MERRILL LYNCH
DRAGON FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1995
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>
Merrill Lynch
Dragon Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH DRAGON FUND, INC.
Asset Allocation
As A Percentage* of
Net Assets as of
March 31, 1995
A map illustrating the following percentages:
Pakistan 0.3%
India 1.7%
Indonesia 6.3%
Singapore 14.3%
Malaysia 19.3%
Thailand 10.5%
Hong Kong 26.1%
South Korea 5.1%
Taiwan 1.0%
Philippines 6.8%
[FN]
* Total may not equal 100%.
<PAGE>
DEAR SHAREHOLDER
The "dragon" stock markets began a modest recovery early in 1995,
only to decline sharply following the earthquake in Kobe, Japan.
However, as investors perceived that a slowing US economy would
cause the Federal Reserve Board to pursue a less restrictive
monetary policy which, in turn, might limit further interest rate
increases in Asia, share prices in the dragon stock markets firmed
somewhat. Nevertheless, by the end of the March quarter the dragon
stock markets were trading in a relatively narrow range. Although
investor confidence has been bolstered by the possibility that
interest rates may have peaked for the near term, developments in
individual countries and concerns about currency devaluations
following the Mexican financial crisis have dampened upside
potential for the near term. The risk of currency devaluations is
considered especially significant for countries with large trade
deficits.
For the three months ended March 31, 1995, Merrill Lynch Dragon
Fund, Inc.'s Class A, B, C and D Shares had total returns of -3.99%,
- -4.32%, -4.29% and -4.05%, respectively, compared to a -1.23% return
for the unmanaged Morgan Stanley Capital International Combined Far
East Free (ex-Japan) Index. The main reasons for the Fund's
underperformance relative to the Index were its under-weighted
position in Hong Kong (which was the best-performing Asian stock
market during the quarter) and its overweighting in the Philippines,
which was one of the worst-performing markets during the period.
(Investment results shown do not include applicable sales charges,
and would be lower if sales charges were deducted. Complete
performance information, including average annual total returns, can
be found on pages 4 and 5 of this report to shareholders.)
Investment Activities
In 1995, we believe the driving force behind the emerging Asian
stock markets will be corporate earnings results. Therefore, our
investment activities during the March quarter were focused on
expanding holdings in companies with clear prospects for sustainable
earnings growth.
Rebounding from its sharp declines in 1994, the prospect of lower
interest rates led Hong Kong to be one of the best-performing dragon
stock markets during the March quarter, with the unmanaged Hang Seng
Index appreciating 4.8%. However, the fiscal year results currently
being reported by the major blue chip companies have been
disappointing and below expectations, and have led to downward
revisions in earnings for 1995. As a result, further near-term
upside share price potential is being limited by the slowing
earnings momentum. Adding to investor concerns is the outcome of the
political transition in the People's Republic of China as Deng Xiao
Ping's health continues to fail. Therefore, we do not expect Hong
Kong stocks to stage a significant rally until there are clear signs
that interest rates have peaked.
<PAGE>
As of March 31, 1995, 26.1% of the portfolio's net assets was
invested in Hong Kong. We expect to maintain this underweighted
position in the weeks ahead. Although we perceive the potential for
better corporate earnings growth in other countries, valuations in
Hong Kong--most notably, price/earnings ratios--are still at very
low levels historically. Consistent with our overall strategy, we
sold investments in companies with questionable earnings outlooks,
such as Amoy Properties Ltd. and C.P. Pokphand Co., Ltd., and added
to our holding in Hong Kong Telecommunications, Ltd.
Malaysia is the Fund's second-largest exposure at 19.3% of net
assets, a slightly underweighted position. Our long-term outlook for
Malaysia remains positive, but there are several near-term factors
that led us to be more cautious. It appears that interest rates have
been held down prior to the elections (which have yet to be
announced), and therefore interest rate increases may follow shortly
thereafter. In addition, there are increasing concerns regarding a
ballooning current account deficit in 1995. Nonetheless, the country
is still experiencing good economic growth and inflation is under
control. At the same time, corporate earnings growth continues
(although the rate of momentum may be slowing) and share valuations
are down to reasonable levels. During the March quarter, we sold the
Fund's investments in Tanjong PLC and Pacific Chemical BHD, and
trimmed the position in Malayan Cement BHD.
