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Draft 9-20-95
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Dimensional Emerging Markets Fund Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PRELIMINARY PROXY MATERIAL
DIMENSIONAL EMERGING MARKETS FUND INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 20, 1995
To the Shareholder of Dimensional Emerging Markets Fund Inc.:
A Special Meeting of Shareholders of Dimensional Emerging
Markets Fund Inc. (the "Fund") will be held at the offices of
Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th Floor,
Santa Monica, California, at 8:00 a.m. Pacific Coast time, on
November 20, 1995 for the following purpose:
To approve or disapprove an Agreement and
Plan of Reorganization providing for (i) a
sale of substantially all of the assets of
the Fund to the Emerging Markets Portfolio of
DFA Investment Dimensions Group Inc. (the
"Emerging Markets Portfolio" or the
"Portfolio") in consideration of the issuance
of shares of common stock of the Portfolio
and (ii) the subsequent dissolution of the
Fund.
Shareholders of record at the close of business on
October 1, 1995 are entitled to vote at the meeting or any
adjournment thereof.
By Order of the Board of
Directors
IRENE R. DIAMANT
Secretary
October 31, 1995
Santa Monica, California
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IMPORTANT
Whether or not you plan to attend the meeting, please mark your
voting instructions on the enclosed proxy and promptly date,
sign and return it in the enclosed envelope. No postage is
required if mailed in the United States. We ask your
cooperation in helping the Fund by mailing your proxy promptly.
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DIMENSIONAL EMERGING MARKETS FUND INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
PROXY STATEMENT - SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 20, 1995
The enclosed proxy is solicited by the Board of Directors of
the Fund in connection with a Special Meeting of Shareholders of
the Fund and any adjournment thereof. Proxies will be voted in
accordance with the instructions contained thereon. If no
instructions are given, proxies that are signed and returned will
be voted in favor of the proposal. A shareholder may revoke a
proxy at any time before it is exercised by delivering a written
notice to the Fund expressly revoking such proxy, by executing
and forwarding to the Fund a subsequently dated proxy, or by
voting in person at the meeting. This proxy statement and the
accompanying form of proxy are being first sent to shareholders
on approximately October 31, 1995. In the event a quorum is not
present in person or by proxy at the meeting or, if there are
insufficient votes to approve the proposal, the persons named as
proxies will consider the best interests of the shareholders in
deciding whether the meeting should be adjourned.
As of the close of business on October 1, 1995, the record
date fixed by the Board of Directors for the determination of
shareholders of the Fund entitled to notice of and to vote at the
meeting, 10,443,820.258 shares of the Fund were outstanding.
EACH SHARE IS ENTITLED TO ONE VOTE. As of the record date, the
sole shareholder of record of the Fund was Wachovia Bank of North
Carolina, N.A., as Trustee of the BellSouth Corporation Master
Pension Trust.
Provided a quorum is present, a favorable vote of the holder
of a majority of the Fund's outstanding shares is required for
approval of the proposal. Under Maryland law, an abstention will
be included for purposes of determining whether a quorum is
present at the meeting, but will be treated as a vote not cast
and, therefore, would not be counted for the purpose of
determining whether the proposal has been approved. No other
business may properly come before the meeting.
The cost of solicitation, including preparing and mailing
the proxy materials, will be borne by the Fund. It is not
anticipated that any persons will be specially engaged to solicit
proxies. Given the fact that the Fund has only one shareholder,
an additional solicitation will not be necessary.
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PROPOSAL: APPROVAL OR DISAPPROVAL OF THE AGREEMENT AND PLAN OF
REORGANIZATION PROVIDING FOR (I) A SALE OF
SUBSTANTIALLY ALL OF THE ASSETS OF THE FUND TO THE
EMERGING MARKETS PORTFOLIO AND (II) THE SUBSEQUENT
DISSOLUTION OF THE FUND.
The Board of Directors of the Fund, who are the same persons
who serve as the Board of Directors of DFA Investment Dimensions
Group Inc. ("DFAIDG"), has approved the sale of substantially all
of the Fund's assets to the Emerging Markets Portfolio of DFAIDG
in exchange for shares of the Portfolio. DFAIDG, 1299 Ocean
Avenue, Santa Monica, California 90401, telephone No. (310) 395-
8005, a Maryland corporation, organized on June 15, 1981, is an
open-end, management investment company, which is registered with
the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940 ("1940 Act"). DFAIDG issues 24
separate Portfolios, or classes of shares, each of which, in
effect, is a separate mutual fund with its own investment
objective and policies. The Emerging Markets Portfolio of DFAIDG
commenced operations in April, 1994 and as of August 31, 1995 its
net assets were $40,370,864.00.
AGREEMENT AND PLAN OF REORGANIZATION
At their meeting on September 22, 1995 the Board of Directors
of the Fund approved an Agreement and Plan of Reorganization, dated
September 22, 1995 ("Agreement"), between the Fund and DFAIDG
providing for the sale of substantially all of the Fund's assets
consisting of primarily securities and cash to the Emerging Markets
Portfolio of DFAIDG in consideration of the issuance of shares of
common stock, of a par value of $.01 per share, of the Portfolio,
such shares to be valued at the net asset value thereof as of the
close of the New York Stock Exchange ("NYSE") on the date the sale,
which is currently scheduled to take place after the close of
business on November 30, 1995.
The Agreement contains customary representations and
warranties and conditions to closing, and provides that the
transaction may be abandoned at any time, including after
approval by the shareholder of the Fund, by a majority vote of
the Board of Directors of either party. Provided that the
transaction contemplated by the Agreement is consummated, the
Fund has agreed to terminate its registration as an investment
company under the 1940 Act and file Articles of Dissolution with
the Department of Assessments and Taxation of the State of
Maryland within one year after the date that the transaction is
consummated. Each party to the transaction will bear its own
costs. The costs to be incurred by the Fund are estimated at
$138,000, which include writing off
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unamortized organizational expenses of the Fund of $98,000 and
$40,000 for legal and other transactional expenses.
RESTRICTED SHARES TO BE ISSUED
The Agreement provides that the shares of the Emerging
Markets Portfolio issued shall be transferred and distributed
immediately to an unissued share account maintained by DFAIDG's
transfer agent, PFPC Inc., in the name of the sole shareholder of
the Fund, the BellSouth Corporation Master Pension Trust. The
shares issued will not be registered under the Securities Act of
1933, as amended ("1933 Act"), or the Georgia Securities Act of
1973 ("Georgia Act") in reliance on the exemption from
registration in Section 4(2) of the 1933 Act for transactions not
involving a public offering, and under paragraphs (7) and (12) of
Section 10-5-9 of the Georgia Act pursuant to which exemptions
from registration apply to any transaction involving (i) the sale
of securities to a pension plan or trust and (ii) the issuance or
transfer of securities of an issuer by the issuer to the holder
of beneficial interest thereof in connection with the sale or
transfer of corporate assets in consideration of the issuance or
transfer of such securities, where the transaction must be
approved by the holders of at least a majority of the voting
shares of such corporation.
The Agreement provides that the said shares issued shall not
be sold, transferred or assigned by the shareholder of the Fund
in absence of registration of such shares under the 1933 Act and
other applicable law providing for the registration of
securities, except in a transaction which, in the opinion of
legal counsel acceptable to DFAIDG, is exempt from the
registration requirements of applicable law, and the said
unissued share account established for the shareholder of the
Fund described above, and any certificates for shares of the
Emerging Markets Portfolio issued in respect thereof, shall be
subject to such restriction, and shall bear a restrictive legend
to the foregoing effect. The foregoing restriction,
notwithstanding, the shares of the Emerging Markets Portfolio
described above may be tendered for redemption at any time to
DFAIDG and such shares shall be redeemed within seven days of a
written request therefor either entirely in cash or, at the
discretion of DFAIDG, and in conformity with rule 18f-1 under the
1940 Act, by delivery of (i) portfolio securities and (ii) cash
not to exceed 1% of the net asset value of the redeemed shares or
$250,000, whichever is less. The restriction on transfer of the
shares of the Portfolio described above is essentially identical
to the restriction on all shares of the Fund originally issued to
the Fund's sole shareholder since on February 1, 1993.
EVALUATION BY THE BOARD OF DIRECTORS
The Board's decision to approve, and recommend that the sole
stockholder of the Fund vote in favor of, the proposal was made
in view of the similarities in investment objectives, investment
policies and management of the Fund and the Emerging Market
Portfolio of DFAIDG, and because they believe the transaction
would be in the best
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interests of the Fund and its sole shareholder. The primary
difference in organizational structure between the Fund and the
Emerging Markets Portfolio is that the shares of the Fund are not
redeemable, whereas the shares of the Portfolio are redeemable, at
net asset value, within seven days after the receipt by DFAIDG of a
request for redemption by the holder. The Board of Directors
believes that asset growth is more likely to be achieved through
the distribution of shares of an open-end investment company, such
as the Portfolio, which issues redeemable shares, as compared with
the distribution of sale of shares of a closed-end fund, whose
shares are not redeemable and, therefore, relatively illiquid in
absence of a viable market for the shares. No market has developed
for the shares of the Fund. Asset growth, in the Board's view,
should enhance a fund's ability to take advantage of investment
opportunities and reduce the effect of certain relatively fixed
costs of operation by spreading them over a larger asset base.
Accordingly, the Board of Directors unanimously recommends that the
Fund's sole shareholder vote in favor of the proposal.
THE EMERGING MARKETS PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Emerging Markets Portfolio
of DFAIDG is to achieve long-term capital appreciation. The
Portfolio pursues its objective by investing all of its assets in
the Emerging Markets Series of The DFA Investment Trust Company
(the "Emerging Markets Series"), which has the same investment
objective and policies as the Portfolio. This method of
organization is customarily referred to as a "master-feeder"
structure. Accordingly, if the proposal is approved by the sole
shareholder of the Fund, the assets transferred by the Fund to
the Portfolio will be transferred promptly by the Portfolio to
the Emerging Markets Series in return for the issuance of shares
of the Series at the current net asset value of such shares. The
DFA Investment Trust Company (the "Trust") is an open-end,
management investment company, which is registered as such with
the SEC under the 1940 Act and currently offers seven series, or
classes, of shares. The Emerging Markets Series operates as a
diversified investment company and seeks to achieve its
investment objective by investing in emerging markets ("Approved
Markets") designated by the Trust's Board of Trustees, who are
the same persons who serve as the boards of directors of DFAIDG
and the Fund, in consultation with Dimensional Fund Advisors Inc.
The Emerging Markets Series invests its assets primarily in
Approved Market equity securities listed on bona fide securities
exchanges or actively traded on over-the-counter ("OTC") markets.
These exchanges or OTC markets may be either within or outside
the issuer's domicile country, and the securities may be listed
or traded in the form of International Depository Receipts
("IDRs") or American Depository Receipts ("ADRs"). The
investment objectives of the Emerging Markets Portfolio and
Series may not be changed without shareholder approval.
Under normal market conditions, the Emerging Markets Series
will invest at least 65% of its assets in Approved Market
securities. Approved Market securities are
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defined to be (a) securities of companies organized in a country in
an Approved Market, or for which the principal trading market is in
an Approved Market, (b) securities issued or guaranteed by the
government of an Approved Market country, its agencies or
instrumentalities, or the central bank of such country, (c)
securities denominated in an Approved Market currency issued by
companies to finance operations in Approved Markets, (d) securities
of companies that derive at least 50% of their revenues primarily
from either goods or services produced in Approved Markets or sales
made in Approved Markets and (e) Approved Markets equity securities
in the form of depositary shares. Securities of Approved Markets
may include securities of companies that have characteristics and
business relationships common to companies in other countries. As
a result, the value of the securities of such companies may reflect
economic and market forces in such other countries as well as in
the Approved Markets. Dimensional Fund Advisors Inc. (the
"Advisor"), however, will select only those companies which, in its
view, have sufficiently strong exposure to economic and market
forces in Approved Markets such that their value will tend to
reflect developments in Approved Markets to a greater extent than
developments in other regions. For example, the Advisor may invest
in companies organized and located in the United States or other
countries outside of Approved Markets, including companies having
their entire production facilities outside of Approved Markets,
when such companies meet the definition of Approved Markets
securities so long as the Advisor believes at the time of
investment that the value of the company's securities will reflect
principally conditions in Approved Markets.
The Advisor defines the term "emerging market" to mean a
country which is considered to be an emerging market by the
International Finance Corporation. Approved Markets may not
include all such emerging markets. In determining whether to
approve markets for investment, the Board of Trustees will take
into account, among other things, market liquidity, investor
information, government regulation, including fiscal and foreign
exchange repatriation rules and the availability of other access
to these markets by the investors in the Emerging Markets Series.
The following countries are currently designated as Approved
Markets: Argentina, Brazil, Chile, Indonesia, Israel, Malaysia,
Mexico, Portugal, Thailand, and Turkey. Countries that may be
approved in the future include, but are not limited to, Republic
of China (Taiwan), which is effectively closed to foreign
investors at present, and Colombia, Greece, India, Jordan,
Nigeria, Pakistan, Philippines, Venezuela and Zimbabwe.
The Emerging Markets Series may invest up to 35% of its
assets in securities of issuers that are not Approved Markets
securities, but whose issuers, the Advisor believes, derive a
substantial proportion, but less than 50%, of their total
revenues from either goods and services produced in, or sales
made in, Approved Markets.
Pending the investment of new capital in Approved Market
equity securities, the Emerging Markets Series will typically
invest in money market instruments or other
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highly liquid debt instruments denominated in U.S. dollars
(including, without limitation, repurchase agreements). In
addition, the Emerging Markets Series may, for liquidity, or for
temporary defensive purposes during periods in which market or
economic or political conditions warrant, purchase highly liquid
debt instruments or hold freely convertible currencies, although
the Series does not expect the aggregate of all such amounts to
exceed 10% of its net assets under normal circumstances.
The Emerging Markets Series also may invest in shares of
other investment companies that invest in one or more Approved
Markets, although it intends to do so only where access to those
markets is otherwise significantly limited. The Emerging Markets
Series may also invest in money market mutual funds for temporary
cash management purposes. The 1940 Act limits investment by the
Series in shares of other investment companies to no more than
10% of the value of the Series' total assets. If The Emerging
Markets Series invests in another investment company, the Series'
shareholders will bear not only their proportionate share of
expenses of the Series (including operating expenses and the fees
of the Advisor), but also will bear indirectly similar expenses
of the underlying investment company. In some Approved Markets
it will be necessary or advisable for the Emerging Markets Series
to establish a wholly-owned subsidiary or a trust for the purpose
of investing in the local markets. The Emerging Markets Series
also may invest up to 5% of its assets in convertible debentures
issued by companies organized in Approved Markets.
The investment objectives, investment policies and
investment limitations of the Fund, the Emerging Markets
Portfolio and the Emerging Markets Series are the same, except as
described in item (7) below.
The Emerging Markets Portfolio and Series will not:
(1) invest in commodities or real estate, including limited
partnership interests therein, although they may purchase and
sell securities of companies which deal in real estate and
securities which are secured by interests in real estate, and may
purchase or sell financial futures contracts and options thereon;
(2) make loan of cash, except through the acquisition of
repurchase agreements and obligations customarily purchased by
institutional investors;
(3) as to 75% of their total assets, invest in the
securities of any issuer (except obligations of the U.S.
Government and its instrumentalities) if, as a result, more than
5% of their total assets, at market, would be invested in the
securities of such issuer;
(4) purchase or retain securities of an issuer if their
officers and directors or the Advisor owning more than 1/2 of 1%
of such securities together own more than 5% of such securities;
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(5) borrow, except from banks, amounts not exceeding 33% of
their net assets and pledge not more than 33% of such assets to
secure such loans;
(6) pledge, mortgage or hypothecate any of their assets to
an extent greater than 10% of their total assets at fair market
value, except as described in (5) above;
(7) invest more than 15% of their total assets in illiquid
securities (whereas the Fund is not subject to this limitation);
(8) engage in the business of underwriting securities
issued by others;
(9) invest for the purpose of exercising control over
management of any company;
(10) invest more than 5% of their total assets in
securities of companies which have (with predecessors) a record
of less than three years' continuous operation;
(11) acquire any securities of companies within one
industry if, as a result of such acquisition, more than 25% of
the value of their total assets would be invested in securities
of companies within such industry;
(12) write or acquire options (except as described in
(1) above) or interests in oil, gas or other mineral exploration,
leases or development programs;
(13) purchase warrants, except they may acquire
warrants as a result of corporate actions involving their
holdings of other equity securities;
(14) purchase securities on margin or sell short; or
(15) acquire more than 10% of the voting securities of
any issuer, provided that this limitation applies only to 75% of
the assets of the Emerging Markets Portfolio and the Emerging
Markets Series.
