MERRILL LYNCH
LATIN AMERICA
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
May 31, 2000
<PAGE>
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation
As a Percentage* of
Net Assets as of
May 31, 2000
[GRAPHIC OMITTED]
[The following table was depicted as a map in the printed material.]
MEXICO VENEZUELA COLOMBIA PERU BRAZIL ARGENTINA CHILE
------ --------- -------- ---- ------ --------- -----
40.3% 2.5% 2.3% 2.1% 43.8% 1.1% 3.5%
*Total may not equal 100% and does not include short-term securities and the
Fund's holding in Spain.
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
DEAR SHAREHOLDER
During the six-month period ended May 31, 2000, total returns for Merrill Lynch
Latin America Fund, Inc.'s Class A, Class B, Class C and Class D Shares were
+8.95%, +8.36%, +8.33% and +8.79%, respectively. (Investment results shown do
not reflect sales charges and would be lower if sales charges were included.
Complete performance information can be found on pages 4 and 5 of this report to
shareholders.) The unmanaged Morgan Stanley Capital International (MSCI) Latin
America Free Index appreciated 2.07%. The Fund's outperformance is mainly
attributable to large individual stock positions in Brazil and Mexico and to the
resulting underweight position in Argentina. Slightly detrimental to relative
performance was the Fund's underweight position in Chile.
Investment Overview
Although Latin American market performance was fairly flat during the six-month
period ended May 31, 2000, the tame +2.07% return of the MSCI Latin America Free
Index disguises the volatility that occurred during that time. The revaluation
of companies in Internet-related businesses that started in mid-1999 continued.
Telecommunications and media stocks rallied in tandem with the National
Association of Securities Dealers Automated Quotations (NASDAQ) on investors'
enthusiasm for virtually any stock idea with an Internet angle. Valuations were
rising to mimic those in the United States, but fortunately, the "irrational
exuberance" for Internet plays in Latin markets did not last long. Not
surprisingly, when the NASDAQ corrected, Latin American stocks that were riding
on the Internet theme declined. Less rationally, other issues sold-off as well,
regardless of their fundamental vulnerability to higher US interest rates,
slower US growth, or unfulfilled US earnings expectations--the concerns that
prevailed in investors' minds. From peak to trough in this period, Latin
American markets declined 26.4%.
We believe that heightened sensitivity to US technology and Internet stock
movements is temporary, and does not take away from the value in our portfolio
investments. For example, the telecom stocks we hold provide telephony services
that are enjoying strong demand growth. The managers who run them are mindful of
their shareholders' interests. These companies' valuations are not excessive and
do not reflect long-term revenue enhancement from increased Internet usage.
Furthermore, despite having a more attractive growth profile, the valuations of
these companies are a fraction of those in the United States, Japan and the
major European countries.
We have maintained an important weighting in the telecommunications sector and
in particular, the Brazilian cellular companies. This industry remains very
fragmented as a result of the privatization of the telephone holding company,
Telebras, in 1997. Currently, there are 19 companies operating as duopolies in
different regions throughout the country. Stocks such as Telesp Celular
Participacoes SA are very attractively valued in absolute terms and relative to
their counterparts in other countries. These companies are exhibiting strong and
profitable growth. However, what attracts us most is the potential for a major
consolidation in the sector, which will further boost profitability in companies
such as Telesp Celular.
We continue to be optimistic about our long-term investments in the Mexican
media sector although we locked in some profits early this year in light of the
stocks' rapid appreciation. We maintained our full position in TV Azteca, SA de
CV.
The Fund has a substantial overweighting in Brazil relative to the Latin
American stock index. The economy is just starting to grow following two years
of recession and a devaluation. Interest rates are still very high and when
inflation is under control, can decline. Fundamentals for the Brazilian real are
very positive, its devaluation last year having wrung out some of the economic
imbalances. Exports have benefited from this and from the strength in commodity
prices. Fiscal targets are being met, and the debt profile restructured. We
believe that among the Latin markets we invest in, Brazil has the most potential
to provide positive surprises.
In Conclusion
The long-anticipated correction of the NASDAQ has led declines in the Latin
American markets and cooled enthusiasm for technology and Internet-related
stocks. Risk-averse investors have become wary of the more volatile Latin
American investments. In our view, short-term market volatility does not
diminish the potential for long-term appreciation of our investments. We thank
you for your continued interest in Merrill Lynch Latin America Fund, Inc., and
we look forward to updating you in our next report to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Grace Pineda
Grace Pineda
Senior Vice President and
Portfolio Manager
June 27, 2000
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Robert C. Doll, Jr., Senior Vice President
Grace Pineda, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Susan B. Baker, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Donald Cecil and Edward H. Meyer, Directors of Merrill Lynch Latin America Fund,
Inc. have recently retired. The Fund's Board of Directors wishes Mr. Cecil and
Mr. Meyer well in their retirements.
2 & 3
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select Pricing(SM) System, which offers four pricing alternatives:
o 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.
o 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.)
o 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.
o 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 "Recent Performance Results" and
"Average Annual Total Return" 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.
