<PAGE>
----------------------------------------------------------------
THE
LATIN AMERICAN
DISCOVERY
FUND, INC.
----------------------------------------------------------------
FIRST QUARTER REPORT
MARCH 31, 2000
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
THE LATIN AMERICAN DISCOVERY FUND, INC.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
Peter J. Chase
DIRECTOR
John W. Croghan
DIRECTOR
Graham E. Jones
DIRECTOR
John A. Levin
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
--------------------------------------------------------------------------------
U.S. ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
--------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
--------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
Boston Equiserve
Investor Relations Department
P.O. Box 644
Boston, Massachusetts 02102-0644
(800) 730-6001
--------------------------------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
--------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers 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 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
---------
For the three months ended March 31, 2000, The Latin American Discovery Fund,
Inc. (the "Fund") had a total return, based on net asset value per share, of
7.37% compared with 3.93% for the Morgan Stanley Capital International (MSCI)
Emerging Markets Free Latin American Index ("the Index"). For the period from
commencement of operations on June 23, 1992 through March 31, 2000, the
Fund's total return, based on net asset value per share, was 237.21% compared
with 137.42% for the Index. On March 31, 2000, the closing price of the
Fund's shares on the New York Stock Exchange was $11 1/2 , representing a
24.1% discount to the Fund's net asset value per share.
Outperformance relative to the Index was attributable to both strong stock
selection and country allocation. Stock selection in Argentine and Brazilian
equities contributed markedly to performance. Notable contributors included
Brazilian telecommunications companies CRT and Telesp. Our underweight
position in Chile (+1.2%) and Colombia (-6.1%) added to performance. Stock
selection in Chile and Mexico detracted from performance.
Latin American markets advanced during the first quarter, amidst the backdrop
of the U.S. interest rate hikes, as investors rewarded continued signs of
macroeconomic improvements in the region and steps towards increasing fiscal
responsibility. Noteworthy at the beginning of the first quarter was
Telefonica de Espana's (TISA) offer to buy out minority shareholders of their
Latin American telecommunications affiliates at a 40% premium. Such tender
offers not only enhance the near term attractiveness of the Latin affiliates,
but also underscore the growth potential of Latin telecommunications service
providers. The improving operating efficiencies of telecommunications
companies are supported by a broadening of services, such as internet access
and data transmission. Retail stocks in the region are also benefiting from a
recovery in consumer demand.
Brazilian equities advanced 3.7%, buoyed by a better than anticipated primary
surplus for January, deceleration in the rate of inflation, and continuing
foreign direct investment. At the beginning of the first quarter, the
Brazilian government made important steps towards improving public finances
over the longer term as the Fiscal Responsibility Law (FRL) and DRU (new
version of the fiscal stabilization fund) passed the Lower House. The FRL
aims to curb excessive spending and indebtedness by all levels of government,
and the DRU allows government discretion over revenues otherwise earmarked
for expenditure. These measures, combined with the government's commitment to
more prudent fiscal policy, enhanced investor sentiment. In addition, Brazil
successfully placed a U.S. $1 billion 30-year Global bond in February. In
March, Brazil's Central Bank cut the benchmark interest rate for the first
time in six months, from 19.0% to 18.5%, and we anticipate further cuts,
albeit at a cautious pace. Reserve requirements for cash deposits were also
lowered during March, setting the foundation for credit expansion and a
lowering of consumer interest rates.
We continue to overweight Brazil, as we are encouraged by positive economic
trends (e.g. increased capacity utilization and trade balance) and the
passage of reform laws (e.g. social security measures). We believe the
ongoing economic recovery should enable Brazil to meet fiscal targets agreed
upon with the IMF. We presently favor telecommunications companies, based on
attractive valuations (especially on a global comparative basis), secular
growth trends from favorable demographics and pent up demand, better
management in the sector driving improvements in return on equity, and
increased confidence of the introduction in value added services (e.g.
wireless, data). During the first quarter, we added to Brazilian long
distance telecommunications services provider Embratel and to
telecommunications companies Telesp and Tele Norte Leste. We trimmed our
holdings in Brazilian mining and natural resource conglomerate CVRD, based on
less compelling valuations in comparison with global peers. We reduced our
position in electricity generator Cemig due to unresolved political and
ownership disputes.
