THE KOREAN INVESTMENT FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
December 22, 1997
Dear Shareholder:
Korean portfolios, including the Korean Investment Fund, have been heavily
affected by the country's financial and economic crisis. For the semi-annual
reporting period ended on October 31, 1997, the Fund's net asset value declined
39.50% from $7.52 a share to $4.55. Your Fund's net asset value ended the
period at $4.55 per share and the market price was $4.438 per share as of
October 31, 1997, representing a 2.47% discount to net asset value.
INVESTMENT RESULTS*
TOTAL RETURNS FOR THE PERIODS
ENDED OCTOBER 31, 1997
6 MONTHS 12 MONTHS
------------ -----------
THE KOREAN INVESTMENT FUND -39.50% -49.56%
KOREAN COMPOSITE STOCK PRICE INDEX -38.10 -46.73
* TOTAL RETURNS ARE BASED ON NET ASSET VALUE.
The primary reason for the Fund's slight underperformance during the period was
the Fund's relatively overweight positions in some of Korea's blue chip stocks.
While these stocks underperformed the benchmark in the recent period due to
sharp depreciation of the Korean won against the U.S. dollar, we see them as
relatively attractive stocks in the region due to their future earnings power
and asset values.
MARKET REVIEW
Recent declines in the Korean market were sparked by corporate defaults and
rapid currency depreciation. From January through October of 1997, the Korean
won depreciated by 14.36% against the U.S. dollar, compared to a 7.37%
depreciation during all of 1996.
As markets worldwide moved lower, starting with the Hong Kong market which lost
more than 46% from its high at the beginning of August, the Korean market fell
more than 42% from its high in early June. Sentiment on Korea has deteriorated
sharply in the past few months and international investors have tended to
assume the worst, given the lack of publicly available information.
Despite fears of rising inflation as a result of the won's depreciation, the
National Statistical Office announced on November 1 that inflation did not
change from September to October. Considering that agricultural production was
high this year and real estate prices remain stable, we anticipate inflation
will be in line with the government target of a 4.2% increase on a
year-over-year basis.
High profile corporate bankruptcies and the contagion effect from the rest of
the region have resulted in a confidence crisis. Overly leveraged corporations,
having pursued rapid expansions, are vulnerable to any downturn in external
demand or the business cycle. The situation was made worse by the labor strike
at the beginning of the year. Corporate failures have led to concerns about the
health of the banking sector.
Currency weakness is discouraging capital inflows and encouraging corporate
hedging activities, putting further downward pressure on the won. When market
sentiment stabilizes, the country's external liquidity could improve
significantly, since its overall external position remains sound. Korea's
foreign debt to export earnings remains below 70%.
RECENT POLITICAL DEVELOPMENTS
Kim Dae-Jung, the leader of the opposition party, the National Congress for New
Politics, narrowly won the presidential election on December 18, 1997. He
received 40.3% of all votes cast, only 1.5 percentage points more than the
38.8% support received by the ruling party candidate. We expect the new
President's impact on the economy to be neutral in the medium- to long-term,
but slightly negative in the short-term. The opposition party has only 78 seats
out of 299 seats in the National Assembly, which should make for some political
instability. There is also some uncertainty associated with reshuffling of
administrative bureaucrats due to the fact that this is the first time an
opposition party has won the presidency in Korea.
However, in the long-term, the election is likely to have little impact on the
economy and the stock market. The newly elected president does not have many
alternatives in solving the current economic crisis. We expect him to cooperate
with the IMF (International Monetary Fund). The key factor we will look for
will be Kim Dae-Jung's ability to persuade the general public to assume
temporary discomfort in the process of long-term economic restructuring. If
this is accomplished at a rapid pace, the stock market should begin a gradual
recovery.
1
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
PORTFOLIO STRATEGY
We see most of the negative factors being reflected in stock prices. We believe
that several fundamentally sound stocks have been oversold during the recent
market collapse and we view the market decline as offering an opportunity to
increase exposure to those attractive valued quality companies.
