MERRILL LYNCH
LATIN AMERICA
FUND, INC.
FUND LOGO
Annual Report
November 30, 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
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 Service, 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
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation*
As a Percentage of
Net Assets as of
November 30, 1995
<PAGE>
A map depicting the following asset allocation percentages:
Mexico 20.7%
Panama 3.4%
Venezuela 4.6%
Colombia 2.1%
Ecuador 1.7%
Peru 6.1%
Brazil 30.1%
Uraguay 0.2%
Argentina 13.7%
Chile 9.7%
[FN]
*Total may not equal 100% and does not include short-term securities.
DEAR SHAREHOLDER
Fiscal Year in Review
During the year ended November 30, 1995, the capital markets in
Latin America experienced dramatic corrections. Every stock market,
with the exception of Peru, had double-digit declines during the
year, resulting in a total return for the unmanaged Morgan Stanley
Latin America Free Index of -28.0%.
During the 12-month period ended November 30, 1995, total returns
for Merrill Lynch Latin America Fund, Inc.'s Class A, Class B, Class
C and Class D Shares were -37.66%, -38.32%, -38.32% and -37.84%,
respectively. (Investment results shown do not include sales
charges, and would be lower if sales charges were deducted. Complete
performance information, including average annual and aggregate
total returns, can be found on pages 4--7 of this report to
shareholders.) The Fund's performance was adversely impacted by
stock holdings in Argentina, Brazil and Mexico, particularly in the
first half of the year. Our expectation of a weak economic
environment in the months following the initial market correction in
December 1994 led us to invest defensively. This decision prevented
the Fund from participating fully in the subsequent rallies that
took place in March 1995, negatively impacting performance. The cash
position increased to a peak level of 14.6% in May.
<PAGE>
Investment Overview
Mexico's devaluation of the peso on December 20, 1994 sent shock
waves throughout Latin America. The spillover effect in the other
Latin American markets, which became known as the "Tequila Effect,"
was quick and widespread. A series of sharp corrections occurred in
almost all Latin American markets, which lasted until March. While
there have been several rallies since then, none have been sustained
and investor confidence has not been restored in the Latin American
equity markets.
Although each country faced its own individual crisis, there were
certain common denominators. First, an economic slowdown developed
in many of the major countries. In Mexico and Argentina, the
slowdown quickly degenerated into recessions, with 1995 estimates of
real gross domestic product growth for Mexico now at -6.0% and
ranging from -0.5% to +1.5% for Argentina. Brazil also experienced
slower growth, although this was induced by policies designed to
curb inflation. Second, in most countries, interest rates rose
significantly as some foreign investors began to withdraw their
investments. The higher yields in fixed-income instruments provided
a more attractive alternative to many stock investments in the
region. Third, partly as an outgrowth of high interest rates, an
increased fragility of the banking sector developed in most of the
countries. In Mexico, the concern centered on rapidly deteriorating
asset quality, coupled with low levels of capitalization and loan
provisions. In Argentina, banking liquidity was hampered as
depositors withdrew their deposits in massive amounts. In Brazil,
investors feared that the banks would not be able to replace the
lost inflationary earnings with sufficient revenues from credit or
fee-generating products.
Although problems remain, the governments in these countries have
taken measures which should strengthen the banking sector in these
countries. In Mexico, for example, banks can receive government aid
to restructure their problem loans, while in Argentina a new deposit
insurance program will address some of the liquidity concerns. In
Brazil, recent central bank changes in reserve requirements should
help to bolster the sector.
In addition to these three common themes, each country had its own
set of problems to contend with. For example, in Mexico the
devaluation of the peso touched off one of the steepest recessions
in recent Mexican history. Poor corporate earnings, coupled with
recurring questions regarding monetary and currency policy, led to
extreme volatility in the stock markets. The government's reticence
and seeming inaction in the initial days of the crisis engendered a
lack of confidence in the Mexican economic team, and hence the
equity market. However, by the summer of 1995, there were also some
positive developments. The Chiapas dissidents were less active, and
Mexico successfully launched a sizable $1.5 billion bond issue in
the international markets. Recently there has been good news on
trade statistics, new tax incentives to promote employment and the
government's stated intention to maintain a floating rate exchange
policy.
<PAGE>
Shortly after the Mexican devaluation, the Argentine economic team
moved rapidly and forcefully to allay investors' fears concerning
Argentina. After a confirmation of the Convertibility Program,
Argentina quickly obtained a new International Monetary Fund (IMF)
package and launched several successful bond issues. In May 1995,
the re-election of President Carlos Menem by a sizable majority was
seen as a mandate for the continuation of economic reforms. Shortly
after the elections, however, rumors began to surface that Economic
Minister Domingo Cavallo would leave the government. Unfortunately,
these rumors plagued the stock market for most of the summer and
into the fall. The success of the recent tax moratorium, a booming
export sector and announced government spending have helped to
bolster confidence in Argentina recently.
In Brazil the continuation of the Real Plan (named for the Brazilian
Monetary Unit which began in the summer of 1994) meant that for most
of the year real interest rates remained high, having a negative
impact on the stock market. The government of President Cardoso
continued to press forward with the Real Plan, proposing legislation
for fiscal reform. One of the proposed measures, a capital gains tax
on security holdings by foreigners, led to stock market weakness.
Likewise, new scandals concerning Congressional leaders and Cabinet
members have had negative repercussions on the market, as did the
recent central bank intervention involving Banco Nacional S.A.
However, satisfactory inflation numbers and the relaxation of credit
restrictions have been viewed as positive. The Finance Ministry
approved an initial rebalancing of telephone tariffs and the first
inflation adjustment since the implementation of the Real Plan. We
believe that this should be positive news for Fund investment
Telecomunicacoes de Brasileiras S.A. (Telebras), the holding company
for 27 operating subsidiaries, because of its potentially positive
impact on earnings. The telephone rebalancing program also
eliminated some of the cross-subsidiaries between different
services, and increased local and long-distance rates.
While Chile also felt the "Tequila Effect," it was viewed as a safer
haven by many investors. Although the Chilean stock market did
correct, its subsequent rally was sustained. Nevertheless, over the
past year, the Chilean market was plagued by three negative
developments. First, the opening of competition for long-distance
service in the telecommunications sector led to weakness in the
telecommunications stocks, such as Fund holding Compania de
Telefonos de Chile (CTC), as investors anticipated lower long-
distance tariffs would hurt profitability. Second, the possibility
that two natural gas pipelines would be built and result in an
excess supply of low-cost electricity prompted a sell-off in the
shares of electric utility stocks. Finally, a shareholder proposal
calling for the liquidation of a large Chilean country fund's
portfolio had a negative impact on the market.
