<PAGE>
- --------------------------------------------------------------------------------
DFA Investment Dimensions Group Inc.
The Emerging Markets Value Portfolio
and
Dimensional Emerging Markets Fund Inc.
Semi-Annual
Report
Six Months Ended May 31, 1998
(Unaudited)
---------------------------------------------
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
THE EMERGING MARKETS VALUE PORTFOLIO
AND
DIMENSIONAL EMERGING MARKETS FUND INC.
SEMI-ANNUAL REPORT
(UNAUDITED)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
DFA INVESTMENT DIMENSIONS GROUP INC. -- THE EMERGING MARKETS VALUE
PORTFOLIO
Statement of Assets and Liabilities................................. 1
Statement of Operations............................................. 2
Statement of Changes in Net Assets.................................. 3
Financial Highlights................................................ 4
Notes to Financial Statements....................................... 5-6
DIMENSIONAL EMERGING MARKETS FUND INC.
Schedule of Investments............................................. 7-14
Statement of Assets and Liabilities................................. 15
Statement of Operations............................................. 16
Statements of Changes in Net Assets................................. 17
Financial Highlights................................................ 18
Notes to Financial Statements....................................... 19-20
</TABLE>
This report is submitted for the information of the Fund's shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
i
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
THE EMERGING MARKETS VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<S> <C>
ASSETS:
Investment in the Dimensional Emerging Markets
Fund Inc. (105,660 Shares, Cost $1,735++)................................................ $ 1,592
Receivable for Fund Share Sold............................................................. 35
Prepaid Expenses and Other Assets.......................................................... 23
---------
Total Assets........................................................................... 1,650
---------
LIABILITIES:
Payable for Investment Securities Purchased................................................ 35
Accrued Expenses and Other Liabilities..................................................... 11
---------
Total Liabilities...................................................................... 46
---------
NET ASSETS................................................................................. $ 1,604
---------
---------
SHARES OUTSTANDING, $.01 PAR VALUE
(Authorized 100,000,000)................................................................. 188,893
---------
---------
NET ASSET VALUE............................................................................ $ 8.49
---------
---------
PUBLIC OFFERING PRICE PER SHARE............................................................ $ 8.53
---------
---------
NET ASSETS CONSIST OF:
Paid-In Capital............................................................................ $ 1,755
Undistributed Net Investment Loss.......................................................... (5)
Undistributed Net Realized Loss............................................................ (3)
Unrealized Depreciation of Investment Securities........................................... (143)
---------
Total Net Assets....................................................................... $ 1,604
---------
---------
</TABLE>
++ Approximates cost for federal income tax purposes.
See accompanying Notes to Financial Statements.
1
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
THE EMERGING MARKETS VALUE PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 2, 1998
(COMMENCEMENT OF OPERATIONS)
TO MAY 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income Distributions Received from Dimensional Emerging Markets Fund Inc.................... --
---------
EXPENSES
Accounting & Transfer Agent Fees............................................................ $ 3
Administrative Fee.......................................................................... --
Legal Fees.................................................................................. --
Audit Fees.................................................................................. --
Filing Fees................................................................................. 1
Shareholders' Reports....................................................................... 1
Directors' Fees and Expenses................................................................ --
Organizational Fees......................................................................... --
Other Expenses.............................................................................. --
---------
Total Expenses........................................................................ 5
---------
NET INVESTMENT LOSS......................................................................... (5)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Loss on Investment Securities.................................................. (3)
Change in Unrealized Appreciation (Depreciation) of Investment Securities................... (143)
---------
NET LOSS ON INVESTMENT SECURITIES........................................................... (146)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................................... $ (151)
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
2
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
THE EMERGING MARKETS VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 2, 1998
(COMMENCEMENT OF OPERATIONS)
TO MAY 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Loss................... $ (5)
Net Realized Loss on Investment
Securities.......................... (3)
Change in Unrealized Appreciation
(Depreciation) of Investment
Securities.......................... (143)
---------
Net Decrease in Net Assets
Resulting from Operations........ (151)
---------
Distributions From:
Net Investment Income................. --
Net Realized Gains.................... --
---------
Total Distributions............... --
---------
Capital Share Transactions (1):
Shares Issued......................... 1,755
Shares Issued in Lieu of Cash
Distributions....................... --
Shares Redeemed....................... --
---------
Net Increase From Capital Share
Transactions..................... 1,755
---------
Total Increase.................... 1,604
NET ASSETS
Beginning of Period................... --
---------
End of Period......................... $ 1,604
---------
---------
(1) SHARES ISSUED AND REDEEMED:
Shares Issued........................ 189
Shares Issued in Lieu of Cash
Distributions...................... --
Shares Redeemed...................... --
---------
189
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
THE EMERGING MARKETS VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR THE PERIOD APRIL 2, 1998
(COMMENCEMENT OF OPERATIONS)
TO MAY 31, 1998
(UNAUDITED)
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<S> <C>
Net Asset Value, Beginning of Period........................................................ $ 10.00
---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss....................................................................... (0.03)
Net Gains (Losses) on Securities (Realized and Unrealized)................................ (1.48)
---------
Total from Investment Operations........................................................ (1.51)
---------
LESS DISTRIBUTIONS
Net Investment Income..................................................................... --
Net Realized Gains........................................................................ --
---------
Total Distributions..................................................................... --
---------
Net Asset Value, End of Period.............................................................. $ 8.49
---------
---------
Total Return................................................................................ (15.10)%#
Net Assets, End of Period (thousands)....................................................... $ 1,604
Ratio of Expenses to Average Net Assets (1)............................................... 5.21%*(a)
Ratio of Net Investment Income to Average Net Assets...................................... (4.55)%*(a)
Portfolio Turnover Rate................................................................... N/A
Average Commission Rate................................................................... N/A
Portfolio Turnover Rate of Master Fund Series............................................. 40.38%*(b)
Average Commission Rate of Master Fund Series............................................. $ 0.0013(b)
</TABLE>
- --------------
* Annualized
# Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund.
