MERRILL LYNCH
LATIN AMERICA
FUND, INC.
FUND LOGO
Quarterly Report
February 28, 1997
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.
<PAGE>
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 in-formation herein are as dated and are
subject to change.
Merrill Lynch
Latin America
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation
As a Percentage* of
Net Assets as of
February 28, 1997
A map illustrating the following percentages:
Mexico 23.7%
Venezuela 2.7%
Colombia 1.7%
Peru 2.6%
Brazil 46.0%
Argentina 10.8%
Chile 6.0%
[FN]
*Total may not equal 100% and does not include short-term
securities.
<PAGE>
DEAR SHAREHOLDER
During the three-month period ended February 28, 1997, total returns
for Merrill Lynch Latin America Fund, Inc.'s Class A, Class B, Class C
and Class D Shares were +20.26%, +19.93%, +19.95% and +20.77%,
respectively. (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--6 of this report to shareholders.) The
unmanaged Morgan Stanley Capital International Latin America Free
Index rose 20.57%, and the unmanaged J.P. Morgan Latin Brady Bond
Index rose 6.78% during the same period. The Fund's performance
benefited from its overweighted position in Brazil (up 29.25%), and
its underweighted position in Chile (up only 10.84%).
Investment Overview
Latin American markets performed well during the three months ended
February 28, 1997, benefiting from improving economic fundamentals,
largely good corporate earnings results, declining interest rates,
increased fund flows, and reasonable stock valuations. During the
February quarter, we added to our investments in Brazil and
Argentina, took profits in Mexico, and deleted our investments in
Argentine floating rate notes.
The best-performing market was again Brazil where, in addition to
the aforementioned factors, the anticipated passage of the
presidential reelection amendment and upcoming privatizations
combined to drive a +29.25% market return. We maintained a large
position in Telecomunicacoes Brasileiras S.A.--Telebras, the
telecommunications holding company, and bought shares in Centrais
Eletricas Brasileiras S.A. (Eletrobras), the electric utility
holding company.
The Colombian market performed strongly as well, rising 23.41% on
expectations of an economic rebound. To enhance the Fund's
participation in this upturn, we added to our investments in
Colombia through purchases of shares in Banco Ganadero S.A., one of
the major commercial banks in Colombia.
The Argentine market rose 16.59% on upward revisions of real
economic growth forecasts and very low inflation. Although the
sustainability of growth is dependent on the continued strength of
the Brazilian economy, we believe that stock investments in
Argentina are not very sensitive to local economic developments. For
example, Yacimientos Petroliferos Fiscales S.A. (YPF), one of our
new investments during the February quarter, is an integrated oil
and gas company that is beginning to show attractive results at its
Maxxus subsidiary. Longer term, YPF will benefit from the growing
energy needs of its partners in Mercosur, the trading bloc in the
southern part of Latin America.
<PAGE>
The Mexican market (+15.36%) benefited from expectations of
continuing economic recovery, after a 7.6% growth rate was achieved
in the last quarter of 1996. The peso's strength enabled interest
rates to decline. We added substantially to our investments in
Telefonos de Mexico, S.A. de C.V. on the view that exaggerated fears
of competition were not warranted in the near term. We also liked
the cash-generating ability of the company and management's active
program to buy back the company's shares.
In Conclusion
We are optimistic about the long-term prospects for stocks in the
emerging markets. However, we remind our shareholders that emerging
markets are volatile and an investor should have a long-term
investment outlook.
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 the upcoming quarters.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and
Portfolio Manager
March 27, 1997
PERFORMANCE DATA
About Fund
Performance
<PAGE>
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. (There is no initial
sales charge for automatic share conversions.)
