MERRILL LYNCH
LATIN AMERICA
FUND, INC.
FUND LOGO
Quarterly Report
February 29, 1996
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, NY 11245
<PAGE>
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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 available
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
investment 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.
Statements and other information herein are as dated and are
subject to change.
Merrill Lynch
Latin America
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation*
As a Percentage of
Net Assets as of
February 29, 1996
A map illustration the following percentages:
Mexico 22.1%
Panama 4.1%
Venezuela 2.1%
Colombia 1.1%
Peru 4.9%
Brazil 39.8%
Uruguay 0.1%
Argentina 10.7%
Chile 8.8%
[FN]
*Total may not equal 100% and does not include
short-term securities.
DEAR SHAREHOLDER
During the three-month period ended February 29, 1996, investment
results for the major Latin American stock markets were positive.
Total returns for Merrill Lynch Latin America Fund, Inc.'s Class A,
Class B, Class C and Class D Shares were +6.10%, +5.82%, +5.72% and
+6.02%, respectively. Over the same period, the unmanaged Morgan
Stanley Capital International Latin America Free Index rose 7.06%.
The Fund's performance gained from its stock investments in Mexico,
Chile and Peru. However, other factors restricted the Fund's
performance, including its overweighting in Venezuela, whose foreign
exchange rate devalued steeply against the US dollar. In addition,
the Fund's underweighting in Argentina and its cash position of over
6% of net assets also adversely affected performance. (Investment
results shown do not reflect sales charges, and would be lower if
sales charges were included. Complete performance information,
including average annual total returns, can be found on pages 3--5
of this report to shareholders.)
<PAGE>
Investment Overview
During the three months ended February 29, 1996, investor sentiment
became more optimistic in contrast to most of 1995. While all
political and economic events were not positive, and some corporate
earnings were disappointing, there is an overall feeling that 1996
will be a year of improved stability and even growth. Economists are
projecting modest positive gross domestic product growth of 2.3%--
2.5% for Mexico and Argentina, 3.5% for Brazil, and a more robust 6%
for countries such as Chile and Peru.
Investors' views on international interest rates played an important
role in Latin American markets' performance during the February
quarter. As international interest rates rose, they negatively
affected many Latin American markets, especially Argentina and
Mexico. Whenever there was an expectation for monetary easing and
lower US interest rates, these markets responded very positively.
There was much optimism in Brazil as investors anticipated the
congressional passage of reforms which would reduce the country's
fiscal deficit. Toward this end, the possible privatizations of
Light-Servicios de Electricidade S.A. and Companhia Vale do Rio Doce
S.A. (CVRD) were also viewed very positively. Light-Servicios is the
sole distributor of electricity in the metropolitan Rio de Janeiro
area, and CVRD, the state-owned mining company, is one of the
world's largest producers of iron ore. Investor enthusiasm was
heightened by good news from the corporate sector. Petroleo
Brasileiro S.A. (Petrobras), the state-owned national oil company,
announced new petroleum discoveries that raised its reserves. Banks
such as Banco Bradesco S.A. and Banco Itau S.A. reported good
earnings results. Later in the February quarter, investor enthusiasm
was dampened by doubts over the central bank's supervision of the
banking sector.
During the quarter the Fund's performance was negatively impacted by
its holdings in Banco Nacional S.A. PN (Brazil). In December, the
Fund wrote down its holdings after intervention of Banco Nacional by
the Central Bank of Brazil and the sale of Nacional's assets to
another institution. Recent public statements indicate that the
controversy surrounding Banco Nacional still continues in Brazil.
Contrasting events in Mexico during the quarter ended February 29,
1996 exemplified the country's efforts to emerge from the economic,
financial and political crises that started in December 1994. We
view these developments as signs of improvement. Progress on the
economic front was achieved with the decline in domestic interest
rates, and the relative stability of the peso exchange rate. Mexico
regained access to international financial markets with three moves:
the successful launch of a long-term maturity global bond issue for
$1 billion; the issuance of an Inter-American Development Bank
facility for $1.5 billion; and the announcement that Mexico would
repay $1.3 billion owed to the US Treasury. However, reported bank
earnings, despite government support programs for the sector, were
weak. Not surprisingly, the threat of corporate defaults loomed.
