Investment Company Act of 1940 File No. 811-7440
Securities And Exchange Commission
Washington, D.C. 20549
Form N-1A
Registration Statement Under The Investment Company Act Of 1940 /X/
Amendment No. 9
Dimensional Emerging Markets Value Fund Inc.
(Exact Name of Registrant as Specified in Charter)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
(Address of Principal Executive Offices)
(310) 395-8005
(Registrant's Telephone Number, including Area Code)
Irene R. Diamant
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
(Name and Address of Agent for Service)
Please Send Copies of Communications to:
Stephen W. Kline, Esq.
Stradley, Ronon, Stevens & Young, LLP
Great Valley Corporate Center
30 Valley Stream Parkway
Malvern, PA 19355
(610) 640-5801
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DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
Part A
December 8, 1998
Introduction
DIMENSIONAL EMERGING MARKETS VALUE FUND INC. (the "Fund"), 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401, (310) 395-8005, is an
open-end management investment company whose shares are offered to other
investment companies and institutional investors. The investment objective of
the Fund is to seek long-term capital growth through investment in "emerging
market" equity securities. The investment objective of the Fund is a fundamental
policy and may not be changed without the affirmative vote of a majority of the
Fund's outstanding securities.
Shares of the Fund are issued solely in private placements pursuant to
available exemptions from registration under the Securities Act of 1933, as
amended ("Securities Act"). This Part A of the Fund's registration statement
("Part A") does not constitute an offer to sell, Or the solicitation of an offer
to buy, any "security" to the public within the meaning of the Securities Act.
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TABLE OF CONTENTS
Page
DIMENSIONAL EMERGING MARKETS VALUE FUND INC. 4
Investment Objective and Policies 4
Fund Characteristics and Policies 4
Portfolio Structure 6
SECURITIES LOANS 7
RISK FACTORS 7
Foreign Securities 7
Investing in Emerging Markets 7
Foreign Currencies and Related Transactions 9
Introduction of the Euro 10
Borrowing 10
Portfolio Strategies 10
Futures Contracts and Options on Futures 10
Repurchase Agreements 11
Year 2000 Issue 11
MANAGEMENT OF THE FUND 11
Consulting Services 12
Administrative Services 12
Directors and Officers 12
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 13
PURCHASE OF SHARES 14
In-Kind Purchases 15
VALUATION OF SHARES 16
Public Offering Price 17
DISTRIBUTION 18
EXCHANGE OF SHARES 18
REDEMPTION OF SHARES 18
GENERAL INFORMATION 19
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DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
Investment Objective and Policies
The investment objective of the Fund is to achieve long-term capital
growth by investing primarily in emerging market equity securities. The Fund
operates as a diversified investment company and seeks to achieve its investment
objective by investing in emerging markets designated by the Investment
Committee of Dimensional Fund Advisors Inc. (the "Advisor") ("Approved
Markets"). The Fund 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 Fund seeks to achieve its objective by investing in emerging market
equity securities which are deemed by the Advisor to be value stocks at the time
of purchase. Securities are considered value stocks primarily because they have
a high book value in relation to their market value (a "high book to market
ratio"). In measuring value, the Advisor may consider additional factors such as
cash flow, economic conditions and developments in the issuer's industry. No
assurance can be given that the Fund's investment objective will be achieved.
Fund Characteristics and Policies
The Fund may not invest in all such companies or Approved Markets
described above for reasons which include constraints imposed within Approved
Markets (e.g., restrictions on purchases by foreigners), and the Fund's policy
not to invest more than 25% of its assets in any one industry.
Under normal market conditions, the Fund will invest at least 65% of its
assets in Approved Market equity securities that are deemed by the Advisor to be
value stocks at the time of purchase. Approved Market securities are 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. 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.
In determining what countries have emerging markets, the Fund will
consider among other things, the data, analysis and classification of countries
published or disseminated by the International Bank for Reconstruction (commonly
known as the World Bank) and the International Finance Corporation, in addition
to the criteria described above. In determining whether to approve markets for
investment, the Advisor 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 of the Fund. Approved emerging markets may not
include all such emerging markets.
As of the date of this Part A, the following countries are designated as
Approved Markets: Argentina, Brazil, Chile, Indonesia, Israel, Mexico,
Philippines, Portugal, South Korea, Thailand and Turkey. Countries that may be
approved in the future include but are not limited to Colombia, Czech Republic,
Greece, Hungary, India, Jordan, Nigeria, Pakistan, Poland, Republic of China
(Taiwan), Republic of South Africa, Venezuela and Zimbabwe.
The Fund 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 Fund will typically invest in money market instruments or other
highly liquid debt instruments denominated in U.S. dollars (including, without
limitation, repurchase agreements). In addition, the Fund 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 Fund does not expect the aggregate
of all such amounts to exceed 10% of its net assets under normal circumstances.
The Fund 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 Fund may also
invest in money market mutual funds for temporary cash management purposes. The
Investment Company Act of 1940 limits investment by the Fund in shares of other
investment companies to no more than 10% of the value of the Fund's total
assets. If the Fund invests in another investment company, the Fund's
shareholders will bear not only their proportionate share of expenses of the
Fund (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 Fund to establish a
wholly-owned subsidiary or a trust for the purpose of investing in the local
markets. The Fund also may invest up to 5% of its assets in convertible
debentures issued by companies organized in Approved Markets.
Portfolio Structure
Even though a company's stock may meet the Fund's criterion for
investment, it may not be included in the Fund 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). 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 also will
exercise discretion in determining the allocation of capital as between Approved
Markets.
Changes in the composition and relative ranking (in terms of book to
market ratio) of the stocks which are eligible for purchase by the Fund take
place with every trade when the securities markets are open for trading due
primarily to price fluctuations of such securities. On a periodic basis, the
Advisor will prepare lists of eligible value stocks which are eligible for
investment. Such list will be revised no less than semi-annually.
It is management's belief that equity investments offer, over a long term,
a prudent opportunity for capital appreciation, but, at the same time, selecting
a limited number of such issues for inclusion in the Fund involves greater risk
than including a large number of them.
The Fund 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
Fund do pay dividends. It is anticipated, therefore, that the Fund 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.
Generally, securities will not be sold to realize short-term profits, but when
circumstances warrant, they may be sold without regard to the length of time
held.
For the purpose of converting U.S. dollars to another currency, or vice
versa, or converting one foreign currency to another foreign currency, the Fund
may enter into forward foreign exchange contracts. In addition, to hedge against
changes in the relative value of foreign currencies, the Fund may purchase
foreign currency futures contracts. The Fund will only enter into such a futures
contract if it is expected that the Fund will be able readily to close out such
contract. However, there can be no assurance that it will be able in any
particular case to do so, in which case the Fund may suffer a loss.
SECURITIES LOANS
The Fund is authorized to lend securities to qualified brokers, dealers,
banks and other financial institutions for the purpose of earning additional
income. While the Fund may earn additional income from lending securities, such
activity is incidental to the investment objective of the Fund. The value of
securities loaned may not exceed 33 1/3% of the value of the Fund's total
assets. In connection with such loans, the Fund 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 Fund will be able to terminate the loan at
any time and will receive reasonable interest on the loan, as well as amounts
equal to any dividends, interest or other distributions on the loaned
securities. In the event of the bankruptcy of the borrower, the Fund could
experience delay in recovering the loaned securities. Management believes that
this risk can be controlled through careful monitoring procedures.
RISK FACTORS
Foreign Securities
The Fund invests in foreign issuers. Such investments 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 payable on
the securities held, possible seizure or nationalization of foreign deposits,
establishment of exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the value of the assets held by the
Fund. 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. Also, there can be no assurance that
the Fund will achieve its investment objective.
The economies of many countries in which the Fund invests are not as
diverse or resilient as the U.S. economy, and have significantly less financial
resources. Some countries are more heavily dependent on international trade and
may be affected to a greater extent by protectionist measures of their
governments, or dependent upon a relatively limited number of commodities and,
thus, sensitive to changes in world prices for these commodities.
In many foreign countries, stock markets are more variable than U.S.
markets for two reasons. Contemporaneous declines in both (i) foreign securities
prices in local currencies and (ii) the value of local currencies in relation to
the U.S. dollar can have a significant negative impact on the net asset value of
the Fund. The net asset value of the Fund is denominated in U.S. dollars, and,
therefore, declines in market price of both the foreign securities held by the
Fund and the foreign currency in which those securities are denominated will be
reflected in the net asset value of the Fund's shares.
Investing in Emerging Markets
The investments of the Fund 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 and the imposition of taxes are intended
to discourage shorter rather than longer-term holdings. While the Fund 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 Fund's investment. If such restrictions were imposed subsequent to
investment in the securities of a particular country, the Fund, among other
things, might discontinue the purchasing of securities in that country. Such
restrictions will be considered in relation to the Fund's liquidity needs and
other factors and may make it particularly difficult to establish the fair
market value of particular securities from time to time. The valuation of
securities held by the Fund is the responsibility of the Fund's Board of
Directors, acting in good faith and with advice from the Advisor. (See
"VALUATION OF SHARES.") Further, some attractive equity securities may not be
available to the Fund because foreign shareholders hold the maximum amount
permissible under current laws.
Relative to the U.S. and to larger non-U.S. markets, many of the emerging
securities markets in which the Fund 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 separate classes for
domestic and non-domestic owners. These risks are heightened for investments in
small company emerging markets securities.