* 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 (continued)
<TABLE>
Performance
Summary--
Class A Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1996 10.41 12.64 -- 0.435 +25.65
1/1/97--2/28/97 12.64 14.91 -- -- +17.96
------ ------
Total $0.396 Total $0.553
Cumulative total return as of 2/28/97: -12.68%**
<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>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
9/27/91--12/31/91 $10.00 $10.32 -- $0.098 + 4.22%
1992 10.32 10.22 -- 0.227 + 1.34
1993 10.22 16.61 -- 0.048 +63.05
1994 16.61 13.55 $0.396 0.118 -15.86
1995 13.55 10.21 -- -- -24.65
1996 10.21 12.39 -- 0.297 +24.29
1/1/97--2/28/97 12.39 14.59 -- -- +17.76
------ ------
Total $0.396 Total $0.788
<PAGE>
Cumulative total return as of 2/28/97: +59.80%**
<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**
<S> <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
1996 10.21 12.37 -- 0.316 +24.28
1/1/97--2/28/97 12.37 14.57 -- -- +17.78
------ ------
Total $0.396 Total $0.434
Cumulative total return as of 2/28/97: -14.83%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
9/27/91--12/31/91 $10.00 $10.31 -- $0.125 + 4.40%
1992 10.31 10.19 -- 0.326 + 2.15
1993 10.19 16.62 -- 0.108 +64.27
1994 16.62 13.66 $0.396 0.118 -15.24
1995 13.66 10.38 -- -- -24.01
1996 10.38 12.61 -- 0.401 +25.39
1/1/97--2/28/97 12.61 14.86 -- -- +17.84
------ ------
Total $0.396 Total $1.078
<PAGE>
Cumulative total return as of 2/28/97: +66.73%**
<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>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +25.65% +19.05%
Inception (10/21/94) through 12/31/96 -12.81 -14.92
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +24.29% +20.29%
Five Years Ended 12/31/96 + 5.42 + 5.42
Inception (9/27/91) through 12/31/96 + 5.98 + 5.98
[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**
<PAGE>
Class C Shares*
Year Ended 12/31/96 +24.28% +23.28%
Inception (10/21/94) through 12/31/96 -13.73 -13.73
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/96 +25.39% +18.81%
Five Years Ended 12/31/96 + 6.27 + 5.13
Inception (9/27/91) through 12/31/96 + 6.82 + 5.73
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
2/28/97 11/30/96 2/29/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $14.91 $12.83 $11.14 +33.84% +16.21%
Class B Shares 14.59 12.46 10.91 +33.73 +17.09
Class C Shares 14.57 12.46 10.90 +33.67 +16.93
Class D Shares 14.86 12.77 11.10 +33.87 +16.37
Class A Shares-Total Return +38.50(1) +20.26(1)
Class B Shares-Total Return +36.97(2) +19.93(2)
Class C Shares-Total Return +37.12(3) +19.95(3)
Class D Shares-Total Return +38.18(4) +20.11(4)
<PAGE>
<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 $0.435 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.297 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.316 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.401 per share ordinary
income dividends.
</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 Banking 82,847 Banco de Galicia y Buenos
Aires S.A. (ADR) (1) $ 1,010,375 $ 1,957,260 0.2%
235,768 Banco Frances del Rio de
la Plata S.A. (ADR) (1) 4,730,556 6,748,859 0.8
126,900 Bansud S.A. (Class B) 1,519,435 1,625,068 0.2
------------ ------------ ------
7,260,366 10,331,187 1.2
Merchandising 563,144 Grimoldi S.A. (Class B) 3,318,672 2,817,016 0.3
Multi-Industry 3,500,533 Compania Naviera Perez
Companc S.A.C.F.I.M.F.A. 16,362,581 26,826,423 3.2
Oil & Gas 613,600 Yacimientos Petroliferos Fiscales
Producers S.A. (ADR) (1) 16,889,766 16,413,800 2.0
Real Estate 1,166,915 Inversiones y Representaciones
S.A. (IRSA) 3,126,377 4,249,525 0.5
134,981 Inversiones y Representaciones
S.A. (IRSA) (GDR) (2) 3,742,358 4,876,189 0.6
------------ ------------ ------
6,868,735 9,125,714 1.1
Telecomm- 340,000 Telecom Argentina Stet--France
unications Telecom S.A. (GDS) (3) 13,876,106 16,362,500 2.0
210,173 Telefonica de Argentina S.A.
