MERRILL LYNCH
LATIN AMERICA
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Quarterly Report
August 31, 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.
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 #16140 -- 8/97
[RECYCLE LOGO]
Printed on post-consumer recycled paper
[GRAPHIC MAP CHART OMITTED: ASSET ALLOCATION]
Asset Allocation
As a Percentage* of
Net Assets as of
August 31, 1997
A map illustrating the following percentages:
MEXICO 29.2%
VENEZUELA 7.0%
COLOMBIA 1.8%
PERU 2.4%
BRAZIL 39.6%
ARGENTINA 11.3%
CHILE 4.0%
* Total may not equal 100% and does not include short-term securities.
Merrill Lynch Latin America Fund, Inc., August 31, 1997
DEAR SHAREHOLDER
During the three-month period ended August 31, 1997, total returns for
Merrill Lynch Latin America Fund, Inc.'s Class A, Class B, Class C and
Class D Shares were +3.77%, +3.54%, +3.55% and +3.72%, 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 4 - 6 of
this report to shareholders.) The unmanaged Morgan Stanley Capital
International Latin America Free Index rose 3.68%, and the unmanaged
J.P. Morgan Latin Brady Bond Index rose 6.00% during the same period.
Beneficial to the Fund's performance were its overweighted positions in
Mexico and Venezuela, whose markets rose 18.11% and 26.11%,
respectively. Detrimental to performance was the Fund's lack of exposure
to Brady Bonds.
Investment Overview
The Latin American stock markets continued the good performance that
began during the May quarter. Many of the same factors at play during
the first half of the year remained intact. These factors included
improving economic fundamentals (especially in Argentina, Peru and
Mexico), declining interest rates (in Mexico, Colombia and Chile),
increased funds flows and reasonable stock valuations. During the August
quarter, we added to our investments in all of the Latin American
markets, but particularly those in Venezuela, Mexico and Argentina.
Many of the markets in the region were negatively affected by investor
concerns about a rise in US interest rates and an increase in inflation.
While many Latin American markets got off to a slow start, they rapidly
made up for lost ground toward the end of the August quarter. Venezuela
was the best-performing market during the August quarter, appreciating
by 26.11%. In May, when petroleum prices rose and there was general
evidence of an improvement in inflation in the country, the market began
to forge ahead. Investor enthusiasm was further encouraged by the
successful passage of the severance pay reform bill by congress, the
opening of marginal oil fields to outside investors, and legislation for
the privatization of Sidor, one of the state-owned steel companies. We
increased our holdings in the Venezuelan telecommunications operator,
Compania Anonima Nacional Telefonos de Venezuela (CANTV), as well as the
large private-sector electric utility, C.A. La Electricidad de Caracas
S.A.I.C.A. -- S.A.C.A.
The Mexican stock market also continued to be strong during the three-
month period ended August 31, 1997, appreciating by 18.11%. Although
concerns about rising US interest rates sporadically had a negative
impact on this market, in general the market moved forward on very
encouraging news about the Mexican economic recovery. Strong gross
domestic product (GDP) numbers, combined with a declining interest rate
trend and a stable peso, have helped this market throughout 1997. On the
political front, the orderly elections held at the beginning of July
marked Mexico's continued progress toward political liberalization. We
increased our holdings in the media company Grupo Televisa, S.A. de
C.V., believing that the improvement in the retail sector would lead to
increased advertising revenues and hence higher revenues for Televisa.
The Argentine market rose by 6.69% during the August quarter.
Macroeconomic developments continued to be the main market drivers.
Strong industrial production figures and upward GDP revisions have
helped boost investor confidence in the market. Furthermore, as the
outlook for a further rise in US interest rates became more benign,
stock prices benefited. Our largest holding in Argentina is Yacimientos
Petroliferos Fiscales S.A. (YPF), the large petroleum/natural gas
conglomerate, which is also one of the most liquid stocks on the
Argentine stock exchange.
The Peruvian market declined by 7.50% during the August quarter. Growing
concerns about adverse weather conditions as a result of El Nino and
political tensions surrounding President Fujimori have negatively
affected the market. One of our key holdings in Peru is Compania de
Minas Buenaventura S.A., a mining company with significant gold
reserves.