The Fund's 14.3% exposure in Singapore is virtually a market
weighting. This is one of the most defensive of the dragon stock
markets in our opinion, stemming from the country's high current
account surplus and the stock market's reasonable valuations. We
have increased our holdings in Singapore Airlines Ltd., DBS Land
Ltd. and United Overseas Bank, while we reduced the Fund's
investment in Sembawang Corp., which had disappointing earnings
results.
The Fund's 10.5% position in Thailand is an underweighted one, but
we are expanding our investments there on share price weakness.
Tight liquidity and high interest rates have driven down valuations,
and the King of Thailand's recent heart attack raised investor
concerns further. However, we view this stock market more positively
since it appears that the relatively poor period for corporate
earnings growth may be over, and Thai companies may average 25%
increases in earnings this year over last year's results. Liquidity
is likely to remain tight over the near term, but will improve when
interest rates begin to decline. With especially attractive
valuations in the banking sector, we added to our investments in
Bangkok Bank and Thai Farmers Bank, Ltd., and also increased the
Fund's holding in PTT Exploration.
The Fund's overweighted position in the Philippines had a negative
effect on performance during the March quarter, since investors
erroneously perceived that economic conditions there were similar to
those in Mexico. Although investor fears of a Mexican-style currency
crisis abated as the quarter progressed, the stock market has not
fully recovered. As a result, valuations are very attractive and,
given our positive view on the earnings growth prospects for
Philippine companies, we took advantage of share price weakness to
add to investments in Benpres Holdings Corp., Ayala Land, Inc. and
SM Prime Holdings.
<PAGE>
Despite relatively good valuations and high corporate earnings
growth, the Indonesian stock market has been hampered by concerns
over its large national debt, one-third of which is denominated in
Japanese yen. With the sharp appreciation in the Japanese currency,
it may become more difficult for Indonesia to keep pace with the
cost of servicing its debt. We have focused our selective Indonesian
investments on companies with especially strong earnings such as
P.T. Indah Kiat Pulp & Paper Corp. and P.T. Hanjaya Mandala
Sampoerna.
Inflation concerns have caused difficulties for the smaller South
Korean companies. We continue to concentrate our investments in blue-
chip issues and added to positions in Korea Mobile Telecommunications
Corp. and Pohang Iron & Steel Co., Ltd. on share price weakness in
January. In India, the stock market has corrected sharply as the
loss of four major state elections has brought into question the
ability of the ruling party to hold onto power. In addition, this
stock market is experiencing difficulties as new share offerings
are draining liquidity. As a result, our Indian investments are
in companies with strong managements that are globally competitive,
such as the new position in the pharmaceutical company, Ranbaxy
Laboratories Limited.
In Conclusion
At the end of the March quarter, the Fund had a 9.2% cash position,
slightly higher than the 8.1% level at the end of the December 31,
1994 quarter. Barring any significant change in our investment
outlook, we do not anticipate altering this position significantly
in the weeks ahead as we await clearer indications regarding the
direction of interest rates in the emerging Asian economies.
We thank you for your investment in Merrill Lynch Dragon Fund, Inc.,
and we look forward to reviewing our outlook and strategy with you
again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Kara Tan Bhala)
Kara Tan Bhala
Vice President and Portfolio Manager
April 24, 1995
<PAGE>
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors, as detailed in the Fund's prospectus. If you were a Class
A shareholder prior to October 21, 1994, your Class A Shares were
redesignated to Class D Shares on October 21, 1994, which, in the
case of certain eligible investors, were simultaneously exchanged
for Class A Shares.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class B and Class D Shares are
presented in the "Performance Summary" and "Average Annual Total
Return" tables below and on page 5. "Aggregate Total Return" tables
for Class A and Class C Shares are also presented on page 5. Data
for all of the Fund's shares, including Class A and Class C Shares,
are presented in the "Recent Performance Results" table on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class B and Class D
Shares for the 12-month and 3-month periods ended March 31, 1995 and
for Class A and Class C Shares for the since inception and 3-month
periods ended March 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
<PAGE>
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
5/29/92--12/31/92 $10.00 $10.13 -- $0.020 + 1.50%
1993 10.13 18.74 $0.006 0.103 +86.15
1994 18.74 15.03 0.241 0.122 -17.86
1/1/95--3/31/95 15.03 14.38 -- -- - 4.32
------ ------
Total $0.247 Total $0.245
Cumulative total return as of 3/31/95: +48.50%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
5/29/92--12/31/92 $10.00 $10.12 -- $0.080 + 2.02%
1993 10.12 18.77 $0.006 0.182 +87.46
1994 18.77 15.08 0.241 0.211 -17.24
1/1/95--3/31/95 15.08 14.47 -- -- - 4.05
------ ------
Total $0.247 Total $0.473
Cumulative total return as of 3/31/95: +51.87%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charges; results would be lower if sales charge was
included.