(ADR) (1) 6,343,531 6,646,721 0.8
525,000 Telefonica de Argentina S.A.
(Class B) 1,497,352 1,659,763 0.2
------------ ------------ ------
21,716,989 24,668,984 3.0
Total Long-Term Investments in
Argentina 72,417,109 90,183,124 10.8
<PAGE>
Brazil Automobiles 828,400 Companhia Fabricadora de Pecas S.A.
(COFAP) (Preferred) 6,793,514 9,222,838 1.1
Banking 2,203,990,217 Banco Bradesco S.A. (Preferred) 12,578,647 18,455,718 2.2
24,500,650 Banco Itau S.A. (Preferred) 6,148,925 12,542,915 1.5
364,129,908 Banco Nacional S.A. PN (Preferred) 9,903,203 347 0.0
------------ ------------ ------
28,630,775 30,998,980 3.7
Beverages & 41,312,159 Companhia Cervejaria Brahma
Tobacco S.A. PN (Preferred) 15,111,903 27,557,164 3.3
Diversified 1,087,800 Souza Cruz S.A. 8,188,144 9,005,481 1.1
Energy Sources 117,800,941 Petroleo Brasileiro S.A. (Preferred) 14,990,460 24,100,488 2.9
Forest Products 109,505,000 Votorantim Celulose e Papel S.A.
(Preferred) 2,186,585 2,677,970 0.3
Machinery & 9,088,000 Weg Exportadora S.A. (Preferred) 5,505,323 4,989,795 0.6
Engineering
Metals & Steel 722,697,000 Companhia Siderurgica de Tubarao
S.A. 'B' (Preferred) 11,445,691 12,172,173 1.4
467,009,000 Companhia Siderurgica Nacional
S.A.--CSN 12,970,061 17,197,876 2.1
1,104,720 Companhia Vale do Rio Doce S.A.
(Preferred) 23,025,915 29,328,850 3.5
15,618,741,007 Usinas Siderurgicas de Minas Gerais--
Usiminas S.A.(Preferred) 16,786,658 17,983,325 2.2
------------ ------------ ------
64,228,325 76,682,224 9.2
Retail 89,000,000 Lojas Arapua S.A. (Preferred) 1,615,793 2,159,578 0.3
Telecomm- 172,000 Multicanal Participacoes S.A.
unications (ADR) (1) 2,408,000 2,193,000 0.3
459,199 Telecomunicacoes Brasileiras
S.A.--Telebras (ADR) (1) 30,417,573 44,542,303 5.3
147,157,454 Telecomunicacoes Brasileiras
S.A.--Telebras (Ordinary) 8,677,688 13,931,578 1.7
198,590,596 Telecomunicacoes Brasileiras
S.A.--Telebras (Preferred) 8,915,759 19,388,519 2.3
89,276,288 Telecomunicacoes de Minejeros
S.A.--TELEMIG(Class B) (Preferred) 6,419,177 13,108,128 1.6
3,265,379 Telecomunicacoes de Sao Paulo
S.A.--TELESP 524,948 894,880 0.1
------------ ------------ ------
57,363,145 94,058,408 11.3
<PAGE>
Textiles & 57,902,363 Companhia de Tecidos Norte de
Apparel Minas S.A. (Preferred) 19,932,769 24,794,046 3.0
Utilities 2,500,000 Centrais Eletricas Brasileiras S.A.
(Eletrobras) 843,547 1,099,058 0.1
21,070,000 Centrais Eletricas Brasileiras S.A.