Mexican equities advanced 4.5% during the first quarter, as market sentiment
was buoyed by better than anticipated 1999 fourth quarter GDP and inflation
and good 1999 fiscal deficit results. In March, Moody's raised Mexico's long
term local currency debt to investment grade status. Private consumption
continues to grow, supported by a strong peso, a low unemployment level and
positive real wage increases. Although the peso's strength may adversely
affect the trade account and lead to depreciation in the near term, we
believe there is limited risk of devaluation. The peso should continue to be
supported by foreign capital inflows, structural changes within the Mexican
economy since NAFTA, continued growth in exports, and the recent local
currency debt upgrade. We believe the greatest risks to the currency would be
a sharp decline in oil prices and/or a significant slowdown in the U.S.
economy.
We are encouraged by the positive economic trends previously mentioned and
maintain our overweight stance in Mexico. We like the merchandising sector as a
play on the growth and consumer recovery taking place in the region. In
addition, consolidation in the sector benefits incumbent retailers due to
economies of scale and operating synergy; and the increasing use of technology
should reduce costs and provide additional e-commerce revenue streams. During
the first quarter, we added to Wal-Mart de Mexico (formerly Cifra), Mexico's
largest retail chain of food and general merchandise, based on expectations for
consumer recovery and Wal-Mart's strong balance sheet. We modestly reduced our
significant overweight in beverage producer Femsa and added to Mexico's leading
industrial corporation Alfa, based on the upside potential from improving
margins in their chemical business and undervalued participation in their
telecommunication assets. We also added modestly to Grupo Sanborns, which
operates retail stores in Mexico (including 85% ownership of Sears de Mexico)
and manufactures a va-
2
<PAGE>
riety of confectionery products. Sanborns' entry into e-commerce service in
Mexico should enhance future sales.
Argentine equities gained 6.5% during the first quarter, as investor
confidence was buoyed by continued signs of economic recovery and the signing
of a three-year U.S. $7.4 billion stand-by credit agreement with the IMF.
Details of the $7.4 billion IMF stand-by loan were revealed in February,
calling for comprehensive social security and labor reform. The De La Rua
administration has pushed through tax increases, but tight fiscal policy
exacerbates the country's anemic consumer demand. In March, the government
announced intentions to reduce minimum liquidity requirements in the banking
system in hopes of boosting credit supply to the private sector. Despite
attractive valuations we continue to find limited investment opportunities in
Argentina, and remain underweight the market.
The Chilean market rose 1.2% during the first quarter. The Chilean market
continued to strengthen due to political stability, a stronger economy and
anticipated higher interest rates. Ricardo Lagos was elected President in the
run-off election on January 16, and he has raised the possibility of more
market friendly reforms, including the abolition of the one-year holding
period for invested capital and increasing the percentage of foreign
investments allowed for Chilean pension funds. The economic recession is
clearly over as January's economic growth of 5.1% was the highest in 19
months. We remain underweight in Chile, but added to energy provider Enersis,
as we are encouraged by signs of economic recovery and fiscal discipline.
Overall, we believe Latin American domestic fundamentals are improving, and
we anticipate regional expansion should continue with growth of around 4.5%
in 2000. Public finances should improve due to structural reform efforts.
Trade balances may deteriorate as domestic demand strengthens, possibly
placing some pressure on the currencies. The Latin American region should
face a heavy political cycle with elections in Brazil, Mexico, Peru and
Venezuela, yet these should have little influence on policy making.