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 to market-based 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 do not keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. The inability of
the Fund to make intended securities purchases due to settlement problems could
cause the Fund to miss investment opportunities. Inability to dispose of a
portfolio security caused by settlement problems could result either in losses
to the Fund due to subsequent declines in value of the portfolio security or, if
the Fund 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 may 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 Fund's portfolio securities in such
markets may not be readily available. The Fund's 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 Directors.
Government involvement in the private sector varies in degree among the
emerging securities markets contemplated for investment by the Fund. Such
involvement may, in some cases, include government ownership of companies in
certain commercial business sectors, wage and price controls or imposition of
trade barriers and other protectionist measures. With respect to any developing
country, there is no guarantee that some future economic or political crisis
will not lead to price controls, forced mergers of companies, expropriation, the
creation of government monopolies, or other measures which could be detrimental
to the investments of the Fund.
On September 1, 1998, the Malaysian government announced a series of
capital and foreign exchange controls on the Malaysian currency, the ringgit,
and on transactions on the Kuala Lampur Stock Exchange, that operate to severely
constrain or prohibit foreign investors, including the Fund, from repatriating
assets. While there is some confusion in the market concerning the
interpretations of these changes, it appears that the Fund will not be permitted
to convert the proceeds of the sale of its Malaysian investments into U.S.
dollars prior to September 1, 1999.
As a consequence of these developments, the Fund has stopped investing
additional funds in Malaysia. With respect to the current Malaysian investments
owned by the Fund, the Fund is presently valuing the securities in good faith by
discounting the U.S. dollar-ringgit currency exchange rate and/or discounting
the current market value of the Malaysian securities. Pending further
clarification from Malaysian regulatory authorities regarding the controls
identified above, the Fund will treat its investments in Malaysian securities as
illiquid. As of November 30, 1998, Malaysian securities constitute approximately
8.69% of the Fund's net asset value.
Taxation of dividends and capital gains received by non-residents varies
among countries with emerging markets and, in some cases, is high in relation to
comparable U.S. rates. Particular tax structures may have the intended or
incidental effect of encouraging long holding periods for particular securities
and/or the reinvestment of earnings and sales proceeds in the same jurisdiction.
In addition, emerging market jurisdictions typically have less well-defined tax
laws and procedures than is the case in the United States, and such laws may
permit retroactive taxation so that the Fund could in the future become subject
to local tax liability that it had not reasonably anticipated in conducting its
investment activities or valuing its assets.
Foreign Currencies and Related Transactions
Investments of the Fund 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 Fund. The Fund may purchase foreign
currency futures contracts and options thereon in order to hedge against changes
in the level of foreign currency exchange rates. Such contracts involve an
agreement to purchase or sell a specific currency at a future date at a price
set in the contract and enable the Fund 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 the Fund's
securities transactions, but they also tend to limit the potential gains that
might result from a positive change in such currency relationships. Gains and
losses on investments in futures and options thereon depend on the direction of
interest rates and other economic factors.
Introduction of the Euro
On January 1, 1999, The European Monetary Union ("EMU") will introduce a
common currency, the Euro, replacing its members' national currencies. This
development will affect the Fund's investments in EMU countries to the extent
the introduction of the Euro changes investment practices, opportunities, risks
and investor behavior or creates administrative problems. The Advisor and its
global custodians are attempting to assure that the Fund will be unaffected by
any transition related disruptions. However, they cannot guarantee that the
efforts will succeed completely. The relative value of the U.S. dollar and Euro
will fluctuate. Accordingly, currency risk (discussed above) will continue to
apply to the Fund's investments in EMU countries.
Borrowing
The Fund has reserved the right to borrow amounts not exceeding 33% of its
net assets for the purpose of making redemption payments. When advantageous
opportunities to do so exist, the Fund may 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 Fund may
increase or decrease at a greater rate than would be the case if the Fund had
not leveraged. The interest payable on the amount borrowed would increase the
Fund's expenses and, if the appreciation and income produced by the investments
purchased when the Fund has borrowed are less than the cost of borrowing, the
investment performance of the Fund will be reduced as a result of leveraging.
Portfolio Strategies
The method employed by the Advisor to manage the Fund 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.
Futures Contracts and Options on Futures
The Fund may invest in index futures contracts and options on index
futures. To the extent that the Fund invests in futures contracts and options
thereon for other than bona fide hedging purposes, the Fund will not enter into
such transactions if, immediately thereafter, the sum of the amount of initial
margin deposits and premiums paid for open futures options would exceed 5% of
the Fund's total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%. Certain index futures
contracts and options on index futures may be considered to be derivative
securities.
These investments entail the risk that an imperfect correlation may exist
between changes in the market value of the stocks owned by the Fund 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 Fund's
ability to close a position in such investments. Gains or losses on investments
in options and futures depend on the direction of securities prices, interest
rates and other economic factors, and the loss from investing in futures
transactions is potentially unlimited. Certain restrictions imposed by the
Internal Revenue Code may limit the ability of the Fund to invest in futures
contracts and options on futures contracts.
Repurchase Agreements
In addition, the Fund may invest in repurchase agreements. In the event of
the bankruptcy of the other party to a repurchase agreement, the Fund 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.
Year 2000 Issue
Unless modified, many computer programs will not properly process
information from the Year 2000 on. While the issue is international in scope,
there is a particular concern with foreign entities. The Advisor has taken steps
to ensure that its computers and those of the Fund's service providers (e.g.,
custodians) will operate properly. The Fund may be negatively affected if the
Advisor's efforts prove inadequate, and/or Year 2000 problems hurt economic
conditions generally.
MANAGEMENT OF THE FUND
Dimensional Fund Advisors Inc. (the "Advisor") serves as investment
advisor to the Fund. As such, the Advisor is responsible for the management of
its assets. Investment decisions for the Fund are made by the Investment
Committee of the Advisor which meets on a regular basis and also as needed to
consider investment issues. The Investment Committee is composed of certain
officers and directors of the Advisor who are elected annually. The Advisor
provides the Fund with a trading department and selects brokers and dealers to
effect securities transactions. Portfolio securities transactions are placed
with a view to obtaining best price and execution and, subject to this goal, may
be placed with brokers which have assisted in the sale of the Fund's shares.
For the fiscal year ended November 30, 1997, (i) the Advisor received a
fee for its services from the Fund which, on an annual basis, equaled 0.10% of
the average net assets of the Fund; and (ii) the total expenses of the Fund were
0.62% of the Fund's average net assets.
For its services, the Advisor is entitled to receive from the Fund a fee,
payable monthly, at the annual rate of 0.10% of the aggregate net assets of the
Fund.
The Fund bears all of its own costs and expenses, including: services of
its independent accountants, legal counsel, brokerage fees, commissions and
transfer taxes in connection with the acquisition and disposition of portfolio
securities, taxes, insurance premiums, costs incidental to meetings of its
shareholders and directors, the cost of filing its registration statements under
the federal securities laws and the cost of any filings required under state
securities laws, reports to shareholders, and transfer and dividend disbursing
agency, administrative services and custodian fees.
The Fund may, as is deemed necessary or appropriate, employ administrators
in other countries in which it invests. Certain emerging market countries
require a local entity to provide administrative services for all direct
investments by foreigners. Where required by local law, the Fund intends to
retain a local entity to provide such administrative services. The local
administrator will be paid a fee by the Fund for its services. Generally, such
services will be contracted for through the custodian, or through a foreign
sub-custodian located in the particular country.
The Advisor was organized in May 1981 and is engaged in the business of
providing investment management services to institutional investors. Assets
under management total approximately $27 billion. David G. Booth and Rex A.
Sinquefield, directors and officers of both the Fund and the Advisor, and
shareholders of the Advisor's outstanding stock, may be deemed controlling
persons of the Advisor. The Advisor owns 100% of the outstanding shares of
Dimensional Fund Advisors Ltd. ("DFAL") and beneficially owns 100% of DFA
Australia Limited ("DFA Australia") (see "Consulting Services").
Consulting Services
The Advisor has entered into a Consulting Services Agreement with DFAL and
DFA Australia, respectively. Pursuant to the terms of each Consulting Services
Agreement, DFAL and DFA Australia provide certain trading and administrative
services to the Advisor with respect to the Fund.
Administrative Services
PFPC Inc. ("PFPC") serves as the administrative and accounting services,
dividend disbursing and transfer agent for the Fund. The services provided by
PFPC are subject to supervision by the executive officers and the Board of
Directors of the Fund and include administrative services such as day-to-day
keeping and maintenance of certain records, calculation of the offering price of
the shares, preparation of reports, liaison with its custodian, and transfer and
dividend disbursing agency services.
Directors and Officers
The Board of Directors is responsible for establishing Fund policies and
for overseeing the management of the Fund. Information as to the Directors and
officers of the Fund is set forth in Part B of the Fund's Registration
Statement, the statement of additional information, under "Directors and
Officers."
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Fund 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 U.S. federal income taxes to the extent that its net
investment income and net realized capital gains are distributed.
The policy of the Fund is to distribute substantially all of its net
investment income together with any net realized capital gains in December of
each year. In addition, the Fund will distribute all net investment income
earned through the end of November each year in the month of November.
Special tax rules may apply in determining the income and gains that the
Fund earns on its investments. These rules may affect the amount of
distributions that the Fund pays to its shareholders.
