MERRILL LYNCH
LATIN AMERICA
FUND, INC.
FUND LOGO
Quarterly Report
February 28, 1995
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.
<PAGE>
Merrill Lynch
Latin America
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH LATIN AMERICA FUND, INC.
Equity Allocations
As Percentages* of
Net Assets as of
February 28, 1995
A map illustrating the following percentages:
MEXICO 13.5%
PANAMA 1.1%
VENEZUELA 3.4%
COLOMBIA 5.2%
ECUADOR 2.4%
PERU 3.7%
BRAZIL 40.1%
URUGUAY 0.1%
ARGENTINA 9.3%
CHILE 10.1%
[FN]
*Total may not equal 100%.
<PAGE>
DEAR SHAREHOLDER
During the quarter ended February
28, 1995, the Fund's Class A, Class B,
Class C and Class D Shares had total
returns of -38.9%, -39.1%, -39.0%
and -38.9%, respectively. The Morgan
Stanley Capital International Latin
America Free Index declined 35.2%
in the February quarter. Merrill Lynch
Latin America Fund, Inc.'s under-
performance is attributed to its 43.2%
total Mexico exposure at the end of
the November quarter (Mexican
equities were 40.6% of net assets and
Mexican government obligations were
2.6%). Although we had substantially
reduced the Fund's Mexico position
in previous months, the Fund still
had an overweighted exposure in
Mexico relative to the Index at the
end of the previous quarter. In US
dollar terms, Mexican equities
declined 54.4% from November 30,
1994 to February 28, 1995.
Investment Overview
Since the end of the November
quarter, we reduced the Fund's total
investments in Mexico from 43.2% to
19.9% of net assets, with the equity
portion declining from 40.6% to 13.5%.
These reductions resulted from stock
market declines, devaluation of the
peso, and selling portfolio shares. We
actively sold Mexican stocks even
before the start of the peso crisis on
December 20, 1994 because we
realized that nervousness about the
peso was offsetting the benefits of
what appeared then to be a strong
economic recovery.
<PAGE>
The Mexican peso collapsed as spec-
ulation against it combined with
lingering concerns about the assassi-
nations earlier in the year, the lack of
progress in negotiations with the
rebels in Chiapas, the gaping current
account deficit, and higher US
interest rates. Initially, we welcomed
the devaluation and cautiously
bought stocks as the market dropped.
However, we soon saw that the gov-
ernment's apparent indecisiveness
and lack of coordination, combined
with the necessary economic medi-
cine of high interest rates and reces-
sion, would continue to bring down
the Mexican stock market.
We selectively sold stocks throughout
the remainder of the February period,
focusing on companies that would be
vulnerable in an extremely difficult
economic environment. Although we
were net sellers of stock, we also
bought stock consisting of a very
small group of companies with excel-
lent managements and trading at low
valuations. These companies included
Kimberly-Clark de Mexico, S.A. de
C.V., the largest producer of paper
products in Mexico. Its product line
includes bathroom and facial tissue,
paper towels, napkins, diapers, femi-
nine care products and notebooks.
With its strong brands, dominance in
its markets and a healthy cash posi-
tion, we expect Kimberly-Clark to
survive and possibly gain from the
current crisis in Mexico.
At the same time, yields were rising
rapidly in Mexican government
treasury bills (Cetes) and the stock
markets throughout the region were
collapsing. We therefore purchased
Cetes, raising the Fund's exposure in
Mexican government obligations from
2.6% to 6.4%, as we were willing to
accept further peso weakness in light
of yields as high as 60%. We also
purchased stocks in markets else-
where in the region such as Brazil
and Colombia.
<PAGE>
Investment Outlook
Since the outbreak of the Mexican
crisis in December 1994, the Fund
has been positioned defensively.
Therefore, our portfolio strategy con-
sists of underweightings in equities in
the larger markets, particularly in
Mexico; overweightings in smaller
and less "discovered" markets, such as
Colombia; adding high-yielding Cetes;
selecting value-oriented stocks, par-
ticularly in Mexico; diversifying more
broadly across markets; and main-
taining cash at 5%--10% of net assets.
This strategy is grounded in our
belief that various short-term
considerations will continue to
dominate the Latin American invest-
ment environment. In our view, these
considerations will hinder a sustained
rally in these markets. First, a higher risk
premium is being attributed to emerging
markets as a whole, which means
that investors will only pay lower
valuations for emerging market
investments. Second, US interest
rates will remain high and in Europe
interest rates will rise. Therefore,
there will be less of the liquidity
that drove emerging markets to spec-
tacular heights in recent years. Third,
we believe that economic and political
difficulties yet to come in Mexico, and
their effects on the earnings, solvency
and viability of companies and the banking
system, are only partially being discounted
by the stock market.