<PAGE>
In Argentina, the market's performance was closely linked with the
outlook for US interest rates. The stock market was also sensitive
to earnings results, which in the case of several high-profile
companies, were poor. However, we are encouraged by growing evidence
that Argentina has turned the corner regarding its recession and
should record modest economic growth in 1996, after declining
approximately 4% in 1995.
In Conclusion
We remind investors that the near-term outlook for several of our
markets remains fragile and hence, share prices may be volatile.
However, we believe that the improving trend in the fundamentals of
the countries and companies we invest in warrant an optimistic long-
term view.
We appreciate your ongoing interest in Merrill Lynch Latin America
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you in upcoming quarters.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
March 22, 1996
PERFORMANCE DATA
<PAGE>
About Fund
Performance
Investors are 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 simultaneously 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 approximately 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 distribution fee).
None of the past results shown should 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. 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.
<PAGE>
PERFORMANCE DATA (concluded)
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/95 -23.85% -27.85%
Inception (10/21/94) through 12/31/95 -35.78 -38.62
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/95 -24.65% -27.66%
Inception (9/27/91) through 12/31/95 + 2.08 + 2.08
[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 % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/95 -24.65% -25.40%
Inception (10/21/94) through 12/31/95 -36.45 -36.45
[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>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/95 -24.01% -28.00%
Inception (9/27/91) through 12/31/95 + 2.87 + 1.58
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $18.22 $13.67 $0.396 $0.118 -22.63%
1995 13.67 10.41 -- -- -23.85
1/1/96--2/29/96 10.41 11.14 -- -- +7.01
------ ------
Total $0.396 Total $0.118
Cumulative total return as of 2/29/96: -36.95%**
<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.
</TABLE>
<PAGE>
<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
1995 13.55 10.21 -- -- -24.65
1/1/96--2/29/96 10.21 10.91 -- -- + 6.86
------ ------
Total $0.396 Total $0.491
Cumulative total return as of 2/29/96: +16.67%**
<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 C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $18.10 $13.55 $0.396 $0.118 -22.78%
1995 13.55 10.21 -- -- -24.65
1/1/96--2/29/96 10.21 10.90 -- -- + 6.76
------ ------
Total $0.396 Total $0.118
Cumulative total return as of 2/29/96: -37.88%**
<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>
<PAGE>
<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
1995 13.66 10.38 -- -- -24.01
1/1/96--2/29/96 10.38 11.10 -- -- + 6.94
------ ------
Total $0.396 Total $0.677
Cumulative total return as of 2/29/96: +20.66%**
<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>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
2/29/96 11/30/95 2/28/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $11.14 $10.50 $10.29 +8.26% +6.10%