Shareholders of the Fund will automatically receive all income dividends
and capital gains distributions in additional shares of the Fund at net asset
value (as of the business date following the dividend record date).
The Fund may be subject to foreign withholding taxes on income and gains
from certain of their foreign securities. These taxes will, in turn, reduce the
amount of distributions the Fund pays to shareholders. If the Fund purchases
shares in certain foreign investment entities, called "passive foreign
investment companies" ("PFIC"), the Fund may be subject to U.S. federal income
tax and a related interest charge on a portion of any "excess distribution" or
gain from the disposition of such shares even if such income is distributed as a
taxable dividend by the Fund to its shareholders. If possible, the Fund will
adopt strategies to avoid PFIC taxes and interest charges.
If more than 50% in value of the total assets of the Fund are invested in
securities of foreign corporations, the Fund may elect to pass through to its
shareholders their pro rata share of foreign income taxes paid by the Fund. If
this election is made, shareholders will be required to include in their gross
income their pro rata share of foreign taxes paid by the Fund.
However, shareholders will be entitled to either deduct (as an itemized
deduction in the case of individuals) their share of such foreign taxes in
computing their taxable income or to claim a credit for such taxes against their
U.S. federal income tax, subject to certain limitations under the Code.
It is anticipated that either none or only a small portion of the
distributions made by the Fund will qualify for the corporate dividends-received
deduction because of the Fund's investment in foreign equity securities.
Whether paid in cash or additional shares and regardless of the length of
time the Fund's shares have been owned by shareholders who are subject to U.S.
federal income taxes, distributions from long-term capital gains are taxable as
such. Dividends from net investment income or net short-term capital gains will
be taxable as ordinary income, whether received in cash or in additional shares.
Dividends and distributions to a 401(k) plan accumulate free of federal income
taxes. For those investors subject to tax, if purchases of shares of the Fund
are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution. Shareholders are notified annually by the Fund as to the U.S.
federal tax status of dividends and distributions paid by the Fund.
Dividends which are declared in October, November or December to
shareholders of record in such a month, but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
U.S. federal income tax purposes as if paid by the Fund and received by the
shareholder on December 31 of the calendar year in which they are declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares. Any loss incurred on the sale of
the Fund's shares, held for six months or less, will be treated as a long-term
capital loss to the extent of capital gain dividends received with respect to
such shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions from the Fund and on gains arising on redemption or
exchange of the Fund's shares.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on the account registration form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the Fund.
PURCHASE OF SHARES
Shares issued by the Fund are not registered under the Securities Act,
which means that the Fund's shares may not be sold publicly. However, the Fund
may sell its shares through private placements pursuant to available exemptions
from registration under the Securities Act. Shares of the Fund are sold only to
other investment companies and certain institutional investors.
Investors may purchase shares of the Fund 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. The Fund reserves
the right to reject any initial or additional investment and to suspend the
offering of shares of the Fund.
Investors having an account with a bank that is a member or a
correspondent of a member of the Federal Reserve System may purchase shares by
first calling the Advisor at (310) 395-8005 to notify the Advisor of the
proposed investment, then requesting the bank to transmit immediately available
funds (Federal Funds) by wire to the custodian, for the Account of Dimensional
Emerging Markets Fund Inc. Additional investments also may be made through the
wire procedure by first notifying the Advisor. Investors who wish to purchase
shares of the Fund by check should send their check to Dimensional Emerging
Markets Fund Inc., c/o PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware
19809. The Chase Manhattan Bank serves as custodian for the Fund.
Under certain circumstances, shares also may be purchased and sold by
investors through securities firms which may charge a service fee or commission
for such transactions. No such fee or commission is charged on shares which are
purchased or redeemed directly from the Fund.
Purchases of shares will be made in full and fractional shares calculated
to three decimal places. In the interest of economy and convenience,
certificates for shares will not be issued.
In-Kind Purchases
If accepted by the Fund, shares may be purchased in exchange for
securities which are eligible for acquisition by the Fund or otherwise
represented in its portfolio as described in this Part A or in exchange for
local currencies in which such securities of the Fund are denominated. Purchases
in exchange for securities will not be subject to a reimbursement fee.
Securities and local currencies to be exchanged which are accepted by the Fund
and Fund shares to be issued therefore will be valued as set forth under
"VALUATION OF SHARES" at the time of the next determination of net asset value
after such acceptance. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Fund and must be
delivered to the Fund by the investor upon receipt from the issuer. Investors
who desire to purchase shares of the Fund with local currencies should first
contact the Advisor for wire instructions.
The Fund will not accept securities in exchange for shares of the Fund
unless: (1) such securities are, at the time of the exchange, eligible to be
included, or otherwise represented, in the Fund and current market quotations
are readily available for such securities; (2) the investor represents and
agrees that all securities offered to be exchanged are not subject to any
restrictions upon their sale by the Fund under the Securities Act or under the
laws of the country in which the principal market for such securities exists, or
otherwise; (3) at the discretion of the Fund, the value of any such security
(except U.S. Government Securities) being exchanged together with other
securities of the same issuer owned by the Fund may not exceed 5% of the net
assets of the Fund immediately after the transaction. The Fund will accept such
securities for investment and not for resale.
A gain or loss for federal income tax purposes will be realized by
investors who are subject to federal taxation upon the exchange depending upon
the cost of the securities or local currency exchanged. Investors interested in
such exchanges should contact the Advisor.
VALUATION OF SHARES
The net asset value per share of the Fund is calculated as of the close of
the NYSE by dividing the total market value of the Fund's investments and other
assets, less any liabilities, by the total outstanding shares of the stock of
the Fund. The value of the shares of the Fund will fluctuate in relation to its
own investment experience. Securities held by the Fund 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
asked prices. Price information on listed securities is taken from the exchange
where the security is primarily traded. Securities issued by open-end investment
companies are valued using their respective net asset values for purchase orders
placed at the close of the NYSE. Unlisted securities for which market quotations
are readily available are valued at the mean between the most recent bid and
asked prices. The value of other assets and securities for which no quotations
are readily available (including restricted securities) are determined in good
faith at fair value in accordance with procedures adopted by the Board of
Directors. The net asset value per share of the Fund is expressed in U.S.
dollars by translating the net assets of the Fund using the bid price for the
dollar as quoted by generally recognized reliable sources
Provided that the Transfer Agent has received the investor's Account
Registration Form in good order and the custodian has received the investor's
payment, shares of the Fund will be priced at the public offering price
calculated next after receipt of the investor's funds by the custodian. The
Transfer Agent or the Fund may from time to time appoint a sub-transfer agent
for the receipt of purchase orders and funds from certain investors. With
respect to such investors, the shares of the Fund will be priced at the public
offering price calculated after receipt of the purchase order by the
sub-transfer agent. The only difference between a normal purchase and a purchase
through a sub-transfer agent is that if the investor buys shares through a
sub-transfer agent, the purchase price will be the public offering price next
calculated after the sub-transfer agent receives the order, rather than on the
day the custodian receives the investor's payment (provided that the Transfer
Agent has received the investor's purchase order in good order). "Good order"
with respect to the purchase of shares means that (1) a fully completed and
properly signed Account Registration Form and any additional supporting legal
documentation required by the Advisor has been received in legible form and (2)
the Advisor has been notified of the purchase by telephone and, if the Advisor
so requests, also in writing, no later than the close of regular trading on the
NYSE (ordinarily 1:00 p.m. PST) on the day of the purchase. If an order to
purchase shares must be canceled due to non-payment, the purchaser will be
responsible for any loss incurred by the Fund arising out of such cancellation.
To recover any such loss, the Fund reserves the right to redeem shares owned by
any purchaser whose order is canceled, and such purchaser may be prohibited or
restricted in the manner of placing further
orders.
To the extent the Fund purchases fixed income securities, net asset value
includes interest on fixed income securities which is accrued daily. Securities
which are traded OTC and on a stock exchange will be valued according to the
broadest and most representative market, and it is expected that for bonds and
other fixed-income securities this ordinarily will be the OTC market. Other
assets and securities for which quotations are not readily available will be
valued in good faith at fair value using methods determined by the Board of
Directors.
Generally, trading in foreign securities markets is completed each day at
various times prior to the close of the NYSE. The values of foreign securities
held by the Fund are determined as of such times for the purpose of computing
the net asset value of the Fund. If events which materially affect the value of
the investments of the Fund occur subsequent to the close of the securities
market on which such securities are primarily traded, the investments affected
thereby will be valued at "fair value" as described above.
Certain of the securities holdings of the Fund in Approved Markets may be
subject to tax, investment and currency repatriation regulations of the Approved
Markets that could have a material effect on the valuation of the securities.
For example, the Fund might be subject to different levels of taxation on
current income and realized gains depending upon the holding period of the
securities. In general, a longer holding period (e.g., 5 years) may result in
the imposition of lower tax rates than a shorter holding period (e.g., 1 year).