Recent Performance Results*
<TABLE>
<CAPTION>
6 Month 12 Month Since Inception
As of May 31, 2000 Total Return Total Return Total Return
==========================================================================================
<S> <C> <C> <C>
ML Latin America Fund, Inc. Class A Shares +8.95% +22.65% -12.84%
------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class B Shares +8.36 +21.24 +54.14
------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class C Shares +8.33 +21.31 -17.86
------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class D Shares +8.79 +22.33 +65.12
==========================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Total investment returns are
based on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's since inception dates are from
10/21/94 for Class A & Class C Shares and from 9/27/91 for Class B & Class
D Shares.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 3/31/00 +62.26% +53.74%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +14.02 +12.80
--------------------------------------------------------------------------------
Inception (10/21/94) through 3/31/00 + 0.89 - 0.11
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 3/31/00 +60.42% +56.42%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +12.85 +12.85
--------------------------------------------------------------------------------
Inception (9/27/91) through 3/31/00 + 7.56 + 7.56
--------------------------------------------------------------------------------
* 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 3/31/00 +60.53% +59.53%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +12.83 +12.83
--------------------------------------------------------------------------------
Inception (10/21/94) through 3/31/00 - 0.17 - 0.17
--------------------------------------------------------------------------------
* 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 3/31/00 +61.75% +53.26%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +13.74 +12.52
--------------------------------------------------------------------------------
Inception (9/27/91) through 3/31/00 + 8.41 + 7.73
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%. (Prior to October 21, 1994, Class D Shares
(formerly Class A Shares) were offered at a higher than maximum sales
charge. Thus, actual returns would have been somewhat lower than noted for
the inception period.)
** Assuming maximum sales charge.
4 & 5
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Shares Held/ Percent of
COUNTRY Industries Face Amount Long-Term Investments Value Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Argentina Real Estate 57,648 IRSA Inversiones y Representaciones SA 'B' $ 141,828 0.1%
57,696 IRSA Inversiones y Representaciones SA (GDR)** 1,406,340 0.6
------------ -----
1,548,168 0.7
-------------------------------------------------------------------------------------------------------------------
Textiles & Apparel 555,659 +Grimoldi SA 'B' 778,000 0.4
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Argentina 2,326,168 1.1
====================================================================================================================================
Brazil Banking 102,126,744 Banco Bradesco SA (Preferred) 689,237 0.3
29,965,540 Banco Itau SA (Preferred) 2,257,059 1.0
------------ -----
2,946,296 1.3
-------------------------------------------------------------------------------------------------------------------
Beverages 4,107,200 Companhia Cervejaria Brahma (Preferred) 2,958,624 1.3
-------------------------------------------------------------------------------------------------------------------
Diversified 3,485,825 Itausa--Investimentos Itau SA (Preferred) 2,845,182 1.3
Financials
-------------------------------------------------------------------------------------------------------------------
Diversified 185,750,637 Embratel Participacoes SA 3,042,423 1.4
Telecommunications 314,129 Embratel Participacoes SA (ADR)* 6,577,076 3.0
Services 153,100,937 Tele Centro Sul Participacoes SA 1,377,112 0.6
263,333 Tele Norte Leste Participacoes SA (ADR)* 5,167,910 2.4
7,859,823 Tele Norte Leste Participacoes SA (Preferred) 154,140 0.1
241,765,637 +Telecomunicacoes Brasileiras SA--Telebras 3,973 0.0
67,124,450 +Telecomunicacoes Brasileiras SA--Telebras 5,920,042 2.7
47,995 +Telecomunicacoes Brasileiras SA--Telebras (ADR)* 750 0.0
29,770 Telecomunicacoes Brasileiras SA--Telebras
(Preferred Block) (ADR)* 3,445,878 1.6
------------ -----
25,689,304 11.8
-------------------------------------------------------------------------------------------------------------------
Electric Utilities 27,891 Companhia Energetica de Minas Gerais SA--CEMIG
(ADR)* 430,852 0.2
72,502 Companhia Energetica de Minas Gerais SA--CEMIG
(ADR)* (a) 1,119,989 0.5
216,397,008 Companhia Energetica de Minas Gerais SA--CEMIG
(Preferred) 3,331,008 1.5
1,202,591,050 Companhia Energetica do Ceara--Coelce 'A'
(Preferred) 3,063,297 1.4
178,262 Companhia Paranaense de Energia--Copel (ADR)* 1,437,237 0.7
55,070 +Espirito Santo Centrais Eletricas SA--Escelsa 1,606,397 0.7
------------ -----
10,988,780 5.0
-------------------------------------------------------------------------------------------------------------------
Food & Drug 167,372 Companhia Brasileira de Distribuicao Grupo Pao de
Retailing Acucar (ADR)* 5,021,160 2.3
-------------------------------------------------------------------------------------------------------------------
Forest Products 61,780 Aracruz Celulose SA (ADR)* 1,034,815 0.5
119,757,412 Votorantim Celulose e Papel SA (Preferred) 3,804,946 1.7
------------ -----
4,839,761 2.2