We continue to overweight SK Telecom and LG Information and Communication,
which offer excellent value at current levels. We remain underexposed to the
construction, merchant banking, and consumer manufacturing sectors. During the
reporting period, we added to holdings in SK Telecom, Mirae, and Daewoo Heavy
Industries. We reduced our exposure to Hyundai Engineering and Construction,
Hyundai Motor Service, and eliminated our position in Dong-Ah Construction.
Thank you for your continued investment in The Korean Investment Fund. We hope
to have more positive news to report to you in the coming periods.
Sincerely,
John D. Carifa
Chairman and Chief Executive Officer
A. Rama Krishna
Vice President
In Kee Oh
Vice President
2
TEN LARGEST HOLDINGS
OCTOBER 31, 1997 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
LG Information & Communications $ 4,620,841 12.0%
Korea Exchange Bank 2,415,682 6.3
Pohang Iron & Steel Co. - ADR 2,210,000 5.7
Korea Electric Power Corp. 1,845,596 4.8
SK Telecom Co., Ltd. - ADR 1,635,618 4.3
Merrill Lynch SK Telecom Wts. 10/10/00 1,489,198 3.9
Kookmin Bank 1,416,811 3.7
Yukong, Ltd. 1,347,150 3.5
Shinhan Bank 1,230,885 3.2
Namhae Chemical 1,155,440 3.0
$19,367,221 50.4%
3
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS-94.3%
FINANCIAL SERVICES-25.7%
BANKING-18.1%
Cho Hung Bank 207,630 $ 834,823
Daegu Bank, Ltd. 137,477 769,301
Housing & Commercial Bank 27,300 299,876
Kookmin Bank 175,285 1,416,811
Korea Exchange Bank 525,030 2,415,682
Shinhan Bank 160,514 1,230,885
------------
6,967,378
BROKERAGE & MONEY MANAGEMENT-2.0%
Dongwon Securities 90,000 759,171
INSURANCE-5.6%
Hyundai Fire & Marine Insurance Co. 25,000 722,798
Oriental Fire & Marine 40,640 471,677
Samsung Fire & Marine Insurance Co. 3,700 977,720
------------
2,172,195
------------
9,898,744
TECHNOLOGY-22.7%
COMMUNICATION EQUIPMENT-15.0%
Korea Electric Terminal Co. 5,000 424,870
LG Information & Communications 80,781 4,620,841
Samsung Electro-Mechanics Co. 20,000 321,243
Sungmi Telecom Electronics Co. 7,922 385,838
------------
5,752,792
ELECTRICAL EQUIPMENT-2.1%
Daewoo Electronics Co. 150,000 825,389
SEMI-CONDUCTOR-5.6%
LG Semicon (a) 45,000 741,451
Mirae Corp. 3,000 298,446
Samsung Electronics 28,716 1,127,810
------------
2,167,707
------------
8,745,888
BASIC INDUSTRIES-14.5%
CHEMICALS-3.6%
Korea Chemical 6,000 212,021
Namhae Chemical 50,000 1,155,440
------------
1,367,461
MINING & METALS-5.8%
Pohang Iron & Steel Co. ADR 136,000 2,210,000
OIL REFINING-3.5%
Yukong, Ltd. 100,000 1,347,150
PAPER & FOREST PRODUCT-1.6%
Hansol Paper Manufacturing Co. 44,076 630,310
------------
5,554,921
UTILITY-9.5%
ELECTRIC POWER-4.8%
Korea Electric Power Corp. 130,000 1,845,596
GAS-0.5%
Pusan City Gas Co., Ltd. 10,000 182,383
TELEPHONE-4.2%
SK Telecom Co., Ltd. ADR 297,385 1,635,618
------------
3,663,597
CAPITAL GOODS-8.8%
ELECTRICAL EQUIPMENT-6.2%
LG Industrial Systems 24,930 302,260
Saehan Precision 42,345 645,048
Samsung Display Devices 36,270 1,108,772
Tri Gem Computer, Inc. 30,026 317,373
------------
2,373,453
4
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
ENGINEERING & CONSTRUCTION-1.1%
Hyundai Engineering & Construction 30,000 $ 444,560
MACHINERY-1.5%
Daewoo Heavy Industries 100,000 580,311
------------
3,398,324
CONSUMER MANUFACTURING-4.3%
AUTO & RELATED-3.0%
Hyundai Motor Co., Ltd. 24,340 401,042
Pyung Hwa Industrial Co. 10,000 321,244
Yoosung Enterprise 15,000 425,907
------------
1,148,193
BUILDING & RELATED-0.9%
Keum Kang, Ltd. 12,339 323,499
OTHER-0.4%
Lucky-Goldstar International Corp. 30,000 161,969
