MERRILL LYNCH
LATIN AMERICA
FUND, INC.
FUND LOGO
Semi-Annual Report
May 31, 1995
<PAGE>
Investing in emerging market securities involves a
number of risk factors and special considerations,
including restrictions on foreign investments and on
repatriation of capital invested in emerging markets,
currency fluctuations, and potential price volatility
and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly avail-
able information about the issuers of securities, and
such issuers may not be subject to accounting, auditing
and financial reporting standards and requirements
comparable to those to which US companies are subject.
Therefore, the Fund is designed as a long-term invest-
ment for investors capable of assuming the risks of
investing in emerging markets. The Fund should be
considered as a vehicle for diversification and not as a
complete investment program. Please refer to the
prospectus for details.
This report is not authorized for use as an offer of sale
or a solicitation of an offer to buy shares of the Fund
unless accompanied or preceded by the Fund's current
prospectus. Past performance results shown in this
report should not be considered a representation of
future performance. Investment return and principal
value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their
original cost.
Merrill Lynch
Latin America
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation*
As a Percentage of
Net Assets as of
May 31, 1995
<PAGE>
A map illustrating the following percentages:
Mexico 17.5%
Panama 2.2%
Venezuela 3.1%
Colombia 3.4%
Ecuador 1.9%
Peru 4.5%
Brazil 35.6%
Uruguay 0.2%
Argentina 11.2%
Chile 6.7%
[FN]
*Total may not equal 100% and does not include short-term
securities.
DEAR SHAREHOLDER
During the quarter ended May 31,
1995, Merrill Lynch Latin America
Fund, Inc.'s Class A, Class B, Class C
and Class D Shares appreciated 4.66%,
4.42%, 4.32% and 4.57%, respectively,
while the unmanaged Morgan Stanley
Capital International Latin America
Free Index appreciated 13.00% (in US
dollar terms). Our Fund's underper-
formance can be attributed to several
factors. First, we increased the Fund's
cash position in anticipation of pos-
sible redemptions. During the May
quarter, we saw significant inflows
of cash into the Fund at several
points. The Fund's short-term posi-
tion at the beginning of March was
9.5% of net assets; by May 31, 1995, it
was 12.8%. Second, partially as a
result of building this cash posi-
tion and also as a strategic move,
we reduced the Fund's position in
Brazil. The Fund also remained
underweighted in Chile. Since many
of these markets enjoyed significant
rallies during April and May, our
underweightings hurt the Fund's
performance.
<PAGE>
Investment Activities
Throughout Latin America, we
reduced our exposure to certain
industries in which we do not expect
much near-term real growth. For
example, we curtailed our exposure
to steel companies and many banks.
On the other hand, we selectively
added to existing holdings and made
new purchases in companies which
we believed could prosper in spite
of an expected adverse economic
environment. For the most part,
the companies are characterized
by having strong managements and
attractive valuations. Examples
include Compania Naviera Perez
Companc S.A.C.F.I.M.F.A., an Argen-
tine energy company; Apasco, S.A.
de C.V. 'A', a Mexican cement producer;
and Companhia de Tecidos Norte de
Minas S.A., a Brazilian textile manu-
facturer. We also established a new
position in Companhia Cevejeria
Brahma S.A., a Brazilian beer bottler.
We have positioned the Fund defen-
sively since the beginning of the
Mexican crisis in December 1994.
This defensive strategy has meant
that the Fund has underweighted
equities in the larger markets; inves-
ted more aggressively in smaller and
less-"discovered" markets such as
Peru; increased cash to 12.8% of net
assets; increased emphasis on com-
panies which are well prepared to
weather adverse economic condi-
tions; and sought high-yielding
fixed-income instruments when
appropriate.
<PAGE>
Investment Outlook
Currently, we believe that we can
relax our defensive strategy some-
what. US interest rates seem to
be stabilizing, a phenomenon which
should indirectly benefit Latin
American markets. On a microeco-
nomic level, since many companies in
the region have borrowed heavily in
US dollars, lower dollar interest rates
should mean lower interest expense
and hence improved earnings. From a
macroeconomic perspective, stable
US dollar interest rates ease the
pressure on those currencies which
are closely linked to the dollar (for
example, Argentina and Mexico to
some extent). In addition, stable US
interest rates tend to increase capital
flows to mutual funds which invest
in international markets, including
Latin America.
We also note that despite our earlier
concerns about redemptions, this
development did not materialize to
the extent we feared. We are encour-
aged by this fact since it affirms our
belief that most investors in emerg-
ing markets are truly committed to
long-term investment rather than
short-term portfolio speculation.
While we may continue to keep our
cash position at higher levels than
before the Mexican crisis, we now
believe we have more flexibility with
respect to our cash position.
<PAGE>
However, a certain level of caution is
still warranted. While most of the
major Latin American equity markets
have enjoyed significant rallies since
March 1995, we question whether
these rallies will be sustained. In
Argentina and Mexico, investors'
euphoria over the international aid
package may give way to the sobering
reality of stark economic slowdowns
projected for most of 1995. In Brazil,
efforts to curb inflation may have to
be redoubled, resulting in a prolonged
environment of high interest rates.
Also, valuations in many markets are
not particularly attractive consider-
ing the lower corporate earnings
projected for much of 1995. There-
fore, although we may reduce our
cash position, we will continue to
maintain a defensive strategy in
terms of stock selection and continue
to emphasize smaller and less-
discovered markets.
In Conclusion
We continue to believe that in the
long term, Latin American securities
markets will outperform those in
more developed countries. However,
at this stage our strategy is twofold:
to remain somewhat defensive to
weather possible near-term storms in
our markets, while at the same time
remaining opportunistic by building
a solid foundation in those compa-
nies which we expect to benefit from
growth in the long term.
<PAGE>
We appreciate your ongoing interest
in Merrill Lynch Latin America Fund,
Inc., and we look forward to assisting
you with your financial needs in the
months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
June 29, 1995
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Grace Pineda, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
PROXY RESULTS
During the six-month period ended May 31, 1995, Merrill
Lynch Latin America Fund, Inc. shareholders voted on the
following proposals. Proposals 1, 2 and 4 were approved
at a special shareholders' meeting on September 28, 1994.
Proposal 3 was passed at a special shareholders' meeting
on January 31, 1995. The description of each proposal
and number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 57,975,803 1,081,574
Edward H. Meyer 57,975,066 1,082,311
Charles C. Reilly 57,985,470 1,071,907
Richard R. West 57,982,313 1,075,064
Arthur Zeikel 57,979,964 1,077,413
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To select Deloitte & Touche LLP as the Fund's independent auditors. 57,339,353 445,493 1,272,531
3. To approve certain changes to the Fund's fundamental investment
restrictions. 27,867,712 1,193,293 1,668,439
4. To amend the Fund's articles of incorporation to implement
the Merrill Lynch Select Pricing SM System. 53,327,491 2,422,472 3,307,414
</TABLE>
<PAGE>
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase
shares of the Fund through the Merrill Lynch Select Pricing SM
System, which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-
end load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors, as detailed in the Fund's prospectus. If you were a
Class A shareholder prior to October 21, 1994, your Class A
Shares were redesignated to Class D Shares on October 21, 1994,
which, in the case of certain eligible investors, were simulta-
neously exchanged for Class A Shares.