Our long-term outlook is much more
positive. Other major Latin American
markets, such as Argentina and
Brazil, are emerging from this very
trying period with their free market
credentials intact. Argentina's Con-
vertibility Plan is being sustained,
with some modifications. Brazil's
currency is being allowed to weaken
without precipitating a collapse.
These countries and their securities
and currency markets were buffeted
although, compared to Mexico,
economic fundamentals are different
and their leadership is much stronger.
We believe that the conduct of their
leaders during this crisis will only
reinforce these countries' develop-
ment in the coming years.
<PAGE>
The driving forces behind the out-
performance of emerging markets are
still in place. The primary one is
superior growth, or the prospect of
turnarounds in the economies and in
corporate earnings. For example, real
gross domestic product growth in
Peru, Chile and Brazil should be
5%--6% per annum through next year
versus only 2.5% in the United States.
In addition, diversification benefits
still exist for the US investor, espe-
cially through the smaller and less
developed markets such as Colombia
and Ecuador. Finally, security market
development will continue, such as
the evolution of a local institutional
investor base in countries like Argen-
tina and Peru. These factors, the
fundamental reasons for investing in
emerging markets, will drive these
markets, albeit without the boost
from excess liquidity.
In Conclusion
Currently, we are defensively invest-
ing the Fund because we expect
short-term risk considerations to
determine the performance of Latin
American markets. We have a sanguine
outlook over the long term, and
expect these markets to once again
outperform markets in more devel-
oped countries. We believe that
countries such as Argentina and
Brazil will emerge from this crisis
stronger than they entered it. It is
still too early to say the same about
Mexico, which will endure a difficult
economic and political transition in
the coming months.
We appreciate your ongoing interest
in Merrill Lynch Latin America Fund,
Inc., and we look forward to reviewing
our outlook and strategy with you
again in our upcoming semi-annual
report to shareholders.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
March 28, 1995
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).
<PAGE>
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 and on page 6.
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 February 28,
1995 and for Class A and Class C Shares for the since inception
and the 3-month periods ended February 28, 1995. All data in this
table assume imposition of the actual total expenses incurred
by each class of shares during the relevant period.
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.
Average Annual
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -15.86% -19.10%
Inception (9/27/91) through 12/31/94 +12.04 +11.80
[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 12/31/94 -15.24% -19.69%
Inception (9/27/91) through 12/31/94 +12.88 +11.03
<PAGE>
[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 12/31/94 -22.63% -26.69%
[FN]
*Maximum sales charge is 5.25%. On 10/21/994, 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 12/31/94 -22.78% -23.53%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to
0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <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--2/28/95 13.55 10.18 -- -- -24.87
------ ------
Total $0.396 Total $0.491
Cumulative total return as of 2/28/95: +8.86%**
<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 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**
<C> <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--2/28/95 13.66 10.29 -- -- -24.67
------ ------
Total $0.396 Total $0.677
Cumulative total return as of 2/28/95: +11.85%**
<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 have been redesignated to Class D Shares.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
2/28/95 11/30/94 2/28/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.29 $17.37 $18.22 -42.17%(1) -39.34%(1)
Class B Shares 10.18 17.24 17.65 -40.93(1) -39.52(1)
Class C Shares 10.19 17.24 18.10 -42.34(1) -39.46(1)
Class D Shares 10.29 17.37 17.69 -40.43(1) -39.34(1)
Class A Shares--Total Return -41.76(2) -38.91(2)
Class B Shares--Total Return -40.51(2) -39.09(2)
Class C Shares--Total Return -41.93(2) -39.03(2)
Class D Shares--Total Return -40.02(2) -38.91(2)
<PAGE>
*Investment results shown do not reflect 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>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Automotive 1,032,382 Compania Interamericana de Automoviles
S.A. $ 14,421,013 $ 5,678,101 0.8%
290,000 Mirgor Sacifia S.A. (ADR) (2) 743,125 688,750 0.1
------------ ------------ ------
15,164,138 6,366,851 0.9
Banking 143,000 Banco del Sud S.A. 2,509,030 624,910 0.1
Beverages 1,746 Buenos Aires Embotelladora S.A. (BAESA) 1,759,894 2,287,260 0.3
91,000 Buenos Aires Embotelladora S.A. (BAESA)
(ADR) (2) 2,575,194 2,388,750 0.4
------------ ------------ ------
4,335,088 4,676,010 0.7
Food 51,014 Quilmes Industrial S.A. 695,385 872,339 0.1
Oil & Related 4,790,880 Astra Compania Argentina de Petroleo S.A. 11,024,264 5,605,330 0.8
1,968,621 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A. 11,151,188 6,299,587 0.9
519,700 Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR) (2) 13,162,011 9,874,300 1.5
------------ ------------ ------
35,337,463 21,779,217 3.2
Real Estate 2,106,241 Inversiones y Representaciones S.A. (IRSA) 5,637,874 4,065,045 0.6
200,000 Inversiones y Representaciones S.A. (IRSA)
(GDS) (3) 5,500,000 3,850,000 0.6
------------ ------------ ------
11,137,874 7,915,045 1.2
Retail 407,744 Grimoldi S.A. (Class B) 2,635,321 2,364,915 0.4
<PAGE>
Telecommunications 866,000 Telecom Argentina Stet--France Telecom S.A. 5,307,028 2,987,700 0.4
187,880 Telecom Argentina Stet--France Telecom S.A.