The above described limitations may not be changed without
shareholder approval, but they are not applied to prevent the
Emerging Markets Portfolio from investing in shares of the
Emerging Markets Series.
PORTFOLIO STRUCTURE
The Emerging Market Series will seek a broad market coverage
of larger companies within each Approved Market. The Series will
attempt to own shares of companies whose aggregate overall share
of the Approved Market's total public market capitalization is at
least the upper 40% of such capitalization, and can be as large
as 75%. The Series may not invest in all such companies or
achieve approximate market
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weights, due to constraints imposed within Approved Markets (E.G.,
restrictions on purchases by foreigners), or by the Series' policy
not to invest more than 25% of its assets in any one industry. The
Series may also further limit the market coverage in the smaller
emerging markets in order to limit purchases of small market
capitalization companies.
The policy of seeking broad market diversification means
that the Advisor will not utilize "fundamental" securities
research techniques in identifying securities selections. The
decision to include or exclude the shares of an issuer will be
made primarily on the basis of such issuer's relative market
capitalization determined by reference to other companies located
in the same country. Company size is measured in terms of
reference to other companies located in the same country and in
terms of local currencies in order to eliminate the effect of
variations in currency exchange rates. Even though a company's
stock may meet the applicable market capitalization criterion, it
may not be included in the Series for one or more of a number of
reasons. For example, in the Advisor's judgment, the issuer may
be considered in extreme financial difficulty, a material portion
of its securities may be closely held and not likely available to
support market liquidity, or the issuer may be a "passive foreign
investment company," as defined in the Internal Revenue Code of
1986, as amended ("IRC"). To this extent, there will be the
exercise of discretion and consideration by the Advisor which
would not be present in the management of a portfolio seeking to
represent an established index of broadly traded domestic
securities (such as the S&P 500 Index). The Advisor will also
exercise discretion in determining the allocation of capital as
between Approved Markets.
The Series does not seek current income as an investment
objective and investments will not be based upon an issuer's
dividend payment policy or record. However, many of the
companies whose securities will be included in the Series do pay
dividends. It is anticipated, therefore, that the Series will
receive dividend income.
Generally, securities will be purchased with the expectation
that they will be held for longer than one year. However,
securities may be disposed of at any time when, in the Advisor's
judgment, circumstances warrant their sale.
For the purpose of converting U.S. dollars to another
currency, or vice versa, or converting one foreign currency to
another foreign currency, the Emerging Markets Series may enter
into forward foreign exchange contracts. In addition, to hedge
against changes in the relative value of foreign currencies, the
Series may purchase foreign currency futures contracts. The
Series will only enter into such a futures contract if it is
expected that the Series will be able readily to close out such
contract. There can, however, be no assurance that it will be
able in any particular case to do so, in which case the Series
may suffer a loss. The investment policies described under
"Portfolio Structure" also are policies of the Fund.
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SECURITIES LOANS
The Emerging Markets Portfolio and the corresponding
Emerging Markets Series of the Trust are authorized to lend
securities to qualified brokers, dealers, banks and other
financial institutions for the purpose of earning additional
income, although inasmuch as the Portfolio will only hold shares
of the Emerging Markets Series, the Portfolio will not actually
engage in this practice. The value of securities loaned may not
exceed 33 1/3% of the value of the Series' total assets. In
connection with such loans, the Series will receive collateral
consisting of cash or U.S. government securities, which will be
maintained at all times in an amount equal to at least 100% of
the current market value of the loaned securities. In addition,
the Series will be able to terminate a loan at any time, will
receive reasonable interest on the loan, as well as amounts equal
to any dividends, interest or other distributions on the loaned
securities. Like the Portfolio and Emerging Markets Series, the
Fund is authorized to lend portfolio securities, as described
above.
RISK FACTORS
Investments in foreign securities involve risks that are not
associated with investments in U.S. public companies. Such risks
may include legal, political and/or diplomatic actions of foreign
governments, such as imposition of withholding taxes on interest
and dividend income, possible seizure or nationalization of
foreign deposits, establishment of exchange controls or the
adoption of other foreign governmental restrictions which might
adversely effect the value of the assets held by the Emerging
Markets Series. Further, foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting
standards comparable to those of U.S. public companies and there
may be less publicly available information about such companies
than comparable U.S. companies.
The investments of the Emerging Markets Series involve risks
in addition to the usual risks of investing in developed foreign
markets. A number of emerging securities markets restrict, to
varying degrees, foreign investment in stocks. Repatriation of
investment income, capital and the proceeds of sales by foreign
investors may require governmental registration and/or approval
in some emerging countries. In some jurisdictions, such
restrictions on the imposition of taxes are intended to
discourage shorter rather than longer-term holdings. While the
Emerging Markets Series will invest only in markets where these
restrictions are considered acceptable to the Advisor, new or
additional repatriation restrictions might be imposed subsequent
to the Series' investment. In such circumstances, the Series
might, among other things, discontinue purchasing securities in
that country. Such restrictions will be considered in relation
to the Series' liquidity needs and other factors and may make it
particularly difficult to establish the fair market value of
certain securities from time to time. The valuation of
securities held by the Emerging Markets Series is the
responsibility of the Trust's Board of Trustees, acting in good
faith with advice from the Advisor. Further, certain attractive
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equity securities may not be available for purchase because
foreign shareholders hold the maximum amount permissible under
applicable law.
Relative to the U.S. and to larger foreign markets, many
emerging securities markets in which the Emerging Markets Series
may invest are relatively small, have low trading volumes, suffer
periods of illiquidity and are characterized by significant price
volatility. Such factors may be even more pronounced in
jurisdictions where securities ownership is divided into classes
for domestic and non-domestic owners.
In addition, many emerging markets, including most Latin
American countries, have experienced substantial and, in some
periods, extremely high rates of inflation for many years.
Inflation and rapid fluctuations in inflation rates have had and
may continue to have very negative effects on the economies and
securities markets of certain countries. In an attempt to
control inflation, wage and price controls have been imposed at
times in certain countries. Certain emerging markets have
recently transitioned, or are in the process of transitioning,
from centrally controlled economies. There can be no assurance
that such transitions will be successful.
Brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more
expensive than in the United States; this is particularly true
with respect to emerging markets. Such markets have different
settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace
with the volume of securities transactions, making it difficult
to conduct such transactions. The inability of the Emerging
Markets Series to make intended securities purchases due to
settlement problems could cause the Series to miss investment
opportunities. Inability to dispose of a security caused by
settlement problems could result either in losses to the Series
due to subsequent declines in the value of the portfolio security
or, if the Series has entered into a contract to sell the
security, could result in possible liability to the purchaser.
The risk also exists that an emergency situation might arise
in one or more emerging markets as a result of which trading of
securities may cease or may be substantially curtailed and prices
for the Emerging Markets Series' portfolio securities in such
markets may not be readily available. The Series' Portfolio
securities in the affected markets will be valued at fair value,
determined in good faith, by or under the direction of the Board
of Trustees.
Investments of the Series will be denominated in foreign
currencies. Changes in the relative values of foreign currencies
and the U.S. dollar, therefore, will affect the value of
investments of the Series. The Series may purchase foreign
currency futures contracts and options in order to hedge against
changes in the level of foreign currency exchange rates, provided
not more than 5% of the Series' assets are then invested as
initial or variation margin deposits on such contracts or
options. Such contracts involve an agreement to purchase or sell
a specific currency at a future date at a price set in the
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contract and enable the Series to protect against losses
resulting from adverse changes in the relationship between the
U.S. dollar and foreign currencies occurring between the trade
and settlement dates of Series' securities transactions, but they
also tend to limit the potential gains that might result from a
positive change in such currency relationships.
The Portfolio and Series have reserved the right to borrow
amounts not exceeding 33% of its net assets for the purposes of
making redemption payments. When advantageous opportunities to
do so exist, the Series may also purchase securities when
borrowings exceed 5% of the value of its net assets. Such
purchases can be considered to be "leveraging" and, in such
circumstances, the net asset value of the Portfolio and Series
may increase or decrease at a greater rate than would be the case
if the Series had not leveraged. The interest payable on the
amount borrowed would increase the Series' expenses and, if the
appreciation and income produced by the investments purchased
when the Series has borrowed are less than the cost of borrowing,
the investment performance of the Series and Portfolio will be
reduced as a result of leveraging.
The method employed by the Advisor to manage the Series will
differ from the process employed by many other investment
advisors in that the Advisor will rely on fundamental analysis of
the investment merits of securities to a limited extent to
eliminate potential portfolio acquisitions rather than rely on
this technique to select securities. Further, because securities
generally will be held long-term and will not be eliminated based
on short-term price fluctuations, the Advisor generally will not
act upon general market movements or short-term price
fluctuations of securities to as great an extent as many other
investment advisors.
The Emerging Markets Series may invest in index futures
contracts and index options. These investments entail the risk
that an imperfect correlation may exist between changes in the
market value of the stocks owned by the Series and the prices of
such futures contracts and options and, at times, the market for
such contracts and options might lack liquidity, thereby
inhibiting the Series' ability to close a position in such
investments.
In addition, the Portfolio and the Series may invest in
repurchase agreements. In the event of the bankruptcy of the
other party to a repurchase agreement, the Fund or the Trust
could experience delay in recovering the securities underlying
such agreements. Management believes that this risk can be
controlled through stringent security selection criteria and
careful monitoring procedures.
The Trust was organized as a Delaware business trust on
October 27, 1992. It offers shares of its Series only to
institutional investors in private placements. DFAIDG may
withdraw the investment of the Emerging Markets Portfolio in the
Emerging Markets Series of the Trust, at any time, if the Board
of Directors of DFAIDG
-11-
<PAGE>
determines that it is in the best interests of the Portfolio to do
so. Upon any such withdrawal, the Board of Directors of DFAIDG
would consider what action might be taken, including the investment
of all the assets of the Portfolio in another pooled investment
entity having the same investment objective as the Portfolio or
hiring an investment advisor to manage the Portfolio's assets in
accordance with its investment policies.
MANAGEMENT
The Board of Directors of DFAIDG and the Board of Trustees
of the Trust are responsible for establishing the policies, and
to oversee the management, of DFAIDG and the Trust. Dimensional
Fund Advisors Inc., investment advisor of the Fund, also serves
as Administrator of the Emerging Markets Portfolio. Under the
Administration Agreement, it performs various services, including
supervision of services provided by the custodian, transfer and
dividend disbursing agent and others who provide services to
DFAIDG for the benefit of the Portfolio, provides shareholders
with information about the Portfolio and their investments,
assists the Portfolio to conduct meetings of shareholders,
furnishes information to the Board of Directors regarding the
Emerging Markets Series and performs such other administrative
services as the Board of Directors may reasonably request. For
services under the Administration Agreement, Dimensional Fund
Advisors Inc. is paid a fee, equal on an annual basis, to .40% of
the average net assets of the Portfolio.
In addition, Dimensional Fund Advisors Inc. serves as
investment advisor to the Emerging Markets Series. The
Investment Committee of the Advisor, which meets on a regular
basis and is composed of certain officers and directors of the
Advisor, makes all investment decisions for the Series, provides
it with a trading department and selects brokers and dealers to
effect securities transactions. Portfolio transactions are
placed with a view to obtaining best price and execution, and
subject to this goal may be placed with brokers who assist in
sale of the Portfolio's shares. The investment advisory fee paid
to the Advisor by the Emerging Markets Series for these services
equals .10% of the average net assets of the Series, on an annual
basis.
Both the Emerging Markets Portfolio and the Emerging Markets
Series bear all of their own costs and expenses, including
services of their independent accountants, legal counsel,
transfer and other taxes, insurance premiums, costs incidental to
shareholders and directors meetings, the cost of filing
registration statements under federal and state securities laws,
reports to shareholders and dividend and disbursing and transfer
agency expense, administrative services and custodian fees. The
Emerging Markets Series and Emerging Markets Portfolio commenced
operations on April 25, 1994. As of the six months ended May 31,
1995, the Portfolio had net assets of $30,254,000 and its ratio
of expenses to average net assets was 1.98%, which includes the
Portfolio's proportionate share of expenses of the Emerging
Markets Series. Because of
-12-
<PAGE>
the relatively recent commencement of operations and related
preliminary transaction costs, this ratio, management believes, is
not necessarily indicative of future ratios.
SHAREHOLDER TRANSACTION EXPENSES - EMERGING MARKETS PORTFOLIO
Reimbursement Fee (as percentage of purchase price) - .50%
ANNUAL PORTFOLIO OPERATING EXPENSES - EMERGING MARKETS PORTFOLIO
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
Total
Management Administration Other Operating
Fee Fee Expenses Expenses
---------- -------------- -------- ---------
<S> <C> <C> <C>
0.10% 0.40% 0.75% 1.25%
</TABLE>
EXAMPLE
A shareholder would pay the following transaction and annual
operating expenses on a $1,000 investment in the Portfolio,
assuming a 5% annual return over each of the following time
periods and redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years
------ -------
<S> <C> <C>
Emerging Markets Portfolio 18 44
</TABLE>
The purpose of the above expense table and Example is to
assist investors in understanding the various costs and expenses
that an investor in the Portfolio will bear directly or
indirectly. With respect to the Emerging Markets Portfolio, the
table summarizes the aggregate estimated annual operating
expenses of both the Portfolio and the Emerging Markets Trust
Series. The Board of Directors of DFAIDG has considered whether
such expenses will be more or less than they would have been if
the Portfolio were to invest directly in the securities held by
the Emerging Markets Series. The aggregate amount of expenses
for the Portfolio and the corresponding Trust Series may be
greater than it would have been if the Portfolio were to invest
directly in the securities held by the corresponding Series.
However, the total expense ratios for the Portfolio and the
Series are expected to be less over time than such ratios would
have been if the Portfolio were to invest directly in the
underlying securities. This is because the master-feeder
arrangement enable various institutional investors to pool their
assets, which may be expected to result in economies by spreading
certain fixed costs over a larger asset base. Each shareholder
in the Series, including the Portfolio, will pay its
proportionate share of the expenses of that Trust Series.
-13-
<PAGE>
The example should not be considered a representation of
past or future expenses. Actual expenses may be greater or
lesser than those shown. The Emerging Markets Portfolio and the
Emerging Markets Series are new and, therefore, the expenses of
the Portfolio and Series included in the table are the estimated
annualized expenses that are expected to be incurred through the
fiscal year ending November 30, 1995 and the above example is
based on estimated expenses for the current and next two fiscal
years and does not extend those estimates over five and ten year
periods.
Dimensional Fund Advisors Inc. provides investment advisory
services to the Fund under the terms of an investment advisory
agreement. For the period beginning December 1, 1993 to February
28, 1994, the Fund paid the Advisor a fee based on an annual
effective rate of 0.10% of average net assets. Effective March
1, 1994, the Fund became obligated to pay the Advisor a fee based
on an annual effective rate of 0.50% of average net assets.
However, at that time, the Advisor agreed to waive 80% of its
advisory fee to keep the fee at an annual rate of 0.10% of
average net assets. The Fund's ratio of expenses to average net
assets for the six months ended May 31, 1995 was 0.61% and for
the year ended November 30, 1994 was 0.80%. Had certain waivers
not been in effect, the annualized ratios of expenses to average
net assets for the periods ended May 31, 1995 and November 30,
1994 would have been 1.02% and 0.88%, respectively.
FEDERAL TAX STATUS OF EMERGING MARKETS PORTFOLIO AND SERIES
The Emerging Markets Portfolio intends to qualify each year
as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"), so that it will not be liable
for federal income taxes to the extent that its net investment
income and net realized capital gains are distributed. It is the
policy of the Portfolio to distribute dividends of substantially
all of its net investment income, together with any net realized
capital gains in November and December of each year. The
Portfolio is treated as a separate corporation for federal income
tax purposes.