Class B Shares 10.91 10.31 10.18 +7.17 +5.82
Class C Shares 10.90 10.31 10.19 +6.97 +5.72
Class D Shares 11.10 10.47 10.29 +7.87 +6.02
Class A Shares-Total Return +8.26 +6.10
Class B Shares-Total Return +7.17 +5.82
Class C Shares-Total Return +6.97 +5.72
Class D Shares-Total Return +7.87 +6.02
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
</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 290,000 Mirgor S.A. C.I.F.I.A. (ADR)(2) $ 743,125 $ 797,500 0.1%
Banking 69,620 Banco de Galicia y Buenos Aires
S.A. (ADR)(2) 1,010,375 1,575,153 0.3
106,375 Banco Frances del Rio de la Plata S.A. 1,891,189 2,765,750 0.4
------------ ------------ ------
2,901,564 4,340,903 0.7
Beverages 502 Buenos Aires Embotelladora S.A. (BAESA) 480,104 419,338 0.1
326,100 Buenos Aires Embotelladora S.A. (BAESA)
(ADR)(2) 7,991,390 5,421,413 0.8
------------ ------------ ------
8,471,494 5,840,751 0.9
Oil & Related 2,330,533 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A. 9,347,518 11,610,699 1.7
389,500 Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR)(2) 7,809,244 7,546,563 1.1
------------ ------------ ------
17,156,762 19,157,262 2.8
Real Estate 1,166,915 Inversiones y Representaciones
S.A. (IRSA) 3,126,377 3,151,931 0.5
111,361 Inversiones y Representaciones
S.A. (IRSA) (GDR)(3) 2,974,708 3,048,507 0.5
------------ ------------ ------
6,101,085 6,200,438 1.0
Retail 358,469 Grimoldi S.A. (Class B) 2,189,332 1,255,144 0.2
Telecommunications 254,800 Telecom Argentina Stet--France
Telecom S.A. (ADR)(2) 12,948,581 11,020,100 1.6
830,500 Telefonica de Argentina S.A. (ADR) (2) 23,498,552 21,696,813 3.2
525,000 Telefonica de Argentina S.A. (Class B) 1,497,352 1,355,042 0.2
------------ ------------ ------
37,944,485 34,071,955 5.0
Utilities 9,500 Central Costanera S.A. (Class B)
(ADR)(2) 228,000 294,500 0.0
Total Long-Term Investments
in Argentina 75,735,847 71,958,453 10.7
<PAGE>
Brazil Appliances & 31,554,000 Brasmotor Group S.A. (Preferred) 9,589,816 8,301,154 1.2
Household 1,775,000,000 Refrigeracao Parana S.A. (Preferred) 6,039,791 4,687,658 0.7
Durables ------------ ------------ ------
15,629,607 12,988,812 1.9
Automotive 459,000 CAPCO Automotive Products Corp.
S.A. (ADR)(2) 5,351,888 3,040,875 0.5
Banking 2,293,534,640 Banco Bradesco S.A. (Preferred) 19,445,548 25,975,532 3.9
29,140,400 Banco Itau S.A. (Preferred) 5,867,813 10,862,902 1.6
364,129,908 Banco Nacional S.A. PN 9,903,203 0 0.0
------------ ------------ ------
35,216,564 36,838,434 5.5
Beverages 61,262,159 Companhia Cervejaria Brahma S.A.
(Preferred) 19,242,994 27,690,869 4.1
3,603,656 Companhia Cervejaria Brahma S.A.
(Rights)(a) 0 0 0.0
------------ ------------ ------
19,242,994 27,690,869 4.1
Food 4,142,410 Sadia Concordia S.A. Industria e
Comercio (Preferred) 4,118,570 2,987,416 0.4
Forest Products 32,733 Bardella Industrial S.A. (Preferred) 8,713,171 2,593,371 0.4
& Paper
Machinery 8,709,000 Iochpe-Maxion S.A. (Ordinary) 3,583,312 884,611 0.1
11,759,765 Iochpe-Maxion S.A. (Preferred) 4,996,055 1,791,737 0.3
9,273,000 Weg Exportadora S.A. (Preferred) 5,597,682 4,652,983 0.7
------------ ------------ ------
14,177,049 7,329,331 1.1
Metals & Steel 405,509,000 Companhia Siderurgica Nacional
S.A.--CSN 11,716,998 10,873,984 1.6
39,890,000 Companhia Vale do Rio Doce S.A.
