[LOGO]
MANAGED BY
[LOGO] EQUITILINK
THE FIRST INTERNATIONAL
COMMONWEALTH MANAGEMENT
FUND LIMITED
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Quarterly Report January 31, 2000
Highlights
o 9.9% per annum cash distribution rate based on a share price of $9.44 on
January 31, 2000
o 90.1% invested in securities rated or deemed equivalent to AA/Aa or better
o 6.1% of assets invested in Asian debt securities
o Net asset values available on a daily basis
[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
================================================================================
March 17, 2000
Dear Shareholder,
We are pleased to present this Quarterly Report which covers the
activities of The First Commonwealth Fund, Inc. (the "Fund") for the quarter
ended January 31, 2000. Included in this report is a review of the Australian,
New Zealand, Canadian, 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: 90.1% of securities rated or deemed equivalent to AA/Aa or
better
The Fund has maintained its high credit quality. 90.1% of assets are rated
AA/Aa or better, or are considered of equivalent quality by the Investment
Manager. An additional 5.8% is held in A rated securities.
Distributions: 9.9% annual cash distribution rate
Distributions to common shareholders for the year totaled 93 cents per
share. Based on the share price of $9.44 on January 31, 2000, the cash
distribution rate over the last 12 months was 9.9%.
On March 16, 2000, the Board of Directors announced a cut in the Fund's
monthly distributions by 0.75 cents per share per month to 7.0 cents per share,
effective with the distribution payable April 14, 2000. For many years the Fund
has maintained its distributions well above its running yield by distributing a
combination of income and capital gains. A combination of the US dollar
appreciating 10% versus the Australian Dollar over the last 2 years and interest
rates in the Commonwealth countries increasing in line with US treasuries over
the last 12 months have both had a negative impact on the valuation of the bonds
within the portfolio and has also diminished the Fund's unrealized gains.
However, even with the cut, shareholders will continue to receive a high
distribution rate relative to bond yields. At the date of this report, with the
share price at $9.38 and monthly distributions at 7.0 cents per share, the
annualized cash distribution rate to shareholders is 9.0% per annum. It is the
Board's intention that the monthly dividend be maintained at the current level
for the next 12 months, subject to regular review at the Board's quarterly
meetings, with the next review to take place in June 2000.
Since all distributions are paid after deducting applicable withholding
taxes, the distribution rate may be higher for those US investors who are able
to claim a tax credit.
Investment Performance: 7.0% per annum return since inception
Since inception, the Fund's Net Asset Value (NAV) has returned 7.0% per
annum to January 31, 2000. However, over the quarter to January 31, 2000, the
Fund's NAV in US dollar terms returned -0.5%. The performance was negatively
impacted by an environment of rising interest rates in Commonwealth bond
markets. The Fund's modest move into Asian bond markets was a positive
contribution to the overall performance. However, the weak Commonwealth bond
markets and the strength of the US dollar against the Australian, New Zealand
and British currencies detracted from the Fund's performance.
1
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The First Commonwealth Fund, Inc.
================================================================================
Asian Investments: 6.1% of assets invested in Asian debt securities
In line with the Fund's mandate, 6.1% of assets are held in Asian debt
securities, a region which presents attractive opportunities. The Investment
Manager's medium-term target is to increase this to 10% of the Fund's assets.
The ability to selectively invest in global debt securities should allow
the Fund to capitalize on higher interest rates and greater potential for future
capital gains than are currently available in the Commonwealth countries. This
supports our goal of providing a competitive yield for our shareholders.
Daily NAVs
NAVs are now available on a daily basis via the following sources: Wall
Street Journal Interactive and Bloomberg.
Share Purchase
The EquitiLink Group recently purchased 210,150 shares in the Fund,
raising its holding to 5.1%. These shares were acquired for investment purposes,
in light of EquitiLink's confidence in the strong prospects for the Fund and its
effectiveness for investing in global bond markets.
For information on the Fund, please telephone EquitiLink USA, Inc.
Investor Relations, toll free on 1-800-522-5465 or visit 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
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 re-invest 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. 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;
Convenience--the Plan Agent will hold your shares in noncertificated form
and will provide a detailed record of your holdings at the end of each
distribution period.
If you would like further information on the Plan, please contact State
Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266, Tel:
1-800-426-5523.
3
<PAGE>
Report of the Investment Manager The First Commonwealth Fund, Inc.