</TABLE>
Average Annual
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/95 - 2.01% - 5.83%
Inception (5/29/92) through 3/31/95 +14.95 +14.40
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/95 - 1.16% - 6.35%
Inception (5/29/92) through 3/31/95 +15.86 +13.68
<PAGE>
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/21/94) through 3/31/95 -14.38% -18.87%
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 3/31/95 -14.80% -15.63%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
3/31/95 12/31/94 3/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $14.45 $15.05 $17.43 -15.77%(1) -3.99%
Class B Shares 14.38 15.03 15.03 - 2.79(1) -4.32
Class C Shares 14.28 14.92 17.29 -16.07(1) -4.29
Class D Shares 14.47 15.08 15.08 - 2.51(1) -4.05
Class A Shares--Total Return -14.38(2) -3.99
Class B Shares--Total Return - 2.01(3) -4.32
Class C Shares--Total Return -14.80(4) -4.29
Class D Shares--Total Return - 1.16(5) -4.05
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results shown for Class A and Class C Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.241 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.251 per share ordinary
income dividends and $0.241 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.122 per share ordinary
income dividends and $0.241 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.229 per share ordinary
income dividends and $0.241 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.211 per share ordinary
income dividends and $0.241 per share capital gains distributions.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US Dollars)
<CAPTION>
Shares Held/ Percent of
COUNTRIES Industries Face Amount Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Banking 5,000 Dah Sing Financial Holdings Ltd. $ 13,884 $ 8,666 0.0%
4,380,000 Guoco Group, Ltd. 16,323,506 16,258,941 1.5
2,197,606 HSBC Holdings, Ltd. 18,872,742 24,799,990 2.2
------------ -------------- ------
35,210,132 41,067,597 3.7
Conglomerates 22,408,000 Guangdong Investments, Ltd. 9,510,303 10,868,525 1.0
$ 3,436,000 Guangdong Investments, Ltd.,
4.50% due 10/07/1998 4,364,558 3,453,180 0.3
4,323,000 Hutchison Whampoa, Ltd. 12,516,919 19,066,714 1.7
897,800 Jardine Matheson Holdings Ltd. 7,511,867 8,080,200 0.7
3,227,000 Swire Pacific Ltd. 'A' 17,817,938 22,016,976 2.0
------------ -------------- ------
51,721,585 63,485,595 5.7
Electrical 18,211,000 Innovative International
Equipment Holdings Ltd. 7,882,226 3,580,252 0.3
4,225,000 Johnson Electric Holdings Ltd. 8,157,249 9,945,677 0.9
------------ -------------- ------
16,039,475 13,525,929 1.2
<PAGE>
Electronics 16,600,000 ASM Pacific Technology 5,454,485 10,252,215 0.9
Insurance 19,767,000 National Mutual Asia, Ltd. 7,969,425 12,208,165 1.1
Leisure 6,370,000 Hong Kong & Shanghai Hotels 5,697,738 7,497,510 0.7
Packaging 14,000,000 M.C. Packaging (HK), Ltd. 6,547,529 4,436,397 0.4
Publishing & 8,750,000 Oriental Press Group 5,834,025 3,734,722 0.3
Broadcasting 8,500,000 South China Morning Post Holdings 4,966,435 4,754,899 0.4
4,216,000 Television Broadcasts Ltd. 16,736,219 14,395,965 1.3