<PAGE>
For the most part, each of these matters has been resolved
positively. Although a price war resulted from the deregulation of
the telecommunications sector, there has been a sharp rebound and
tariffs have now stabilized. With regard to the electric utilities
sector, it is likely that only one gas pipeline will actually be
constructed in the next few years, and that the ensuing effect on
utility profit margins will be minimal, in our opinion.
Finally, since the shareholder proposal to liquidate the large
Chilean country fund failed, there was not a drastic sell-off of its
investments.
The weakness of stock prices in the utility sector provided an
opportunity for the Fund to purchase shares in Enersis S.A., a blue-
chip holding company with exposure to electricity distribution and
generation in Chile, Argentina and Peru. We believe that earnings
growth of Enersis will be robust in the coming years. The sources of
Enersis' earnings growth are its extensive restructuring and cost-
cutting programs, its investments in Argentina and Peru, and the
growth of the electricity market in Chile, which will be the most
rapid in the region.
Initially, the Colombian stock market rose in the first few months
of the Mexican crisis. However, charges of corruption against
President Samper's team surfaced in the summer, leading to the
resignation of key members of the government. The charges
subsequently became more intense, even pointing to the President
himself. The result has been a declining stock market which did not
mirror the rallies experienced in the larger markets.
At first, Peru also suffered the "Tequila Effect" because of concern
over its current account deficit, although the funding for much of
this deficit was long-term foreign direct investment rather than
volatile portfolio investment. Despite these concerns, the Peruvian
stock market was able to sustain a rally from the spring through
September 1995, buoyed by a strong economic outlook for 1995 and
news that the Peruvian government and the international commercial
banks had reached an agreement to reschedule Peruvian bank debt.
Recently, the stock market has declined in response to renewed
concern about the current account deficit.
Venezuela's stock market was virtually flat for most of the year.
Only in the fall, when rumors of a possible agreement with the IMF
surfaced, did the stock market rally, rising close to 50% on a
nominal basis by the end of November.
More recently, as negotiations with the IMF have stalled and
international reserves have dwindled, the market has experienced a
slight correction.
<PAGE>
In Conclusion
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
January 5, 1996
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 simultaneously exchanged
for Class A Shares.
<PAGE>
* 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).
Performance data for all of the Fund's shares are presented in the
"Total Return Based on a $10,000 Investment" graphs and the
"Performance Summary" and "Recent Performance Results" tables on
pages 5--7. Data for Class B and Class D Shares are presented in
the "Average Annual Total Return" table on page 5. Data for Class A
and Class C Shares are also presented in the "Aggregate Total
Return" table on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for all of the Fund's
shares for the 12-month and 3-month periods ended November 30, 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 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.
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares and Class C Shares compared to growth of an
investment in the Emerging Markets Free Latin America Index.
Beginning and ending values are:
<PAGE>
10/21/94** 11/95
ML Latin America Fund, Inc.++--
Class A Shares*+++ $ 9,475 $5,663
ML Latin America Fund, Inc.++--
Class C Shares* $10,000 $5,940
Emerging Markets Free Latin
America Index++++ $10,000 $6,991
A line graph depicting the growth of an investment in the Fund's
Class B Shares and Class D Shares compared to growth of an
investment in the Emerging Markets Free Latin America Index.
Beginning and ending values are:
9/27/91** 11/95
ML Latin America Fund, Inc.++--
Class B Shares* $10,000 $11,079
ML Latin America Fund, Inc.++--
Class D Shares* $ 9,475 $10,845
Emerging Markets Free Latin
America Index++++ $10,000 $17,174
[FN]
*Assuming maximum sales Charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Latin America Fund, Inc. invests primarily in Latin American
equity and debt securities.
++++This unmanaged market capitalization-weighted Index by Morgan
Stanley Capital International is comprised of a representative
sampling of stocks of large-, medium-, and small-capitalization
companies in Argentina, Brazil, Chile, and Mexico which are freely
purchasable by foreign investors.
+++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.
<PAGE>
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/21/94) through 9/30/95 -35.99% -39.35%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 9/30/95 -36.63% -37.24%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
Average Annual
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 -38.10% -40.47%
Inception (9/27/91) through 9/30/95 + 4.43 + 4.43
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/95 -37.63% -40.90%
Inception (9/27/91) through 9/30/95 + 5.23 + 3.82
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
<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%
1/1/95--11/30/95 13.67 10.50 -- -- -23.19
------ ------
Total $0.396 Total $0.118
Cumulative total return as of 11/30/95: -40.57%**
<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
1/1/95--11/30/95 13.55 10.31 -- -- -23.91
------ ------
Total $0.396 Total $0.491
Cumulative total return as of 11/30/95: +10.25%**
<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%
1/1/95--11/30/95 13.55 10.31 -- -- -23.91
------ ------
Total $0.396 Total $0.118
Cumulative total return as of 11/30/95: -41.25%**
<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
1/1/95--11/30/95 13.66 10.47 -- -- -23.35
------ ------
Total $0.396 Total $0.677
Cumulative total return as of 11/30/95: +13.81%**
<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
11/30/95 8/31/95 11/30/94 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.50 $11.40 $17.37 -38.10%(1) -7.89%
Class B Shares 10.31 11.22 17.24 -38.75(1) -8.11
Class C Shares 10.31 11.22 17.24 -38.75(1) -8.11
Class D Shares 10.47 11.38 17.37 -38.27(1) -8.00
Class A Shares-Total Return -37.66(2) -7.89
Class B Shares-Total Return -38.32(2) -8.11
Class C Shares-Total Return -38.32(2) -8.11
Class D Shares-Total Return -37.84(2) -8.00
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(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>
<PAGE>
PORTFOLIO INFORMATION (unaudited)
As of November 30, 1995
Percent of
Ten Largest Equity Holdings Net Assets
Kimberly-Clark de Mexico, S.A. de C.V. 'A' 4.2%
Companhia Cervejaria Brahma S.A. PN (Preferred) 3.1
Panamerican Beverages Inc. (Class A) 2.9
C.A. La Electricidad de Caracas S.A.I.C.A.-S.A.C.A. 2.8
Grupo Carso, S.A. de C.V. (ADR) 2.7
Banco Bradesco S.A. (Preferred) 2.5
Apasco, S.A. de C.V. 'A' 2.3
Telefonica de Argentina S.A. (ADR) (Class B) 2.2
Telecomunicacoes de Sao Paulo S.A.--TELESP
de C.V. (Preferred) 2.0
Telecomunicacoes Brasileiras S.A.---Telebras 1.9
Percent of
Ten Largest Industries Net Assets
Telecommunications 13.4%
Utilities 11.6
Banking 7.4
Beverages & Tobacco 6.2
Beverages 6.1
Health & Personal Care 4.2
Retail 3.7
Oil & Related 3.5
Building & Construction 3.4
Multi-Industry 2.9
<PAGE>
<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 $ 326,250 0.1%
Banking 69,620 Banco de Galicia y Buenos Aires S.A.