(Eletrobras) 'B' (Preferred) 7,441,245 9,563,603 1.2
80,800 Centrais Eletricas de Santa Catarina
S.A. (CELESC) (ADR) (1) 6,499,552 10,988,800 1.3
995,199 Centrais Eletricas de Santa Catarina
S.A. (CELESC) 'B' (Preferred) 440,401 1,382,615 0.2
76,000 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR) (1) 1,628,295 3,049,500 0.4
28,470 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (ADR) (1) 638,750 1,142,359 0.1
290,700,000 Companhia Energetica de Minas Gerais
S.A. (CEMIG) (Preferred) 7,861,044 11,714,859 1.4
141,125,419 Companhia Paulista de Forca e Luz S.A. 8,278,351 19,581,464 2.3
288,000 Globex Utilidades S.A. (Preferred) 5,061,120 5,809,877 0.7
41,357,251 Light Participacoes S.A. 4,867,623 12,243,069 1.5
------------ ------------ ------
43,559,928 76,575,204 9.2
Total Long-Term Investments in
Brazil 268,106,664 382,822,176 46.0
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Chile Closed-End Funds 225,468 The Chile Fund, Inc. $ 5,870,919 $ 5,439,416 0.7%
Merchandising 528,846 Santa Isabel S.A. 430,047 1,021,428 0.1
477,304 Santa Isabel S.A. (ADR) (1) 13,113,079 14,319,120 1.7
------------ ------------ ------
13,543,126 15,340,548 1.8
Telecomm- 612,328 Compania de Telecomunicaciones de
unications Chile S.A. (ADR) (1) 14,586,043 17,910,594 2.2
Utilities 30,000 Distribuidora Chilectra Metropolitana
S.A. (ADR) (1) 1,263,750 1,950,000 0.2
3,724,465 Empresa Nacional de Electricidad
S.A. (ENDESA) 2,032,168 2,301,281 0.3
2,057,425 Enersis S.A. 930,264 1,326,084 0.2
157,200 Enersis S.A. (ADR) (1) 3,990,659 5,207,250 0.6
------------ ------------ ------
8,216,841 10,784,615 1.3
Total Long-Term Investments in Chile 42,216,929 49,475,173 6.0
<PAGE>
Colombia Banking 1,407,052 Banco de Bogota S.A. 7,257,506 8,240,613 1.0
62,600 Banco Ganadero S.A. (Preferred)
(ADR) (1) 1,508,170 1,549,350 0.2
------------ ------------ ------
8,765,676 9,789,963 1.2
Beverages & 502,854 La Compania Cervecera Bavaria S.A. 2,915,335 3,219,911 0.4
Tobacco
Merchandising 1,428,814 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) 4,043,019 1,196,766 0.1
35,000 Gran Cadena de Almacenes Colombianos
S.A. (CADENALCO) (ADR) (1) 611,250 341,250 0.0
------------ ------------ ------
4,654,269 1,538,016 0.1
Total Long-Term Investments in
Colombia 16,335,280 14,547,890 1.7
Mexico Banking 2,460,000 Grupo Financiero Banamex-Accival,
S.A. de C.V. (Banacci) 6,077,462 5,738,199 0.7
9,584,000 Grupo Financiero Bancomer, S.A. de
C.V. 'B' (Ordinary) 2,626,470 3,727,779 0.4
------------ ------------ ------
8,703,932 9,465,978 1.1
Beverages 529,560 Panamerican Beverages Inc. (Class A) 17,503,473 29,853,945 3.6
Beverages & 2,282,200 Fomento Economico Mexicano, S.A.
Tobacco de C.V. (Femsa) (ADR) (1) 6,691,646 9,585,240 1.2
1,679,000 Fomento Economico Mexicano, S.A.
de C.V. (Femsa) (Ordinary) 'B' 4,255,011 7,141,543 0.9
------------ ------------ ------
10,946,657 16,726,783 2.1
Building 3,162,000 Apasco, S.A. de C.V. 'A' 10,710,570 22,852,095 2.8
Materials 2,249,000 Cementos Mexicanos, S.A. de C.V.