------------ -------------- ------
27,536,679 22,885,586 2.0
Real Estate 2,183,000 Cheung Kong Holdings Ltd. 8,152,206 9,515,243 0.9
3,326,813 Hong Kong Land Holdings Ltd. 6,561,275 7,271,958 0.6
3,628,020 New World Development Co., Ltd. 9,331,350 9,877,750 0.9
2,790,100 Sun Hung Kai Properties, Ltd. 12,644,845 19,036,122 1.7
1,795,000 Wharf Holdings Ltd. 6,952,014 5,862,219 0.5
$ 9,840,000 Wharf Holdings Ltd.,
5% due 7/15/2000 9,335,976 10,209,000 0.9
------------ -------------- ------
52,977,666 61,772,292 5.5
Telecommuni- 12,220,000 ABC Communications Holdings Ltd. 3,501,176 3,161,094 0.3
cations 15,636,800 Hong Kong Telecommunications, Ltd. 27,741,771 30,438,316 2.7
------------ -------------- ------
31,242,947 33,599,410 3.0
Utilities-- 2,225,200 China Light & Power Co., Ltd. 9,301,633 10,792,860 1.0
Electric & Gas 5,908,880 Hong Kong & China Gas Co. (The) 8,402,958 10,546,795 0.9
------------ -------------- ------
17,704,591 21,339,655 1.9
Total Investments in Hong Kong 258,102 252 292,070,351 26.1
India Chemicals 960,000 Mardia Chemicals Ltd. 4,415,127 3,898,089 0.3
960,000 Mardia Chemicals Ltd. (Rights) 0 0 0.0
------------ -------------- ------
4,415,127 3,898,089 0.3
Conglomerates 243,300 Reliance Industries (ADR)* 6,667,743 3,831,975 0.3
Consumer--Durables 456,000 IFB Industries Ltd. 3,998,087 4,066,242 0.4
Finance 66,210 Housing Development Finance 6,347,114 4,217,197 0.4
<PAGE>
Pharmaceuticals 80,000 Ranbaxy Laboratories Limited 1,621,095 1,592,357 0.1
Steel Mills 872,000 Essar Gujarat Limited 2,917,155 1,978,662 0.2
Total Investments in India 25,966,321 19,584,522 1.7
Indonesia Banking 1,744,000 P.T. Bank International Indonesia 7,223,733 4,229,414 0.4
Food 2,060,672 P.T. Mayorah Indah 6,294,419 8,843,295 0.8
Forest Products 5,359,200 P.T. Indah Kiat Pulp & Paper Corp. 6,453,834 7,247,018 0.6
Miscellaneous-- 1,941,250 P.T. Modern Photo Film 5,119,000 7,940,294 0.7
Consumer
Pharmaceuticals 2,251,500 P.T. Kalbe Farma 7,362,735 8,630,582 0.8
Telecommuni- 118,490 P.T. Indonesian Satellite
cations Corp. (Indosat) (ADR)* 4,045,632 4,176,773 0.4
Tobacco 5,425,000 P.T. Hanjaya Mandala Sampoerna 4,892,468 28,737,707 2.6
Total Investments in Indonesia 41,391,821 69,805,083 6.3
Malaysia Banking 4,256,000 Affin Holdings BHD 6,646,052 6,160,554 0.5
851,200 Affin Holdings BHD (Rights)(b) 157,673 159,232 0.0
2,054,000 Arab-Malaysian Merchant Bank BHD 7,932,519 21,120,823 1.9
MYR 1,969,000 Arab-Malaysian Merchant Bank BHD,
7.50% due 11/20/1999 768,091 965,616 0.1
2,850,000 Malayan Banking BHD 6,748,454 19,274,273 1.7
------------ -------------- ------
22,252,789 47,680,498 4.2
Building & 1,912,500 George Kent Holdings BHD 2,694,743 3,819,705 0.3
Construction 382,500 George Kent Holdings BHD (Rights)(c) 100,464 225,400 0.0
2,355,000 I.J.M. Corp. BHD 5,257,205 8,009,887 0.7
2,370,000 Malayan Cement BHD 2,850,307 3,655,527 0.3
------------ -------------- ------
10,902,719 15,710,519 1.3
Conglomerates 9,000,000 Renong BHD 8,454,940 13,952,937 1.2
Finance 938,000 Hong Leong Credit BHD 6,877,505 4,006,486 0.4
3,440,000 MBF Capital BHD 5,461,287 3,659,719 0.3