================================================================================
Distributions
During the latest 12 month period, the Fund paid a total of 93 cents per
share in distributions to common shareholders, consisting of 12 monthly payments
of 7.75 cents per share. Based upon the January 31, 2000 share price of $9.44,
and total distributions of 93 cents per share paid over the past 12 months, the
Fund provided a cash distribution rate of 9.9%.
On March 16, 2000, the Board of Directors announced a cut in the Fund's
monthly distributions by 0.75 cents per share per month to 7.0 cents per share,
effective with the distribution payable April 14, 2000. For many years the Fund
has maintained its distributions well above its running yield by distributing a
combination of income and capital gains. A combination of the US dollar
appreciating 10% versus the Australian Dollar over the last 2 years and interest
rates in the Commonwealth countries increasing in line with US treasuries over
the last 12 months have both had a negative impact on the valuation of the bonds
within the portfolio and has also diminished the Fund's unrealized gains.
However, even with the cut shareholders will continue to receive a high
distribution rate relative to bond yields. At the date of this report, with the
share price at $9.38 and monthly distributions at 7.0 cents per share, the
annualized cash distribution rate to shareholders is 9.0% per annum. It is the
Board's intention that the monthly dividend be maintained at the current level
for the next 12 months, subject to regular review at the Board's quarterly
meetings, with the next review to take place in June 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. Since all distributions are paid after
deducting applicable withholding taxes, the distribution rate may be higher for
those US investors who are able to claim a tax credit.
Net Asset Value (NAV) Performance
The Fund's NAV per share at January 31, 2000 was $11.79. The Fund's NAV in
US dollar terms returned -0.5% over the quarter to January 31, 2000. The
performance was negatively impacted by an environment of rising interest rates.
Commonwealth bond markets weakened during the quarter; Australian bond yields
rose from 6.63% to 7.17%, New Zealand bond yields rose from 7.08% to 7.46%, UK
bond yields rose from 5.41% to 5.74% and Canadian bond yields rose from 6.05% to
6.54%. The Fund's modest move into Asian bond markets was a positive
contribution to the overall performance. However, the weak Commonwealth bond
markets and the strength of the US dollar against the Australian, New Zealand
and British currencies detracted from the Fund's performance.
4
<PAGE>
Report of the Investment Manager (continue) The First Commonwealth Fund, Inc.
================================================================================
Since inception, the Fund has returned 7.0% per annum. All figures assume
reinvestment of distributions. At the date of this report, the NAV was $11.70
per share.
Share Price Performance
As of January 31, 2000, the Fund's share price as quoted on the New York
Stock Exchange was $9.44, which represented a discount of 19.9% to the NAV. The
total investment return, based on the Fund's share price and assuming
reinvestment of distributions, was -5.0% over the past 12 months. At the date of
this report, the share price was $9.38, representing a discount of 19.8% to NAV.
Auction Market Preferred Stock (AMPS)
The Fund's US$30 million of AMPS continue to be well bid at the weekly
auctions. The average interest rate paid was 5.49% over the quarter, compared
with the 30-day commercial paper rate of 5.69% over the same period. These rates
have increased since last quarter because the US Federal Reserve raised official
cash rates.
5
<PAGE>
Portfolio Composition The First Commonwealth Fund, Inc.
================================================================================
GEOGRAPHIC COMPOSITION/CREDIT EXPOSURE
The table below shows the geographic composition of the Fund's total
investments as of January 31, 2000, compared with the previous quarter and one
year ago.
TABLE 1: THE FIRST COMMONWEALTH FUND, INC.--GEOGRAPHIC ASSET ALLOCATION
- --------------------------------------------------------------------------------
January 31, 2000 October 31, 1999 January 31, 1999
- --------------------------------------------------------------------------------
Australia 24.6% 24.2% 24.9%
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Canada 31.6% 30.2% 29.6%
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New Zealand 5.9% 7.9% 10.0%
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United Kingdom 30.5% 33.2% 35.0%
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United States* 1.3% 0.1% 0.5%
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Asia 6.1% 4.4% --
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Total Portfolio 100.0% 100.0% 100.0%
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* It is the policy of the Investment 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 January 31, 2000, compared with the previous quarter and one
year ago.
TABLE 2: THE FIRST COMMONWEALTH FUND, INC.--CURRENCY ALLOCATION
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January 31, 2000 October 31, 1999 January 31, 1999
- --------------------------------------------------------------------------------
Australian Dollar 24.6% 24.2% 24.9%
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Canadian Dollar 31.6% 30.2% 29.6%
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New Zealand Dollar 5.9% 7.9% 10.0%
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British Pound 30.5% 33.2% 35.0%
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United States Dollar* 3.6% 2.3% 0.5%
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Asian Currencies 3.8% 2.2% --
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Total Portfolio 100.0% 100.0% 100.0%
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* Includes Asian Yankee bond investments.
