[LOGO]
MANAGED BY
[LOGO] EQUITILINK
THE FIRST INTERNATIONAL
COMMONWEALTH MANAGEMENT
FUND, INC. LIMITED
--------------------------------------------------------------------------------
Quarterly Report July 31, 2000
Highlights
o 9.7% cash distribution rate for the previous 12 months, based on a share
price of $9.25 on July 31, 2000
o 88.7% invested in securities rated or deemed equivalent to AA/Aa or better
o 5.8% of total assets invested in Asian debt securities
[GRAPHIC OMITTED]
www.equitilink.com
NYSE - FCO
Managed by EquitiLink International
Management Limited
Advised by EquitiLink Australia Limited
ALL AMOUNTS ARE IN US DOLLARS UNLESS
OTHERWISE STATED
<PAGE>
letter to Shareholders
================================================================================
September 14, 2000
Dear Shareholder,
We present this Quarterly Report which covers the activities of The First
Commonwealth Fund, Inc. (the "Fund") for the three months ended July 31, 2000.
Included in this report is a review of the Australian, Canadian, New Zealand,
United Kingdom and selected Asian economies and investment markets, together
with an overview of the Fund's investments prepared by the Investment Manager,
EquitiLink International Management Limited.
High Credit Quality: 88.7% of securities rated or deemed equivalent to AA/Aa or
better
The Fund has maintained its high credit quality. Over 88% of assets are
rated AA/Aa or better, or are considered of equivalent quality by the Investment
Manager. An additional 7.9% is held in A rated securities.
Distributions: 9.7% annual cash distribution rate
Distributions paid to common shareholders for the year to July 31, 2000
totaled 90 cents per share. Based on the share price of $9.25 on July 31, 2000,
the cash distribution rate over the last 12 months was 9.6%. Since all
distributions are paid after deducting applicable foreign withholding taxes, the
effective distribution rate may be higher for those US investors who are able to
claim a foreign tax credit.
On March 17, 2000, the Board of Directors announced a 7.0 cent per share
monthly distribution. It is the Board's intention that the monthly distribution
be maintained until March 2001, subject to regular review at the Board's
quarterly meetings, having regard to market conditions, with the next scheduled
review to take place in December 2000. The Board's policy is to provide
investors with a stable monthly distribution out of current income, supplemented
by realized capital gains and, to the extent necessary, paid-in capital.
Investment Performance: 6.3% per annum return since inception
Since inception, the Fund's Net Asset Value (NAV) has returned 6.3% per
annum to July 31, 2000. However, over the three months to July 31, 2000 the
Fund's NAV returned -1.0%, which was primarily due to the strength of the US
dollar against the Commonwealth currencies.
Commonwealth bond markets generally strengthened during the period, due to
the countries' late stage of maturity in the growth cycle. Australian and New
Zealand bond yields fell from 6.39% to 6.24% and from 7.03% to 6.71%
respectively, as both countries are likely to experience moderating growth in
the second half of the year. Canadian yields also fell from 6.17% to 5.89%. UK
bond yields were virtually unchanged, however, shifting from 5.21% to 5.22%. The
Fund's modest move into Asian bond markets had a positive contribution to the
overall performance of the Fund.
1
<PAGE>
The First commonwealth Fund, Inc.
================================================================================
Asian Investments: 5.8% of total assets invested in Asian debt securities
As at July 31, 2000, 5.8% of the Fund's total assets are held in Asian
debt securities, a sector which presents attractive opportunities. The Fund's
ability to increase its investment in Asian markets remains constrained by
currency repatriation issues.
For information about the Fund, including weekly updates of share price,
NAV, and details of recent distributions, contact EquitiLink USA, Inc. Investor
Relations, by:
o calling toll free 1-800-552-5465 or 1-212-968-8800 in the United
States,
o email to [email protected], or
o visiting the website at www.equitilink.com.
Yours sincerely,
/s/ Brian M. Sherman /s/ Laurence S. Freedman [LOGO]
THE FIRST
Brian M. Sherman Laurence S. Freedman COMMONWEALTH
Chairman President FUND, INC.
================================================================================
Your Board's policy is to provide investors with a stable monthly
distribution out of current income, supplemented by realized capital gains and,
to the extent necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S.
tax accounting rules, the amount of distributable income for each fiscal period
depends on the actual exchange rates during the entire year between the US
dollar and the currencies in which Fund assets are denominated and on the
aggregate gains and losses realized by the Fund during the entire year.
Therefore the exact amount of distributable income for each fiscal year
can only be determined as at the end of the Fund's fiscal year, October 31.
However, under the U.S. Investment Company Act of 1940, the Fund is
required to indicate the source of each distribution to shareholders.
The Fund estimates that distributions year to date, including the
distribution paid on September 15, 2000 are made up of 73% net investment
income, 17% realized capital gains, and 10% return of paid-in capital.
This estimated distribution composition will vary from month to month
because it may be materially impacted by future realized gains and losses on
securities and fluctuations in the value of the currencies in which Fund assets
are denominated.
In January 2001, a Form 1099 DIV will be sent to shareholders which will
state the amount and composition of distributions and provide information with
respect to their appropriate tax treatment.
================================================================================
2
<PAGE>
Dividend Reinvestment and Cash Purchase Plan The First Commonwealth Fund, Inc.
