTHER: Securities denominated in currencies other than U.S. dollars are subject
to changes in value due to fluctuations in exchange rates.
Some countries require governmental approval for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign investors. In
addition, if there is a deterioration in a country's balance of payments or for
other reasons, a country may impose temporary restrictions on foreign capital
remittances abroad. Amounts repatriated prior to the end of specified periods
may be subject to taxes as specified in the Fund's prospectus.
The Latin American securities markets are substantially smaller, less liquid and
more volatile than the major securities markets in the United States.
Consequently, acquisition and disposition of securities by the Fund may be
inhibited. A significant proportion of the aggregate market value of equity
securities listed on the major securities exchanges are held by a small number
of investors. This may limit the number of shares for acquisition or disposition
by the Fund.
The Fund, subject to local investment limitations, may invest up to 25% of its
assets in non-publicly traded equity securities, which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be
substantially less than those originally paid by the Fund or the current
carrying values. Further, companies whose securities are not publicly traded may
not be subject to the disclosure and other investor protection requirements
applicable to companies whose securities are publicly traded.
The Fund is permitted to engage in the trading of sovereign debt of Latin
American countries, which involves a high degree of risk. The issuer of the debt
or the governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal and/or interest when due in accordance
with the terms of such debt. Sovereign debt in which the Fund will invest is
widely considered to have a credit quality below investment grade as determined
by U.S. rating agencies. As a result, sovereign debt may be regarded as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations and involves
major risk exposure to adverse conditions.
The Fund may enter into repurchase agreements ("repos") on U.S. Government
securities with primary government securities dealers recognized by the Federal
Reserve Bank of New York and member banks of the Federal Reserve System and on
securities issued by the governments of foreign countries, their
instrumentalities and with creditworthy parties in accordance with established
procedures. Repos are contracts under which the buyer of a security
simultaneously buys and commits to resell the security to the seller at an
agreed upon price and date. Repos are deposited with the Fund's custodian and,
pursuant to the terms of the repo, the collateral must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities fall below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on
- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
its repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited. At December 31, 1999, the Fund had
no such agreements.
NOTE B. AGREEMENTS
Credit Suisse Asset Management, LLC ("CSAM"), formerly known as BEA Associates,
serves as the Fund's investment adviser, with respect to all investments other
than sovereign debt. As compensation for its advisory services, CSAM receives
from the Fund an annual fee, calculated weekly and paid quarterly, equal to
1.0625% of the first $100 million of the Fund's average weekly net assets,
0.9775% of the next $50 million of the Fund's average weekly net assets and
0.8925% of amounts over $150 million. CSAM has agreed to waive its portion of
the advisory fee previously payable to the Fund's former sub-advisers. For the
year ended December 31, 1999, CSAM earned $1,012,087 for advisory services, of
which CSAM waived $97,269. CSAM also provides certain administrative services to
the Fund and is reimbursed by the Fund for costs incurred on behalf of the Fund
(up to $20,000 per annum). For the year ended December 31, 1999, CSAM was
reimbursed $14,001 for administrative services rendered to the Fund.
Salomon Brothers Asset Management Inc. ("SBAM") serves as the Fund's investment
adviser, with respect to sovereign debt. In return for its services, SBAM is
paid an annual fee, calculated weekly and paid quarterly, equal to 0.1875% of
the first $100 million of the Fund's average weekly net assets, 0.1725% of the
next $50 million of the Fund's average weekly net assets and 0.1575% of amounts
over $150 million. SBAM has agreed to waive its portion of the advisory fee
previously payable to the Fund's former sub-advisers. For the year ended
December 31, 1999, advisory fees amounted to $178,603, of which $17,165 was
waived by SBAM.
Celfin Servicios Financieros Limitada ("Celfin") serves as the Fund's
sub-adviser with respect to Chilean investments. In return for its services,
Celfin is paid a fee, out of the advisory fees payable to CSAM and SBAM,
computed weekly and paid quarterly at an annual rate of 0.05% of the Fund's
average weekly net assets. For the year ended December 31, 1999, these
sub-advisory fees amounted to $47,684.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee that is computed weekly at an
annual rate of 0.10% of the first $100 million of the Fund's average weekly net
assets and 0.08% of amounts in excess of $100 million. For the year ended
December 31, 1999, BSFM earned $95,101 for administrative services.