* Class B Shares are subject to a maximum contingent deferred
sales charge of 4% if redeemed during the first year, decreasing
1% each year thereafter to 0% after the fourth year. In addition,
Class B Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. These shares automatically
convert to Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and
an account maintenance fee of 0.25%. In addition, Class C
Shares are subject to a 1% contingent deferred sales charge
if redeemed within one year of purchase.
* Class D Shares incur a maximum initial sales charge of
5.25% and an account maintenance fee of 0.25% (but no distri-
bution fee).
Performance data for the Fund's Class B and Class D Shares
are presented in the "Performance Summary," "Recent Perfor-
mance Results" and "Average Annual Total Return" tables below
and on page 6. Data for Class A and Class C Shares are also
presented in the "Recent Performance Results" and "Aggregate
Total Return" tables below.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class B and Class D
Shares for the 12-month and 3-month periods ended May 31,
1995 and for Class A and Class C Shares for the since inception
and the 3-month periods ended May 31, 1995. All data in this
table assume imposition of the actual total expenses incurred
by each class of shares during the relevant period.
<PAGE>
None of the past results shown should be considered a represen-
tation of future performance. Investment return and principal
value of shares will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost. Dividends
paid to each class of shares will vary because of the different
levels of account maintenance, distribution and transfer agency
fees applicable to each class, which are deducted from the
income available to be paid to shareholders.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
5/31/95 2/28/95 5/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.77 $10.29 $18.22 -39.47%(1) +4.66%
Class B Shares 10.63 10.18 15.83 -31.22 (1) +4.42
Class C Shares 10.63 10.19 18.10 -39.85 (1) +4.32
Class D Shares 10.76 10.29 15.89 -30.66 (1) +4.57
Class A Shares--Total Return -39.04 (2) +4.66
Class B Shares--Total Return -30.74 (2) +4.42
Class C Shares--Total Return -39.42 (2) +4.32
Class D Shares--Total Return -30.17 (2) +4.57
<FN>
*Investment results shown do not reflect any sales charges; results shown
would be lower if a sales charge was included.
++Investment results shown for Class A and Class C Shares are since inception
(10/21/94).
(1)Percent change includes reinvestment of $0.396 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.118 per share ordinary income dividends
and $0.396 per share capital gains distributions.
</TABLE>
Average Annual
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/95 -40.29% -42.55%
Inception (9/27/91) through 3/31/95 + 0.45 + 0.17
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/95 -39.76% -42.92%
Inception (9/27/91) through 3/31/95 + 1.25 - 0.29
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/21/94) through 3/31/95 -45.55% -48.41%
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 3/31/95 -45.81% -46.32%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
9/27/91-12/31/91 $10.00 $10.32 -- $0.098 + 4.22%
1992 10.32 10.22 -- 0.227 + 1.34
1993 10.22 16.61 -- 0.048 +63.05
1994 16.61 13.55 $0.396 0.118 -15.86
1/1/95-5/31/95 13.55 10.63 -- -- -21.55
------ ------
Total $0.396 Total $0.491
Cumulative total return as of 5/31/95: +13.67%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend
date, and do not reflect deduction of any sales charge;
results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
9/27/91-12/31/91 $10.00 $10.31 -- $0.125 + 4.40%
1992 10.31 10.19 -- 0.326 + 2.15
1993 10.19 16.62 -- 0.108 +64.27
1994 16.62 13.66 $0.396 0.118 -15.24
1/1/95-5/31/95 13.66 10.76 -- -- -21.23
------ ------
Total $0.396 Total $0.677
Cumulative total return as of 5/31/95: +16.96%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and
do not include sales charge; results would be lower if sales
charge was included.
***As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class A Shares of the Fund outstanding
prior to October 21, 1994 were redesignated to Class D Shares.
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Automotive 290,000 Mirgor S.A.C.I.F.I.A. (ADR) (2) (b) $ 743,125 $ 887,400 0.1%
Banking 84,231 Banco del Sud S.A. 1,508,748 589,676 0.1
50,500 Banco Frances del Rio de la Plata S.A. 1,024,393 984,750 0.1
------------ ------------ ------
2,533,141 1,574,426 0.2
Beverages 1,746 Buenos Aires Embotelladora S.A. (BAESA) 1,759,894 2,601,800 0.4
426,300 Buenos Aires Embotelladora S.A. (BAESA)
(ADR) (2) 11,186,019 12,842,288 1.7
------------ ------------ ------
12,945,913 15,444,088 2.1
Foreign ARS 27,820,000 Republic of Argentina, Floating Rate
Government Notes, 7.312% due 3/31/2005 17,558,200 18,291,650 2.5
Obligations
Oil & Related 7,599,880 Astra Compania Argentina de Petroleo S.A. 15,170,913 11,933,005 1.6
2,737,972 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A. 12,780,297 11,747,075 1.6
481,200 Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR) (2) 9,902,483 9,744,300 1.3
------------ ------------ ------
37,853,693 33,424,380 4.5
Real Estate 2,106,241 Inversiones y Representaciones S.A.
(IRSA) (b) 5,637,874 5,055,484 0.7
200,000 Inversiones y Representaciones S.A.
(IRSA) (GDS) (3) (b) 5,500,000 4,775,000 0.6
------------ ------------ ------
11,137,874 9,830,484 1.3
<PAGE>
Retail 407,744 Grimoldi S.A. (Class B) (b) 2,635,321 1,631,139 0.2
Telecommunications 525,000 Telefonica de Argentina S.A. 1,497,352 1,417,642 0.2
Utilities 350,000 Central Costanera S.A. 1,039,311 1,015,102 0.1
9,500 ++Central Costanera S.A. (Class B)
(ADR) (2) 228,000 270,750 0.0
59,294 Central Puerto S.A. 260,493 246,095 0.0
------------ ------------ ------
1,527,804 1,531,947 0.1
Total Long-Term Investments in
Argentina 88,432,423 84,033,156 11.2
Brazil Appliances & 24,515,500 Brasmotor Group S.A. (Preferred) 7,919,225 5,324,756 0.7
Household Durables 1,635,300,000 Refrigeracao Parana S.A. (Preferred) 6,301,635 2,596,287 0.4
------------ ------------ ------
14,220,860 7,921,043 1.1
Automotive 715,400 CAPCO Automotive Products Corp. S.A.
(ADR)(2) 8,531,980 5,902,050 0.8
1,062,000 Confab Industrial S.A. 1,909,375 761,080 0.1
------------ ------------ ------
10,441,355 6,663,130 0.9
Banking 1,853,253,275 Banco Bradesco S.A. (Preferred) 14,773,124 15,937,569 2.2
28,720,400 Banco Itau S.A. (Preferred) 5,717,840 8,011,313 1.1
361,229,908 Banco Nacional S.A. PN 9,848,468 7,567,110 1.0
17,237,154 Uniao de Bancos Brasileiros S.A.
(UNIBANCO) 397,694 467,513 0.1
------------ ------------ ------
30,737,126 31,983,505 4.4
Beverages 43,192,072 Companhia Cervejaria Brahma S.A.
(Preferred) (b) 12,011,438 13,952,896 1.9
629,087 Companhia Cervejaria Brahma S.A.
(Preferred) (Pro Rata) (b) 144,514 203,222 0.0
1,880,905 Companhia Cervejaria Brahma S.A.
