<PAGE>
MORGAN STANLEY
EMERGING MARKETS FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs William G. Morton, Jr.
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS Frederick B. Whittemore
Warren J. Olsen DIRECTOR
PRESIDENT AND DIRECTOR James W. Grisham
Peter J. Chase VICE PRESIDENT
DIRECTOR Harold J. Schaaff, Jr.
John W. Croghan VICE PRESIDENT
DIRECTOR Joseph P. Stadler
David B. Gill VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Graham E. Jones SECRETARY
DIRECTOR James R. Rooney
John A. Levin TREASURER
DIRECTOR Joanna M. Haigney
ASSISTANT TREASURER
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank, N.A. (Domestic)
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
- --------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
- ----------------------------------------------------------
MORGAN STANLEY
EMERGING MARKETS
FUND, INC.
---------------
THIRD QUARTER REPORT
SEPTEMBER 30, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- -------
After the first quarter 1995 panic and the second quarter recovery, the third
quarter was a phase of consolidation for the emerging markets. The Morgan
Stanley Emerging Markets Fund, Inc. returned 1.35% during the quarter ended
September 30, 1995, based on net asset value per share, outpacing the IFC Global
Total Return Composite Index return of -1.49% and the Morgan Stanley Capital
International Emerging Markets Free (MSCI EMF) Index return of -0.64%. For the
nine months ended September 30, 1995 the Fund's total return based on net asset
value per share was -7.87% compared with -9.65% for the IFC Global Total Return
Composite Index and -3.90% for the MSCI EMF Index.
The Asian markets were very soft, down 4.9% in U.S. dollar terms. Latin America
continued its recovery with a rise of 2.9%. Europe, which had been a solid
performer for most of the year, saw mixed fortunes--Turkey nose-dived 21.4%
although Israel and Greece held their own. South Africa gained just over 4.0%.
We have recently reduced the Fund's exposure to Mexico while remaining positive
on the prospects for Brazil. The Mexican market rallied during July and August
but there are growing concerns over the depth of the recession. While some
companies still represent good value and have attractive upside, we have become
more cautious about the prospects of short term economic recovery.
Brazil remains the largest country weighting in the Fund. Two visits by
portfolio managers to the country in the last quarter have reinforced our
confidence in the future economic stability of that country. The most obvious
progress has been made on the inflation front. In 1993, Brazilian inflation was
almost 2,500%. By the end of 1995, inflation should be around 25%, with a 15-20%
number in prospect for 1996. Judging from meetings with the government, the
Central Bank and several major companies, there is unanimity in the fight
against inflation. Brazilians want stability and have confidence that President
Cardoso's government can achieve it. Excluding Chile, the country has arguably
the strongest economy in Latin America. A high level of international reserves,
combined with a financeable and manageable current account deficit, offset the
fact that reforming the country's administrative and social security systems
will take some time to achieve. Collection of tax revenues in Brazil is not a
problem--they currently collect a higher percentage of GNP as tax than the U.S.
In all emerging markets there are risks, however, and Brazil is no exception.
The sting here is that in a desire to create long-term stability, monetary
policy is kept too tight in the short-term and the country lapses into
recession. On a 2-3 year view, the tough economic policies carried through today
will be very positive. Companies in Brazil offer good value and they are
extremely well-managed. Executives have cut their teeth in the inflation
cauldron of the "old" Brazil and should be able to achieve healthy returns in
this more predictable market environment. Earnings growth is 20%, the market
sells at 13.5x 1995 estimated earnings. The Brazilian market rose 14.1% for the
quarter.
Privatization will happen at some point in the future. For Latin America, a
savings rate of 18% is relatively high and we have only to look to Chile as a
guide to what can be achieved when the growth of pension funds is encouraged.
Currently, Brazilian pension funds amount to 10% of GNP (approximately $50
billion) but in 10 years time 30% of GNP is not an unrealistic target and these
funds will provide the domestic buyers for the government's privatization
program.
Asia has disappointed thus far in performance terms this year, dominated by
fears of economic overheating and Sino-Taiwanese tensions. Asian countries,
1
<PAGE>
often lumped together as a single economic powerhouse, are in reality a spectrum
of countries at different stages of development with a wide range of economic
outlooks and stockmarket opportunities. At one end of the range are Malaysia and
Thailand, where economic growth is high (GNP grew at 9.5% in the first half of
1995 in Malaysia, for example), but there are fears of growing inflation,
burgeoning trade and current account deficits, and elements of political unrest.