(Preferred) 7,195,289 6,199,259 0.9
12,606,741,007 Usinas Siderurgicas de Minas
Gerais--Usiminas S.A. (Preferred) 13,224,047 13,701,586 2.0
------------ ------------ ------
32,136,334 30,774,829 4.5
Oil & Related 55,520,000 Petroleo Brasileiro S.A. (Preferred) 7,056,177 6,175,155 0.9
Retail 207,264,600 Lojas Americanas S.A. 4,476,775 5,052,667 0.7
<PAGE>
Telecommunications 598,867 Telecomunicacoes Brasileiras S.A.--
Telebras (ADR)(2) 28,703,173 31,440,518 4.7
22,217,454 Telecomunicacoes Brasileiras S.A.--
Telebras (Ordinary) 920,306 936,541 0.1
208,326,328 Telecomunicacoes Brasileiras S.A.--
Telebras (Preferred) 9,370,488 10,876,560 1.6
105,160,000 Telecomunicacoes de Minejeros S.A.--
TELEMIG (Preferred) 7,035,638 6,996,425 1.0
76,193,965 Telecomunicacoes de Sao Paulo S.A.--
TELESP (Preferred) 9,902,003 12,615,151 1.9
------------ ------------ ------
55,931,608 62,865,195 9.3
Textiles 50,387,363 Companhia de Tecidos Norte de
Minas S.A. 16,566,587 19,959,947 3.0
Utilities 62,800,467 Centrais Eletricas Brasileiras S.A.--
Eletrobras 'B' (Preferred) 19,430,062 17,478,241 2.6
478,000 Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) (ADR)(2) 7,325,140 6,572,500 1.0
4,387,500 Centrais Eletricas da Santa Catarina
S.A. (CELESC) 'B' (Preferred) 764,541 2,763,078 0.4
76,000 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR)(2) 1,628,295 1,919,000 0.3
28,470 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR)(2) 638,750 718,868 0.1
173,020,000 Companhia Paulista de Forca e Luz S.A. 10,106,226 9,780,155 1.4
27,707,000 Light Participacoes S.A. 2,522,244 3,095,473 0.5
27,707,000 Light-Servicios de Eletricidad S.A. 10,670,483 8,381,051 1.2
------------ ------------ ------
53,085,741 50,708,366 7.5
Total Long-Term Investments in Brazil 271,703,065 269,005,267 39.8
Chile Automotive 302,400 Chilgener Inc. S.A. 6,755,902 7,295,400 1.1
Banking 202,900 Banco O'Higgins S.A. (ADR)(2) 3,101,779 4,920,325 0.7
Beverages 4,084,632 Vina Concha y Toro S.A. 1,694,797 1,363,196 0.2
148,700 Vina Concha y Toro S.A. (ADR)(2) 2,826,275 2,416,375 0.4
------------ ------------ ------
4,521,072 3,779,571 0.6
Closed-End Funds 418,468 The Chile Fund, Inc. 10,695,683 10,147,849 1.5
Food & Household 138,650 Cristalerias de Chile S.A. (ADR)(2) 3,035,094 3,119,625 0.5
Products
Publishing 4,916,262 Editorial Lord Cochrane S.A. 2,645,715 2,147,881 0.3
</TABLE>
<PAGE>
<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>
Chile Retail Sales 528,846 Santa Isabel S.A. $ 430,047 $ 847,180 0.1%
(concluded)
Telecommunications 123,169 Compania de Telecomunicaciones
de Chile S.A. (ADR)(2) 11,155,801 10,192,235 1.5
98,732 Empresa Nacional de Telecomunicaciones
S.A. (ENTEL) 677,828 960,960 0.1
------------ ------------ ------
11,833,629 11,153,195 1.6
Utilities 35,000 Distribuidora Chilectra Metropolitan
S.A. (ADR)(2) 1,473,750 1,820,000 0.3
3,724,465 Empresa Nacional de Electricidad S.A.