(ADR) (2) 12,410,628 6,716,710 1.0
1,050,000 Telefonica de Argentina S.A. 3,009,246 1,921,500 0.3
140,552 Telefonica de Argentina S.A. (ADR) (2) 2,132,935 2,617,781 0.4
------------ ------------ ------
22,859,837 14,243,691 2.1
Tobacco 49,980 Massalin Particulares S.A. 508,374 379,848 0.1
Utilities 9,500 Central Costanera S.A. (Class B) 228,000 230,375 0.0
414,750 Transportadora de Gas del Sur S.A.
(ADR) (2) 5,265,622 3,577,219 0.5
------------ ------------ ------
5,493,622 3,807,594 0.5
Total Long-Term Investments in Argentina 100,676,132 63,030,420 9.3
Brazil Appliances & 29,375,500 Brasmotor Group S.A. (Preferred) 8,255,333 8,131,028 1.2
Household Durables 1,895,000 Multibras S.A. (Preferred) 1,571,103 2,053,475 0.3
2,453,400,000 Refrigeracao Parana S.A. (Preferred) 8,912,960 5,461,632 0.8
------------ ------------ ------
18,739,396 15,646,135 2.3
Automotive 692,300 CAPCO Automotive Products Corp. S.A.
(ADR) (2) 8,282,268 5,884,550 0.9
1,062,000 Confab Industrial S.A. 1,909,375 1,250,883 0.2
------------ ------------ ------
10,191,643 7,135,433 1.1
Banking 1,886,253,276 Banco Bradesco S.A. (Preferred) 14,882,870 14,841,192 2.2
15,500,400 Banco Itau S.A. (Preferred) 2,460,710 4,199,166 0.6
366,829,908 Banco Nacional S.A. PN 9,913,526 8,641,458 1.3
17,237,154 Uniao de Bancos Brasileiros S.A.
(UNIBANCO) 397,694 472,854 0.1
------------ ------------ ------
27,654,800 28,154,670 4.2
Beverages 36,487,072 Companhia Cervejaria Brahma S.A.
(Preferred) 9,783,508 11,087,944 1.7
1,880,905 Companhia Cervejaria Brahma S.A.
(Warrants) (a) 48,935 2,683 0.0
------------ ------------ ------
9,832,443 11,090,627 1.7
Building & Construction 547,000 Companhia Cimento Portland Itau S.A. PN 134,354 186,843 0.0
Chemicals 12,300,000 Bombril S.A. (Preferred) 282,747 296,996 0.0
<PAGE>
Energy 307,900,000 Companhia Brasil Petro Ipiranga S.A.
(Preferred) 5,181,594 4,790,765 0.7
75,800 Companhia Energetica de Sao Paulo S.A.
(CESP) (ADR) (2) 919,821 947,500 0.1
21,576,060 Companhia Energetica de Sao Paulo S.A.
(CESP) (Preferred) (ADR) (2) 482,578 927,339 0.1
------------ ------------ ------
6,583,993 6,665,604 0.9
Food 130,400,000 Ceval Alimentos S.A. 1,982,542 1,820,071 0.3
12,275,410 Sadia Concordia S.A. Industria e Comercio
(Preferred) 10,627,282 13,012,802 1.9
------------ ------------ ------
12,609,824 14,832,873 2.2
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Brazil Forest Products & 364,851 Aracruz Celulose S.A. (Preferred) $ 647,358 $ 906,756 0.1%
(concluded)Paper 36,996 Bardella Industrial S.A. (Preferred) 9,456,868 9,543,138 1.4
519,000 Industrias Klabin de Papel e Celulose S.A.