================================================================================
We invite you to participate in the Fund's Dividend Reinvestment and Cash
Purchase Plan ("the Plan") which allows you to automatically reinvest your
distributions in shares of the Fund's common stock at favorable commission
rates. Distributions made under the Plan are taxable to the same extent as are
cash distributions. The Plan also enables you to make additional cash
investments in shares of at least $100 per month. Under this arrangement, the
Plan Agent will purchase shares for you on the stock exchange or otherwise on
the open market on or about the 15th of each month. As a participant in the
Plan, you will have the convenience of:
Automatic reinvestment--the Plan Agent will automatically reinvest your
distributions, allowing you to gradually grow your holdings in the Fund;
Lower costs--shares purchased on your behalf under the Plan will be at
reduced brokerage rates. Brokerage on share purchases was reduced from 5 cents
to 2 cents per share;
Convenience--the Plan Agent will hold your shares in non-certificated form
and will provide a detailed record of your holdings at the end of each
distribution period.
To request a brochure containing information on the Plan, together with an
authorization form, please contact the Plan Agent, State Street Bank & Trust
Company, P.O. Box 8200, Boston, MA 02266, or toll-free on 1-800-426-5523.
3
<PAGE>
Report of the Investment Manager The First Commonwealth Fund, Inc.
================================================================================
Distributions
Distributions paid for the 12 month period ended July 31, 2000 totalled 90
cents per share. The Board's policy is to provide investors with a stable
monthly distribution out of current income, supplemented by realized capital
gains and, to the extent necessary, paid-in capital. On March 17, 2000, the
Board of Directors announced a 7.0 cent per share monthly distribution. It is
the Board's intention that the monthly distributions be maintained until March
2001, subject to regular review at the Board's quarterly meetings, having regard
to market conditions, with the next review to take place in December 2000.
Based upon the July 31, 2000 share price of $9.25, and total distributions
of 90 cents per share paid over the 12 months ended July 31, 2000, the Fund
provided a cash distribution rate of 9.7%. Since all distributions are paid
after deducting applicable foreign withholding taxes, the effective distribution
rate may be higher for those US investors who are able to claim a foreign tax
credit.
Net Asset Value (NAV) Performance
The Fund's NAV per share at July 31, 2000 was $10.99. The Fund's NAV
returned -1.0% over the three months to July 31, 2000. The strength of the US
dollar against the Commonwealth currencies detracted from the Fund's
performance.
Bond yields fell in Australia, New Zealand and Canada over the quarter,
while UK bond yields were virtually unchanged. The Fund's modest move into Asian
bond markets had a positive contribution to the overall performance of the Fund.
Since inception, the Fund's NAV has returned 6.3% per annum. All figures
assume reinvestment of distributions. At the date of this report, the NAV was
$10.51 per share.
Share Price Performance
As of July 31, 2000, the Fund's share price as quoted on the New York
Stock Exchange was $9.25, which represented a discount of 15.8% to the NAV. At
the date of this report, the share price was $9.12, representing a discount of
13.2% to NAV.
4
<PAGE>
Report of the Investment Manager (concluded) The First Commonwealth Fund, Inc.
================================================================================
Auction Market Preferred Stock (AMPS)
The Fund's $30 million of AMPS continued to be well bid at the weekly
auctions. The average interest rate paid was 6.49% over the quarter, compared
with the 30-day commercial paper rate of 6.52% over the same period.
The Fund is a leveraged Fund. However, in recent times the US dollar has
strengthened against virtually all other currencies in the world and official
cash interest rates in the United States have risen to levels that exceed many
of those found in the Commonwealth countries. This has resulted in a negative
impact for common shareholders.
The Manager expects that in the medium to longer term this situation will
rectify itself and that the AMPS will contribute positively.
5
<PAGE>
Portfolio Composition The First Commonwealth Fund, Inc.
================================================================================
GEOGRAPHIC COMPOSITION
The table below shows the geographic composition of the Fund's total
investments as of July 31, 2000, compared with the previous quarter and twelve
months:
TABLE 1: THE FIRST COMMONWEALTH FUND, INC.--GEOGRAPHIC ASSET ALLOCATION
--------------------------------------------------------------------------------
July 31, 2000 April 30, 2000 July 31, 1999
% % %
--------------------------------------------------------------------------------
Australia 23.8 24.2 24.3
--------------------------------------------------------------------------------
Canada 35.1 33.3 29.2
--------------------------------------------------------------------------------
New Zealand 3.3 3.6 8.1
--------------------------------------------------------------------------------
United Kingdom 29.9 31.5 32.1
--------------------------------------------------------------------------------
United States* 2.1 1.5 0.1
--------------------------------------------------------------------------------
Asia 5.8 5.9 6.2
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
--------------------------------------------------------------------------------
* It is the policy of the Manager to maintain a portion of the Fund's
investments in US short-term securities to cover distributions and
expenses.
CURRENCY COMPOSITION
The table below shows the currency composition of the Fund's total
investments as of July 31, 2000, compared with the previous quarter and twelve
months:
TABLE 2: THE FIRST COMMONWEALTH FUND, INC.--CURRENCY ASSET ALLOCATION
--------------------------------------------------------------------------------
July 31, 2000 April 30, 2000 July 31, 1999
% % %
--------------------------------------------------------------------------------
Australian Dollar 23.8 24.2 24.3
--------------------------------------------------------------------------------
Canadian Dollar 35.1 33.3 29.2
--------------------------------------------------------------------------------
New Zealand Dollar 3.3 3.6 8.1
--------------------------------------------------------------------------------
British Pound 29.9 31.5 32.1
--------------------------------------------------------------------------------
United States Dollar* 4.7 4.3 2.2
--------------------------------------------------------------------------------
Asian Currencies 3.2 3.1 4.1
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
--------------------------------------------------------------------------------
* Includes Asian Yankee bond investments.