'B' (Cemex) 9,262,512 9,791,757 1.2
901,000 Cementos Mexicanos, S.A. de C.V. 'B'
(Cemex) (ADR) (1) 7,864,424 7,883,750 0.9
------------ ------------ ------
27,837,506 40,527,602 4.9
Chemicals 193,700 Desc, S.A. de C.V. (ADR) (1) 4,125,949 5,108,837 0.6
Financial Services 228,200 Banca Quadrum, S.A. de C.V.
(ADR) (1) 3,657,508 855,750 0.1
63,052 Grupo Financiero Bancomer, S.A.
de C.V. (Series L) 22,760 19,857 0.0
248,539 Grupo Financiero Inbursa, S.A.
de C.V. 'B' 889,303 863,806 0.1
6,107 Grupo Financiero Inbursa, S.A.
de C.V. 'B' (ADR) (1) 106,089 103,819 0.0
------------ ------------ ------
4,675,660 1,843,232 0.2
<PAGE>
Health & 742,059 Kimberly-Clark de Mexico, S.A. de
Personal Care C.V. 'A' 8,436,723 15,930,526 1.9
Merchandising 11,297,750 Cifra, S.A. de C.V. 'C' 13,996,482 17,293,921 2.1
250,000 Cifra, S.A. de C.V. 'C' (ADR) (1) 338,325 375,000 0.0
291,160 Sears Roebuck de Mexico, S.A. de
C.V. 'B' (ADR) (1) 7,681,175 982,665 0.1
------------ ------------ ------
22,015,982 18,651,586 2.2
Multi-Industry 88,704 Grupo Carso, S.A. de C.V. 'A'
(ADR) (1) 983,267 997,920 0.1
3,594,126 Grupo Carso, S.A. de C.V. 'A1' 21,837,646 20,338,153 2.5
------------ ------------ ------
22,820,913 21,336,073 2.6
Telecomm- 346,112 Grupo Televisa, S.A. de C.V.
unications (GDS) (3) 9,496,271 8,479,744 1.0
751,200 Telefonos de Mexico, S.A. de C.V.
(ADR) (1) 23,508,645 29,202,900 3.5
------------ ------------ ------
33,004,916 37,682,644 4.5
Total Long-Term Investments in
Mexico 160,071,711 197,127,206 23.7
Peru Financial 353,772 Credicorp Ltd. S.A. 6,394,124 8,136,756 1.0
Services
Food & Household 2,885,636 Consorcio Alimentos Fabril 5,303,100 4,527,557 0.6
Products Pacifico S.A.
Metals-- 272,100 Compania de Minas Buenaventura S.A. 4,421,121 5,305,950 0.6
Non-Ferrous 910,101 Minsur Sociedad Limitada S.A.
(T Shares) 2,575,220 3,251,590 0.4
------------ ------------ ------
6,996,341 8,557,540 1.0
Total Long-Term Investments in Peru 18,693,565 21,221,853 2.6
Venezuela Building 622,251 Venezolana de Cementos S.A.C.A.
Materials (Vencemos) 866,981 1,792,706 0.2
Food & Household 11,728,719 Mavesa S.A. 2,075,657 3,832,034 0.5
Products
Metals & Steel 10,780,332 Siderurgica Venezolana Sivensa
S.A.I.C.A.--S.A.C.A. 2,716,069 3,600,946 0.4
<PAGE>
Telecomm- 131,750 Compania Anonima Nacional Telefonos
unications de Venezuela (CANTV) (ADR) (1) 4,209,193 4,183,062 0.5
Utilities 8,170,271 C.A. La Electricidad de Caracas
S.A.I.C.A.--S.A.C.A. 7,351,435 8,989,004 1.1
Total Long-Term Investments in
Venezuela 17,219,335 22,397,752 2.7
Total Long-Term Investments in
Latin America 595,060,593 777,775,174 93.5
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Percent of
Face-Amount Short-Term Investments Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Commercial US$ 34,764,000 General Electric Capital Corp.,
Paper* 5.38% due 3/03/1997 $ 34,753,609 $ 34,753,609 4.2%
US Government 15,000,000 Student Loan Marketing Association,
Agency 5.18% due 3/03/1997 14,995,683 14,995,683 1.8
Obligations*
Total Short-Term Investments 49,749,292 49,749,292 6.0
Total Investments $644,809,885 827,524,466 99.5
============
Other Assets Less Liabilities 3,848,038 0.5
------------ ------
Net Assets $831,372,504 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $72,362,627 and 4,853,645
shares outstanding $ 14.91
============
Class B--Based on net assets of $599,606,633 and 41,085,128
shares outstanding $ 14.59
============
Class C--Based on net assets of $31,723,984 and 2,177,403
shares outstanding $ 14.57
============
Class D--Based on net assets of $127,679,260 and 8,590,284
shares outstanding $ 14.86
============
<PAGE>
<FN>
*Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
(1)American Depositary Receipts (ADR).