-------------------------------------------------------------------------------------------------------------------
Machinery & 8,900,087 Weg SA (Preferred) 4,582,899 2.1
Engineering
-------------------------------------------------------------------------------------------------------------------
Metals & Mining 949 Companhia Siderurgica Nacional 31 0.0
BRL 1,099,391 Companhia Vale do Rio Doce, 0% due 12/31/2049 (b) 0 0.0
352,742 Companhia Vale do Rio Doce 'A' (Preferred) 8,791,981 4.0
------------ -----
8,792,012 4.0
-------------------------------------------------------------------------------------------------------------------
Oil & Gas 6,051,500 Petroleo Brasileiro SA--Petrobras 1,342,568 0.6
11,794,144 Petroleo Brasileiro SA--Petrobras (Preferred) 2,707,064 1.3
------------ -----
4,049,632 1.9
-------------------------------------------------------------------------------------------------------------------
Specialty Retailing 278,060 Globex Utilidades SA (Preferred) 2,132,479 1.0
-------------------------------------------------------------------------------------------------------------------
Textiles & Apparel 23,089,686 Companhia de Tecidos Norte de Minas--Coteminas
(Preferred) 1,542,980 0.7
21,491,685 +Empresa Nasional de Comercio SA 55,333 0.0
------------ -----
1,598,313 0.7
-------------------------------------------------------------------------------------------------------------------
Wireless 3,308,000 +Celular CRT Participacoes SA (Preferred) 987,598 0.4
Telecommunications 149,205,637 Tele Celular Sul Participacoes SA 383,333 0.2
Services 149,205,637 Tele Centro Oeste Celular Participacoes SA 453,624 0.2
359,475 Tele Centro Oeste Celular Participacoes SA (ADR)* 3,662,151 1.7
149,205,637 Tele Leste Celular Participacoes SA 122,601 0.0
15,200 Tele Leste Celular Participacoes SA (ADR)* 609,900 0.3
149,205,637 Tele Nordeste Celular Participacoes SA 341,649 0.1
23,785 Tele Nordeste Celular Participacoes SA (ADR)* 1,260,605 0.6
149,205,637 Tele Norte Celular Participacoes SA 123,419 0.1
33,275 Tele Norte Celular Participacoes SA (ADR)* 1,530,650 0.7
149,205,637 Tele Sudeste Celular Participacoes SA 637,526 0.3
190,284,354 Telemig Celular Participacoes SA 458,642 0.2
5,900 Telemig Celular Participacoes SA (ADR)* 342,569 0.2
9,845,775 +Telemig Celular SA 135,376 0.1
735,140 Telemig Celular SA 'C' (Preferred) 16,068 0.0
103,900 Telesp Celular Participacoes SA (ADR)* 3,935,212 1.8
------------ -----
15,000,923 6.9
-------------------------------------------------------------------------------------------------------------------
Wireline 9,845,775 Telecomunicacoes de Minas Gerais--Telemig 226,580 0.1
Telecommunications 735,140 Telecomunicacoes de Minas Gerais--Telemig 'B'
Services (Preferred) 23,961 0.0
152,883,737 Telesp Participacoes SA 2,311,471 1.1
69,525 Telesp--Telecomunicacoes de Sao Paulo SA 1,764,197 0.8
------------ -----
4,326,209 2.0
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Brazil 95,771,574 43.8
====================================================================================================================================
Chile Diversified 269,586 Compania de Telecomunicaciones de Chile SA (ADR)* 5,324,323 2.4
Telecommunications
Services
-------------------------------------------------------------------------------------------------------------------
Electric Utilities 76,925 Chilectra SA (ADR)* (a) 1,321,987 0.6
1,649,656 +Empresa Nacional de Electricidad SA (Endesa) 648,113 0.3
1,014,657 Enersis SA 433,995 0.2
------------ -----
2,404,095 1.1
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Chile 7,728,418 3.5
===================================================================================================================================
</TABLE>
6 & 7
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Shares Held/ Percent of
COUNTRY Industries Face Amount Long-Term Investments Value Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Colombia Banking 1,045,595 Banco de Bogota $ 1,735,179 0.8%
83,802 Banco Ganadero SA (Preferred) (ADR)* 361,396 0.2
------------ -----
2,096,575 1.0
-------------------------------------------------------------------------------------------------------------------
Beverages 485,874 Bavaria SA 1,679,822 0.7
-------------------------------------------------------------------------------------------------------------------
Diversified Financials 513,565 +Valores Bavaria SA 431,032 0.2
-------------------------------------------------------------------------------------------------------------------
Multiline 522,783 Almacenes Exito SA 872,552 0.4
Retailing
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Colombia 5,079,981 2.3
====================================================================================================================================
Mexico Banking 70,876 Banco Latinoamericano de Exportaciones, SA 'E' 1,732,032 0.8
63,000 +Grupo Financiero Banamex Accival, SA de CV
(Banacci) 'L' 205,417 0.1
1,604,048 +Grupo Financiero Banamex Accival, SA de CV
(Banacci) 'O' 5,230,133 2.4
------------ -----
7,167,582 3.3
-------------------------------------------------------------------------------------------------------------------
Beverages 133,338 Fomento Economico Mexicano, SA de CV (ADR)* 5,075,178 2.3
299,049 Panamerican Beverages, Inc. 'A' (US
Registered Shares) 4,597,878 2.1
------------ -----
9,673,056 4.4
-------------------------------------------------------------------------------------------------------------------
Construction Material 173,800 Cemex, SA de CV 735,782 0.3
213,968 Cemex, SA de CV (ADR)* 4,533,447 2.1
13,298 Cemex, SA de CV (ADR)* (Warrants) (c) 39,063 0.0
9,000 Cemex, SA de CV (Warrants) (c) 5,206 0.0
------------ -----
5,313,498 2.4