(Warrants) (a) (b) 48,935 2,511 0.0
------------ ------------ ------
12,204,887 14,158,629 1.9
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Brazil Building & 547,000 Companhia Cimento Portland Itau S.A. PN $ 134,354 $ 162,834 0.0%
(concluded)Construction
Chemicals 12,300,000 Bombril S.A. (Preferred) 282,747 271,224 0.0
Energy 75,800 Companhia Energetica de Sao Paulo S.A.
(CESP) (ADR) (2) 919,821 862,225 0.1
21,576,060 Companhia Energetica de Sao Paulo S.A.
(CESP) (Preferred) (ADR) (2) 482,578 827,836 0.1
------------ ------------ ------
1,402,399 1,690,061 0.2
Food 130,400,000 Ceval Alimentos S.A. PN 1,982,542 1,394,576 0.2
12,275,410 Sadia Concordia S.A. Industria e Comercio
(Preferred) 10,627,282 12,451,353 1.7
------------ ------------ ------
12,609,824 13,845,929 1.9
Forest Products 41,196 Bardella Industrial S.A. (Preferred) 10,514,838 6,949,270 0.9
& Papers 519,000 Industrias Klabin de Papel e Celulose
S.A. (Preferred) 746,632 698,104 0.1
16,802,000 MelPaper S.A. (Preferred) (b) 10,233,320 4,631,202 0.6
------------ ------------ ------
21,494,790 12,278,576 1.6
Machinery 8,709,000 Iochpe-Maxion S.A. (Ordinary) 3,583,312 5,540,345 0.8
9,699,765 Iochpe-Maxion S.A. (Preferred) 4,360,680 4,063,849 0.6
9,273,000 Weg Exportadora S.A. (Preferred) 5,597,682 5,316,384 0.7
------------ ------------ ------
13,541,674 14,920,578 2.1
Metals & Steel 312,000 ++Companhia Siderurgica de Tubarao S.A.
(CST) 9,862,066 9,204,000 1.2
Mining 88,001,200 Companhia Vale do Rio Doce S.A. 14,382,247 13,293,323 1.8
Oil & Related 55,520,000 Petroleo Brasileiro S.A. 7,056,177 5,203,087 0.7
Retail 4,188,934 Casa Anglo Brasileira S.A. 865,348 424,897 0.1
118,564,600 Lojas Americanas S.A. 2,125,943 2,601,362 0.4
13,896,600 Mesbla S.A. (b) 3,127,325 1,072,811 0.1
------------ ------------ ------
6,118,616 4,099,070 0.6
Steel 562,000 Acos Industria Villares S.A. 110,584 224,304 0.0
255,060,000 Companhia Metalurgica Barbara S.A. 247,899 188,413 0.0
191,318,000 Companhia Siderurgica Nacional S.A.--CSN 6,838,186 4,366,354 0.6
8,811,482,013 Usinas Siderurgicas de Minas Gerais--
Usiminas S.A. (Preferred) 5,858,452 9,714,976 1.3
------------ ------------ ------
13,055,121 14,494,047 1.9
<PAGE>
Telecommunications 443,667 ++Telecomunicacoes Brasileiras S.A.--
Telebras (ADR) (2) 19,412,100 15,140,136 2.0
33,197,615 Telecomunicacoes Brasileiras S.A.--
Telebras (Ordinary) 1,178,023 1,028,504 0.1
311,434,366 Telecomunicacoes Brasileiras S.A.--
Telebras (Preferred) 13,746,886 10,850,414 1.5
60,723,102 Telecomunicacoes de Minejeros S.A.--
TELEMIG (Ordinary) 2,682,475 2,309,754 0.3
5,641,975 Telecomunicacoes de Minejeros S.A.--
TELEMIG (Preferred) 290,003 199,055 0.0
131,226,231 Telecomunicacoes de Sao Paulo S.A.--
TELESP 14,804,413 16,464,769 2.2
4,430,936 Telecomunicacoes Parana S.A.--TELEPAR
(Preferred) 754,996 1,270,169 0.2
------------ ------------ ------
52,868,896 47,262,801 6.3
Textiles 873,000 Brasperola Industria e Comercio S.A. 931,692 558,258 0.1
33,527,363 Companhia de Tecidos Norte de Minas S.A. 9,018,728 10,904,710 1.5
------------ ------------ ------
9,950,420 11,462,968 1.6
Utilities 245,000 Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) (ADR) (2) 3,827,553 3,338,125 0.5
55,100,467 Centrais Eletricas Brasileiras S.A.--
Eletrobras 'B' (Preferred) 16,082,093 15,248,310 2.1
4,387,500 Centrais Eletricas da Santa Catarina S.A.
(CELESC) 'B' (Preferred) (b) 764,541 3,628,032 0.5
125,271,686 Companhia Energetica de Minas Gerais S.A.
(CEMIG) 1,625,256 2,886,635 0.4
28,470 Companhia Energetica de Minas Gerais S.A.
(CEMIG) (ADR) (2) 638,750 651,251 0.1
203,820,000 Companhia Paulista de Forca e Luz S.A. 11,896,752 11,460,661 1.6
50,122,000 Light--Servicios de Electricidade S.A. 18,156,844 16,412,606 2.2
------------ ------------ ------
52,991,789 53,625,620 7.4
Total Long-Term Investments in Brazil 283,355,348 262,540,425 35.6
Chile Apparel 1,206,231 Bata Chile S.A. 340,424 185,426 0.0
Banking 202,900 Banco O'Higgins S.A. (ADR) (2) 3,101,779 4,286,263 0.6
Beverages 4,084,632 Vina Concha y Toro S.A. 1,694,797 1,732,152 0.2
297,000 Vina Concha y Toro S.A. (ADR) (2) 5,641,450 6,237,000 0.8
------------ ------------ ------
7,336,247 7,969,152 1.0
<PAGE>
Building & 338,225 Empresas Pizarreno S.A. 644,310 829,203 0.1
Construction 124,900 Maderas y Sinteticos S.A. (MASISA)
(Foreign) (ADR) (2) 3,501,631 2,310,650 0.3
------------ ------------ ------
4,145,941 3,139,853 0.4
Closed-End Funds 67,984 The Chile Fund, Inc. 1,993,436 3,399,200 0.5
Food & Household 138,650 Cristalerias de Chile S.A. (ADR) (2) 3,035,094 3,223,613 0.4
Products
Multi-Industry 776,044 Forrestal Terranova S.A. 1,285,948 1,583,763 0.2
Publishing 4,447,062 Editorial Lord Cochrane S.A. 2,437,641 1,944,779 0.3
Retail Sales 400,000 Santa Isabel S.A. 281,952 466,472 0.1
Steel 509,056 Compania de Acero del Pacifico
S.A. de Inv. (CAP) 1,641,453 3,453,971 0.5
509,056 Invercap S.A. 363,675 984,921 0.1
------------ ------------ ------
2,005,128 4,438,892 0.6
Telecommunications 157,225 Compania de Telefonos de Chile S.A.
