<PAGE>
MORGAN STANLEY
EMERGING MARKETS FUND, INC.
---------------------------------------------
OFFICERS AND DIRECTORS
Barton M. Biggs James W. Grisham
CHAIRMAN OF THE BOARD VICE PRESIDENT
OF DIRECTORS Harold J. Schaaff, Jr.
Warren J. Olsen VICE PRESIDENT
PRESIDENT AND DIRECTOR Joseph P. Stadler
John W. Croghan VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Madhav Dhar SECRETARY
DIRECTOR Hilary D. Toole
David B. Gill ASSISTANT SECRETARY
DIRECTOR James R. Rooney
Gerard E. Jones TREASURER
DIRECTOR Timothy F. Osborne
Oscar S. Schafer ASSISTANT TREASURER
DIRECTOR
---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
--------------------------------------------------------
ADMINISTRATOR
The United States Trust Company of New York
73 Tremont Street
Boston, Massachusetts 02108
--------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company
One Pierrepont Plaza
Brooklyn, New York 11201
The United States Trust Company of New York
770 Broadway
New York, New York 10003
--------------------------------------------------------
SHAREHOLDER SERVICING AGENT
The First National Bank of Boston
Investor Relations Department
P.O. Box 644, Mail Stop 46-02-09
Boston, Massachusetts 02102-0644
(617)-575-2900
--------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
--------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
--------------------------------------------------------
[LOGO]
MORGAN STANLEY
EMERGING MARKETS
FUND, INC.
[LOGO]
FIRST QUARTER REPORT
MARCH 31, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- -------
The correction in emerging markets has continued over the first quarter of 1995,
but by the end of March the momentum in most of the emerging markets had turned
positive. The fundamentally strong economic outlook for the emerging markets of
Asia, Europe and even Latin America has not disappeared. However, the emerging
markets have been unable to escape the dominant factor currently affecting the
global investment scene, i.e. the dislocation in the currency markets due to the
level of non-trading cash flows. Estimates of speculative versus commercial
flows range from 8 to 1 to 50 to 1. Whichever estimate is closer to the mark
matters less than the impact of the dwarfing of worldwide commercial
transactions today by speculative flows, so much so that commerce has ceased to
be of significance in the short-term movements of currencies.
Speculation obviously magnifies any sign of currency weakness and the Mexican
peso crisis provided ample evidence of how far down a currency can be driven
once pushed into free-fall. Thankfully, the speculators don't always win. When
the currencies in Thailand and Hong Kong were attacked recently, the strong and
immediate responses from the respective central banks successfully and swiftly
counteracted the pressure. Current weakness of the US dollar has even had a
positive impact on emerging market exports due to the links of many of their
currencies to the dollar.
Undoubtedly, the last six months have been a difficult time for emerging market
investors, but there is a silver lining. More timely and higher quality
information monitoring systems are being introduced. These will act as early
warning signals to detect dislocations such as the Mexican current account
deficit. But recent events have also provided a graphic illustration of the
strength of purpose of the government ministers, central bankers and civil
servants in the emerging markets to deal with what initially seemed overwhelming
odds. With the support of outside agencies such as the IMF, the developing
countries show strong signs of continuing their economic reform programs. Mexico
has provided a lesson for other countries about the downside of overconfidence.
Countries such as India and South Africa will now, no doubt, be reluctant to
make their currencies freely convertible until their economies are strong enough
to resist speculative pressures.
In Latin America, the aftermath of the devaluation of the Mexican peso created
spillover crises in Argentina and Brazil. Mexico introduced a credible economic
program in early March which, combined with the $50 billion financial package
led by President Clinton, let the Mexican government take control of the
country's situation. Nobody doubts that the Mexican economy will suffer the
pains of austerity, but most of the bad economic news is already discounted by
the stock market, and the recent trade numbers, showing a surplus, suggest that
the current account adjustment is happening rapidly.
Both Argentina and Brazil took measures to avoid "another Mexico" situation.
Brazil saw the effect of unwarranted market disappointment over the slow pace of
fiscal reform, but the government also clearly signalled its priority to stem a
deteriorating trade balance by introducing tariffs on consumer goods. The
Argentine economics Minister, Domingo Cavallo, combined a large financial
assistance package from abroad with a domestic austerity package and restored
confidence to the banking sector. The economic and financial situation in Mexico
and Latin America began to stabilize in mid-March and all the region's markets
finished the quarter with an upward momentum.