-------------------------------------------------------------------------------------------------------------------
Diversified Financials 761,429 +Grupo Carso, SA de CV 'A1' 2,322,529 1.1
67,381 +Grupo Carso, SA de CV (ADR)* 411,051 0.2
------------ -----
2,733,580 1.3
-------------------------------------------------------------------------------------------------------------------
Diversified 705,500 +Carso Global Telecom (ADR)* 3,227,874 1.5
Telecommunications 352,853 Telefonos de Mexico SA (ADR)* 17,179,530 7.9
Services ------------ -----
20,407,404 9.4
-------------------------------------------------------------------------------------------------------------------
Food Products 1,100,153 Grupo Industrial Bimbo, SA de CV 'A' 1,550,571 0.7
-------------------------------------------------------------------------------------------------------------------
Industrial 770,943 Alfa, SA 'A' 2,088,013 1.0
Conglomerates 179,644 Desc, SA de CV (ADR)* 2,178,184 1.0
------------ -----
4,266,197 2.0
-------------------------------------------------------------------------------------------------------------------
Machinery 109,700 Tubos de Acero de Mexico SA (ADR)* 1,480,950 0.7
-------------------------------------------------------------------------------------------------------------------
Media 647,520 +Corporacion Interamericana de Entretenimiento
SA 'B' 2,588,037 1.2
133,128 +Grupo Televisa SA (GDR)** 7,413,566 3.4
5,792,000 TV Azteca, SA de CV 3,448,090 1.5
1,070,870 TV Azteca, SA de CV (ADR)* 10,106,336 4.6
------------ -----
23,556,029 10.7
-------------------------------------------------------------------------------------------------------------------
Multiline Retailing 357,900 +Grupo Sanborns SA 'B1' 568,424 0.3
1,742,637 +Wal-Mart de Mexico, SA de CV 'C' 3,372,550 1.5
------------ -----
3,940,974 1.8
-------------------------------------------------------------------------------------------------------------------
Paper & Forest Products 963,412 Kimberly-Clark de Mexico, SA de CV 'A' 2,989,288 1.4
-------------------------------------------------------------------------------------------------------------------
Specialty Retailing 4,641,550 Grupo Elektra, SA de CV 3,749,367 1.7
-------------------------------------------------------------------------------------------------------------------
Supermarkets 1,292,752 Controladora Comercial Mexicana, SA de CV 1,090,494 0.5
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Mexico 87,918,990 40.3
====================================================================================================================================
Peru Banks 104,271 Credicorp Limited 925,405 0.4
-------------------------------------------------------------------------------------------------------------------
Beverages 6,868,232 +Alicorp SA 958,813 0.5
-------------------------------------------------------------------------------------------------------------------
Metals & Mining 176,685 Compania de Minas Buenaventura SA (ADR)* 2,661,318 1.2
1 Minsur SA 2 0.0
------------ -----
2,661,320 1.2
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Peru 4,545,538 2.1
====================================================================================================================================
Spain Internet Content 2,800 +Terra Networks, SA 127,239 0.1
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Spain 127,239 0.1
====================================================================================================================================
Venezuela Construction Material 1,497,199 Corporacion Venezolana de Cementos I, SACA 483,673 0.2
989,726 Corporacion Venezolana de Cementos II, SACA 300,840 0.1
765,505 +Sudamtex de Venezuela (ADR)* (a) 359,711 0.2
------------ -----
1,144,224 0.5
-------------------------------------------------------------------------------------------------------------------
Diversified 102,024 Compania Anonima Nacional Telefonos de Venezuela
Telecommunications (CANTV) (ADR)* 2,901,307 1.3
Services
--------------------------------------------------------------------------------------------------------------------
Food Products 26,506,157 Mavesa SA 1,227,993 0.6
-------------------------------------------------------------------------------------------------------------------
Metals & Mining 46,750 International Briquettes Holding, Inc. 122,719 0.1
-------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Venezuela 5,396,243 2.5
====================================================================================================================================
Total Long-Term Investments (Cost--$238,126,402) 208,894,151 95.7
====================================================================================================================================
Face
Amount Short-Term Investments
====================================================================================================================================
United States Commercial US$ 6,774,000 General Motors Acceptance Corp., 6.81%
Paper*** due 6/01/2000 6,774,000 3.1
2,685,000 Honeywell International, 6.28% due 6/19/2000 2,676,569 1.2
-------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost--$9,450,569) 9,450,569 4.3
===================================================================================================================================
Total Investments (Cost--$247,576,971) 218,344,720 100.0
Other Assets Less Liabilities 45,591 0.0
------------ -----
Net Assets $218,390,311 100.0%
============ =====
====================================================================================================================================
</TABLE>
* American Depositary Receipts (ADR).