(ADR)(2) 15,443,096 13,914,413 1.9
98,732 Empresa Nacional de Telecomunicaciones
S.A. (ENTEL) 677,829 897,564 0.1
------------ ------------ ------
16,120,925 14,811,977 2.0
Utilities 4,965,953 Empresa Nacional de Electricidad S.A.-
(ENDESA) 2,530,323 4,132,810 0.6
Total Long-Term Investments in Chile 44,614,838 49,582,200 6.7
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Colombia Banking 245,001 Banco de Bogota S.A. $ 903,609 $ 1,287,711 0.2%
1,035,700 Banco de Colombia S.A. (b) 974,829 355,016 0.1
------------ ------------ ------
1,878,438 1,642,727 0.3
<PAGE>
Beverages & 587,154 La Compania Cervecera Bavaria S.A. 3,401,356 1,476,050 0.2
Tobacco
Building Products 90,000 Cementos Diamante S.A. 590,537 555,302 0.1
250,137 ++Cementos Paz Del Rio S.A. (b) 373,682 228,930 0.0
200,000 Cementos Paz Del Rio S.A. (ADR) (2) (b) 4,139,375 2,700,000 0.4
------------ ------------ ------
5,103,594 3,484,232 0.5
Forest Products 629,900 ++Papeles Nacionales S.A. (b) 10,733,476 5,984,050 0.8
& Paper
Merchandising 258,171 Carulla y CIA S.A. 3,218,690 3,112,093 0.4
357,850 ++Carulla y CIA S.A. (ADR) (2) 4,484,071 5,993,988 0.8
------------ ------------ ------
7,702,761 9,106,081 1.2
Retail 1,428,814 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) 4,043,019 2,367,208 0.3
35,000 ++Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) (ADR) (2) 611,250 616,875 0.1
------------ ------------ ------
4,654,269 2,984,083 0.4
Tobacco 69,200 La Compania Colombiano de Tabaco S.A.
(COLTABACO) 356,988 189,762 0.0
Total Long-Term Investments in Colombia 33,830,882 24,866,985 3.4
Ecuador Insurance 59,672 ++La Cemento Nacional C.A. 10,605,732 13,724,560 1.9
Total Long-Term Investments in Ecuador 10,605,732 13,724,560 1.9
Mexico Beverages 2,032,000 ++Fomento Economico Mexicano, S.A. de C.V.
(Femsa) (ADR) (2) 3,386,039 4,475,480 0.6
1,475,000 Fomento Economico Mexicano, S.A. de C.V.
(Femsa) (Ordinary) 'B' 2,962,756 3,467,755 0.5
------------ ------------ ------
6,348,795 7,943,235 1.1
Broadcasting & 3,215,000 Grupo Fernandez Editores, S.A. de C.V. 4,709,988 1,490,710 0.2
Publishing
Building & 2,687,000 Apasco, S.A. de C.V. 'A' (b) 8,865,768 9,344,180 1.3
Construction 332,000 ++Corporacion Geo, S.A. de C.V. 'B'
(ADR)(2)(b) 9,485,500 3,829,620 0.5
------------ ------------ ------
18,351,268 13,173,800 1.8
<PAGE>
Building 880,000 Cementos Mexicanos, S.A. de C.V. Nom 'B'
Materials (Cemex) 7,139,240 2,859,102 0.4
Engineering & 378,000 Grupo Profesional Planeacion y Proyectos,
Construction S.A. de C.V. (PYP) (Class B) 5,457,192 2,160,000 0.3
Financial 533,900 Banca Quadrum, S.A. de C.V. (ADR)
Services (2) (b) 9,916,217 3,136,662 0.4
380,000 Grupo Financiero (GBM) Atlantico,
S.A. de C.V. (b) 2,270,875 241,959 0.0
220,000 ++Grupo Financiero (GBM) Atlantico,
S.A. de C.V. 'L' (b) 4,742,022 495,000 0.1
US$ 8,500,000 ++Grupo Financiero InverMexico, S.A. de
C.V., 7.50% due 6/16/2001 8,500,000 2,380,000 0.3
------------ ------------ ------
25,429,114 6,253,621 0.8
Food & Household 3,253,846 Grupo Herdez, S.A. de C.V. 'A' (b) 3,295,834 956,232 0.1
Products 5,012,461 Grupo Herdez, S.A. de C.V. 'B' (b) 6,285,722 1,440,315 0.2
754,189 Grupo Industrial Maseca, S.A. de C.V. 'B2' 1,225,349 506,076 0.1
312,518 Sigma Alimentos, S.A. de C.V. 5,569,354 2,194,004 0.3
------------ ------------ ------
16,376,259 5,096,627 0.7
Health & Personal 1,366,850 Kimberly-Clark de Mexico, S.A. de
Care C.V. 'A' 15,316,855 14,304,504 1.9
Leisure 179,000 Grupo Posadas, S.A. de C.V. 'A' (b) 149,627 50,851 0.0
395,300 ++Grupo Posadas, S.A. de C.V. (ADR) (2) (b) 6,138,293 2,174,150 0.3
------------ ------------ ------
6,287,920 2,225,001 0.3
Merchandising 134,500 Controladora de Farmacias, S.A. de C.V.
(COFAR) 199,610 62,584 0.0
616,000 Farmacias Benavides, S.A. de C.V. 2,767,171 593,371 0.1
1,418,000 Grupo Empresarial Fenix, S.A. de C.V.
ELEKTRA 'L' Shares 13,024,645 4,120,882 0.6
------------ ------------ ------
15,991,426 4,776,837 0.7
Metals & Steel 1,830,000 Grupo Simec, S.A. de C.V. (Ordinary) (b) 1,645,949 866,449 0.1
143,500 ++Hylsamex, S.A. de C.V. (b) 3,398,937 2,583,000 0.4
------------ ------------ ------
5,044,886 3,449,449 0.5
<PAGE>
Multi-Industry 1,167,000 Desc Sociedad de Fomento Industrial, S.A.
de C.V. (b) 8,735,843 3,715,347 0.5
607,400 Desc Sociedad de Fomento Industrial,
S.A. de C.V. (Class B) (b) 5,072,389 2,082,514 0.3
375,000 ++Grupo Carso, S.A. de C.V. 'A' (b) 4,449,228 3,375,000 0.5
4,215,500 Grupo Carso, S.A. de C.V. (ADR) (2) (b) 39,319,781 19,752,629 2.7
------------ ------------ ------
57,577,241 28,925,490 4.0
Retail 10,746,000 Cifra, S.A. de C.V. 'C' 17,338,614 13,333,812 1.8
1,705,000 El Puerto de Liverpool, S.A. de C.V.
(Non-Voting) (Series C1) 2,372,048 1,021,608 0.1
988,500 Sears Roebuck de Mexico, S.A. de C.V.
'B' (b) 6,010,030 2,501,510 0.3
547,500 ++Sears Roebuck de Mexico, S.A. de C.V.