(ADR)(2) 1,010,375 1,383,697 0.2
92,500 Banco Frances del Rio de la Plata
S.A. 1,891,189 2,416,562 0.4
------------ ------------ ------
2,901,564 3,800,259 0.6
Beverages 1,715 Buenos Aires Embotelladora S.A. (BAESA) 1,727,491 2,153,402 0.3
463,300 Buenos Aires Embotelladora S.A.
(BAESA) (ADR)(2) 11,937,651 11,756,237 1.8
------------ ------------ ------
13,665,142 13,909,639 2.1
Foreign ARS 27,820,000 Republic of Argentina, Floating
Government Rate Notes, 7.312% due 3/31/2005 17,558,200 18,048,225 2.8
Obligations
Oil & Related 1,656,960 Astra Compania Argentina de
Petroleo S.A. 2,604,480 2,818,241 0.4
1,597,400 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A.(b) 6,917,944 7,751,266 1.2
389,500 Yacimientos Petroliferos Fiscales
S.A. (Sponsored) (ADR)(2) 7,809,244 7,595,250 1.2
------------ ------------ ------
17,331,668 18,164,757 2.8
Real Estate 1,165,215 Inversiones y Representaciones
S.A. (IRSA) 3,126,377 2,506,465 0.4
111,200 Inversiones y Representaciones
S.A. (IRSA)(GDS)(3) 2,974,708 2,418,600 0.4
------------ ------------ ------
6,101,085 4,925,065 0.8
Retail 372,469 Grimoldi S.A. (Class B)(b) 2,315,433 1,639,683 0.2
Telecommunications 259,000 Telecom Argentina Stet--France
Telecom S.A. (ADR)(2) 13,152,271 11,331,250 1.7
596,100 Telefonica de Argentina S.A.
(ADR)(2) 16,609,418 14,604,450 2.2
525,000 Telefonica de Argentina S.A.
(Class B) 1,497,352 1,307,904 0.2
------------ ------------ ------
31,259,041 27,243,604 4.1
<PAGE>
Utilities 385,600 Central Costanera S.A. (b) 1,114,898 1,203,674 0.2
9,500 ++Central Costanera S.A. (Class B)
(ADR)(2) 228,000 283,219 0.0
------------ ------------ ------
1,342,898 1,486,893 0.2
Total Long-Term Investments in
Argentina 93,218,156 89,544,375 13.7
Brazil Appliances & 29,455,500 Brasmotor Group S.A. (Preferred) 8,992,598 6,189,924 1.0
Household 2,211,200,000 Refrigeracao Parana S.A. (Preferred) 7,705,607 5,035,860 0.8
Durables ------------ ------------ ------
16,698,205 11,225,784 1.8
Automotive 874,700 CAPCO Automotive Products Corp.
S.A. (ADR)(2) 9,945,767 6,778,925 1.0
913,000 Confab Industrial S.A. (Preferred) 1,638,568 453,665 0.1
------------ ------------ ------
11,584,335 7,232,590 1.1
Banking 1,886,719,347 Banco Bradesco S.A. (Preferred) 15,022,652 16,308,598 2.5
28,720,400 Banco Itau S.A. (Preferred) 5,717,840 8,295,022 1.3
364,129,908 Banco Nacional S.A. PN 9,903,203 3,505,599 0.5
3,681,154 Uniao de Banco Brasileiras S.A.
(UNIBANCO) 98,973 120,038 0.0
1,855,780 Uniao de Banco Brasileiras S.A.
(UNIBANCO) (Rights)(c) 0 2 0.0
------------ ------------ ------
30,742,668 28,229,259 4.3
Beverages 50,431,159 Companhia Cervejaria Brahma S.A.
(Preferred) 14,391,659 19,890,550 3.1
Food 6,267,410 Sadia Concordia S.A. Industria e
Comercio (Preferred) 6,030,196 4,282,081 0.7
Forest 390,000 Aracruz Celulose S.A. 3,510,000 3,510,000 0.5
Products & 1,250,000 Aracruz Celulose S.A. (Preferred) 2,249,740 2,251,553 0.3
Paper 40,787 Bardella Industrial S.A. (Preferred) 10,432,254 5,657,824 0.9
16,802,000 MelPaper S.A. (Preferred)(b) 10,233,320 2,522,039 0.4
------------ ------------ ------
26,425,314 13,941,416 2.1
Machinery 8,709,000 Iochpe-Maxion S.A. (Ordinary) 3,583,312 1,250,454 0.2
11,759,765 Iochpe-Maxion S.A. (Preferred) 4,996,055 1,923,440 0.3
9,273,000 Weg Exportadora S.A. (Preferred) 5,597,682 4,031,739 0.6
------------ ------------ ------
14,177,049 7,205,633 1.1
<PAGE>
Oil & Related 55,520,000 Petroleo Brasileiro S.A. (Preferred) 7,056,177 4,712,878 0.7
Retail 118,564,600 Lojas Americanas S.A. 2,125,943 2,594,675 0.4
Steel 182,000 Acos Industria Villares, S.A.
(Preferred) 37,587 56,145 0.0
197,018,000 Companhia Siderurgica Nacional
S.A.--CSN (b) 6,462,375 4,109,640 0.6
4,662,582,013 Usinas Siderurgicas de Minas
Gerais--Usiminas S.A. (Preferred) 3,914,669 4,150,952 0.6
------------ ------------ ------
10,414,631 8,316,737 1.2
Telecommunications 262,667 Telecomunicacoes Brasileiras S.A.
--Telebras (ADR)(2) 10,918,443 12,608,016 2.0
22,217,454 Telecomunicacoes Brasileiras S.A.
--Telebras (Ordinary) 920,306 897,208 0.1
208,326,328 Telecomunicacoes Brasileiras S.A.
--Telebras (Preferred) 9,370,488 10,265,355 1.6
76,193,965 Telecomunicacoes de Sao Paulo S.A.
--TELESP (Preferred) 9,902,003 13,248,758 2.0
835,929 Telecomunicacoes Parana S.A.
--TELEPAR (Preferred)(b) 148,370 263,932 0.0
------------ ------------ ------
31,259,610 37,283,269 5.7
Textiles 873,000 Brasperola Industria e Comerico S.A. 931,692 271,118 0.0
33,727,363 Companhia de Tecidos Norte de
Minas S.A. 9,078,176 10,893,310 1.7
------------ ------------ ------
10,009,868 11,164,428 1.7
Utilities 41,100,467 Centrais Eletricas Brasileiras S.A.
--Eletrobras 'B' (Preferred) 12,461,163 11,572,802 1.8
478,000 Centrais Eletricas Brasileiras S.A.