(a) Because of commencement of operations and related preliminary transaction
costs, these ratios are not necessarily indicative of future ratios.
(b) Calculated for the six months ended May 31, 1998.
N/A Refer to the respective Master Fund.
See accompanying Notes to Financial Statements.
4
<PAGE>
THE DFA INVESTMENT DIMENSIONS GROUP INC.
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION:
DFA Investment Dimensions Group Inc. (the "Group") is an open-end management
investment company whose shares are offered, without a sales charge, generally
to institutional investors and clients of registered investment advisors. The
Group offers thirty portfolios, one of which, the Emerging Markets Value
Portfolio (the "Portfolio") is included in this report. Of the remaining
twenty-nine portfolios, twenty-eight are presented within two separate reports
and the remaining portfolio has not yet commenced operations.
The Portfolio invests all of its assets in the Dimensional Emerging Markets
Fund Inc. (the "Fund"). At May 31, 1998, the Portfolio owned 1% of the
outstanding shares of the Fund. The financial statements of the Fund are
included elsewhere in this report and should be read in conjunction with the
financial statements of the Portfolio.
B. SIGNIFICANT ACCOUNTING POLICIES:
The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Group in preparation of its financial
statements. The preparation of financial statements in accordance with generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
1. SECURITY VALUATION: The shares of the Fund held by the Portfolio are
valued at its respective daily net asset value.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal taxes is required in the financial
statements.
3. OTHER: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains and
losses on the sale of investment securities are those of specific securities
sold. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Expenses directly attributable to the Portfolio or to the Fund
are directly charged. Common expenses are allocated using methods determined by
the Board of Directors.
C. INVESTMENT ADVISOR:
Dimensional Fund Advisors Inc. ("DFA" or the "Advisor") provides
administrative services to the Portfolio, including supervision of services
provided by others, providing information to the shareholders and the Board of
Directors, and other administrative services. The Advisor provides investment
advisory services to the Fund. For the period ended May 31, 1998, the
Portfolio's administrative fees were computed daily and paid monthly to the
Advisor based on an effective annual rate of 0.40% of 1% of average daily net
assets.
Certain officers of the Portfolio are also officers, directors and
shareholders of the Advisor.
D. INVESTMENT TRANSACTIONS:
At May 31, 1998, gross unrealized appreciation and depreciation for
financial reporting and federal income tax purposes of investment securities was
as follows (amounts in thousands):
<TABLE>
<S> <C>
Gross Unrealized Appreciation............................. --
Gross Unrealized Depreciation............................. $ (143)
---------
Net....................................................... $ (143)
---------
---------
</TABLE>
5
<PAGE>
E. LINE OF CREDIT:
The Group, together with other DFA-advised portfolios, has entered into a
$50 million unsecured line of credit with its domestic custodian bank. Each
portfolio is permitted to borrow, subject to its investment limitations, up to a
maximum of $50 million. Borrowings under the line are charged interest at the
current overnight federal funds rate plus a variable rate determined at the date
of borrowing. Each portfolio is individually, and not jointly liable for its
particular advances under the line. There is no commitment fee on the unused
portion of the line of credit. There were no borrowings under the line of credit
by the Portfolio during the period ended May 31, 1998.
F. REIMBURSEMENT FEE:
Shares of the Portfolio are sold at a public offering price which is equal
to the Portfolio's current net asset value plus a reimbursement fee of 0.50% of
such net asset value. Reimbursement fees are recorded as an addition to paid in
capital.
6
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
ISRAEL -- (11.5%)
COMMON STOCKS -- (11.5%)
*Africa-Israel Investments, Ltd...................... 3,000 $ 189,632
*Africa-Israel Investments, Ltd...................... 150 86,730
Agis Industries (1983), Ltd.......................... 17,600 122,328
American Israeli Paper Mills, Ltd.................... 3,000 120,018
Bank Hapoalim B.M.................................... 1,029,800 3,164,550
*Bank Leumi Le-Israel................................ 947,250 1,912,935
Bezek, Ltd........................................... 601,800 1,930,007
*Blue Square Chain Stores Properties Investment...... 24,000 294,218
CLAL Electronics Industries, Ltd..................... 3,460 530,204
CLAL Industries, Ltd................................. 122,600 687,739
CLAL Insurance, Ltd.................................. 35,800 427,119
CLAL Israel, Ltd..................................... 2,515,000 743,260
Delek Israel......................................... 7,000 340,955
*Elbit Medical Imaging............................... 16,533 132,103
Elbit Systems, Ltd................................... 16,533 222,133
Elbit, Ltd........................................... 16,533 47,459
*Elite Industries, Ltd............................... 10,080 325,478
Elron Electronic Industries, Ltd..................... 20,066 345,386