** Global Depositary Receipts (GDR).
*** Commercial Paper is traded on a discount basis; the interest rates shown
reflect the discount rates paid at the time of purchase by the Fund.
(a) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(b) Received through a bonus issue from Companhia Vale do Rio Doce. As of May
31, 2000, the bonds have not commenced trading and the coupon rate has not
been determined.
(c) Warrants entitle the Fund to purchase a predetermined number of shares of
common stock and are non-income producing. The purchase price and number
of shares are subject to adjustment under certain conditions until the
expiration date.
+ Non-income producing security.
See Notes to Consolidated Financial Statements.
8 & 9
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of May 31, 2000
=================================================================================================================================
<C> <S> <C> <C>
Assets: Investments, at value (identified cost--$247,576,971) ........................ $ 218,344,720
Cash ......................................................................... 109,949
Foreign cash ................................................................. 12,855
Receivables:
Dividends .................................................................. $ 1,642,971
Capital shares sold ........................................................ 138,373 1,781,344
-------------
Prepaid expenses ............................................................. 80,007
-------------
Total assets ................................................................. 220,328,875
-------------
=================================================================================================================================
Liabilities: Payables:
Securities purchased ....................................................... 623,710
Capital shares redeemed .................................................... 406,470
Investment adviser ......................................................... 153,713
Distributor ................................................................ 129,076 1,312,969
-------------
Accrued expenses ............................................................. 625,595
-------------
Total liabilities ............................................................ 1,938,564
-------------
=================================================================================================================================
Net Assets: Net assets ................................................................... $ 218,390,311
=============
=================================================================================================================================
Net Assets Class A Common Stock, $.10 par value, 100,000,000 shares authorized .......... $ 250,954
Consist of: Class B Common Stock, $.10 par value, 100,000,000 shares authorized .......... 862,868
Class C Common Stock, $.10 par value, 100,000,000 shares authorized .......... 75,526
Class D Common Stock, $.10 par value, 100,000,000 shares authorized .......... 414,821
Paid-in capital in excess of par ............................................. 396,650,429
Undistributed investment income--net ......................................... 803,232
Accumulated realized capital losses on investments and foreign
currency transactions--net ................................................... (151,369,969)
Unrealized depreciation on investments and foreign currency
transactions--net ............................................................ (29,297,550)
-------------
Net assets ................................................................... $ 218,390,311
=============
=================================================================================================================================
Net Asset Class A--Based on net assets of $34,694,959 and 2,509,540 shares outstanding $ 13.83
Value: =============
Class B--Based on net assets of $116,412,715 and 8,628,682 shares outstanding $ 13.49
=============
Class C--Based on net assets of $10,179,689 and 755,257 shares outstanding .. $ 13.48
=============
Class D--Based on net assets of $57,102,948 and 4,148,208 shares outstanding $ 13.77
=============
================================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 2000
===========================================================================================================
<C> <S> <C> <C>
Investment Income: Dividends (net of $364,779 foreign withholding tax) $ 3,366,682
Interest and discount earned ....................... 267,589
------------
Total income ....................................... 3,634,271
------------
===========================================================================================================
Expenses: Investment advisory fees ........................... $ 1,266,526
Account maintenance and distribution fees--Class B . 725,244
Transfer agent fees--Class B ....................... 160,700
Custodian fees ..................................... 75,727
Foreign capital gains tax .......................... 72,334
Account maintenance fees--Class D .................. 71,699
Account maintenance and distribution fees--Class C . 59,389
Transfer agent fees--Class D ....................... 51,737
Professional fees .................................. 51,345
Accounting services ................................ 48,505
Transfer agent fees--Class A ....................... 35,116
Registration fees .................................. 30,145
Printing and shareholder reports ................... 24,781
Directors' fees and expenses ....................... 17,051
Transfer agent fees--Class C ....................... 12,907
Other .............................................. 10,187
------------
Total expenses ..................................... 2,713,393
------------
Investment income--net ............................. 920,878
------------
===========================================================================================================
Realized & Realized gain (loss) from:
Unrealized Investments--net ................................. 18,082,353
Gain (Loss) on Foreign currency transactions--net ............... (105,816) 17,976,537
Investments & ------------
Foreign Currency Change in unrealized depreciation on:
Transactions--Net: Investments--net ................................. 3,493,722
Foreign currency transactions--net ............... 54,591 3,548,313
------------ ------------
Net Increase in Net Assets Resulting from Operations $ 22,445,728
============
</TABLE>
See Notes to Consolidated Financial Statements.