6
<PAGE>
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
MATURITY COMPOSITION
As of July 31, 2000, the average maturity of the Fund's assets was 8.5
years, decreased from 9.2 years three months ago. The Fund's duration was 5.5
years as of July 31, 2000. The table below shows the maturity composition of the
Fund's total investments as of July 31, 2000:
TABLE 3: THE FIRST COMMONWEALTH FUND, INC.--MATURITY ANALYSIS
--------------------------------------------------------------------------------
Less than 1 year 1-5 years 5-10 years Over 10 years
% % % %
--------------------------------------------------------------------------------
Australia 5.0 48.8 36.3 9.9
--------------------------------------------------------------------------------
Canada 28.3 24.1 11.6 36.0
--------------------------------------------------------------------------------
New Zealand 32.2 43.1 24.7 --
--------------------------------------------------------------------------------
United Kingdom 12.5 31.2 21.2 35.1
--------------------------------------------------------------------------------
United States 100.0 -- -- --
--------------------------------------------------------------------------------
Asia 3.6 29.5 44.6 22.3
--------------------------------------------------------------------------------
Total Portfolio 18.5 32.6 22.0 26.9
--------------------------------------------------------------------------------
SECTORAL COMPOSITION
The table below shows the sectoral composition of the Fund's total
investments as of July 31, 2000:
TABLE 4: THE FIRST COMMONWEALTH FUND, INC.--SECTORAL COMPOSITION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Provincial/ Utilities/
Sovereign State Supranational Corporate Cash or
Govt. Bonds Bonds Bonds Bonds Equivalent
% % % % &
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Australia 10.3 9.8 1.0 2.1 0.6
---------------------------------------------------------------------------------------
Canada 21.6 5.8 0.5 1.8 5.4
---------------------------------------------------------------------------------------
New Zealand 0.3 -- 1.8 0.5 0.7
---------------------------------------------------------------------------------------
United Kingdom 18.3 -- 2.9 5.3 3.4
---------------------------------------------------------------------------------------
United States -- -- -- -- 2.1
---------------------------------------------------------------------------------------
Asia 1.0 -- 0.1 3.0 1.7
---------------------------------------------------------------------------------------
Total Portfolio 51.5 15.6 6.3 12.7 13.9
---------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Portfolio Composition (concluded) The First Commonwealth Fund, Inc.
================================================================================
QUALITY OF INVESTMENTS
As of July 31, 2000, 88.7% of the Fund's assets were invested in
securities where either the issue or the issuer was rated at least "AA" by
Standard & Poor's Ratings Group or "Aa" by Moody's Investors Service, Inc. or,
if unrated, were judged to be of equivalent quality by the Investment Manager.
The table below shows the asset quality of the Fund's investments as of July 31,
2000.
TABLE 5: THE FIRST COMMONWEALTH FUND, INC.--ASSET QUALITY
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
AAA/Aaa AA/Aa A BBB/Baa BB/Ba* B/B*
% % % % % %
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Australia 77.6 20.2 2.2 -- -- --
---------------------------------------------------------------------------------------------------------
Canada 16.9 76.0 7.1 -- -- --
---------------------------------------------------------------------------------------------------------
New Zealand 32.2 52.6 15.2 -- -- --
---------------------------------------------------------------------------------------------------------
United Kingdom 63.4 24.2 12.4 -- -- --
---------------------------------------------------------------------------------------------------------
United States 100.0 -- -- -- -- --
---------------------------------------------------------------------------------------------------------
Asia 8.6 -- 12.3 32.4 26.4 20.3
---------------------------------------------------------------------------------------------------------
Total Portfolio 47.6 41.1 7.9 1.4 1.1 0.9
---------------------------------------------------------------------------------------------------------
</TABLE>
* Below Investment Grade.
8
<PAGE>
Market Review and Outlook The First Commonwealth Fund, Inc.
================================================================================
Australia
The Australian economy has now experienced nine years of continuous growth
at an average rate of just over 4.0% per annum, which compares favorably with
other developed countries. Despite historically low levels of unemployment, the
absence of strong wage pressures has helped contain inflation. This pattern of
solid growth and benign inflation is expected to prevail in the near-term.
The combination of solid domestic growth with low inflation has had a
positive impact on the bond market in 2000. However Australian bond yields
continued to be influenced by US Treasuries, and declined progressively over the
period. The benchmark ten-year government bond rate closed at 6.24% on July 31,
2000, a fall from 6.39% on April 30, 2000.
The Australian dollar weakened slightly against the US dollar in the three
months to July 31, 2000, falling 0.55% to US58.1 cents. Australian official cash
interest rates remained below those in the US over the period, which was
reflected in the US dollar's relative strength. Despite strong global demand for
commodities, which generally benefits currencies of exporters such as Australia,
this was insufficient to counter the prevailing strength of the US dollar.
Continued global growth is expected to support the Australian dollar in the
coming months, through the sustained demand for commodities. In addition, the
Olympics may provide a boost to tourism and have a positive impact on the
currency.
The Fund's exposure to Australia was slightly reduced to 23.8% of the
portfolio.