The Fund may also be subject to certain contractual arrangements with investment
authorities in an Approved Market which require the Fund to maintain minimum
holding periods or to limit the extent of repatriation of income and realized
gains. As a result, the valuation of particular securities at any one time may
depend materially upon the assumptions that the Fund makes at that time
concerning the anticipated holding period for the securities. Absent special
circumstances as determined by the Board of Directors, it is presently intended
that the valuation of such securities will be based upon the assumption that
they will be held for at least the amount of time necessary to avoid higher tax
rates or penalties and currency repatriation restrictions. However, the use of
such valuation standards will not prevent the Fund from selling such securities
in a shorter period of time if the Advisor considers the earlier sale to be a
more prudent course of action. Revision in valuation of those securities will be
made at the time of the transaction to reflect the actual sales proceeds inuring
to the Fund.
Futures contracts are valued using the settlement price established each
day on the exchange on which they are traded. The value of such futures
contracts held by the Fund are determined each day as of such close.
Public Offering Price
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 the Fund's shares to such investors, will eliminate a
dilutive effect such costs would otherwise have on the net asset value of shares
held by existing investors. Therefore, the shares of the Fund are sold at an
offering price which is equal to the current net asset value of such shares plus
a reimbursement fee. The amount of the reimbursement fee represents management's
estimate of the costs reasonably anticipated to be associated with the purchase
of securities by the Fund and is paid to the Fund and used by it to defray such
costs. Such costs include brokerage commissions on listed securities and imputed
commissions on OTC securities. Reinvestments of dividends and capital gains
distributions paid by the Fund and in-kind investments are not subject to a
reimbursement fee. (See "In-Kind Purchases" and "DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAXES.") The Fund's shares are sold at an offering price which
is equal to the current net asset value of such shares plus a reimbursement fee
of 0.50% of such value of the shares of the Fund.
DISTRIBUTION
The Fund distributes its own shares of stock. It has, however, 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 shares by the Fund. No compensation is paid by the Fund to DFA
Securities Inc. under this agreement.
EXCHANGE OF SHARES
There is no exchange privilege between the Fund and any portfolio of DFA
Investment Dimensions Group Inc. or Dimensional Investment Group Inc.
REDEMPTION OF SHARES
Shares issued by the Fund are not registered under the Securities Act,
which means that the Fund's shares are restricted securities which may not be
sold unless registered or pursuant to an available exemption from that Act.
Investors who desire to redeem shares of the Fund must first contact the
Advisor at the telephone number shown under "PURCHASE OF SHARES." The Fund will
redeem shares at the net asset value of such shares next determined, either: (1)
after receipt of a written request for redemption in good order, by the Fund's
Transfer Agent or (2) if stock certificates have been issued, after receipt of
the stock certificates in good order at the office of the Transfer Agent. "Good
order" means that the request to redeem shares must include all necessary
documentation, to be received in writing by the Advisor no later than the close
of regular trading on the NYSE (ordinarily 1:00 p.m. PST), including: the stock
certificate(s), if issued; a letter of instruction or a stock assignment
specifying the number of shares or dollar amount to be redeemed, signed by all
registered owners (or authorized representatives thereof) of the shares; and, if
the Fund does not have on file the authorized signatures for the account, a
guarantee of the signature of each registered owner by an eligible guarantor
institution; and any other required supporting legal documents.
Shareholders redeeming shares for which certificates have not been issued,
who have authorized redemption payment by wire on an authorization form filed
with the Fund, may request that redemption proceeds be paid in federal funds
wired to the bank they have designated on the authorization form. The Fund
reserves the right to send redemption proceeds by check in its discretion; a
shareholder may request overnight delivery of such check at the shareholder's
own expense. If the proceeds are wired to the shareholder's account at a bank
which is not a member of the Federal Reserve System, there could be a delay in
crediting the funds to the shareholder's bank account. The Fund reserves the
right at any time to suspend or terminate the redemption by wire procedure after
prior notification to shareholders. No charge is made by the Fund for
redemptions. The redemption of all shares in an account will result in the
account being closed. A new Account Registration Form will be required for
future investments. (See "PURCHASE OF SHARES.")
Although the redemption payments will ordinarily be made within seven days
after receipt, payment to investors redeeming shares which were purchased by
check will not be made until the Fund can verify that the payments for the
purchase have been, or will be, collected, which may take up to fifteen days or
more. Investors may avoid this delay by submitting a certified check along with
the purchase order.
The Fund reserves the right to redeem a shareholder's account if the value
of the shares in the Fund is $500 or less, whether because of redemptions, a
decline in the Fund's net asset value per share or any other reason. Before the
Fund involuntarily redeems shares from such an account and sends the proceeds to
the stockholder, the Fund will give written notice of the redemption to the
stockholder at least sixty days in advance of the redemption date. The
stockholder will then have sixty days from the date of the notice to make an
additional investment in the Fund in order to bring the value of the shares in
the account to more than $500 and avoid such involuntary redemption. The
redemption price to be paid to a stockholder for shares redeemed by the Fund
under this right will be the aggregate net asset value of the shares in the
account at the close of business on the redemption date.
When in the best interests of the Fund, the Fund may make a redemption
payment, in whole or in part, by a distribution of portfolio securities in lieu
of cash. Investors may incur brokerage charges and other transaction costs
selling securities that were received in payment of redemptions. The Fund
reserves the right to redeem its shares in the currencies in which its
investments are denominated. Investors may incur charges in converting such
currencies to dollars and the value of the securities may be affected by
currency exchange fluctuations.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on January 9, 1991. The
shares of the Fund, when issued and paid for in accordance with the Fund's
registration statement, will be fully paid and non-assessable shares, with
equal, non-cumulative voting rights and no preferences as to conversion,
exchange, dividends, redemption or any other feature.
With respect to matters which require shareholder approval, shareholders
are entitled to vote only with respect to matters which affect the interest of
the class of shares which they hold, except as otherwise required by applicable
law. If liquidation of the Fund should occur, shareholders would be entitled to
receive on a per class basis the assets of the particular class whose shares
they own, as well as a proportionate share of Fund assets not attributable to
any particular class. Ordinarily, the Fund does not intend to hold annual
meetings of its shareholders, except as required by the Investment Company Act
of 1940 or other applicable law. The Fund's bylaws provide that special meetings
of its shareholders shall be called at the written consent of 10% of the
shareholders. Such meeting may be called to consider any matter, including the
removal of one or more directors. Shareholders will receive shareholder
communications with respect to such matters as required by the Investment
Company Act of 1940, including semi-annual and annual financial statements of
the Fund, the latter being audited at least once each year.
The Fund may disseminate reports of its investment performance from time
to time. Investment performance is calculated on a total return basis; that is
by including all net investment income and any realized and unrealized net
capital gains or losses during the period for which investment performance is
reported. If dividends or capital gains distributions have been paid during the
relevant period the calculation of investment performance will include such
dividends and capital gains distributions as though reinvested in shares of the
Fund. Standard quotations of total return, which include deductions of any
applicable reimbursement fees, are computed in accordance with SEC Guidelines
and are presented whenever any non-standard quotations are disseminated to
provide comparability to other investment companies. Non-standardized total
return quotations may differ from the SEC Guideline computations by covering
different time periods, excluding deduction of reimbursement fees charged to
investors and paid to the Fund which would otherwise reduce return quotations.
In all cases, disclosures are made when performance quotations differ from the
SEC Guidelines which were established effective May 1, 1988.
Performance data is based on historical earnings and is not intended to
indicate future performance. Rates of return expressed on an annual basis will
usually not equal the sum of returns expressed for consecutive interim periods
due to the compounding of the interim yields. The Fund's annual report to
shareholders for the fiscal year ended November 30, 1997 contains additional
performance information. A copy of the annual report is available upon request
and without charge.
Rates of return expressed as a percentage of U.S. dollars will reflect
applicable currency exchange rates at the beginning and ending dates of the
investment periods presented. The return expressed in terms of U.S. dollars is
the return one would achieve by investing dollars in the Fund at the beginning
of the period and liquidating the investment in dollars at the end of the
period. Hence, the return expressed as a percentage of U.S. dollars combines the
investment performance of the Fund as well as the performance of the local
currency or currencies of the Fund.
As of November 30, 1998, 94.40% of the voting securities of the Fund were
held by State Street Bank and Trust Company as Trustee of the BellSouth Master
Pension Trust (the "Trust") and 5.60% of the voting securities of the Fund were
held by Emerging Markets Value Portfolio of DFA Investment Dimensions Group Inc.
The address of the Trust is 1155 Peachtree Street, N.E., Atlanta, Georgia
30309-3610. On account of the fact that this investor presently owns 94.40% of
the outstanding voting securities of the Fund, it may be considered to be a
controlling person of the Fund in accordance with applicable SEC rules. Under
the Investment Company Act of 1940, an investor is presumed to control a
registered investment company whenever the investor owns more than 25% of the
outstanding voting securities of the company.
On November 21, 1997, the shareholders of the Fund approved the Fund's
conversion from a closed-end management investment company to an open-end
management investment company registered with the SEC. The Fund commenced
operations as an open-end company on November 26, 1997.
Shareholder inquiries may be made by writing or calling the Fund at the
address or telephone number appearing on the cover of this Part A. Only those
individuals whose signatures are on file for the account in question may receive
specific account information or make changes in the account registration
DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
Investment Advisor
DIMENSIONAL FUND ADVISORS INC.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
Custodian
THE CHASE MANHATTAN BANK
4 Chase Metrotech Center
Brooklyn, NY 11245
Transfer and Dividend Disbursing Agent
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Legal Counsel
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Independent Accountants
PRICEWATERHOUSECOOPERS LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
<PAGE>
DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401
Telephone: (310) 395-8005
PART B
STATEMENT OF ADDITIONAL INFORMATION
December 8, 1998
Dimensional Emerging Markets Value Fund Inc. is a diversified, open-end
management investment company. The investment objective of the Fund is to seek
long-term capital growth through investment in "emerging market" equity
securities.