'B' (ADR) (2) (b) 14,403,127 2,669,062 0.4
------------ ------------ ------
40,123,819 19,525,992 2.6
Telecommunications 549,700 Telefonos de Mexico, S.A. de C.V. (ADR)
(2) 28,256,539 15,460,312 2.1
Transportation 107,000 Transportacion Maritima Mexicana, S.A. de
C.V. 'L' (TMM) (b) 1,192,663 751,184 0.1
Total Long-Term Investments in Mexico 253,603,205 128,395,864 17.5
Panama Banking 80,000 Banco Latinoamericano de Exportaciones,
S.A. ('BLADEX') 'E' 1,992,245 2,760,000 0.4
Beverages & Tobacco 480,260 Panamerican Beverages Inc. (Class A) 13,690,703 13,087,085 1.8
Total Long-Term Investments in Panama 15,682,948 15,847,085 2.2
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Peru Banking 4,191,382 Banco de Credito de Peru S.A. $ 5,771,448 $ 9,046,819 1.2%
4,034,029 Banco Wiese Limitado S.A. 7,783,798 8,348,124 1.1
------------ ------------ ------
13,555,246 17,394,943 2.3
Beverages 61,231 Cerveceria Backus and Johnston S.A. 111,704 146,606 0.0
Food 2,906,649 La Fabril S.A. (b) 4,858,787 2,664,752 0.4
Mining 2,969,513 Southern Peru Copper Corp. S.A. (b) 9,490,269 13,202,241 1.8
Total Long-Term Investments in Peru 28,016,006 33,408,542 4.5
<PAGE>
Uruguay Banking 64,500 ++Banco Commercial S.A. 1,211,625 1,096,500 0.2
Total Long-Term Investment in Uruguay 1,211,625 1,096,500 0.2
Venezuela Building & 1,124,607 Corporacion Ceramica Carabobo S.A. 'B' 2,294,951 825,698 0.1
Construction 1,129,218 Corporacion Ceramica Carabobo S.A.C.A. 2,606,929 868,706 0.1
------------ ------------ ------
4,901,880 1,694,404 0.2
Building 147,600 Corimon C.A. S.A.C.A. 1,091,848 977,850 0.1
Materials 463,734 Venezolana de Cementos S.A.C.A. (Vencemos) 616,436 708,304 0.1
------------ ------------ ------
1,708,284 1,686,154 0.2
Food & Household 10,304,247 Mavesa S.A. 2,587,936 1,883,775 0.3
Products 375,832 ++Mavesa S.A. (ADR) (2) 4,010,625 1,033,538 0.1
389,500 Mavesa S.A. (ADR) (2) 3,519,375 1,071,125 0.1
------------ ------------ ------
10,117,936 3,988,438 0.5
Foreign US$ 5,750,000 Republic of Venezuela, Floating Rate
Government Notes, 5.75% due 12/18/2007 (1) 4,300,625 2,803,125 0.4
Obligations
Steel 108,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.-S.A.C.A. 35,345 34,871 0.0
216,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.-S.A.C.A. (ADR) (2) 1,231,384 302,400 0.0
169,940 ++Venezolana de Prerreducidos Caroni
Venprecar C.A. (GDS) (3) 1,239,230 828,457 0.1
------------ ------------ ------
2,505,959 1,165,728 0.1
Textiles 1,075,000 Mantex S.A.C.A. 152,879 158,489 0.0
153,000 Mantex S.A.C.A. (ADR) (2) 782,350 726,750 0.1
------------ ------------ ------
935,229 885,239 0.1
Utilities 11,512,498 C.A. La Electricidad de Caracas
S.A.I.C.A.-S.A.C.A. 19,686,959 12,152,722 1.6
Total Long-Term Investments in Venezuela 44,156,872 24,375,810 3.1
Total Long-Term Investments in
Latin America 803,509,879 637,871,127 86.3
<PAGE>
<CAPTION>
Face Amount Short-Term Investments
<S> <S> <S> <C> <S> <C> <C> <C>
Mexico Foreign US$ 10,000,000 Bonos de la Tesoreria de la Federacion,
Government 7.461% due 8/10/1995 9,854,917 9,778,200 1.3
Obligations* MXN 67,290,030 Mexican Cetes (Certificados de la
Tesoreria de la Federacion), 45.321%
due 8/24/1995 10,812,714 9,764,239 1.3
Total Short-Term Investments in Mexico 20,667,631 19,542,439 2.6
United Commercial Paper* US$ 15,000,000 ANZ (Delaware), Inc., 5.95% due
States 6/30/1995 14,928,104 14,928,104 2.0
15,000,000 Daimler-Benz AG, 5.95% due 6/01/1995 15,000,000 15,000,000 2.0
du Pont (E.I.) de Nemours & Co.:
10,000,000 5.90% due 6/09/1995 9,986,889 9,986,889 1.3
15,000,000 5.92% due 6/22/1995 14,948,200 14,948,200 2.0
21,363,000 General Electric Capital Corp.,
6.13% due 6/01/1995 21,363,000 21,363,000 2.9
Total Short-Term Investments in the
United States 76,226,193 76,226,193 10.2
Total Short-Term Investments 96,893,824 95,768,632 12.8
Total Investments $900,403,703 733,639,759 99.1
============
Other Assets Less Liabilities 6,879,246 0.9
------------ ------
Net Assets $740,519,005 100.0%
============ ======
<PAGE>
<FN>
(1)The interest rate is subject to change periodically
based on the change in the LIBOR (London
Interbank Offered Rate). The interest rate shown
is the rate in effect as of May 31, 1995.
(2)American Depositary Receipts (ADR).
(3)Global Depositary Shares (GDS).
*Commercial Paper and certain Foreign
Government Obligations are traded on a discount
basis; the interest rates shown are the discount
rates paid at the time of purchase by the Fund.
(a)Warrants entitle the Fund to purchase a predeter-
mined number of shares of Common Stock. The
purchase price and number of shares are subject
to adjustment under certain conditions until the
expiration date.
(b)Non-income producing security.
++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately
$76,103,000, representing 10.3% of net assets.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Banco Commercial S.A. 10/24/1994 $ 1,211,625 $ 1,096,500
Carulla y CIA S.A. (ADR) 6/23/1994 4,484,071 5,993,988
Cementos Paz Del Rio S.A. 9/22/1994 373,682 228,930
Central Costanera S.A. (Class B) (ADR) 12/17/1993 228,000 270,750
Companhia Siderurgica de Tubarao S.A. (CST) 7/20/1994 9,862,066 9,204,000
Corporacion Geo, S.A. de C.V. 'B' (ADR) 9/28/1994 9,485,500 3,829,620
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (ADR) 3/24/1995 3,386,039 4,475,480
Gran Cadena de Almacenes Colombianos S.A.