Canada
Economic growth in Canada remains robust, with a second quarter rise in
GDP of 4.8% year-on-year. Lagging indicators suggest that this level of
expansion may be sustained for the duration of the year. The unemployment rate
has fallen to a 24-year low of 6.6% and inflation has remained well contained at
just 1.5% over the year. Monetary policy was tightened by 0.5% in mid-May, in
line with official cash interest rate movements in the US.
The Canadian currency appreciated against the other Commonwealth
currencies over the three months to July 31, 2000, largely due to its superior
economic performance. The Canadian dollar was relatively stable against the US
dollar, finishing the quarter at US67.3 cents.
The Fund's exposure to the Canadian markets increased from 33.3% to 35.1%.
New Zealand
New Zealand's economic data released over the three months to July 31,
2000 was generally softer than anticipated. GDP is expected to have moderated
from the robust 5.5% pace recorded in the first quarter of the year. Consumer
and business confidence has declined, which may be partly attributable to higher
interest rates. The Reserve Bank of New Zealand raised official cash interest
rates by 0.5% in mid-May, following the lead of the US. Tentative signals of
mounting inflationary pressures and a rebound in growth may cause further rate
rises in the second half of 2000.
The New Zealand dollar weakened the most of the Commonwealth currencies
over the three months to July 31, 2000, to close 6.3% lower to US45.5 cents.
Exposure to New Zealand was decreased marginally from 3.6% to 3.3% over the
period.
9
<PAGE>
Market Review and Outlook (concluded) The First Commonwealth Fund, Inc.
================================================================================
United Kingdom
There was no change in monetary policy in the UK over the three months to
July 31, 2000, as potential sources of price pressure eased over the period.
Notably, average earnings growth moderated to 4.0%, which is below the 4.5%
target set by the Bank of England (BoE). Housing inflation, which had risen
sharply earlier in the year, also declined considerably.
The most recent inflation report from the central bank, however, revealed
its expectations of a possible rise in inflation over the medium term, largely
as the result of exchange rate weakness and strong economic data. A rise in the
cost of imported goods due to a weaker currency also may result in inflationary
pressures, which may prompt the BoE to raise official cash interest rates later
in the year.
The US dollar appreciated by 4.3% against the British pound over the three
months to July 31, 2000, and the pound closed at US$1.50.
The Fund's exposure to the UK markets decreased over the period, from
31.5% to 29.9%.
Asia
Domestic and Yankee (US$ denominated) bonds
Asian domestic bond markets have had a mixed performance over the past
three months, which was largely dependent on the relative stages of economic
progress between the countries. South Korea's 5-year benchmark bond yield has
fallen by 1.00% over the period to 8.28%, while Malaysia's decreased by 0.09% to
5.77%. The Philippines', in contrast, has risen by 0.17%, to 14.57%, and
Singapore's increased by 0.39% to 4.53%. At July 31, 2000, the Fund held 5.8% of
its portfolio in Asian domestic bonds.
Yankees have had a mixed performance over the three months to July 31,
2000. Although the Philippines benchmark bond yield rose from 10.43% to 11.14%
over the period, yields fell for Korean and Thai bonds by 0.12% and 0.10%,
respectively, to 8.20% and 8.00%. As at July 31, 2000, the Fund held 2.6% of its
total assets in Yankees.
Currencies
The continuing strength of the US economy has seen the US dollar perform
strongly against most Asian currencies. The exception was the Malaysian ringgit
which is pegged to the US dollar. Asian currency exposure as a whole was
increased from 3.1% to 3.2% during the period.
10
<PAGE>
Summary of Key Rates The First Commonwealth Fund, Inc.
================================================================================
The following table summarizes the movements of key interest rates and
currencies over the last three and twelve month periods.
--------------------------------------------------------------------------------
July 31, 2000 April 30, 2000 July 31, 1999
--------------------------------------------------------------------------------
Australia
90 day bank bills 6.35% 6.24% 4.91%
10 year bonds 6.24% 6.39% 6.24%
Australian Dollar $ 0.58 $ 0.58 $0.65
Canada
90 day bank bills 5.65% 5.50% 4.73%
10 year bonds 5.89% 6.17% 5.72%
Canadian Dollar $ 0.67 $ 0.68 $0.66
New Zealand
90 day bank bills 6.87% 6.66% 4.75%
10 year bonds 6.71% 7.03% 6.63%
NZ Dollar $ 0.45 $ 0.49 $0.53
United Kingdom
90 day bank bills 5.90% 6.01% 4.81%
10 year bonds 5.22% 5.21% 5.34%
British Pound $ 1.50 $ 1.57 $1.62
South Korea
90 day bank bills 7.38% 7.37% 7.52%
5 year bonds 8.28% 9.28% 8.81%
South Korean Won* W 1117 W 1108 W1204
Thailand
90 day bank bills 3.38% 3.50% 3.25%
10 year bonds 5.65% 6.95% 7.74%
Thai Baht* B 41 B 38 B 37
Philippines
90 day bank bills 9.21% 8.80% 9.56%
10 year bonds 14.57% 14.40% 5.00%
Philippines Peso* P 45 P 41 P 39
Malaysia
90 day bank bills 3.25% 2.85% 3.75%
10 year bonds 5.77% 5.86% 5.90%
Malaysian Ringgit* R 3.8 R 3.8 R 3.8
Singapore
90 day bank bills 2.26% 2.17% 1.23%
10 year bonds 4.53% 4.14% 4.47%
Singapore Dollar* S$ 1.73 S$ 1.71 S$1.68
US$ Yankee Bonds**
South Korea 8.20% 8.32% 8.41%
Thailand 8.00% 8.10% 8.37%
Philippines 11.14% 10.43% 9.29%
* These currencies are quoted Asian currency per US dollar. The Australian,
New Zealand, Canadian dollars and British pound are quoted US dollars per
currency.