BEA Administration, Administradora de Fondos de Inversion de Capital Extranjero
S.A. ("AFICE") serves as the Fund's Chilean administrator. For its services,
AFICE is paid an annual fee by the Fund equal to the greater of 2,000 U.F.'s
(approximately $58,000 at December 31, 1999) or 0.10% of the Fund's average
weekly net assets invested in Chile and an annual reimbursement of out-of-pocket
expenses not to exceed 500 U.F.'s. Such fees are paid by AFICE to Celfin for
certain administrative services. An accounting fee is also paid to Celfin, which
is calculated, and paid quarterly at an annual rate of 205.32 U.F.'s
(approximately $6,000 at December 31, 1999). For the year ended December 31,
1999, Celfin earned $66,411 and $5,942 for administrative and accounting
services, respectively.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001, par value. Of the 6,587,139 shares outstanding at December 31, 1999,
CSAM owned 7,169 shares.
- --------------------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at December
31, 1999 was $89,749,575. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currencies) of
$22,969,520, was composed of gross appreciation of $25,545,134 for those
investments having an excess of value over cost and gross depreciation of
$2,575,614 for those investments having an excess of cost over value.
For the year ended December 31, 1999, purchases and sales of securities, other
than short-term investments, were $106,422,326 and $121,506,624 , respectively.
NOTE E. CREDIT AGREEMENTS
The Fund, along with 10 other U.S. regulated investment companies for which CSAM
serves as investment adviser, had a credit agreement with BankBoston, N.A.. The
agreement provided that each fund was permitted to borrow an amount equal to the
lesser of $25,000,000 or 25% of the net assets of the fund. However, at no time
was the aggregate outstanding principal amount of all loans to any of the 11
funds to exceed $25,000,000. The line of credit bore interest at (i) the greater
of the bank's prime rate or the Federal Funds Effective Rate plus 0.50% or (ii)
the Adjusted Eurodollar Rate plus 1.50%. The above credit agreement was
terminated as of June 30, 1999.
Effective December 15, 1999, the Fund, together with other funds advised by
CSAM, established a $250 million committed, unsecured, line of credit facility
("Credit Facility") with Deutsche Bank AG as administrative agent, State Street
Bank and Trust Company as operations agent, Bank of Nova Scotia as syndication
agent as well as certain other lenders, for temporary or emergency purposes.
Under the terms of the Credit Facility, the funds with access to the Credit
Facility pay an aggregate commitment fee at a rate of 0.075% per annum on the
average daily balance of the Credit Facility that is undisbursed and uncanceled
during the preceding quarter allocated among the participating funds in such
manner as is determined by the governing Boards of the various funds. In
addition, the participating funds will pay interest on borrowing at the Federal
funds rate plus 0.50%. At December 31, 1999 and during the year ended December
31, 1999, the Fund had no borrowings under the credit agreements.
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE F. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of units/shares held, the acquisition dates, aggregate
costs, fair value as of December 31, 1999, value per unit/share of such
securities and percent of net assets which the securities comprise.
<TABLE>
<CAPTION>
NUMBER FAIR VALUE PERCENT
OF UNITS/ VALUE AT PER OF NET
SECURITY SHARES ACQUISITION DATES COST 12/31/99 UNIT/SHARE ASSETS
- -------- --------- ------------------- -------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures I L.P. 447,558 01/22/98 - 10/27/98 $459,537 $ 493,836 $1.10 0.43
Emerging Markets Ventures I L.P. 52,774 02/26/99 53,184 58,231 1.10 0.05
Emerging Markets Ventures I L.P. 21,376 04/19/99 30,002 23,585 1.10 0.02
Emerging Markets Ventures I L.P. 12,214 08/24/99 12,310 13,477 1.10 0.01
Emerging Markets Ventures I L.P. 91,609 10/01/99 92,328 101,081 1.10 0.09
Emerging Markets Ventures I L.P. 86,203 12/21/99 94,662 95,117 1.10 0.08
Jamaican Assets I L.P. 794,973 07/29/97 - 10/17/97 892,099 1,033,322 1.30 0.89
Venworld Telecommunications 40,140 07/30/92 - 08/07/92 816,959 394,916 9.84 0.34
</TABLE>
The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE G. SHARE REPURCHASE PROGRAM
On October 21, 1998, the Fund announced that its Board of Directors had
authorized the repurchase by the Fund of up to 15% of the Fund's outstanding
common stock, for the purposes of enhancing shareholder value. The Fund's Board
had authorized management of the Fund to repurchase such shares in open market
transactions at prevailing market prices from time to time and in a manner
consistent with the Fund continuing to seek to achieve its investment
objectives. The Board's actions were taken in light of the significant discounts
at which the Fund's shares were trading. It is intended both to provide
additional liquidity to those shareholders that elect to sell their shares and
to enhance the net asset value of the shares held by those shareholders that
maintain their investment. The repurchase program is subject to review by the
Board of Directors of the Fund. By July 1999, the Fund had repurchased the full
amount so authorized (1,200,000 shares). On October 14, 1999, the Fund announced
that its Board of Directors has authorized the repurchase by the Fund of up to
an additional 15% of the Fund's outstanding common stock, for the purpose of
further enhancing shareholder value. From October 21, 1998 through December 31,
1998, the Fund repurchased 26,100 of its shares for a total cost of $235,428 at
a weighted average discount of 25.43% from net asset value. The discount of
individual repurchases ranged from 25.31% - 25.83%. For the year ended December
31, 1999, the Fund repurchased 1,338,000 of its shares for a total cost of
$12,985,948 at a weighted average discount of 23.03% from net asset value. The
discount of individual repurchases ranged from 17.53% - 26.78%.