(CADENALCO) (ADR) 2/14/1995 611,250 616,875
Grupo Carso, S.A. de C.V. 'A' 5/13/1994 4,449,228 3,375,000
Grupo Financiero (GBM) Atlantico, S.A. de C.V. 'L' 8/25/1994 4,742,022 495,000
Grupo Financiero InverMexico, S.A. de C.V., 7.50% due 6/16/2001 6/09/1994 8,500,000 2,380,000
Grupo Posadas, S.A. de C.V. (ADR) 3/23/1992 6,138,293 2,174,150
Hylsamex, S.A. de C.V. 10/31/1994 3,398,937 2,583,000
La Cemento Nacional C.A. 6/22/1992 10,605,732 13,724,560
Mavesa S.A. (ADR) 10/13/1993 4,010,625 1,033,538
Papeles Nacionales S.A. 10/04/1995 10,733,476 5,984,050
Sears Roebuck de Mexico, S.A. de C.V. 'B' (ADR) 8/09/1994 14,403,127 2,669,062
Telecommunicacoes Brasileiras S.A.--Telebras (ADR) 12/29/1993 19,412,100 15,140,136
Venezolana de Prerreducidos Caroni Venprecar C.A. (GDS) 2/13/1992 1,239,230 828,457
Total $117,275,003 $ 76,103,096
============ ============
See Notes to Consolidated
Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of May 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$900,403,703) (Note 1a) $ 733,639,759
Foreign cash (Note 1e) 11,484,477
Receivables:
Securities sold $ 3,757,145
Capital shares sold 2,354,796
Dividends 2,251,306
Interest 869,203 9,232,450
--------------
Deferred organization expenses (Note 1g) 42,657
Prepaid registration fees and other assets (Note 1g) 83,159
--------------
Total assets 754,482,502
--------------
Liabilities: Payables:
Securities purchased 5,639,797
Capital shares redeemed 2,329,839
Investment adviser (Note 2) 686,724
Distributor (Note 2) 575,339 9,231,699
--------------
Accrued expenses and other liabilities 4,731,798
--------------
Total liabilities 13,963,497
--------------
Net Assets: Net assets $ 740,519,005
==============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 180,939
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 5,373,875
Class C Common Stock, $0.10 par value, 100,000,000 shares authorized 108,449
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 1,284,272
Paid-in capital in excess of par 1,045,232,288
Undistributed investment income--net 4,798,428
Accumulated realized capital losses on investments and foreign currency
transactions--net (150,201,062)
Unrealized depreciation on investments and foreign currency transactions--net (166,258,184)
--------------
Net assets $ 740,519,005
==============
Net Asset Class A--Based on net assets of $19,495,711 and 1,809,393 shares outstanding $ 10.77
Value: ==============
Class B--Based on net assets of $571,319,055 and 53,738,751 shares outstanding $ 10.63
==============
Class C--Based on net assets of $11,530,398 and 1,084,487 shares outstanding $ 10.63
==============
Class D--Based on net assets of $138,173,841 and 12,842,718 shares outstanding $ 10.76
==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 1995
<S> <S> <C> <C>
Investment Dividends (net of $1,099,932 foreign withholding tax) $ 9,490,388
Income Interest and discount earned 5,270,832
(Notes 1e Other 19,439
& 1f): -------------
Total income 14,780,659
-------------
Expenses: Investment advisory fees (Note 2) $ 3,897,128
Distribution fees--Class B (Note 2) 3,110,741
Custodian fees 986,096
Transfer agent fees--Class B (Note 2) 883,278
Printing and shareholder reports 307,074
Account maintenance fees--Class D (Note 2) 169,959
Transfer agent fees--Class D (Note 2) 157,883
Registration fees (Note 1g) 149,238
Accounting services (Note 2) 83,471
Foreign tax expense (Note 1e) 72,856
Professional fees 51,471
Distribution fees--Class C (Note 2) 38,487
Directors' fees and expenses 22,083
Transfer agent fees--Class A (Note 2) 16,383
Transfer agent fees--Class C (Note 2) 11,747
Amortization of organization expenses (Note 1g) 11,560
Pricing fees 3,799
Other 8,977
--------------
Total expenses 9,982,231
-------------
Investment income--net 4,798,428
-------------
Realized & Realized loss from:
Unrealized Investments--net (131,208,125)
Gain (Loss) Foreign currency transactions--net (18,391,371) (149,599,496)
on --------------
Investments Change in unrealized appreciation/depreciation on:
& Foreign Investments--net (274,001,939)
Currency Foreign currency transactions--net 375,127 (273,626,812)
Transactions -------------- -------------
- --Net Net realized and unrealized gain on investments and foreign currency
(Notes 1c, transactions (423,226,308)
1d, 1f & 3): -------------
Net Decrease in Net Assets Resulting from Operations $(418,427,880)
=============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES OF NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: May 31, 1995 Nov. 30, 1994
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ 4,798,428 $ (3,648,206)
Realized gain (loss) on investments and foreign currency transactions--net (149,599,496) 40,187,144
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net (273,626,812) 29,595,876
-------------- --------------
Net increase (decrease) in net assets resulting from operations (418,427,880) 66,134,814
-------------- --------------
Dividends & Investment income--net:
Distributions Class A -- (1,113,310)
to Class B -- (624,870)
Shareholders Class C -- --
(Note 1h): Class D -- --
Realized gain on investments--net: --
Class A (319,531) --
Class B (27,829,088) --
Class C (173,079) --
Class D (6,020,373) --
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (34,342,071) (1,738,180)
-------------- --------------
Capital Net increase in net assets derived from capital share transactions 35,742,190 712,764,490
Share -------------- --------------
Transactions
(Note 4):
Net Assets: Total increase (decrease) in net assets (417,027,761) 777,161,124
Beginning of period 1,157,546,766 380,385,642
-------------- --------------
End of period* $ 740,519,005 $1,157,546,766
============== ==============
<FN>
*Undistributed investment income--net $ 4,798,428 $ --
============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
The following per share data and ratios have been derived For the Six For the Period
from information provided in the consolidated financial statements. Months Ended Oct. 21, 1994++
May 31, to Nov. 30,
Increase (Decrease) in Net Assets Value: 1995++++ 1994++++
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 17.37 $ 18.22
Operating -------------- --------------
Performance: Investment income--net .14 --
Realized and unrealized loss on investments and foreign
currency transactions--net (6.23) (.85)
-------------- --------------
Total from investment operations (6.09) (.85)
-------------- --------------
Less distributions from realized gain on investments--net (.51) --
-------------- --------------
Net asset value, end of period $ 10.77 $ 17.37
============== ==============
Total Based on net asset value per share (36.06%)+++ (4.67%)+++
Investment ============== ==============
Return:**
Ratios to Expenses 1.69%* 1.85%*
Average ============== ==============
Net Assets: Investment income--net 2.54%* (.20%)*
============== ==============
Supplemental Net assets, end of period (in thousands) $ 19,496 $ 10,350
Data: ============== ==============
Portfolio turnover 26.92% 30.15%
============== ==============
<PAGE>
<CAPTION>
Class B
For the
Period
The following per share data and ratios have been derived For the Sept. 27,
from information provided in the financial statements. Six Months For the Year Ended 1991++ to
Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: May 31, 1995++++ 1994++++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 17.24 $ 14.39 $ 9.83 $ 9.80 $ 10.00
Operating -------- -------- -------- -------- -------
Performance: Investment income (loss)--net .06 (.09) .10 .08 .04
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (6.16) 2.99 4.68 .05 (.24)
-------- -------- -------- -------- -------
Total from investment operations (6.10) 2.90 4.78 .13 (.20)
-------- -------- -------- -------- -------
Less dividends and distributions:
Investment income--net -- (.05) (.13) (.10) --
Realized gain on investments--net (.51) -- (.09) --+++++ --
-------- -------- -------- -------- -------
Total dividends and distributions (.51) (.05) (.22) (.10) --
-------- -------- -------- -------- -------
Net asset value, end of period $ 10.63 $ 17.24 $ 14.39 $ 9.83 $ 9.80
======== ======== ======== ======== =======
Total Based on net asset value per share (36.40%)+++ 20.19% 49.80% 1.30% (2.00%)+++
Investment ======== ======== ======== ======== =======
Return:**
Ratios to Expenses, excluding distribution fees 1.72%* 1.51% 1.59% 1.65% 1.73%*
Average ======== ======== ======== ======== =======
Net Assets: Expenses 2.72%* 2.51% 2.59% 2.65% 2.73%*
======== ======== ======== ======== =======
Investment income--net 1.07%* (.54%) 1.09% 1.30% 3.28%*
======== ======== ======== ======== =======
Supplemental Net assets, end of period (in thousands) $571,319 $937,221 $305,301 $126,344 $63,012
Data: ======== ======== ======== ======== =======
Portfolio turnover 26.92% 30.15% 24.74% 36.50% --
======== ======== ======== ======== =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
For the For the
The following per share data and ratios have been derived Six Months Period
from information provided in the consolidated financial statements. Ended Oct. 21, 1994++
May 31, to Nov. 30,
Increase (Decrease) in Net Assets Value: 1995++++ 1994++++
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 17.24 $ 18.10
Operating -------------- --------------