In Thailand's case, interest rates are expected to remain high to protect the
baht.
At the other end of the spectrum is Hong Kong where we have been building
exposure. Sino-American relations have improved, the colony experienced an
economic downturn ahead of the other Asian nations and property prices have
stabilized approximately 30% below their high. 1996 earnings should show a
recovery and the market is cheap. Recent economic releases from China indicate
that the hoped for "soft landing" seems to be occurring. China has slowed
economic growth to less than 10% per year and inflation is coming down to 1995's
target of 15%.
In the center of the Asian range are Indonesia, Korea, Taiwan and the
Philippines. Indonesia is an attractive stockmarket on valuation grounds but
liquidity is a problem. Over the quarter we were buyers of Taiwan and Korea and
the Philippines. The tension between China and Taiwan has depressed the
stockmarket-- Taiwan has fallen 31.3% in U.S. dollar terms thus far this year.
The electronics sector, where sales and earnings growth have exceeded
expectations, is particularly cheap. There has been a marked improvement in
liquidity in the Korean market as interest rates have come down. A major
transformation has occurred in the Philippine economy from low growth, high
inflation to high growth combined with government action to curb inflation.
Earnings growth in the Philippines is already the best in Asia and the country
is at a much earlier stage of its development than the four tigers where growth
is still phenomenal but momentum is slowing.
European markets have performed relatively well this year; however, changes in
the political scene have heightened volatility in the Turkish market. The
collapse of Prime Minister Ciller's ruling coalition led to the market's
collapse making Turkey the worst performing market for the quarter, down 21.4%.
The tremendous opportunities in Russia look increasingly accessible as progress
is being made on the custody front. We expect to be able to buy Russian
securities shortly. The Russian market is off from its peak in July and in the
near term we expect continued slippage, mainly over political worries.
Fundamentals in Russia continue to improve with the ruble stabilized, inflation
down and economic growth no longer plummeting. Further, Russia is making
progress with its plans to restructure the former Soviet Union debt to
commercial banks and Western governments.
Sincerely,
[SIG]
Madhav Dhar
PORTFOLIO MANAGER
[SIG]
Marianne L. Hay
PORTFOLIO MANAGER
November 2, 1995
2
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Investment Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
----------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------------ ------------------------ ------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C>
------------------------ ------------------------ ------------------------
CURRENT QUARTER -0.08% -- 1.35% -- -1.49% --
FISCAL YEAR TO DATE -17.82 -- -7.87 -- -9.65 --
ONE YEAR -27.65 -27.65% -21.67 -21.67% -20.03 -20.03%
SINCE INCEPTION* 91.73 18.09 100.13 19.39 55.99 12.02
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION (2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Periods ended September 30
1991* 1992 1993 1994 9 MONTHS ENDED 9/30/95 (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value $ 14.71 $ 16.74 $ 28.20 $ 20.30 $ 16.44
Income Dividends 0.04 0.01 -- -- --
Capital Gains and Other Distributions -- 0.01 1.49 6.5 0.76
Total Return (1) 4.61% 13.94% 95.22% (5.33%) (7.67%)
Index Total Return (3) 3.25% 0.33% 67.52% (0.51%) (9.65%)
</TABLE>
(1)Assumes dividends and distributions, if any, were reinvested.
(2)Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to differences
between the market price of the stock and the net asset value of the Fund.
(3)IFC Global Total Return Composite Index
*The Fund commenced operations on November 1, 1991.
3
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Portfolio Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 89.3%
Debt Securities 6.3%
Short-Term Investments 4.4%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banking 16.8%
Multi Industry 9.9%
Telecommunications 8.9%
Beverages & Tobacco 8.8%
Utilities & Electrical & Gas 6.5%
Real Estate 5.6%
Chemicals 3.7%
Building Materials & Components 3.6%
Electronic Components & Instruments 3.6%
Other 32.6%
100.1%
</TABLE>
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Brazil 17.5%
Hong Kong 11.1%
India 8.4%
Russia 7.1%
Mexico 6.1%
Greece 4.7%
Indonesia 4.4%
Taiwan 4.3%
Philippines 4.2%
Thailand 4.2%
Turkey 4.0%
Israel 3.4%
Pakistan 2.8%
China 2.5%
Korea 2.4%
South Africa 1.7%
Poland 1.5%
Argentina 1.1%
Colombia 1.1%
Portugal 0.8%
Zimbabwe 0.7%
Morocco 0.5%
Peru 0.5%
Sri Lanka 0.3%
Equador 0.2%
United Kingdom 0.2%
Other 4.3%
</TABLE>
- --------------------------------------------------------------------------------
4
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Portfolio Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<C> <S>