This statement of additional information is not a prospectus but should be read
in conjunction with Part A of the Fund's registration statement dated
December 8, 1998 ("Part A"), which can be obtained from the Fund by writing
to the Fund at the above address or by calling the above telephone number.
<PAGE>
TABLE OF CONTENTS
Page
FUND CHARACTERISTICS AND POLICIES 2
BROKERAGE COMMISSIONS 2
INVESTMENT LIMITATIONS 3
FUTURES CONTRACTS 5
FEDERAL TAX TREATMENT OF FUTURES
CONTRACTS AND SIMILAR POSITIONS 6
DIRECTORS AND OFFICERS 7
ADMINISTRATIVE SERVICES 10
OTHER INFORMATION 10
PRINCIPAL HOLDERS OF SECURITIES 11
PURCHASE OF SHARES 11
REDEMPTION OF SHARES 11
CALCULATION OF PERFORMANCE DATA 12
FINANCIAL STATEMENTS 13
<PAGE>
FUND CHARACTERISTICS AND POLICIES
The following information supplements the information set forth in PartA
under the caption "DIMENSIONAL EMERGING MARKETS VALUE FUND - Investment
Objectives and Policies," "Fund Characteristics and Policies," and "Portfolio
Structure."
It is possible that the Fund might include at least 5% of the outstanding
voting securities of one or more issuers. In such circumstances, the Fund and
the issuer would be deemed "affiliated persons" under the Investment Company Act
of 1940 and certain requirements of the Act regulating dealings between
affiliates might become applicable. However, management does not anticipate that
the Fund will include as much as 5% of the voting securities of any issuer.
The Fund may invest up to 5% of its assets in convertible debentures
issued by non-U.S. companies. Convertible debentures include corporate bonds and
notes that may be converted into or exchanged for common stock. These securities
are generally convertible either at a stated price or a stated rate (that is,
for a specific number of shares of common stock or other security). As with
other fixed income securities, the price of a convertible debenture to some
extent varies inversely with interest rates. While providing a fixed-income
stream (generally higher in yield than the income derived from a common stock
but lower than that afforded by a non-convertible debenture), a convertible
debenture also affords the investor an opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock into
which it is convertible. As the market price of the underlying common stock
declines, convertible debentures tend to trade increasingly on a yield basis and
so may not experience market value declines to the same extent as the underlying
common stock. When the market price of the underlying common stock increases,
the price of a convertible debenture tends to rise as a reflection of the value
of the underlying common stock. To obtain such a higher yield, the Fund may be
required to pay for a convertible debenture an amount in excess of the value of
the underlying common stock. Common stock acquired by the Fund upon conversion
of a convertible debenture will generally be held for so long as the Advisor
anticipates such stock will provide the Fund with opportunities which are
consistent with the Fund's investment objective and policies.
For the fiscal year ended November 30, 1998, the portfolio turnover rate
for the Fund is anticipated to be approximately 20%-90%, which reflects the
purchase of value stocks and sale of non-value stocks. Generally, securities
will be purchased with the expectation that they will be held for longer than
one year.
BROKERAGE COMMISSIONS
For the fiscal years ending November 30, 1995, 1996 and 1997, the Fund
paid brokerage commissions of $85,081, $14,699 and $560,478, respectively. The
substantial increases or decreases in the amount of brokerage commissions paid
by the Fund from year to year resulted from increases or decreases in the amount
of securities that were bought and sold by the Fund.
Portfolio transactions will be placed with a view to receiving the best
price and execution. The Fund will seek to acquire and dispose of securities in
a manner which would cause as little fluctuation in the market prices of stocks
being purchased or sold as possible in light of the size of the transactions
being effected, and brokers will be selected with this goal in view. The Advisor
monitors the performance of brokers which effect transactions for the Fund to
determine the effect that their trading has on the market prices of the
securities in which they invest. The Advisor also checks the rate of commission
being paid by the Fund to its brokers to ascertain that they are competitive
with those charged by other brokers for similar services. Transactions also may
be placed with brokers who provide the Advisor with investment research, such as
reports concerning individual issuers, industries and general economic and
financial trends and other research services.
During the 1997 fiscal year, the Fund did not pay any brokerage
commissions for securities transactions to brokers which provided market price
monitoring services, market studies and research services to the Fund.
The investment management agreement permits the Advisor knowingly to pay
commissions on these transactions which are greater than another broker might
charge if the Advisor, in good faith, determines that the commissions paid are
reasonable in relation to the value of the research or brokerage services
provided by the broker or dealer when viewed in terms of either a particular
transaction or the Advisor's overall responsibilities to the Fund. Research
services furnished by brokers through whom securities transactions are effected
may be used by the Advisor in servicing all of its accounts and not all such
services may be used by the Advisor with respect to the Fund.
INVESTMENT LIMITATIONS
The Fund has adopted certain limitations which may not be changed without
the approval of a majority of the outstanding voting securities of the Fund. A
"majority" is defined as the lesser of: (1) at least 67% of the voting
securities of the Fund (to be affected by the proposed change) present at a
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of the Fund.
The Fund will not:
(1) invest in commodities or purchase or sell real estate (including
limited partnership interests), although it may purchase and sell securities of
companies which deal in real estate and may purchase and sell securities which
are secured by interests in real estate and may purchase or sell financial
futures contracts and options thereon, such as forward foreign currency futures
contracts and options and index futures contracts and options;
(2) make loans of cash, except through the acquisition of publicly-traded
debt securities and short-term money market instruments;
(3) 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 the
Fund's total assets, at market, would be invested in the securities of such
issuer, provided that this limitation applies only to 75% of the total assets of
the Fund;
(4) borrow, except in connection with a foreign currency transaction, the
settlement of a portfolio trade, or as a temporary measure for extraordinary or
emergency purposes, including to meet redemption requests, and, in no event, in
excess of 33% of the Fund's net assets valued at market;
(5) engage in the business of underwriting securities issued by others,
except to the extent that the sale of securities originally acquired for
investment purposes may be deemed an underwriting;
(6) invest for the purpose of exercising control over management of any
company;
(7) acquire any securities of companies within one industry if, as a
result of such acquisition, more than 25% of the value of the Fund's total
assets would be invested in securities of companies within such industry;
(8) purchase securities on margin;
(9) as to 75% of the Fund's assets, acquire more than 10% of the voting
securities of any issuer; or
(10) issue senior securities (as such term is defined in Section 18(f) of
the Investment Company Act of 1940), except to the extent permitted under the
Act.
The investment limitations described in (1) and (8) above do not prohibit
the Fund from making margin deposits with respect to financial futures contracts
and options thereon to the extent permitted under applicable regulations.
Although (2) above prohibits cash loans, the Fund is authorized to lend
portfolio securities.
For purposes of (4) above, the Fund may borrow in connection with a
foreign currency transaction or the settlement of a portfolio trade. The only
type of borrowing contemplated thereby is the use of a letter of credit issued
on the Fund's behalf in lieu of depositing initial margin in connection with
currency futures contracts, and the Fund has no present intent to engage in any
other types of borrowing transactions under this authority.
Pursuant to Rule 144A under the 1933 Act, the Fund may purchase certain
unregistered (i.e. restricted) securities upon a determination that a liquid
institutional market exists for the securities. If it is decided that a liquid
market does exist, the securities will not be subject to the Fund's 15%
limitation on holdings of illiquid securities as described below. While
maintaining oversight, the Board of Directors has delegated the day-to-day
function of making liquidity determinations to the Advisor. For Rule 144A
securities to be considered liquid, there must be at least two dealers making a
market in such securities. After purchase, the Board of Directors and the
Advisor will continue to monitor the liquidity of Rule 144A securities.
As a non-fundamental policy, the Fund does not intend to invest more than
15% of its net assets in illiquid securities.
The Fund may acquire and sell forward foreign currency exchange contracts
in order to hedge against changes in the level of future currency rates. Such
contracts involve an obligation to purchase or sell a specific currency at a
future date at a price set in the contract.
Notwithstanding any of the above investment restrictions, the Fund may
establish subsidiaries or other similar vehicles for the purpose of conducting
its investment operations in Approved Markets, if such subsidiaries or vehicles
are required by local laws or regulations governing foreign investors such as
the Fund or whose use is otherwise considered by the Fund to be advisable. The
Fund would "look through" any such vehicle to determine compliance with its
investment restrictions.
Subject to future regulatory guidance, for purposes of those investment
limitations identified above that are based on total assets, "total assets"
refers to the assets that the Fund owns, and does not include assets which the
Fund does not own but over which it has effective control. For example, when
applying a percentage investment limitation that is based on total assets, the
Fund will exclude from its total assets those assets which represent collateral
received by the Fund for its securities lending transactions.
Unless otherwise indicated, all limitations applicable to the Fund's
investments apply only at the time that a transaction is undertaken. Any
subsequent change in a rating assigned by any rating service to a security or
change in the percentage of the Fund's assets invested in certain securities or
other instruments resulting from market fluctuations or other changes in the
Fund's total assets will not require the Fund to dispose of an investment until
the Advisor determines that it is practicable to sell or closeout the investment
without undue market or tax consequences. In the event that ratings services
assign different ratings to the same security, the Advisor will determine which
rating it believes best reflects the security's quality and risk at that time,
which may be the higher of the several assigned ratings.