--Eletrobras (Preferred)(ADR)(2) 7,325,140 6,692,000 1.0
4,387,500 Centrais Eletricas da Santa Catarina
S.A.(CELESC) 'B' (Preferred)(b) 764,541 2,952,252 0.5
76,000 ++Companhia Energetica de Minas
Gerais S.A. (CEMIG) (ADR)(2) 1,628,295 1,662,500 0.3
28,470 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR) (2) 638,750 622,781 0.1
173,020,000 Companhia Paulista de Forca e Luz S.A. 10,106,226 7,968,592 1.2
941,228 Companhia Paulista de Forca e Luz
S.A. (Rights)(a) 0 1 0.0
27,707,000 Light--Servicios de Eletricidad S.A. 10,670,483 8,317,836 1.3
------------ ------------ ------
43,594,598 39,788,764 6.2
Total Long-Term Investments in
Brazil 224,510,253 195,868,064 30.1
</TABLE>
<PAGE>
<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> <C> <S> <C> <C> <C>
Chile Automotive 403,200 Chilgener Inc. S.A. $ 8,888,165 $ 9,475,200 1.5%
Banking 202,900 Banco O'Higgins S.A. (ADR)(2) 3,101,779 3,753,650 0.6
Beverages 4,084,632 Vina Concha y Toro S.A. 1,694,797 1,366,495 0.2
217,700 Vina Concha y Toro S.A. (ADR)(2) 4,138,538 3,728,112 0.6
------------ ------------ ------
5,833,335 5,094,607 0.8
Building & 338,225 Empresas Pizarreno S.A. 644,310 655,952 0.1
Construction
Closed-End Funds 414,468 The Chile Fund, Inc. 10,594,293 10,050,849 1.5
Food & Household 138,650 Cristalerias de Chile S.A. (ADR)(2) 3,035,094 3,084,962 0.5
Products
Publishing 4,916,262 Editorial Lord Cochrane S.A. 2,645,715 1,668,550 0.3
Retail Sales 528,846 Santa Isabel S.A. 430,047 820,513 0.1
Steel 152,238 Invercap S.A. 108,761 225,128 0.0
Telecommunications 164,225 Compania de Telefonos de Chile
S.A. (ADR)(2) 15,943,837 11,844,728 1.8
98,732 Empresa Nacional de Telecomuni-
caciones S.A. (ENTEL) 677,828 909,531 0.1
------------ ------------ ------
16,621,665 12,754,259 1.9
Utilities 35,000 ++Distribuidora Chilectra Metro-
politan S.A. (ADR)(2) 1,473,750 1,522,500 0.2
4,965,953 Empresa Nacional de Electricidad
S.A. (ENDESA) 2,530,323 3,204,695 0.5
1,900,000 Enersis S.A. 842,297 944,242 0.2
380,200 Enersis S.A. (ADR)(2) 9,341,910 9,742,625 1.5
------------ ------------ ------
14,188,280 15,414,062 2.4
Total Long-Term Investments in
Chile 66,091,444 62,997,732 9.7
<PAGE>
Colombia Banking 253,182 Banco de Bogota S.A 903,609 1,067,391 0.2
Beverages & 587,154 La Compania Cervecera Bavaria S.A. 3,401,356 1,469,943 0.2
Tobacco
Building 90,000 Cementos Diamante S.A 590,537 441,618 0.1
Products
Forest Products 534,325 ++Papeles Nacionales S.A. (ADR)(2)(b) 9,013,126 3,606,694 0.6
& Paper
Merchandising 309,805 Carulla y CIA S.A. 3,218,690 2,016,556 0.3
404,420 ++Carulla y CIA S.A. (ADR)(2) 4,248,029 2,704,559 0.4
------------ ------------ ------
7,466,719 4,721,115 0.7
Multi-Industry 29,000 Corporacion Financiera del Valle
S.A. (ADR)(2) 478,500 326,250 0.0
Retail 1,428,814 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) 4,043,019 1,573,899 0.2
35,000 ++Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO)(ADR)(2) 611,250 385,000 0.1
------------ ------------ ------
4,654,269 1,958,899 0.3
Total Long-Term Investments in
Colombia 26,508,116 13,591,910 2.1
Ecuador Building 60,072 ++La Cemento Nacional C.A. (GDR)(4) 10,693,757 10,993,176 1.7
Materials &
Components
Total Long-Term Investments in
Ecuador 10,693,757 10,993,176 1.7
Mexico Banking 975,000 Grupo Financiero Banamex--Accival,
S.A. de C.V. (Banacci) 2,126,670 1,389,148 0.2
Beverages 4,280,000 ++Fomento Economico Mexicano, S.A.
& Tobacco de C.V. (Femsa)(ADR)(2) 9,730,328 9,758,400 1.5
4,607,000 Fomento Economico Mexicano, S.A.
de C.V. (Femsa) (Ordinary) 'B' 11,407,302 10,661,739 1.6
------------ ------------ ------
21,137,630 20,420,139 3.1
<PAGE>
Broadcasting & 3,215,000 Grupo Fernandez Editores, S.A.
Publishing de C.V. (b) 4,709,988 877,597 0.2
Building & 3,687,900 Apasco, S.A. de C.V. 'A' 12,435,322 14,977,490 2.3
Construction 332,000 ++Corporacion Geo, S.A. de C.V. 'B'
(ADR)(2)(b) 9,485,500 3,758,240 0.6
------------ ------------ ------
21,920,822 18,735,730 2.9
Engineering & 378,000 Grupo Profesional Planeacion y
Construction Proyectos S.A. de C.V. (PYP)
(Class B) 5,457,192 2,063,648 0.3
Financial 651,900 Banca Quadrum, S.A. de C.V.
Services (ADR)(2)(b) 10,545,780 3,911,400 0.6
US$ 8,500,000 ++Grupo Financiero InverMexico,
S.A. de C.V., 7.50% due 6/16/2001 8,500,000 1,275,000 0.2
------------ ------------ ------
19,045,780 5,186,400 0.8
Food & 693,846 Grupo Herdez, S.A. de C.V. 'A' (b) 819,974 138,584 0.0
Household 2,910,461 Grupo Herdez, S.A. de C.V. 'B' (b) 3,905,490 697,581 0.1
Products 312,518 Sigma Alimentos, S.A. de C.V. 5,569,354 2,039,066 0.3
------------ ------------ ------
10,294,818 2,875,231 0.4
Health & 2,067,450 Kimberly-Clark de Mexico, S.A.