Asia has suffered during the quarter from concerns over the succession in China
(now resolved), the decline in the Hong Kong property market (now showing signs
of stability) and fears that the Japanese earthquake would cause repatriation of
Japanese
2
<PAGE>
monies for the re-building process. The Indian stock market was depressed by the
poor results achieved by the ruling Congress party in the State elections. The
March budget was also not as fiscally stringent as foreign investors had wished.
We believe, however, that even if the Congress party loses the general election
next year that the reform process in India will continue. Economic growth will
be underpinned by the amount of domestic investment in the economy which is
being boosted currently by corporate profits growing in excess of 40% last year
and 35% this year.
The Fund has 29% of its net assets in Latin America, 27% in Asia, 17% in Europe,
18% in the Sub-continent and 8% in Africa/Middle East. It maintains positions in
a diverse group of companies with solid long-term growth prospects. The total
return of the Fund based on net asset value per share for the three month period
ended March 31, 1995 was -19.85% as compared to -12.84% for the IFC Global Total
Return Composite Index (Index) for the same period. The difference in
performance between the Fund and the Index is due to several factors.
First, Malaysia, which rose 1.9% over the quarter, is 15.5% of the Index and 0%
of the Fund. We remain negative on the prospects for the Malaysian stock market
given the outlook of the rising inflation and an expanding current account
deficit.
Second, the Fund has 16.1% in Brazil compared to 9.1% in the Index. The
Brazilian stock market had a volatile quarter during which it fell 31.3%
overall, but also experienced a rise of 25% in a single day. We are extremely
upbeat about a recovery in the stock market given the growth prospects for the
Brazilian private sector, while the public sector has attractive assets at cheap
valuation levels.
Third, a slightly overweight position in Mexico (5.7% vs 5.3%) and
underweightings in Korea and Taiwan all had small negative impacts.
Fourth, overweight positions in Morocco, Israel, Turkey, South Africa, Indonesia
and Hong Kong all helped performance. Hong Kong rose 3.4%, while Turkey is the
best performing emerging market in the world with a rise of 24.9% in dollars
year to date.
Despite predictions to the contrary, the long-term foreign direct investment
flows of the type which creates factories and employment in the emerging markets
have only slowed slightly. Companies such as General Motors, Anheuser Busch and
Chrysler are still investing in the emerging markets because they see the
potential of large domestic populations with growing middle class incomes. We
believe that the correction in emerging markets has been overdone and the
markets should rebound from here. Once again there is tremendous value. We are
back to the levels of valuation which existed before the markets surged ahead in
1993. The price to earnings ratio of the portfolio today is around 13x 1995
estimated earnings and earnings are projected to grow around 20%.
Sincerely,
[SIG]
Madhav Dhar
DIRECTOR AND PORTFOLIO MANAGER
[SIG]
Marianne L. Hay
PORTFOLIO MANAGER
April 25, 1995
3
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
MARCH 31, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
COMMON STOCKS (93.1%)
(Unless otherwise noted)
- -----------------------------------------------------------
- -------------
ARGENTINA (3.3%)
AUTOMOBILES
CIADEA 193,803 U.S.$ 998
------------
BANKING
Banco de Galicia 26,524 103
Banco de Galicia ADR 59,038 900
Banco del Sud 36,900 236
------------
1,239
------------
BEVERAGES & TOBACCO
Buenos Aires Embotelladora
ADR 7,400 192
Buenos Aires Embotelladora
`B' ADR 19,100 497
Massalin Particulares 51,864 425
Quilmes 170,700 2,817
------------
3,931
------------
ENERGY SOURCES