The Emerging Markets Series has obtained a ruling from the
Internal Revenue Service holding, in part, that the Series is
taxable as a partnership and that the Emerging Markets Portfolio
is deemed to own a proportionate share of the assets of the
Emerging Markets Series. Shareholders receive all dividends and
any capital gains distributions paid by the Portfolio in
additional shares of the Portfolio at the net asset value of such
shares as of the business date following the dividend record
date.
TAX CONSEQUENCES OF THE TRANSACTION
Consummation of the Reorganization is subject to the receipt
of a private letter ruling from the Internal Revenue Service or,
in the alternative, an opinion from Stradley, Ronon, Stevens &
Young, legal counsel to DFAIDG, substantially to the effect that,
among other things, no gain or loss will be recognized by the
Emerging Markets
-14-
<PAGE>
Portfolio or its shareholders for federal income tax purposes as a
result of the issuance of shares of the Portfolio in consideration
of transfer of the assets of the Fund under Section 1032(a) of the
Code. Also, in the opinion of Stradley, Ronon, Stevens & Young, no
gain or loss will be recognized by the Emerging Markets Series or
by the Emerging Markets Portfolio on the transfer by the Portfolio
of the Fund's assets to the Series in exchange for shares of the
Series under Section 72(a) of the Code. In addition, the Portfolio
has requested a private ruling letter from the IRS to the effect
that the tax basis of the assets of the Fund in the hands of the
Portfolio and Series as a result of the reorganization will be
equal to their fair market value as of the date of transfer under
Section 1012 of the Code. It is anticipated that the Emerging
Markets Series will continue to hold the assets of the Fund with
disposition of such assets only in the normal course of business.
If the reorganization is not approved by the Fund shareholders, the
Board of Directors of the Fund will consider other alternatives.
ACCOUNTING TREATMENT
The acquisition of assets by the Portfolio and Series will
be treated as a purchase transaction for accounting purposes.
Since the transaction is expected to be taxable for federal
income tax purposes, the tax and book bases of the assets of the
Fund as a result of this transaction will be equal to their fair
market value as of the date of transfer.
Information Regarding the Advisor
The Advisor, located at 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401, was organized in May 1981 and is
engaged in the business of providing investment management
services to institutional investors. David G. Booth and Rex A.
Sinquefield, directors and officers of both the Fund and the
Advisor, together own approximately 61% of the Advisor's
outstanding stock. Schroeder Capital Management, 33 Gutter Lane,
London, England EC2V 8AS, owns approximately 10.4% of the
Advisor's outstanding stock. The name, address and principal
occupation of each director and principal executive officer of
the Advisor is set forth below. The officers of the Advisor and
the Fund are also listed below.
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF THE ADVISOR
David G. Booth, Santa Monica, CA, is Chairman - Chief
Executive Officer, President and a Director of the Advisor,
the Fund and DFAIDG and is President, Chairman - Chief
Executive Officer and a Trustee of The DFA Investment Trust
Company. Mr. Booth is also Chairman - Chief Executive
Officer and a Director of DFA Securities Inc., Dimensional
Investment Group Inc. (registered investment company) and
DFA Australia Pty Limited ("DFA Australia"). He is Chairman
and Director of Dimensional Fund Advisors Ltd. ("DFAL").
-15-
<PAGE>
Rex A. Sinquefield, Santa Monica, CA, is Chairman - Chief
Investment Officer and a Director of the Advisor, the Fund
and DFAIDG. He is also Chairman - Chief Investment Officer
and a Director of DFA Securities Inc., Dimensional
Investment Group Inc. and DFA Australia, Trustee and
Chairman - Chief Investment Officer of the Trust, and
Chairman, Chief Executive Officer and Director of DFAL.
Eugene Francis Fama, Chicago, IL, Director, is the Robert R.
McCormick Distinguished Service Professor of Finance, and
has been engaged in teaching and research in finance and
economics at the Graduate School of Business, University of
Chicago, Chicago, Illinois since September, 1963. Mr. Fama
also is a Director of DFA Securities Inc.
John Andrew McQuown, Mill Valley, CA, Director, has been
self employed since 1974 as an entrepreneur, financier and
consultant to major financial institutions. He is also a
Director of Chalone Wine Group, Inc., Mortgage Information
Corporation, KMV Corporation and Microsource, Inc. Mr.
McQuown also is a Director of DFA Securities Inc.
Lloyd Stockel, Los Angeles, CA, Director, is the Chairman of
Sand County Ventures, Inc. and a Trustee of Muir Investment
Trust. Mr. Stockel also is a Director of DFA Securities
Inc.
David Salisbury, London, England, Director, is Chief
Executive Officer of Schroder Capital Management
International Inc. Mr. Salisbury also is a Director of DFA
Securities Inc.
OFFICERS OF THE ADVISOR, THE FUND, DFAIDG AND DFAITC
Arthur Barlow, Vice President, Santa Monica, CA.
Maureen Connors, Vice President, Santa Monica, CA.
Robert Deere, Vice President, Santa Monica, CA.
Irene R. Diamant, Vice President and Secretary, Santa
Monica, CA.
Eugene Fama, Jr., Vice President, Santa Monica, CA.
David Plecha, Vice President, Santa Monica, CA.
George Sands, Vice President, Santa Monica, CA.
Michael T. Scardina, Vice President, Chief Financial
Officer, Controller and Treasurer, Santa Monica, CA.
Cem Severoglu, Vice President, Santa Monica, CA.
-16-
<PAGE>
Jeanne C. Sinquefield, Ph.D., Executive Vice President,
Santa Monica, CA.
OFFICERS OF THE ADVISOR
Daniel Wheeler, Marketing Officer, Santa Monica, CA
David Schneider, Marketing Officer, Santa Monica, CA
Lawrence Spieth, Marketing Officer, Santa Monica, CA
Each of the officers listed above owns stock of the Advisor
in an amount not exceeding 1% of the Advisor's total outstanding
stock, except for Michael T. Scardina who owns 3% of the
Advisor's total outstanding stock.
ADDITIONAL INFORMATION ABOUT THE SHARES OF THE EMERGING MARKETS
PORTFOLIO
The shares of the Portfolio, when issued and paid for, are
fully paid and non-assessible shares, with equal, non-cumulative
voting rights and no preferences as to conversion, exchange,
dividends, redemption or any other feature.
It is the current policy of DFAIDG, whenever the Portfolio,
as an investor in the Emerging Markets Series, is asked to vote
on a proposal, to hold a special meeting of the Portfolio's
shareholders to solicit their votes with respect to the proposal.
The directors of DFAIDG will then vote the Portfolio's shares in
the Emerging Markets Series in accordance with the voting
instructions received from the Emerging Markets Portfolio's
shareholders. The directors of DFAIDG will vote the shares of
the Portfolio for which they receive no voting instructions in
the same proportion as the shares for which they receive voting
instructions. If a majority shareholder of the Emerging Markets
Series redeems its entire interest in the Series, a majority in
interest of the remaining shareholders of the Series must vote to
approve the continuing existence of the Series or the Series will
be liquidated. That issue, however, will be voted upon only by
the direct holders of the Series' shares, such as the Portfolio,
and will not be voted upon by the shareholders of the Emerging
Markets Portfolio.
The public offering price of the shares of the Portfolio,
and the corresponding purchase price of shares of the Emerging
Markets Series, is equal to the net asset value per share plus a
reimbursement fee. The net asset values of the shares of the
Portfolio and Series are calculated as of the close of the NYSE
by dividing the total market value of their respective
investments and other assets, less any liabilities, by their
respective total outstanding shares of stock. Securities held by
the Series which are listed on a securities exchange and for
which market quotations are available are valued at the last
quoted sale price of the day or, if there is no such reported
sale, such securities are valued at the mean between the most
recent quoted bid and ask prices. Price information on listed
securities is taken from the exchange where the security is
primarily traded. The value of other assets and securities for
which no quotations are readily available are determined in good
faith at fair value in accordance with procedures adopted by the
Board of Directors of DFAIDG and the Board of Trustees of the
Trust. The net asset value per share of the Emerging Markets
Series is expressed in U.S.
-17-
<PAGE>
dollars by translating the net assets of the Series using the bid
price for the dollar as quoted by generally recognized reliable
sources.
It is management's belief that payment of a reimbursement
fee by each investor, which is used to defray significant costs
associated with investing proceeds of the sale of shares of the
Portfolio, will eliminate a dilutive effect such costs would
otherwise have on the net asset value of shares held by previous
investors. Therefore, the Emerging Markets Series and the
Emerging Markets Portfolio are sold at an offering price which is
equal to the current net asset value of the shares plus a
reimbursement fee. The amount of the reimbursement fee
represents management's estimate of the cost reasonably
anticipated to be associated with the purchase of securities by
the Emerging Markets Series and is paid to the Portfolio, and
passed through to the Series, to defray such costs. These costs
include brokerage commissions on listed securities and imputed
commissions on over-the-counter securities. The reimbursement
fee, expressed as a percentage of the net asset value of the
shares of the Portfolio is 0.50%. A reimbursement fee, however,
will not be imposed on the transfer of assets from the Fund to
the Emerging Markets Portfolio or from the Portfolio to the
Emerging Markets Series because such investment will not entail a
corresponding acquisition of securities in the securities markets
by the Series.
OTHER INFORMATION
Investors may purchase shares of the Portfolio by first
contacting the Advisor at (310) 395-8005 to notify the Advisor of
the proposed investment. All investments are subject to approval
of the Advisor and all investors must complete and submit the
necessary account registration forms. DFAIDG reserves the right
to reject any initial or additional investment and to suspend the
offering of shares of the Portfolio.
PFPC Inc. serves as the accounting services, dividend
disbursing and transfer agent for the Emerging Markets Portfolio
and Emerging Markets Series and is located at 400 Bellevue
Parkway, Wilmington, DE 19809. DFAIDG acts as distributor of
each series of its own shares of stock, including the Emerging
Markets Portfolio. DFAIDG has entered into an agreement with DFA
Securities Inc., a wholly-owned subsidiary of the Advisor,
pursuant to which DFA Securities Inc. is responsible for
supervising the sale of each series of shares of DFAIDG. No
compensation is paid by DFAIDG to DFA Securities Inc. under this
agreement.
Coopers & Lybrand L.L.P. serve as DFAIDG's independent
accountants. A representative of Coopers & Lybrand L.L.P. is not
expected to be present at the meeting.
Information about DFAIDG is included in its current
prospectus, dated June 30, 1995, and the annual report to
shareholders of DFAIDG, as of November 30, 1994, relating to the
Emerging Markets Portfolio, the latter being enclosed with this
Proxy Statement and incorporated by reference herein. Additional
information about DFAIDG and the Emerging Markets Portfolio is
included in a Statement of Additional Information, of even date
with the prospectus, which has been filed with the SEC and is
incorporated by reference herein. Copies of the Statement of
Additional Information
-18-
<PAGE>
may be obtained without charge by writing to the Advisor, or
calling (310) 395-8005. DFAIDG is subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940
Act, as applicable, and, in accordance with such requirements,
files proxy materials, reports and other information with the SEC.
These materials can be inspected and copied at the Public Reference
Facilities maintained by the SEC, 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the offices of DFAIDG at 1299 Ocean
Avenue, Santa Monica, CA 90401 and at the Regional Office of the
SEC at 5670 Wilshire Boulevard, 11th Floor, Los Angeles, CA
90036-3648. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, Washington, D.C. 20549, at prescribed rates.
INFORMATION ABOUT THE FUND
Information about the Fund is incorporated herein by
reference from its prospectus dated March 20, 1995, and Statement
of Additional Information of the same date, copies of which may
be obtained without charge by writing or calling the Advisor at
the address and telephone number shown above. Reports and other
information filed by the Fund can be inspected and copies at the
Public Reference Facilities maintained by the SEC at 450 Fifth
Street N.W., Washington, D.C. 20549, and copies of such material
can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Washington, D.C.
20549, at prescribed rates.
FINANCIAL STATEMENTS
The financial statements contained in the audited annual
report to stockholders of the Fund, DFAIDG in respect of the
Emerging Markets Portfolio and the Trust in respect of the
Emerging Markets Series, dated as of November 30, 1994, and the
unaudited semi-annual report to stockholders of the Fund,
Portfolio and the Series dated May 31, 1995, are incorporated
herein by reference and enclosed with this proxy statement. Set
forth hereafter are the pro forma balance sheet of the Emerging
Markets Portfolio as of May 31, 1995 as if the Fund's assets had
been sold pursuant to the Agreement on May 31, 1995. Also set
forth below are the pro forma statements of operations of the
Emerging Markets Portfolio as of November 30, 1994 and May 31,
1995 giving effect to the transaction.
By Order of the Board of Directors
IRENE R. DIAMANT
Secretary
October 31, 1995
-19-
<PAGE>
The purpose of the proforma financial statements is to show the
effect of the proposed sale of substantially all of the assets of
Dimensional Emerging Markets Fund Inc. ("the Fund") in exchange
for the issuance of shares of common stock of The Emerging
Markets Portfolio ("the Feeder") and the subsequent transfer of
such assets to The Emerging Markets Series ("the Master"). The
Fund is a closed-end management investment company. The Feeder
is an open-end management investment company and invests solely
in the Master. Proforma combined financial statements have been
presented for the Feeder and the Master. The Proforma Combined
Statements of Assets and Liabilities which combine the Fund and
the Feeder and the Fund and the Master, respectively are
presented at May 31, 1995. The Proforma Combined Schedule of
Investments which combine the Fund and the Master is presented
at May 31, 1995. The Proforma Combined Statements of Operations
which combine the Fund and the Feeder and the Fund and the
Master, respectively, are presented for the periods ended May 31,
1995 and November 30, 1994.