** Ten-year sovereign issues.
EquitiLink International Management Limited
September 2000
11
<PAGE>
Portfolio of Investments July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
---------------------------------------------------------
Principal Amount
Local Currency (a) Value
(000) Description (US$)
---------------------------------------------------------
LONG-TERM INVESTMENTS--89.2%
AUSTRALIA--24.0%
Government Bonds--10.6%
Commonwealth of Australia,
A$ 1,500 12.00%, 11/15/01 .......... $ 927,829
3,000 10.00%, 10/15/02 .......... 1,866,530
2,000 9.50%, 8/15/03 ............ 1,258,225
1,000 10.00%, 2/15/06 ........... 677,428
2,600 10.00%, 10/15/07 .......... 1,824,204
2,700 8.75%, 8/15/08 ............ 1,802,899
2,500 7.50%, 9/15/09 ............ 1,568,403
2,500 6.50%, 5/15/13 ............ 1,471,198
-----------
11,396,716
-----------
Government Banks
Export Finance & Insurance
Corporation,
3,750 11.00%, 12/29/04 .......... 2,502,379
-----------
Total Australian government
bonds (cost US$16,727,834) 13,899,095
-----------
Semi-Government Bonds--10.2%
New South Wales--2.3%
New South Wales Treasury
Corporation,
2,000 8.00%, 12/01/01 ........... 1,178,773
1,500 7.00%, 4/01/04 ............ 878,878
1,500 8.00%, 3/01/08 ............ 937,140
-----------
2,994,791
-----------
Queensland--4.1%
Queensland Treasury
Corporation,
3,000 8.00%, 8/14/01 ............ 1,761,397
2,000 8.00%, 5/14/03 (Global) ... 1,200,853
1,000 8.00%, 9/14/07 ............ 624,130
1,000 8.00%, 9/14/07 (Global) ... 625,511
500 6.00%, 7/14/09 ............ 277,602
1,750 6.00%, 6/14/11 ............ 964,121
-----------
5,453,614
-----------
South Australia--0.7%
South Australia Finance
Authority,
1,000 12.50%, 10/15/00 .......... 584,924
500 12.50%, 5/08/01 ........... 300,907
-----------
885,831
-----------
Victoria--2.6%
State Electricity Commission
of Victoria,
535 10.50%, 5/27/03 ........... 338,669
Treasury Corporation of
Victoria,
1,000 9.00%, 6/27/05 ............ 630,540
2,500 10.25%, 11/15/06 .......... 1,711,906
1,500 5.50%, 9/15/10 ............ 795,863
-----------
3,476,978
-----------
Western Australia--0.5%
Western Australia Treasury
Corporation,
1,000 10.00%, 7/15/05 ........... 659,741
-----------
Total Australian semi-
government bonds
(cost US$15,941,479) ...... 13,470,955
-----------
Supranational--1.0%
Eurofima,
2,000 9.875%, 1/17/07 ........... 1,340,844
-----------
Total Australian supranational
bonds (cost US$1,510,331) 1,340,844
-----------
Corporate Banks--1.0%
First Australian National
Mortgage Acceptance
Corporation, Series 22,
1,568 11.40%, 12/15/01 .......... 957,284
ING Mercantile Mutual
Bank Ltd.,
500 7.125%, 3/13/02 ........... 289,982
-----------
Total Australian corporate
bank bonds
(cost US$1,552,470) ....... 1,247,266
-----------
Corporate Non-Banks--1.2%
Telstra Corp.,
2,000 11.50%, 10/15/02 .......... 1,263,623
GE Capital Australia,
600 6.75%, 9/15/07 ............ 343,303
-----------
Total Australian corporate
non-bank bonds
(cost US$2,082,120) ....... 1,606,926
-----------
Total Australian long-term
investments
(cost US$37,814,234) ...... 31,565,086
-----------
12
<PAGE>
Portfolio of Investments (continued)
July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
---------------------------------------------------------
Principal Amount
Local Currency (a) Value
(000) Description (US$)
---------------------------------------------------------
CANADA--30.8%
Government Bonds--22.4%
Canadian Government,
C$ 5,500 7.50%, 3/01/01 ............ $ 3,740,775
6,000 8.50%, 4/01/02 ............ 4,199,830
5,000 5.25%, 9/01/03 ............ 3,292,901
2,500 7.25%, 6/01/07 ............ 1,800,774
2,000 5.50%, 6/01/09 ............ 1,309,331
1,000 10.75%, 10/01/09 .......... 894,465
3,000 10.25%, 3/15/14 ........... 2,812,838
4,000 8.00%, 6/01/23 ............ 3,408,109
8,000 9.00%, 6/01/25 ............ 7,551,251
Canada (Cayman),
750 7.25%, 6/01/08 ............ 530,036
-----------
Total Canadian
government bonds
(cost US$31,631,452) ...... 29,540,310
-----------
Semi-Government Bonds--6.0%
British Columbia--1.8%
Province of British Columbia,
1,000 10.15%, 8/29/01 ........... 701,661
2,000 9.50%, 1/09/12 ............ 1,681,316
-----------
2,382,977
-----------
Montreal--0.5%
Ville de Montreal,
1,000 6.375%, 2/15/01 ........... 673,881