Capex 3,500 19
Capex ADR 57,000 627
------------
646
------------
METALS -- STEEL
Siderca 1,173,000 704
------------
MULTI-INDUSTRY
Compania Naviera Perez
Companc 392,350 1,459
------------
8,977
------------
- -----------------------------------------------------------
- -------------
BRAZIL (16.1%)
APPLIANCES & HOUSEHOLD DURABLES
Brasmotor (Preferred) 8,743,700 1,994
------------
BANKING
Banco Bradesco (Preferred) 440,830,587 2,967
Banco do Brasil (Preferred) 124,100,000 1,284
Banco Itau (Preferred) 12,391,000 2,950
Banco Nacional (Preferred) 99,598,720 1,662
------------
8,863
------------
BEVERAGES & TOBACCO
Brahma (Preferred) 7,188,000 1,719
------------
CHEMICALS
Rhodia-Ster ADS 70,000 858
------------
ENERGY SOURCES
Petrobras (Preferred) 45,669,999 3,175
Petrobras Distribuidora
(Preferred) 6,000,000 182
------------
3,357
------------
MERCHANDISING
Lojas Americanas (Bonus
Preferred Rights) 65,535 9
------------
METALS -- NON-FERROUS
CVRD (Preferred) 6,990,000 945
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
METALS -- STEEL
Cosipa 'B' 194,000,000 U.S.$ 339
Usiminas (Preferred) 3,656,500,000 4,189
------------
4,528
------------
TELECOMMUNICATIONS
Telebras 33,820,000 786
Telebras (Preferred) 241,809,183 6,509
Telesp (Preferred) 17,027,535 1,761
------------
9,056
------------
UTILITIES -- ELECTRICAL & GAS
Cemig ADR 25,000 500
Cemig (Preferred) 63,787,195 1,277
CESP 15,539,540 527
CESP ADR 81,320 956
CESP (Preferred) 20,764,700 832
CPFL 36,212,000 1,591
Eletrobras 4,459,078 878
Eletrobras 'B' (Preferred) 23,614,138 4,518
Light 3,496,000 1,030
------------
12,109
------------
43,438
------------
- -----------------------------------------------------------
- -------------
CHILE (0.2%)
BANKING
Banco Osorno ADR 47,900 611
------------
- -----------------------------------------------------------
- -------------
CHINA (2.8%)
APPLIANCES & HOUSEHOLD PRODUCTS
Shanghai Refrigerator
Compressor `B' 1,800,000 814
------------
AUTOMOBILES
Shanghai Diesel Engine Co.
Ltd. 'B' 500,000 375
------------
BUILDING MATERIALS & COMPONENTS
Shanghai Yaohua Pilkington
'B' 186,000 205
------------
BUSINESS & PUBLIC SERVICES
Jinqiao Export Processing
Zone Development Co. 2,301,000 1,491
Shanghai Outer Gaoqiao 731,250 395
------------
1,886
------------
CHEMICALS
Shenzhen Yizheng Chemical 1,700,000 604
------------
ENERGY SOURCES
Shandong Huaneng Power Co.
Ltd. ADR 71,000 639
------------
INDUSTRIAL COMPONENTS
Shanghai Tyre & Rubber Co.
'B' 654,000 183
------------
MACHINERY & ENGINEERING
Beiren Printing Machine 'H' 900,000 193
Shanghai Erfangji Co., Ltd.
'B' 536,800 100
------------
293
------------
- -----------------------------------------------------------
- -------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
CHINA (CONTINUED)
METALS -- STEEL
Maanshan Iron & Steel Co.
Ltd. 'H' 4,000,000 U.S.$ 828
------------
REAL ESTATE
Chiwan Wharf Holdings 'B' 635,800 290
Shanghai JinJang Tower Co.
'B' 564,850 207
------------
497
------------
RECREATION, OTHER CONSUMER GOODS
Shanghai Phoenix Bicycle
Ltd. 'B' 320,000 93
------------
TRANSPORTATION -- SHIPPING
China Merchants Shekou Port
Service 'B' 1,873,200 1,054
------------
7,471
------------
- -----------------------------------------------------------
- -------------
COLOMBIA (1.0%)
BANKING
Banco de Bogota 6,254 33
Banco de Colombia 6,880,000 2,764
------------
2,797
------------
- -----------------------------------------------------------
- -------------
GREECE (2.3%)
BANKING
Ergo Bank S.A. 35,730 1,484
------------
BEVERAGES & TOBACCO
Delta Dairy S.A. 57,200 1,130
Hellenic Bottling Co. S.A. 61,200 1,498
------------
2,628
------------
CONSTRUCTION & HOUSING
Aegek 104,000 2,153
------------
6,265
------------
- -----------------------------------------------------------
- -------------
HONG KONG (6.0%)
CONSTRUCTION & HOUSING
Hopewell Holdings 1,950,000 1,375
Wai Kee Holdings Ltd. 1,988,000 318
Wai Kee Holdings Ltd.