(2)Global Depositary Receipts (GDR).
(3)Global Depositary Shares (GDS).
</TABLE>
PORTFOLIO INFORMATION
As of February 28, 1997
Percent of
Ten Largest Equity Holdings Net Assets
Telecomunicacoes Brasileiras S.A.--Telebras* 9.3%
Panamerican Beverages Inc. (Class A) 3.6
Companhia Vale do Rio Doce S.A. (Preferred) 3.5
Telefonos de Mexico, S.A. de C.V. (ADR) 3.5
Companhia Cervejaria Brahma S.A. PN (Preferred) 3.3
Companhia Naviera Perez Companc S.A.C.F.I.M.F.A. 3.2
Companhia de Tecidos Norte de Minas S.A. (Preferred) 3.0
Petroleo Brasileiro S.A. (Preferred) 2.9
Apasco, S.A. de C.V. 'A' 2.8
Grupo Carso, S.A. de C.V.* 2.6
[FN]
*Includes combined holdings.
Percent of
Ten Largest Industries Net Assets
Telecommunications 21.5%
Utilities 11.6
Metals & Steel 9.6
Banking 7.2
Multi-Industry 5.8
Beverages & Tobacco 5.8
Building Materials 5.1
Merchandising 4.4
Beverages 3.6
Energy Sources 2.9
<PAGE>
EQUITY PORTFOLIO CHANGES
For the Quarter Ended February 28, 1997
Additions
Banco Ganadero S.A. (Preferred)(ADR)
Bansud S.A. (Class B)
Centrais Eletricas Brasileiras S.A.--
(Eletrobras)
Centrais Eletricas Brasileiras S.A.--
(Eletrobras) 'B' (Preferred)
Compania Anonima Nacional Telefonos
de Venezuela (CANTV) (ADR)
Grupo Financiero Bancomer, S.A. de C.V. 'B'
(Ordinary)
Lojas Arapua S.A. (Preferred)
Telecom Argentina Stet--France Telecom
S.A. (GDS)
Votorantim Celulose e Papel S.A.
(Preferred)
Yacimientos Petroliferos Fiscales S.A.
(ADR)
Deletions
Banco Industrial Colombiano S.A.
Banco Latinoamericano de Exportaciones
S.A. ('BLADEX') 'E'
Carso Global Telecom, S.A. de C.V. 'A1'
Carso Global Telecom, S.A. de C.V. (ADR)
Cementos Diamante S.A.
Cristalerias de Chile S.A. (ADR)
Editorial Lord Cochrane S.A.
Empresa Nacional de
Telecomunicaciones S.A. (ENTEL)
Grupo Casa Autrey, S.A. de C.V. (ADR)
Iochpe-Maxion S.A. (Ordinary)
Quilmes Industrial S.A.
Siderurgica Venezolana Sivensa
S.A.I.C.A.-S.A.C.A (ADR)
Telefonica del Peru S.A.
Telefonica del Peru S.A. (B Shares)
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Grace Pineda, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