- --------------------------------------------------------------------------------
25
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
The Latin America Investment Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Latin America Investment Fund,
Inc. (the "Fund") at December 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and issuers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 18, 2000
- --------------------------------------------------------------------------------
26
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On May 11, 1999, the annual meeting of shareholders of The Latin America
Investment Fund, Inc. (the "Fund") was held and the following matters were voted
upon:
(1) To re-elect two directors to the Board of Directors of the Fund.
<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- ---------------- --------- -------- ---------
<S> <C> <C> <C>
James J. Cattano 5,724,766 717,285 1,124,288
Riordan Roett 5,709,138 732,913 1,124,288
</TABLE>
In addition to the directors re-elected at the meeting, Dr. Enrique R. Arzac,
Peter A. Gordon*, George W. Landau, Martin M. Torino, William W. Priest, Jr. and
Richard W. Watt continue to serve as directors of the Fund.
* Mr. Gordon subsequently resigned from the Board and the size of the Board was
reduced by one.
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent public
accountants for the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
--------- ------- ------- ---------
<S> <C> <C> <C>
6,350,045 56,172 35,834 1,124,288
</TABLE>
(3) To approve a shareholder proposal providing that the advisory contract
between the Fund and Credit Suisse Asset Management, LLC be terminated.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
--------- --------- ------- ---------
<S> <C> <C> <C>
1,154,790 5,214,868 72,393 1,124,288
</TABLE>
The required votes were not received to approve the above proposal.
TAX INFORMATION (UNAUDITED)
The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise its shareholders within 60 days of the Fund's fiscal year end
(December 31, 1999) as to the U.S. federal tax status of dividends and
distributions received by the Fund's shareholders in respect of such fiscal
year. The $0.50 per share dividend paid in respect of such fiscal year was
derived entirely from net investment income. There were no distributions which
would qualified for the dividend received deduction available to corporate
shareholders.
The Fund does not intend to make an election under Section 853 to pass through
foreign taxes paid by the Fund to its shareholders. This information is given to
meet certain requirements of the Internal Revenue Code of 1986, as amended.
Shareholders should refer to their Form 1099-DIV to determine the amount
includable on their respective tax returns for 1999.
Notification for calendar year 1999 was mailed in January 2000. The notification
along with Form 1099-DIV reflects the amount to be used by calendar year
taxpayers on their U.S. federal income tax returns.
Foreign shareholders will generally be subject to U.S. withholding tax on the
amount of their distribution. They will generally not be entitled to a foreign
tax credit or deduction for the withholding taxes paid by the Fund.
- --------------------------------------------------------------------------------
27
<PAGE>
TAX INFORMATION (UNAUDITED) (CONTINUED)
In general, distributions received by tax-exempt recipients (e.g., IRAs and
Keoghs) need not be reported as taxable income for U.S. federal income tax
purposes. However, some retirement trusts (e.g., corporate, Keogh and 403(b)(7)
plans) may need this information for their annual information reporting.
Shareholders are advised to consult their own tax advisors with respect to the
tax consequences of their investment in the Fund.
- --------------------------------------------------------------------------------
28
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM
The InvestLink-SM- Program is sponsored and administered by BankBoston, N.A.,
not by The Latin America Investment Fund, Inc. (the "Fund"). BankBoston, N.A.
will act as program administrator (the "Program Administrator") of the
InvestLink-SM- Program (the "Program"). The purpose of the Program is to provide
interested investors with a simple and convenient way to invest funds and
reinvest dividends in shares of the Fund's common stock ("Shares") at prevailing
prices, with reduced brokerage commissions and fees.
An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions). Participants will not be charged any fee for
reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of the Fund's common stock in the open market. Such purchases will be
made by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the purchase date. In all cases, transaction processing will occur within
30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.