Having shown exceptionally strong performance from the beginning of the
year, the Brazilian market declined 4.07% as investors began to focus
more on the current account deficit and similar problems in certain
Asian markets, notably Thailand. Amidst these concerns, both foreign and
domestic investors preferred to remain on the sidelines, and the huge
inflows from US mutual funds slowed. Our largest holding in Brazil
continues to be Telecomunicacoes Brasileiras S.A. (Telebras), the
telecommunications holding company.
The Chilean market declined 1.43% during the quarter. The sharpest
decline, -5.37%, occurred in August. With poor trade figures reported
during the August quarter, the outlook for further interest rate cuts by
the central bank waned.
In Conclusion
We are optimistic about the long-term prospects for stocks in the
emerging markets, and particularly in Latin America. However, as a
reminder to investors, despite the performance of the Latin American
markets during the August quarter, these markets and all emerging
markets remain volatile. 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 our upcoming annual report to
shareholders.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/GRACE PINEDA
Grace Pineda
Vice President and Portfolio Manager
September 24, 1997
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
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
[bullet] 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. However, in the case of certain
eligible investors, the shares were simultaneously exchanged for Class A
Shares.
[bullet] 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.)
[bullet] 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.
[bullet] 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. Figures shown in the "Average Annual Total Return"
tables as well as the total returns and cumulative total returns in the
"Performance Summary" tables assume reinvestment of all dividends and
capital gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so that
shares, when redeemed, may be worth more or less than their original
cost. Dividends paid to each class of shares will vary because of the
different levels of account maintenance, distribution and transfer
agency fees applicable to each class, which are deducted from the income
available to be paid to shareholders.
<TABLE>
<CAPTION>
Performance
Summary --
Class A Shares
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 -- 8/31/97 12.64 16.79 -- -- +32.83
Total $0.396 Total $0.553
Cumulative total return as of 8/31/97: -1.67%**
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class B Shares
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 -- 8/31/97 12.39 16.36 -- -- +32.04
Total $0.396 Total $0.788
Cumulative total return as of 8/31/97: +79.19%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class C Shares
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 -- 8/31/97 12.37 16.33 -- -- +32.01
Total $0.396 Total $0.434
Cumulative total return as of 8/31/97: -4.54%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class D Shares
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 -- 8/31/97 12.61 16.72 -- -- +32.59
Total $0.396 Total $1.078
Cumulative total return as of 8/31/97: +87.60%**
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Recent
Performance
Results*
12 Month 3 Month
8/31/97 5/31/97 8/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $16.79 $16.18 $12.75 +31.69% +3.77%
Class B Shares 16.36 15.80 12.42 +31.72 +3.54
Class C Shares 16.33 15.77 12.42 +31.48 +3.55
Class D Shares 16.72 16.12 12.70 +31.65 +3.72
Class A Shares - Total Return +36.27(1) +3.77
Class B Shares - Total Return +34.92(2) +3.54
Class C Shares - Total Return +34.87(3) +3.55
Class D Shares - Total Return +35.89(4) +3.72
* 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>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/97 +43.26% +35.74%
Inception (10/21/94)
through 6/30/97 + 1.15 - 0.85
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/97 +41.79% +37.79%
Five Years Ended 6/30/97 +12.11 +12.11
Inception (9/27/91)
through 6/30/97 +11.61 +11.61
* Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
** Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/97 +41.76% +40.76%
Inception (10/21/94)
through 6/30/97 + 0.09 + 0.09
* 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 6/30/97 +42.89% +35.39%
Five Years Ended 6/30/97 +13.00 +11.78
Inception (9/27/91)
through 6/30/97 +12.48 +11.43
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
<TABLE>
<CAPTION>
Merrill Lynch Latin America Fund, Inc., August 31, 1997
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
Percent of
COUNTRY Industries Shares Held Long-Term Investments Cost Value Net Assets
<S> <C> <C> <C> <C> <C> <C>
Argentina Banking 82,847 Banco de Galicia y
Buenos Aires S.A. (ADR)(1) $1,010,375 $2,454,342 0.3%
230,868 Banco Frances del Rio de la
Plata S.A. (ADR)(1) 4,655,398 7,560,927 0.8
126,900 Bansud S.A. (Class B) 1,519,435 1,865,803 0.2
------------ ------------ -------
7,185,208 11,881,072 1.3
Merchandising 547,144 Grimoldi S.A. (Class B) 3,174,556 1,915,387 0.2
Multi-Industry 2,278,251 Compania Naviera Perez
Companc S.A.C.F.I.M.F.A. 10,734,550 18,184,080 2.0
Oil & Gas Producers 1,299,563 Yacimientos Petroliferos
Fiscales S.A. (YPF)(ADR)(1) 35,874,822 42,317,020 4.6
Real Estate 1,166,915 Inversiones y Representaciones
S.A. (IRSA) 3,126,377 5,135,453 0.6
126,741 Inversiones y Representaciones
S.A. (IRSA)(GDR)(2) 3,522,249 5,632,053 0.6
------------ ------------ -------
6,648,626 10,767,506 1.2
Telecommunications 207,500 Nortel Inversora S.A. (ADR)(1) 5,976,000 5,835,938 0.6
149,632 Telecom Argentina Stet --
France Telecom S.A. (GDR)(2) 3,179,182 4,133,584 0.4
201,994 Telefonica de Argentina S.A.