First International Bank of Israel................... 780 602,111
IDB Bankholding Corp., Ltd........................... 33,600 839,439
IDB Development Corp., Ltd. Series A................. 36,450 949,541
Israel Chemicals, Ltd................................ 917,000 1,161,795
*Israel Corp. Series B............................... 800 260,505
Koor Industries, Ltd................................. 12,205 1,526,276
*Leumi Holdings Insurance............................ 286,100 192,589
*Makhteshim Chemical Works, Ltd...................... 78,319 649,370
Matav Cable Israel................................... 16,000 162,433
Osem Investment, Ltd................................. 61,856 307,381
Property and Building Corp., Ltd..................... 3,461 310,638
Super-Sol, Ltd. Series B............................. 139,600 490,871
Tadiran, Ltd......................................... 15,653 627,503
Tambour.............................................. 40,000 73,336
Teva Pharmaceutical Industries, Ltd.................. 46,050 1,886,386
------------
TOTAL COMMON STOCKS
(Cost $16,239,179)................................... 21,662,428
------------
INVESTMENT IN CURRENCY -- (0.0%)
*Israel Shekel
(Cost $1).......................................... 1
------------
TOTAL -- ISRAEL
(Cost $16,239,180)................................... 21,662,429
------------
TURKEY -- (11.3%)
COMMON STOCKS -- (11.3%)
Akbank............................................... 52,491,374 1,544,342
*Akbank Issue 98..................................... 29,526,398 731,530
Aksa................................................. 11,030,729 409,937
Arcelik A.S.......................................... 25,036,590 1,041,899
Aygaz................................................ 3,104,640 492,762
Bekoteknik Sanayi A.S................................ 6,222,051 163,789
Brisa Bridgestone Sanbanci Lastik San & Tic A.S...... 9,261,000 483,987
SHARES VALUE+
------------ ------------
CIMSA A.S. (Cimento Sanayi ve Ticaret)............... 4,680,000 $ 271,756
*Cimentas A.S........................................ 1,685,180 97,854
Dogan Sirketler Grubu Holdings A.S................... 12,458,250 735,476
Doktas............................................... 2,400,000 95,231
*Eczacibasi Ilac..................................... 3,781,620 182,991
*Eregli Demir ve Celik Fabrikalari Turk A.S.......... 7,837,500 1,092,250
Good Year Lastikleri A.S............................. 5,622,750 364,590
Guney Biracilik...................................... 1,088,587 100,085
Hurriyet Gazette..................................... 14,261,000 518,943
*Izmir Demir Celik................................... 9,222,807 74,084
*Netas Northern Electric Telekomunikasyon A.S........ 1,292,000 380,118
Tat Konserve......................................... 2,749,996 93,682
*Tofas Turk Otomobil Fabrikasi A.S................... 13,999,125 582,574
Trakya Cam Sanayii A.S............................... 13,208,854 480,656
Turcas Petrolculuk A.S............................... 5,500,078 221,434
Turk Demir Dokum..................................... 9,299,942 156,607
Turk Siemens Kablo ve Elektrik Sanayi A.S............ 1,260,000 73,165
Turk Sise Cam........................................ 28,699,346 933,240
*Turkiye Garanti Bankasi A.S......................... 48,444,998 2,062,925
Turkiye Is Bankasi A.S. Series C..................... 83,300,000 3,385,916
*Turkiye Is Bankasi A.S. Series C Issue 98........... 14,700,000 574,724
Yapi ve Kredi Bankasi A.S............................ 206,435,241 3,995,726
------------
TOTAL -- TURKEY
(Cost $10,195,094)................................... 21,342,273
------------
MEXICO -- (11.0%)
COMMON STOCKS -- (11.0%)
Apasco S.A. de C.V................................... 48,000 292,376
Carso Global Telecom S.A. de C.V. Telecom Series
A1................................................. 271,000 879,149
*Cementos de Mexico S.A. de C.V. Series B............ 358,000 1,758,320
*Cementos de Mexico S.A. de C.V. Series A............ 13,500 55,893
Cifra S.A. de C.V. Series C.......................... 1,083,000 1,520,814
Cifra S.A. de C.V. Series V.......................... 273,998 396,575
Controladora Comercial Mexicana S.A. de C.V. Series
B.................................................. 279,000 272,163
El Puerto de Liverpool S.A. Series 1................. 20,000 29,492
El Puerto de Liverpool S.A. Series C1................ 328,600 447,276
Empresas ICA Sociedad Controladora S.A. de C.V....... 336,000 583,120
*Empresas la Moderna S.A. de C.V. Series A........... 184,885 880,801
Fomento Economico Mexicano S.A. de C.V. Series B..... 244,000 1,693,824
Grupo Carso S.A. de C.V. Series A-1.................. 271,000 1,380,202
*Grupo Financiero Banamex Accival S.A. de C.V. Series
B.................................................. 456,000 1,127,582
*Grupo Financiero Banamex Accival S.A. de C.V. Series
L.................................................. 42,607 91,825
</TABLE>
7
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Grupo Financiero Bancomer S.A. de C.V. Series B...... 790,000 $ 394,282
Grupo Financiero Bancomer S.A. de C.V. Series L...... 29,259 10,006
*Grupo Financiero GBM Atlantico S.A. de C.V. Series
B.................................................. 149,000 101,406
*Grupo Financiero GBM Atlantico S.A. de C.V. Series
L.................................................. 980 611
Grupo Financiero Inbursa-C........................... 9,455 24,989
*Grupo Financiero Santander Mexicano S.A. de C.V.