FUTURES CONTRACTS
The Fund may enter into futures contracts and options on futures
contracts. The Fund may enter into futures contracts and options on future
contracts only for the purpose of remaining fully invested and to maintain
liquidity to pay redemptions.
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of defined securities at a specified future
time and at a specified price. Futures contracts which are standardized as to
maturity date and underlying financial instrument are traded on national futures
exchanges. The Fund will be required to make a margin deposit in cash or
government securities with a broker or custodian to initiate and maintain
positions in futures contracts. Minimal initial margin requirements are
established by the futures exchange and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures
contract position is opened, the value of the contract is marked to market
daily. If the futures contract price changes to the extent that the margin on
deposit does not satisfy margin requirements, payment of additional "variation"
margin will be required. Conversely, reduction in the contract value may reduce
the required margin resulting in a repayment of excess margin to the Fund.
Variation margin payments are made to and from the futures broker for as long as
the contract remains open. The Fund expects to earn income on its margin
deposits. To the extent that the Fund invests in futures contracts and options
thereon for other than bona fide hedging purposes, the Fund will not enter into
such transactions if, immediately thereafter, the sum of the amount of initial
margin deposits and premiums paid for open futures options would exceed 5% of
the Fund's total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%. Pursuant to published
positions of the SEC, the Fund may be required to maintain segregated accounts
consisting of liquid assets, (or, as permitted under applicable regulation,
enter into offsetting positions) in connection with its futures contract
transactions in order to cover its obligations with respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract at any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, the Fund would continue to be required to
continue to make variation margin deposits. In such circumstances, if the Fund
has insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
FEDERAL TAX TREATMENT OF
FUTURES CONTRACTS AND SIMILAR POSITIONS
The investment by the Fund in futures contracts and options on futures
contracts is subject to many complex and special tax rules. The treatment by the
Fund of certain futures and forward contracts is generally governed by Section
1256 of the Code. These "Section 1256" positions generally include listed
options on futures contracts, regulated futures contracts and certain foreign
currency contracts and options thereon.
Absent a tax election to the contrary, each such Section 1256 position
held by the Fund will be marked-to-market (i.e., treated as if it were sold for
fair market value) on the last business day of the Fund's fiscal year, and all
gain or loss associated with fiscal year transactions and marked-to-market
positions at fiscal year end (except certain currency gain or loss covered by
Section 988 of the Code) will generally be treated as 60% long-term capital gain
or loss and 40% short-term capital gain or loss. The effect of Section 1256
mark-to-market rules may be to accelerate income or to convert what otherwise
would have been long-term capital gains into short-term capital gains or
short-term capital losses into long-term capital losses within the Fund. The
acceleration of income on Section 1256 positions may require the Fund to accrue
taxable income without the corresponding receipt of cash. In order to generate
cash to satisfy the distribution requirements of the Code, the Fund may be
required to dispose of portfolio securities that it otherwise would have
continued to hold or to use cash flows from other sources such as the sale of
the Fund's shares. In these ways, any or all of these rules may affect both the
amount, character and timing of income distributed to shareholders by the Fund.
The Taxpayer Relief Act of 1997 has added new provisions for dealing with
transactions that are generally called "Constructive Sale Transactions." Under
these rules, the Fund must recognize gain (but not loss) on any constructive
sale of an appreciated financial position in stock, a partnership interest or
certain debt instruments. The Fund will generally be treated as making a
constructive sale when it: 1) enters into a short sale on the same property, 2)
enters into an offsetting notional principal contract, or 3) enters into a
futures or forward contract to deliver the same or substantially similar
property. Other transactions (including certain financial instruments called
collars) will be treated as constructive sales as provided in Treasury
regulations to be published. There are also certain exceptions that apply for
transactions that are closed before the end of the 30th day after the close of
the taxable year.
DIRECTORS AND OFFICERS
The names, addresses and dates of birth of the directors and officers of
the Fund and a brief statement of their present positions and principal
occupations during the past five years is set forth below.
Directors
David G. Booth*, (12/2/46), Director, President and
Chairman-Chief Executive Officer, Santa Monica, CA. President,
Chairman-Chief Executive Officer and Director, Dimensional Fund
Advisors Inc., DFA Securities Inc., DFA Australia Limited,
Dimensional Investment Group Inc. (registered investment company)
and DFA Investment Dimensions Group Inc. (registered investment
company). Trustee, President and Chairman-Chief Executive Officer
of The DFA Investment Trust Company. Chairman and Director,
Dimensional Fund Advisors Ltd.
George M. Constantinides, (9/22/47), Director, Chicago, IL.
Leo Melamed Professor of Finance, Graduate School of Business,
University of Chicago. Trustee, The DFA Investment Trust Company.
Director, Dimensional Investment Group Inc. and DFA Investment
Dimensions Group Inc.
John P. Gould, (1/19/39), Director, Chicago, IL. Steven G.
Rothmeier Distinguished Service Professor of Economics, Graduate
School of Business, University of Chicago. Trustee, The DFA
Investment Trust Company and First Prairie Funds (registered
investment company). Director, Dimensional Investment Group Inc.,
DFA Investment Dimensions Group Inc. and Harbor Investment
Advisors. Executive Vice President, Lexecon Inc. (economics, law,
strategy and finance consulting).
Roger G. Ibbotson, (5/27/43), Director, New Haven, CT.
Professor in Practice of Finance, Yale School of Management.
Trustee, The DFA Investment Trust Company. Director, Dimensional
Investment Group Inc., DFA Investment Dimensions Group Inc.,
Hospital Fund, Inc. (investment management services) and BIRR
Portfolio Analysis, Inc. (software products). Chairman and
President, Ibbotson Associates, Inc. (software, data, publishing
and consulting).
Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert
R. McCormick Distinguished Service Professor Emeritus, Graduate
School of Business, University of Chicago. Trustee, The DFA
Investment Trust Company. Director, Dimensional Investment Group
Inc. and DFA Investment Dimensions Group Inc. Public Director,
Chicago Mercantile Exchange.
Myron S. Scholes, (7/1/41), Director, Greenwich, CT. Limited
Partner, Long-Term Capital Management L.P. (money manager). Frank
E. Buck Professor Emeritus of Finance, Graduate School of
Business and Professor of Law, Law School, Senior Research
Fellow, Hoover Institution, (all) Stanford University. Trustee,
The DFA Investment Trust Company. Director, Dimensional
Investment Group Inc., DFA Investment Dimensions Group Inc.,
Benham Capital Management Group of Investment Companies and Smith
Breeden Group of Investment Companies.
Rex A. Sinquefield*, (9/7/44), Director, Chairman-Chief
Investment Officer, Santa Monica, CA. Chairman-Chief Investment
Officer and Director, Dimensional Fund Advisors Inc., DFA
Securities Inc., DFA Australia Limited, Dimensional Investment
Group Inc. and DFA Investment Dimensions Group Inc. Trustee,
Chairman-Chief Investment Officer of The DFA Investment Trust
Company. Chairman, Chief Executive Officer and Director,
Dimensional Fund Advisors Ltd.
* Interested Director of the Fund.
Officers
Each of the officers listed below hold the same office (except as
otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA
Securities Inc., DFA Australia Limited, Dimensional Investment Group Inc., The
DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and DFA Investment
Dimensions Group Inc.
Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA.
Truman Clark, (4/8/41), Vice President, Santa Monica, CA.
Consultant until October 1995 and Principal and Manager of
Product Development, Wells Fargo Nikko Investment Advisors, San
Francisco, CA from 1990-1994.
Maureen Connors, (11/17/36), Vice President and Assistant
Secretary, Santa Monica, CA.
Robert Deere, (10/8/57), Vice President, Santa Monica, CA.
Irene R. Diamant, (7/16/50), Vice President and Secretary (for all
entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard
Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA.
Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica,
CA. Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller
and Assistant Treasurer, Santa Monica, CA.
Stephen P. Manus, (12/26/50), Vice President, Santa Monica,
CA. Managing Director, ANB Investment Management and Trust
Company 1985-1993; President, ANB Investment Management and Trust
Company 1993-1997.
Karen McGinley, (3/10/66), Vice President, Santa Monica, CA.
Catherine L. Newell, (5/7/64), Vice President and Assistant Secretary (for
all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Associate, Morrison & Foerster LLP 1989-1996.
David Plecha, (10/26/61), Vice President, Santa Monica, CA.
George Sands, (2/8/56), Vice President, Santa Monica, CA.
Michael T. Scardina, (10/12/55), Vice President, Chief
Financial Officer and Treasurer, Santa Monica, CA.
Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice
President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice
President, Santa Monica, CA.
Weston Wellington, (3/1/51), Vice President, Santa Monica,
CA. Director of Research, LPL Financial Services, Inc., Boston,
MA 1989-1994.
Rex A. Sinquefield and Jeanne C. Sinquefield are husband and
wife.
No director or officer currently owns shares of the Fund.
Set forth below is a table listing, for each director entitled to receive
compensation, the compensation received from the Fund during the fiscal year
ended November 30, 1997, and the total compensation received from all four
registered investment companies for which the Advisor serves as investment
advisor during that same fiscal year.