The performance of the Latin American markets at quarter- end reflects their
vulnerability to shifts in sentiment in global (especially the U.S.) markets
as well as to a slowdown in the U.S. economy. However, we are emboldened by
the evidence of commitment to fiscal discipline in Brazil coupled with growth
and consolidation trends in the telecommunications and banking arenas, which
bode well for earnings growth. Given continued oil price strength and a
robust U.S. economy, we also anticipate further economic strength in Mexico.
While the economic recovery of Argentina and Chile is more embryonic, we do
anticipate reform-minded policies should yield improved growth for 2000.
Sincerely,
/s/ Harold J. Schaaff, Jr.
Harold J. Schaaff, Jr.*
PRESIDENT AND DIRECTOR
April 2000
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
--------------------------------------------------------------------------------
DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION
FOR THE FUND, ARE AVAILABLE ON OUR WEBSITE AT
www.msdw.com/institutional/investmentmanagement.
* HAROLD J. SCHAAFF, JR. WAS ELECTED PRESIDENT AND DIRECTOR OF THE FUND ON
MARCH 20, 2000. MR. SCHAAFF JOINED MORGAN STANLEY DEAN WITTER IN 1989 AND IS
A MANAGING DIRECTOR OF MORGAN STANLEY & CO. INCORPORATED AND MORGAN STANLEY
DEAN WITTER INVESTMENT MANAGEMENT INC. HE FORMERLY SERVED AS GENERAL COUNSEL
AND SECRETARY OF MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
3
<PAGE>
The Latin American Discovery Fund, Inc.
Investment Summary as of March 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN (%)
------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) MSCI EMF LA INDEX (3)
---------------------- ---------------------- ----------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Fiscal Year to Date 7.60 % -- 7.37 % -- 3.93 % --
One Year 40.60 40.60 % 59.35 59.35 % 46.32 46.32 %
Five Year 111.83 16.20 210.74 25.45 104.31 15.36
Since Inception* 155.97 12.86 237.21 16.93 137.42 11.77
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
--------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
ENDED
MARCH 31,
1992* 1993 1994 1995 1996 1997 1998 1999 2000
----- ---- ---- ---- ---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share........... $15.23 $23.31 $17.16 $ 10.98 $14.77 $20.34 $ 8.19 $14.11 $15.15
Market Value Per Share.............. $13.25 $27.13 $18.25 $ 9.88 $12.50 $17.94 $ 6.19 $10.69 $11.50
Premium/(Discount).................. -13.0% 16.4% 6.4% -10.0% -15.4% -11.8% -24.4% -24.2% -24.1%
Income Dividends.................... -- -- $ 0.00# -- $ 0.16 -- $ 0.08 $ 0.09 $ --
Capital Gains Distributions......... -- -- $ 5.74 $ 0.45 $ 1.14 $ 0.70 $ 6.67 -- --
Fund Total Return (2)............... 8.01% 65.36%+ -0.14% -27.61%+ 47.19% 43.06% -33.53% 73.78% 7.37%
MSCI EMF LA Index Total Return (3).. 2.00% 53.92% 0.64% -12.83% 22.21% 31.64% -35.11% 58.89% 3.93%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share 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 per share of the Fund.
(3) The Morgan Stanley Capital International Emerging Markets Free Latin
America Index is a broad based market cap weighted composite index
covering at least 60% of markets in Argentina, Brazil, Chile, Colombia,
Mexico, Peru and Venezuela. The Index takes into account local market
restrictions for specific securities or classes of shares that may be
excluded from or limited for foreign investor ownership.
* The Fund commenced operations on June 23, 1992.
# Amount is less than $0.01 per share.
+ This return excludes the effect of the rights issued in connection with
the Rights Offerings.
4
<PAGE>
The Latin American Discovery Fund, Inc.