Performance: Investment gain (loss)--net .08 (.02)
Realized and unrealized loss on investments and foreign currency
transactions--net (6.18) (.84)
-------------- --------------
Total from investment operations (6.10) (.86)
-------------- --------------
Less distributions from realized gain on investments--net (.51) --
-------------- --------------
Net asset value, end of period $ 10.63 $ 17.24
============== ==============
Total Based on net asset value per share (36.40%)+++ (4.75%)+++
Investment ============== ==============
Return:**
Ratios to Expenses, excluding distribution fees 1.75%* 1.93%*
Average Net ============== ==============
Assets: Expenses 2.75%* 2.93%*
============== ==============
Investment income--net 1.46%* (1.22%)*
============== ==============
Supplemental Net assets, end of period (in thousands) $ 11,530 $ 5,069
Data: ============== ==============
Portfolio turnover 26.92% 30.15%
============== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class D
For the
For the Period
The following per share data and ratios have been derived Six Months Sept. 27,
from information provided in the financial statements. Ended For the Year Ended 1991++ to
May 31, November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1995++++ 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 17.37 $ 14.45 $ 9.90 $ 9.81 $ 10.00
Operating -------- -------- -------- -------- -------
Performance: Investment income--net .11 .03 .18 .15 .06
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (6.21) 3.00 4.69 .06 (.25)
-------- -------- -------- -------- -------
Total from investment operations (6.10) 3.03 4.87 .21 (.19)
-------- -------- -------- -------- -------
Less dividends and distributions:
Investment income--net -- (.11) (.23) (.12) --
Realized gain on investments--net (.51) -- (.09) --+++++ --
-------- -------- -------- -------- -------
Total dividends and distributions (.51) (.11) (.32) (.12) --
-------- -------- -------- -------- -------
Net asset value, end of period $ 10.76 $ 17.37 $ 14.45 $ 9.90 $ 9.81
======== ======== ======== ======== =======
Total Based on net asset value per share (36.12%)++++ 21.07% 50.86% 2.19% (1.90%)+++
Investment ======== ======== ======== ======== =======
Return:**
Ratios to Expenses, excluding account maintenance fees 1.67%* 1.48% 1.58% 1.64% 1.72%*
Average ======== ======== ======== ======== =======
Net Assets: Expenses 1.92%* 1.73% 1.83% 1.89% 1.97%*
======== ======== ======== ======== =======
Investment income--net 1.84%* .23% 1.83% 2.18% 4.05%*
======== ======== ======== ======== =======
Supplemental Net assets, end of period (in thousands) $138,174 $204,907 $ 75,085 $ 30,685 $18,074
Data: ======== ======== ======== ======== =======
Portfolio turnover 26.92% 30.15% 24.74% 36.50% --
======== ======== ======== ======== =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Latin America Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. These unaudited
financial statements reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. The Fund offers four classes of shares under the
Merrill Lynch Select Pricing SM System. Shares of Class A and Class D
are sold with a front-end sales charge. Shares of Class B and Class C
may be subject to a contingent deferred sales charge. All classes of
shares have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except that Class B, Class C
and Class D Shares bear certain expenses related to the account
maintenance of such shares, and Class B and Class C Shares also
bear certain expenses related to the distribution of such shares.
Each class has exclusive voting rights with respect to matters
relating to its account maintenance and distribution expenditures.
The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at the
last available bid price. Securities traded in the over-the-counter
market are valued at the last available bid price prior to the time of
valuation. In cases where securities are traded on more than one
exchange, the securities are valued on the exchange designated by
or under the authority of the Board of Directors as the primary
market. Securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest
and most representative market. Options written are valued at the
last sale price in the case of exchange-traded options or, in the case
of options traded in the over-the-counter market, the last asked
price. Options purchased are valued at the last sale price in the case
of exchange-traded or, in the case of options traded in the over-
the-counter market, the last bid price. Short-term securities are
valued at amortized cost, which approximates market value. Other
investments, including futures contracts and related options, are
stated at market value. Securities and assets for which market
value quotations are not available are valued at fair value as deter-
mined in good faith by or under the direction of the Fund's Board
of Directors.
<PAGE>
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank
of the Federal Reserve System or a primary dealer in US Govern-
ment securities. Under such agreements, the bank or primary dealer
agrees to repurchase the security at a mutually agreed upon time
and price. The Fund takes possession of the underlying securities,
marks to market such securities and, if necessary, receives additions
to such securities daily to ensure that the contract is fully collat-
eralized.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing
when recognized. Assets and liabilities denominated in foreign
currencies are valued at the exchange rate at the end of the period.
Foreign currency transactions are the result of settling (realized)
or valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Derivative financial instruments--The Fund may engage in
various portfolio strategies to seek to increase its return by hedging
its portfolio against adverse movements in the equity, debt and
currency markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Options--The Fund is authorized to write and purchase call and
put options. When the Fund writes an option, an amount equal to
the premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the closing
transaction exceeds the premium paid or received).
Written and purchased options are non-income producing
investments.
<PAGE>
* Forward foreign exchange contracts--The Fund is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Fund's records. However, the effect on
operations is recorded from the date the Fund enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
* Foreign currency options and futures--The Fund may also purchase
or sell listed or over-the-counter foreign currency options, foreign
currency futures and related options on foreign currency futures as
a short or long hedge against possible variations in foreign exchange
rates. Such transactions may be effected with respect to hedges on
non-US dollar denominated securities owned by the Fund, sold by
the Fund but not yet delivered, or committed or anticipated to be
purchased by the Fund.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When
the contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
(e) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income
tax provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital
gains at various rates.
(f) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Dividend income is recorded on the ex-dividend
dates except that if the ex-dividend date has passed, certain divi-
dends from foreign securities are recorded as soon as the Fund is
informed of the ex-dividend date. Interest income (including amor-
tization of discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
<PAGE>
(g) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid
by the Fund are recorded on the ex-dividend dates.
(i) Basis of consolidation--The accompanying consolidated financial
statements include the accounts of ML Latin America Fund Chile
Ltd., a wholly-owned subsidiary, which primarily invests in Chilean
securities. Intercompany accounts and transactions have been
eliminated.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Fund has entered into a Distribution Agree-
ment and Distribution Plans with Merrill Lynch Funds Distributor,
Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary of Merrill
Lynch Group, Inc.
MLAM is responsible for the management of the Fund's portfolio
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Fund. For
such services, the Fund pays a monthly fee of 1.0%, on an annual
basis, of the average daily value of the Fund's net assets. Certain of
the states in which the shares of the Fund are qualified for sale
impose limitations on the expenses of the Fund. The most restrictive
annual expense limitation requires that the Investment Adviser
reimburse the Fund to the extent the Fund's expenses (excluding
interest, taxes, distribution fees, brokerage fees and commissions,
and extraordinary items) exceed 2.5% of the Fund's first $30 million
of average daily net assets, 2.0% of the next $70 million of average
daily net assets, and 1.5% of the average daily net assets in excess
thereof. MLAM's obligation to reimburse the Fund is limited to the
amount of the management fee. No fee payment will be made to MLAM
during any fiscal year which will cause such expenses to exceed the
most restrictive expense limitation at the time of such payment.