6
<PAGE>
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
MATURITY COMPOSITION
On January 31, 2000, the average maturity of the Fund's assets was 8.0
years, slightly increased from 7.9 years last quarter. The table below shows the
maturity composition of the Fund's investments:
TABLE 3: THE FIRST COMMONWEALTH FUND, INC.--MATURITY ANALYSIS
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Less than 1 year 1-5 years 5-10 years Over 10 years
- --------------------------------------------------------------------------------
Australia 4.7% 47.6% 42.3% 5.4%
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Canada 13.2% 39.6% 10.6% 36.6%
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New Zealand 59.2% 23.4% 17.4% --
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United Kingdom 7.5% 32.1% 28.1% 32.3%
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United States 100.0% -- -- --
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Asia -- 51.9% 27.7% 20.4%
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Total Portfolio 12.6% 38.3% 25.0% 24.1%
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SECTORAL COMPOSITION
The table below shows the sectoral composition of the Fund's total
investments at January 31, 2000:
TABLE 4: THE FIRST COMMONWEALTH FUND, INC.--SECTORAL COMPOSITION
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State/
Sovereign Province Utilities/ Corporate Cash or
Govt. Bonds Bonds Supranationals Bonds Equivalent
- --------------------------------------------------------------------------------
Australia 12.9% 8.3% 1.0% 1.0% 1.8%
- --------------------------------------------------------------------------------
Canada 20.1% 4.6% 1.8% 0.3% 4.9%
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New Zealand 0.3% -- 2.0% 0.5% 3.1%
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United Kingdom 19.3% -- 3.1% -- 8.5%
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United States -- -- -- -- 1.3%
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Asia 1.8% -- 0.4% 2.1% 0.9%
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Total Portfolio 54.4% 12.9% 8.3% 3.9% 20.5%
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7
<PAGE>
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
QUALITY OF INVESTMENTS
On January 31, 2000, 90.1% 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.
TABLE 5: THE FIRST COMMONWEALTH FUND, INC.--ASSET QUALITY
- --------------------------------------------------------------------------------
AAA/Aaa AA/Aa A BBB/Baa BB/Ba*
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Australia 80.7% 18.5% 0.8% -- --
- --------------------------------------------------------------------------------
Canada 13.0% 79.0% 8.0% -- --
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New Zealand 58.7% 32.4% 8.9% -- --
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United Kingdom 58.7% 33.3% 8.0% -- --
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Asia 6.1% 8.9% -- 48.9% 36.1%
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Total Portfolio 47.6% 42.5% 5.8% 2.2% 1.9%
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* Below Investment Grade
8
<PAGE>
Market Review and Outlook The First Commonwealth Fund, Inc.
================================================================================
Australia
The growth in the Australian economy has been uninterrupted since 1992,
one of its longest periods of expansion. The strong economic conditions are
forecast to continue with a broad range of indicators remaining robust,
including employment growth and consumer confidence, suggesting that our
expectation of 4.4% GDP growth for calendar year 2000 is likely to be met.
Inflation remains well contained, with no emerging pressures.
Australian bond yields rose over the quarter in anticipation of another
monetary policy tightening by the Reserve Bank of Australia and in line with the
trend in global rates. Ten-year government bond yields increased from 6.63% to
7.17% during the quarter.
The Reserve Bank of Australia increased official cash rates by 0.25% in
November 1999, and by another 0.50% in February 2000. The Reserve Bank of
Australia is expected to maintain its pre-emptive approach and further
tightenings of monetary policy are forecast to occur during the first half of
the year.
The Australian dollar fell 0.3% against the US dollar over the quarter.
The continuing strength of the US economy has seen commodity-based currencies
weaken. The Australian dollar closed the period at US63.70 cents. The resilience
of Australian economic growth is a key positive for the currency in the medium
term. Looking further out, improving global growth should lead commodity prices
higher, supporting the Australian dollar.
Canada
Canadian bond yields increased over the quarter in response to
stronger-than-expected economic growth, with ten-year government bond yields
rising from 6.05% to 6.54%.
The Bank of Canada raised official rates by 0.25% to 5.25% in early
February.
The Canadian dollar was the strongest of the Commonwealth currencies over
the quarter, appreciating 1.5% against the US dollar to finish at US$0.69.