(ENDESA) 2,032,168 2,440,790 0.4
2,057,425 Enersis S.A. 930,264 1,132,333 0.1
380,200 Enersis S.A. (ADR)(2) 9,341,910 10,788,175 1.6
------------ ------------ ------
13,778,092 16,181,298 2.4
Total Long-Term Investments in Chile 56,797,013 59,592,324 8.8
Colombia Banking 253,182 Banco de Bogota S.A. 903,609 1,356,941 0.2
Beverages & Tobacco 587,154 La Compania Cervecera Bavaria S.A. 3,401,356 1,947,396 0.3
Building Products 90,000 Cementos Diamante S.A 590,537 449,913 0.1
Forest Products 209,325 Papeles Nacionales S.A. (ADR)(2) 3,163,126 1,412,944 0.2
& Paper
Retail 1,428,814 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) 4,043,019 1,711,500 0.2
35,000 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) (ADR)(2) 611,250 533,750 0.1
------------ ------------ ------
4,654,269 2,245,250 0.3
Total Long-Term Investments in Colombia 12,712,897 7,412,444 1.1
<PAGE>
Mexico Banking 975,000 Grupo Financiero Banamex--Accival,
S.A. de C.V. (Banacci) 2,126,670 1,703,213 0.3
9,584,000 Grupo Financiero Bancomer, S.A. de
C.V. 'B' (Ordinary) 2,626,470 3,582,216 0.5
------------ ------------ ------
4,753,140 5,285,429 0.8
Beverages & 4,167,000 Fomento Economico Mexicano, S.A.
Tobacco de C.V. (Femsa) (ADR)(2) 9,555,958 10,209,150 1.5
4,607,000 Fomento Economico Mexicano, S.A.
de C.V. (Femsa) (Ordinary) 'B' 11,407,302 11,540,157 1.7
------------ ------------ ------
20,963,260 21,749,307 3.2
Broadcasting & 3,215,000 Grupo Fernandez Editores, S.A.
Publishing de C.V. 4,709,988 801,115 0.1
Building & 3,992,100 Apasco, S.A. de C.V. 'A' 13,724,655 17,277,285 2.6
Construction 332,000 Corporacion Geo, S.A. de C.V.
'B' (ADR)(2) 9,485,500 4,332,600 0.6
------------ ------------ ------
23,210,155 21,609,885 3.2
Engineering & 378,000 Grupo Profesional Planeacion y
Construction Proyectos, S.A. de C.V. (PYP)
(Class B) 5,457,192 2,280,393 0.4
Financial Services 651,900 Banca Quadrum, S.A. de C.V. (ADR)(2) 10,545,780 3,503,963 0.5
Food & Household 312,518 Sigma Alimentos, S.A. de C.V. 5,569,354 2,106,679 0.3
Products
Health & 2,146,450 Kimberly-Clark de Mexico, S.A.
Personal Care de C.V. 'A' 23,096,579 35,891,459 5.3
Leisure & Tourism 179,000 Grupo Posadas, S.A. de C.V. 'A' 149,627 72,774 0.0
395,300 Grupo Posadas, S.A. de C.V. (ADR)(2) 6,138,293 3,112,988 0.5
------------ ------------ ------
6,287,920 3,185,762 0.5
Multi-Industry 3,161,625 Grupo Carso, S.A. de C.V. 'A' 33,164,587 19,944,152 3.0
117,750 Grupo Carso, S.A. de C.V. (ADR)(2) 1,269,344 1,442,438 0.2
------------ ------------ ------
34,433,931 21,386,590 3.2
Retail 12,066,750 Cifra, S.A. de C.V. 'C' 17,413,104 13,831,265 2.0
988,500 Sears Roebuck de Mexico, S.A.
de C.V. 'B' 6,010,030 2,476,111 0.4
547,500 Sears Roebuck de Mexico, S.A.
de C.V. 'B' (ADR)(2) 14,403,127 2,669,062 0.4
------------ ------------ ------
37,826,261 18,976,438 2.8
<PAGE>
Telecommunications 359,700 Telefonos de Mexico, S.A. de C.V.