(Warrants), expiring
12/31/96 397,600 4
------------
1,697
------------
ELECTRICAL & ELECTRONICS
Great Wall Electronics
International ADR 58,630 216
------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Varitronix International
Ltd. 1,100,000 1,622
------------
FOOD & HOUSEHOLD PRODUCTS
Charoen Pokphand Co. Ltd. 4,518,000 1,344
------------
MACHINERY & ENGINEERING
Harbin Power Equipment Co.
Ltd. 1,000,000 288
------------
MULTI-INDUSTRY
Citic Pacific Ltd. 449,000 1,109
Guangdong Investments Ltd. 3,100,000 1,504
Hutchison Whampoa Ltd. 581,000 2,562
Swire Pacific Ltd. 'A' 161,000 1,098
------------
6,273
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
REAL ESTATE
Cheung Kong (Holdings) Ltd. 240,000 U.S.$ 1,046
New World Development Co.
Ltd. 510,000 1,389
Sun Hung Kai Properties Ltd. 74,100 506
Wharf (Holdings) Ltd. 178,000 581
------------
3,522
------------
TELECOMMUNICATIONS
Hong Kong Telecom Ltd. 590,000 1,148
------------
16,110
------------
- -----------------------------------------------------------
- -------------
HUNGARY (1.3%)
CHEMICALS
Egis RT 40,000 726
Gedeon Richter 26,500 391
------------
1,117
------------
ENERGY EQUIPMENT & SERVICES
Mol Magyar Olay-Es 19,000 1,915
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Pannonplast Plastic 50,000 445
------------
3,477
------------
- -----------------------------------------------------------
- -------------
INDIA (11.1%)
AUTOMOBILES
Hero Honda 102,625 735
Tata Engineering &
Locomotive 27,700 370
------------
1,105
------------
BANKING
Bank of Rajasthan 234,500 2,986
Bank of Rajasthan (New) 480,000 306
State Bank of India 1,136,200 6,365
------------
9,657
------------
CHEMICALS
ITC Agrotech Co. 4,000 25
Reliance Industries Ltd. GDS 4,600 38
Supreme Petrochem 13,500 15
------------
78
------------
ENERGY EQUIPMENT & SERVICES
Bharat Heavy Electricals 3,125,000 11,440
------------
FINANCIAL SERVICES
Housing Development Finance
Corp. 45,880 2,921
------------
HEALTH & PERSONAL CARE
Ranbaxy Labs Ltd. 1,372 27
------------
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd. 33 -
Bharat Forge Co. Ltd.
(Warrants), expiring 1995 14,285 -
------------
-
------------
METALS - STEEL
Shri Ishar Alloy Steels 500 1
------------
- -----------------------------------------------------------
- -------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
INDIA (CONTINUED)
MISCELLANEOUS MATERIALS & COMMODITIES
Shrenujur Co. Diamond 100,000 U.S.$ 231
------------
TELECOMMUNICATIONS
Videsh Sanchar Nigam Ltd. 5,700 129
------------
TEXTILES & APPAREL
DCM Shriram Industries 3,000 24
J.K. Synthetics Ltd. 1,000 1
Mahavir Spinning Mills Ltd. 5,500 34
Monotona Exports Ltd. 3,000 3
Nicholas Piramal India Ltd. 225,000 2,757
------------
2,819
------------
UTILITIES - ELECTRICAL & GAS
Tata Power Co. Ltd. 125 5
------------
WHOLESALE & INTERNATIONAL TRADE
Geekay Exim 155,000 271
Geekay Exim (Rights) 244,500 1,401
------------
1,672
------------
30,085
------------
- -----------------------------------------------------------
- -------------
INDONESIA (5.4%)
BANKING
Bank Bali (Foreign) 121,000 276
------------
BUILDING MATERIALS & COMPONENTS
Indocement Tunggal Prakarsa
(Foreign) 243,000 765
Kermika Indonesia (Foreign) 261,500 315
------------
1,080
------------
CHEMICALS
Sorini Corp. (Foreign) 80,000 272
------------
ELECTRICAL & ELECTRONICS
Jembo Cable Co. (Foreign) 165,600 148
Voksel Electronics (Foreign) 399,000 677
------------