New Zealand
The New Zealand bond market also corrected, as it too anticipated rising
interest rates. As a result, ten-year government bond yields increased from
7.08% to 7.46% over the period. At the January official cash rate review, the
Reserve Bank of New Zealand increased the cash rate by 0.25% to 5.25%.
The New Zealand dollar has continued to underperform during the quarter,
reflecting political uncertainty leading up to and following the general
election in November. A coalition government, including the Greens Party, was
formed, leading to concerns about economic direction. The currency depreciated
2.3% against the US dollar, to close the quarter at US49.69 cents.
9
<PAGE>
Market Review and Outlook (concluded) The First Commonwealth Fund, Inc.
================================================================================
United Kingdom
The Bank of England raised official rates by 0.50% during the quarter and
0.25% in early February, raising the official rate to 6.00%. However, the market
remains concerned about the effects of inflation, anticipating further rate
rises by the Bank of England. Ten-year government bond yields continued their
rise during the quarter, from 5.41% to 5.74%.
The strength of the US dollar resulted in the British pound depreciating
1.7% against the US dollar, to close at US$1.62.
Asia
Economies
The Asian economies sustained an impressive rebound in 1999. This has
resulted in upward revisions in growth expectations for the region. The recovery
is forecast to continue in 2000 and beyond, although the pace of growth in many
Asian economies may moderate from their strong rebound numbers in 1999.
Significant excess capacity remains within the region and within certain
sectors, particularly manufacturing.
The inflation outlook for the Asian economies is generally neutral. The
onset of inflation is likely to be reflected in an appreciation of Asian
currencies rather than rises in interest rates.
Some countries such as Korea have now completed their interest rate easing
cycles. This year could see some shift to firmer policy settings emerge, however
this is likely to be moderate considering the high level of debt in the
economies. Other countries such as Thailand may still look to ease monetary
policy further.
Domestic and Yankee (US$ denominated) bonds
Asian domestic bond yields rallied over the quarter due to the stable or
strengthening Asian currencies and generous liquidity conditions. South Korea
was the exception as the concerns surrounding Daewoo, one of South Korea's
largest companies, kept pressure upon yields. However, we expect the situation
to improve since the re-structuring plan for Daewoo was agreed upon and signed
in January 2000.
US-dollar denominated Asian bonds (Yankees) were mixed over the quarter.
The Thai and Philippine markets weakened, while South Korean Yankees rallied.
However, the credit outlook for both Malaysia and India has improved over the
last year, which should be positive for the Yankee bond market in the medium
term. At January 31, 2000, the Fund held 2.3% of its portfolio in Yankees.
Currencies
The improving economic environment in Asian countries during the quarter
has resulted in an appreciation by some Asian currencies against the US dollar,
particularly the Thai Baht and South Korean Won.
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.
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January 31, 1999 October 31, 1999 January 31, 1999
- --------------------------------------------------------------------------------
Australia
90 day bank bills 5.59% 5.35% 4.76%
10 year bonds 7.17% 6.63% 5.01%
Australian Dollar $0.64 $0.64 $0.63
Canada
90 day bank bills 5.13% 4.78% 4.70%
10 year bonds 6.54% 6.05% 4.89%
Canadian Dollar $0.69 $0.68 $0.66
New Zealand
90 day bank bills 5.80% 5.29% 4.11%
10 year bonds 7.46% 7.08% 5.46%
NZ Dollar $0.50 $0.51 $0.54
United Kingdom
90 day bank bills 5.85% 5.29% 5.53%
10 year bonds 5.74% 5.41% 4.10%
British Pound $1.62 $1.64 $1.64
South Korea
90 day bank bills 6.88% 7.26% 7.10%
5 year bonds 9.58% 9.03% 7.98%
South Korean Won* (Won) 1125 (Won)1200 (Won)1175
Thailand
90 day bank bills 3.70% 4.00% 5.00%
10 year bonds 7.63% 7.81% 7.81
Thai Baht* (Baht) 37 (Baht) 39 (Baht) 37
Philippines
90 day bank bills 9.75% 9.75% 14.81%
10 year bonds 14.87% 15.31% 17.97%
Philippines Peso* (Peso) 40 (Peso) 40 (Peso) 38
Singapore
90 day bank bills 1.23% 0.63% N/A
5 year bonds 4.47% 4.65% 4.35%
Singapore Dollar S$1.70 S$1.66 S$1.69
US$ Yankee Bonds**
South Korea 8.26% 8.37% 7.74%
Thailand 8.28% 8.02% 7.44%
Philippines 9.63% 9.42% 8.84%
* These currencies are quoted Asian currency per US dollar. The Australian,
New Zealand and Canadian dollars and the British pound are quoted US
dollars per currency.