------------
1,633,661
CONSUMER SERVICES-3.3%
AIRLINES-0.8%
Korean Air Lines (a) 38,296 301,209
OTHER-2.5%
Hyundai Motor Service Co. 30,000 $335,751
Keum Kang Development 62,266 620,724
------------
956,475
------------
1,257,684
HEALTHCARE-1.6%
DRUGS-1.6%
Dae Woong Pharmaceutical 23,238 609,245
WARRANTS-3.9%
COMMUNICATION EQUIPMENT-3.9%
Merrill Lynch SK Telecom Wts. 10/10/00 (a) 2,908 1,489,198
Total Common Stocks and Other Investments
(cost $72,561,506) 36,251,262
TOTAL INVESTMENTS-94.3%
(cost $72,561,506) 36,251,262
Other assets less liabilities-5.7% 2,197,324
NET ASSETS-100% $38,448,586
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $72,561,506) $36,251,262
Cash 60,690
Foreign cash, at value (cost $2,313,397) 2,190,163
Receivable for investment securities sold 330,993
Other assets 6,543
Total assets 38,839,651
LIABILITIES
Payable for investment securities purchased 156,573
Management fee payable 80,758
Co-Manager fee payable 17,874
Other accrued expenses 135,860
Total liabilities 391,065
NET ASSETS $38,448,586
COMPOSITION OF NET ASSETS
Capital stock, at par $ 84,507
Additional paid-in capital 90,091,030
Accumulated net investment loss (679,218)
Accumulated net realized loss on investments and foreign
currency transactions (14,614,011)
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (36,433,722)
$38,448,586
NET ASSET VALUE PER SHARE (based on 8,450,704 shares outstanding) $4.55
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1997 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $15,091) $ 63,830
Interest 14,901 $ 78,731
EXPENSES
Management fee 269,843
Co-Manager fee 126,983
Custodian 122,658
Directors' fees and expenses 62,310
Audit and legal 39,097
Printing 23,561
Transfer agency 15,649
Registration 9,016
Miscellaneous 20,298
Total expenses 689,415
Net investment loss (610,684)
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions (8,981,668)
Net realized loss on foreign currency transactions (44,074)
Net change in unrealized depreciation of:
Investments (15,377,045)
Foreign currency denominated assets and liabilities (124,231)
Net loss on investments and foreign currency
denominated assets and liabilities (24,527,018)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(25,137,702)
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31,1997 APRIL 30,
(UNAUDITED) 1997
-------------- -------------
DECREASE IN NET ASSETS FROM OPERATIONS
Net investment loss $ (610,684) $ (564,942)
Net realized loss on investments and foreign
currency transactions (9,025,742) (4,130,840)
Net change in unrealized depreciation of
investments and foreign currency
denominated assets and liabilities (15,501,276) (36,139,044)
Net decrease in net assets from operations (25,137,702) (40,834,826)
NET ASSETS
Beginning of year 63,586,288 104,421,114
End of period $ 38,448,586 $ 63,586,288
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Korean Investment Fund, Inc. (the "Fund") was incorporated in the State of
Maryland on November 1, 1991 as a non-diversified, closed-end management
investment company. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the Korea Stock Exchange
on the day of valuation or if no such closing price is available, at the last
bid price quoted on such day. Securities for which market quotations are not
readily available and restricted securities are valued in good faith at fair
value using methods determined by the Board of Directors. In determining fair
value, consideration is given to cost, operating and other financial data.