(ADR)(2) 14,075,357 10,970,850 1.6
Transportation-- 61,850 Transportacion Maritima Mexicana,
Shipping S.A. de C.V. 492,862 502,531 0.1
107,000 Transportacion Maritima Mexicana,
S.A. de C.V. 'L' (ADR)(2) 1,192,663 857,403 0.1
------------ ------------ ------
1,685,525 1,359,934 0.2
Total Long-Term Investments in Mexico 192,614,442 149,107,804 22.1
Panama Banking 80,000 Banco Latinoamericano de Exportaciones
S.A. ('BLADEX') 'E' 1,992,245 3,990,000 0.6
Beverages & Tobacco 580,260 Panamerican Beverages Inc. (Class A) 16,384,971 23,500,530 3.5
Total Long-Term Investments in Panama 18,377,216 27,490,530 4.1
Peru Banking 1,117,825 Banco Wiese Limitado S.A. 2,393,518 2,154,043 0.3
45,070 Credicorp Ltd. S.A. 596,952 822,528 0.1
------------ ------------ ------
2,990,470 2,976,571 0.4
Building Materials 2,258,707 Cementos Norte Pacasmayo S.A. 4,983,462 4,457,974 0.7
Food 2,885,636 Companhia Industrial Peru Pacifico S.A. 5,303,100 4,299,059 0.6
Metals & Mining 481,485 Southern Peru Copper Corp. S.A. 6,911,669 8,004,688 1.2
Miscellaneous 376,305 Minsur Sociedad Limitada S.A.
Materials & (T Shares) 2,555,655 3,034,718 0.5
Commodities
Utilities-- 1,309,036 CPT Telefonica Del Peru S.A.
Telecommunications (A Shares) 2,476,689 2,739,197 0.4
3,526,436 CPT Telefonica Del Peru S.A.
(B Shares) 6,834,961 7,468,979 1.1
------------ ------------ ------
9,311,650 10,208,176 1.5
Total Long-Term Investments in Peru 32,056,006 32,981,186 4.9
Uruguay Banking 64,500 Banco Commercial S.A. (ADR)(2) 1,211,625 1,007,812 0.1
Total Long-Term Investments in Uruguay 1,211,625 1,007,812 0.1
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Venezuela Building & 1,124,607 Corporacion Ceramica Carabobo
Construction S.A. 'B' $ 2,294,951 $ 701,497 0.1%
1,129,218 Corporacion Ceramica Carabobo
S.A.C.A. 2,606,929 752,128 0.1
------------ ------------ ------
4,901,880 1,453,625 0.2
Building Materials 577,792 Venezolana de Cementos S.A.C.A.
(Vencemos) 800,775 845,436 0.1
Food & Household 10,304,247 Mavesa S.A. 2,587,936 1,677,684 0.3
Products 263,832 Mavesa S.A. (ADR)(2) 2,812,086 989,370 0.1
25,500 Mavesa S.A. (ADR)(2) 144,695 95,625 0.0
------------ ------------ ------
5,544,717 2,762,679 0.4
Steel 681,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.--S.A.C.A. 348,589 200,154 0.0
169,940 Venezolana de Prerreducidos Caroni
Venprecar C.A. (GDS)(1) 1,239,230 616,033 0.1
1,587,819 816,187 0.1
------------ ------------ ------
Textile 2,131,381 Mantex S.A.C.A. 246,278 154,356 0.0
Utilities 12,994,393 C.A. La Electricidad de Caracas
S.A.I.C.A.--S.A.C.A. 15,446,652 8,133,001 1.3
Total Long-Term Investments
in Venezuela 28,528,121 14,165,284 2.1
Total Long-Term Investments 689,736,232 632,721,104 93.7
Face Amount Short-Term Investments
<PAGE>
Commercial US$ 14,642,000 General Electric Capital Corp.,
Paper* 5.42% due 3/01/1996 14,642,000 14,642,000 2.1
10,000,000 Matterhorn Capital Corp.,
5.39% due 3/04/1996 9,995,508 9,995,508 1.5
Total Short-Term Investments 24,637,508 24,637,508 3.6
Total Investments $714,373,740 657,358,612 97.3
============
Other Assets Less Liabilities 17,982,835 2.7
------------ ------
Net Assets $675,341,447 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $34,359,453 and
3,084,639 shares outstanding $ 11.14
============
Class B--Based on net assets of $516,373,762 and
47,350,900 shares outstanding $ 10.91
============
Class C--Based on net assets of $18,825,455 and
1,726,443 shares outstanding $ 10.90
============
Class D--Based on net assets of $105,782,777 and
9,527,150 shares outstanding $ 11.10
============
<FN>
(1)Global Depositary Shares (GDS).