** Ten-year sovereign issues.
Yield comparisons are direct and do not take into account fluctuations in
currency exchange rates.
EquitiLink International Management Limited
March 2000
11
<PAGE>
Portfolio of Investments (unaudited)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
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Principal Amount
Local Currency Value
(000) Description (US$)
- ---------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 88.2%
AUSTRALIA -- 24.3%
Government Bonds -- 12.6%
Commonwealth of Australia,
A$ 1,000 13.00%, 7/15/00 .................. 656,325
1,500 12.00%, 11/15/01 ................. 1,039,462
3,000 10.00%, 10/15/02 ................. 2,053,777
2,000 9.50%, 8/15/03 ................... 1,371,689
3,000 10.00%, 2/15/06 ................. 2,172,819
2,600 10.00%, 10/15/07 ................ 1,923,773
2,700 8.75%, 8/15/08 .................. 1,883,695
3,000 7.50%, 9/15/09 .................. 1,946,136
3,250 5.75%, 6/15/11 .................. 1,831,781
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14,879,457
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Government Banks
Export Finance & Insurance
Corporation,
3,750 11.00%, 12/29/04 ................ 2,699,127
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Total Australian
government bonds
(cost US$20,185,196) ............ 17,578,584
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Semi-Government Bonds -- 8.2%
New South Wales -- 1.6%
New South Wales Treasury
Corporation,
2,000 8.00%, 12/01/01 ................. 1,296,420
1,500 7.00%, 4/01/04 .................. 943,146
-------------
2,239,566
-------------
Queensland -- 3.3%
Queensland Treasury Corporation,
3,000 8.00%, 8/14/01 .................. 1,944,630
2,000 8.00%, 5/14/03 (Global) ......... 1,304,682
1,000 8.00%, 9/14/07 .................. 655,258
1,000 8.00%, 9/14/07 (Global) ......... 655,836
-------------
4,560,406
-------------
South Australia -- 0.7%
South Australia Finance
Authority,
A$ 1,000 12.50%, 10/15/00 ................ 662,369
500 12.50%, 5/08/01 ................. 338,753
-------------
1,001,122
-------------
Victoria -- 2.0%
State Electricity Commission
of Victoria,
535 10.50%, 5/27/03 ................. 370,150
Treasury Corporation of Victoria,
1,000 9.00%, 6/27/05 .................. 675,092
2,500 10.25%, 11/15/06 ................ 1,820,882
-------------
2,866,124
-------------
Western Australia -- 0.5%
Western Australia Treasury
Corporation,
1,000 10.00%, 7/15/05 ................. 709,911
-------------
Total Australian
semi-government bonds
(cost US$12,910,942) ............ 11,377,129
-------------
Supranational -- 1.0%
Eurofima,
2,000 9.875%, 1/17/07 ................. 1,419,834
-------------
Total Australian
supranational bonds
(cost US$1,510,332) ............. 1,419,834
-------------
12
<PAGE>
Portfolio of Investments (unaudited)(continued)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- ---------------------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- ---------------------------------------------------------------------
Corporate Banks -- 1.5%
Commonwealth Bank of Australia,
A$ 1,000 6.25%, 9/01/09 .................. 577,436
First Australian National
Mortgage Acceptance
Corporation, Series 22,
1,736 11.40%, 12/15/01 ................ 1,171,032
ING Mercantile Mutual Bank Ltd.,
500 7.125%, 3/13/02 ................. 316,511
-------------
Total Australian
corporate bank bonds
(cost US$2,283,421) ............. 2,064,979
-------------
Corporate Non-Banks -- 1.0%
Telstra Corp.,
2,000 11.50%, 10/15/02 ................ 1,397,210
-------------
Total Australian corporate
non-bank bonds
(cost US$1,745,314) ............. 1,397,210
-------------
Total Australian long-term
investments
(cost US$38,635,205) ............ 33,837,736
-------------
CANADA -- 27.9%
Government Bonds -- 19.8%
Canadian Government,
C$ 5,500 7.50%, 3/01/01 .................. 3,854,783
6,000 8.50%, 4/01/02 .................. 4,315,171
5,000 5.25%, 9/01/03 .................. 3,309,981
2,500 7.25%, 6/01/07 .................. 1,791,655
2,000 5.50%, 6/01/09 .................. 1,280,315