1. Bank for Foreign Economic Affairs
Unrestructured Loans
2. Telebras (Preferred)
3. Bharat Heavy Electricals
4. State Bank of India
5. Banco Bradesco (Preferred)
6. Brahma (Preferred)
7. Samsung Electronics Co. (Foreign)
8. Eletrobras 'B' (Preferred)
9. New World Development Co. Ltd.
10. Hutchison Whampoa Ltd.
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
COMMON STOCKS (89.4%)
(Unless otherwise noted)
- -----------------------------------------------------------
- -------------
ARGENTINA (1.1%)
AUTOMOBILES
CIADEA 1 U.S.$ --
------------
BEVERAGES & TOBACCO
Quilmes Industrial 170,700 3,158
------------
ENERGY SOURCES
Capex 3,500 26
Capex ADR 57,000 784
------------
810
------------
3,968
------------
- -----------------------------------------------------------
- -------------
BRAZIL (17.5%)
APPLIANCES & HOUSEHOLD DURABLES
Brasmotor (Preferred) 7,313,700 1,873
------------
BANKING
Banco Bradesco (Preferred) 699,483,685 6,716
Banco do Brasil (Preferred) 144,330,000 2,317
Banco Itau (Preferred) 15,366,500 4,837
Banco Nacional (Preferred) 61,598,720 1,221
------------
15,091
------------
BEVERAGES & TOBACCO
Brahma (Preferred) 16,331,209 6,657
------------
CHEMICALS
Rhodia-Ster ADS 86,575 1,158
------------
ENERGY SOURCES
Petrobras (Preferred) 38,328,999 4,042
------------
MERCHANDISING
Cia Brasileira ADR 34,650 377
Lojas Americanas (Bonus
Preferred Rights) 65,534 9
------------
386
------------
METALS -- NON-FERROUS
CVRD (Preferred) 9,756,000 1,638
------------
METALS -- STEEL
Acesita (Preferred) 99,500,000 710
CSN 46,120,000 1,234
------------
1,944
------------
TELECOMMUNICATIONS
Telebras 33,820,000 1,366
Telebras (Preferred) 241,809,183 11,542
Telebras ADR 11,600 551
Telesp (Preferred) 17,377,535 2,850
------------
16,309
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
UTILITIES -- ELECTRICAL & GAS
Cemig 64,983,860 U.S.$ 1,459
Cemig ADR 23,725 528
CESP 32,325,540 1,051
CESP ADR 27,890 291
CESP (Preferred) 20,764,370 719
CPFL 15,074,000 870
Eletrobras 10,889,076 3,359
Eletrobras 'B' (Preferred) 21,355,138 6,588
Light 3,496,000 1,302
------------
16,167
------------
65,265
------------
- -----------------------------------------------------------
- -------------
CHINA (2.5%)
APPLIANCES & HOUSEHOLD DURABLES
Shanghai Refrigerator
Compressor 'B' 2,340,000 1,137
------------
AUTOMOBILES
Shanghai Diesel Engine Co., Ltd. 'B'500,000 300
Shenzen North Jianshe
Motorcycle 'B' 825,000 507
------------
807
------------
BUILDING MATERIALS & COMPONENTS
Shanghai Yaohua Pilkington
'B' 186,000 197
------------
BUSINESS & PUBLIC SERVICES
Jinqiao Export Processing
Zone Development Co. 2,301,000 1,312
Shanghai Outer Gaoqiao 731,250 298
------------
1,610
------------
CHEMICALS
Jilin Chemical Industrial
Co. ADR 29,000 645
Shenzhen Yizheng Chemical 4,342,000 1,278
------------
1,923
------------
ENERGY SOURCES
Shandong Huaneng Power Co.
Ltd. ADR 71,000 630
------------
INDUSTRIAL COMPONENTS
Shanghai Tyre & Rubber Co.
'B' 654,000 204
------------
MACHINERY & ENGINEERING
Beiren Printing Machine 'H' 900,000 189
Shanghai Erfangji Co. Ltd.
'B' 590,480 100
------------
289
------------
METALS -- STEEL
Maanshan Iron & Steel Co.,
Ltd. 'H' 4,000,000 745
------------
- -----------------------------------------------------------
- -------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
CHINA (CONTINUED)
REAL ESTATE
Shanghai JinJang Tower Co.