Portfolio Summary as of March 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (95.7%)
Short-Term Investments (4.3%)
</TABLE>
--------------------------------------------------------------------------------
INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Banks (8.8%)
Beverages (6.8%)
Construction Materials (3.5%)
Diversified Telecommunication Services (35.7%)
Electric Utilities (5.9%)
Media (4.5%)
Metals & Mining (5.6%)
Multiline Retail (4.7%)
Oil & Gas (4.2%)
Wireless Telecommunication Services (6.5%)
Other (13.8%)
</TABLE>
--------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
[CHART]
<TABLE>
<S> <C>
Mexico (41.6%)
Brazil (37.9%)
Chile (7.2%)
Argentina (5.4%)
United States (5.0%)
Venezuela (1.5%)
Peru (1.2%)
Colombia (0.3%)
Other (-0.1%)
</TABLE>
--------------------------------------------------------------------------------
TEN LARGEST HOLDINGS*
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
----------
<S> <C>
1. Telmex (Mexico) 14.0%
2. Petrobras (Brazil) 4.2
3. Televisa (Mexico) 4.0
4. Telecomunicacoes de Sao Paulo (Brazil) 3.6
5. Cemex (Mexico) 3.5
6. FEMSA (Mexico) 3.1
7. Celular CRT Participaos (Brazil) 3.0
8. Wal-Mart de Mexico (Mexico) 3.0
9. CVRD (Brazil) 2.7
10. Kimberly (Mexico) 2.6
----
43.7%
----
----
</TABLE>
* Excludes short-term investments.
5
<PAGE>
FINANCIAL STATEMENTS
---------
STATEMENT OF NET ASSETS (UNAUDITED)
---------
MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS(95.8%)
(UNLESS OTHERWISE NOTED)
ARGENTINA(5.4%)
BANKS
Banco del Suquia 1 U.S.$ --@
Banco Rio De La Plata ADR 50,695 725
-------------
725
-------------
BEVERAGES
Quilmes Industrial ADR 164,355 1,726
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telecom Argentina ADR 80,966 2,814
Telefonica Argentina ADR 109,617 4,302
-------------
7,116
-------------
9,567
-------------
BRAZIL (37.9%)
BANKS
Banco Bradesco (Preferred) 268,231,099 2,215
Banco Bradesco ADR 3,700 30
(a)Banco Nacional (Preferred) 95,420,000 3
Itaubanco (Preferred) 22,840,340 2,033
Unibanco (Preferred) GDR 67,038 2,128
-------------
6,409
-------------
BEVERAGES
Brahma (Preferred) 819,000 648
Brahma (Preferred) ADR 40,040 651
-------------
1,299
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Companhia Riograndense de 5,804,866 2,633
Telecomunicacoes (Preferred)
Embratel (Preferred) 107,813,000 2,749
Embratel ADR 35,675 914
Tele Centro-Sul (Preferred) 73,125,250 1,192
Tele Centro-Sul ADR 100 8
Tele Norte-Leste (Preferred) 99,507,000 2,668
Tele Norte-Leste (Preferred) ADR 59,929 1,596
Telebras (Preferred) ADR 7,100 1,063
Telecomunicacoes de Parana 2,936,500 1,258
Telecomunicacoes de Sao Paulo 143,480 4,259
Telecomunicacoes de Sao Paulo 74,885,359 2,202
(Preferred)
-------------
20,542
-------------
ELECTRIC UTILITIES
Cemig ADR 60,393 1,056
Cemig (Preferred) 29,260,003 505
CERJ 4,209,300,000 1,281
Copel (Preferred) ADR 30,166 256
Copel (Preferred) 'B' 266,861,500 2,260
Electrobras 43,906,000 782
Electrobras ADR 14,130 125
Electrobras (Preferred) ADR 74,680 713
-------------
6,978
-------------
INDUSTRIAL CONGLOMERATES
Itausa Investimentos Itau (Preferred) 1,282,364 U.S.$1,252
-------------