(ADR)(1) 6,083,565 7,006,667 0.8
525,000 Telefonica de Argentina S.A.
(Class B) 1,497,352 1,837,868 0.2
------------ ------------ -------
16,736,099 18,814,057 2.0
------------ ------------ -------
Total Long-Term Investments
in Argentina 80,353,861 103,879,122 11.3
============ ============ =======
Brazil Banking 2,153,490,217 Banco Bradesco S.A.
(Preferred) 12,275,266 21,300,206 2.3
23,890,650 Banco Itau S.A. (Preferred) 6,086,413 13,696,810 1.5
------------ ------------ -------
18,361,679 34,997,016 3.8
Beverages &
Tobacco 37,062,732 Companhia Cervejaria Brahma
S.A. PN (Preferred) 17,498,217 24,846,524 2.7
27,200 Companhia Cervejaria Brahma
S.A. PN (Preferred) (ADR)(1) 397,933 368,900 0.1
------------ ------------ -------
17,896,150 25,215,424 2.8
Diversified 1,077,100 Souza Cruz S.A. 8,102,911 10,150,526 1.1
Energy Sources 1,308,766 Companhia Paranaense de
Energia S.A. (Copel) (ADR)(1) 23,557,788 18,813,511 2.0
151,267,034 Petroleo Brasileiro S.A.
(Preferred) 31,558,884 36,297,716 4.0
------------ ------------ -------
55,116,672 55,111,227 6.0
Food & Household
Products 414,600 Latas de Aluminio S.A. (GDR)(2) 6,645,182 4,560,600 0.5
Forest Products 288,086,000 Votorantim Celulose e Papel
S.A. (Preferred) 7,636,997 7,677,720 0.8
Machinery &
Engineering 8,848,000 Weg Exportadora S.A. (Preferred) 5,385,285 7,194,115 0.8
Metals & Steel 546,221 Companhia de Vale do Rio Doce
S.A. (Preferred) 11,274,750 12,706,304 1.4
703,497,000 Companhia Siderurgica de
Tubarao S.A. 'B' (Preferred) 11,137,437 11,790,453 1.3
308,069,000 Companhia Siderurgica Nacional
S.A. -- CSN 8,382,511 10,439,191 1.1
1,533,774 Usinas Siderurgicas de Minas
Gerais S.A. -- Usiminas
(Preferred) 16,584,635 15,591,988 1.7
------------ ------------ -------
47,379,333 50,527,936 5.5
Retail 146,000 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar S.A. (ADR)(1) 2,989,085 2,993,000 0.3
89,000,000 Lojas Arapua S.A. (Preferred) 1,615,793 758,036 0.1
------------ ------------ -------
4,604,878 3,751,036 0.4
Telecommunications 172,000 Multicanal Participacoes S.A.