8,000 10.25%, 3/15/14 ................. 7,380,066
4,000 8.00%, 6/01/23 .................. 3,295,141
2,000 9.00%, 6/01/25 .................. 1,826,532
Canada (Cayman),
750 7.25%, 6/01/08 .................. 527,247
-------------
Total Canadian
government bonds
(cost US$29,645,283) ............ 27,580,891
-------------
Semi-Government Bonds -- 5.8%
British Columbia -- 1.7%
Province of British Columbia,
C$ 1,000 10.15%, 8/29/01 ................. 729,342
2,000 9.50%, 1/09/12 .................. 1,664,246
-------------
2,393,588
-------------
Montreal -- 0.5%
Ville de Montreal,
1,000 6.375%, 2/15/01 ................. 691,262
-------------
Ontario -- 1.9%
Ontario Hydro,
500 8.50%, 5/26/25 .................. 417,059
Province of Ontario,
1,000 8.75%, 4/22/03 .................. 730,736
2,000 7.50%, 2/07/24 .................. 1,494,603
-------------
2,642,398
-------------
Quebec -- 1.3%
Quebec Hydro,
1,500 7.00%, 6/01/04 .................. 1,079,549
1,000 5.342%, 1/28/05 (b) ............. 688,018
-------------
1,767,567
-------------
Toronto -- 0.4%
Metropolitan Municipality
of Toronto,
750 9.625%, 5/14/02 ................. 548,730
-------------
Total Canadian
semi-government bonds
(cost US$8,274,529) ............. 8,043,545
-------------
Utilities--0.5%
Bell Telephone Company
of Canada,
500 10.50%, 7/15/09 ................. 373,996
Tokyo Electric Power Company,
500 10.50%, 6/14/01 ................. 362,679
-------------
Total Canadian utility
bonds (cost US$879,374) ......... 736,675
-------------
13
<PAGE>
Portfolio of Investments (unaudited)(continued)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- ---------------------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- ---------------------------------------------------------------------
Corporate Banks -- 1.5%
Bank of Nova Scotia,
C$ 1,000 10.35%, 7/19/01 ................. 725,614
Credit Local de France,
1,000 6.75%, 3/21/06 .................. 690,986
Rabobank Nederland N.V.,
1,000 9.00%, 12/22/00 ................. 707,965
-------------
Total Canadian
corporate bank bonds
(cost US$2,410,355) ............. 2,124,565
-------------
Corporate Non-Banks -- 0.3%
Procter & Gamble Company,
500 10.875%, 8/15/01 ................ 365,509
-------------
Total Canadian corporate
non-bank bonds
(cost US$453,347) ............... 365,509
-------------
Total Canadian
long-term investments
(cost US$41,662,888) ............ 38,851,185
-------------
NEW ZEALAND -- 3.1%
Government Bonds -- 0.3%
Canadian Government,
NZ$ 1,000 6.625%, 10/03/07 ................ 456,258
-------------
Total government bonds
(cost US$557,544) ............... 456,258
-------------
Supranational -- 0.3%
International Bank
for Reconstruction
and Development,
1,000 7.00%, 9/18/00 .................. 495,482
-------------
Total New Zealand
supranational bonds
(cost US$630,310) ............... 495,482
-------------
Utilities -- 1.6%
NZ$ Electricity Corporation of
New Zealand Ltd.,
1,750 10.00%, 10/15/01 ................ 914,346
1,000 8.00%, 2/15/03 .................. 499,913
TCNZ Finance Limited,
1,000 9.25%, 7/01/02 .................. 507,140
Transpower Finance Ltd.,
500 8.00%, 6/15/05 .................. 245,904
-------------
Total New Zealand utility bonds
(cost US$2,683,470) ............. 2,167,303
-------------
Corporate Banks -- 0.4%
Primary Industry Bank of
Australia Limited,
1,000 8.25%, 3/27/00 .................. 497,296
-------------
Total New Zealand
corporate bank bonds
(cost US$589,733) ............... 497,296
-------------
Corporate Non-Banks -- 0.5%
Housing New Zealand,
1,500 8.00%, 11/15/06 ................. 719,444
-------------
Total New Zealand corporate
non-bank bonds
(cost US$806,898) ............... 719,444
-------------
Total New Zealand
long-term investments
(cost US$5,267,955) ............. 4,335,783
-------------
PHILIPPINES -- 0.7%
Government Bonds -- 0.7%
Philippine Government,
PHP 30,000 11.875%, 6/10/01 ................ 746,922
7,000 16.50%, 2/25/09 ................. 189,147
-------------
Total Philippine
long-term investments
(cost US$999,077) ............... 936,069
-------------
14
<PAGE>