'B' 564,850 U.S.$ 183
Chiwan Wharf Holdings 'B' 1,035,800 489
------------
672
------------
RECREATION, OTHER CONSUMER GOODS
Shanghai Phoenix Bicycle
Ltd. 'B' 320,000 67
------------
TRANSPORTATION -- SHIPPING
China Merchants Shekou Port
Service 'B' 2,060,520 936
------------
9,217
------------
- -----------------------------------------------------------
- -------------
COLOMBIA (0.6%)
BANKING
Banco de Bogota 6,338 31
Banco de Colombia 6,880,000 2,245
------------
2,276
------------
- -----------------------------------------------------------
- -------------
GREECE (4.7%)
BANKING
Alpha Credit Bank 61,000 3,793
Ergo Bank S.A. 74,000 3,584
------------
7,377
------------
BEVERAGES & TOBACCO
Delta Dairy S.A. 160,000 3,550
Hellenic Bottling Co. S.A. 122,500 4,124
------------
7,674
------------
CONSTRUCTION & HOUSING
Aegek 208,000 2,363
Aegek (Preferred Rights) 104,000 77
Aegek (Rights) 104,000 65
------------
2,505
------------
17,556
------------
- -----------------------------------------------------------
- -------------
HONG KONG (11.1%)
BANKING
Hang Seng Bank Ltd. 369,000 3,042
------------
CONSTRUCTION & HOUSING
Wai Kee Holdings Ltd. 1,988,000 239
Wai Kee Holdings Ltd.
(Warrants), expiring
12/31/96 397,600 6
------------
245
------------
ELECTRICAL & ELECTRONICS
Great Wall Electronics
International ADR 58,630 234
------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Varitronix International
Ltd. 1,100,000 2,241
------------
ENERGY SOURCES
Zhenhai Refining & Chemical
Co. Ltd. 'H' 176,000 42
------------
FOOD & HOUSEHOLD PRODUCTS
Charoen Pokphand Co. Ltd. 4,518,000 1,841
------------
MACHINERY & ENGINEERING
Harbin Power Equipment Co.
Ltd. 1,458,000 386
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
MULTI-INDUSTRY
Citic Pacific Ltd. 1,106,000 U.S.$ 3,340
Guangdong Investments Ltd. 4,894,000 2,928
Hutchison Whampoa Ltd. 1,037,000 5,620
Swire Pacific Ltd. 'A' 443,000 3,509
------------
15,397
------------
REAL ESTATE
Cheung Kong (Holdings) Ltd. 803,000 4,372
Hopewell Holdings 3,966,000 2,693
New World Development Co.
Ltd. 1,541,000 6,079
Sun Hung Kai Properties Ltd. 206,100 1,673
------------
14,817
------------
TELECOMMUNICATIONS
Hong Kong Telecom Ltd. 1,678,800 3,051
------------
41,296
------------
- -----------------------------------------------------------
- -------------
INDIA (7.6%)
AUTOMOBILES
Hero Honda 67,912 473
Tata Engineering &
Locomotive 27,700 545
------------
1,018
------------
BANKING
Bank of Rajasthan (New) 367,700 3,956
HDFC Bank Ltd. 500 39
State Bank of India 1,136,200 7,351
------------
11,346
------------
CHEMICALS
Reliance Industries Ltd. GDS 3,500 28
------------
CONSUMER GOODS
Essel Packagings Ltd. 50,000 311
------------
ELECTRICAL & ELECTRONICS
Asian Electronics Ltd. 30,000 442
------------
ENERGY EQUIPMENT & SERVICES
Bharat Heavy Electricals 3,125,000 9,672
------------
FINANCIAL SERVICES
Housing Development Finance
Corp. 45,880 3,509
------------
HEALTH & PERSONAL CARE
Ranbaxy Labs Ltd. 1,372 30
------------
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd. 33 --
Bharat Forge Co. Ltd.