(Preferred) 746,632 638,816 0.1
16,802,000 MelPaper S.A. (Preferred) 10,233,320 7,520,330 1.1
------------
21,084,178 18,609,040 2.7
Machinery 8,709,000 Iochpe-Maxion S.A. (Ordinary) 3,583,312 5,918,837 0.9
31,199,765 Iochpe-Maxion S.A. (Preferred) 12,724,664 17,088,211 2.5
9,273,000 Weg Exportadora S.A. (Preferred) 5,597,682 5,035,163 0.7
------------ ------------ ------
21,905,658 28,042,211 4.1
Metals & Steel 312,000 Companhia Siderurgica de Tubarao S.A. (CST) 9,862,065 9,204,000 1.4
Mining 88,191,200 Companhia Vale do Rio Doce S.A. 10,390,542 12,880,693 1.9
Oil & Related 55,520,000 Petroleo Brasileiro S.A. 7,056,177 5,657,285 0.8
Retail 4,188,934 Casa Anglo Brasileira S.A. 865,348 651,283 0.1
118,564,600 Lojas Americanas S.A. 2,125,943 2,513,737 0.4
13,896,600 Mesbla S.A. 3,127,325 1,473,138 0.2
------------ ------------ ------
6,118,616 4,638,158 0.7
<PAGE>
Steel 3,192,700 Acos Industria Villares S.A. 714,377 1,466,611 0.2
272,560,000 Companhia Metalurgica Barbara S.A. 267,267 311,406 0.1
191,318,000 Companhia Siderurgica Nacional S.A.--CSN 6,838,186 4,957,593 0.7
12,844,682,013 Usinas Siderurgicas de Minas Gerais--
Usiminas S.A. (Preferred) 7,655,752 18,457,615 2.7
------------ ------------ ------
15,475,582 25,193,225 3.7
Telecommunications 377,667 Telecomunicacoes Brasileiras S.A.--
Telebras (ADR) (2) 16,834,886 10,952,343 1.6
33,197,615 Telecomunicacoes Brasileiras S.A.--
Telebras (Ordinary) 1,178,023 797,681 0.1
297,434,366 Telecomunicacoes Brasileiras S.A.--
Telebras (Preferred) 13,191,757 8,793,407 1.3
60,723,102 Telecomunicacoes de Minejeros S.A.--
TELEMIG (Ordinary) 2,682,475 2,860,924 0.4
5,641,975 Telecomunicacoes de Minejeros S.A.--
TELEMIG (Preferred) 290,003 212,654 0.0
1,373,646 Telecomunicacoes de Sao Paulo S.A.--
TELESP (Preferred) 142,960 169,077 0.0
129,852,585 Telecomunicacoes de Sao Paulo S.A.--
TELESP 14,661,454 15,983,033 2.4
4,430,936 Telecomunicacoes Parana S.A.--TELEPAR
(Preferred) 754,996 1,069,948 0.2
------------ ------------ ------
49,736,554 40,839,067 6.0
Textiles 873,000 Brasperola Industria e Comercio S.A. 931,692 915,159 0.1
9,147,363 Companhia de Tecidos Norte de Minas S.A. 2,331,499 2,381,116 0.4
------------ ------------ ------
3,263,191 3,296,275 0.5
Transportation 165,000 Marcopolo S.A. Carrocerias E Onibus 'B'
(Preferred) 25,066 30,901 0.0
Utilities 25,000 Centrais Eletricas Brasileiras S.A.--
Electrobras (Preferred) 418,500 262,500 0.0
33,600,467 Centrais Eletricas Brasileiras S.A.--
Eletrobras 'B' (Preferred) 9,495,738 7,400,414 1.1
4,387,500 Centrais Eletricas da Santa Catarina S.A.
(CELESC) `B' (Preferred) 764,541 2,883,657 0.4
34,321,009 Companhia Energetica de Minas Gerais S.A.
(CEMIG) 1,625,256 2,769,127 0.4
30,000 Companhia Energetica de Minas Gerais S.A.