METALS & MINING
CSN 52,767,000 1,867
CSN ADR 6,800 239
CVRD 5,000 115
CVRD (Preferred) ADR 47,230 1,294
CVRD (Preferred) 'A' 123,861 3,378
CVRD Bonus 116,420 --@
Gerdau (Preferred) 64,152,422 1,676
Usiminas (Preferred) 111,200 552
(a)Usiminas ADR 1,038 5
-------------
9,126
-------------
MULTILINE RETAIL
Globex Utilidades (Preferred) 14,200 163
(a,b)Lojas Arapua (Preferred) 41,337,400 --@
(a)Lojas Arupau (Preferred) ADR 20,775 --@
-------------
163
-------------
OIL & GAS
Petrobras (Preferred) 20,841,579 5,649
(b)Petrobras (Preferred) ADR 30,795 838
Petrobras (Preferred) ADR 36,125 983
-------------
7,470
-------------
PAPER & FOREST PRODUCTS
Aracruz Celulose ADR 57,068 1,209
-------------
REAL ESTATE
Rossi Residencial GDS (Registered) 269,535 320
(a,b)Rossi Residential GDR 176,972 210
-------------
530
-------------
TELECOMMUNICATION SERVICES
Telesp Celular (Preferred) --@
(Preferred)
-------------
TEXTILES & APPAREL
Coteminas 5,426,400 390
(a,b)Coteminas ADR 9,305 33
-------------
423
-------------
UTILITIES - ELECTRICAL & GAS
Eletrobras (Preferred) 'B' 31,902,080 614
-------------
WIRELESS TELECOMMUNICATION SERVICES
(a)Celular CRT Participaos (Preferred) 11,698,066 5,374
Tele Leste Celular (Preferred) 678,632,139 826
Tele Leste Celular ADR 2,185 131
Tele Nordeste Celular (Preferred) 77,391,900 284
Tele Norte Celular (Preferred) 611,474,200 755
Tele Sudeste Celular ADR 80 4
Tele Sudeste Celular (Preferred) 73,569,790 743
Telesp Celular ADR 28,300 1,604
-------------------------------------------------------------------------------
6
<PAGE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL(CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES (CONTINUED)
Telesp Celular (Preferred) 78,099,253 U.S.$ 1,771
-------------
11,492
-------------
67,507
-------------
CHILE(6.8%)
BANKS
Banco Edwards ADR 69,853 1,275
Banco Santander Chile ADR 14,900 203
Banco Santiago ADR 28,795 568
-------------
2,046
-------------
BEVERAGES
CCU ADR 59,200 1,473
-------------
DIVERSIFIED FIANANCIALS
Citi Corp. Cash Fund 20,233 48
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES
CTC ADR 135,952 3,093
-------------
ELECTRIC UTILITIES
Chilectra ADR 103,165 1,809
Endesa ADR 56,909 619
Enersis ADR 57,548 1,169
-------------
3,597
-------------
FOOD & DRUG RETAILING
Santa Isabel ADR 44,675 482
-------------
INDUSTRIAL CONGLOMERATES
Quinenco ADR 56,020 630
-------------
MULTILINE RETAIL
D&S ADR 37,675 676
-------------
12,045
-------------
COLOMBIA(0.3%)
BEVERAGES
Bavaria 96,960 423
(a)Valores Bavaria 76,519 78
-------------
501
-------------
MEXICO(41.6%)
BANKS
Bancomer 'O' 3,623,752 2,037
Banmex 'L' 645,651 2,765
(a)Banorte 'O' 684,441 1,036
Grupo Financiero 142,520 660
-------------
6,498
-------------
BEVERAGES
FEMSA 763,319 3,427
FEMSA ADR 45,393 2,043
Grupo Modelo 'C' 394,300 844
Pepsi-Gemex GDR 28,800 157
-------------
6,471
-------------
CONSTRUCTION & ENGINEERING
Empresas ICA Sociedad Controladora 347,351 139
ICA ADR 71,070 173
-------------
312
-------------
CONSTRUCTION MATERIALS
(a)Cemex ADR 145,478 3,291
Cemex CPO 643,242 2,916
-------------
6,207
-------------
CONTAINERS & PACKAGING