(2)American Depositary Receipts (ADR).
(3)Global Depositary Receipts (GDR).
(a)The rights may be exercised until 3/28/1996.
*Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
As of February 29, 1996
Percent of
Ten Largest Equity Holdings Net Assets
Telecomunicacoes Brasileiras S.A.--Telebras* 6.4%
Kimberly-Clark de Mexico, S.A. de C.V. 'A' 5.3
Companhia Cervejaria Brahma S.A. (Preferred) 4.1
Banco Bradesco S.A. (Preferred) 3.9
Panamerican Beverages Inc. (Class A) 3.5
Telefonica de Argentina S.A.* 3.4
Fomento Economico Mexicano, S.A. de C.V.* 3.2
Grupo Carso, S.A. de C.V. * 3.2
Companhia de Tecidos Norte de Minas S.A. 3.0
Centrais Eletricas Brasileiras S.A.--Eletrobras 'B'
(Preferred) 2.6
[FN]
*Includes combined holdings.
Percent of
Ten Largest Industries Net Assets
Telecommunications 17.5%
Utilities 11.2
Banking 8.9
Beverages & Tobacco 7.0
Beverages 5.6
Health & Personal Care 5.3
Metals & Steel 4.5
Retail 4.0
Oil & Related 3.7
Building & Construction 3.4
<PAGE>
PORTFOLIO CHANGES
For the Quarter Ended February 29, 1996
Additions
Cementos Norte Pacasmayo S.A.
Companhia Cervejaria Brahma S.A. (Rights)
Companhia Vale do Rio Doce S.A.
(Preferred)
Credicorp Ltd. S.A.
Grupo Financiero Bancomer, S.A. de C.V.
'B' (Ordinary)
Light Participacoes S.A.
Telecomunicacoes de Minejeros S.A.
TELEMIG (Preferred)
Deletions
Acos Industria Villares, S.A. (Preferred)
Aracruz Celulose S.A.
Aracruz Celulose S.A. (Preferred)
Astra Compania Argentina de Petroleo
S.A.
Brasperola Industria e Comerico S.A.
Carulla y CIA S.A.
Carulla y CIA S.A. (ADR)
Central Costanera S.A.
Cerveceria Backus y Johnson S.A.
Companhia Paulista de Forca e Luz S.A.
(Rights)
Confab Industrial S.A. (Preferred)
Corimon C.A. S.A.C.A.
Corporacion Banco Credito del Peru S.A.
Corporacion Financiera del Valle S.A.
(ADR)
Desc Sociedad de Fomento Industrial,
S.A. de C.V. (Class C)
Empresas Pizarreno S.A.
Grupo Empresarial Fenix S.A. de C.V.
(ELEKTRA) 'L' Shares
<PAGE>
Grupo Herdez, S.A. de C.V. 'A'
Grupo Herdez, S.A. de C.V. 'B'
Grupo Situr, S.A. de C.V.
Invercap S.A.
La Cemento Nacional C.A. (GDR)
Mantex S.A.C.A. (ADR)
MelPaper S.A. (Preferred)
Siderurgica Venezolana SIVENSA,
S.A.I.C.A.--S.A.C.A. (ADR)
Southern Peru Copper Corp. S.A.
(Working Labor Shares)
Telecomunicacoes Parana S.A.--TELEPAR
(Preferred)
Uniao de Banco Brasileiras S.A. (UNIBANCO)
Uniao de Banco Brasileiras S.A.
(UNIBANCO) (Rights)