-20-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
CHILE
COMMON STOCKS
50,304 50,304 Banco de Credito e Inversiones SA Series A $ 373,611 $ 373,611
347,000 347,000 Banmedica SA 157,393 157,393
100,000 100,000 CAP SA (Compania de Aceros del Pacifico) 679,045 679,045
117,150 117,150 CMPC SA (Compania Manufacturera de Papeles y
Cartones) 2,128,588 2,128,588
757,488 757,488 COPEC (Cia de Petroleos de Chile) 4,440,447 4,440,447
4,900,000 4,900,000 CTI SA (Cia Tecno Industrial) 362,626 362,626
93,000 93,000 Cervecerias Unidas SA 488,435 488,435
138,000 138,000 Chilectra Generacion S 1,134,748 1,134,748
225,611 225,611 Chilectra SA 1,184,907 1,184,907
103,000 103,000 Consumidores de Gas de Santiago SA 877,003 877,003
4,308,900 4,308,900 Empresa Nacional de Electricidad SA 3,613,990 3,613,990
49,000 49,000 Empresa Nacional de Telecomunicaciones SA 438,011 438,011
3,895,960 3,895,960 Enersis SA 2,237,335 2,237,335
147,795 147,795 Forestal Terranova SA 303,823 303,823
1,057,365 1,057,365 *Industrias Forestales Inforsa SA 370,218 370,218
100,000 100,000 Invercap SA 206,631 206,631
225,069 225,069 Laboratorio Chile SA 253,725 253,725
231,227 231,227 MADECO SA (Manufacturera de Cobre) 686,934 686,934
357,062 357,062 Maderas y Sinteticos SA 223,992 223,992
102,255 102,255 Minera Mantos Blancos SA 301,069 301,069
63,000 63,000 Sociedad Industrial Pizarreno SA 147,056 147,056
28,000 28,000 *Sociedad Quimica y Minera de Chile SA Series A 118,833 118,833
410,000 410,000 Sud Americana de Vapores SA 309,947 309,947
200,000 200,000 Telefonos de Chile SA Series A 1,015,915 1,015,915
352,166 352,166 Telefonos de Chile SA Series B 1,718,794 1,718,794
163,489 163,489 Vina Sta Carolina SA 177,800 177,800
350,000 350,000 Vina de Concha y Toro SA 153,183 153,183
------------ ------------
TOTAL COMMON STOCKS 24,104,059 24,104,059
------------ ------------
INVESTMENT IN CURRENCY
*Chilean Pesos 188,332 188,332
------------ ------------
PREFERRED STOCK
77,090 77,090 Sociedad Quimica y Minera de Chile SA Series B 325,128 325,128
------------ ------------
TOTAL - CHILE 24,617,519 24,617,519
------------ ------------
BRAZIL
COMMON STOCKS
6,300,000 6,300,000 Bancor BCO 37,897 37,897
730,000 730,000 Belgo Mineira $ 72,702 72,702
342,000 342,000 Embraco SA 264,238 264,238
6,762,000 6,220,000 12,982,000 Lojas Americanas SA 150,764 137,307 288,071
378,000 149,000 527,000 Mannesmann 116,821 42,759 159,580
180,016 20,000 200,016 Souza Cruz Industria e Comercio Cruz 1,239,845 131,347 1,371,192
82,869,000 13,450,000 96,319,000 Telecomunicacoes Brasilieras SA 2,808,033 417,158 3,225,191
121,000 10,000 131,000 VSMA (Cia Vidraria Santa Marina) 487,472 40,287 527,759
------------ ----------- ------------
TOTAL COMMON STOCKS 5,105,070 841,560 5,946,630
------------ ----------- ------------
PREFERRED STOCK
1,265,999 79,999 1,345,998 Aracruz Celulose SA Series B 2,920,461 181,013 3,101,474
99,339,028 31,559,888 130,898,916 Banco Bradesco SA 904,577 271,708 1,176,285
3,312,000 710,000 4,022,000 Banco Itau SA 987,020 198,267 1,185,287
56,145,862 11,920,000 68,065,862 Banco do Brasil SA 687,880 140,777 828,657
14,980,000 14,980,000 Banco do Estado de Sao Paulo SA 99,205 99,205
2,015,570 410,000 2,425,570 Brasmotor SA 430,166 89,150 519,316
3,976,399 1,130,000 5,106,399 Cervejaria Brahma 1,285,966 365,442 1,651,408
568,558 19,482 588,040 *Cervejaria Brahma Issue 95 15,541 6,220 21,761
14,250,000 5,100,000 19,350,000 COFAP Cia Fabricadora de Pecas 141,556 48,692 190,248
4,510,000 980,000 5,490,000 Duratex SA 248,896 54,095 302,991
130,000 130,000 Embraco SA 10,044 10,044
20,194,770 6,500,000 26,694,770 Ericsson Telecomunicacoes SA 109,444 34,078 143,522
334,825 29,500 364,325 IKPC Industrias Klabin de Papel e Celulose SA 451 39,724 40,175
1,088,000 530,000 1,618,000 Investimentos Itau SA 600,442 292,494 892,936
4,324,460 4,324,460 Lojas Americanas SA 98,804 98,804
427,145 59,000 486,145 Multibras Eletrodomesticos SA 334,738 42,785 377,523
9,588,000 2,120,000 11,708,000 Paranapanema SA 160,647 33,602 194,249
308,282 70,000 378,282 Sadia Concordia SA 311,685 71,082 382,767
2,181,754 2,181,754 Siderurgica Belgo Mineira Issue 217,284 217,284
1,889,166 137,922 2,027,088 Telecomunicacoes Brasileiras SA 65,891 4,811 70,702
419,254,000 121,390,000 540,644,000 Usinas Siderurgicas de Minas Gerais SA 522,911 133,985 656,896
29,893,000 2,830,000 32,723,000 Vale do Rio Doce 4,916,178 427,967 5,344,145
550,256,498 66,000,000 616,256,498 White Martins SA 510,172 57,550 567,722
------------ ----------- ------------
TOTAL PREFERRED STOCK 15,569,915 2,503,486 18,073,401
------------ ----------- ------------
TOTAL - BRAZIL 20,674,985 3,345,046 24,020,031
</TABLE>
-21-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
THAILAND
COMMON STOCKSAA
2,100 2,100 Adkinson Securities Public Co., Ltd (Foreign) $ 5,805 $ 5,805
8,000 8,000 Advanced Info Servuce Public Co., Ltd. 124,228 124,228
124,500 11,400 135,900 Advanced Info Service Public Co., Ltd.
(Foreign) $ 1,902,927 173,780 2,076,707
7,400 7,400 Amarin Plaza Public Co., Ltd. 8,724 8,724
4,150 4,150 American Standard Sanitaryware (Thailand)
Public Co., Ltd (Foriegn) 66,636 66,636
2,500 2,500 Asia Credit Public Co., Ltd (Foreign) 19,207 19,207
69,000 5,300 74,300 Asia Securites Trading Public Co., Ltd
(Foreign) 246,829 18,313 265,142
13,000 1,000 14,000 Ayudhya Insurance Public Co. Ltd (Foreign) 98,293 7,805 106,098
41,100 41,100 Bangkok Bank of Commerce Public Co., Ltd. 33,415 33,415
1,400 1,400 Bangkok Insurance Public Co., Ltd (Foreign) 26,179 26,179
256,400 47,200 303,600 Bangkok Land Public Co., Ltd. (Foreign) 541,984 99,772 641,756
45,400 45,400 Bangkok Metropolitan Bank Public Co., Ltd
(Foreign) 41,755 41,755
40,000 14,600 54,600 Bangkok Rubber Public Co., Ltd. (Foreign) 37,805 14,837 52,642
42,000 42,000 Bangkok Steel Industry Public Co., Ltd
(Foreign) 66,585 66,585
188,100 12,870 200,970 Bank of Asia Public Co., Ltd. (Foreign) 523,774 34,529 558,303
61,600 15,400 77,000 Bank of Ayudhya Public Co., Ltd. (Foreign) 330,537 82,634 413,171
2,000 2,000 Banpu Public Co., Ltd. 44,715 44,715
25,000 1,800 26,800 Banpu Public Co., Ltd. (Foreign) 552,845 39,951 592,796
3,000 3,000 Capital Nomura Securities Public Co., Ltd
(Foreign) 8,902 8,902
7,000 7,000 CMIC Finance and Securities Public Co., Ltd 26,037 26,037
138,000 6,300 144,300 CMIC Finance and Securities Public Co., Ltd
(Foreign) 555,366 24,073 579,439
8,100 6,000 14,100 Charoen Pokphand Feedmill Public Co., Ltd
(Foreign) 51,366 42,683 94,049
32,000 4,000 36,000 Christiani & Nielsen (Thai) Public Co., Ltd
(Foreign) 107,967 12,195 120,162
128,007 8,000 136,007 Dhana Siam Finance and Securities Public Co.,
Ltd (Foreign) 749,268 44,878 794,146
13,400 13,400 Dustit Thani Public Co., Ltd (Foreign) 11,439 11,439
2,600 2,600 First Asia Securities Public Co., Ltd
(Foreign) 13,951 13,951
66,000 66,000 First Bangkok City Bank Public Co. Ltd 61,037 61,037
920,400 69,100 989,500 First Bangkok City Bank Public Co. Ltd
(Foreign) 841,829 51,965 893,794
11,900 11,900 First City Investment Public Co., Ltd.
(Foreign) 18,866 18,866
3,800 3,800 Five Stars Property Public Co., Ltd (Foreign) 13,285 13,285
3,200 3,200 *GSS Array Techology Public Co., Ltd (Foreign) 14,959 14,959
5,400 5,400 General Finance and Securities Public Co.,
Ltd. 26,122 26,122
2,700 2,700 General Finance and Securities Public Co. Ltd
(Foreign) 13,061 13,061
1,000 1,000 Hana Microelectronics Co., Ltd. (Foreign) 4,878 4,878
10,700 10,700 *ITF Finance and Securities Public Co., Ltd
(Foreign) 16,963 16,963
2,900 2,900 International Broadcasting Corp. Public Co.,
Ltd (Foreign) 12,967 12,967
2,000 2,000 International Engineering Public Co., Ltd
(Foreign) 14,228 14,228
1,000 1,000 Juldis Develop Public Co., Ltd. (Foreign) 4,106 4,106
36,000 2,800 38,800 Kiatnakin Finance and Securities Public Co.,
Ltd. (Foreign) 162,439 12,293 174,732
11,000 11,000 *Krisda Mahanakom Public Co., Ltd. 26,382 26,382
22,600 22,600 Krug Thai Bank Public Co., Ltd 81,305 81,305
616,000 90,970 706,970 Krung Thai Bank Public Co., Ltd. (Foreign) 2,303,740 323,572 2,627,312
71,100 1,000 72,100 Land and House Public Co., Ltd. (Foreign) 1,219,683 20,163 1,239,846
21,000 2,600 23,600 MK Real Estate Development Public Co., Ltd.
(Foreign) 70,000 8,772 78,772
46,000 46,000 Modernform Group Public Co., Ltd. (Foreign) 86,016 86,016
500 500 Mutual Fund Public Co., Ltd ( Foreign) 12,439 12,439
9,000 9,000 Nakomthon Bank Public Co., Ltd 26,707 26,707
3,400 3,400 Nakomthon Bank Public Co., Ltd ( Foreign) 10,089 10,089
6,400 6,400 *Naowarat Patanakarn Co., Ltd. 15,610 15,610
3,000 3,000 National Finance and Securitites Public Co.,
Ltd. 14,512 14,512
3,000 3,000 National Finance and Securities Public Co.,
Ltd. (Foreign) 14,756 14,756
5,000 5,000 *Natural Park Public Co., Ltd. 28,455 28,455
5,000 5,000 *Natural Park Public Co., Ltd (Foreign) 28,455 28,455
5,000 5,000 *Nava Finance and Securities Public Co., Ltd. 16,565 16,565
120,000 13,900 133,900 *Nava Finance and Securities Public Co., Ltd.
(Foreign) 419,512 45,203 464,715
32,000 32,000 *New Imperial Hotel Public Co., Ltd. (Foreign) 30,894 30,894
8,500 8,500 NTS Steel Group Public Co., Ltd (Foreign) 17,190 17,190
55,000 5,200 60,200 *Padaeng Industry Public Co., Ltd. (Foreign) 77,134 7,398 84,532
10,000 10,000 Phatra Thanakit Public Co. Ltd (Foreign) 86,179 86,179
8,200 8,200 *Phoenix Pulp and Paper Public Co., Ltd. 44,333 44,333
1,900 1,900 Poonipat Finance and Securities 16,374 16,374
9,200 9,200 Post Publishing Public Co., Ltd. (Foreign) 55,350 55,350
1,600 1,600 Power P (Foreign) 7,154 7,154
32,000 6,000 38,000 Premier Enterprise Public Co., Ltd. (Foreign) 69,593 13,049 82,642
1,300 1,300 Property Perfect Public Co., Ltd. (Foreign) 12,207 12,207
7,000 7,000 Quality Houses Public Co., Ltd. 30,163 30,163
5,000 5,000 Quality Houses Public Co., Ltd. (Foreign) 17,886 17,886
24,700 24,700 Robinson Department Store Public Co., Ltd.
(Foreign) 53,215 53,215
25,400 25,400 Saha Pathana Inter-holding Public Co., Ltd.
(Foreign) 52,142 52,142
12,000 12,000 Saha-Union Public Co. Ltd., (Foreign) 19,756 19,756
6,000 6,000 Securities One Public Co., Ltd. 55,610 55,610
69,000 1,500 70,500 Securities One Public Co., Ltd. (Foreign) 701,219 13,902 715,121
1,000 1,000 Serm Suk Public Co., Ltd (Foreign) 11,382 11,382
108,000 108,000 Shangri-La Hotel Public Co., Ltd. (Foreign) 87,805 87,805
3,000 3,000 Shinawatra Computer and Communications Public
Co., Ltd. 80,000 80,000
102,800 7,500 110,300 Shinawatra Computer and Communications Public
Co., Ltd. (Foreign) 2,774,764 201,220 2,975,984
3,000 3,000 Siam Cement Public Co., Ltd 51,707 51,707
2,000 2,000 Siam Cement Public Co., Ltd. (Foreign) 128,618 128,618
638,200 64,000 702,200 Siam City Bank Public Co., Ltd. (Foreign) 706,949 81,301 788,250
90,600 6,200 96,800 Siam City Cement Public Co., Ltd. (Foreign) 1,554,195 108,374 1,662,569
1,000 5,000 6,000 Siam Commercial Bank Public Co., Ltd.
(Foreign) 8,618 52,439 61,057
48,000 4,500 52,500 Siam Pulp & Paper Co., Ltd. (Foreign) 160,000 15,274 175,274
21,200 900 22,100 Sino-Thai Engineering and Construction Public
Co., Ltd. (Foreign) 249,919 10,683 260,602
5,400 5,400 Somprasong Land Public Co., Ltd. 14,049 14,049
21,000 1,400 22,400 *Srithai Superware Public Co., Ltd. (Foreign) 163,049 10,870 173,919
</TABLE>
-22-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
8,000 8,000 TPI Polene Public Co., Ltd. 53,659 53,659
129,125 10,275 139,400 TPI Polene Public Co., Ltd. (Foreign) 881,829 68,919 950,748
163,800 11,000 174,800 Tanayong Public Co., Ltd. (Foreign) 346,244 23,028 369,272
58,000 3,000 61,000 Thai German Ceramic Industry Public Co., Ltd.
(Foreign) $ 185,081 $ 8,720 $ 193,801
60,000 3,000 63,000 Thai Glass Industries Public Co., Ltd.
(Foreign) 262,195 14,024 276,219
204,000 19,200 223,200 Thai Military Bank Public Co., Ltd. (Foreign) 746,341 76,488 822,829
29,500 29,500 *Thai Packaging and Printing Public Co., Ltd.
(Foreign) 26,382 26,382
6,000 6,000 Thai Plastic and Chemicals Public Co., Ltd.
(Foreign) 48,537 48,537
21,000 21,000 Thai Wah Public Co., Ltd. (Foreign) 29,878 29,878
6,200 6,200 Tipco Asphalt Public Co., Ltd. (Foreign) 25,455 25,455
11,428 11,428 *Tuntex (Thailand) Public Co., Ltd. (Foreign) 33,680 33,680
85,000 85,000 *Unicord Public Co., Ltd. (Foreign) 20,732 20,732
10,000 1,400 11,400 Union Asia Finance Public Co., Ltd. 56,504 7,797 64,301
33,000 3,000 36,000 Union Asia Finance Public Co., Ltd. (Foreign) 186,463 16,707 203,170
16,000 16,000 Wattachak Public Co., Ltd. 32,520 32,520
8,300 8,300 Wattachak Public Co., Ltd (Foreign) 16,871 16,871
------------ ----------- -------------
TOTAL COMMON STOCKS 20,384,291 3,468,650 23,852,941
------------ ----------- -------------
INVESTMENT IN CURRENCY
*Thailand Baht 260 17,720 17,980
------------ ----------- ------------
RIGHTS/WARRANTS
7,566 7,566 *Bangkok Metropolitan Bank Public Co., Ltd
(Foreign) Rights 06/16/95 0 0 0
23,000 2,100 25,100 *CMIC Finance and Securities Public Co., Ltd.
(Foreign) Rights 76,199 0 76,199
3,600 2,800 6,400 *Kiatnakin Finance and Securities Public Co.,
Ltd. (Foreign) Rights 0 0 0
70 70 *Kiatnakin Finance and Securities Public Co.,
Ltd Warrants 03/30/00 0 0 0
------------ ----------- -------------
TOTAL RIGHTS/WARRANTS 76,199 0 76,199
------------ ----------- -------------
TOTAL - THAILAND 20,460,750 3,486,370 23,947,120
------------ ----------- -------------
MALAYSIA
COMMON STOCKS
31,000 9,000 40,000 AMMB Holdings Berhad 415,516 115,150 530,666
31,000 2,000 33,000 AMMB Holdings Berhad 7.50% Unsecured Loan
Stock 11/20/99 18,257 1,121 19,378
99,000 15,000 114,000 Amsteel Corp. Berhad 141,543 20,715 162,258
21,000 10,000 31,000 Aokam Perdana Berhad 58,428 27,011 85,439
117,000 17,000 134,000 Asiatic Development Berhad 134,963 19,610 154,573
43,000 10,000 53,000 Berjaya Leisure Berhad 36,677 8,530 45,207
21,600 21,600 Berjaya Singer Berhad 25,443 25,443
26,000 10,000 36,000 Commerce Asset Holding Berhad 142,567 54,021 196,588
123,000 7,000 130,000 DCB Holdings Berhad 369,699 21,040 390,739
35,000 8,000 43,000 Edaran Otombil Nasional Berhad 319,862 69,537 389,399
30,000 4,000 34,000 Ekran Berhad 99,309 12,754 112,063
112,500 29,000 141,500 Genting Berhad 1,210,906 306,255 1,517,161
159,000 38,000 197,000 Golden Hope Plantations Berhad 302,242 70,382 372,624
35,000 9,000 44,000 Guinness Anchor Berhad 63,688 16,523 80,211
68,000 25,000 93,000 Highlands & Lowlands Berhad 133,127 46,914 180,041
49,499 15,000 64,499 Hong Leong Credit Berhad 267,399 77,376 344,775
23,000 2,000 25,000 Hong Leong Industries Berhad 141,064 12,266 153,330
57,000 6,000 63,000 Hume Industries (Malaysia) Berhad 326,442 34,362 360,804
127,000 11,000 138,000 Kamunting Corp. Berhad 106,779 9,159 115,938
41,000 7,000 48,000 Kedah Cement Holdings Berhad 59,618 9,610 69,228
56,000 20,000 76,000 Kuala Lumpur Kepong Berhad 181,966 63,769 245,735
68,333 6,000 74,333 Leader Universal Holdings Berhad 256,734 20,959 277,693
4,000 4,000 *Leader Universal Holdings Berhad Issue 94 13,647 13,647
12,375 1,000 13,375 *Lion Land Berhad 14,928 1,182 16,110
160,000 38,000 198,000 Magnum Corp. Berhad 386,677 89,521 476,198
183,000 48,000 231,000 Malayan Banking Berhad 1,516,328 395,776 1,912,104
39,000 6,000 45,000 Malayan Cement Berhad 61,779 9,456 71,235
104,000 25,000 129,000 Malayan United Industries Berhad 183,331 43,867 227,198
53,000 6,000 59,000 Malaysia Mining Corp. Berhad 96,011 11,064 107,075
56,000 25,000 81,000 Malaysian Airlines System 194,476 89,866 284,342
23,666 23,666 Malaysian International Shipping Corp.