------------ -------------- ------
12,338,792 7,666,205 0.7
<PAGE>
Financial 980,000 Pan Pacific Asia BHD 5,892,045 3,759,541 0.3
Services
Food 1,721,700 Nestle Malaysia BHD 7,333,320 11,371,323 1.0
Forest $ 2,000,000 Aokam Perdana BHD, 3.50%
Products due 6/13/2004 2,345,000 1,940,000 0.2
2,739,000 Aokam Perdana BHD (Ordinary) 8,368,426 15,382,163 1.4
------------ -------------- ------
10,713,426 17,322,163 1.6
Hotels 6,000,000 Pernas International Hotels &
Properties BHD 3,815,457 4,413,684 0.4
3,000,000 Pernas International Hotels &
Properties BHD (Warrants) (a) 165,079 166,581 0.0
------------ -------------- ------
3,980,536 4,580,265 0.4
Leisure 3,300,000 Berjaya Sports TOTO BHD 7,410,648 4,254,696 0.4
848,500 Genting BHD 7,511,393 7,651,097 0.7
3,216,000 Resorts World BHD 10,967,664 16,661,894 1.5
------------ -------------- ------
25,889,705 28,567,687 2.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US Dollars)
<CAPTION>
Shares Held/ Percent of
COUNTRIES Industries Face Amount Long-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Malaysia Real Estate 3,944,000 Land & General BHD $ 8,186,739 $ 12,088,590 1.1%
(concluded) 1,972,000 Land & General BHD 'A' 0 6,044,295 0.5
------------ -------------- ------
8,186,739 18,132,885 1.6
Shipyards 830,000 Westmont BHD 6,278,222 4,168,875 0.4
Telecommuni- 3,555,000 Leader Universal Cable BHD 5,406,845 12,372,553 1.1
cations 2,370,000 Leader Universal Holdings BHD 'A' 3,384,773 7,779,711 0.7
1,289,000 Telekom Malaysia BHD 7,206,391 8,921,297 0.8
$ 2,375,000 Telekom Malaysia BHD, 4% due
10/03/2004 2,034,638 2,006,875 0.2
------------ -------------- ------
18,032,647 31,080,436 2.8
Transportation 1,199,000 Malaysian Airlines System BHD 3,345,381 3,959,521 0.4
2,957,333 Malaysian International Shipping
Co. BHD 6,043,232 8,538,078 0.8
------------ -------------- ------
9,388,613 12,497,599 1.2
Total Investments in Malaysia 149,644,493 216,490,933 19.3
<PAGE>
Pakistan Telecommuni- 41,905 Pakistan Telecommunications
(GDR)** 7,533,262 3,771,450 0.3
cations
Total Investments in Pakistan 7,533,262 3,771,450 0.3
Philippines Beverages 4,804,800 San Miguel Corp. 'B' 10,222,586 21,873,992 2.0
Conglomerates 826,530 Benpres Holdings Corp. 8,047,236 6,405,608 0.6
Food & Beverage 3,210,000 Universal Robina Corp. 2,874,306 1,842,315 0.2
International 13,253,416 International Container Terminal 8,867,496 9,411,472 0.8
Trade
Oil 6,570,000 Petron Corp. 5,609,882 4,729,377 0.4
Real Estate 3,858,000 Ayala Land, Inc. 5,508,954 4,578,560 0.4
Retail 38,775,750 SM Prime Holdings 10,093,708 11,768,516 1.1
Telecommuni- 78,880 Philippine Long Distance
cations Telephone Co. (ADR)* 4,027,836 4,772,240 0.4
Utilities-- 967,180 Manila Electric Co. (MERALCO) 'B' 6,682,217 9,972,868 0.9
Electric
Total Investments
in the Philippines 61,934,221 75,354,948 6.8
Singapore Airlines 1,529,000 Singapore Airlines 'Foreign' Ltd. 10,946,601 15,279,164 1.4
Automotive 1,610,000 Cycle & Carriage, Ltd. 7,464,505 13,692,417 1.2
Banking 1,854,000 Development Bank of Singapore Ltd. 16,917,049 19,446,634 1.7
1,366,866 Overseas Chinese Banking Corp.