10 & 11
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
May 31, November 30,
Increase (Decrease) in Net Assets: 2000 1999
=============================================================================================================================
<C> <S> <C> <C>
Operations: Investment income--net ................................................... $ 920,878 $ 2,700,111
Realized gain (loss) on investments and foreign currency transactions--net 17,976,537 (22,152,034)
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net ............................................. 3,548,313 65,469,076
------------- -------------
Net increase in net assets resulting from operations ..................... 22,445,728 46,017,153
------------- -------------
=============================================================================================================================
Dividends to Investment income--net:
Shareholders: Class A ................................................................ (557,889) (1,332,021)
Class B ................................................................ (867,056) (6,005,561)
Class C ................................................................ (83,947) (362,386)
Class D ................................................................ (742,386) (2,282,954)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders ...... (2,251,278) (9,982,922)
------------- -------------
=============================================================================================================================
Capital Share Net decrease in net assets derived from capital share transactions ....... (28,038,850) (89,007,857)
Transactions: ============= =============
=============================================================================================================================
Net Assets: Total decrease in net assets ............................................. (7,844,400) (52,973,626)
Beginning of period ...................................................... 226,234,711 279,208,337
------------- -------------
End of period* ........................................................... $ 218,390,311 $ 226,234,711
============= =============
=============================================================================================================================
*Undistributed investment income--net ..................................... $ 803,232 $ 2,133,632
============= =============
=============================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A+
The following per share data and ratios ------------------------------------------------------------
have been derived from information provided For the Six
in the financial statements. Months Ended For the Year Ended November 30,
May 31, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===================================================================================================================================
<C> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ............. $ 12.89 $ 10.61 $ 15.10 $ 12.83 $ 10.50
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ........................... .11 .20 .38 .17 .46
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net ........... 1.06 2.63 (4.87) 2.54 1.87
-------- -------- -------- -------- --------
Total from investment operations ................. 1.17 2.83 (4.49) 2.71 2.33
-------- -------- -------- -------- --------
Less dividends from investment income--net ....... (.23) (.55) -- (.44) --
-------- -------- -------- -------- --------
Net asset value, end of period ................... $ 13.83 $ 12.89 $ 10.61 $ 15.10 $ 12.83
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ............... 8.95%++ 28.74% (29.74%) 21.79% 22.19%
Return:** ======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses ......................................... 1.44%* 1.77% 1.53% 1.46% 1.48%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ........................... 1.39%* 1.84% 2.12% 1.03% 3.74%
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) ......... $ 34,695 $ 32,023 $ 26,249 $ 77,086 $ 46,369
Data: ======== ======== ======== ======== ========
Portfolio turnover ............................... 15.08% 29.91% 31.92% 84.91% 66.14%
======== ======== ======== ======== ========
===================================================================================================================================
<CAPTION>
Class B+
The following per share data and ratios ------------------------------------------------------------
have been derived from information provided For the Six
in the financial statements. Months Ended For the Year Ended November 30,
May 31, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===================================================================================================================================
<C> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ............. $ 12.52 $ 10.20 $ 14.66 $ 12.46 $ 10.31
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .................... .03 .10 .23 --+++ .32
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net ........... 1.02 2.56 (4.69) 2.50 1.83
-------- -------- -------- -------- --------
Total from investment operations ................. 1.05 2.66 (4.46) 2.50 2.15
-------- -------- -------- -------- --------
Less dividends from investment income--net ....... (.08) (.34) -- (.30) --
-------- -------- -------- -------- --------
Net asset value, end of period ................... $ 13.49 $ 12.52 $ 10.20 $ 14.66 $ 12.46
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ............... 8.36%++ 27.32% (30.42%) 20.51% 20.85%
Return:** ======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses ......................................... 2.47%* 2.87% 2.57% 2.50% 2.54%
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .................... .40%* .98% 1.76% (.03%) 2.69%
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) ......... $116,413 $135,883 $190,670 $527,520 $518,865
Data: ======== ======== ======== ======== ========
Portfolio turnover ............................... 15.08% 29.91% 31.92% 84.91% 66.14%
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns exclude the effects of sales
charges.
+ Based on average shares outstanding.
+++ Amount is less than $.01 per share.
++ Aggregate total investment return.
See Notes to Consolidated Financial Statements.