Vitro ADR 111,592 530
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Carso Global Telecom 968,544 3,139
Telmex 'L' ADR 372,954 24,988
-------------
28,127
-------------
FOOD PRODUCTS
(a)Grupo Industrial Bimbo 'A' 163,732 273
-------------
INDUSTRIAL CONGLOMERATES
(a)Alfa 'A' 687,649 2,606
(a)Grupo Carso 'A1' 385,445 1,453
-------------
4,059
-------------
LEISURE EQUIPMENT & PRODUCTS
(a)Blockbuster de Mexico 40,000 --@
-------------
MACHINERY
Tamsa ADR 44,212 724
-------------
MEDIA
CIE 188,300 945
Televisa CPO ADR 104,421 7,100
-------------
8,045
-------------
METALS & MINING
Grupo Mexico 'B' 170,610 797
-------------
MULTILINE RETAIL
(a)Wal-Mart de Mexico 'C' 978,227 2,254
Wal-Mart de Mexico 'V' 1,166,261 2,763
(a)Wal-Mart de Mexico 'V' ADR 11,250 281
Grupo Sanborns 297,750 670
(a)Soriana 'B' 329,585 1,521
-------------
7,489
-------------
PAPER & FOREST PRODUCTS
Kimberly 'A' 1,334,074 4,589
-------------
74,121
-------------
PERU(1.2%)
DIVERSIFIED TELECOMMUNICATION SERVICES
Tel Peru 'B' ADR 120,517 2,049
-------------
UNITED STATES(1.1%)
BEVERAGES
Panamerican Beverages, Inc. 'A' 35,600 627
-------------
FOOD PRODUCTS
(a)Seminis, Inc. 'A' 69,300 446
-------------
INTERNET SOFTWARE & SERVICES
StarMedia Network Inc. 31,900 959
-------------
2,032
-------------
-------------------------------------------------------------------------------
7
<PAGE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------------------------
<S> <C> <C>
VENEZUELA(1.5%)
DIVERSIFIED TELECOMMUNICATION SERVICES
CANTV ADR 93,995 U.S.$ 2,726
-------------
TOTAL COMMON STOCKS
(Cost U.S.$133,132) 170,548
-------------
-------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
-------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS(4.3%)
CHILE(0.4%)
REPURCHASE AGREEMENT
Citibank Time Deposit 5.0% 04/11/00 CLP 415,500 799
-------------
UNITED STATES(3.9%)
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.90%, dated
3/31/00, due 4/03/00, to be repurchased
at U.S.$6,895, collateralized by
U.S.$6,955, United States Freddie Mac
Home Loan Note, 5.75%, due 7/15/03 U.S.$ 6,892 6,892
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost U.S.$7,691) 7,691
-------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN(0.0%)
Brazil Real BRL 113 65
Chilean Peso CLP 65 --@
Mexican Peso MXP 89 10
-------------
(Cost U.S.$75) 75
-------------
TOTAL INVESTMENTS(100.1%)
(Cost U.S.$140,898) U.S.$ 178,314
-------------
-------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES(-0.1%)
Other Assets U.S.$ 14,031
Liabilities (14,271) (240)
------------- -------------
-------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 11,756,125 issued and
outstanding U.S.$0.01 par value
shares (100,000,000 shares authorized) U.S.$ 178,074
-------------
-------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 15.15
-------------
-------------------------------------------------------------------------------
</TABLE>
(a) - Non-income producing
(b) - 144A Security certain conditions for public sale may exist
@ - Value is less than U.S.$500
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
GDS - Global Depositary Shares
8