(ADR)(1) 2,408,000 1,784,500 0.2
406,699 Telecomunicacoes Brasileiras
S.A. -- Telebras (ADR)(1) 57,066,934 47,990,482 5.2
164,157,454 Telecomunicacoes Brasileiras
S.A. -- Telebras (Ordinary) 10,546,082 17,589,910 1.9
696,776 Telecomunicacoes de Minas
Gerais S.A. -- TELEMIG
(Class B) (Preferred) 99,475 108,482 0.0
3,265,379 Telecomunicacoes de Sao Paulo
S.A. -- TELESP 524,948 861,278 0.1
------------ ------------ -------
70,645,439 68,334,652 7.4
Textiles &
Apparel 19,091,093 Companhia de Tecidos Norte de
Minas S.A. (Preferred) 8,349,721 6,644,029 0.7
19,351,093 Empresa Nacional de Comercio
S.A. 0 18 0.0
------------ ------------ -------
8,349,721 6,644,047 0.7
Utilities 26,673,201 Centrais Eletricas Brasileiras
S.A. (Eletrobras) 13,599,173 11,359,134 1.2
74,917 Centrais Eletricas de Santa
Catarina S.A. (CELESC) (ADR)(1) 6,026,323 9,467,561 1.0
995,199 Centrais Eletricas de Santa
Catarina S.A. (CELESC) 'B'
(Preferred) 440,401 1,330,699 0.2
28,470 Companhia Energetica de Minas
Gerais S.A. (CEMIG) (ADR)(1) 638,750 1,259,798 0.1
50,573 Companhia Energetica de Minas
Gerais S.A. (CEMIG) (ADR)(1) 1,086,614 2,273,939 0.3
227,010,000 Companhia Energetica de Minas
Gerais S.A. (CEMIG) (Preferred) 6,166,861 10,187,279 1.1
134,944,712 Companhia Paulista de Forca e
Luz S.A. 7,892,758 23,234,367 2.5
1,005,419 Companhia Paulista de Forca e
Luz S.A. (Preferred) 84,733 162,060 0.0
288,000 Globex Utilidades S.A.
(Preferred) 5,061,120 3,428,885 0.4
31,023,766 Light Participacoes S.A. 3,926,938 11,620,771 1.3
------------ ------------ -------
44,923,671 74,324,493 8.1
Utilities --
Electric 1,143,900,000 Companhia Energetica do Ceara
S.A. (Preferred) 4,912,770 5,342,879 0.6
55,000 Espirito Santo Centrais
Eletricas S.A. (Escelsa) 9,896,967 9,923,574 1.1
------------ ------------ -------
14,809,737 15,266,453 1.7
------------ ------------ -------
Total Long-Term Investments in
Brazil 309,857,655 363,755,245 39.6
============ ============ =======
Chile Telecommunications 603,496 Compania de Telecomunicaciones
de Chile S.A. (ADR)(1) 14,393,167 18,142,599 2.0
428,000 Quinenco S.A. (ADR)(1) 7,704,000 6,955,000 0.7
------------ ------------ -------
22,097,167 25,097,599 2.7
Utilities 75,000 Distribuidora Chilectra
Metropolitana S.A. (ADR)(1) 1,263,750 2,312,415 0.2
3,724,465 Empresa Nacional de Electricidad
S.A. (ENDESA) 2,032,168 2,692,709 0.3
2,057,425 Enersis S.A. 930,264 1,418,109 0.2
152,900 Enersis S.A. (ADR)(1) 3,878,773 5,437,506 0.6
------------ ------------ -------
8,104,955 11,860,739 1.3
------------ ------------ -------
Total Long-Term Investments in
Chile 30,202,122 36,958,338 4.0
============ ============ =======
Colombia Banking 1,463,334 Banco de Bogota S.A. 7,257,506 8,604,179 0.9
83,600 Banco Ganadero S.A. (Preferred)
(ADR) (1) 2,026,555 2,246,750 0.3
------------ ------------ -------
9,284,061 10,850,929 1.2
Beverages &
Tobacco 488,354 La Compania Cervecera Bavaria
S.A. 2,831,026 4,369,593 0.5
Merchandising 1,485,966 Gran Cadena de Almacenes
Colombianos S.A. (CADENALCO) 4,043,018 1,167,499 0.1
36,400 Gran Cadena de Almacenes
Colombianos S.A. (CADENALCO)
(ADR) (1) 611,250 330,152 0.0
------------ ------------ -------
4,654,268 1,497,651 0.1
------------ ------------ -------
Total Long-Term Investments in
Colombia 16,769,355 16,718,173 1.8
============ ============ =======
Mexico Banking 4,480,700 Grupo Financiero Banamex --
Accival, S.A. de C.V. 'B'
(Banacci) 10,804,887 12,020,406 1.3
63,000 Grupo Financiero Banamex --
Accival, S.A. de C.V. 'L'
(Banacci) 140,485 141,855 0.0
9,305,000 Grupo Financiero Bancomer,
S.A. de C.V. 'B' (Ordinary) 2,549,692 5,686,921 0.6
------------ ------------ -------
13,495,064 17,849,182 1.9
Beverages 447,554 Panamerican Beverages Inc.