(Foreign) 75,939 75,939
15,000 15,000 Malaysian Oxygen Berhad 56,661 56,661
38,000 8,000 46,000 Nestle (Malaysia) Berhad 299,431 62,063 361,494
32,000 3,000 35,000 New Straits Times Press (Malaysia) Berhad 105,930 9,139 115,069
17,000 17,000 Nylex (Malaysia) Berhad 50,061 50,061
17,000 2,000 19,000 Oriental Holdings Berhad 93,907 10,479 104,386
81,000 21,000 102,000 Perusahaan Otomobil Nasional Berhad 312,551 75,487 388,038
8,000 8,000 Public Bank Berhad (Foreign) 17,222 17,222
29,000 29,000 RJ Reynolds Berhad 56,775 56,775
174,000 48,000 222,000 Resorts World Berhad 1,194,395 313,891 1,508,286
46,000 11,000 57,000 Rothmans of Pall Mall Malaysia Berhad 366,206 84,890 451,096
48,000 13,000 61,000 Shell Refining Co. Federation of Malaysia
Berhad 163,769 42,506 206,275
355,980 93,800 449,780 Sime Darby Berhad (Malaysia) 1,026,587 266,694 1,293,281
66,000 9,000 75,000 Sime UEP Properties Berhad 132,965 17,327 150,292
79,000 12,000 91,000 Tan Chong Motor Holdings Berhad 90,808 13,599 104,407
318,000 88,000 406,000 Telekom Malaysia Berhad 2,609,098 675,548 3,284,646
481,000 135,000 616,000 Tenaga Nasional Berhad 2,051,381 559,301 2,610,682
39,666 6,800 46,466 UMW Holdings Berhad 111,973 18,367 130,340
87,000 24,000 111,000 United Engineers (Malaysia) Berhad 583,063 158,896 741,959
------------ ----------- -------------
TOTAL COMMON STOCKS 16,571,320 4,072,791 20,644,111
------------ ----------- -------------
INVESTMENT IN CURRENCY
*Malaysian Ringetts 63,549 324,278 387,827
------------ ----------- -------------
TOTAL - MALAYSIA 16,634,869 4,397,069 21,031,938
</TABLE>
-23-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
TURKEY
COMMON STOCKS
2,890,000 1,437,000 4,327,000 Akbank 806,512 401,023 1,207,535
445,000 413,500 858,500 *Akbank Issue 94 394,855 112,991 507,846
48,000 11,000 59,000 *Akcimento 83,721 16,628 100,349
641,280 158,800 800,080 Aksa 663,650 162,493 826,143
228,480 54,500 282,980 Alarko Holding $ 188,629 $ 41,826 $ 230,455
3,112,265 597,840 3,710,105 *Arcelik A.S. 959,012 177,266 1,136,278
670,602 128,000 798,602 Aygaz 467,862 78,884 546,746
372,000 50,000 422,000 *Bekoteknik Sanayi A.S. 62,288 12,209 74,497
1,323,000 210,000 1,533,000 Brisa Bridgestone Sabanci Lastik San & Tic
A.S. 461,512 70,814 532,326
33,000 33,000 Cimentas A.S. 24,558 24,558
234,000 234,000 Cimentas Izmir Cimento Fabrikasi Turk A.S. 185,023 185,023
50,000 7,000 57,000 *CIMSA A.S. (Cimento Sanayi ve Ticaret) 290,698 35,814 326,512
559,000 119,000 678,000 Cukurova Elektrik A.S. 191,750 40,820 232,570
312,000 312,000 *Dogan Sirketler Grubu Holdings AS 81,628 81,628
150,000 17,000 167,000 *Doktas 66,279 6,029 72,308
1,050,450 209,150 1,259,600 Eczacibasi Ilac 244,291 48,153 292,444
771,800 142,800 914,600 *EGE Biracilik ve Malt Sanayii A.S. 987,186 179,330 1,166,516
374,400 73,400 447,800 *Erciyas Biracilik 565,953 112,660 678,613
837,500 1,518,000 2,355,500 Eregli Demir ve Celik Fabrikalari Turk A.S. 1,130,058 218,874 1,348,932
661,500 120,000 781,500 Good Year Lastikleri A.S. 346,134 62,791 408,925
217,500 58,000 275,500 *Guney Biracilik 111,279 28,326 139,605
473,000 473,000 *Hurriyet Gazette 45,100 45,100
1,816,704 1,816,704 *Izmir Demir Celik 77,104 77,104
1,242,569 475,000 1,717,569 Koc Holding A.S. 1,069,187 408,721 1,477,908
50,000 17,000 67,000 *Migros Turk A.S. 174,419 57,326 231,745
495,000 296,000 791,000 NETAS Northern Electric Telekomunikayson A.S 175,552 104,977 280,529
1,096,000 192,000 1,288,000 Otosan Otomobil A.S. 369,581 58,047 427,628
200,000 95,000 295,000 *Tat Konserve 153,488 75,116 228,604
25,000 25,000 *Teletas 7,849 7,849
980,000 287,000 1,267,000 *Tofas Turk Otomobil Fabrikasi A.S. 763,488 220,256 983,744
1,517,640 254,840 1,772,480 Trakya Cam Sanayi A.S. 271,763 43,856 315,619
517,640 254,840 772,480 *Trayka Cam Sanayii Issue 94 236,469 39,708 276,177
13,000 13,000 *Tuborg Bira ve Malt Sanayi A.S. 8,314 8,314
572,585 123,450 696,035 Turcas Petrolculuk A.S. 173,107 37,322 210,429
115,995 72,000 187,995 Turk Demir Dokum 311,440 17,163 328,603
504,000 60,000 564,000 Turk Siemens Kablo ve Elektrik Sanayii A.S. 155,302 18,140 173,442
2,857,512 551,025 3,408,537 Turk Sise Cam 714,378 131,348 845,726
3,902,488 958,000 4,860,488 Turkiye Garanti Bankasi A.S. 1,021,000 245,070 1,266,070
560,000 624,000 1,184,000 Turkiye Is Bankasi A.S. Series C 890,791 118,995 1,009,786
1,747,200 1,747,200 *Turkiye Is Bankasi A.S. Series C Issue 95 320,981 320,981
20,000 3,000 23,000 *USAS Ucak Servisi A.S. 132,558 16,047 148,605
5,605,740 905,700 6,511,440 Yapi ve Kredi Bankasi A.S. 808,269 128,482 936,751
------------ ----------- ------------
TOTAL - TURKEY 15,627,484 4,093,039 19,720,523
------------ ----------- ------------
INDONESIA
COMMON STOCKS
135,625 135,625 *PT Argo Pantes (Foreign) 158,412 158,412
1,094,400 234,000 1,328,400 PT Astra International (Foreign) 294,987 420,485 715,472
166,000 166,000 PT Berlian Laju Tanker (Foreign) 67,116 67,116
63,000 63,000 PT Branta Mulia (Foreign) 99,057 99,057
84,000 22,000 106,000 PT Charoen Pokphand Indonesia (Foreign) 166,981 43,733 210,714
47,250 10,500 57,750 PT Dankos Laboratories (Foreign) 148,585 32,842 181,427
372,000 149,000 521,000 *PT Gadjah Tunggal (Foreign) 405,256 187,421 592,677
88,000 37,000 125,000 *PT Hadtex Indosyntec (Foreign) 64,241 22,855 87,096
455,000 116,250 571,250 *PT Hanjaya Mandela Sampoerna (Foreign) 3,577,044 832,968 4,410,012
110,000 17,000 127,000 *PT Hero Supermarket (Foreign) 216,195 33,221 249,416
1,461,600 266,700 1,728,300 PT Indah Kiat Pulp & Paper Corp. (Foreign) 1,969,811 371,415 2,341,226
30,000 30,000 *PT Indocement Tunggal Prakarsa 110,512 110,512
21,000 21,000 *PT Indocement Tunggal Prakarsa (Foreign) 77,358 77,358
127,500 38,250 165,750 PT Indorama Synthetics (Foreign) 370,873 111,262 482,135
411,500 120,000 531,500 *PT Inti Indorayon Utama (Foreign) 882,710 280,323 1,163,033
636,000 145,000 781,000 *PT Jakarta International Hotel and Development
(Foreign) 728,571 166,105 894,676
16,000 16,000 *PT Japfa Comfeed Indonesia 12,579 12,579
124,000 13,000 137,000 *PT Japfa Comfeed Indonesia (Foreign) 100,270 10,220 110,490
90,000 53,000 143,000 *PT Kabelmetal Indonesia (Foreign) 132,412 91,071 223,483
204,800 56,000 260,800 PT Kalbe Farma (Foreign) 828,032 237,107 1,065,139
193,200 53,000 246,200 PT Lippo Land Development (Foreign) 199,623 48,214 247,837
96,262 48,120 144,382 *PT Mayorah Indah (Foreign) 387,037 191,853 578,890
125,000 34,000 159,000 PT Modern Photo Film Co. (Foreign) 692,105 175,651 867,756
54,000 54,000 *PT Pakuwon Jati 40,633 40,633
198,000 102,000 300,000 *PT Pakuwon Jati (Foreign) 126,752 76,752 203,504
56,000 56,000 PT Polysindo Eka Perkasa 30,189 30,189
1,032,000 84,000 1,116,000 PT Polysindo Eka Perkasa (Foreign) 579,515 45,283 624,798
106,200 33,000 139,200 PT Semen Cibinong (Foreign) 202,763 103,774 306,537
150,000 150,000 PT Semen Gresik (Foreign) 603,100 603,100
47,700 41,000 88,700 PT Summarecon Agung (Foreign) 42,857 32,234 75,091
46,400 46,400 *PT Surya Toto Indonesia (Foreign) 86,505 86,505
38,000 4,000 42,000 PT Tigaraksa Satria (Foreign) 107,547 11,860 119,407
15,400 15,400 PT Unggul Indah Corp. 13,319 13,319
132,999 39,600 172,599 PT Unggul Indah Corp. (Foreign) 126,516 34,245 160,761
------------ ----------- ------------
TOTAL COMMON STOCKS 13,364,873 3,845,484 17,210,357
------------ ----------- ------------
RIGHTS/WARRANTS
21,250 1,375 22,625 *PT Indorama Synthetics (Foreign) Rights
07/07/95 17,183 0 17,183
------------ ----------- ------------
TOTAL - INDONESIA 13,382,056 3,845,484 17,227,540
------------ ----------- ------------
</TABLE>
-24-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
ARGENTINA
COMMON STOCKS
161,067 12,000 173,067 *Acindar Industria Argentina de Aceros SA
Series A 99,872 7,321 107,193
187,000 23,000 210,000 *Alpargatas SA y Commercial 86,029 10,696 96,725
254,800 124,840 379,640 Astra Cia Argentina de Petroleo SA 587,373 196,018 783,391
94,649 17,900 112,549 Bagley y Cia, Ltd SA Series B 229,073 40,279 269,352
92,934 25,000 117,934 Banco Frances del Rio de la Plata SA 641,309 165,017 806,326
40,250 40,250 Banco de Galicia y Buenos Aires SA Series A 165,847 165,847
151,029 151,029 Banco de Galicia y Buenos Aires SA Series B $ 634,385 $ 634,385
250 100 350 Buenos Aires Embotelladora SA Series B 372,537 $ 149,015 521,552
73,500 22,000 95,500 *Celulosa Argentina SA Series B 23,596 6,755 30,351
60,908 13,000 73,908 *CIADEA SA 316,752 65,657 382,409
129,060 34,000 163,060 Comercial del Plata 329,136 82,628 411,764
29,106 4,078 33,184 *Corcemar Corporacion Cementera Argentina SA
Series B 140,247 19,454 159,701
84,400 129,000 213,400 *Indupa SA Industrial y Comercial 41,867 62,571 104,438
16,800 18,000 34,800 *Industrias Petroq Koppers 78,632 84,248 162,880
22,000 22,000 *Irsa Inversiones y Representaciones SA 52,805 52,805
10,200 10,200 Juan Minetti SA 39,447 39,447
160,500 42,000 202,500 Ledesma SA Agricola Industrial 186,199 46,625 232,824
50,102 13,447 63,549 Molinos Rio de la Plata SA Series B 298,137 75,311 373,448
22,420 22,420 Naviera Perez Companc SA Series A 95,967 95,967
431,880 23,600 455,480 Naviera Perez Companc SA Series B 1,930,697 101,254 2,031,951
37,200 15,542 52,742 Nobleza Piccardo Sociedad Industrial Comerciay
Financeira 154,395 63,340 217,735
92,476 20,034 112,510 Sevel Argentina SA Series C 186,449 35,824 222,273
685,410 203,000 888,410 Siderca SA Series A 514,109 146,784 660,893
18,800 87,000 105,800 Telecom Argentina Stet-France SA Series B 3,608,737 432,433 4,041,170
1,183,000 204,000 1,387,000 Telefonica de Argentina SA Series B 3,289,069 550,855 3,839,924
569,907 569,907 YPF Sociedad Anonima Yachimientos Petroliferos
Fiscales Series D 569,907 569,907
------------ ----------- ------------
TOTAL - ARGENTINA 13,748,600 3,266,058 17,014,658
------------ ----------- ------------
PORTUGAL
COMMON STOCKS
176,600 53,600 230,200 Banco Comercial Portugues SA 2,349,919 709,624 3,059,543
22,000 2,700 24,700 Banco Internacional de Credito 332,661 40,917 373,578
67,050 16,900 83,950 Banco Portugues de Investimentos SA 1,230,151 309,493 1,539,644
59,070 3,900 62,970 Banco Totta & Acores SA 1,290,171 85,575 1,375,746
3,300 3,300 Cel-Cat Fabrica Nacional de Condutores
Electricos SA 78,730 78,730
26,000 5,600 31,600 Corticeira Amorim Sociedad Gestora
Participacoes Sociais SA 400,134 88,441 488,575
13,600 2,200 15,800 Empresa Fabril de Maquinas Electricas 162,688 26,317 189,005
7,612 300 7,912 Filmes Lusomundo SA 89,523 3,528 93,051
22,800 6,300 29,100 Estabelecimentos Jeronimo Martins & Filho
Administracao e Participacoes Financeiros SA 1,146,129 317,540 1,463,669
9,266 1,500 10,766 *Lusotur Sociedad Financeira de Turismo SA 194,598 31,250 225,848
6,600 1,300 7,900 Mague-Gestao e Participacoes SA 182,742 35,733 218,475
17,000 4,600 21,600 Modelo Continente SGPS SA 1,562,332 426,613 1,988,945
16,300 6,800 23,100 Modelo Sociedade Gestora de Participacoes
Sociais SGPS SA 565,242 234,892 800,134
10,300 2,900 13,200 Mota e Companhia SA Empreiteiros de Obras
Publicas e Construcao Civil 215,276 61,196 276,472
28,100 6,000 34,100 Portuguesa Radio Marconi SA 1,171,778 250,000 1,421,778
11,400 2,200 13,600 Salvador Caetano Industrias Metalurgicas e
Veiculos de Transporte SA 208,962 39,239 248,201
16,510 3,930 20,440 Sociedade Construcao Soares da Costa SA 318,494 77,834 396,328
45,400 19,600 65,000 Sonae Investimentos Sociedade e Gestora de
Participacoes Socials SA 1,104,489 478,804 1,583,293
38,000 9,000 47,000 Uniceruniao Cervejeira SA 648,656 153,629 802,285
------------ ----------- ------------
TOTAL COMMON STOCKS 13,252,675 3,370,625 16,623,300
------------ ----------- ------------
INVESTMENT IN CURRENCY
*Portuguese Escudos 0 375,557 375,557
------------ ----------- ------------
TOTAL - PORTUGAL 13,252,675 3,746,182 16,998,857
------------ ----------- ------------
MEXICO
COMMON STOCKS
43,000 43,000 Alfa S.A. de C.V. Series A 497,637 497,637
48,000 8,000 56,000 *Apasco S.A. de C.V. 166,650 27,384 194,034
13,500 13,500 Cementos de Mexico S.A. de C.V. Series A 43,218 43,218
284,000 100,000 384,000 Cementos de Mexico S.A. de C.V. Series B 944,352 324,368 1,268,720
818,000 290,000 1,108,000 Cifra S.A. de C.V. Series C 1,045,333 359,251 1,404,584
229,000 75,000 304,000 *Controladora Comercial Mexicana SA de C.V. 126,911 46,210 173,121
20,000 20,000 El Puerto de Liverpool S.A. Series 11,508 11,508
212,000 80,000 292,000 El Puerto de Liverpool S.A. Series C-1 127,856 46,683 174,539
26,000 11,000 37,000 Empresas ICA Sociedad Controladora S.A. de
C.V. 192,404 78,712 271,116
112,885 38,000 150,885 *Empresas la Moderna S.A. de C.V. Series A 370,763 118,924 489,687
134,000 58,000 192,000 Fomento Economico Mexicano S.A. de C.V.