Aggregate Total Compensation from
Compensation Fund
Director from Fund and Fund Complex
George M. Constantinides $ 5,000 $ 30,000
John P. Gould $ 5,000 $ 30,000
Roger G. Ibbotson $ 5,000 $ 30,000
Merton H. Miller $ 5,000 $ 30,000
Myron S. Scholes $ 5,000 $ 30,000
ADMINISTRATIVE SERVICES
PFPC Inc. ("PFPC") serves as the administrative and accounting services,
dividend disbursing and transfer agent for the Fund. The services provided by
PFPC are subject to supervision by the executive officers and the Board of
Directors of the Fund, and include day-to-day keeping and maintenance of certain
records, calculation of the offering price of the shares, preparation of
reports, liaison with its custodian, and transfer and dividend disbursing agency
services. For its services, the Fund pays PFPC annual fees which are set forth
below:
.1230% of the first $300 million of net assets
.0615% of the next $300 million of net assets
.0410% of the next $250 million of net assets
.0205% of the net assets over $850 million
The Fund is subject to a $75,000 per year minimum fee. PFPC has agreed to
limit the minimum fee for the Fund from time to time.
OTHER INFORMATION
For the services it provides as investment advisor to the Fund, the
Advisor is entitled to receive from the Fund a fee, payable monthly, at the
annual rate of 0.10% of the aggregate net assets of the Fund. For the fiscal
years ending November 30, 1995, 1996 and 1997, the Fund paid management fees to
the Advisor for its services of $145,564, $173,017 and $203,976, respectively.
The Chase Manhattan Bank, N.A., the custodian for the Fund, maintains a
separate account or accounts for the Fund; receives, holds and releases
portfolio securities on account of the Fund; makes receipts and disbursements of
money on behalf of the Fund; and collects and receives income and other payments
and distributions on account of the Fund's portfolio securities.
PricewaterhouseCoopers LLP, the Fund's independent accountants, audits the
Fund's financial statements on an annual basis.
Prior to December 8, 1998, the name of the Fund was
"Dimensional Emerging Markets Fund Inc."
PRINCIPAL HOLDERS OF SECURITIES
As of November 30, 1998, the following persons beneficially owned 5% or
more of the outstanding securities of the Fund:
BellSouth Corporation Master Pension Trust 94.40%
155 Peachtree Street N.E.
Atlanta, GA 30309
DFA Investment Dimensions Group - 5.60%
Emerging Markets Value Portfolio
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
PURCHASE OF SHARES
The following information supplements the information set forth in Part A
under the caption "PURCHASE OF SHARES."
The Fund will accept purchase and redemption orders on each day that the
New York Stock Exchange ("NYSE") is open for business, regardless of whether the
Federal Reserve System is closed. However, no purchases by wire may be made on
any day that the Federal Reserve System is closed. The Fund will generally be
closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday
through Friday throughout the year except for days closed to recognize New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal
Reserve System is closed on the same days as the NYSE, except that it is open on
Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions
and purchases will not be processed if the Fund is closed.
The Fund reserves the right, in its sole discretion, to suspend the
offering of shares of the Fund or reject purchase orders when, in the judgment
of management, such suspension or rejection is in the best interest of the Fund.
Securities accepted in exchange for shares of the Fund will be acquired for
investment purposes and will be considered for sale under the same circumstances
as other securities in the Fund.
REDEMPTION OF SHARES
The following information supplements the information set forth in Part A
under the caption "REDEMPTION OF SHARES."
The Fund may suspend redemption privileges or postpone the date of
payment: (1) during any period when the NYSE is closed, or trading on the NYSE
is restricted as determined by the SEC, (2) during any period when an emergency
exists as defined by the rules of the SEC as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or
fairly to determine the value of its assets and (3) for such other periods as
the SEC may permit.
CALCULATION OF PERFORMANCE DATA
Following are quotations of the annualized percentage total returns over
the one-, five-, and ten-year periods (or fractional portion thereof) ended
November 30, 1997, using the standardized method of calculation required by the
SEC, which is net of the cost of the current reimbursement fee charged to
investors and paid to the Fund. A reimbursement fee of 0.50% has been in effect
from the inception of the Fund.
One Year* Five Years* Ten Years
(57 mos.)
1.46 11.36 n/a
* Prior to November 26, 1997, the Fund was a closed-end investment
company; performance figures include the period during which the Fund operated
as a closed-end company and the Fund may incur additional expenses as an
open-end company. Performance figures also reflect that, until September 30,
1997, it was the Fund's policy to attempt to own shares of companies whose
overall share of the Approved Markets total public capitalization was at least
in the upper 40% of such capitalization, and could be as large as 75%.
As the following formula indicates, the average annual total return is
determined by finding the average annual compounded rates of return over the
stated time period that would equate a hypothetical initial purchase order of
$1,000 to its redeemable value (including capital appreciation/depreciation and
dividends and distributions paid and reinvested less any fees charged to a
shareholder account) at the end of the stated time period. The calculation
assumes that all dividends and distributions are reinvested at the public
offering price on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each period and the
deduction of all applicable charges and fees. According to the SEC formula:
P(1 + T)n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the one-,five-, and ten-year
periods at the end of the one-, five-, and ten-year
periods (or fractional portion thereof).
The Fund may compare its investment performance to appropriate market and
mutual fund indices and investments for which reliable performance data is
available. Such indices are generally unmanaged and are prepared by entities and
organizations which track the performance of investment companies or investment
advisors. Unmanaged indices often do not reflect deductions for administrative
and management costs and expenses. The performance of the Fund may also be
compared in publications to averages, performance rankings, or other information
prepared by recognized mutual fund statistical services. Any performance
information, whether related to the Fund or to the Advisor, should be considered
in light of the Fund's investment objectives and policies, characteristics and
the quality of the portfolio and market conditions during the time period
indicated and should not be considered to be representative of what may be
achieved in the future.
FINANCIAL STATEMENTS
The audited financial statements and financial highlights of the Fund for
its fiscal year ended November 30, 1997, as set forth in the Fund's annual
report to shareholders, and the report thereon of PricewaterhouseCoopers LLP
(formerly Coopers & Lybrand L.L.P.), independent accountants, also appearing
therein, and the unaudited financial information for the period ended May 31,
1998, as set forth in the Fund's semi-annual report to shareholders, are
incorporated herein by reference.
A shareholder may obtain a copy of these reports, upon request and without
charge, by contacting the Fund at the address or telephone number appearing on
the cover of the statement of additional information
<PAGE>
DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements.
Part A: Not Applicable.
Part B:
(1) Schedule of Investments*
(2) Statement of Assets and Liabilities*
(3) Statement of Operations*
(4) Statement of Changes in Net Assets*
(5) Financial Highlights*
(6) Notes to Financial Statements*
(7) Report of Independent Accountants*
(b) Exhibits.
(1) Copies of the charter, as now in effect.
(a) Articles of Amendment and Restatement dated
November 21, 1997.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 6 to
the Registrant's Registration
Statement on Form N-1A.
File No.: 811-7440.
Filing Date: November 26, 1997.
(1) Articles of Amendment dated December 2,
1998 ARE ELECTRONICALLY FILED
HEREWITH AS EXHIBIT EX-99.B1.
(2) Copies of the existing bylaws or instruments
corresponding thereto.
By-Laws of the Registrant as approved through
December 18, 1997.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No.7 to the
Registrant's Registration Statement on Form
N-1A.
File No.: 811-7440.
Filing Date: March 30, 1998.
(3) Copies of any voting trust agreement with respect
to more than 5 percent of any class of equity
securities of the Registrant.
Not applicable.
(4) Copies of all instruments defining the rights of
holders of the securities being registered
including where applicable, the relevant portion of
the articles or incorporation or bylaws of the
Registrant.
(a) No specimen securities are issued on behalf of the
Registrant.
(b) Relevant portion of Articles ofAmendment and
Restatement dated November 21, 1997.
See Article Fifth.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 6 to
the Registrant's Registration
Statement on Form N-1A.
File No.: 811-7440.
Filing Date: November 26, 1997.
* Audited financial statements of DIMENSIONAL EMERGING MARKETS FUND INC. (the
"Registrant") are contained with the Registrant's Annual Report to Shareholders
dated November 30, 1997, and were also filed electronically on February 5, 1998
via the Securities and Exchange Commission's EDGAR system pursuant to Rule
30b2-1 under the Investment Company Act of 1940 and are herein incorporated by
reference into PART B, the Statement of Additional Information .
Unaudited financial statements of the Registrant are contained with the
Registrant's Semi-Annual Report to Shareholders dated May 31, 1998, and were
also filed electronically on August 6, 1998 via the Securities and Exchange
Commission's EDGAR system pursuant to Rule 30b2-1 under the Investment Company
Act of 1940 and are herein incorporated by reference into PART B, the Statement
of Additional Information.
(5) Copies of all investment advisory contracts relating to the
management of the assets of the Registrant.
Investment Management Agreement between the Registrant and Dimensional
Fund Advisors Inc. ("DFA") dated November 26, 1997.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A.
File No.: 811-7440.
Filing Date: November 26, 1997.
(6) Copies of each underwriting or distribution contract between the
Registrant and a principal underwriter, and specimens or copies of
all agreements between principal underwriters and dealers.
Not applicable.