-----------
Ontario--2.0%
Ontario Hydro,
500 8.50%, 5/26/25 ............ 423,436
Province of Ontario,
1,000 8.75%, 4/22/03 ............ 716,003
2,000 7.50%, 2/07/24 ............ 1,529,021
-----------
2,668,460
-----------
Quebec--1.3%
Quebec Hydro,
1,500 7.00%, 6/01/04 ............ 1,034,442
1,000 5.95333%, 1/28/05 (b) ..... 672,195
-----------
1,706,637
-----------
Toronto--0.4%
Metropolitan Municipality
of Toronto,
750 9.625%, 5/14/02 ........... 531,756
-----------
Total Canadian semi-
government bonds
(cost US$8,280,097) ....... 7,963,711
-----------
Utilities--0.5%
Bell Telephone Company
of Canada,
500 10.50%, 7/15/09 ........... 364,335
Tokyo Electric Power
Company,
500 10.50%, 6/14/01 ........... 348,436
-----------
Total Canadian utility bonds
(cost US$879,374) ......... 712,771
-----------
Corporate Banks--1.6%
Bank of Nova Scotia,
1,000 10.35%, 7/19/01 ........... 699,484
Credit Local de France,
1,000 6.75%, 3/21/06 ............ 679,747
Rabobank Nederland N.V.,
1,000 9.00%, 12/22/00 ........... 680,488
-----------
Total Canadian corporate
bank bonds
(cost US$2,411,920) ....... 2,059,719
-----------
Corporate Non-Banks--0.3%
Procter & Gamble Company,
500 10.875%, 8/15/01 .......... 351,672
-----------
Total Canadian corporate
non-bank bonds
(cost US$453,347) ......... 351,672
-----------
Total Canadian long-term
investments
(cost US$43,656,190) ...... 40,628,183
-----------
MALAYSIA--0.5%
Semi-Government Bonds--0.5%
Danamodal Nasional Berhad,
MYR 3,100 0.00%, 10/21/03 ........... 696,721
-----------
Total Malaysia long term
investments
(cost US$696,117) ......... 696,721
-----------
NEW ZEALAND--2.7%
Government Bonds--0.3%
Canadian Government,
NZ$ 1,000 6.625%, 10/03/07 .......... 434,688
-----------
Total New Zealand government
bonds (cost US$557,544) ... 434,688
-----------
13
<PAGE>
Portfolio of Investments (continued)
July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
----------------------------------------------------------
Principal Amount
Local Currency (a) Value
(000) Description (US$)
----------------------------------------------------------
Supranational--0.4%
International Bank for
Reconstruction and
Development,
NZ$ 1,000 7.00%, 9/18/00 ............ $ 452,726
-----------
Total New Zealand
supranational bonds
(cost US$630,424) ......... 452,726
-----------
Utilities--1.5%
Electricity Corporation of
New Zealand Ltd.,
1,750 10.00%, 10/15/01 .......... 818,641
1,000 8.00%, 2/15/03 ............ 463,135
TCNZ Finance Limited,
1,000 9.25%, 7/01/02 ............ 465,750
Transpower Finance Ltd.,
500 8.00%, 6/15/05 ............ 233,135
-----------
Total New Zealand
utility bonds
(cost US$2,683,581) ....... 1,980,661
-----------
Corporate Non-Banks--0.5%
Housing New Zealand,
1,500 8.00%, 11/15/06 ........... 702,035
-----------
Total New Zealand corporate
non-bank bonds
(cost US$806,899) ......... 702,035
-----------
Total New Zealand long-
term investments
(cost US$4,678,448) ....... 3,570,110
-----------
PHILIPPINES--0.2%
Government Bonds--0.2%
Philippine Government,
PHP 4,000 11.875%, 6/10/01 .......... 89,977
7,000 16.50%, 2/25/09 ........... 172,700
-----------
Total Philippine long-term
investments
(cost US$310,182) ......... 262,677
-----------
SINGAPORE--0.2%
Government Bonds--0.2%
Singapore Government,
SG$ 440 4.00%, 2/01/05 ............ 255,489
-----------
Total Singapore long-term
investments
(cost US$260,281) ......... 255,489
-----------
THAILAND--0.5%
Government Bonds--0.3%
Thailand Government,
THB 5,000 6.125%, 4/12/02 (c) ....... 126,383
550 8.25%, 10/14/03 ........... 14,903
7,000 8.00%, 12/08/06 (c) ....... 194,107
-----------
Total Thailand government
bonds (cost US$356,568) ... 335,393
-----------
Utilities--0.1%
Eastern Water Resources
Development and
Management Company
Limited,
4,000 9.00%, 7/22/04 (c) ........ 105,933
-----------
Total Thailand utility bonds
(cost US$102,863) ......... 105,933
-----------
Corporate Non-Banks--0.1%
Advanced Info Service Public
Company Limited,
8,000 6.50%, 3/20/03 (c) ........ 195,424
-----------
Total Thailand corporate
non-bank bonds
(cost US$212,033) ......... 195,424
-----------
Total Thailand long-term
investments
(cost US$671,464) ......... 636,750
-----------
UNITED KINGDOM--27.6%
Government Bonds--19.2%
United Kingdom Treasury,