(CEMIG) (ADR) (2) 638,750 600,000 0.1
203,820,000 Companhia Paulista de Forca e Luz S.A. 11,896,752 10,203,004 1.5
50,122,000 Light--Servicios de Electricidade S.A. 18,156,844 16,235,041 2.4
------------ ------------ ------
42,996,381 40,353,743 5.9
Total Long-Term Investments in Brazil 273,943,210 272,753,779 40.1
<PAGE>
Chile Apparel 1,206,231 Bata Chile S.A. 340,424 205,791 0.0
Banking 202,900 Banco O'Higgins S.A. (ADR) (2) 3,101,779 3,449,300 0.5
Beverages 4,084,633 Vina Concha y Toro S.A. 1,694,797 1,383,778 0.2
394,000 Vina Concha y Toro S.A. (ADR) (2) 7,465,050 6,353,250 0.9
------------ ------------ ------
9,159,847 7,737,028 1.1
Building & 338,225 Empresas Pizarreno S.A. 644,310 634,739 0.1
Construction 426,700 Maderas y Sinteticos S.A. (MASISA)
(Foreign) (ADR) (2) 10,835,658 7,253,900 1.1
128,445 Maderas y Sinteticos S.A. (MASISA)
(Ordinary) 57,151 70,437 0.0
------------ ------------ ------
11,537,119 7,959,076 1.2
Chemicals 417,300 Sociedad Quimica y Minera de Chile S.A.
(ADR) (2) 13,363,054 13,197,113 1.9
Closed-End Funds 67,984 The Chile Fund, Inc. 1,993,436 2,974,300 0.4
Food & Household 138,650 Cristalerias de Chile S.A. (ADR) (2) 3,035,094 2,097,081 0.3
Products
Multi-Industry 170,000 Antofagasta Holdings PLC 933,338 747,181 0.1
509,056 Forestal Terranova S.A. 874,786 849,874 0.1
------------ ------------ ------
1,808,124 1,597,055 0.2
Pharmaceutical 2,838,804 Laboratorio Chile S.A. (LABCHILE) 2,115,737 2,594,569 0.4
Publishing 3,602,317 Editorial Lord Cochrane S.A. 2,061,625 1,316,957 0.2
Retail Sales 400,000 Santa Isabel S.A. 281,952 287,594 0.0
Steel 509,056 Compania de Acero del Pacifico S.A. de
Inv. (CAP) 1,641,453 2,853,592 0.4
509,056 Invercap S.A. 363,675 713,398 0.1
------------ ------------ ------
2,005,128 3,566,990 0.5
Telecommunications 307,225 Compania de Telefonos de Chile S.A.
(ADR) (2) 33,202,226 18,740,725 2.8
98,732 Empresa Nacional de Telecomunicaciones
S.A. (ENTEL) 677,828 685,806 0.1
------------ ------------ ------
33,880,054 19,426,531 2.9
<PAGE>
Utilities 3,750,010 Empresa Nacional de Electricidad S.A.--
ENDESA 1,476,057 2,810,451 0.4
14,200 Enersis S.A. (ADR) (2) 261,850 330,150 0.1
------------ ------------ ------
1,737,907 3,140,601 0.5
Total Long-Term Investments in Chile 86,421,280 69,549,986 10.1
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Held/ Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Colombia Banking 402,160 Banco de Bogota S.A. $ 1,449,888 $ 2,344,956 0.3%
1,035,700 Banco de Colombia S.A. 974,829 495,203 0.1
------------ ------------ ------
2,424,717 2,840,159 0.4
Beverages & Tobacco 587,154 La Compania Cervecera Bavaria S.A. 3,401,356 2,019,947 0.3
Building Products 90,000 Cementos Diamante S.A. 590,537 661,120 0.1
227,500 Cementos Diamante S.A. (ADR) (2) 3,785,350 5,118,750 0.8
250,137 Cementos Paz Del Rio S.A. 373,682 306,290 0.0
377,500 Cementos Paz Del Rio S.A. (ADR) (2) 8,384,750 6,228,750 0.9
------------ ------------ ------
13,134,319 12,314,910 1.8
Forest Products & 629,900 Papeles Nacionales S.A. 10,733,476 5,511,625 0.8
Paper
Merchandising 258,171 Carulla y CIA S.A. 3,218,690 3,341,922 0.5
367,850 Carulla y CIA S.A. (ADR) (2) 4,597,371 5,885,600 0.9
------------ ------------ ------
7,816,061 9,227,522 1.4
Retail 1,428,814 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) 4,043,019 2,832,634 0.4
35,000 Gran Cadena de Almacenes Colombianos
S.A. (ADR) (2) (CADENALCO) 611,250 595,000 0.1
------------ ------------ ------
4,654,269 3,427,634 0.5
Tobacco 69,200 La Compania Colombiano de Tabaco S.A.