'Foreign' 8,900,801 13,755,845 1.2
2,700,000 Public Bank BHD 'Foreign' 2,361,655 4,707,300 0.4
2,050,587 United Overseas Bank 16,361,421 20,346,008 1.8
------------ -------------- ------
44,540,926 58,255,787 5.1
Beverages 190,000 Fraser & Neave Ltd. (Warrants) (a) 1,139,529 834,869 0.1
Conglomerates 2,616,000 ACMA Ltd. 8,074,466 8,046,378 0.7
<PAGE>
Electronics 6,641,000 Goldtron, Ltd. 5,086,589 6,495,096 0.6
14,340,000 I.P.C. Corp. 10,159,282 8,943,444 0.8
------------ -------------- ------
15,245,871 15,438,540 1.4
Marine/ 2,807,500 Sembawang Maritime Ltd. 8,560,245 11,341,425 1.0
Offshore Oil
Services SG$ 2,090,000 Sembawang Maritime Ltd.,
1.50% due 10/25/1998 1,325,469 2,814,316 0.3
------------ -------------- ------
9,885,714 14,155,741 1.3
Publishing & 792,000 Singapore Press Holdings Ltd. 8,715,428 13,415,167 1.2
Broadcasting
Real Estate 4,104,000 DBS Land Ltd. 12,091,181 10,936,244 1.0
Shipping 1,466,000 Sembawang Corp. 12,005,214 10,181,999 0.9
Total Investments in Singapore 130,109,435 160,236,306 14.3
South Korea Automotive 22,485 Dong ah Tire Industries Co. 840,416 1,743,170 0.2
Building & 1,624 Samsung Heavy Industries (New) 38,691 39,127 0.0
Construction
Retail Stores 78,020 Shinsegae Department Stores Co. 2,691,974 8,491,648 0.8
10,400 Shinsegae Department Stores Co.
(New) 715,633 723,420 0.1
------------ -------------- ------
3,407,607 9,215,068 0.9
Steel 146,200 Pohang Iron & Steel Co., Ltd. 13,398,607 16,418,715 1.5
Telecommuni- 15,562 Korea Mobile Telecommunications
cations Corp. 8,576,917 12,186,135 1.1
Utilities-- 428,900 Korean Electric & Power Corp. 12,196,137 15,542,625 1.4
Electric
Total Investments in South Korea 38,458,375 55,144,840 5.1
Taiwan Closed-End Funds 343,300 The R.O.C. Taiwan (ADR)* 2,904,850 3,647,563 0.3
Electrical $ 4,000,000 TECO Electric and Machinery,
Equipment 2.75% due 4/15/2004 4,000,000 3,360,000 0.3
<PAGE>
Food & Beverage 215,649 President Enterprises (ADR)* 3,119,745 4,043,419 0.4
Total Investments in Taiwan 10,024,595 11,050,982 1.0
Thailand Banking 2,474,800 Bangkok Bank 10,102,691 21,917,790 2.0
5,853,333 Industrial Finance Corp.