(Warrants), expiring 1995 14,285 55
------------
55
------------
METALS -- STEEL
Shri Ishar Alloy Steels 500 1
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Shrenujur Co. Diamond 17,500 26
------------
MULTI-INDUSTRY
Morgan Stanley Growth Fund 215,000 45
------------
TELECOMMUNICATIONS
Videsh Sanchar Nigam Ltd. 5,700 143
------------
- -----------------------------------------------------------
- -------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
INDIA (CONTINUED)
TEXTILES & APPAREL
Mahavir Spinning Mills Ltd. 5,500 U.S.$ 24
Monotona Exports Ltd. 100 -
Nicholas Piramal India Ltd. 225,000 1,784
------------
1,808
------------
UTILITIES -- ELECTRICAL & GAS
Tata Power Co. Ltd. 1,250 4
------------
28,438
------------
- -----------------------------------------------------------
- -------------
INDONESIA (4.4%)
BANKING
Bank Bali (Foreign) 563,350 908
Bank Bali (Warrants),
expiring 8/29/00 24,200 -
------------
908
------------
BEVERAGES & TOBACCO
HM Sampoerna (Foreign) 57,500 536
------------
BUILDING MATERIALS & COMPONENTS
Indocement Tunggal Prakarsa
(Foreign) 243,000 885
Keramika Indonesia (Foreign) 261,500 208
Semen Gresik (Foreign) 216,000 610
------------
1,703
------------
CHEMICALS
Polysindo Eka Perkasa
(Foreign) 4,234,000 2,430
Sorini Corp. (Foreign) 80,000 459
------------
2,889
------------
ELECTRICAL & ELECTRONICS
Voksel Electronics (Foreign) 399,000 440
------------
FOREST PRODUCTS & PAPER
Barito Pacific Timber
(Foreign) 886,000 655
------------
HEALTH & PERSONAL CARE
Kalbe Farma (Foreign) 723,520 2,890
------------
INDUSTRIAL COMPONENTS
Jembo Cable Co. (Foreign) 41,600 34
Lippo Industries (Foreign) 20,000 44
------------
78
------------
LEISURE & TOURISM
Sona Topas Tourism (Foreign) 720,000 429
------------
MACHINERY & ENGINEERING
United Tractors (Foreign) 684,000 1,374
------------
MERCHANDISING
Tempo Scan Pacific (Foreign) 100,000 526
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Charoen Pokphand Indonesia
(Foreign) 757,194 1,671
------------
REAL ESTATE
Duta Pertiwi Property
(Foreign) 25,000 31
------------
TELECOMMUNICATIONS
Indosat (Foreign) 620,000 2,162
------------
16,292
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
ISRAEL (3.4%)
AEROSPACE & MILITARY TECHNOLOGY
Elbit Ltd. 27,400 U.S.$ 1,970
------------
BANKING
First International Bank of
Israel 10,321 1,260
------------
FOOD & HOUSEHOLD PRODUCTS
Osem Investment Ltd. 120,450 944
Super Sol Ltd. 60,013 1,261
------------
2,205
------------
HEALTH & PERSONAL CARE
Teva Pharmaceutical
Industries Ltd. ADR 51,000 1,843
------------
MULTI-INDUSTRY
Koor Industries Ltd. 19,850 1,837
Pec Israel Economic Corp. 83,384 2,085
Scitex Corp. 55,467 1,047
------------
4,969
------------
REAL ESTATE
Israel Land Development 157,600 456
------------
12,703
------------
- -----------------------------------------------------------
- -------------
KOREA (2.4%)
APPLIANCES & HOUSEHOLD PRODUCTS
Samsung Electronics Co.
(Foreign) 26,828 6,647
------------
BANKING
Shinhan Bank Co. Ltd.
(Foreign) 29,659 656
------------
ENERGY SOURCES
Yukong Ltd. (Foreign) 27,600 1,121
------------
METALS -- STEEL
Pohang Iron & Steel
(Foreign) 7,870 679
------------
9,103
------------
- -----------------------------------------------------------
- -------------
MEXICO (6.1%)
BANKING
G. Banacci 'B' 1,505,190 2,840
G. Banacci 'L' 736,191 1,306
G. Bancomer 'B' 1,231,340 367
G. Bancomer 'L' 79,393 22
G. Bancomer ADR 606,933 3,566
G. Serfin ADR 32,600 151
------------
8,252
------------
BEVERAGES & TOBACCO
FEMSA 'B' 1,312,175 3,328
Panamerican Beverages, Inc.