BankBoston, N.A., as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each
- --------------------------------------------------------------------------------
29
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
participant in the Program will receive a statement of his account following
each purchase of Shares. The statements will also show the amount of dividends
credited to such participant's account (if applicable), as well as the fees paid
by the participant. In addition, each participant will receive copies of the
Fund's annual and semi-annual reports to shareholders, proxy statements and, if
applicable, dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program
- --------------------------------------------------------------------------------
30
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
Administrator are not subject to protection under the Securities Investors
Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested investor may participate in the Program. To participate in the
Program, an investor who is not already a registered owner of the Shares must
make an initial investment of at least $250.00. All other cash payments or bank
account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including the terms and conditions) may be obtained by calling the
Program Administrator at one of the following telephone numbers: First Time
Investors--(800) 337-9697; Current Shareholders--(800) 730-6001. All
correspondence regarding the Program should be directed to: BankBoston, N.A.,
InvestLink Program, P.O. Box 8040, Boston, MA 02266-8040.
- --------------------------------------------------------------------------------
* InvestLink is a service mark of Boston EquiServe Limited Partnership.
- --------------------------------------------------------------------------------
31
<PAGE>
RECENT DEVELOPMENTS (UNAUDITED)
Recently, the Securities and Exchange Commission (the "SEC") amended Rule
14a-4(c) under the Securities Exchange Act of 1934 (the "1934 Act") which
governs the Fund's use of discretionary proxy voting authority with respect to
shareholder proposals that are not being included in the Fund's proxy
solicitation material pursuant to Rule 14a-8 of the 1934 Act. In light of these
amendments, the Fund's Board of Directors reviewed the By-laws of the Fund and
made the following material changes: 1) the percentage of ownership needed for
stockholders to request a special meeting has been increased from 25% to a
majority of the outstanding capital stock of the Fund entitled to vote at such
meeting; 2) the advance notice requirements applicable to stockholder proposals
at annual meetings and for nominations by stockholders for election to the Board
of Directors have been revised to reflect changes in Rule 14a-4(c); 3) the
Board's ultimate authority concerning reimbursement of expenses in soliciting
proxies for the election of Directors has been clarified; and 4) the power to
amend the By-laws is reserved to the Board of Directors. The Fund's By-laws are
on file with the SEC and are accessible through the SEC web site (www.sec.gov)
or may be obtained from the Secretary of the Fund upon request.
- --------------------------------------------------------------------------------
32
<PAGE>
SUMMARY OF GENERAL INFORMATION
The Fund--The Latin America Investment Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange. Its investment objective is long-term capital appreciation
through investments primarily in Latin American equity and debt securities. The
Fund is managed and advised by Credit Suisse Asset Management, LLC ("CSAM"),
formerly known as BEA Associates. CSAM is a diversified asset manager, handling
equity, balanced, fixed income, international and derivative based accounts.
Portfolios include international and emerging market investments, common stocks,
taxable and non-taxable bonds, options, futures and venture capital. CSAM
manages money for corporate pension and profit-sharing funds, public pension
funds, union funds, endowments and other charitable institutions and private
individuals. As of December 31, 1999, CSAM-Americas managed approximately $72.0
billion in assets.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "LatInv" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "LatinAmFd". The Fund's New York Stock Exchange
trading symbol is LAM. Weekly comparative net asset value (NAV) and market price
information about The Latin America Investment Fund, Inc.'s shares are published
each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET JOURNAL and
BARRON'S, as well as other newspapers, in a table called "Closed-End Funds."
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.cefsource.com.
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
The Portugal Fund, Inc. (PGF)
MULTIPLE COUNTRY
The Emerging Markets Infrastructure Fund, Inc. (EMG)
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Equity Fund, Inc. (LAQ)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse Asset Management Strategic Global Income Fund, Inc. (CGF)
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Latin America Investment Fund, Inc.
may from time to time purchase shares of its capital stock in the open market.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DIRECTORS AND CORPORATE OFFICERS
Dr. Enrique R. Arzac Director
James J. Cattano Director
George W. Landau Director
Riordan Roett Director
Martin M. Torino Director
William W. Priest, Jr. Chairman of the Board of
Directors
Richard W. Watt President and Director
Emily Alejos Chief Investment Officer
Yarek Aranowicz Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Secretary
Rocco A. Del Guercio Vice President
Robert M. Rizza Treasurer
INVESTMENT ADVISERS
Credit Suisse Asset Management, LLC
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Salomon Brothers Asset Management Inc.
7 World Trade Center
New York, NY 10048
ADMINISTRATOR
Bear Stearns Funds Management Inc.
575 Lexington Avenue
New York, NY 10022
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
BankBoston, N.A.
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent LAM
to the shareholders of the Fund for their information. It is not [NYSE LOGO]
a prospectus, circular or representation intended for use in the
purchase or sale of shares of the Fund or of any securities
mentioned in this report.
- --------------------------------------------------------------------------------
3914-AR-99