Personal Care de C.V. 'A' 21,774,825 27,198,943 4.2
Leisure 179,000 Grupo Posadas, S.A. de C.V. 'A' (b) 149,627 50,053 0.0
395,300 ++Grupo Posadas, S.A. de C.V. (ADR)
(2)(b) 6,138,293 1,927,087 0.3
3,350,000 Grupo Situr, S.A. de C.V. 1,907,393 1,066,112 0.2
------------ ------------ ------
8,195,313 3,043,252 0.5
Merchandising 435,000 Grupo Empresarial Fenix, S.A. de
C.V. (ELEKTRA) 'L' Shares 4,102,071 1,477,031 0.2
Multi-Industry 66,000 Desc Sociedad de Fomento Industrial,
S.A. de C.V. (Class C)(b) 458,365 215,313 0.0
3,161,625 Grupo Carso, S.A. de C.V. 'A' (b) 33,164,587 17,597,327 2.7
117,750 ++Grupo Carso, S.A. de C.V. (ADR)(2)(b) 1,269,344 1,295,250 0.2
------------ ------------ ------
34,892,296 19,107,890 2.9
Retail 12,066,750 Cifra, S.A. de C.V. 'C' 17,413,104 12,500,575 1.9
988,500 Sears Roebuck de Mexico, S.A. de
C.V. 'B' (b) 6,010,030 2,303,429 0.4
547,500 ++Sears Roebuck de Mexico, S.A. de
C.V. 'B'(ADR) (2)(b) 14,403,127 2,395,312 0.4
------------ ------------ ------
37,826,261 17,199,316 2.7
Telecommunications 359,700 Telefonos de Mexico, S.A. de C.V.
(ADR)(2) 14,075,357 11,870,100 1.8
</TABLE>
<PAGE>
<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> <C> <S> <C> <C> <C>
Mexico Transportation 345,350 Transportacion Maritima Mexicana,
(concluded) S.A. de C.V. (b) $ 2,837,584 $ 2,633,294 0.4%
107,000 Transportacion Maritima Mexicana,
S.A. de C.V. 'L' (TMM)(ADR)(2)(b) 1,192,663 820,666 0.1
------------ ------------ ------
4,030,247 3,453,960 0.5
Total Long-Term Investments in
Mexico 209,589,270 134,898,385 20.7
Panama Banking 80,000 Banco Latinoamericano de Expor-
taciones S.A. ('BLADEX')'E' 1,992,245 3,590,000 0.5
Beverage & 580,260 Panamerican Beverages Inc.
Tobacco (Class A) 16,384,971 18,713,385 2.9
Total Long-Term Investments
in Panama 18,377,216 22,303,385 3.4
Peru Banking 3,215,161 Banco Wiese Limitado S.A. 6,573,706 5,127,627 0.8
Beverages 560,056 Cerveceria Backus Y Johnson S.A. 1,020,549 965,614 0.1
Building 2,487,551 Cementos Norte Pacasmayo S.A. 5,488,368 4,406,825 0.7
Materials
Financial 359,683 Corporacion Banco Credito del
Services Peru S.A. (b) 4,498,944 5,754,928 0.9
Food 2,885,636 Companhia Industrial Peru
Pacifico S.A. (b) 5,303,100 2,860,760 0.4
Mining 1,846,813 Southern Peru Copper Corp. S.A. (b) 6,304,085 7,323,569 1.1
525,682 Southern Peru Copper Corp. S.A.
(Working Labor Shares)(b) 1,666,418 1,654,086 0.3
------------ ------------ ------
7,970,503 8,977,655 1.4
<PAGE>
Miscellaneous 376,305 Minsur Sociedad Limitada S.A.
Materials (T Shares) 2,555,655 2,660,087 0.4
& Commodities
Utilities-- 1,309,036 CPT Telefonica Del Peru S.A.
Telecommuni- (A Shares) 2,476,689 2,465,727 0.4
cations 3,526,436 CPT Telefonica Del Peru S.A.
(B Shares) 6,834,961 6,809,670 1.0
------------ ------------ ------
9,311,650 9,275,397 1.4
Total Long-Term Investments in Peru 42,722,475 40,028,893 6.1
Uruguay Banking 64,500 ++Banco Commercial S.A. (ADR)(2) 1,211,625 967,500 0.2
Total Long-Term Investments in
Uruguay 1,211,625 967,500 0.2
Venezuela Building & 1,124,607 Corporacion Ceramica Carabobo S.A. 'B' 2,294,951 1,392,743 0.2
Construction 1,129,218 Corporacion Ceramica Carabobo
S.A.C.A. 2,606,929 1,598,233 0.2
------------ ------------ ------
4,901,880 2,990,976 0.4
Building Materials 36,625 Corimon C.A. S.A.C.A. 266,355 137,344 0.0
577,792 Venezolana de Cementos S.A.C.A.
(Vencemos) 800,775 1,322,069 0.2
------------ ------------ ------
1,067,130 1,459,413 0.2
Food & Household 10,304,247 Mavesa S.A. 2,587,936 2,582,594 0.4
Products 375,832 ++Mavesa S.A. (ADR)(2) 4,010,625 1,080,517 0.2
364,500 Mavesa S.A. (ADR)(2) 3,379,894 1,093,500 0.2
------------ ------------ ------
9,978,455 4,756,611 0.8
Foreign VEB 200,000 Republic of Venezuela, Floating
Government Rate Notes, 6.812% due 12/18/2007 (1) 103,250 92,000 0.0
Obligations
Steel 681,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.--S.A.C.A. 348,589 425,700 0.1
116,000 Siderurgica Venezolana SIVENSA,
S.A.I.C.A.--S.A.C.A. (ADR)(2) 678,904 174,000 0.0
169,940 ++Venezolana de Prerreducidos Caroni
Venprecar C.A. (GDS)(3) 1,239,230 690,381 0.1
------------ ------------ ------
2,266,723 1,290,081 0.2
<PAGE>
Textiles 2,131,381 Mantex S.A.C.A. 246,278 329,945 0.1
218,600 Mantex S.A.C.A. (ADR)(2)(b) 896,329 792,425 0.1
------------ ------------ ------
1,142,607 1,122,370 0.2
Utilities 15,087,899 C.A. La Electricidad de Caracas
S.A.I.C.A.--S.A.C.A. 19,844,314 18,329,346 2.8
Total Long-Term Investments in
Venezuela 39,304,359 30,040,797 4.6
Total Investments $732,226,671 601,234,217 92.3
============
Other Assets Less Liabilities 50,326,824 7.7
------------ ------
Net Assets $651,561,041 100.0%
============ ======
<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 November 30, 1995.
(2)American Depositary Receipts (ADR).
(3)Global Depositary Shares (GDS).
(4)Global Depositary Receipts (GDR).
*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)The rights will expire 12/18/1995.
(b)Non-income producing security.
(c)The rights will expire 12/20/1995.