12 & 13
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
CONSOLIDATED FINANCIAL HIGHLIGHTS (concluded)
<TABLE>
<CAPTION>
Class C+
The following per share data and ratios ------------------------------------------------------------
have been derived from information provided For the Six
in the financial statements. Months Ended For the Year Ended November 30,
May 31, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===================================================================================================================================
<C> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ............. $ 12.53 $ 10.18 $ 14.64 $ 12.46 $ 10.31
Operating ------- ------- ------- -------- --------
Performance: Investment income (loss)--net .................... .03 .09 .23 (.02) .32
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net ........... 1.02 2.58 (4.69) 2.52 1.83
------- ------- ------- -------- --------
Total from investment operations ................. 1.05 2.67 (4.46) 2.50 2.15
------- ------- ------- -------- --------
Less dividends from investment income--net ....... (.10) (.32) -- (.32) --
------- ------- ------- -------- --------
Net asset value, end of period ................... $ 13.48 $ 12.53 $ 10.18 $ 14.64 $ 12.46
======= ======= ======= ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ............... 8.33%++ 27.42% (30.46%) 20.52% 20.85%
Return:** ======= ======= ======= ======== ========
===================================================================================================================================
Ratios to Average Expenses ......................................... 2.47%* 2.85% 2.57% 2.50% 2.54%
Net Assets: ======= ======= ======= ======== ========
Investment income (loss)--net .................... .38%* .89% 1.77% (.11%) 2.68%
======= ======= ======= ======== ========
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) ......... $10,179 $10,638 $12,196 $ 37,027 $ 23,183
Data: ======= ======= ======= ======== ========
Portfolio turnover ............................... 15.08% 29.91% 31.92% 84.91% 66.14%
======= ======= ======= ======== ========
===================================================================================================================================
<CAPTION>
Class D+
The following per share data and ratios ------------------------------------------------------------
have been derived from information provided For the Six
in the financial statements. Months Ended For the Year Ended November 30,
May 31, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===================================================================================================================================
<C> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ............. $ 12.83 $ 10.53 $ 15.02 $ 12.77 $ 10.47
Operating ------- ------- ------- -------- --------
Performance: Investment income--net ........................... .09 .18 .34 .11 .42
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net ........... 1.05 2.62 (4.83) 2.54 1.88
------- ------- ------- -------- --------
Total from investment operations ................. 1.14 2.80 (4.49) 2.65 2.30
------- ------- ------- -------- --------
Less dividends from investment income--net ....... (.20) (.50) -- (.40) --
------- ------- ------- -------- --------
Net asset value, end of period ................... $ 13.77 $ 12.83 $ 10.53 $ 15.02 $ 12.77
======= ======= ======= ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ............... 8.79%++ 28.47% (29.89%) 21.40% 21.97%
Return:** ======= ======= ======= ======== ========
===================================================================================================================================
Ratios to Average Expenses ......................................... 1.69%* 2.04% 1.78% 1.71% 1.74%
Net Assets: ======= ======= ======= ======== ========
Investment income--net ........................... 1.17%* 1.73% 2.54% .72% 3.47%
======= ======= ======= ======== ========
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) ......... $57,103 $47,691 $50,093 $128,433 $112,833
Data: ======= ======= ======= ======== ========
Portfolio turnover ............................... 15.08% 29.91% 31.92% 84.91% 66.14%
======= ======= ======= ======== ========
</TABLE>
* Annualized.
** Total investment returns exclude the effects of sales
charges.
+ Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Consolidated Financial Statements.
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's financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America,
which may require the use of management accruals and estimates. These unaudited
financial statements reflect all adjustments, which are, in the opinion of
management, necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature. The Fund
offers four classes of shares under the Merrill Lynch Select PricingSM 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 that 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
that 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
or purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). 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.
(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
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. Losses may arise due to changes in the value
14 & 15
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
of the contract or if the counterparty does not perform under the contract.
o 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.
o 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.
o 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.
o Financial futures contracts -- The Fund may purchase or sell financial 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.
(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. Dividends from foreign
securities where the ex-dividend date may have passed are subsequently recorded
when the Fund has determined 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) Prepaid registration fees -- 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.
(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.
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 ("MLFD" or the "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is 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.
Pursuant to 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 ....................................... .25% .75%
Class C ....................................... .25% .75%
Class D ....................................... .25% --
--------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("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 six months ended May 31, 2000, MLFD earned underwriting discounts and
direct commissions and MLPF&S earned dealer concessions on sales of the Fund's
Class D Shares as follows:
--------------------------------------------------------------------------------
MLFD MLPF&S
--------------------------------------------------------------------------------
Class D .............................................. $3,816 $7,847
--------------------------------------------------------------------------------
For the six months ended May 31, 2000, MLPF&S received contingent deferred sales
charges of $108,802 and $2,486 relating to transactions in Class B and Class C
Shares, respectively.
In addition, MLPF&S received $10,344 in commissions on the execution of
portfolio security transactions for the Fund for the six months ended May 31,
2000.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 2000 were $36,418,459 and $71,876,191, respectively.
Net realized gains (losses) for the six months ended May 31, 2000 and net
unrealized losses as of May 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Losses
--------------------------------------------------------------------------------
Long-term investments ............................ $ 18,082,488 $(29,232,251)
Short-term investments ........................... (135) --
Foreign currency transactions .................... (105,816) (65,299)
------------ ------------
Total $ 17,976,537 $(29,297,550)
============ ============
--------------------------------------------------------------------------------
As of May 31, 2000, net unrealized depreciation for Federal income tax purposes
aggregated $29,232,251, of which $41,844,919 related to appreciated securities
and $71,077,170
16 & 17
<PAGE>
Merrill Lynch Latin America Fund, Inc., May 31, 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
related to depreciated securities. At May 31, 2000, the aggregate cost of
investments for Federal income tax purposes was $247,576,971.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$28,038,850 and $89,007,857 for the six months ended May 31, 2000 and the year
ended November 30, 1999, respectively.