825
------------
FOREST PRODUCTS & PAPER
Barito Pacific Timber
(Foreign) 886,000 1,198
------------
HEALTH & PERSONAL CARE
Kalbe Farma (Foreign) 723,520 2,772
Tempo Scan Pacific (Foreign) 100,000 425
------------
3,197
------------
INDUSTRIAL COMPONENTS
Lippo Industries (Foreign) 20,000 47
------------
LEISURE & TOURISM
Sona Topas Tourism (Foreign) 240,000 408
------------
MACHINERY & ENGINEERING
United Tractors (Foreign) 684,000 1,207
------------
REAL ESTATE
Duta Pertiwi Property
(Foreign) 250,000 324
------------
RECREATION, OTHER CONSUMER GOODS
Modern Photo Film (Foreign) 12,000 49
------------
TELECOMMUNICATIONS
Indosat (Foreign) 620,000 2,272
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
TEXTILES & APPAREL
Polysindo Eka Perkasa
(Foreign) 2,142,000 U.S.$ 2,106
------------
WHOLESALE & INTERNATIONAL TRADE
Charoen Pokphand Indonesia
(Foreign) 757,194 1,404
------------
14,665
------------
- -----------------------------------------------------------
- -------------
ISRAEL (2.2%)
AEROSPACE & MILITARY TECHNOLOGY
Elbit Ltd. 6,460 413
------------
BANKING
First International Bank of
Israel 930 106
------------
FOOD & HOUSEHOLD PRODUCTS
Osem Investment Ltd. 109,418 724
Super Sol Ltd. 48,723 847
------------
1,571
------------
MULTI-INDUSTRY
Koor Industries Ltd. 3,015 235
Pec Israel Economic Corp. 83,384 2,189
Scitex Ltd. 55,467 1,006
------------
3,430
------------
REAL ESTATE
Israel Land Development 157,600 511
------------
6,031
------------
- -----------------------------------------------------------
- -------------
MEXICO (5.7%)
BANKING
G. Banacci 'B' 926,600 1,091
G. Banacci 'C' 373,000 428
G. Banacci 'L' 217,135 242
G. Bancomer 'B' 1,400,640 225
G. Bancomer 'C' 743,000 131
G. Bancomer ADR 336,128 1,218
G. Bancrecer 'B' 426,000 157
G. Financiero GBM Atlantico
ADR 10,710 31
G. Probursa 'B' 257,660 38
G. Probursa 'C' 742,630 108
G. Serfin ADR 32,600 155
------------
3,824
------------
BEVERAGES & TOBACCO
FEMSA 'B' 296,000 496
------------
BUILDING MATERIALS & COMPONENTS
Apasco 206,888 563
Cemex 'A' 349,312 734
Cemex ADR 57,850 245
Interceramica 'A' Units (one
unit equals 1 'D' share + 1
'L' share) 268,206 403
Interceramica 'B' Units (one
unit equals 2 'B' shares) 36,873 49
Tolmex 'B2' 397,000 904
------------
2,898
------------
- -----------------------------------------------------------
- -------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
MEXICO (CONTINUED)
CONSTRUCTION & HOUSING
G. Tribasa ADR 111,852 U.S.$ 643
GMD 'B' ADR 22,803 57
GMD 'L' ADR 24,284 70
------------
770
------------
FOOD & HOUSEHOLD PRODUCTS
G. Herdez 'A' 777,000 213
------------
METALS - STEEL
G. Hylsamex ADR 23,975 222
------------
MULTI-INDUSTRY
G. Carso 'A1' 150,000 655
G. Carso ADR 187,316 1,635
G. Sidek 'A' 812,000 497
G. Sidek 'B' 754,000 461
G. Sidek 'L' 39,084 35
------------
3,283
------------
TELECOMMUNICATIONS
G. Iusacell 'D' ADR 17,800 185
G. Iusacell 'L' ADR 21,400 254
G. Televisa ADR 3,800 63
Telmex 'L' ADR 115,400 3,289
------------
3,791
------------
15,497
------------
- -----------------------------------------------------------
- -------------
MOROCCO (0.7%)
BANKING
Wafabank 20,000 893
------------
MULTI-INDUSTRY
ONA Group 21,400 923
------------
1,816
------------
- -----------------------------------------------------------
- -------------
PAKISTAN (3.3%)
BANKING
Bank of Punjab 460,784 429
Muslim Commercial Bank Ltd. 119,200 188
Muslim Commerical Bank Ltd.