++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately $44,305,000,
representing 6.8% of net assets.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date(s) Cost (Note 1a)
<S> <C> <C> <C>
Banco Commercial S.A. (ADR) 10/24/1994 $ 1,211,625 $ 967,500
Carulla y CIA S.A. (ADR) 6/23/1994 4,248,029 2,704,559
Central Costanera S.A. (Class B) (ADR) 12/17/1993 228,000 283,219
Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR) 7/20/1995-8/01/1995 1,628,295 1,662,500
Corporacion Geo, S.A. de C.V. 'B' (ADR) 9/28/1994 9,485,500 3,758,240
Distribuidora Chilectra Metropolitan
S.A. (ADR) 10/24/1995-10/26/1995 1,473,750 1,522,500
Fomento Economico Mexicano, S.A.
de C.V. (Femsa) (ADR) 11/18/1993 9,730,328 9,758,400
Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) (ADR) 2/14/1995 611,250 385,000
Grupo Carso, S.A. de C.V. (ADR) 5/13/1994 1,269,344 1,295,250
Grupo Financiero InverMexico, S.A. de
C.V., 7.50% due 6/16/2001 6/09/1994 8,500,000 1,275,000
Grupo Posadas, S.A. de C.V. (ADR) 3/23/1992 6,138,293 1,927,087
La Cemento Nacional C.A. (GDR) 6/22/1992-8/22/1995 10,693,757 10,993,176
Mavesa S.A. (ADR) 10/13/1993 4,010,625 1,080,517
Papeles Nacionales S.A. (ADR) 10/04/1995 9,013,126 3,606,694
Sears Roebuck de Mexico, S.A. de C.V.
'B' (ADR) 8/09/1994 14,403,127 2,395,312
Venezolana de Prerreducidos Caroni
Venprecar C.A. (GDS) 2/13/1992 1,239,230 690,381
Total $83,884,279 $44,305,335
=========== ===========
See Notes to Consolidated
Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$732,226,671)
(Note 1a) $ 601,234,217
Cash 12,117,862
Foreign cash (Note 1b) 14,727,952
Receivables:
Securities sold $ 30,446,616
Capital shares sold 1,497,300
Dividends 1,062,663
Interest 616,733 33,623,312
------------
Deferred organization expenses (Note 1f) 19,390
Prepaid registration fees and other assets (Note 1f) 88,999
-------------
Total assets 661,811,732
-------------
<PAGE>
Liabilities: Payables:
Capital shares redeemed 7,220,238
Securities purchased 1,140,386
Investment adviser (Note 2) 526,256
Distributor (Note 2) 439,751 9,326,631
------------
Accrued expenses and other liabilities 924,060
-------------
Total liabilities 10,250,691
-------------
Net Assets: Net assets $ 651,561,041
=============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares
Consist of: authorized $ 247,894
Class B Common Stock, $0.10 par value, 100,000,000 shares
authorized 4,899,918
Class C Common Stock, $0.10 par value, 100,000,000 shares
authorized 142,217
Class D Common Stock, $0.10 par value, 100,000,000 shares
authorized 1,010,571
Paid-in capital in excess of par 966,189,113
Accumulated realized capital losses on investments and foreign
currency transactions--net (Note 6) (188,908,080)
Accumulated distributions in excess of realized capital
gains--net (601,566)
Unrealized depreciation on investments and foreign currency
transactions--net (131,419,026)
-------------
Net assets $ 651,561,041
=============
Net Asset Class A--Based on net assets of $26,034,232 and 2,478,936
Value: shares outstanding $ 10.50
=============
Class B--Based on net assets of $505,037,900 and 48,999,181
shares outstanding $ 10.31
=============
Class C--Based on net assets of $14,659,299 and 1,422,171
shares outstanding $ 10.31
=============
Class D--Based on net assets of $105,829,610 and 10,105,712
shares outstanding $ 10.47
=============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended November 30, 1995
<S> <S> <C> <C>
Investment Income Dividends (net of $1,596,716 foreign withholding tax) $ 14,847,250
(Notes 1d & 1e): Interest and discount earned 9,087,928
-------------
Total income 23,935,178
-------------
Expenses: Investment advisory fees (Note 2) 7,649,241
Account maintenance and distribution fees--Class B (Note 2) 5,982,063
Transfer agent fees--Class B (Note 2) 2,090,228
Custodian fees 1,725,817
Printing and shareholder reports 492,140
Transfer agent fees--Class D (Note 2) 404,307
Account maintenance fees--Class D (Note 2) 340,258
Accounting services (Note 2) 152,840
Professional fees 114,495
Account maintenance and distribution fees--Class C (Note 2) 113,075
Registration fees (Note 1f) 110,586
Foreign tax expense (Note 1d) 66,978
Transfer agent fees--Class A (Note 2) 57,355
Transfer agent fees--Class C (Note 2) 41,004
Directors' fees and expenses 37,776
Amortization of organization expenses (Note 1f) 23,267
Pricing services 16,825
Other 24,813
-------------
Total expenses 19,443,068
-------------
Investment income--net 4,492,110
-------------
Realized & Realized loss from:
Unrealized Loss Investments--net $(187,727,584)
on Investments & Foreign currency transactions--net (19,696,483) (207,424,067)
Foreign Currency -------------
Transactions--Net Change in unrealized appreciation/depreciation on:
(Notes 1b, 1c, Investments--net (238,230,449)
1e & 3): Foreign currency transactions--net (557,205) (238,787,654)
------------- -------------
Net realized and unrealized loss on investments and
foreign currency transactions (446,211,721)
-------------
Net Decrease in Net Assets Resulting from Operations $(441,719,611)
=============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended Nov. 30,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ 4,492,110 $ (3,648,206)
Realized gain (loss) on investments and foreign currency
transactions--net (207,424,067) 40,187,144
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (238,787,654) 29,595,876
-------------- --------------
Net increase (decrease) in net assets resulting from
operations (441,719,611) 66,134,814
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A -- (1,113,310)
Shareholders Class B -- (624,870)
(Note 1g): Realized gain on investments--net:
Class A (313,934) --
Class B (27,341,609) --
Class C (170,047) --
Class D (5,914,915) --
In excess of realized gain on investments--net:
Class A (5,597) --
Class B (487,479) --
Class C (3,032) --
Class D (105,458) --
-------------- --------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (34,342,071) (1,738,180)
-------------- --------------
Capital Shares Net increase (decrease) in net assets derived from
Transactions capital shares transactions (29,924,043) 712,764,490
(Note 4): -------------- --------------
Net Assets: Total increase (decrease) in net assets (505,985,725) 777,161,124
Beginning of year 1,157,546,766 380,385,642
-------------- --------------
End of year $ 651,561,041 $1,157,546,766
============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data Class A Class B
and ratios have been derived For the For the
from information provided in Period Period
the financial statements. For the Oct. 21, Sept. 27,
Year Ended 1994++ to For the Year Ended 1991++ to
Increase (Decrease) in Nov. 30, Nov. 30, November 30, Nov. 30,
Net Asset Value: 1995++++ 1994++++ 1995++++ 1994++++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 17.37 $ 18.22 $ 17.24 $ 14.39 $ 9.83 $ 9.80 $ 10.00
Performance: -------- -------- -------- -------- -------- -------- --------