Sanmex Series B.................................... 33,466 28,660
*Grupo Financiero Serfin S.A. de C.V. Series B....... 290,383 44,466
*Grupo Gigante S.A. Series B......................... 423,360 177,680
Grupo Industrial Alfa S.A. Series A.................. 221,264 1,036,544
Grupo Industrial Bimbo S.A. de C.V. Series A......... 529,348 1,212,885
*Grupo Televisa S.A. (Certificate Representing Series
A, Series D & Series L)............................ 62,000 1,218,054
Kimberly Clark de Mexico S.A. de C.V. Series A....... 360,000 1,480,258
Telefonos de Mexico S.A. Series L.................... 1,280,000 3,048,991
*Tolmex S.A. de C.V. Series B-2...................... 40,000 195,099
Vitro S.A............................................ 176,400 496,223
------------
TOTAL COMMON STOCKS
(Cost $18,367,775)................................... 20,879,566
------------
RIGHTS/WARRANTS -- (0.0%)
*Cementos de Mexico S.A. de C.V. Series B Rights
06/18/98
(Cost $0).......................................... 10,740 0
------------
TOTAL -- MEXICO
(Cost $18,367,775)................................... 20,879,566
------------
PORTUGAL -- (10.0%)
COMMON STOCKS -- (10.0%)
*BCP (Banco Comercial Portugues SA) Em 98............ 54,464 1,777,057
Banco Pinto & Sotto Mayor SA......................... 16,000 389,718
Banco Totta & Acores SA.............................. 59,070 2,188,617
Cel-Cat Fabrica Nacional de Condutores Electricos
SA................................................. 4,950 41,130
*Companhia de Seguros Mundial Confianca SA........... 12,000 369,964
Companhia de Seguros Tranquilidade SA................ 3,000 100,302
Corticeira Amorim Sociedad Gestora Participacoes
Sociais SA......................................... 37,100 805,240
EFACEC (Empresa Fabril de Maquinas Electricas)....... 18,133 198,772
Engil Sociedade Gestora de Participacoes Sociais
SA................................................. 6,000 69,356
*Filmes Lusomundo SA................................. 7,612 114,733
*Inparsa Industrias e Participacoes S.G.P.S. SA...... 51,125 2,334,460
*Lusotur Sociedad Financeira de Turismo SA........... 13,266 210,787
Mague-Gestao e Participacoes SA...................... 11,800 449,331
Portugal Telecom SA.................................. 65,232 3,432,321
SHARES VALUE+
------------ ------------
Salvador Caetano Industrias Metalurgicas e Veiculos
de Transporte SA................................... 15,868 $ 408,767
*Sociedad Construcoes Soares da Costa SA............. 23,710 220,271
Sonae Investimentos Sociedade Gestora de
Participacoes Sociais SA........................... 81,800 4,707,591
Uniceruniao Cervejeira SA............................ 50,600 1,158,988
------------
TOTAL -- PORTUGAL
(Cost $7,552,459).................................... 18,977,405
------------
BRAZIL -- (10.0%)
PREFERRED STOCKS -- (6.8%)
Aracruz Celulose SA Series B......................... 1,265,999 1,706,079
Banco Bradesco SA.................................... 133,883,959 1,094,185
Banco do Brasil SA................................... 56,145,862 707,327
Banco do Estado de Sao Paulo SA...................... 14,980,000 768,549
Brasmotor SA......................................... 2,015,570 205,030
*COFAP (Cia Fabricadora De Pecas).................... 14,250 124,265
Cervejaria Brahma.................................... 1,874,480 1,091,917
Cia Siderurgica Belgo-Mineira........................ 2,181,754 135,722
Duratex SA........................................... 4,510,000 176,412
IKPC Industrias Klabin de Papel e Celulose SA........ 418,531 218,330
Investimentos Itau SA................................ 1,088,000 804,048
*Lojas Americanas SA................................. 4,324,460 28,199
Multibras Eletrodomesticos SA........................ 427,145 181,973
*Paranapanema SA..................................... 9,588,000 65,105
Sadia Concordia SA................................... 308,282 195,661
Telecomunicacoes Brasileiras SA...................... 1,389,166 147,349
USIMINAS (Usinas Siderurgicas de Minas Gerais SA).... 41,925 230,005
Vale do Rio Doce..................................... 239,144 4,969,258
*Vale do Rio Doce Series B........................... 239,144 0
------------
TOTAL PREFERRED STOCKS
(Cost $6,994,378).................................... 12,849,414
------------
COMMON STOCKS -- (3.2%)
Banco do Estado de Sao Paulo SA...................... 6,300,000 256,890
Embraco SA........................................... 342,000 118,938
*Lojas Americanas SA................................. 6,762,000 39,978
*Mannesmann SA....................................... 378,000 39,437
Souza Cruz Industria e Comercio...................... 150,016 1,030,383
Telecomunicacoes Brasileiras SA...................... 50,000,000 4,216,731
VSMA (Cia Vidraria Santa Marina)..................... 121,000 202,512
White Martins SA..................................... 200,000 198,230
------------
TOTAL COMMON STOCKS
(Cost $2,838,142).................................... 6,103,099
------------
RIGHTS/WARRANTS -- (0.0%)
*Cia Siderurgica Belgo-Mineira Rights 06/08/98
(Cost $0).......................................... 45,872 0
------------
TOTAL -- BRAZIL
(Cost $9,832,520).................................... 18,952,513
------------
ARGENTINA -- (9.8%)
COMMON STOCKS -- (9.8%)
*Acindar Industria Argentina de Aceros SA Series B... 161,067 334,378
*Alpargatas SA Industrial y Comercial................ 275,000 61,080
</TABLE>
8
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Astra Cia Argentina de Petroleos SA.................. 481,800 $ 761,617
Bagley y Cia, Ltd. SA Series B....................... 121,090 242,299
Banco de Galicia y Buenos Aires SA Series A.......... 265,686 1,364,966
Banco Frances del Rio de la Plata SA................. 136,130 1,043,267
*Buenos Aires Embotelladora SA Series B.............. 250 19,009
CIADEA SA............................................ 134,917 276,717
*Celulosa Argentina SA Series B...................... 43,375 9,330
Corcemar SA Series B................................. 34,805 205,450
Garovaglio y Zorraquin SA............................ 25,800 52,142
*Indupa SA Industrial y Comercial.................... 204,322 175,803
Irsa Inversiones y Representaciones SA............... 88,477 313,362
Juan Minetti SA...................................... 41,179 152,437
Ledesma SA........................................... 192,459 167,521