(Rights) 20,250 7
------------
624
------------
BEVERAGES & TOBACCO
Industrial Fruit Products 828,000 87
------------
BUILDING MATERIALS & COMPONENTS
Cherat Cement Ltd. 446,364 984
D. G. Khan Cement Ltd. 369,600 474
------------
1,458
------------
CHEMICALS
Fauji Fertilizer Co. Ltd. 1,250,000 2,857
------------
ENERGY SOURCES
Pakistan State Oil Co. Ltd. 7,000 72
------------
INSURANCE
Adamjee Insurance Co. Ltd. 325,972 1,374
------------
TELECOMMUNICATIONS
Pakistan Telecommunications 5,405 543
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
TEXTILES & APPAREL
Crescent Textile Mills Ltd. 15,300 U.S.$ 12
Dewan Salman Fibre 300,000 1,225
Dewan Salman Fibre (Rights) 3,750 -
Nishat Mills Ltd. 337,154 339
Sapphire Fibers 210,000 238
------------
1,814
------------
8,829
------------
- -----------------------------------------------------------
- -------------
PERU (1.0%)
BEVERAGES & TOBACCO
Backus y Johnston 'C' 7,122 130
------------
BUILDING MATERIALS & COMPONENTS
Cementos Norte Pacasmayo 'T' 163,969 491
Cementos Yura 250,117 1,565
------------
2,056
------------
METALS - NON-FERROUS
Southern Peru Copper 'T' 177,701 609
Southern Peru Copper
(Rights) 21,336 -
------------
609
------------
2,795
------------
- -----------------------------------------------------------
- -------------
PHILIPPINES (3.4%)
BANKING
Philippine National Bank 81,873 692
------------
BEVERAGES & TOBACCO
San Miguel Corp. 'B' 360,000 1,626
------------
ENERGY SOURCES
Petron Corp. 2,343,000 1,674
------------
REAL ESTATE
Ayala Land, Inc. 'B' 1,600,625 1,885
SM Prime Holdings, Inc. 3,145,000 947
------------
2,832
------------
TELECOMMUNICATIONS
Philippine Long Distance
Telephone 'B' 17,600 1,046
Philippine Long Distance
Telephone ADR 6,540 396
------------
1,442
------------
UTILITIES - ELECTRICAL & GAS
Manila Electric Co. 'B' 91,910 940
------------
9,206
------------
- -----------------------------------------------------------
- -------------
POLAND (2.1%)
BEVERAGES & TOBACCO
Okocim 7,500 166
Wedel 4,990 265
Zwyeic 8,515 503
------------
934
------------
CHEMICALS
Eastbridge 33,600 2,259
------------
CONSTRUCTION & HOUSING
Mostostal Exports 'A' 123,000 674
------------
FINANCIAL SERVICES
Bank Rozwoju Eksportu 850 10
------------
- -----------------------------------------------------------
- -------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
POLAND (CONTINUED)
MULTI-INDUSTRY
Elektrim 116,500 U.S.$ 386
International UNP Holdings
Ltd. 2,280,000 1,386
International UNP Holdings
Ltd. (Warrants), expiring
12/31/95 1,140,000 -
------------
1,772
------------
5,649
------------
- -----------------------------------------------------------
- -------------
PORTUGAL (0.3%)
MULTI-INDUSTRY
@Portuguese Investment Fund
Ltd. 4,000 266
------------
WHOLESALE & INTERNATIONAL TRADE
Jeronimo Martins 10,100 458
------------
724
------------
- -----------------------------------------------------------
- -------------
RUSSIA (2.6%)
MULTI-INDUSTRY
Alliance Cellulose 'B' 1,250 2,514
------------
TELECOMMUNICATIONS
Russian Telecom Development
Corp. 176,000 1,760
SFMT, Inc. 214,285 2,143
Storyfirst Communications
'C' 270 180
Storyfirst Communications
'D' 720 540
------------
4,623
------------
7,137
------------
- -----------------------------------------------------------
- -------------
SOUTH AFRICA (4.0%)
CHEMICALS
SASOL Ltd. 394,083 3,759
------------
ENERGY SOURCES
Trans Natal Coal Corp. Ltd. 194,388 1,435
------------
INSURANCE
Liberty Life Strategic
Investments Ltd. 375,000 1,227
------------
MULTI-INDUSTRY
Anglo American Industrial