Transactions in capital shares for each class were as follows:
--------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 679,707 $ 10,594,527
Shares issued to shareholders in
reinvestment of dividends ................ 36,804 539,541
------------ ------------
Total issued ............................. 716,511 11,134,068
Shares redeemed .......................... (691,587) (10,658,046)
------------ ------------
Net increase ............................. 24,924 $ 476,022
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 1,210,003 $ 12,934,241
Shares issued to shareholders in
reinvestment of dividends ................ 105,420 977,240
------------ ------------
Total issued ............................. 1,315,423 13,911,481
Shares redeemed .......................... (1,304,078) (13,422,919)
------------ ------------
Net increase ............................. 11,345 $ 488,562
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 359,167 $ 5,406,655
Shares issued to shareholders in
reinvestment of dividends ................ 50,093 719,843
------------ ------------
Total issued ............................. 409,260 6,126,498
Automatic conversion of shares ........... (585,237) (8,886,058)
Shares redeemed .......................... (2,047,338) (30,541,134)
------------ ------------
Net decrease ............................. (2,223,315) $(33,300,694)
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 1,134,597 $ 12,098,486
Shares issued to shareholders in
reinvestment of dividends ................ 547,877 4,985,678
------------ ------------
Total issued ............................. 1,682,474 17,084,164
Automatic conversion of shares ........... (977,681) (10,571,440)
Shares redeemed .......................... (8,546,113) (83,167,432)
------------ ------------
Net decrease ............................. (7,841,320) $(76,654,708)
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 71,317 $ 1,078,335
Shares issued to shareholders in
reinvestment of dividends ................ 4,894 70,283
------------ ------------
Total issued ............................. 76,211 1,148,618
Shares redeemed .......................... (170,286) (2,588,475)
------------ ------------
Net decrease ............................. (94,075) $ (1,439,857)
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 262,327 $ 2,973,939
Shares issued to shareholders in
reinvestment of dividends ................ 33,177 301,912
------------ ------------
Total issued ............................. 295,504 3,275,851
Shares redeemed .......................... (643,977) (6,282,624)
------------ ------------
Net decrease ............................. (348,473) $ (3,006,773)
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class DShares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 576,786 $ 8,316,520
Shares issued to shareholders in
reinvestment of dividends ................ 42,408 619,582
Automatic conversion of shares ........... 574,051 8,886,058
------------ ------------
Total issued ............................. 1,193,245 17,822,160
Shares redeemed .......................... (763,477) (11,596,481)
------------ ------------
Net increase ............................. 429,768 $ 6,225,679
============ ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class D Shares for the Six Months Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 311,136 $ 3,350,984
Shares issued to shareholders in
reinvestment of dividends ................ 204,442 1,891,084
Automatic conversion of shares ........... 955,945 10,571,440
------------ ------------
Total issued ............................. 1,471,523 15,813,508
Shares redeemed .......................... (2,508,144) (25,648,446)
------------ ------------
Net decrease ............................. (1,036,621) $ (9,834,938)
============ ============
--------------------------------------------------------------------------------
5. Commitments:
At May 31, 2000, the Fund had entered into foreign exchange contracts under
which it agreed to purchase foreign currency with an approximate value of
$111,000.
6. Capital Loss Carryforward:
At November 30, 1999, the Fund had a net capital loss carryforward of
approximately $167,472,000, of which $88,329,000 expires in 2004, $52,462,000,
expires in 2006 and $26,681,000 expires in 2007. This amount will be available
to offset like amounts of any future taxable gains.
PORTFOLIO INFORMATION
As of May 31, 2000
Percent of
Ten Largest Holdings (Equity Investments) Net Assets
Telefonos de Mexico SA (ADR) ..................................... 7.9%
TV Azteca, SA de CV* ............................................. 6.1
Embratel Participacoes SA* ....................................... 4.4
Telecomunicacoes Brasileiras SA--Telebras* ....................... 4.3
Companhia Vale do Rio Doce 'A' (Preferred) ....................... 4.0
Grupo Televisa SA (GDR) .......................................... 3.4
Grupo Financiero Banamex Accival, SA de CV
(Banacci)* .................................................... 2.5
Tele Norte Leste Participacoes SA* ............................... 2.5
Compania de Telecomunicaciones de Chile SA (ADR) ................. 2.4
Cemex, SA de CV* ................................................. 2.4
Percent of
Ten Largest Industries (Equity Investments) Net Assets
Diversified Telecommunications Services .......................... 24.9%
Media ............................................................ 10.7
Beverages ........................................................ 6.9
Wireless Telecommunications Services ............................. 6.9
Electric Utilities ............................................... 6.1
Banking .......................................................... 5.6
Metals & Mining .................................................. 5.3
Construction Material ............................................ 2.9
Diversified Financials ........................................... 2.8
Specialty Retailing .............................................. 2.7
* Includes combined holdings.
18 & 19
<PAGE>
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 #16140--5/00
[LOGO] Printed on post-consumer recycled paper