of Thailand 10,224,432 11,889,768 1.1
1,434,000 Siam Commercial Bank, Ltd. (The) 7,125,609 12,117,489 1.1
462,300 Thai Farmers Bank, Ltd. 4,042,603 3,906,496 0.3
------------ -------------- ------
31,495,335 49,831,543 4.5
Building & 1,527,000 Christiani & Nielsen 'Local' 5,510,930 4,187,386 0.4
Construction 15,400 Christiani & Nielsen 'Local'
(Warrants) (a) 30,291 22,679 0.0
------------ -------------- ------
5,541,221 4,210,065 0.4
Financial 452,600 Finance One Co., Ltd. 'Foreign' 8,693,175 2,500,654 0.2
Services 905,200 Finance One Co., Ltd. (New) 542,252 5,001,308 0.4
1,082,000 Phatra Thanakit Co., Ltd. 9,718,270 7,077,067 0.6
------------ -------------- ------
18,953,697 14,579,029 1.2
Mutual Funds 15,977,000 Ruam Pattana Fund II 6,993,984 8,924,792 0.8
Oil & Gas 1,331,500 PTT Exploration 12,867,796 12,225,025 1.1
Real Estate 936,000 Land & House Public Co. 7,122,664 15,970,750 1.4
Telecommuni- 510,000 Advanced Information Service 7,561,746 7,085,923 0.6
cations 747,000 International Engineering Co. Ltd. 3,347,314 5,159,049 0.5
------------ -------------- ------
10,909,060 12,244,972 1.1
Total Investments in Thailand 93,883,757 117,986,176 10.5
Total Long-Term Investments 817,048,532 1,021,495,591 91.4
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US Dollars)
<CAPTION>
Shares Held/ Percent of
COUNTRIES Industries Face Amount Short-Term Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Commercial $20,000,000 ANZ (Delaware) Inc.,
Paper*** 5.98% due 4/05/1995 $ 19,986,711 $ 19,986,711 1.8%
37,908,000 General Electric Capital
Corp., 6.25% due 4/03/1995 37,894,837 37,894,837 3.4
25,000,000 H.J. Heinz Company, 6%
due 4/27/1995 24,891,667 24,891,667 2.2
------------ -------------- ------
82,773,215 82,773,215 7.4
US Government 20,000,000 Federal National Mortgage
& Agency Association, 5.92% due
Obligations*** 5/02/1995 19,898,044 19,898,044 1.8
Total Short-Term Investments 102,671,259 102,671,259 9.2
Total Investments $919,719,791 1,124,166,850 100.6
============
Liabilities in Excess of Other Assets (6,643,232) (0.6)
-------------- ------
Net Assets $1,117,523,618 100.0%
============== ======
Net Asset Value: Class A--Based on net assets of $5,148,554
and 356,227 shares outstanding $ 14.45
==============
Class B--Based on net assets of $836,502,537
and 58,157,155 shares outstanding $ 14.38
==============
Class C--Based on net assets of $6,944,797 and
486,382 shares outstanding $ 14.28
==============
Class D--Based on net assets of $268,927,730 and
18,590,554 shares outstanding $ 14.47
==============
<FN>
*American Depositary Receipt (ADR).
**Global Depositary Receipt (GDR).
***Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of Common Stock. The purchase price and number of shares are
subject to adjustment under certain conditions until the expiration
date.
(b)The rights may be exercised until April 25, 1995.
(c)The rights may be exercised until November 17, 1999.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
For the Quarter Ended March 31, 1995
Additions
Affin Holdings BHD (Rights)
Finance One Co., Ltd. (New)
Land & General BHD 'A'
Leader Universal Holdings BHD 'A'
Pernas International Hotels & Properties
BHD (Warrants)
Ranbaxy Laboratories Limited
Shinsegae Department Stores Co. (New)
Telekom Malaysia BHD, 4% due 10/03/2004
Deletions
Amoy Properties Ltd.
Bandar Raya Developments BHD
C.P. Pokphand Co., Ltd.
DBS Land Ltd. (Warrants)
Ekran BHD
Golden Plus Holdings BHD
Goldtron, Ltd. (Warrants)
Hong Kong Aircraft Engineering Co.
Hong Kong Telecommunications,
Ltd. (Warrants)
Indian Tobacco Co. (GDR)
Land & General BHD (Rights)
Malaysian Helicopter Services BHD
Overseas Chinese Banking Corp. 'Foreign'
(Warrants)
P.T. Duta Anggada Realty
Pacific Chemical BHD
Peregrine Investment Holdings
Post Publishing Public Co. Ltd.
SCICI Ltd., 3.50% due 4/01/2004
Samsung Heavy Industries
Shangri-La Asia, Ltd.
Shangri-La Asia, Ltd., 2.875% due 12/16/2000
Tanjong PLC
Technology Resources Industries BHD
United Merchant Group BHD
Van Der Horst Ltd.
<PAGE>\
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Kara W.Y. Tan Bhala, Vice President
Gerald M. Richard, Treasurer
Michael J. Hennewinkel, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Financial Data Services, Inc.
Transfer Agency Mutual Fund Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