Series B 321,076 135,192 456,268
206,000 78,000 284,000 *Grupo Carso S.A. de C.V. Series A 1,024,124 364,254 1,388,378
274,000 105,000 379,000 Grupo Financiero Banamex Accival S.A. de C.V.
Series B 406,422 157,457 563,879
13,700 13,700 Grupo Financiero Banamex Accival S.A. de C.V.
Series L 20,544 20,544
790,000 210,380 1,000,380 *Grupo Financiero Bancomer S.A. de C.V.
Series B 171,263 45,608 216,871
29,259 7,791 37,050 *Grupo Financiero Bancomer S.A. de C.V.
Series L 6,200 1,651 7,851
20,000 20,000 *Grupo Financiero GBM Atantico S.A. de C.V.
Series B 26,732 26,732
14,000 10,000 24,000 *Grupo Financiero GBM Atantico S.A. de C.V.
Series C 26,015 18,582 44,597
980 980 *Grupo Financiero GBM Atantico S.A. de C.V.
Series L 623 623
126,000 25,000 151,000 Grupo Financiero Invermexico S.A. de C.V.
Series B 49,291 9,780 59,071
12,600 500 13,100 *Grupo Financiero Invermexico S.A. de C.V.
Series L 4,929 196 5,125
64,000 10,000 74,000 *Grupo Financiero Serfin S.A. de C.V. Series B 43,293 6,471 49,764
192,000 30,000 222,000 *Grupo Gigante S.A. Series B 35,990 5,575 41,565
15,000 15,000 *Grupo Industrial Alfa S.A. Series A 170,171 170,171
82,337 30,000 112,337 Grupo Industrial Bimbo S.A. de C.V. Series A 289,891 105,623 395,514
56,000 20,000 76,000 Grupo Televisa SA (representing 1 share each
Series A, Series D & Series L) 492,910 160,391 653,301
49,000 17,000 66,000 Kimberly Clark de Mexico S.A. de C.V. Series A 511,165 177,620 688,785
</TABLE>
-25-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED SCHEDULE OF INVESTMENTS (Unaudited)
MAY 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------- -----------------------------------------
DIMENSIONAL THE THE EMERGING DIMENSIONAL THE THE EMERGING
EMERGING EMERGING MARKETS SERIES EMERGING EMERGING MARKETS SERIES
MARKETS MARKETS PROFORMA MARKETS MARKETS PROFORMA
FUND INC. SERIES COMBINED SECURITY FUND INC. SERIES COMBINED
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
50,000 50,000 *Telefonos de Mexico S.A. Series A $ 70,579 $ 70,579
1,010,000 384,000 1,394,000 Telefonos de Mexico S.A. Series L $ 1,531,051 540,792 2,071,843
230,000 16,000 246,000 Tolmex S.A. de C.V. Series B 122,249 59,984 182,233
86,400 51,600 138,000 Vitro S.A. 250,961 145,506 396,467
------------ ----------- ------------
TOTAL - MEXICO 8,834,629 3,203,696 12,038,325
------------ ----------- ------------
UNITED STATES
COMMON STOCKS
20,000 20,000 *Turk Garanti Bankasi A.S. American Depository
Receipts 42,500 0 42,500
------------ ----------- ------------
TEMPORARY CASH INVESTMENTS
Par (000) Repurchase Agreement, Chase Manhattan Bank,
- ---------------------------------------- N.A. 5.80%, 06/01/95 (Collateralized by
$ 0 $ 2,122 $ 2,122 U.S. Treasury Notes 9.25%, 01/15/96) 0 2,122,000 2,122,000
------------ ----------- ------------
TOTAL INVESTMENTS - (100.0%) $147,276,067 $31,504,944 $178,781,011
-----------------------------------------
TOTAL COST $147,276,067+ $30,529,220 $177,805,287
-----------------------------------------
-----------------------------------------
</TABLE>
* Non-Income Producing Securities
+ Reflects the step-up in basis of $44,230,754 to fair market value as
of the date of transfer
See accompanying Notes to Proforma Financial Statements
-26-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DIMENSIONAL THE EMERGING THE EMERGING
EMERGING MARKETS MARKETS PROFORMA MARKETS SERIES
FUND INC. SERIES ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ------------ -----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Value (Cost of $103,045, $30,529
and $177,805, respectively)......................... $ 147,276 $31,505 - $178,781
Cash................................................. 1,718 514 $ (800)(1) 1,432
Receivables:
Dividends and Interest............................. 902 55 - 957
Investment Securities Sold......................... 45 - - -
Fund Shares Sold................................... - 167 - 167
Other Assets......................................... 138 12 (138)(2) 12
---------------- ------------ ------------ -----------------
Total Assets......................................... 150,079 32,253 (938) 181,394
---------------- ------------ ------------ -----------------
LIABILITIES:
Payable for Investment Securities Purchased.......... 446 1,925 (446)(3) 1,925
Payable for Fund Shares Redeemed..................... - - - -
Accrued Expenses..................................... 314 77 (314)(3) 77
---------------- ------------ ------------ -----------------
Total Liabilities.................................... 760 2,002 (760) 2,002
---------------- ------------ ------------ -----------------
NET ASSETS............................................. $ 149,319 $30,251 $ (178) $179,392
---------------- ------------ ------------ -----------------
---------------- ------------ ------------ -----------------
SHARES OUTSTANDING, $.01 PAR VALUE
(AUTHORIZED 100,000,000 SHARES)....................... 8,983,540 N/A N/A
----------------
----------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE....................................... $ 16.62 N/A N/A
----------------
----------------
PUBLIC OFFERING PRICE PER SHARE........................ $ 16.87 N/A N/A
----------------
----------------
NET ASSETS CONSIST OF:
Paid-In Capital...................................... $ 102,792 - $(102,792)(4) -
Partners' Equity..................................... - $30,251 149,141 (4) $179,392
Undistributed Net Investment Income.................. 1,470 - (1,470)(4) -
Undistributed Net Realized Gain...................... 872 - (872)(4) -
Accumulated Net Realized Foreign
Exchange Loss....................................... (26) - 26 (4) -
Unrealized Appreciation of Investment
Securities and Foreign Currency..................... 44,231 - (44,231)(4) -
Unrealized Net Foreign Exchange Gain (Loss).......... (20) - 20 (4) -
---------------- ------------ ------------ -----------------
Total Net Assets..................................... $ 149,319 $30,251 $ (178) $179,392
---------------- ------------ ------------ -----------------
---------------- ------------ ------------ -----------------
</TABLE>
Explanation of Note References:
(1) Reflects cash required by Dimensional Emerging Markets Fund
Inc. to discharge all liabilities existing on the transaction
date as well as $40 of estimated expenses associated with
this transaction.
(2) Reflects organization costs to be written off by Dimensional
Emerging Markets Fund Inc. prior to the transaction.
(3) Reflects liabilities to be discharged by Dimensional Emerging
Markets Fund Inc.
(4) Reflects transfer of assets to The Emerging Markets Series at
fair market value and elimination of the capital accounts of
Dimensional Emerging Markets Fund Inc. in conjunction with the
transaction.
See accompanying Notes to Proforma Financial Statements
-27-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED NOVEMBER 30, 1994
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DIMENSIONAL THE EMERGING THE EMERGING
EMERGING MARKETS MARKETS PROFORMA MARKETS SERIES
FUND INC. SERIES (a) ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes Withheld of
$320, $2 and $322, respectively)......................... $ 2,804 $ 61 - $ 2,865
Interest.................................................. 101 55 - 156
-------- ----- ----------- --------
Total Investment Income............................... 2,905 116 - 3,021
-------- ----- ----------- --------
EXPENSES
Investment Advisory Services.............................. 583 6 (437)(1) 152
Administrative Services................................... - - - -
Accounting & Transfer Agent Fees.......................... 146 9 32 (1) 187
Custodians' Fee........................................... 472 39 (31)(1) 480
Legal Fees................................................ 40 12 (40)(2) 12
Audit Fees................................................ 19 5 (12)(2) 12
Filing Fees............................................... 90 - (90)(2) -
Shareholders' Reports..................................... 2 3 3 (3) 8
Directors' Fees and Expenses.............................. 24 - (24)(2) -
Trustees' Fees and Expenses............................... - 2 1 (3) 3
Organization Costs........................................ 50 1 (50)(4) 1
Other..................................................... 40 7 (40)(2) 7
-------- ----- ----------- --------
Total Expenses........................................ 1,466 84 (688) 862
Less: Fee Waived........................................ (437) - 437 (5) -
-------- ----- ----------- --------
Net Expenses............................................ 1,029 84 (251) 862
-------- ----- ----------- --------
NET INVESTMENT INCOME (LOSS).............................. 1,876 32 251 2,159
-------- ----- ----------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
NVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on
Investment Securities...................................... 257 20 - 277
Net Realized Loss on Foreign Currency Transactions.......... (205) (6) - (211)
Change in Unrealized Appreciation (Depreciation) of
Investment Securities and Foreign Currency................. 16,976 453 - 17,429
Translation of Foreign Currency Denominated Amounts......... (41) 1 - (40)
-------- ----- ----------- --------
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY........................................... 16,987 468 - 17,455
-------- ----- ----------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $18,863 $500 $ 251 $19,614
-------- ----- ----------- --------
-------- ----- ----------- --------
</TABLE>
Explanation of Note References:
(a) For the period April 25, (commencement of operations) to
November 30, 1994.
(1) Reflects an adjustment to investment advisory services,
accounting & transfer agent fees and custodians' fee based on
the fee schedule of The Emerging Markets Series.
(2) Reflects the elimination of duplicate or non-applicable fees
or expenses.
(3) Reflects an adjustment for a larger pro-rata share of the
total expenses allocated across Dimensional Fund Advisors
portfolios based on relative net assets.
(4) Reflects the elimination of amortization of organization
costs of Dimensional Emerging Markets Fund Inc.
(5) Reflects an adjustment to eliminate fee waiver.
See accompanying Notes to Proforma Financial Statements
-28-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
PROFORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DIMENSIONAL THE EMERGING THE EMERGING
EMERGING MARKETS MARKETS PROFORMA MARKETS SERIES
FUND INC. SERIES ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes Withheld of $202, $22
and $224, respectively).................................. $ 2,105 $267 - $ 2,372
Interest.................................................... 53 73 - 126
------- ----- ----------- -------
Total Investment Income............................... 2,158 340 - 2,498
------- ----- ----------- -------
EXPENSES
Investment Advisory Services.............................. 338 10 (270)(1) 78
Administrative Services................................... - - - -
Accounting & Transfer Agent Fees.......................... 68 31 (3)(1) 96
Custodians' Fee........................................... 195 48 (13)(1) 230
Legal Fees................................................ 13 5 (9)(2) 9
Audit Fees................................................ 10 11 (10)(2) 11
Shareholders' Reports..................................... 1 3 4 (3) 8
Directors' Fees and Expenses.............................. 14 - (14)(2) -
Trustees' Fees and Expenses............................... - 2 1 (3) 3
Organization Costs........................................ 25 2 (25)(4) 2
Other..................................................... 21 7 (21)(2) 7
------- ----- ----------- -------
Total Expenses........................................ 685 119 (360) 444
Less: Fee Waived........................................ (271) - 271 (5) -
------- ----- ----------- -------
Net Expenses............................................ 414 119 (89) 444
------- ----- ----------- -------
NET INVESTMENT INCOME..................................... 1,744 221 89 2,054
------- ----- ----------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on Investment Securities.................. 884 106 - 990
Net Realized Loss on Foreign Currency Transactions.......... (26) (18) - (44)
Change in Unrealized Appreciation (Depreciation) of
Investment Securities and Foreign Currency................. (6,378) 522 - (5,856)
Translation of Foreign Currency Denominated Amounts......... - 3 - 3
------- ----- ----------- -------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY........................................... (5,520) 613 - (4,907)
------- ----- ----------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................................ $(3,776) $834 $ 89 $(2,853)
------- ----- ----------- -------
------- ----- ----------- -------
</TABLE>
Explanation of Note References:
(1) Reflects an adjustment to investment advisory services,
accounting & transfer agent fees and custodians' fee based on
the fee schedule of The Emerging Markets Series.
(2) Reflects the elimination of duplicate or non-applicable fees
or expenses.
(3) Reflects an adjustment for a larger pro-rata share of the
total expenses allocated across Dimensional Fund Advisors
portfolios based on relative net assets.
(4) Reflects the elimination of amortization of organization
costs of Dimensional Emerging Markets Fund Inc.
(5) Reflects an adjustment to eliminate fee waiver.
See accompanying Notes to Proforma Financial Statements
-29-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS SERIES
NOTES TO PROFORMA FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Combination - The Proforma Statement of Assets and
Liabilities, including the Schedule of Investments, and the
related Statements of Operations ("Proforma Statements")
reflects the accounts at May 31, 1995 and for the periods
ended November 30, 1994 and May 31, 1995 of Dimensional
Emerging Markets Fund Inc. ("the Fund"), and The Emerging
Markets Series (the "Series").
The Proforma Statements give effect to the proposed
acquisition of substantially all of the assets of the Fund in
exchange for shares of the Emerging Markets Portfolio ("the
Portfolio") and the subsequent transfer of those assets to
the Series in exchange for partnership interest in the
Series. Since this transaction will be considered taxable for
federal income tax purposes, the tax and book bases of the
assets of the fund as a result of this transaction will be
equal to their fair market value as of the date of transfer.
Certain amounts have been reclassified to conform to current
presentation.
The Proforma Statements of Operations do not reflect the
expenses of the Fund or the Series in carrying out their
obligations under the Agreement and Plan of Reorganization or
any adjustment with respect to distributions that may be made
prior to reorganization.
The Proforma Statements should be read in conjunction with
the historical financial statements of the Fund and the
Series included in its respective Prospectus or Statement of
Additional Information.
2. Proforma Operations - The Proforma Statements of Operations
assume similar rates of gross investment income for the
investments of the Fund and the Series. Accordingly the
combined gross investment income is equal to the sum of the
gross investment income of the Fund and the Series.
Proforma operating expenses reflect the expected expenses of
the Series after the acquisition of the Fund's assets from
the Portfolio. Proforma Investment Advisory Services,
Accounting and Transfer Agent Fees and Custodian's Fees were
calculated based on the fee schedule in effect for the Series
at the proforma combined level of average net assets for the
periods ended November 30, 1994 and May 31, 1995.