(Class A) 8,279,749 13,454,592 1.5
Beverages &
Tobacco 2,183,350 Fomento Economico Mexicano,
S.A. de C.V. (Femsa) (ADR)(1) 6,402,480 14,959,659 1.6
1,679,000 Fomento Economico Mexicano,
S.A. de C.V. (Femsa) (Ordinary)
'B' 4,255,011 11,644,120 1.3
------------ ------------ -------
10,657,491 26,603,779 2.9
Building
Materials 1,206,097 Apasco, S.A. de C.V. 'A' 4,514,557 9,000,724 1.0
2,661,000 Cementos Mexicanos, S.A. de C.V.
'B' (Cemex) 11,225,515 14,756,704 1.6
871,300 Cementos Mexicanos, S.A. de C.V.
'B' (Cemex)(ADR)(1) 7,598,980 9,584,300 1.0
------------ ------------ -------
23,339,052 33,341,728 3.6
Chemicals 190,737 Desc, S.A. de C.V. (ADR)(1) 4,023,170 6,342,005 0.7
Construction/
Housing 59,650 Bufete Industrial, S.A. de C.V.
(ADR)(1) 1,220,171 1,245,194 0.1
Diversified 1,240,000 Alfa, S.A. de C.V. (Class A) 10,234,486 9,684,509 1.1
Financial Services 63,052 Grupo Financiero Bancomer, S.A.
de C.V. (Series L) 22,760 31,640 0.0
Health &
Personal Care 1,515,980 Kimberly-Clark de Mexico, S.A.
de C.V. 'A' 3,994,088 6,787,970 0.7
Merchandising 1,381,799 Cifra, S.A. de C.V. 'A' 1,390,187 2,542,425 0.3
250,000 Cifra, S.A. de C.V. 'B' (ADR)(1) 338,325 465,000 0.1
11,006,850 Cifra, S.A. de C.V. 'C' 12,380,515 19,657,112 2.1
------------ ------------ -------
14,109,027 22,664,537 2.5
Multi-Industry 31,179 Grupo Carso, S.A. de C.V. 'A'
(ADR)(1) 347,491 424,814 0.1
3,594,126 Grupo Carso, S.A. de C.V. 'A1' 21,837,646 25,064,543 2.7
------------ ------------ -------
22,185,137 25,489,357 2.8
Telecommunications 1,190,712 Grupo Televisa, S.A. de C.V.
(GDR)(2) 32,623,640 38,846,979 4.3
1,426,392 Telefonos de Mexico, S.A. de
C.V. (ADR)(1) 60,243,417 65,435,733 7.1
------------ ------------ -------
92,867,057 104,282,712 11.4
------------ ------------ -------
Total Long-Term Investments in
Mexico 204,427,252 267,777,205 29.2
============ ============ =======
Peru Financial Services 409,269 Credicorp Ltd. S.A. 6,250,803 8,620,228 0.9
Food & Household
Products 2,885,636 Consorcio Alimentos Fabril
Pacifico S.A. 5,303,100 3,700,929 0.4
Metals --
Non-Ferrous 350,100 Compania de Minas Buenaventura
S.A. (ADR)(1) 5,976,051 6,476,850 0.7
910,102 Minsur Sociedad Limitada S.A.