'A' 78,965 2,122
------------
5,450
------------
BUILDING MATERIALS & COMPONENTS
Apasco 270,288 1,067
Cemex 'A' 107,582 411
Cemex ADR 243,922 2,062
Tolmex 'B2' 679,550 3,430
------------
6,970
------------
- -----------------------------------------------------------
- -------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
MEXICO (CONTINUED)
CONSTRUCTION & HOUSING
Empresas ICA Sociedad
Controladora S.A. ADS 99,514 U.S.$ 1,145
GMD 'L' ADR 3,134 12
------------
1,157
------------
METALS -- STEEL
G. Hylsamex ADR 36,925 655
------------
MULTI-INDUSTRY
G. Sidek 'A' 559,400 430
------------
22,914
------------
- -----------------------------------------------------------
- -------------
MOROCCO (0.5%)
BANKING
Wafabank 20,000 831
------------
MULTI-INDUSTRY
Groupe Ona 21,400 877
------------
1,708
------------
- -----------------------------------------------------------
- -------------
PAKISTAN (2.8%)
BANKING
Muslim Commercial Bank Ltd. 37,950 50
------------
BEVERAGES & TOBACCO
Industrial Fruit Products 602,000 69
------------
BUILDING MATERIALS & COMPONENTS
Cherat Cement Ltd. 84,227 151
D. G. Khan Cement Ltd. 665,000 981
------------
1,132
------------
CHEMICALS
Fauji Fertilizer Co. Ltd. 1,250,000 2,469
------------
ELECTRICAL & ELECTRONICS
Karachi Electric Supply
Corp. 504,000 504
------------
ENERGY SOURCES
Pakistan State Oil Co. Ltd. 114,000 1,302
------------
INSURANCE
Adamjee Insurance Co. Ltd. 121,008 426
------------
TELECOMMUNICATIONS
Pakistan Telecommunications 22,000 2,408
Pakistan Telecommunications GDR 4,500 472
------------
2,880
------------
TEXTILES & APPAREL
Crescent Textile Mills Ltd. 20,234 13
Dewan Salman Fibre 300,000 840
Dewan Salman Fibre (Rights) 3,750 -
Nishat Mills Ltd. 387,726 360
------------
1,213
------------
UTILITIES -- ELECTRICAL & GAS
Sui Northern Gas Co. 390,000 458
------------
10,503
------------
- -----------------------------------------------------------
- -------------
PERU (0.5%)
BEVERAGES & TOBACCO
Backus y Johnston 'C' 9,021 163
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
BUILDING MATERIALS & COMPONENTS
Cementos Yura 250,117 U.S.$ 1,565
------------
METALS -- NON-FERROUS
Southern Peru Copper 'T' 35,575 139
------------
1,867
------------
- -----------------------------------------------------------
- -------------
PHILIPPINES (4.2%)
BEVERAGES & TOBACCO
San Miguel Corp. 'B' 738,000 2,606
------------
ENERGY SOURCES
Petron Corp. 5,726,625 2,692
------------
MULTI-INDUSTRY
JG Summit Holdings 'B' 3,523,000 1,041
------------
REAL ESTATE
Ayala Land, Inc. 'B' 1,415,781 1,576
C&P Homes, Inc. 2,395,900 1,494
SM Prime Holdings, Inc. 6,294,100 1,884
------------
4,954
------------
TELECOMMUNICATIONS
Philippine Long Distance
Telephone 'B' 24,760 1,654
------------
UTILITIES -- ELECTRICAL & GAS
Manila Electric Co. 'B' 336,865 2,573
------------
15,520
------------
- -----------------------------------------------------------
- -------------
POLAND (1.5%)
BEVERAGES & TOBACCO
Wedel 5,090 253
Zywiec 8,515 700
------------
953
------------
CHEMICALS
Eastbridge 33,600 2,259
------------
CONSTRUCTION & HOUSING
Mostostal Exports 'A' 246,000 647
------------
FINANCIAL SERVICES
Bank Rozwoju Eksportu 4,550 80
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Debica 9,700 140
------------
MULTI-INDUSTRY
Elektrim 116,500 431
International UNP Holdings
Ltd. 2,280,000 933
International UNP Holdings
Ltd.