Securities that mature in 60 days or less are valued at amortized cost, which
approximates market value, unless this method does not represent fair value.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents net foreign
exchange gains and losses from holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities at period end
exchange rates are reflected as a component of net unrealized
appreciation/depreciation of investments and foreign currency denominated
assets and liabilities. The Fund does not isolate that portion of the results
of operations arising as a result of changes in the foreign exchange rates from
the fluctuations arising from changes in the market prices of securities during
the fiscal year.
The exchange rate for the Korean Won at October 31, 1997 was Won 965.00 to U.S.
$1.00.
3. TAXES
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to its
shareholders. Therefore, no provision for U.S. income or excise taxes is
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Realized and unrealized gains and losses from investment and
foreign currency transactions are calculated on the identified cost basis.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences, do not require such
reclassification.
NOTE B: MANAGEMENT FEE, CO-MANAGER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P. ("Alliance") a fee at an annualized rate of
.85 of 1% of the Fund's average weekly net assets. Such fee is calculated
weekly and paid monthly.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
Under the terms of the Management Agreement, the Fund pays Orion Asset
Management Co., Ltd. (the "Co-Manager") a fee at an annualized rate of .40 of
1% of the Funds average weekly net assets. Such fee is calculated weekly and
paid monthly.
Under the Terms of a Shareholder Inquiry Agency agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Manager, the Fund
reimburses AFS for costs relating to servicing phone inquiries for the Fund.
For the period ended October 31, 1997 no such reimbursement was made by the
Fund.
Brokerage commissions paid on securities transactions for the six months ended
October 31, 1997 amounted to $134,916, of which $10,662 was paid to Tong Yang
Securities Co., Ltd., an affiliate of the Co-Manager.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
government securities) aggregated $14,237,636 and $16,248,997, respectively,
for the six months ended October 31, 1997. There were no purchases or sales of
U.S. government and government agency obligations for the six months ended
October 31, 1997. At October 31, 1997, the cost of investments for federal
income tax purposes was the same as the cost for financial reporting purposes,
resulting in net unrealized depreciation of investments of $36,310,244
(excluding foreign currency transactions). The Fund incurred and elected to
defer post October currency losses of $68,534 and capital losses of $2,638,651.
At April 30, 1997, the Fund had a net capital loss carryover of $2,932,640, of
which $439,256 expires at April 30, 2004 and $2,493,384 expires at April 30,
2005. To the extent that any net capital loss carryover or post October loss is
used to offset future capital gains, it, is probable that these gains will not
be distributed to shareholders.
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. Of the
8,450,704 shares outstanding October 31, 1997, the Investment Manager owned
9,000 shares. During the six months ended October 31, 1997 the Fund issued no
shares of common stock in connection with the Fund's dividend reinvestment plan.