(COLTABACO) 356,988 235,643 0.0
Total Long-Term Investments in Colombia 42,521,186 35,577,440 5.2
<PAGE>
Ecuador Insurance 47,400 La Cemento Nacional C.A. 10,760,328 16,590,000 2.4
Total Long-Term Investments in Ecuador 10,760,328 16,590,000 2.4
Mexico Broadcasting & 3,215,000 Grupo Fernandez Editores, S.A. de C.V. 4,709,988 1,436,720 0.2
Publishing
Building & 1,054,000 Apasco, S.A. de C.V. 'A' 3,851,706 2,808,297 0.4
Construction 67,500 Bufete Industrial, S.A. de C.V. (ADR) (2) 1,552,500 388,125 0.1
332,000 Corporacion Geo S.A. de C.V. (ADR) (2) 9,485,500 2,822,000 0.4
1,742,500 Tolmex, S.A. de C.V. 'B' 20,529,389 5,583,052 0.8
------------ ------------ ------
35,419,095 11,601,474 1.7
Building Materials 880,000 Cementos Mexicanos, S.A. de C.V.
Nom 'B' (Cemex) 7,139,240 2,220,034 0.3
Chemicals 779,800 Grupo Cydsa, S.A. de C.V. 2,828,658 1,262,408 0.2
Engineering & 378,000 Grupo Profesional Planeacion y Proyectos
Construction S.A. de C.V. (PYP) (Class B) 5,457,192 1,721,079 0.3
Financial Services 533,900 Banca Quadrum, S.A. de C.V. (ADR) (2) 9,916,217 1,935,387 0.3
380,000 Grupo Financiero (GBM) Atlantico, S.A.
de C.V. 2,270,875 351,164 0.1
220,000 Grupo Financiero (GBM) Atlantico, S.A.
de C.V. 'L' 4,742,022 385,000 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 0.4
------------ ------------ ------
25,429,114 5,051,551 0.9
Food & Household 3,253,846 Grupo Herdez, S.A. de C.V. 'A' 3,295,834 1,042,548 0.2
Products 5,012,461 Grupo Herdez, S.A. de C.V. 'B' 6,285,722 1,724,354 0.3
3,544,189 Grupo Industrial Maseca, S.A. de C.V. 'B2' 5,064,889 2,348,847 0.3
372,518 Sigma Alimentos, S.A. de C.V. 6,625,947 1,714,965 0.3
------------ ------------ ------
21,272,392 6,830,714 1.1
Health & Personal Care 984,250 Kimberly-Clark de Mexico, S.A. de C.V. 'A' 11,967,169 7,767,774 1.1
866,500 Nacional de Drogas, S.A. de C.V.
(Nadro) 'L' 3,788,443 2,264,882 0.3
------------ ------------ ------
15,755,612 10,032,656 1.4
Leisure 179,000 Grupo Posadas, S.A. de C.V. 'A' 149,627 75,464 0.0
395,300 Grupo Posadas, S.A. de C.V. (ADR) (2) 6,138,293 2,865,925 0.4
------------ ------------ ------
6,287,920 2,941,389 0.4
<PAGE>
Merchandising 134,500 Controladora de Farmacias, S.A.
de C.V. (COFAR) 199,610 68,044 0.0
616,000 Farmacias Benavides, S.A. de C.V. 2,767,171 610,806 0.1
1,418,000 Grupo Empresarial Fenix, S.A. de C.V.
Elektra 'L' Shares 13,024,645 3,562,934 0.5
------------ ------------ ------
15,991,426 4,241,784 0.6
Metals & Steel 284,600 Grupo Simec, S.A. de C.V. (ADR) (2) 7,794,957 1,138,400 0.2
1,830,000 Grupo Simec, S.A. de C.V. (Ordinary) 1,645,949 493,761 0.1
283,500 Hylsamex, S.A. de C.V. 6,552,942 2,976,750 0.4
------------ ------------ ------
15,993,848 4,608,911 0.7
Multi-Industry 607,400 Desc Sociedad de Fomento Industrial, S.A.
de C.V. (Class B) 5,072,389 1,116,469 0.2
1,167,000 Desc Sociedad de Fomento Industrial, S.A.
de C.V. 8,735,843 2,294,641 0.3
205,000 Grupo Carso, S.A. de C.V. 'A' 2,897,978 1,486,250 0.2
4,045,500 Grupo Carso, S.A. de C.V. (ADR) (2) 38,386,059 15,008,600 2.2
------------ ------------ ------
55,092,269 19,905,960 2.9
Retail 5,571,000 Cifra, S.A. de C.V. 'C' 11,683,065 4,922,772 0.7
2,090,000 El Puerto de Liverpool, S.A. de C.V.