Investment income (loss)
--net .16 -- .05 (.09) .10 .08 .04
Realized and unrealized
gain (loss) on investments
and foreign currency
transactions--net (6.52) (.85) (6.47) 2.99 4.68 .05 (.24)
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations (6.36) (.85) (6.42) 2.90 4.78 .13 (.20)
-------- -------- -------- -------- -------- -------- --------
Less dividends and
distributions:
Investment income--net -- -- -- (.05) (.13) (.10) --
Realized gain on
investments--net (.50) -- (.50) -- (.09) --+++++ --
In excess of realized gain
on investments--net (.01) -- (.01) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions (.51) -- (.51) (.05) (.22) (.10) --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period $ 10.50 $ 17.37 $ 10.31 $ 17.24 $ 14.39 $ 9.83 $ 9.80
======== ======== ======== ======== ======== ======== ========
Total Investment Based on net asset
Return:** value per share (37.66%) (4.67%)+++ (38.32%) 20.19% 49.80% 1.30% (2.00%)+++
======== ======== ======== ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, excluding
Net Assets: account maintenance and
distribution fees 1.66% 1.85%* 1.71% 1.51% 1.59% 1.65% 1.73%*
======== ======== ======== ======== ======== ======== ========
Expenses 1.66% 1.85%* 2.71% 2.51% 2.59% 2.65% 2.73%*
======== ======== ======== ======== ======== ======== ========
Investment income
(loss)--net 1.40% (.20%)* .43% (.54%) 1.09% 1.30% 3.28%*
======== ======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 26,034 $ 10,350 $505,038 $937,221 $305,301 $126,344 $ 63,012
======== ======== ======== ======== ======== ======== ========
Portfolio turnover 54.86% 30.15% 54.86% 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>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
The following per share data Class C Class D
and ratios have been derived For the For the
from information provided in Period Period
the financial statements. For the Oct. 21, Sept. 27,
Year Ended 1994++ to For the Year Ended 1991++ to
Increase (Decrease) in Nov. 30, Nov. 30, November 30, Nov. 30,
Net Asset Value: 1995++++ 1994++++ 1995++++ 1994++++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 17.24 $ 18.10 $ 17.37 $ 14.45 $ 9.90 $ 9.81 $ 10.00
Performance: -------- -------- -------- -------- -------- -------- --------
Investment income
(loss)--net .03 (.02) .14 .03 .18 .15 .06
Realized and unrealized
gain (loss) on investments
<PAGE> and foreign currency
transactions--net (6.45) (.84) (6.53) 3.00 4.69 .06 (.25)
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations (6.42) (.86) (6.39) 3.03 4.87 .21 (.19)
-------- -------- -------- -------- -------- -------- --------
Less dividends and
distributions:
Investment income--net -- -- -- (.11) (.23) (.12) --
Realized gain on
investments--net (.50) -- (.50) -- (.09) --+++++ --
In excess of realized gain
on investments--net (.01) -- (.01) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions (.51) -- (.51) (.11) (.32) (.12) --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period $ 10.31 $ 17.24 $ 10.47 $ 17.37 $ 14.45 $ 9.90 $ 9.81
======== ======== ======== ======== ======== ======== ========
Total Investment Based on net asset value
Return:** per share (38.32%) (4.75%)+++ (37.84%) 21.07% 50.86% 2.19% (1.90%)+++
======== ======== ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding
Net Assets: account maintenance and
distribution fees 1.72% 1.93%* 1.66% 1.48% 1.58% 1.64% 1.72%*
======== ======== ======== ======== ======== ======== ========
Expenses 2.72% 2.93%* 1.91% 1.73% 1.83% 1.89% 1.97%*
======== ======== ======== ======== ======== ======== ========
Investment income
(loss)--net .30% (1.22%)* 1.18% .23% 1.83% 2.18% 4.05%*
======== ======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 14,659 $ 5,069 $105,830 $204,907 $ 75,085 $ 30,685 $ 18,074
======== ======== ======== ======== ======== ======== ========
Portfolio turnover 54.86% 30.15% 54.86% 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. 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 options 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
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
<PAGE>
(b) 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.
(c) 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.
* 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.
<PAGE>
* 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.
(d) 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
(e) Security transactions and investment income--Security
transactions 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 dividends from foreign securities are recorded as soon as
the Fund is informed of the ex-dividend date. Interest income
(including amortization of discount) is recognized on the accrual
basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
(f) 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.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates. Distributions in
excess of realized gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
<PAGE>
(h) Basis of consolidation--The accompanying consolidated financial
statements include the accounts of Merrill Lynch Latin America Fund
Chile Ltd., a wholly-owned subsidiary, which primarily invests in
Chilean securities. Intercompany accounts and transactions have been
eliminated.
(i) Reclassification--Generally accepted accounting principles
require that certain components of net assets be reclassified to
reflect permanent differences between financial reporting and tax
purposes. Accordingly, current year's permanent book/tax differences
of $14,023,877 and $4,492,110 have been reclassified from paid-in-
capital in excess of par and undistributed net investment income,
respectively, to accumulated net realized capital losses. These
reclassifications have no effect on net assets or net asset values
per share.
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
Agreement 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 MLAM 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 Distribution
Maintenance Fee 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 and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the year ended November 30, 1995, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer con-
cessions on sales of the Fund's Class A and Class D Shares as
follows:
MLFD MLPF&S
Class A $ 188 $ 2,684
Class D $40,794 $604,452
For the year ended November 30, 1995, MLPF&S received contingent
deferred sales charges of $2,264,262 and $14,661 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $280,047 in commissions on the
execution of portfolio security transactions for the Fund for the
year ended November 30, 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.
<PAGE>
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLPF&S, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended November 30, 1995 were $385,122,920 and
$474,387,521, respectively.