(T Shares) 2,575,220 3,110,345 0.4
------------ ------------ -------
8,551,271 9,587,195 1.1
Total Long-Term Investments in
Peru 20,105,174 21,908,352 2.4
============ ============ =======
Venezuela Building Materials 771,285 Corporacion Venezolana de
Cementos I, S.A.C.A. 559,240 1,840,794 0.2
359,139 Corporacion Venezolana de
Cementos II, S.A.C.A. 307,742 846,292 0.1
------------ ------------ -------
866,982 2,687,086 0.3
Food & Household
Products 22,907,438 Mavesa S.A. 2,037,878 4,475,280 0.5
Metals & Steel 10,543,332 Siderurgica Venezolana Sivensa,
S.A.I.C.A. -- S.A.C.A. 2,675,288 5,627,244 0.6
Telecommunications 643,750 Compania Anonima Nacional
Telefonos de Venezuela (CANTV)
(ADR)(1) 22,198,519 26,554,688 2.9
Utilities 14,736,680 C.A. La Electricidad de Caracas
S.A.I.C.A. -- S.A.C.A. 17,725,901 24,961,326 2.7
------------ ------------ -------
Total Long-Term Investments in
Venezuela 45,504,568 64,305,624 7.0
============ ============ =======
Total Long-Term Investments in
Latin America 707,219,987 875,302,059 95.3
============ ============ =======
<CAPTION>
Face Amount Short-Term Investments
<S> <C> <C> <C> <C> <C> <C>
United States Commercial Paper* US$29,327,000 General Motors Acceptance Corp.,
5.69% due 9/02/1997 29,313,094 29,313,094 3.2
US Government
Agency 1,548,000 Federal Home Loan Banks, 5.48%
Obligations* due 9/02/1997 1,547,293 1,547,293 0.1
------------ ------------ -------
Total Short-Term Investments 30,860,387 30,860,387 3.3
============ ============ =======
Total Investments $738,080,374 906,162,446 98.6
============
Other Assets Less
Liabilities 12,483,733 1.4
------------ -------
Net Assets $918,646,179 100.0%
============ =======
Net Asset Value: Class A -- Based on net assets of $88,701,339
and 5,281,427 shares outstanding $16.79
============
Class B -- Based on net assets of $638,546,175
and 39,042,179 shares outstanding $16.36
============
Class C -- Based on net assets of $42,416,751
and 2,597,873 shares outstanding $16.33
============
Class D -- Based on net assets of $148,981,914
and 8,909,389 shares outstanding $16.72
============
* 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).
</TABLE>
PORTFOLIO INFORMATION
As of August 31, 1997
Percent of
Ten Largest Equity Holdings Net Assets
Telecomunicacoes Brasileiras S.A. -- Telebras* 7.1%
Telefonos de Mexico, S.A. de C.V. (ADR) 7.1
Yacimientos Petroliferos Fiscales S.A. (YPF)(ADR) 4.6
Grupo Televisa, S.A. de C.V. (GDR) 4.3
Petroleo Brasileiro S.A. (Preferred) 4.0
Fomento Economico Mexicano, S.A. de C.V. (Femsa)* 2.9
Compania Anonima Nacional Telefonos de Venezuela
(CANTV)(ADR) 2.9
Grupo Carso, S.A. de C.V.* 2.8
Companhia Cervejaria Brahma S.A. PN (Preferred)* 2.8
C.A. La Electricidad de Caracas S.A.I.C.A. -- S.A.C.A. 2.7
* Includes combined holdings.
Percent of
Ten Largest Industries Net Assets
Telecommunications 26.4%
Utilities 12.1
Banking 8.2
Beverages & Tobacco 6.2
Metals & Steel 6.1
Energy Sources 6.0
Multi-Industry 4.8
Oil & Gas Producers 4.6
Building Materials 3.9
Merchandising 2.8
EQUITY PORTFOLIO CHANGES
For the Quarter Ended August 31, 1997
Additions
Alfa, S.A. de C.V. (Class A)
Companhia Cervejaria Brahma S.A. PN
(Preferred) (ADR)
Companhia Paranaense de Energia S.A.
(Copel) (ADR)
Corporacion Venezolana de Cementos II,
S.A.C.A.
Empresa Nacional de Comercio S.A.
Espirito Santo Centrais Eletricas S.A.
(Escelsa)
Nortel Inversora S.A. (ADR)
Quinenco S.A. (ADR)
* TV Azteca, S.A. de C.V. (ADR)
Telecomunicacoes de Minas Gerais S.A. --
TELEMIG (Class B)(Preferred)
Deletions
Banco Nacional S.A. PN (Preferred)
Centrais Eletricas Brasileiras S.A.
(Eletrobras)'B' (Preferred)
Companhia Fabricadora de Pecas S.A.
(COFAP)(Preferred)
Santa Isabel S.A.
Santa Isabel S.A. (ADR)
Sears Roebuck de Mexico, S.A. de C.V.
'B' (ADR)
Supermercados Unimarc S.A.
* TV Azteca, S.A. de C.V. (ADR)
Telecomunicacoes Brasileiras S.A. --
Telebras (Preferred)
* Added and deleted in the same quarter.