<PAGE>
Pursuant to the distribution plans ("the Distribution Plans") adopted
by the Fund in accordance with Rule 12b-1 under the Investment
Company Act of 1940, the Fund pays the Distributor ongoing account
maintenance and distribution fees. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net
assets of the shares as follows:
Account
Maintenance Fee Distribution Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor of MLPF&S for providing account maintenance services
to Class B, Class C and Class D shareholders. The ongoing distribu-
tion fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and Class C
shareholders.
For the six months ended May 31, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the Fund's
Class A and Class D Shares as follows:
MLFD MLPF&S
Class A -- $ 97
Class D $24,541 $396,311
For the six months ended May 31, 1995, MLPF&S received contingent
deferred sales charges of $1,136,462 and $5,708 relating to trans-
actions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $152,903 in commissions on the
execution of portfolio security transactions for the Fund for the six
months ended May 31, 1995.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLPF&S, MLFDS, MLFD and/or ML & Co.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1995 were $193,333,345 and
$267,846,527, respectively.
Net realized and unrealized gains (losses) as of May 31, 1995 were
as follows:
Unrealized
Realized Gains
Losses (Losses)
Long-term investments $(131,208,125) $(165,638,752)
Short-term investments -- (1,125,192)
Foreign currency transactions (18,391,371) 505,760
------------- -------------
Total $(149,599,496) $(166,258,184)
============= =============
As of May 31, 1995, net unrealized depreciation for Federal income
tax purposes aggregated $166,763,944, of which $49,623,952 related
to appreciated securities and $216,387,896 related to depreciated
securities. At May 31, 1995, the aggregate cost of investments for
Federal income tax purposes was $900,403,703.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $35,742,190 and $712,764,490 for the six months ended May 31,
1995 and the year ended November 30, 1994, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended May 31, 1995 Shares Amount
Shares sold 2,219,482 $ 24,287,719
Shares issued to shareholders in
reinvestment of distributions 18,463 304,264
------------ ------------
Total issued 2,237,945 24,591,983
Shares redeemed (1,024,345) (10,741,085)
------------ ------------
Net increase 1,213,600 $ 13,850,898
============ ============
<PAGE>
Class A Shares for the Period Dollar
October 21, 1994++ to November 30, 1994 Shares Amount
Shares sold 753,289 $ 13,593,383
Shares redeemed (157,496) (2,773,649)
------------ ------------
Net increase 595,793 $ 10,819,734
============ ============
[FN]
++Commencement of Operations.
Class B Shares for the Six Months Dollar
Ended May 31, 1995 Shares Amount
Shares sold 10,709,227 $121,335,068
Shares issued to shareholders in
reinvestment of distributions 1,527,757 24,963,541
------------ ------------
Total issued 12,236,984 146,298,609
Automatic conversion of shares (240,888) (2,584,599)
Shares redeemed (12,634,906) (143,787,623)
------------ ------------
Net decrease (638,810) $ (73,613)
============ ============
Class B Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 45,078,402 $784,209,065
Shares issued to shareholders in
reinvestment of dividends 65,453 987,681
------------ ------------
Total issued 45,143,855 785,196,746
Shares redeemed (11,980,794) (204,167,756)
------------ ------------
Net increase 33,163,061 $581,028,990
============ ============
<PAGE>
Class C Shares for the Six Months Dollar
Ended May 31, 1995 Shares Amount
Shares sold 1,030,633 $ 11,812,035
Shares issued to shareholders in
reinvestment of distributions 9,124 149,092
------------ ------------
Total issued 1,039,757 11,961,127
Shares redeemed (249,377) (2,717,045)
------------ ------------
Net increase 790,380 $ 9,244,082
============ ============
Class C Shares for the Period Dollar
October 21, 1994++ to November 30, 1994 Shares Amount
Shares sold 301,172 $ 5,323,437
Shares redeemed (7,065) (123,893)
------------ ------------
Net increase 294,107 $ 5,199,544
============ ============
[FN]
++Commencement of Operations.
Class D Shares for the Six Months Dollar
Ended May 31, 1995 Shares Amount
Shares sold 3,865,998 $ 44,031,225
Automatic conversion of shares 238,430 2,584,599
Shares issued to shareholders in
reinvestment of distributions 319,791 5,266,950
------------ ------------
Total issued 4,424,219 51,882,774
Shares redeemed (3,379,024) (39,161,951)
------------ ------------
Net increase 1,045,195 $ 12,720,823
============ ============
<PAGE>
Class D Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 12,305,213 $213,150,837
Shares issued to shareholders in
reinvestment of dividends 36,001 543,613
------------ ------------
Total issued 12,341,214 213,694,450
Shares redeemed (5,740,580) (97,978,228)
------------ ------------
Net increase 6,600,634 $115,716,222
============ ============
PORTFOLIO CHANGES
For the Quarter Ended May 31, 1995
Additions
Banco Frances del Rio de la Plata S.A.
Central Costanera S.A (Class B) (ADR)
Central Puerto S.A.
Companhia Cervejaria Brahma S.A. (Preferred) (Pro Rata)
Corimon C.A. S.A.C.A.
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (ADR)
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (Ordinary) 'B'
Mantex S.A.C.A.
Mantex S.A.C.A. (ADR)
Republic of Argentina, Floating Rate Notes, 7.312% due 3/31/2005
Deletions
<PAGE>
Antofagasta Holdings PLC
Aracruz Celulose S.A. (Preferred)
Bufete Industrial, S.A. de C.V. (ADR)
Cementos Diamante S.A. (ADR)
Cementos Lima S.A.
Companhia Brasil Petro Ipiranga S.A. (Preferred)
Compania Interamericana de Automoviles S.A.
Enersis S.A. (ADR)
Grupo Cydsa, S.A. de C.V.
Grupo Simec, S.A. de C.V. (ADR)
Laboratorio Chile S.A. (LABCHILE)
Maderas y Sinteticos S.A. (MASISA) (Ordinary)
Marcopolo S.A. Carrocerias E Onibus 'B' (Preferred)
Massalin Particulares S.A.
Multibras S.A. (Preferred)
Nacional de Drogos, S.A. de C.V. (Nadro) 'L'
Quilmes Industrial S.A.
Sociedad Quimica y Minera de Chile S.A. (ADR)
Telecom Argentina Stet--France Telecom S.A.
Telecom Argentina Stet--France Telecom S.A. (ADR)
Telecomunicacoes de Sao Paulo S.A.--TELESP (Preferred)
Telefonica de Argentina S.A. (ADR)
Tolmex, S.A. de C.V. 'B'
Transportadora de Gas del Sur S.A. (ADR)
Venaseta S.A.
Venaseta S.A. ('B' Shares)
<PAGE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of May 31, 1995 Net Assets
Telecomunicacoes Brasileiras S.A.--Telebras* 3.6%
Grupo Carso, S.A. de C.V.* 3.2
Centrais Eletricas Brasileiras S.A.--Eletrobras* 2.6
Telecomunicacoes de Sao Paulo S.A.--TELESP (Preferred) 2.2
Light--Servicios de Electricidade S.A. 2.2
Banco Bradesco S.A. (Preferred) 2.2
Telefonos de Mexico, S.A. de C.V. (ADR) 2.1
Buenos Aires Embotelladora S.A. (Baesa)* 2.1
Kimberly-Clark de Mexico, S.A. de C.V. 'A' 1.9
Companhia Cervejaria Brahma S.A. (Preferred) 1.9
[FN]
*Represents combined holdings in the Fund's portfolio.