Portfolio of Investments (unaudited)(continued)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- ---------------------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- ---------------------------------------------------------------------
SINGAPORE -- 0.4%
Corporate Banks -- 0.4%
ABN Amro Bank N.V.,
SGD 1,000 4.72%, 10/14/2004 ............... 589,812
-------------
Total Singapore
long-term investments
(cost US$592,558) ............... 589,812
-------------
THAILAND -- 1.0%
Government Bonds -- 0.8%
Thailand Government,
THB 19,000 6.125%, 4/12/02 (c) ............. 523,682
20,000 8.00%, 12/08/06 (c) ............. 565,801
-------------
Total Thailand
government bonds
(cost US$1,107,265) ............. 1,089,483
-------------
Utilities -- 0.2%
Eastern Water Resources
Development and Management
Company Limited,
10,000 9.00%, 7/22/04 (c) .............. 285,764
-------------
Total Thailand utility bonds
(cost US$256,568) ............... 285,764
-------------
Total Thailand
long-term investments
(cost US$1,363,833) ............. 1,375,247
-------------
UNITED KINGDOM -- 28.5%
Government Bonds -- 19.1%
United Kingdom Treasury,
(pound) 250 8.00%, 12/07/00 ................. 409,657
1,000 7.00%, 11/06/01 ................. 1,629,409
1,500 8.00%, 6/10/03 .................. 2,531,463
500 5.00%, 6/07/04 .................. 767,309
1,500 6.75%, 11/26/04 ................. 2,467,649
2,000 7.50%, 12/07/06 ................. 3,459,723
500 5.75%, 12/07/09 ................. 809,690
600 8.00%, 12/07/15 ................. 1,260,660
3,000 8.00%, 6/07/21 .................. 6,823,522
1,200 6.00%, 12/07/28 ................. 2,336,332
Republic of Finland,
1,000 8.00%, 4/07/03 .................. 1,661,275
1,250 10.125%, 6/22/08 ................ 2,433,477
-------------
Total government bonds
(cost US$27,233,715) ............ 26,590,166
-------------
Utilities--3.0%
British Gas PLC,
(pound)1,400 8.875%, 7/08/08 ................. 2,528,923
Thames Water Utilities
Finance PLC,
1,000 10.50%, 11/21/01 ................ 1,700,259
-------------
Total United Kingdom
utility bonds
(cost US$4,307,395) ............. 4,229,182
-------------
Corporate Banks -- 6.4%
Abbey National Treasury
Services PLC,
1,250 8.00%, 4/02/03 .................. 2,066,484
Barclays Bank PLC,
1,000 9.875%, 5/29/49 ................. 1,799,742
Halifax Building Society,
1,500 11.00%, 1/17/14 ................. 3,296,992
Lloyds Bank PLC,
500 7.375%, 3/11/04 ................. 814,704
Prudential Finance B.V.,
500 9.375%, 6/04/07 ................. 903,672
-------------
Total United Kingdom
corporate bank bonds
(cost US$7,777,833) ............. 8,881,594
-------------
Total United Kingdom
long-term investments
(cost US$39,048,943) ............ 39,700,942
-------------
UNITED STATES -- 2.3%
Yankee Obligations -- 2.3%
Government Bonds -- 0.3%
Kingdom of Thailand,
US $ 500 7.07%, 9/30/13 .................. 411,280
-------------
Total US$ denominated
government bonds
(cost US$449,088) ............... 411,280
-------------
15
<PAGE>
Portfolio of Investments (unaudited)(continued)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- ---------------------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- ---------------------------------------------------------------------
Corporate Non-Banks -- 2.0%
Petroliam Nasional Berhad,
US $ 1,000 7.125%, 10/18/06 ................ 941,000
Reliance Industries Ltd.,
1,000 10.25%, 1/15/97 ................. 837,198
Samsung Electronics America,
1,000 9.75%, 5/01/03 .................. 1,034,876
-------------
Total US$ denominated
corporate non-bank bonds
(cost US$2,809,185) ............. 2,813,074
-------------
Total US$ denominated
long-term investments
(cost US$3,258,273) ............. 3,224,354
-------------
Total long-term investments
(cost US$130,828,732) ........... 122,851,128
-------------
SHORT-TERM INVESTMENTS -- 9.9%
Australia -- 0.2%
Banque Nationale de Paris
Fixed Deposit,
A $ 475 4.35%, 2/01/00
(cost US$302,005) ............... 302,005
-------------
Canada -- 3.7%
State Street Bank and Trust
Company Time Deposit,
C $ 7,400 4.450%, 2/02/00
(cost US$5,133,898) ............. 5,107,675