3. The investment objectives of the Series will remain
unchanged. The Advisor will continue to be Dimensional Fund
Advisors Inc. The Advisory fee structure currently in place
for the Series will remain unchanged.
4. Subsequent Event - On August 8, 1995, an additional $25
million was invested in the Fund. The majority of this money
was invested in Israeli Securities.
-30-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS PORTFOLIO
PROFORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DIMENSIONAL THE EMERGING THE EMERGING
EMERGING MARKETS MARKETS PROFORMA MARKETS PORTFOLIO
FUND INC. PORTFOLIO ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Value (Cost of $103,045, $29,096
and $176,372, respectively)......................... $ 147,276 $ 30,072 - $177,348
Cash................................................. 1,718 - $ (800)(1) 918
Receivables:
Dividends and Interest............................. 902 - - 902
Investment Securities Sold......................... 45 - - 45
Fund Shares Sold................................... - 185 - 185
Other Assets......................................... 138 36 (138)(2) 36
---------------- ------------ ----------- -----------------
Total Assets......................................... 150,079 30,293 (938) 179,434
---------------- ------------ ----------- -----------------
LIABILITIES:
Payable for Investment Securities Purchased.......... 446 - (446)(3) -
Payable for Fund Shares Redeemed..................... - 18 - 18
Accrued Expenses..................................... 314 21 (314)(3) 21
---------------- ------------ ----------- -----------------
Total Liabilities.................................... 760 39 (760) 39
---------------- ------------ ----------- -----------------
NET ASSETS............................................. $ 149,319 $ 30,254 $ (178) $ 179,395
---------------- ------------ ----------- -----------------
---------------- ------------ ----------- -----------------
SHARES OUTSTANDING $.01 PAR VALUE
(AUTHORIZED 200,000,000, 100,000,000 AND
100,000,000 SHARES, RESPECTIVELY)..................... 8,983,540 2,733,680 16,206,218
---------------- ------------ -----------------
---------------- ------------ -----------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE....................................... $ 16.62 $ 11.07 $ 11.07
---------------- ------------ -----------------
---------------- ------------ -----------------
PUBLIC OFFERING PRICE PER SHARE........................ $ 16.87 $ 11.24 $ 11.24
---------------- ------------ -----------------
---------------- ------------ -----------------
NET ASSETS CONSIST OF:
Paid-In Capital...................................... $ 102,792 $ 29,047 $ 46,349 (4) $ 178,188
Undistributed Net Investment Income.................. 1,470 140 (1,470)(4) 140
Undistributed Net
Realized Gain....................................... 872 106 (872)(4) 106
Accumulated Net Realized Foreign Exchange Loss....... (26) (18) 26 (4) (18)
Unrealized Appreciation of Investment
Securities and Foreign Currency..................... 44,231 976 (44,231)(4) 976
Unrealized Net Foreign Exchange Gain (Loss).......... (20) 3 20 (4) 3
---------------- ------------ ----------- -----------------
Total Net Assets..................................... $ 149,319 $ 30,254 $ (178) $ 179,395
---------------- ------------ ----------- -----------------
---------------- ------------ ----------- -----------------
</TABLE>
Explanation of Note References:
(1) Reflects cash required by Dimensional Emerging Markets Fund
Inc. to discharge all liabilities existing on the transaction
date as well as $40 of estimated expenses associated with
this transaction.
(2) Reflects organization costs to be written off by Dimensional
Emerging Markets Fund Inc. prior to the transaction.
(3) Reflects liabilities to be discharged by Dimensional Emerging
Markets Fund Inc.
(4) Reflects transfer of assets to The Emerging Markets Portfolio
at fair market value and elimination of the capital accounts of
Dimensional Emerging Markets Fund Inc. In conjunction with the
transaction.
See accompanying Notes to Proforma Financial Statements
-31-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS PORTFOLIO
PROFORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED NOVEMBER 30, 1994
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
THE EMERGING
DIMENSIONAL MARKETS THE EMERGING
EMERGING MARKETS PORTFOLIO PROFORMA MARKETS PORTFOLIO
FUND INC. (A) ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes Withheld of
$320, $0 and $320, respectively)......................... $ 2,804 - $ (2,804)(1) -
Interest.................................................. 101 - (101)(1) -
Net Investment Income from The Emerging Markets Series.... - $ 32 2,127 (2) $ 2,159
---------------- ------------ ----------- -----------------
Total Investment Income............................... 2,905 32 (778) 2,159
---------------- ------------ ----------- -----------------
EXPENSES
Investment Advisory Services.............................. 583 - (583)(3) -
Administrative Services................................... - 23 585 (3) 608
Accounting & Transfer Agent Fees.......................... 146 23 (131)(3) 38
Custodians' Fee........................................... 472 - (472)(3) -
Legal Fees................................................ 40 3 (40)(4) 3
Audit Fees................................................ 19 2 (19)(4) 2
Filing Fees............................................... 90 - (90)(4) -
Shareholders' Reports..................................... 2 1 (2)(4) 1
Directors' Fees and Expenses.............................. 24 2 (24)(4) 2
Organization Costs........................................ 50 - (50)(5) -
Other..................................................... 40 3 (40)(4) 3
---------------- ------------ ----------- -----------------
Total Expenses........................................ 1,466 57 (866) 657
Less: Fee Waived........................................ (437) - 437 (6) -
---------------- ------------ ----------- -----------------
Net Expenses............................................ 1,029 57 (429) 657
---------------- ------------ ----------- -----------------
NET INVESTMENT INCOME (LOSS)................................ 1,876 (25) (349) 1,502
---------------- ------------ ----------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on Investment Securities.................. 257 20 - 277
Net Realized Loss on Foreign Currency Transactions.......... (205) (7) - (212)
Change in Unrealized Appreciation (Depreciation) of
Investment Securities and Foreign Currency................. 16,976 453 - 17,429
Translation of Foreign Currency Denominated Amounts......... (41) 1 - (40)
---------------- ------------ ----------- -----------------
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY........................................... 16,987 467 - 17,454
---------------- ------------ ----------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 18,863 $ 442 $ (349) $ 18,956
---------------- ------------ ----------- -----------------
---------------- ------------ ----------- -----------------
</TABLE>
Explanation of Note References:
(a) For the period April 25, (commencement of operations) to
November 30, 1994.
(1) Reflects income of Dimensional Emerging Markets Fund Inc.
that will not be combined with The Emerging Markets
Portfolio.
(2) Represents the allocation of income from The Emerging Markets
Series.
(3) Reflects an adjustment to investment advisory services,
administrative services, accounting & transfer agent fees and
custodians' fee based on the fee schedule of The Emerging
Markets Portfolio.
(4) Reflects the elimination of duplicate or non-applicable fees
or expenses.
(5) Reflects the elimination of amortization of organization
costs of Dimensional Emerging Markets Fund Inc.
(6) Reflects an adjustment to eliminate fee waiver.
See accompanying Notes to Proforma Financial Statements
-32-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS PORTFOLIO
PROFORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DIMENSIONAL THE EMERGING THE EMERGING
EMERGING MARKETS MARKETS PROFORMA MARKETS PORTFOLIO
FUND INC. PORTFOLIO ADJUSTMENTS PROFORMA COMBINED
---------------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (Net of Foreign Taxes Withheld of $202, $0
and $202, respectively).................................. $ 2,105 - $(2,105)(1) -
Interest.................................................. 53 - (53)(1) -
Net Investment Income from The Emerging Markets Series.... - $221 1,833 (2) $ 2,054
------- ----- ----------- -------
Total Investment Income............................... 2,158 221 (325) 2,054
------- ----- ----------- -------
EXPENSES:
Investment Advisory Services.............................. 338 - (338)(3) -
Administrative Services................................... - 40 271 (3) 311
Accounting & Transfer Agent Fees.......................... 68 19 (68)(3) 19
Custodians' Fee........................................... 195 - (195)(3) -
Legal Fees................................................ 13 4 (13)(4) 4
Audit Fees................................................ 10 3 (10)(4) 3
Filing Fees............................................... - 6 - 6
Shareholders' Reports..................................... 1 2 (1)(4) 2
Directors' Fees and Expenses.............................. 14 2 (14)(4) 2
Organization Costs........................................ 25 - (25)(5) -
Other..................................................... 21 5 (21)(4) 5
------- ----- ----------- -------
Total Expenses........................................ 685 81 (414) 352
Less: Fee Waived........................................ (271) - 271 (6) -
------- ----- ----------- -------
Net Expenses............................................ 414 81 (143) 352
------- ----- ----------- -------
NET INVESTMENT INCOME....................................... 1,744 140 (182) 1,702
------- ----- ----------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on Investment Securities.................. 884 106 - 990
Net Realized Loss on Foreign Currency Transactions.......... (26) (18) - (44)
Change in Unrealized Appreciation (Depreciation) of
Investment Securities and Foreign Currency................. (6,378) 523 - (5,855)
Translation of Foreign Currency Denominated Amounts......... - 2 - 2
------- ----- ----------- -------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY......................................... (5,520) 613 - (4,907)
------- ----- ----------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................................ $(3,776) $753 $ (182) $(3,205)
------- ----- ----------- -------
------- ----- ----------- -------
</TABLE>
Explanation of Note References:
(1) Reflects income of Dimensional Emerging Markets Fund Inc.
that will not be combined with The Emerging Markets
Portfolio.
(2) Represents the allocation of income from The Emerging
Markets Series.
(3) Reflects an adjustment to investment advisory services,
administrative services, accounting & transfer agent fees
and custodians' fee based on the fee schedule of The
Emerging Markets Portfolio.
(4) Reflects the elimination of duplicate or non-applicable fees
or expenses.
(5) Reflects the elimination of amortization of organization
costs of Dimensional Emerging Markets Fund Inc.
(6) Reflects an adjustment to eliminate fee waiver.
See accompanying Notes to Proforma Financial Statements
-33-
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
THE EMERGING MARKETS PORTFOLIO
NOTES TO PROFORMA FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Combination - The Proforma Statement of Assets and
Liabilities, including the Schedule of Investments, and the
related Statements of Operations ("Proforma Statements")
reflects the accounts at May 31, 1995 and for the periods
ended November 30, 1994 and May 31, 1995 of Dimensional
Emerging Markets Fund Inc. ("the Fund") and The Emerging
Markets Portfolio ("the Portfolio").
The Proforma Statements give effect to the proposed
acquisition of substantially all of the assets of the Fund in
exchange for shares of the Portfolio. Since the transaction
will be considered taxable for federal income tax purposes,
the tax and book bases of the assets of the Fund as a result
of this transaction will be equal to their fair market value
as of the date of transfer.
Certain amounts have been reclassified to conform to current
presentation.
The Proforma Statements of Operations do not reflect the
expenses of the Fund or the Portfolio in carrying out their
obligations under the Agreement and Plan of Reorganization or
any adjustment with respect to distributions that may be made
prior to reorganization.
The Proforma Statements should be read in conjunction with the
historical financial statements of the Fund and the Portfolio
included in its respective Prospectus or Statement of
Additional Information.
2. Shares of Capital Stock - The proforma net asset value per
share assumes the issuance of additional shares of the
Portfolio. The amount of additional shares assumed to be
issued was calculated by dividing the market value of the
assets of the Fund acquired by the Portfolio at May 31, 1995
by the net asset value per share of the Portfolio at May 31,
1995. The proforma combined number of shares outstanding at
May 31, 1995 after the acquisition consists of 2,733,680
outstanding shares of the Portfolio plus 13,472,538
additional shares of the Portfolio issued to acquire the
assets of the Fund.
3. Proforma Operations - The Proforma Statements of Operations
assume a larger share of net investment income from The
Emerging Markets Series ("the Series") due to the subsequent
acquisition of the Fund's asset by the Series. The net
investment income of the Series is allocated to the
Portfolio. Accordingly, the combined gross investment
income is equal to the net investment income of the Series.
Proforma operating expenses reflect the expected expenses of
the Portfolio after the transfer of the Fund's assets.
Proforma Administrative Services and Accounting and Transfer
Agent Fees were calculated based on the fee schedule in effect
for the Portfolio at the proforma combined level of average
net assets for the periods ended November 30, 1994 and May 31,
1995.
4. The investment objectives of the Portfolio will remain
unchanged. Dimensional Fund Advisors Inc. will continue to
provide Administrative Services. The Administrative
Services structure currently in place for the Portfolio will
remain unchanged.
5. Subsequent Event - On August 8, 1995, an additional $25
million was invested in the Fund. The majority of this
money was invested in Israeli Securities.
-34-
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE
PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED TO VOTE "FOR" EACH
PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY
PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY ATTEND
THE MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED
ENVELOPE.
DIMENSIONAL EMERGING MARKETS FUND INC. PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS MICHAEL T. SCARDINA, IRENE R. DIAMANT AND
MARTI WILES, OR ANY ONE OF THEM, WITH THE RIGHT OF SUBSTITUTION, PROXIES OF
THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS OF DIMENSIONAL
EMERGING MARKETS FUND INC. ("FUND") TO BE HELD AT 1299 OCEAN AVENUE, 11TH
FLOOR, SANTA MONICA, CALIFORNIA, 90401 AT 8:00 A.M., PACIFIC COAST TIME, ON
OCTOBER 15, 1995 OR AT ANY POSTPONEMENT OR ADJOURNMENT THEREOF, WITH ALL THE
POWERS WHICH THE UNDERSIGNED WOULD POSSESS, IF PERSONALLY PRESENT, AND
INSTRUCTS THEM TO VOTE UPON ANY MATTERS WHICH MAY PROPERLY BE ACTED UPON AT
THIS MEETING, AND SPECIFICALLY AS INDICATED ON THE LOWER PORTION OF THIS FORM.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SHAREHOLDER WHOSE SIGNATURE APPEARS BELOW. IF PROPERLY EXECUTED BUT
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" EACH PROPOSAL.
PLEASE REFER TO THE PROXY STATEMENT DISCUSSION OF EACH OF THESE MATTERS.
TO VOTE MARK IN BLUE OR BLACK INK BELOW PLEASE FOLD HERE
AN / X /
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. TO APPROVE AN AGREEMENT AND PLAN OF
REORGANIZATION PROVIDING FOR A SALE OF
SUBSTANTIALLY ALL OF THE ASSETS OF THE
FUND TO THE EMERGING MARKETS PORTFOLIO
OF DFA INVESTMENT DIMENSIONS GROUP
INC. IN CONSIDERATION OF THE ISSUANCE
OF SHARES OF COMMON STOCK OF THE
PORTFOLIO AND SUBSEQUENT DISSOLUTION
OF THE FUND.
_________________________ _________________________ _________
SIGNATURE SIGNATURE (JOINT OWNER) DATE
PLEASE DATE AND SIGN NAME OR NAMES AS PRINTED ABOVE TO
AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED ABOVE. WHERE
SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS
SHOULD SIGN. PERSONS SIGNING AS AN EXECUTOR, ADMINISTRATOR,
TRUSTEE OR OTHER REPRESENTATIVE SHOULD GIVE FULL TITLE AS SUCH.
-35-
<PAGE>
EXHIBITS
1. Agreement and Plan of Reorganization
2. Financial Data Schedule Under rule 483
-36-
<PAGE>
EXHIBIT NO. 1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, made as of this
22nd day of September, 1995, by and between DFA Investment
Dimensions Group Inc. ("DFAIDG"), a corporation organized under
the laws of the State of Maryland, with its principal place of
business at 1299 Ocean Avenue, Santa Monica, California and
Dimensions Emerging Markets Fund Inc. ("DEM"), a corporation
organized under the laws of the State of Maryland with its
principal place of business at 1299 Ocean Avenue, Santa Monica,
California.
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the
"Plan of Reorganization") will consist of (i) the acquisition by
the Emerging Markets Portfolio ("EMP") of DFAIDG of substantially
all of the property and assets of DEM in exchange solely for
shares of common stock of EMP par value, (ii) the distribution of
such shares to the shareholders of DEM according to their
respective interests, and (iii) the dissolution of DEM as soon as
practicable and not later than one year after the closing (as
defined in Section 3, hereinafter called the "Closing"), all upon
and subject to the terms and conditions of this Agreement
hereinafter set forth.