Corp. 18,300 933
Bidvest Group (Ltd.) 365,200 1,755
Gencor Ltd. 520,830 1,675
------------
4,363
------------
10,784
------------
- -----------------------------------------------------------
- -------------
SRI LANKA (0.5%)
MULTI-INDUSTRY
John Keells Holdings 360,400 1,383
------------
- -----------------------------------------------------------
- -------------
TAIWAN (3.6%)
BUILDING MATERIALS & COMPONENTS
Hocheng Group Corp. 560,200 2,650
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Taiwan Semiconductor Co. 535,000 U.S.$ 3,869
United Micro Electronics
Corp. Ltd. 665,086 3,300
------------
7,169
------------
9,819
------------
- -----------------------------------------------------------
- -------------
THAILAND (4.8%)
BANKING
Bangkok Bank Ltd. (Local) 211,000 1,534
Bangkok Bank Ltd. (Foreign) 164,000 1,452
Thai Farmers Bank Ltd.
(Foreign) 35,560 300
------------
3,286
------------
BUILDING MATERIALS & COMPONENTS
Siam Cement Co. Ltd.
(Foreign) 24,527 1,408
------------
FINANCIAL SERVICES
Finance One Co. Ltd. (Local) 354,000 1,711
Finance One Co. Ltd.
(Foreign) 171,000 944
Phatra Thanakit Co. Ltd.
(Foreign) 208,500 1,363
------------
4,018
------------
REAL ESTATE
Land and House Co. Ltd.
(Foreign) 85,000 1,450
------------
TELECOMMUNICATIONS
Advanced Information
Services Co. Ltd. (Foreign) 92,700 1,288
International Engineering
Co. Ltd. (Foreign) 203,400 1,404
------------
2,692
------------
12,854
------------
- -----------------------------------------------------------
- -------------
TURKEY (8.2%)
AUTOMOBILES
Tofas Turk Otomobil
Fabrikasi 1,980,000 1,689
Tofas Turk Otomobil
Fabrikasi GDR 166,300 674
------------
2,363
------------
BANKING
Yapi Ve Kredi Bankasi AS 10,014,000 973
------------
BEVERAGES & TOBACCO
Ege Biracilik Ve Malt
Sanayii 5,155,600 4,826
------------
BUILDING MATERIALS & COMPONENTS
Borusan Birmesik 1,507,000 1,339
Ege Seramik Sanayi ve
Ticaret AS 1,128,000 528
------------
1,867
------------
FINANCIAL SERVICES
Koc Yatirim Ve Sanayi
Mamulleri 2,842,500 2,661
------------
FOOD & HOUSEHOLD PRODUCTS
Migros Turk TAS 340,000 967
Tat Konserve Sanayii AS 1,414,000 2,379
------------
3,346
------------
- -----------------------------------------------------------
- -------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
TURKEY (CONTINUED)
HEALTH & PERSONAL CARE
Efes Sinai Yatirim 30,236,087 U.S.$ 1,648
------------
METALS - NON-FERROUS
Sarkuysan Elektrolitik Bakir 5,680,000 3,903
------------
TEXTILES
Aksa Akrilik Kimya Sanayii
AS 387,000 358
------------
UTILITIES - ELECTRICAL & GAS
Turcas Petroculuk AS 863,750 301
------------
22,246
------------
- -----------------------------------------------------------
- -------------
UNITED KINGDOM (0.3%)
MULTI-INDUSTRY
Lonrho plc 314,277 771
------------
- -----------------------------------------------------------
- -------------
ZIMBABWE (0.9%)
MULTI-INDUSTRY
Trans Zambezi Industries
Ltd. 1,800,000 2,340
------------
- -----------------------------------------------------------
- -------------
TOTAL COMMON STOCKS
(Cost U.S. $259,064) 251,777
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT
(000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
DEBT INSTRUMENTS (2.6%)
- ---------------------------------------------------------
- ------------
COLOMBIA (0.7%)
BANKING
Banco de Colombia
(Convertible)
5.20%, 2/1/99 U.S.$ 2,615 1,817
------------
- -----------------------------------------------------------
- -------------
ECUADOR (0.5%)
BRADY BONDS
Republic of Ecuador Discount
Bond 7.25%, 2/28/25 1,985 898