Molinos Rio de la Plata SA Series B.................. 178,214 458,235
Naviera Perez Companc SA Series B.................... 474,264 2,614,476
Nobleza-Piccardo Sdad Industrial Comercial y
Financiera Pica.................................... 44,200 179,098
*Sevel Argentina SA Series C......................... 92,475 85,119
Siderar SAIC Series A................................ 31,416 127,517
Siderca SA Series A.................................. 842,532 1,702,749
Sociedad Comercial del Plata......................... 193,410 208,985
Telecom Argentina Stet-France SA Series B............ 648,800 4,024,532
Telefonica de Argentina SA Series B.................. 1,183,000 3,870,306
------------
TOTAL COMMON STOCKS
(Cost $12,713,068)................................... 18,450,395
------------
RIGHTS/WARRANTS -- (0.0%)
*Acindar Industria Argentina de Aceros SA Series B
Rights 06/09/98
(Cost $0).......................................... 161,067 0
------------
TOTAL -- ARGENTINA
(Cost $12,713,068)................................... 18,450,395
------------
CHILE -- (9.3%)
COMMON STOCKS -- (8.3%)
Banco de Credito e Inversiones SA Series A........... 53,304 324,546
Banmedica SA......................................... 347,000 95,340
CAP SA (Compania de Aceros del Pacifico)............. 100,000 197,824
COPEC (Cia de Petroleos de Chile).................... 757,488 2,106,214
CTI Cia Tecno Industrial SA.......................... 4,900,000 90,471
Cervecerias Unidas SA................................ 143,000 669,502
Chilectra Generacion SA.............................. 3,119,986 905,238
Chilectra SA......................................... 225,611 1,363,733
Cia de Consumidores de Gas de Santiago SA............ 103,000 280,734
Compania de Sud Americana de Vapores SA.............. 410,000 180,240
Compania de Telecomunicaciones de Chile SA Series
A.................................................. 200,000 1,090,229
Compania de Telecomunicaciones de Chile SA Series
B.................................................. 352,166 1,315,929
Compania Manufacturera de Papeles y Cartones SA...... 117,150 901,253
Empresa Nacional de Electricidad SA.................. 4,536,900 2,333,519
SHARES VALUE+
------------ ------------
Empresa Nacional de Telecomunicaciones SA............ 49,000 $ 137,861
Enersis SA........................................... 3,895,960 1,943,912
Forestal Terranova SA................................ 147,795 100,707
*Industrias Forestales Inforsa SA.................... 1,057,365 85,993
Invercap SA.......................................... 100,000 76,932
Laboratorio Chile SA................................. 271,069 232,370
Madeco Manufacturera de Cobre SA..................... 231,227 304,948
Maderas y Sinteticos SA.............................. 420,205 114,539
Minera Mantos Blancos SA............................. 102,255 123,618
Sociedad Industrial Pizarreno SA..................... 63,000 73,947
Sociedad Quimica y Minera de Chile SA Series A....... 36,000 102,868
Sociedad Quimica y Minera de Chile SA Series B....... 77,090 269,421
Vina de Concha y Toro SA............................. 350,000 194,637
*Vina Sta Carolina SA Series A....................... 163,489 48,513
*Vina Sta Carolina SA Series B....................... 41,411 14,109
------------
TOTAL COMMON STOCKS
(Cost $14,022,729)................................... 15,679,147
------------
INVESTMENT IN CURRENCY -- (1.0%)
*Chilean Pesos
(Cost $1,948,648).................................. 1,818,409
------------
TOTAL -- CHILE
(Cost $15,971,377)................................... 17,497,556
------------
SOUTH KOREA -- (6.3%)
COMMON STOCKS -- (6.3%)
*Asia Banking Corp. Seoul, Korea..................... 10,980 39,005
*Asia Cement Manufacturing Co., Ltd.................. 5,730 28,090
*Asia Motors Co., Inc................................ 10,428 6,964
BYC Co., Ltd......................................... 810 28,199
*Bank of Che Ju...................................... 4,500 2,909
*Bank of Pusan....................................... 38,410 55,807
*Boo Kook Securities Co., Ltd........................ 18,295 33,795
*Boram Bank Co., Ltd................................. 52,408 86,385
*Boram Securities Co., Ltd........................... 21,640 19,142
*Byuck San Engineering and Construction Co., Ltd..... 3,360 2,160
*Cheil Industrial, Inc............................... 32,821 69,956
Cheil Jedang Corp.................................... 15,759 200,416
Chon Bang Co., Ltd................................... 3,760 51,959
*Choongnam Spinning Co., Ltd......................... 11,910 7,954
Chosun Brewery Co., Ltd.............................. 9,050 51,439
*Chung Chong Bank Co., Ltd........................... 35,060 20,052
*Commercial Bank of Korea Co., Ltd................... 307,999 239,616
*Coryo Securities Co., Ltd........................... 17,660 7,026
*Daegu Bank Co., Ltd................................. 97,480 143,363
*Daehan Synthetic Fiber Co., Ltd..................... 1,020 28,951
*Daelim Industrial Co., Ltd.......................... 41,360 60,534
Daewoo Corp.......................................... 167,630 435,897
*Daewoo Electronic Components Co., Ltd............... 11,310 25,232
*Daewoo Precision Industries, Ltd.................... 14,010 35,834
*Daewoo Securities Co., Ltd.......................... 65,210 278,445
*Daewoo Telecom Co., Ltd............................. 8,070 25,973
*Daeyu Securities Co., Ltd........................... 11,540 28,450
*Daishin Securities Co., Ltd......................... 44,980 66,791
*Dong Sung Co., Ltd.................................. 12,880 1,510
</TABLE>
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------------ ------------
<S> <C> <C>
*Dong-Ah Construction Industrial Co., Ltd............ 58,790 $ 83,956
*Dong-Ah Securities Co., Ltd......................... 6,720 4,536
Dong-Il Corp......................................... 4,205 23,901
Dongbu Steel Co., Ltd................................ 17,310 43,044
*Dongkuk Steel Mill Co., Ltd......................... 36,030 145,912
*Dongsuh Securities Co., Ltd......................... 24,780 17,870
*Dongwon Industries Co., Ltd......................... 9,740 48,164
*Dongwon Securities Co., Ltd......................... 41,660 148,289
*Doosan Construction & Engineering Co., Ltd.......... 9,402 10,220
Doosan Glass Co., Ltd................................ 2,910 6,409
Haitai Confectionery Co., Ltd........................ 13,270 18,479