AGREEMENT
In order to consummate the Plan of Reorganization and
in consideration of the premises and of the covenants and
agreements hereinafter set forth, and intending to be legally
bound, the parties hereto covenant and agree as follows:
1. SALE AND TRANSFER OF ASSETS, LIQUIDATION AND
DISSOLUTION OF DEM
(a) Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties
of DFAIDG herein contained, and in consideration of the delivery
by DFAIDG of the number of EMP shares of hereinafter provided,
DEM agrees that it will convey, transfer and deliver to DFAIDG
for the account of EMP at the Closing substantially all of the
then existing property and assets of DEM, as set forth on
Schedule 1 hereto, free and clear of all liens, encumbrances, and
claims whatsoever except for cash, bank deposits, and cash
equivalents in an estimated amount necessary (1) to pay its costs
and expenses of carrying out this Agreement (including, but not
<PAGE>
limited to, fees of counsel and accountants, and expenses of its
liquidation and dissolution contemplated hereunder), which costs
and expenses shall be established on the books of DEM as
liability reserves, (2) to discharge its unpaid liabilities of
DEM on its books at the closing date (as defined in Section 3,
hereinafter called the "Closing Date"), including, but not
limited to, its income dividends and capital gains distributions,
if any, payable for any period prior to, and through, the Closing
Date, and (3) to pay such contingent liabilities of DEM as the
board of directors shall reasonably determine to exist, if any,
at the Closing Date, for which appropriate liability reserves
shall be established on the books of DEM. DEM shall also retain
any and all rights which it may have over and against any person
which may have accrued up to and including the close of business
on the Closing Date.
(b) Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties
of the DEM herein contained, and in consideration of such sale,
conveyance, transfer, and delivery, DFAIDG agrees at the Closing
to issue and deliver to DEM the number of shares of common stock
of EMP ($.01 par value) determined by dividing the aggregate
assets of DEM transferred on the Closing Date by the net asset
value per share of EMP as of the close of business on the Closing
Date; such values to be determined in the manner as set forth in
Section 2 hereof.
(c) Immediately following the Closing DEM shall
distribute pro rata to its shareholders of record as of the close
of business on the Closing Date the shares of EMP received by the
DEM pursuant to this Section 1. Such distribution shall be
accomplished by the establishment of share accounts on the
records of DFAIDG of the type and in the amounts due such
shareholders, based on their respective holdings as of the close
of business on the Closing Date. Fractional shares of EMP shall
be carried to the third decimal place. The shares of stock of
EMP delivered hereunder to DEM and thence to the shareholders of
DEM will not be registered under the Securities Act of 1933, and
shall be issued in reliance upon the exemption from registration
set forth in section 4(2) under said Act and shall not be
registered under the Georgia Securities Act of 1933, in reliance
on the exemptions set forth in paragraphs (7) and (12) of section
10-5-9 of said Georgia Act. Said shares shall not be sold,
transferred or assigned by the shareholder of DEM in absence of
registration of such shares under the Securities Act of 1933 and
under any other applicable law providing for the registration of
securities, except in a transaction which, in the opinion of
counsel acceptable to DFAIDG, is exempt from the registration
requirements of applicable law. and the unissued share accounts
established pursuant to this Agreement, and any certificates for
shares issued in respect thereof shall be subject to, and shall
bear a restrictive legend to the foregoing effect.
2
<PAGE>
2. VALUATION
The value of the assets to be acquired by DFAIDG and
the net asset value per share of EMP hereunder shall be computed
as of the close of the New York Stock Exchange on the Closing
Date using the valuation procedures set forth in DFAIDG's
currently effective prospectus.
3. CLOSING AND CLOSING DATE
The Closing Date shall be December 1, 1995, or such
later date as the parties may mutually agree. The Closing shall
take place at the principal office of DFAIDG at 10:00 a.m.
Pacific Coast Time. DEM shall have provided for delivery as of
the Closing of the assets to be transferred to DFAIDG's
Custodian, Chase Manhattan Bank, N.A., 4 Metrotech Center,
Brooklyn, New York. Also, DEM shall deliver at the Closing a
list of names and addresses of the shareholders of record of the
DEM and the number of shares of common stock of DEM owned by each
such shareholder, indicating thereon which such shares are
represented by outstanding certificates and which by book-entry
accounts, all as of the close of business on the Closing Date,
certified by its Transfer Agent, or by a duly authorized officer
of DEM to the best of their knowledge and belief. DFAIDG shall
instruct its Transfer Agent to create an unissued share account
for the shares of common stock of EMP to be delivered to DEM with
instruction to transfer such shares to an account or accounts
registered in the names of such shareholders of DEM as DEM shall
request in writing. The accounts so registered and any
certificates of EMP issued in respect thereof shall be subject to
the restriction on transfer as provided.
4. REPRESENTATIONS AND WARRANTIES BY THE DEM
DEM represents and warrants to DFAIDG that:
(a) DEM is a corporation duly organized under the laws
of the State of Maryland, and is validly existing and in good
standing under the laws of that state. DEM is a diversified
closed-end investment company duly registered under the
Investment Company Act of 1940, as amended, as an open-end,
management investment company and all its outstanding shares have
been sold to, and are currently held by, a shareholder which is
an "accredited investor" as provided in reg. section 230.501(a)
under the 1933 Act.
(b) Each outstanding share of DEM was duly and validly
issued and is fully paid, non-assessable, and has full voting
rights.
(c) The financial statements appearing in DEM's Annual
Report to Shareholders for the fiscal year ended November 30,
3
<PAGE>
1994, audited by Coopers & Lybrand, L.L.P., and the unaudited
financial statements OF DEM as of subsequent dates, copies of
which have been delivered to DFAIDG, fairly present the financial
position of DEM as of the respective dates indicated, in
conformity with generally accepted accounting principles applied
on a consistent basis.
(d) The books and records of DEM made available to
DFAIDG are true and correct and contain no material omissions
with respect to the business and operations of DEM.
(e) The assets transferred by DEM to DFAIDG hereunder
are not subject to any lien, charge or encumbrance.
5. REPRESENTATIONS AND WARRANTIES BY DFAIDG
DFAIDG represents and warrants to DEM that:
(a) DFAIDG is a corporation under the laws of the
State of Maryland, and is validly existing and in good standing
under the laws of that state. DFAIDG, of which the EMP is a
diversified separate series of shares, is duly registered under
the Investment Company Act of 1940, as amended, as an open-end,
management investment company and all its shares sold have been
sold pursuant to an effective registration statement filed under
the Securities Act of 1933, as amended, except for those shares
sold pursuant to section 4(2) of the 1933 Act to its investment
advisor and (ii) as otherwise provided herein.
(b) DFAIDG is authorized to issue 100,000,000 shares
of common stock, par value $.01 per share of EMP. Each
outstanding share is fully paid, non-assessable, and has full
voting rights. The shares of common stock of EMP issued pursuant
to this Agreement will be validly issued, fully paid, non-
assessable, outstanding shares of common stock of EMP.
(c) The financial statements appearing in DFAIDG's
Annual Report to Shareholders for the fiscal year ended November
30, 1994, audited by Coopers & Lybrand L.L.P. and the financial
statements of DFAIDG of subsequent dates, copies of which have
been delivered to DEM, fairly present the financial position of
EMP as of the respective dates indicated and the results of its
operations for the periods indicated in conformity with generally
accepted accounting principles applied on a consistent basis.
6. REPRESENTATIONS AND WARRANTIES BY DFAIDG AND DEM
DFAIDG and DEM each represents and warrants to the
other that:
(a) The statement of assets and liabilities to be
furnished by it as of the close of business on the Closing Date
4
<PAGE>
for the purpose of determining the number of shares of common
stock of EMP to be issued hereunder will be true and correct as
of such date and prepared in conformity with generally accepted
accounting principles applied on a consistent basis.
(b) At the Closing, it will have good and marketable
title to all of the securities and other assets shown on the
statement of assets and liabilities referred to in paragraph (a)
above, free and clear of all liens or encumbrances of any nature
whatever except such imperfections of title or encumbrances as do
not materially detract from the value or use of the assets
subject thereto, or materially affect title thereto.
(c) Except as disclosed in writing to the other party
by this agreement, there is no material suit, or legal or
administrative proceeding pending or threatened against it.
(d) There are no known actual or proposed deficiency
assessments with respect to any taxes payable by it.
(e) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary action of
its board of directors and this Agreement constitutes its valid
and binding obligation enforceable in accordance with its terms,
subject to approval by a majority of the outstanding common stock
of DEM.
(f) It anticipates that consummation of this Agreement
will not cause it to fail to conform to the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), for Federal income taxation as a regulated
investment company at the end of its fiscal year.
7. COVENANTS OF DEM AND DFAIDG
(a) DEM and DFAIDG each covenant to operate their
respective businesses as presently conducted between the date
hereof and the Closing.
(b) DEM undertakes that it will not acquire the EMP
shares for the purpose of making distributions thereof other than
to DEM's shareholders.
(c) DEM and DFAIDG each agree that by the Closing, all
of its Federal and other tax returns and reports required by law
to be filed on or before such date shall have been filed and all
Federal and other taxes shown as due on said returns shall have
either been paid or adequate liability reserves shall have been
provided for the payment of such taxes.
(d) DEM at the Closing will provide DFAIDG with a copy
of the shareholder ledger accounts for all the shareholders of
5
<PAGE>
record of DEM as of the close of business on the Closing Date,
who are to become shareholders of EMP as a result of the transfer
of assets which is the subject of this Agreement, certified by
its Transfer Agent or duly authorized officer to the best of
their knowledge and belief.
(e) DEM agrees to present this agreement and the
transactions contemplated herein for approval by its stockholder
without soliciting any proxy, consent or authorization.
(f) DFAIDG shall provide DEM, its representatives and
stockholders, and DEM will provide its stockholders, with such
information and assistance regarding this Agreement, and the
transaction contemplated herein, as may be necessary or desirable
to assist such stockholders to make an informed decision
regarding whether or not to approve this Agreement.
(g) DEM agrees to liquidate any remaining assets and
dissolve as soon after the Closing Date as practicable, but not
more than one year thereafter.
(h) DEM and EMP shall pay dividends of any
undistributed net investment income and net capital gains for the
period through the Closing Date immediately prior to such Date.
8. CONDITIONS PRECEDENT TO BE FULFILLED BY DEM AND DFAIDG
The obligations of DEM and DFAIDG to effectuate this
Agreement shall be subject to the following conditions:
(a) That (1) all the representations and warranties of
the other party contained herein shall be true and correct as of
the Closing with the same effect as though made as of and at such
date; (2) the other party shall have performed all obligations
required by this Agreement to be performed by it prior to the
Closing.
(b) That the Securities and Exchange Commission shall
not have issued an unfavorable management report under Section
25(b) of the Investment Company Act of 1940, as amended, nor
instituted nor threatened to institute any proceeding seeking to
enjoin consummation of the Plan of Reorganization under Section
25(c) of the Investment Company Act of 1940, as amended, and no
other legal, administrative or other proceeding shall be
instituted or threatened which would materially affect the
financial condition of either party or would prohibit the
transactions contemplated hereby.
(c) That the adoption of this Agreement and the Plan
of Reorganization contemplated hereby shall have been duly and
validly approved by the stockholders of DEM, as provided herein.
6
<PAGE>
(d) That each party shall have declared a distribution
or distributions prior to the Closing Date which, together with
all previous distributions, shall have the effect of distributing
to its shareholders (i) all of its ordinary income and all of its
capital gain net income, if any, for the period from the close of
its last fiscal year to the close of business on the Closing
Date, and (ii) any undistributed ordinary income and capital gain
net income from any prior period. Capital gain net income has the
meaning given such term by Section 1222(9) of the Code.
(e) That prior to or at the Closing, DFAIDG shall
receive either a private letter ruling from the U.S. Internal
Revenue Service or, in the alternative, an opinion from Messrs.
Stradley, Ronon, Stevens & Young, to the effect that provided the
acquisition contemplated hereby is carried out in accordance with
this Agreement and the applicable provisions of the Maryland
General Corporation Law: No gain or loss will be recognized by
EMP upon the receipt of substantially all of the assets of DEM in
exchange solely for the EMP shares of DFAIDG (Section 1032(a)).
In giving the opinion set forth above, counsel may
state that they are relying on certificates of the officers of
DEM and DFAIDG with regard to certain facts and circumstances of,
and the intentions of the parties to, the Reorganization.
9. BROKERAGE FEES AND EXPENSES
(a) DEM and DFAIDG each represents and warrants to the
other that there are no broker or finders fees payable by it in
connection with the transactions provided for herein.
(b) The expenses of each party of entering into and
carrying out the provisions of this Agreement shall be borne by
such party.
10. TERMINATION; WAIVER; ORDER
(a) Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and
the Plan of Reorganization abandoned at any time (whether before
or after adoption thereof by the shareholders of DEM) prior to
the Closing by either party by majority vote of its board of
directors.
(b) If any order or orders of the U.S. Securities and
Exchange Commission with respect to this Agreement shall be
issued prior to the Closing and shall impose any terms or
conditions which are determined by action of the boards of
directors of DFAIDG and of DEM to be acceptable, such terms and
conditions shall be binding as if contained herein without
further vote or approval of the shareholders of DEM, unless such
terms and conditions shall result in a change in the method of
7
<PAGE>
computing the number of shares of EMP to be issued hereunder in
which event, unless such terms and conditions shall are approved
by the stockholders of DEM in the same manner provided for
approval of this Agreement.
11. ENTIRE AGREEMENT AND AMENDMENTS
This Agreement embodies the entire Agreement between
the parties and there are no agreements, understandings,
restrictions, or warranties between the parties other than those
set forth herein or herein provided for. This Agreement may be
amended only by mutual consent of the parties in writing.
Neither this Agreement nor any interest herein may be assigned
without the prior written consent of the other party.
12. COUNTERPARTS
This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all such counterparts together shall constitute but one
instrument.
13. NOTICES
Any notice, report, or demand required or permitted by
any provision of this Agreement shall be in writing and shall be
deemed to have been given if delivered or mailed, first class
postage prepaid, addressed to DFAIDG or DEM as the case may be at
1299 Ocean Avenue, Santa Monica, California 90401, Attention:
Irene R. Diamant.
14. GOVERNING LAW
This Agreement shall be governed by and carried out in
accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, DFAIDG and DEM have each caused
this Agreement and Plan of Reorganization to be executed on its
8
<PAGE>
behalf by its duly authorized officers, all as of the day and
year first above written.
DFA INVESTMENT DIMENSIONS GROUP
INC.
Attest:
Marti Wiles By: Irene R. Diamant
- ------------------------ ----------------------------
Assisant Secretary Vice-President
DIMENSIONAL EMERGING MARKETS FUND
INC.
Attest:
Irene R. Diamant By: David G. Booth
- ------------------------ -----------------------------
Secretary President
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000896163
<NAME> DIMENSIONAL EMERGING MARKETS FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 103,045,312
<INVESTMENTS-AT-VALUE> 147,276,113
<RECEIVABLES> 946,874
<ASSETS-OTHER> 252,142
<OTHER-ITEMS-ASSETS> 138,744
<TOTAL-ASSETS> 150,079,248
<PAYABLE-FOR-SECURITIES> 446,273
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,113
<TOTAL-LIABILITIES> 760,386
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102,792,648
<SHARES-COMMON-STOCK> 8,983,540
<SHARES-COMMON-PRIOR> 8,951,712
<ACCUMULATED-NII-CURRENT> 1,468,593
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 872,188
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44,230,801
<NET-ASSETS> 149,318,862
<DIVIDEND-INCOME> 2,105,512
<INTEREST-INCOME> 52,873
<OTHER-INCOME> 0
<EXPENSES-NET> 413,871
<NET-INVESTMENT-INCOME> 1,744,514
<REALIZED-GAINS-CURRENT> 883,699
<APPREC-INCREASE-CURRENT> (6,378,297)
<NET-CHANGE-FROM-OPS> (3,776,141)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 286,455
<DISTRIBUTIONS-OF-GAINS> 214,841
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 318,287
<NET-CHANGE-IN-ASSETS> (3,776,147)
<ACCUMULATED-NII-PRIOR> 10,534
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 338,425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 413,871
<AVERAGE-NET-ASSETS> 135,098,319
<PER-SHARE-NAV-BEGIN> 17.10
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> (.62)
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (.02)
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</TABLE>