(pounds) 250 8.00%, 12/07/00 ........... 376,129
1,000 7.00%, 11/06/01 ........... 1,510,645
1,500 8.00%, 6/10/03 ............ 2,359,915
500 5.00%, 6/07/04 ............ 726,921
1,500 6.75%, 11/26/04 ........... 2,329,646
500 7.50%, 12/07/06 ........... 821,766
500 5.75%, 12/07/09 ........... 776,250
600 8.00%, 12/07/15 ........... 1,185,586
3,000 8.00%, 6/07/21 ............ 6,402,378
2,700 6.00%, 12/07/28 ........... 4,959,388
Republic of Finland,
1,000 8.00%, 4/07/03 ............ 1,546,371
1,250 10.125%, 6/22/08 .......... 2,274,338
-----------
Total United Kingdom
government bonds
(cost US$27,503,898) ...... 25,269,333
-----------
14
<PAGE>
Portfolio of Investments (continued)
July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
----------------------------------------------------------
Principal Amount
Local Currency (a) Value
(000) Description (US$)
----------------------------------------------------------
Utilities--2.9%
British Gas PLC,
(pounds)1,400 8.875%, 7/08/08 ........... $ 2,329,616
Thames Water Utilities
Finance PLC,
1,000 10.50%, 11/21/01 .......... 1,558,927
------------
Total United Kingdom
utility bonds
(cost US$4,037,546) ....... 3,888,543
------------
Corporate Banks--4.0%
Abbey National Treasury
Services PLC,
1,250 8.00%, 4/02/03 ............ 1,924,555
Barclays Bank PLC,
1,000 9.875%, 5/29/49 ........... 1,720,066
Lloyds Bank PLC,
500 7.375%, 3/11/04 ........... 758,760
Prudential Finance B.V.,
500 9.375%, 6/04/07 ........... 848,598
------------
Total United Kingdom
corporate bank bonds
(cost US$5,034,154) ....... 5,251,979
------------
Corporate Non-Banks--1.5%
Capital Shopping Centers,
1,500 6.875%, 3/05/13 ........... 1,985,917
------------
Total United Kingdom
corporate non-bank bonds
(cost US$2,143,098) ....... 1,985,917
------------
Total United Kingdom
long-term investments
(cost US$38,718,696) ...... 36,395,772
------------
UNITED STATES--2.7%
Yankee Obligations--2.7%
Government Bonds--0.3%
Kingdom of Thailand,
US$ 500 7.07%, 9/30/13 ............ 425,810
------------
Total US$ denominated
government bonds
(cost US$450,115) ......... 425,810
------------
Corporate Banks--0.7%
Bangkok Bank,
250 8.75%, 3/15/07 ............ 205,626
Cho Hung Bank,
300 6.875%, 10/22/01 (b) ...... 255,570
250 11.875%, 4/01/10 .......... 245,375
Hanvit Bank,
250 12.75%, 3/01/10 ........... 252,841
------------
Total US$ denominated
corporate bank bonds
(cost US$1,009,014) ....... 959,412
------------
Corporate Non-Banks--1.7%
Petroleum Nasional Berhad,
1,000 7.125%, 10/18/06 .......... 950,000
Reliance Industries Ltd.,
1,000 10.25%, 1/15/97 ........... 820,724
Total Access Communication
Public Company Limited,
500 8.375%, 11/04/06 (d) ...... 428,580
------------
Total US$ denominated
corporate non-bank bonds
(cost US$2,196,155) ....... 2,199,304
------------
Total US$ denominated
long-term investments
(cost US$3,655,284) ....... 3,584,526
------------
Total long-term investments
(cost US$130,460,896) ..... 117,595,314
------------
SHORT-TERM INVESTMENTS--13.1%
Australia--0.6%
Banque Nationale de Paris
Fixed Deposit,
A$ 1,295 5.35%, 8/01/00
(cost US$748,284) ......... 748,284
------------
15
<PAGE>
Portfolio of Investments (continued)
July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
----------------------------------------------------------
Principal Amount
Local Currency (a) Value
(000) Description (US$)
----------------------------------------------------------
Canada--5.7%
State Street Bank and Trust
Company Time Deposit,
C$ 5,610 5.50%, 8/01/00 ............ $ 3,782,420
5,616 5.55%, 8/08/00 ............ 3,786,465
------------
Total Canadian Short Term
Investments
(cost US$7,615,353) ....... 7,568,885
------------
New Zealand--0.8%
State Street Bank and
Trust Company
Time Deposit,
NZ$ 2,312 6.00%, 8/07/00
(cost US$1,057,025) ....... 1,046,852
------------
Singapore--0.1%
Singapore Treasury Bills,
SG$ 200 0.00%, 8/03/00
(cost US$116,496) ......... 115,537
------------
United Kingdom--3.7%
State Street Bank and
Trust Company
Fixed Deposit,
(pounds)3,237 5.625%, 8/02/00
(cost US$4,908,265) ....... 4,838,989
------------
United States--2.2%
US$ 2,880 Repurchase Agreement,
State Street Bank and
Trust Company, 6.46%
dated 7/31/00, due
8/01/00 in the amount of
$2,880,517 (collateralized
by $2,245,000 U.S.