*Han Il Cement Manufacturing Co., Ltd................ 7,884 73,098
*Han Kook Titanium Industry Co., Ltd................. 10,080 35,020
*Han Yang Securities Co., Ltd........................ 9,030 7,442
*Han-Il Synthetic Fiber Industrial Co., Ltd.......... 29,000 11,332
*Hana Bank........................................... 62,560 257,796
*Hanil Bank.......................................... 255,640 188,892
*Hanil Securities Co., Ltd........................... 22,230 26,771
*Hanjin Engineering and Construction Co., Ltd........ 24,760 20,846
*Hanjin Shipping Co., Ltd............................ 15,910 47,589
Hankook Cosmetics Co., Ltd........................... 3,000 21,528
*Hanshin Construction................................ 7,540 1,125
*Hansol Chemical Co., Ltd............................ 7,540 22,499
Hansol Paper Co., Ltd................................ 26,735 160,505
*Hanwha Chemical Corp................................ 88,740 163,294
*Hanwha Machinery Co., Ltd........................... 8,530 11,394
*Hanwha Securities Co., Ltd.......................... 8,490 7,691
*Hyosung T & C Co., Ltd.............................. 12,410 77,590
*Hyundai Cement Co., Ltd............................. 2,770 11,119
*Hyundai Corp........................................ 19,190 45,061
*Hyundai Engineering & Construction Co., Ltd......... 102,823 375,496
*Hyundai International Merchant Bank................. 25,281 54,784
*Hyundai Motor Co., Ltd.............................. 53,770 569,217
*Hyundai Motor Service Co., Ltd...................... 22,580 59,679
*Hyundai Pipe Co., Ltd............................... 19,650 25,130
*Hyundai Precision Industry Co., Ltd................. 41,310 86,582
*Hyundai Securities Co., Ltd......................... 39,980 93,168
*Inchon Iron & Steel Co., Ltd........................ 36,960 115,541
*Jinro, Ltd.......................................... 9,213 11,586
*KLB Securities Co................................... 9,460 7,595
*Kangwon Bank Co., Ltd............................... 31,350 30,960
*Keang Nam Enterprises Co., Ltd...................... 10,987 10,733
*Keum Kang Development Industry Co., Ltd............. 18,010 44,145
*Keumkang Co., Ltd................................... 7,740 82,487
*Kia Precision Works Co., Ltd........................ 2,550 9,602
*Kohap Co., Ltd...................................... 35,550 35,361
*Kohap, Inc.......................................... 4,240 1,973
*Kolon Industries, Inc............................... 13,320 65,109
Kolon International Corp............................. 14,798 13,773
*Kookmin Bank........................................ 78,850 389,348
*Koram Bank, Ltd..................................... 19,370 70,874
*Korea Chemical Co., Ltd............................. 5,360 70,451
*Korea Electronics Co., Ltd.......................... 5,170 38,573
*Korea Exchange Bank................................. 351,250 723,712
Korea Express Co., Ltd............................... 22,170 42,922
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
*Korea First Bank Inc., Ltd.......................... 14,200 $ 34,756
*Korea First Bank Securities......................... 9,850 19,980
*Korea Industrial Leasing Co., Ltd................... 6,810 4,355
*Korea International Merchant Bank................... 17,394 64,880
*Korea Iron & Steel Co., Ltd......................... 10,440 12,980
Korea Komho Petrochemical............................ 47,300 68,219
*Korea Long Term Credit Bank......................... 83,690 233,083
*Korea Merchant Banking Co........................... 6,310 23,312
*Korea Tungsten Mining Co............................ 21,910 17,201
*Korean Air.......................................... 83,930 256,411
*Korean French Banking Corp.......................... 13,000 41,471
*Kuk Dong Engineering & Construction Co., Ltd........ 7,305 2,024
*Kumho Construction & Engineering Co., Ltd........... 65,630 54,789
*Kumho Tire Co., Ltd................................. 21,810 31,766
*Kwangju Bank, Ltd................................... 53,508 60,446
*Kyong Nam Bank...................................... 45,270 70,759
*Kyungki Bank, Ltd................................... 59,240 34,513
*Kyungnam Wool Textile Co., Ltd...................... 4,172 1,927
*Kyungwon-Century Co., Ltd........................... 5,740 18,352
*LG Cable & Machinery, Ltd........................... 7,020 21,696
*LG Construction, Ltd................................ 24,330 44,252
*LG Industrial Systems, Ltd.......................... 26,250 79,543
*LG International Corp............................... 34,920 43,914
*LG Merchant Banking Corp............................ 80,940 213,635
*LG Metals Corp...................................... 16,630 38,222
*LG Securities Co., Ltd.............................. 61,860 157,781
*Mando Machinery Corp................................ 3,767 21,147
*Namkwang Engineering & Construction Co., Ltd........ 2,370 1,078
*Orient Co., Ltd..................................... 560 4,536
*Oriental Brewery Co., Ltd........................... 4,490 65,715
Oriental Chemical Industries Co., Ltd................ 16,390 116,098
*Orion Electric Co., Ltd............................. 23,658 79,000
*Pang Rim Spinning................................... 2,330 17,796
*Peeres Cosmetics.................................... 1,060 2,410
*Poong San Corp...................................... 25,130 50,528
*SK Corp., Ltd....................................... 120,400 709,141
*STC Corp............................................ 4,950 9,460
*Saehan Industries, Inc.............................. 15,090 45,994
*Saehan Media Corp................................... 9,020 34,606
Sam Yang Corp........................................ 14,580 57,180
*Sambu Construction Co., Ltd......................... 8,670 24,609
*Samsung Aerospace Industrial Co., Ltd............... 49,910 138,294
*Samsung Corp........................................ 101,620 331,393
*Samsung Fine Chemicals.............................. 2,290 19,199
*Samwhan Corp. Co., Ltd.............................. 9,100 18,814
*Se Poong Corp....................................... 6,810 11,128
*Seah Steel Corp..................................... 8,500 43,481
*Seoul Bank.......................................... 14,200 27,643
*Seoul Securities Co., Ltd........................... 13,500 12,421
*Shin Han Securities Co., Ltd........................ 10,420 13,252