-------------
New Zealand -- 2.8%
State Street Bank and Trust
Company Time Deposit,
NZ $ 7,799 4.25%, 2/03/00
(cost US$3,958,681) ............. 3,852,617
-------------
United Kingdom -- 2.0%
State Street Bank and Trust
Company Fixed Deposit,
(pound)1,704 5.50%, 2/02/00
(cost US$2,768,918) ............. 2,756,987
-------------
United States -- 1.2%
US $ 1,748 Repurchase Agreement,
State Street Bank and
Trust Company, 5.00%
dated 1/31/00, due
2/01/00 in the amount of
$1,748,243 (cost $1,748,000;
collateralized by $1,785,000
U.S. Treasury Notes,
6.625% due 7/31/01:
value $1,786,999) ............... 1,748,000
-------------
Total short-term investments
(cost US$13,911,502) ............ 13,767,284
-------------
Total Investments -- 98.1%
(cost US$144,740,234) ........... 136,618,412
Unrealized appreciation
on forward foreign
currency exchange
contracts -- 0.1% (d) ........... 54,974
Variation margin
on open futures
contracts -- 0.0% (e) ........... 7,103
Other assets in excess
of liabilities -- 1.8% .......... 2,532,052
-------------
Total Net Assets -- 100.0% ........ $139,212,541
=============
16
<PAGE>
Portfolio of Investments (unaudited)(continued)
January 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
(a) A$--Australian dollar
C$--Canadian dollar
NZ$--New Zealand dollar
PHP--Philippine peso
SGD--Singapore dollar
THB--Thai Baht
(pound)--British pound
US$--United States dollar
(b) Coupon changes periodically upon a predetermined schedule. Stated interest
rate in effect at January 31, 2000.
(c) Securities pledged as collateral for the forward currency exchange
contracts.
(d) Forward foreign currency exchange contracts entered into as of January 31,
2000 were as follows:
- --------------------------------------------------------------------------------
Purchases
<TABLE>
<CAPTION>
Net Unrealized
Contracts to Receive In exchange for Settlement Date Value Appreciation (Depreciation)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KRW 2,863,250,000 US$2,500,000 2/14/00 US$2,549,871 $ 49,871
THB 21,392,640 US$ 576,000 3/10/00 US$ 574,608 (1,392)
TWD 4,380,880 US$ 140,000 6/12/00 US$ 140,233 233
--------
$ 48,712
--------
</TABLE>
- --------------------------------------------------------------------------------
Sales
<TABLE>
<CAPTION>
Net Unrealized
Contracts to Receive In exchange for Settlement Date Value Appreciation (Depreciation)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KRW 561,900,000 US$ 500,000 2/14/00 US$500,401 $ (401)
THB 2,194,035 US$ 58,821 2/22/00 US$ 58,806 16
THB 21,346,560 US$ 576,000 3/10/00 US$573,370 2,630
TWD 4,380,880 US$ 144,250 6/12/00 US$140,233 4,017
--------
$ 6,262
--------
Total $ 54,974
========
</TABLE>
(e)Open futures contracts sold as of January 31, 2000 were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Par Value Net Unrealized
Subject to Put Issue Expiration Date Value Appreciation
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
200,000 10 Year U.S. Treasury Notes Mar. 00 $188,500 $ 7,013
=======
</TABLE>
17
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Directors
- -----------------------------------------------------------------------------
Brian M. Sherman, Chairman
David Lindsay Elsum
Rt. Hon. Malcolm Fraser
Laurence S. Freedman
Michael Gleeson-White
Michael R. Horsburgh
David Manor
Neville J. Miles
William J. Potter
Peter D. Sacks
Anton E. Schrafl
E. Duff Scott
John T. Sheehy
Warren C. Smith
Officers
- -----------------------------------------------------------------------------
Laurence S. Freedman, President
Brian M. Sherman, Vice President
David Manor, Treasurer
Roy M. Randall, Secretary
Ouma Sananikone,
Assistant Vice President and
Chief Investment Officer
Barry G. Sechos, Assistant Treasurer
Allan S. Mostoff, Assistant Secretary
Margaret A. Bancroft, Assistant Secretary
Sander M. Bieber, Assistant Secretary
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.
[GRAPHIC] 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 Price & Rhoads
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
1-800-323-9995
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.