Republic of Ecuador Past Due
Interest Bond 7.25%,
2/27/15 1,887 434
------------
1,332
------------
- -----------------------------------------------------------
- -------------
INDIA (1.3%)
CHEMICALS
Supreme Petrochem 15.00%,
4/22/02 INR 600 286
------------
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd. 7.25%,
3/4/00 14 21
------------
METALS - STEEL
Shri Ishar Alloy Steel
15.00%, 4/21/00 581 408
------------
MULTI-INDUSTRY
Somani Pilkington 15.30%,
1/4/02 207 1,207
------------
TEXTILES & APPAREL
DCM Shriram Industries
16.50%, 3/1/00 335 491
DCM Shriram Industries
15.00%, 2/21/02 330 630
Raymond Woolen Mills 16.00%,
12/31/99 124 419
------------
1,540
------------
3,462
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
POLAND (0.0%)
BRADY BOND
Polish People's Republic
Past Due Interest Bond
3.25%, 10/27/14 U.S. $ 28 U.S. $ 11
------------
- -----------------------------------------------------------
- -------------
RUSSIA (0.1%)
LOAN AGREEMENT
Bank for Foreign Economic
Affairs Unrestructured
Loans CHF 1,935 337
------------
- -----------------------------------------------------------
- -------------
TOTAL DEBT INSTRUMENTS
(Cost U.S. $7,892) 6,959
------------
- -----------------------------------------------------------
- -------------
SHORT TERM INVESTMENT (0.3%)
- ---------------------------------------------------------
- ------------
UNITED STATES (0.3%)
GOVERNMENT AGENCY OBLIGATION
Federal Home Loan Mortgage
Corp., 4/3/95 (Cost U.S.
$910) U.S. $ 910 910
------------
</TABLE>
- -----------------------------------------------------------------
- -------------
<TABLE>
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (3.1%)
</TABLE>
- ---------------------------------------------------------
- ------------
<TABLE>
<S> <C> <C>
Colombian Peso COP 308,084 341
Hong Kong Dollar HKD 551 71
Indian Rupee INR 96,591 3,075
Indonesian Rupiah IDR 4,079,733 1,823
Korean Won KRW 99 --
Mexican New Peso MXN 721 106
Moroccan Dirham MAD 333 40
Pakistani Rupee PKR 43,294 1,403
Philippine Peso PHP 45 2
Polish Zloty PLZ 23 10
South African Rand ZAR 147 41
Sri Lankan Rupee LKR 968 20
Thai Baht THB 39,186 1,591
-------------
(Cost U.S. $8,548) 8,523
-------------
</TABLE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------
- ---------
TOTAL INVESTMENTS (99.1%)
(Cost U.S. $276,414) 268,169
------------
- -----------------------------------------------------------------
- -------------
OTHER ASSETS AND LIABILITIES (0.9%)
Other Assets U.S. $7,728
Liabilities (5,305) 2,423
----------- ------------
- -----------------------------------------------------------------
- -------------
NET ASSETS (100%)
Applicable to 16,630,334 issued and outstanding U.S.
$.01 par value shares (100,000,000 shares authorized) U.S.$270,592
-------------
- -----------------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S. $ 16.27
-------------
- -----------------------------------------------------------------
- -------------
<FN>
@ --Advised by an affiliate of the Fund
ADR--American Depositary Receipt
ADS --American Depositary Shares
GDR--Global Depositary Receipt
GDS--Global Depositary Share
CHF--Swiss Franc
Note: Prior governmental approval for foreign investments may be
required under certain circumstances in some emerging markets, and
foreign ownership limitations may also be imposed by the charters of
individual companies in emerging markets. As a result, an additional
class of shares designated as "foreign" may be created and offered for
investment. The "local" and "foreign" shares' market values may vary.
</TABLE>
9