*Shin Poong Paper Manufacturing Co., Ltd............. 2,600 17,549
*Shin Sung Corp...................................... 6,290 2,949
*Shin Wha Engineering & Construction Co., Ltd........ 5,970 6,065
*Shin Young Securities Co., Ltd...................... 13,880 71,989
Shin Young Wacoal, Inc............................... 210 7,311
</TABLE>
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SHARES VALUE+
------------ ------------
<S> <C> <C>
Shin-Ho Paper Manufacturing Co., Ltd................. 6,840 $ 3,888
*Shindongbang Corp................................... 4,202 11,912
*Shinhan Bank Co., Ltd............................... 173,340 677,350
*Shinho Paper Co., Ltd............................... 14,430 6,869
Shinil Engineering Co., Ltd.......................... 4,260 8,323
*Shinsegae Department Store.......................... 14,440 138,501
*Shinsung Tongsang Co., Ltd.......................... 9,984 10,002
*Shinwon Corp........................................ 2,830 4,504
*Ssang Bang Wool Co., Ltd............................ 1,950 3,048
*Ssangyong Cement Industry Co., Ltd.................. 51,805 78,766
*Ssangyong Corp...................................... 9,023 5,193
*Ssangyong Heavy Industy Co., Ltd.................... 5,700 3,037
*Ssangyong Investment Securities Co., Ltd............ 40,420 60,020
Sunkyong Industries, Ltd............................. 13,761 35,686
*Sunkyong, Ltd....................................... 57,070 124,479
*Tai Han Electric Wire Co............................ 24,890 72,150
Taihan Sugar Industrial Co., Ltd..................... 3,150 31,332
Tong Yang Cement Corp................................ 19,250 42,671
*Tong Yang Merchant Bank............................. 4,462 14,456
*Tong Yang Securities Co., Ltd....................... 22,280 32,609
*Tongkook Corp....................................... 7,400 7,045
*Tongyang Confectionery Co........................... 3,300 14,536
*Trigem Computer, Inc................................ 11,780 31,051
Union Steel Manufacturing Co., Ltd................... 3,000 102,309
*Youngchang Akki Co., Ltd............................ 3,200 17,506
------------
TOTAL COMMON STOCKS
(Cost $26,595,479)................................... 12,000,323
------------
INVESTMENT IN CURRENCY -- (0.0%)
*Korean Won
(Cost $6).......................................... 4
------------
RIGHTS/WARRANTS -- (0.0%)
*Asia Banking Corp. Seoul, Korea Rights 06/23/98..... 10,980 0
*Korea Merchant Banking Co. Rights 06/20/98.......... 5,048 0
*Kwangju Bank, Ltd. Rights 06/11/98.................. 23,781 0
*Tong Yang Merchant Bank Rights 06/24/98............. 3,120 0
------------
TOTAL RIGHTS/WARRANTS
(Cost $0)............................................ 0
------------
TOTAL -- SOUTH KOREA
(Cost $26,595,485)................................... 12,000,327
------------
MALAYSIA -- (6.2%)
COMMON STOCKS -- (6.1%)
*AMMB Holdings Berhad................................ 187,200 166,703
AMMB Holdings Berhad 7.5% Unsecured Loan Stock
1999............................................... 31,000 3,229
Advance Synergy Berhad............................... 81,000 11,811
Affin Holdings Berhad................................ 431,000 150,381
*Amsteel Corp. Berhad................................ 198,000 22,427
Antah Holding Berhad................................. 74,000 11,946
*Aokam Perdana Berhad................................ 32,000 5,124
Arab Malaysia Corp. Berhad........................... 149,000 46,168
Arab Malaysian Development Berhad.................... 309,000 40,229
Asia Pacific Land Berhad............................. 368,000 40,724
Asiatic Development Berhad........................... 117,000 36,253
SHARES VALUE+
------------ ------------
Austral Enterprises Berhad........................... 83,000 $ 86,447
Bandar Raya Developments Berhad...................... 257,000 50,189
Batu Kawan Berhad.................................... 154,000 193,277
Berjaya Leisure Berhad............................... 74,000 47,785
Berjaya Singer Berhad................................ 32,400 8,521
Boustead Holdings Berhad............................. 181,000 131,962
Cahya Mata Sarawak Berhad............................ 150,000 78,896
Chin Teck Plantations Berhad......................... 29,000 36,396
Commerce Asset Holding Berhad........................ 420,200 222,108
*Cycle & Carriage Bintang Berhad..................... 47,000 53,602
DCB Sakura Merchant New Shares....................... 6,150 2,082
DNP Holdings Berhad.................................. 166,000 25,286
*Damansara Realty Berhad............................. 391,000 37,670
Datuk Keramik Holdings Berhad........................ 127,000 33,399
Diversified Resources Berhad......................... 139,000 42,708
Edaran Otomobil Nasional Berhad...................... 100,000 135,399
*Ekran Berhad........................................ 42,000 6,070
*Faber Group Berhad.................................. 171,000 24,934
Gadek (Malaysia) Berhad.............................. 25,000 15,558
*General Corp. Berhad................................ 178,000 21,320
Genting Berhad....................................... 112,500 292,931
Golden Hope Plantations Berhad....................... 159,000 173,884
Golden Plus Holdings Berhad.......................... 77,000 17,844
Guiness Anchor Berhad................................ 35,000 46,478
*Gula Perak Berhad................................... 135,000 31,285
*Guthrie Ropel Berhad................................ 67,000 52,337
HLG Capital Berhad................................... 30,000 13,280
Hicom Holdings Berhad................................ 363,000 117,204
Highlands and Lowlands Berhad........................ 99,000 96,925
*Hock Hua Bank Berhad (Foreign)...................... 44,000 45,140
Hong Leong Credit Berhad............................. 209,447 159,246
Hong Leong Industries Berhad......................... 129,800 106,125
Hong Leong Properties Berhad......................... 371,000 83,078
Hume Industries (Malaysia) Berhad.................... 116,000 91,821
IGB Corp. Berhad..................................... 275,000 85,210
IJM Corp. Berhad..................................... 205,000 90,743
*Idris Hydraulic (Malaysia) Berhad................... 296,000 43,932
Innovest Berhad...................................... 175,000 30,074
*Insas Berhad........................................ 300,000 44,135
Intria Berhad........................................ 451,000 63,414