(Warrants), expiring
12/31/95 1,140,000 -
------------
1,364
------------
5,443
------------
- -----------------------------------------------------------
- -------------
PORTUGAL (0.8%)
BANKING
Banco Totta & Acores 'B' 55,000 1,085
------------
BEVERAGES & TOBACCO
UNICER-Uniao Cervejeira S.A. 67,500 1,090
------------
BROADCAST & PUBLISHING
Filmes Lusomundo 35,000 430
------------
- -----------------------------------------------------------
- -------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
PORTUGAL (CONTINUED)
MULTI-INDUSTRY
Portuguese Investment Fund
Ltd. 4,000 U.S.$ 250
------------
2,855
------------
- -----------------------------------------------------------
- -------------
RUSSIA (2.3%)
MULTI-INDUSTRY
Alliance Cellulose 'B' 156,075 3,139
------------
TELECOMMUNICATIONS
Global Telesystems Group,
Inc. 214,285 2,143
Russian Telecom Development
Corp. 176,000 1,760
Storyfirst Communications
'C' (Preferred) 270 180
Storyfirst
Communications 'D'
(Preferred) 720 540
Storyfirst Communications
'E' (Preferred) 780 780
------------
5,403
------------
8,542
------------
- -----------------------------------------------------------
- -------------
SOUTH AFRICA (1.7%)
CHEMICALS
SASOL Ltd. 260,969 2,144
------------
INSURANCE
Liberty Life Strategic
Investments Ltd. 160,000 537
------------
MULTI-INDUSTRY
Anglo American Industrial
Corp. 10,000 482
Bidvest Group Ltd. 365,200 2,100
Morgan Stanley Africa
Investment Fund 78,265 959
------------
3,541
------------
6,222
------------
- -----------------------------------------------------------
- -------------
SRI LANKA (0.3%)
MULTI-INDUSTRY
John Keells Holdings 360,400 1,184
------------
- -----------------------------------------------------------
- -------------
TAIWAN (4.3%)
CHEMICALS
Shinkong Synthetic Fiber 588,000 626
------------
DATA PROCESSING & REPRODUCTION
Acer, Inc. 820,000 1,939
------------
ELECTRICAL & ELECTRONICS
Mosel Vitelic, Inc. 410,000 1,591
------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Advanced Semiconductor
Engineering, Inc. 321,000 724
Taiwan Semiconductor Co. 1,495,000 5,442
United Micro Electronics
Corp. Ltd. 1,202,629 3,266
------------
9,432
------------
INDUSTRIAL COMPONENTS
Walsin Lihwa Corp. GDR 121,000 1,466
------------
METALS -- STEEL
China Steel Corp. 1,310,000 1,036
------------
16,090
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
THAILAND (4.2%)
BANKING
Bangkok Bank Ltd. (Local) 211,000 U.S.$ 1,732
Bangkok Bank Ltd. (Foreign) 284,000 3,191
Thai Farmers Bank Ltd.
(Foreign) 315,560 2,742
------------
7,665
------------
ELECTRICAL & ELECTRONICS
Shinawatra Computer Co. Ltd.
(Foreign) 67,000 1,655
------------
FINANCIAL SERVICES
Finance One Co. Ltd.
(Foreign) 774,600 4,723
------------
TELECOMMUNICATIONS
Advanced Information
Services Co. Ltd. (Foreign) 92,700 1,492
------------
15,535
------------
- -----------------------------------------------------------
- -------------
TURKEY (4.0%)
AUTOMOBILES
Tofas Turk Otomobil
Fabrikasi 7,920,000 1,157
Tofas Turk Otomobil Fabrikasi GDR 665,200 585
------------
1,742
------------
BANKING
Yapi Kredi Bankasi AS 12,016,800 634
------------
BEVERAGES & TOBACCO
Ege Biracilik Ve Malt
Sanayii 11,857,880 4,389
------------
BUILDING MATERIALS & COMPONENTS
Borusan Birmesik 4,521,000 1,490
Ege Seramik Sanayi ve
Ticaret AS 1,128,000 343
------------
1,833
------------
FOOD & HOUSEHOLD PRODUCTS
Migros Turk TAS 1,020,000 1,097
Tat Konserve Sanayii AS 3,535,000 2,330
------------
3,427
------------
HEALTH & PERSONAL CARE
Efes Sinai Yatirim 30,236,087 1,410
------------
METALS -- NON-FERROUS
Sarkuysan Elektrolitik Bakir 6,090,000 1,112
------------
TEXTILES & APPAREL
Aksa Akrilik Kimya Sanayii
AS 387,000 104
Aksa Akrilik Kimya Sanayii
AS (New) 77,400 20
Aksa Akrilik Kimya Sanayii
AS (Rights), expiring
10/23/95 561,327 139
------------
263
------------
UTILITIES -- ELECTRICAL & GAS
Turcas Petroculuk AS 863,750 201
------------
15,011
------------
- -----------------------------------------------------------
- -------------
UNITED KINGDOM (0.2%)
MULTI-INDUSTRY
Lonrho plc 316,304 832
------------
- -----------------------------------------------------------
- -------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------
<S> <C> <C>
- ------------
ZIMBABWE (0.7%)
MULTI-INDUSTRY
Trans Zambezi Industries
Ltd. 1,800,000 U.S.$ 2,520
------------
- -----------------------------------------------------------
- -------------
TOTAL COMMON STOCKS
(Cost U.S. $305,842) 332,860
------------
</TABLE>
- -----------------------------------------------------------------
- -------------
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
<S> <C> <C>
---------------------------------------------------------
- ------------
DEBT INSTRUMENTS (6.3%)
---------------------------------------------------------
- ------------
COLOMBIA (0.5%)
BANKING
Banco de Colombia
(Convertible)
5.20%, 2/1/99 U.S.$ 2,615 1,935
------------
- -----------------------------------------------------------
- -------------
ECUADOR (0.2%)
BRADY BONDS
Republic of Ecuador Past Due
Interest Bond 6.813%,
2/27/15 1,928 624
------------
- -----------------------------------------------------------
- -------------
INDIA (0.8%)
CHEMICALS
Supreme Petrochem 15.00%,
4/22/02 INR 600 248
------------
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd.