(Non-Voting) (Series C1) 2,844,592 1,304,047 0.2
988,500 Sears Roebuck de Mexico, S.A. de C.V. 'B' 6,010,030 2,667,116 0.4
547,500 Sears Roebuck de Mexico, S.A. de C.V. 'B'
(ADR) (2) 14,403,127 2,326,875 0.3
------------ ------------ ------
34,940,814 11,220,810 1.6
Telecommunications 271,400 Telefonos de Mexico, S.A. de C.V.
(ADR) (2) 19,586,648 7,497,425 1.1
Transportation 107,000 Transportacion Maritima Mexicana, S.A. de
C.V. 'L' (TMM) 1,192,663 454,705 0.1
Total Long-Term Investments in Mexico 267,096,879 91,027,620 13.5
Panama Banking 80,000 Banco Latinoamericano de Exportaciones S.A.
('BLADEX') 'E' 1,992,245 2,060,000 0.3
Beverages & Tobacco 207,860 Panamerican Beverages Inc. (Class A) 6,397,335 5,066,587 0.8
Total Long-Term Investments in Panama 8,389,580 7,126,587 1.1
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Held/ Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Peru Banking 2,441,382 Banco de Credito de Peru S.A. $ 2,685,608 $ 4,422,002 0.7%
4,514,382 Banco Wiese Limitado S.A. 8,225,925 8,439,229 1.2
------------ ------------ ------
10,911,533 12,861,231 1.9
Beverages 61,231 Cerveceria Backus and Johnston S.A. 111,704 112,549 0.0
Building & 610,744 Cementos Lima S.A. 607,035 999,697 0.2
Construction
Food 2,918,493 La Fabril S.A. 5,816,130 2,584,354 0.4
Mining 2,211,480 Southern Peru Copper Corp. S.A. 7,823,850 7,961,724 1.2
Total Long-Term Investments in Peru 25,270,252 24,519,555 3.7
Uruguay Banking 59,500 Banco Commercial S.A. 1,145,375 595,000 0.1
Total Long-Term Investments in Uruguay 1,145,375 595,000 0.1
Venezuela Building & 937,173 Corporacion Ceramica Carabobo S.A. 'B' 2,294,951 967,183 0.1
Construction 941,015 Corporacion Ceramica Carabobo S.A. C.A. 2,606,928 998,895 0.2
------------ ------------ ------
4,901,879 1,966,078 0.3
Building Materials 445,899 Venezolana de Cementos S.A.C.A. (Vencemos) 616,436 736,284 0.1
Food & Household 10,052,924 Mavesa S.A. 2,587,935 2,371,392 0.4
Products 366,666 Mavesa S.A. (ADR) (2) 4,010,625 1,168,748 0.2
380,000 Mavesa S.A. (ADR) (2) 3,519,375 1,282,500 0.2
------------ ------------ ------
10,117,935 4,822,640 0.8
Foreign Government US$ 5,750,000 Republic of Venezuela, Floating Rate
Obligations Notes, 5.75% due 12/18/2007 (1) 4,300,625 2,565,937 0.4
Multi-Industry 1,837,882 Venaseta S.A. 401,601 184,254 0.0
3,124,398 Venaseta S.A. ('B' Shares) 487,777 298,492 0.0
------------ ------------ ------
889,378 482,746 0.0
<PAGE>
Steel 108,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.-S.A.C.A. 35,345 34,616 0.0
216,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.-S.A.C.A. (ADR) (2) 1,231,384 297,000 0.0
169,940 Venezolana de Prerreducidos Caroni
Venprecar C.A. (GDS) (3) 1,239,230 934,670 0.1
------------ ------------ ------
2,505,959 1,266,286 0.1
Utilities 11,512,498 C.A. La Electricidad de Caracas
S.A.I.C.A.-S.A.C.A. 19,686,959 11,813,261 1.7
Total Long-Term Investments in Venezuela 43,019,171 23,653,232 3.4
Total Long-Term Investments in
Latin America 859,243,393 604,423,619 88.9
Face Amount Short-Term Investments
Mexico Foreign Government US$ 10,000,000 Bonos de la Tesoreria de la Federacion,
Obligations* 7.461% due 8/10/1995 9,664,235 9,249,500 1.4
MXN 6,337,050 Mexican Cetes (Certificados de la Tesoreria
de la Federacion):
39.542% due 2/28/1995 1,009,132 980,159 0.1
36,559,050 30.417% due 3/09/1995 6,864,884 6,094,203 0.9
23,902,980 59.718% due 3/23/1995 3,912,578 3,897,435 0.6
36,551,400 14.103% due 4/12/1995 10,437,483 5,842,677 0.9
11,697,830 30.417% due 4/20/1995 2,060,902 1,827,860 0.3