Net realized and unrealized losses as of November 30, 1995 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $(187,623,034) $(130,992,454)
Short-term investments (104,550) --
Foreign currency transactions (19,696,483) (426,572)
------------- -------------
Total $(207,424,067) $(131,419,026)
============= =============
As of November 30, 1995, net unrealized depreciation for Federal
income tax purposes aggregated $133,470,573, of which $41,375,187
related to appreciated securities and $174,845,760 related to
depreciated securities. At November 30, 1995, the aggregate cost of
investments for Federal income tax purposes was $734,704,790.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $(29,924,043) and $712,764,490 for the years ended
November 30, 1995 and November 30, 1994, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 3,438,542 $ 37,843,792
Shares issued to shareholders in
reinvestment of distributions 18,463 304,264
----------- -------------
Total issued 3,457,005 38,148,056
Shares redeemed (1,573,862) (16,786,743)
----------- -------------
Net increase 1,883,143 $ 21,361,313
=========== =============
<PAGE>
Class A Shares for the Period Dollar
Oct. 21, 1994++ to Nov. 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 Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 18,702,609 $ 208,392,855
Shares issued to shareholders in
reinvestment of distributions 1,527,757 24,963,542
----------- -------------
Total issued 20,230,366 233,356,397
Automatic conversion of shares (381,355) (4,102,038)
Shares redeemed (25,227,391) (278,539,083)
----------- -------------
Net decrease (5,378,380) $ (49,284,724)
=========== =============
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 Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 1,762,120 $ 19,860,125
Shares issued to shareholders in
reinvestment of distributions 9,124 149,092
----------- -------------
Total issued 1,771,244 20,009,217
Shares redeemed (643,180) (6,956,487)
----------- -------------
Net increase 1,128,064 $ 13,052,730
=========== =============
Class C Shares for the Period Dollar
Oct. 21, 1994++ to Nov. 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
Class D Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 7,252,530 $ 81,328,489
Automatic conversion of shares 376,941 4,102,038
Shares issued to shareholders in
reinvestment of distributions 319,791 5,266,950
----------- -------------
Total issued 7,949,262 90,697,477
Shares redeemed (9,641,073) (105,750,839)
----------- -------------
Net decrease (1,691,811) $ (15,053,362)
=========== =============
<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
=========== =============
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 Class D Shares. There were
12,538,430 shares redesignated amounting to $188,179,623.
5. Commitments:
At November 30, 1995, the Fund had entered into foreign exchange
contracts under which it agreed to sell various foreign currency
with approximate values of $2,583,000.
6. Capital Loss Carryforward:
At November 30, 1995, the Fund had a net capital loss carryforward
of approximately $145,157,000, all of which expires in 2003. This
amount will be available to offset like amounts of any future
taxable gains.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
Merrill Lynch Latin America Fund, Inc.:
We have audited the accompanying consolidated statement of assets
and liabilities, including the consolidated schedule of investments,
of Merrill Lynch Latin America Fund, Inc. and its subsidiary as of
November 30, 1995, the related consolidated statements of operations
for the year then ended and changes in net assets for each of the
years in the two-year period then ended, and the consolidated
financial highlights for the four-year period then ended and the
period September 27, 1991 (commencement of operations) to November
30, 1991. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
<PAGE>
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at November
30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements and
consolidated financial highlights present fairly, in all material
respects, the financial position of Merrill Lynch Latin America
Fund, Inc. and its subsidiary as of November 30, 1995, the results
of their operations, the changes in their net assets, and the
consolidated financial highlights for the respective stated periods
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 19, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions
paid by Merrill Lynch Latin America Fund, Inc. during the fiscal
year ended November 30, 1995:
<TABLE>
<CAPTION>
Qualifying Non-Qualifying Foreign Total Foreign Taxes Long-Term
Record Payable Domestic Domestic Source Ordinary Paid or Capital
Date Date Ordinary Income Ordinary Income Income Income Withheld Gains
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares 12/13/94 12/21/94 $0.022974 $0.062161 $0.033095 $0.118230 $0.012401 $0.395934
Class B Shares 12/13/94 12/21/94 $0.022974 $0.062161 $0.033095 $0.118230 $0.012401 $0.395934
Class C Shares 12/13/94 12/21/94 $0.022974 $0.062161 $0.033095 $0.118230 $0.012401 $0.395934
Class D Shares 12/13/94 12/21/94 $0.022974 $0.062161 $0.033095 $0.118230 $0.012401 $0.395934
</TABLE>
<PAGE>
The qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations. All of the foreign taxes paid
or withheld represent taxes incurred by the Fund on dividends
received by the Fund from foreign sources. Foreign taxes paid or
withheld should be included in taxable income with an offsetting
deduction from gross income or as a credit for taxes paid to foreign
governments. You should consult your tax adviser regarding the
appropriate treatment of foreign taxes paid.
Please retain this information for your records.
PORTFOLIO CHANGES (unaudited)
For the Quarter Ended November 30, 1995
Additions
Aracruz Celulose S.A.
Aracruz Celulose S.A. (Preferred)
Chilgener Inc. S.A.
Companhia Industrial Peru Pacifico S.A.
Companhia Paulista de Forca e Luz S.A.
(Rights)
Corporacion Banco Credito del Peru S.A.
Distribuidora Chilectra Metropolitan S.A.
(ADR)
Transportacion Maritima Mexicana, S.A.
de C.V.
Uniao de Banco Brasileiras S.A.
(UNIBANCO) (Rights)
Deletions
Banco de Colombia S.A.
Banco de Credito de Peru S.A.
Banco del Sud S.A.
Bata Chile S.A.
Casa Anglo Brasileira S.A.
Cementos Mexicanos, S.A. de C.V. Nom 'B'
(Cemex)
Cementos Paz Del Rio S.A.
Cementos Paz Del Rio S.A. (ADR)
Ceval Alimentos S.A. (Preferred)
Companhia Energetica de Minas Gerais
S.A. (CEMIG) (Preferred)
<PAGE>
Companhia Energetica de Sao Paulo S.A.
(CESP) (ADR)
Companhia Energetica de Sao Paulo S.A.
(CESP)(Preferred)(ADR)
Companhia Metalurgica Barbara S.A.
Companhia Siderurgica de Tubarao S.A.
(CST)
Companhia Vale do Rio Doce S.A.
(Preferred)
Compania de Acero del Pacifico S.A. de
Inv. (CAP)
Controladora de Farmacias, S.A. de C.V.
(COFAR)
Desc Sociedad de Fomento Industrial,
S.A. de C.V. (Class B)
El Puerto de Liverpool, S.A. de C.V.
(Non-Voting)(Series C1)
Empresas ICA Sociedad Controladora,
S.A. de C.V. (ADR) Farmacias
Benavides, S.A. de C.V.
Forestal Terranova S.A.
Grupo Financiero (GBM) Atlantico, S.A. de C.V.
Grupo Financiero (GBM) Atlantico, S.A. de C.V. 'L'
Grupo Industrial Maseca, S.A. de C.V. 'B2'
Grupo Sidek, S.A. de C.V. 'B'
Industrias Klabin de Papel e Celulose S.A. (Preferred)
La Bombril S.A. (Preferred)
La Compania Colombiano de Tabaco S.A. (COLTABACO)
La Fabril S.A.
Mesbla S.A.
Telecomunicacoes de Minejeros S.A.--TELEMIG (Ordinary)
Telecomunicacoes de Minejeros S.A.--TELEMIG (Preferred)
Tolmex, S.A. de C.V. 'B'