14.00%, 4/14/02 14 19
------------
METALS-STEEL
Shri Ishar Alloy Steels
2.85%, 4/21/00 581 274
------------
MULTI-INDUSTRY
Somani Pilkington 30.00%,
1/4/02 207 1,145
------------
TEXTILES & APPAREL
DCM Shriram Industries
9.90%, 3/1/00 335 611
DCM Shriram Industries
(Convertible) 7.50%, 3/1/00 330 456
Raymond Ltd. 16.00%,
12/31/99 124 364
------------
1,431
------------
3,117
------------
- -----------------------------------------------------------
- -------------
POLAND (0.0%)
BRADY BOND
Polish People's Republic
Past Due Interest Bond
3.25%, 10/27/14 U.S.$ 28 18
------------
- -----------------------------------------------------------
- -------------
RUSSIA (4.8%)
LOAN AGREEMENTS
Bank for Foreign Economic
Affairs Unrestructured
Loans CHF CHF 1,935 522
Bank for Foreign Economic
Affairs Unrestructured
Loans U.S.$ 38,000 12,451
------------
12,973
------------
- -----------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
---------------------------------------------------------
- ------------
UTILITIES -- ELECTRICAL & GAS
LUKoil (Convertible), 0.00%,
4/6/96 U.S.$ 5 U.S.$ 4,998
------------
17,971
------------
- -----------------------------------------------------------
- -------------
TOTAL DEBT INSTRUMENTS
(Cost U.S. $23,769) 23,665
------------
- -----------------------------------------------------------
- -------------
SHORT TERM INVESTMENT (2.7%)
---------------------------------------------------------
- ------------
REPURCHASE AGREEMENT
Chase Manhattan Bank, N.A.,
6.00%, dated 9/29/95, due
10/2/95, to be repurchased
at U.S.$9,882,
collateralized by
U.S.$8,450 United States
Treasury Bonds 8.125%, due
5/15/21, valued at
U.S.$10,077
(Cost $9,877) 9,877 9,877
------------
</TABLE>
- -----------------------------------------------------------------
- -------------
<TABLE>
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (1.7%)
Argentine Peso ARS 254 254
Colombian Peso COP 156,860 163
Hong Kong Dollar HKD 5,300 685
Indian Rupee INR 89,682 2,643
Indonesian Rupiah IDR 512,881 226
Israeli Shekels ILS 18 6
Mexican New Peso MXN 43 7
Pakistani Rupee PKR 16,439 522
Peruvian Sol PEN 619 276
Philippine Peso PHP 18,062 693
South African Rand ZAR 71 20
Sri Lankan Rupee LKR 793 15
Taiwanese Dollar TWD 22,323 825
Thai Baht THB 2,977 119
-----
(Cost U.S. $6,690) 6,454
-----
</TABLE>
<TABLE>
<S> <C> <C>
---------------------------------------------
- ---------
TOTAL INVESTMENTS (100.1%)
(Cost U.S. $346,178) 372,856
------------
-----------------------------------------------------------------
- -------------
OTHER ASSETS AND LIABILITIES (-0.1%)
Other Assets U.S.$ 9,421
Liabilities (9,853) (432)
----------- ------------
-----------------------------------------------------------------
- -------------
NET ASSETS
Applicable to 22,659,798 issued and outstanding U.S.
$.01 par value shares (100,000,000 shares authorized) U.S.$372,424
-------------
-----------------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S.$ 16.44
-------------
-----------------------------------------------------------------
- -------------
ADR--American Depositary Receipt
ADS--American Depositary Shares
GDR--Global Depositary Receipt
GDS--Global Depositary Share
CHF--Swiss Franc
</TABLE>
11