67,290,030 45.321% due 8/24/1995 9,806,855 9,190,252 1.3
38,347,332 Nafinsa, 27.15% due 3/30/1995 7,059,226 6,182,133 0.9
------------ ------------ ------
50,815,295 43,264,219 6.4
Total Short-Term Investments in Mexico 50,815,295 43,264,219 6.4
United Commercial Paper* US$ 21,053,000 General Electric Capital Corp.,
States 6% due 3/01/1995 21,053,000 21,053,000 3.1
Total Short-Term Investments in the
United States 21,053,000 21,053,000 3.1
Total Short-Term Investments 71,868,295 64,317,219 9.5
Total Investments $931,111,688 668,740,838 98.4
============
Other Assets Less Liabilities 10,654,300 1.6
------------ ------
Net Assets $679,395,138 100.0%
============
<PAGE>
Net Asset Value: Class A--Based on net assets of $12,386,842 and 1,203,261 shares
outstanding $ 10.29
============
Class B--Based on net assets of $543,133,791 and 53,329,918 shares
outstanding $ 10.18
============
Class C--Based on net assets of $6,886,893 and 676,168 shares
outstanding $ 10.19
============
Class D--Based on net assets of $116,987,612 and 11,373,405 shares
outstanding $ 10.29
============
<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 February 28, 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 predetermined number of shares
of Common Stock. The purchase price and number of shares are subject
to adjustment under certain conditions until the expiration date.
</TABLE>
PORTFOLIO CHANGES
For the Quarter Ended February 28, 1995
Additions
Bombril S.A. (Preferred)
Centrais Eletricas Brasileiras S.A.--Eletrobras (Preferred)
Companhia Energetica de Sao Paulo S.A. (CESP) (ADR)
Gran Cadena de Almacenes Colombianos S.A. (ADR)
Inversiones y Representaciones S.A. (IRSA) (GDS)
Mirgor Sacifia (ADR)
Telecomunicacoes de Sao Paulo S.A.--TELESP
<PAGE>
Deletions
Banco de Galicia y Buenos Aires S.A. (ADR)
Banco de Galicia y Buenos Aires S.A. (Preferred) (ADR)
Banco Frances del Rio de la Plata S.A.
Bonos de la Tesoreria de la Federacion, 8.135% due 8/10/1995
Cementos Mexicanos, S.A. de C.V. (Class B) (Cemex) (ADR)
Controladora Comercial Mexicana, S.A. de C.V. (COMERCI)
Embotelladora Andina S.A.
Empresas Ica Sociedad, S.A. de C.V.
Empresas Telex--Chile S.A.
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (ADR)
Grupo Embotellador de Mexico, S.A. de C.V. (GGEMEX) (ADR)
Grupo Embotellador de Mexico, S.A. de C.V. (GGEMEX) (Ordinary)
Grupo Financiero Asemex Banpais, S.A. de C.V.
Grupo Financiero Banamex--Accival, S.A. de C.V.
Grupo Financiero Bancomer, S.A. de C.V. (ADR)
Grupo Financiero Probursa, S.A. de C.V. 'C'
Grupo Gigante, S.A. de C.V.
Grupo Mexicano de Desarrollo, S.A. de C.V. (Class B)
Grupo Mexicano de Desarrollo, S.A. de C.V. (Class L) (ADR)
Grupo Sidek, S.A. de C.V. 'B'
Grupo Situr, S.A. de C.V.
Grupo Situr, S.A. de C.V. (ADR)
Grupo Tribasa, S.A. de C.V. (ADR)
Tubos de Acero de Mexico, S.A. de C.V. (Tamsa)
Vitro, S.A. de C.V.
Vitro, S.A. de C.V. (ADR)
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of February 28, 1995 Net Assets
Compania de Telefonos de Chile S.A. (ADR) 2.8%
Usinas Siderurgicas de Minas
Gerais-Usiminas S.A. (Preferred) 2.7
Iochpe-Maxion S.A. (Preferred) 2.5
La Cemento Nacional C.A. 2.4
Light-Servicios de Electricidade S.A. 2.4
Telecomunicacoes de Sao Paulo S.A.-TELESP 2.4
Grupo Carso, S.A. de C.V. (ADR) 2.2
Banco Bradesco S.A. (Preferred) 2.2
Sociedad Quimica y Minera de Chile S.A. (ADR) 1.9
Sadia Concordia S.A. Industria e Comercio (Preferred) 1.9
<PAGE>
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
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