Treasury Notes,
8.50% due 2/15/20;
value $3,026,383) ......... 2,880,000
State Street Bank and
Trust Company
Fixed Deposit,
23 4.50%, 9/05/00 .............. 23,000
------------
Total United States Short
Term Investments
(cost US$2,903,000) ....... 2,903,000
------------
Total short-term investments
(cost US$17,348,423) ...... 17,221,547
------------
Total Investments--102.3%
(cost US$147,809,319) ..... 134,816,861
Unrealized appreciation
on forward foreign
currency exchange
contracts--0.0% (e) ....... 5,285
Other liabilities in excess
of assets--(2.3%) ......... (3,014,010)
------------
Total Net Assets--100.0% $131,808,136
============
(a) A$--Australian dollar MYR--Malaysian Ringgit THB--Thai Baht
C$--Canadian dollar PHP--Philippine peso (pounds)--British pound
NZ$--New Zealand dollar SGD--Singapore dollar US$--United States dollar
(b) Coupon changes periodically upon a predetermined schedule. Stated interest
rate in effect at July 31, 2000.
(c) Securities pledged as collateral for the forward currency exchange
contracts.
(d) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At July 31,
2000, this security amounted to $428,580 or 0.3% of net assets.
16
<PAGE>
Portfolio of Investments (concluded)
July 31, 2000 The First Commonwealth Fund, Inc.
================================================================================
(e) Forward foreign currency exchange contracts entered into as of July 31,
2000 were as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Purchases Net Unrealized
Appreciation
Contracts to Receive In exchange For Settlement Date Value (Depreciation)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THB 3,912,000 US$ 94,072 08/02/00 US$ 94,790 $ 718
THB 3,721,500 US$ 90,000 08/02/00 US$ 90,175 175
THB 2,396,100 US$ 60,000 08/10/00 US$ 58,158 (1,842)
KRW 2,569,100,000 US$ 2,300,000 09/05/00 US$ 2,299,382 (618)
PHP 7,739,757 US$ 177,893 09/05/00 US$ 171,953 (5,940)
PHP 987,263 US$ 22,801 09/05/00 US$ 21,934 (867)
THB 7,499,300 US$ 190,000 09/11/00 US$ 182,154 (7,846)
THB 7,509,750 US$ 190,000 09/11/00 US$ 182,408 (7,592)
--------
$(23,812)
--------
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Sales Net Unrealized
Appreciation
Contracts to Receive In exchange For Settlement Date Value (Depreciation)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THB 3,925,000 US$ 100,332 08/02/00 US$ 95,105 $ 5,227
THB 3,912,000 US$ 94,084 08/07/00 US$ 94,952 (868)
PHP 7,739,757 US$ 179,961 09/05/00 US$ 171,953 8,008
THB 7,485,050 US$ 190,000 09/11/00 US$ 181,808 8,192
THB 7,470,800 US$ 190,000 09/11/00 US$ 181,462 8,538
--------
$ 29,097
--------
Total $ 5,285
========
</TABLE>
17
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Directors Officers
================================================================================
Brian M. Sherman, Chairman Laurence S. Freedman, President
David Lindsay Elsum Brian M. Sherman, Vice President
Laurence S. Freedman David Manor, Treasurer
Michael Gleeson-White Roy M. Randall, Secretary
Michael R. Horsburgh Ouma Sananikone,
David Manor Assistant Vice President and
Neville J. Miles Chief Investment Officer
William J. Potter Barry G. Sechos, Assistant Treasurer
Peter D. Sacks Allan S. Mostoff, Assistant Secretary
Anton E. Schrafl Margaret A. Bancroft, Assistant Secretary
E. Duff Scott Sander M. Bieber, Assistant Secretary
John T. Sheehy
Warren C. Smith
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of its
common stock in the open market.
[RECYCLE LOGO] Printed on post-consumer recycled paper
19
<PAGE>
INVESTMENT MANAGER
EquitiLink International Management Limited
P.O. Box 578, 17 Bond Street
St. Helier, Jersey JE45XB
Channel Islands
INVESTMENT ADVISER
EquitiLink Australia Limited
Level 3, 190 George Street
Sydney, NSW 2000, Australia
CONSULTANT
CIBC World Markets, Inc.
BCE Place, Canada Trust Tower
P.O. Box 500
Toronto, Ontario, M5J 2S8
Canada
ADMINISTRATOR
Princeton Administrators, L.P.
Box 9095
Princeton, New Jersey 08543-9095
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
1 Heritage Drive
Boston, Massachusetts 02171
AUCTION AGENT
Bankers Trust Company
Four Albany Street
New York, New York 10006
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
LEGAL COUNSEL
Dechert
1775 Eye Street, N.W.
Washington, DC 20006
Stikeman Elliott
Level 40 Chifley Tower
2 Chifley Square
Sydney, NSW 2000, Australia
INVESTOR RELATIONS
EquitiLink USA, Inc.
45 Broadway, 31st Fl
New York, NY 10006
1-800-522-5465 or 1-212-968-8800
[email protected]
The common shares of The First Commonwealth Fund, Inc. are traded on the New
York Stock Exchange under the symbol "FCO." Information about the Fund's net
asset value and market price is published weekly in Barron's and in the Monday
edition of The Wall Street Journal.
This report, including the financial information herein, is transmitted to the
shareholders of The First Commonwealth Fund, Inc. for their general information
only. It does not have regard to the specific investment objectives, financial
situation and the particular needs of any specific person. Past performance is
no guarantee of future returns.