10
FINANCIAL HIGHLIGHTS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
------------------------------------------------------------------------------
ENDED
OCTOBER 31, YEAR ENDED APRIL 30,
1997 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $7.52 $12.36 $12.66 $13.09 $10.37 $11.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.07)(a) (.07)(a) (.01)(a) (.13)(a) (.09) (.03)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (2.90) (4.77) .86 .28 2.81 (.59)
Net increase (decrease) in net asset value (2.97) (4.84) .85 .15 2.72 (.62)
LESS: DISTRIBUTIONS
Distributions from net realized gains on
investments and foreign currency
transactions -0- -0- (.29) -0- -0- (.01)
CAPITAL SHARE TRANSACTIONS
Dilutive effect of rights offering -0- -0- (.80) (.48) -0- -0-
Offering costs charged to additional
paid-in capital -0- -0- (.06) (.10) -0- -0-
Total capital share transactions -0- -0- (.86) (.58) -0- -0-
Net asset value, end of period $4.55 $7.52 $12.36 $12.66 $13.09 $10.37
Market value, end of period $4.438 $7.125 $11.50 $12.375 $13.375(b) $12.125
TOTAL RETURN
Total investment return based on: (c)
Market value (37.71)% (38.04)% (1.55)% (5.88)% 10.31%(b) 21.39%
Net asset value (39.50)% (39.16)% 4.00% (3.28)% 26.23% (5.62)%
Net assets, end of period (000's omitted) $38,449 $63,586 $104,421 $75,461 $55,078 $43,663
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets 2.16%(d) 2.11% 2.09% 2.00% 2.26% 2.55%
Ratio of net investment loss to average
net assets (1.92)%(d) (.73)% (.53)% (.83)% (.82)% (.27)%
Portfolio turnover rate 49% 32% 40% 34% 14% 43%
Average commission rate(e) $.0867 $.1277 -- -- -- --
</TABLE>
(a) Based on average shares outstanding.
(b) Restated.
(c) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Rights offerings, if any, are assumed for
purposes of this calculation, to be fully subscribed under the terms of the
rights offering. Generally, total investment return based on net asset value
will be higher than total investment return based on market value in periods
where there is an increase in the discount or a decrease in the premium of the
market value to the net asset value from the beginning to the end of such
periods. Conversely, total investment return based on the net asset value will
be lower than total investment return based on market value in the market
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return for a period of less than one year is not
annualized.
(d) Annualized.
(e) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged. This amount includes commissions paid to foreign
brokers which may materially affect the rate shown. Amounts paid in foreign
currencies have been converted into U.S. dollars using the prevailing exchange
rate on the date of the transaction.
11
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SUK WHAN CHANG, PRESIDENT
DONG HOON SHIN, SENIOR VICE PRESIDENT
DAVID H. DIEVLER (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
THE HON. JAMES D. HODGSON (1)
CHOONG (JOHN) H. KOH (1)
OFFICERS
ROBERT HEISTERBERG, EXECUTIVE VICE PRESIDENT--INVESTMENTS
YUNG CHUL PARK, EXECUTIVE VICE PRESIDENT--INVESTMENTS
A. RAMA KRISHNA, VICE PRESIDENT
IN KEE OH, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
INVESTMENT MANAGER AND
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109-3661
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
CO-MANAGER
ORION ASSET MANAGEMENT CO., LTD.
529 Madison Avenue
New York, NY 10022
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
TRANSFER AGENT, DIVIDEND PAYING AGENT, AND REGISTRAR
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110-1520
(1) Member of the Audit Committee.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report, including the financial statement herein is transmitted to
the shareholders of The Korean Investment Fund for their information. This is
not a prospectus, circular or representation intended for use in the purchase
of shares of the Fund or any securities mentioned in this report.
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an opinion
thereon.
12
THE KOREAN INVESTMENT FUND
Summary of General Information
POLICIES AND OBJECTIVES
The investment objective of the Fund is to seek long-term capital appreciation
through investment primarily in equity securities of Korean companies.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
KoreanInvFd. The Fund's NYSE trading symbol is "KIF". Weekly comparative net
asset value (NAV) and market price information about the Fund is published each
Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW YORKTIMES and each
Saturday in BARRON'S, and other newspapers in a table called "Closed-End Funds".
DIVIDEND REINVESTMENT PLAN
Under the Fund's Dividend Reinvestment Plan, all shareholders will
automatically have their dividends and other distributions from the Fund
invested in additional shares of the Fund unless a shareholder elects to
receive cash.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call State Street
Bank and Trust Company at 1-800-219-4218.
THE KOREAN INVESTMENT FUND
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
KORSR