(7) Copies of all bonus, profit sharing, pension or other similar
contracts or arrangements wholly or partly for the benefit of
directors or officers of the Registrant in their capacity as such;
any such plan that is not set forth in a formal document, furnish a
reasonably detailed description thereof.
Not applicable.
(8) Copies of all custodian agreements and depository contracts under
Section 17(f) of the 1940 Act [15 U.S.C. 80a 17(f)] with respect to
securities and similar investments of the Registrant, including the
schedule of remuneration. Agreement between the Registrant and The
Chase Manhattan Bank.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A.
File No.: 811-7440.
Filing Date: March 30, 1998.
(9) Copies of all other material contracts not made in the ordinary course
of business which are to be performed in whole or in part at or after
the date of filing the Registration Statement.
(a) FORM OF Transfer Agency Agreement between the Registrant and
PFPC Inc.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A.
File No.: 811-7440.
Filing Date: March 30, 1998.
(1) Amendment No. 1 to Transfer Agency Agreement.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 7 to the
Registrant's Registration Statement
on Form N-1A.
File No.: 811-7440.
Filing Date: March 30, 1998
(b) FORM OF Administration and Accounting Services Agreement between
the Registrant and PFPC Inc.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A.
File No.: 811-7440.
Filing Date: March 30, 1998
(10) An opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will,
when sold, be legally issued, fully paid and non-assessable.
Not applicable.
(11) Copies of any other opinions, appraisals or rulings and
consents to the use, thereof relied on in the preparation
of this Registration Statement and required by Section 7
of the 1933 Act [15 U.S.C.77g].
Consent of PricewaterhouseCoopers LLP IS
ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.B11.
(12) All financial statements omitted from Item 23.
Not applicable.
(13) Copies of any agreements or understandings made in
consideration for providing the initial capital between or
among the Registrant, the underwriter, adviser, promoter or
initial stockholders and written assurances from promoters
of initial stockholders that their purchases were made
for investment purposes without any present intention of
redeeming or reselling.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No.__ to the
Registrant's Registration Statement on
Form N-1A.
File No.: 811-7440.
Filing Date: January 19, 1993.
(14) Copies of the model plan used with establishment of any
retirement plan in conjunction with which Registrant offers
its securities, any instructions thereto and any other
documents making up the model plan. Such form(s) should
disclose the costs and fees charged in connection therewith.
Not applicable.
(15) Copies of any plan entered into by Registrant pursuant to
Rule 12b-1 under the 1940 Act, which describes all material
aspects of the financing of distribution of Registrant's
shares, and any agreements with any person relating to
implementation of such plan.
Not applicable.
(16) Schedule for computation of each performance quotation
provided in the Registration Statement in response to
Item 22 (which need not be audited).
Not applicable.
(17) Electronic Filers. A Financial Data Schedule meeting the
requirements of rule 483 under the Securities Act of 1933
(ss.230.483 of this chapter).
(a) Financial Data Schedule containing financial
information dated May 31, 1998 and November 30, 1997
IS ELECTRONICALLY FILED HEREWITH AS
EX-27.1.
(18) Copies of any plan entered into by Registrant pursuant to
Rule 18f-3 under the 1940 Act, any agreement with any person
relating to the implementation of a plan, any amendment to
a plan or agreement, and a copy of the portion of the
minutes of a meeting of the Registrant's directors
describing any action taken to revoke a plan.
Not Applicable.
(19) Powers-of-Attorney.
Power-of-Attorney dated July 18, 1997, appointing David
G.Booth, Rex A. Sinquefield, Michael T. Scardina, Irene
R. Diamant, Catherine L. Newell and Stephen W. Kline, Esq.
as attorney-in-fact for the Registrant and certified
resolution relating thereto.
Incorporated herein by reference to:
Filing: Post-Effective Amendment No.6 to the
Registrant's Registration Statement on
Form N-1A.
File No.: 811-7440.
Filing Date: November 26, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Holders as of Title of Class
November 30, 1998 (Par Value $.01)
Dimensional Emerging Markets Fund Shares 2
Item 27. Indemnification.
Reference is made to Article Seventh of the Registrant's Articles of
Amendment and Restatement and Article 5, Section 5.08 of the Registrant's Bylaw,
which are incorporated herein by reference.
The Articles and Bylaws of Registrant provide for indemnification of
officers and directors to the full extent permitted by the General Laws of the
State of Maryland. Registrant's charter provides that the directors and officers
shall not be personally liable to the Registrant or its stockholders for money
damages, except as otherwise required under the Investment Company Act of 1940.
Pursuant to Rule 484 under the Securities Act of 1933, as amended,
the Registrant furnishes the following undertaking:
"Insofar as indemnification for liability arising under the
Securities Act of 1933, (the "Act"), may be permitted to the directors, officers
and controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, an officer
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue."
Item 28. Business and Other Connections of the Investment Advisor.
Dimensional Fund Advisors Inc., the investment manager for the
Registrant, is also the investment manager for three other registered open-end
investment companies, DFA Investment Dimensions Group Inc., The DFA Investment
Trust Company and Dimensional Investment Group Inc. The Advisor also serves as
sub-advisor for certain other registered investment companies.
For additional information, please see "Management of the Fund" in
PART A of this Registration Statement.
Additional information as to the Advisor and the directors and
officers of the Advisor is included in the Advisor's Form ADV filed with the
Commission (File No. 801-16283) which is incorporated herein by reference and
sets forth the officers and directors of the Advisor and information as to any
business, profession, vocation or employment of a substantial nature engaged in
by those officers and directors during the past two years.
Item 29. Principal Underwriters.
Names of investment companies for which the Registrant's principal
underwriter also acts as principal underwriter.
(a) Not applicable.
(b) Registrant distributes its own shares. It has entered into an
agreement with DFA Securities Inc. which provides that DFA Securities Inc., 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401, will supervise the
sale of Registrant's shares.
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records of the Registrant will be located at
the office of the Registrant and at additional locations, as follows:
Name Address
Dimensional Emerging Markets Value Fund Inc. 1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
PFPC Inc. 400 Bellevue Parkway
Wilmington, DE 19809
The Chase Manhattan Bank 4 Chase MetroTech Center
Brooklyn, NY 11245
Item 31. Management Services.
None.
Item 32. Undertakings.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Post-Effective Amendment No. 9 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Santa Monica and the State of California on the
8th day of December, 1998.
DIMENSIONAL EMERGING MARKETS FUND INC.
(Registrant)
By: David G. Booth*
David G. Booth
President and Chairman
Chief Executive Officer
(Signature and Title)
*By: Irene R. Diamant
Irene R. Diamant
Attorney-in-Fact
(Pursuant to a Power of Attorney)
<PAGE>
EXHIBIT INDEX
N-1A EDGAR
EXHIBIT NO. EXHIBIT NO. DESCRIPTION
24(b)(1) EX-99.B1 Articles of Amendment
24(b)(11) EX-99.B11 Consent of PricewaterhouseCoopers LLP
24(b)(17) EX-27.1 Financial Data Schedule dated May 31, 1998
and November 30, 1997.
DIMENSIONAL EMERGING MARKETS FUND INC.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST: The charter of Dimensional Emerging Markets Fund Inc., a Maryland
corporation (the "Corporation"), is hereby amended by changing (i) the corporate
name from "Dimensional Emerging Markets Fund Inc." to "Dimensional Emerging
Markets Value Fund Inc." and by deleting from the charter of the Corporation the
name "Dimensional Emerging Markets Fund Inc." and inserting in lieu thereof the
name "Dimensional Emerging Markets Value Fund Inc."; and (ii) the name of
"Dimensional Emerging Markets Fund Shares" class of the common stock of the
Corporation to "Dimensional Emerging Markets Value Fund Shares" and by deleting
from the charter of the Corporation the name "Dimensional Emerging Markets
Shares" and inserting in lieu thereof the name "Dimensional Emerging Markets
Value Fund Shares."
SECOND: The amendment to the charter of the Corporation as set forth above
has been duly approved by a majority of the entire Board of Directors of the
Corporation as required by law and is limited to a change expressly permitted by
Section 2-605(a)(4) of the Maryland General Corporation Law to be made without
action by the stockholders of the Corporation.
THIRD: The Corporation is registered as an open-end company
under the Investment Company Act of 1940.
FOURTH: The undersigned Vice President acknowledges these Articles of
Amendment to be the corporate act of the Corporation and, as to all matters or
facts required to be verified under oath, the undersigned Vice President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be signed
in its name and on its behalf by its Vice President and attested to by its
Secretary on this 2ND day of December, 1998.
ATTEST: DIMENSIONAL EMERGING MARKETS
FUND INC.
IRENE R. DIAMANT By: MICHAEL T. SCARDINA
Irene R. Diamant, Secretary Michael T. Scardina, Vice President
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 9 (File No. 811-7440) under the Investment Company Act of 1940 to
the Registration Statement on Form N-1A of Dimensional Emerging Markets Value
Fund Inc. of our report dated January 16, 1998 on our audit of the financial
statements and financial highlights of Dimensional Emerging Markets Value Fund,
Inc. as of November 30, 1997 and for the respective periods then ended, which
report is included in the Annual Reports to Shareholders.
We also consent to the reference to our firm under the captions "Other
Information" and "Financial Statements" in the Statement of Additional
Information.
PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA
December 8, 1998
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