*Island & Peninsular Berhad.......................... 124,000 83,947
Johan Holdings Berhad................................ 73,000 10,264
Kamunting Corp. Berhad............................... 455,000 59,237
Keck Seng (Malaysia) Berhad.......................... 94,000 35,857
Kedah Cement Holdings Berhad......................... 41,000 7,473
Kelang Container Terminal Berhad..................... 30,000 20,700
Kemayan Corp. Berhad................................. 84,000 11,702
Kretam Holdings Berhad............................... 25,000 13,865
Kuala Lumpur Kepong Berhad........................... 117,000 207,161
Kuala Sidim Berhad................................... 72,000 89,613
Kulim Malaysia Berhad................................ 98,000 57,159
Land - General Berhad................................ 266,000 41,557
*Landmarks Berhad.................................... 244,000 36,849
Larut Consolidated Berhad............................ 110,000 24,059
Leader Universal Holdings Berhad..................... 252,333 51,248
*Lingui Development Berhad........................... 78,000 25,387
Lion Land Berhad..................................... 142,375 16,497
MBF Holdings Berhad.................................. 837,000 89,356
*MBF Land Berhad..................................... 455,000 43,243
MUI Properties Berhad................................ 404,000 52,071
Magnum Corp. Berhad.................................. 240,000 126,234
</TABLE>
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<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Malayan Banking Berhad............................... 374,000 $ 525,869
Malayan Cement Berhad................................ 67,500 29,879
Malayan United Industries Berhad..................... 291,200 37,912
Malayawata Steel Berhad.............................. 92,000 23,955
Malaysia Building Society Berhad..................... 120,000 35,308
Malaysia Industrial Development Finance Berhad....... 298,000 86,129
Malaysia Mining Corp. Berhad......................... 483,000 212,543
Malaysian Airlines System............................ 446,000 267,101
Malaysian Helicopter Services Berhad................. 400,000 56,243
Malaysian Mosaics Berhad............................. 154,000 46,916
Malaysian Oxygen Berhad.............................. 23,000 61,086
Malaysian Plantations Berhad......................... 170,000 39,175
*Malaysian Resources Corp. Berhad.................... 240,333 73,217
Matsushita Electric Co. (Malaysia) Berhad............ 6,000 20,154
Metroplex Berhad..................................... 388,000 87,895
Mulpha International Berhad.......................... 554,000 66,356
Nestle (Malaysia) Berhad............................. 38,000 169,197
New Straits Times Press (Malaysia) Berhad............ 73,000 51,321
Nylex (Malaysia) Berhad.............................. 120,500 52,712
OSK Holdings......................................... 143,000 48,033
Olympia Industries Berhad............................ 122,000 14,613
Oriental Holdings Berhad............................. 53,760 93,088
PJ Development Holdings Berhad....................... 136,000 20,185
Peladang Kimia Berhad................................ 25,000 9,764
Pernas International Holdings Berhad................. 375,000 87,391
Perusahaan Otomobil Nasional Berhad.................. 285,000 283,479
Pilecon Engineering Berhad........................... 105,000 27,614
*Promet Berhad....................................... 140,000 13,488
RHB Capital Berhad................................... 123,000 67,257
RJ Reynolds Berhad................................... 43,000 67,179
Resorts World Berhad................................. 174,000 269,574
Road Builders (Malaysia) Holdings Berhad............. 68,000 52,764
Rothmans of Pall Mall Malaysia Berhad................ 46,000 347,351
SCB Developments Berhad.............................. 58,000 23,106
SP Settia Berhad..................................... 74,000 27,939
Sarawak Enterprise Corp. Berhad...................... 620,000 206,640
Selangor Properties Berhad........................... 182,000 76,297
Shangri-la Hotels (Malaysia) Berhad.................. 233,000 64,309
Shell Refining Co. Federation of Malaysia Berhad..... 48,000 81,239
*Silverstone Berhad.................................. 6,930 0
Sime Darby Berhad (Malaysia)......................... 355,980 283,635
Sime UEP Properties Berhad........................... 66,000 52,243
Southern Bank Berhad (Foreign)....................... 125,000 59,888
Southern Steel Berhad................................ 67,000 26,168
Sungei Way Holdings Berhad........................... 213,000 49,915
Ta Enterprise Berhad................................. 387,000 70,538
Tan & Tan Developments Berhad........................ 142,000 48,067
Tan Chong Motor Holdings Berhad...................... 389,000 253,222
Telekom Malaysia Berhad.............................. 487,500 1,117,041
Tenaga Nasional Berhad............................... 502,000 830,022
Time Engineering Berhad.............................. 350,000 92,045
*Tongkah Holdings Berhad............................. 84,000 19,576
Tractors Malaysia Holdings Berhad.................... 140,000 47,390
Tradewinds (Malaysia) Berhad......................... 90,000 43,588
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
UMW Holdings Berhad.................................. 153,666 $ 95,629
United Engineering (Malaysia) Berhad................. 87,000 51,876
United Malacca Rubber Estates Berhad................. 30,000 30,933
------------
TOTAL COMMON STOCKS
(Cost $18,778,065)................................... 11,573,223
------------
INVESTMENT IN CURRENCY -- (0.1%)
*Malaysian Ringetts
(Cost $127,263).................................... 126,714
------------
TOTAL -- MALAYSIA
(Cost $18,905,328)................................... 11,699,937
------------
PHILIPPINES -- (6.2%)
COMMON STOCKS -- (6.2%)
*Aboitiz Equity Ventures, Inc........................ 5,782,000 261,266
*Alsons Consolidated Resources, Inc.................. 16,694,000 480,032
*Anglo Philippine Holdings Corp...................... 890,000 8,683
Bacnotan Cement Corp................................. 958,000 162,331
Bacnotan Consolidated Industries, Inc................ 237,085 362,170
*Bankard, Inc........................................ 446,000 18,206
*Belle Corp.......................................... 18,941,000 671,079
*Cebu Holdings, Inc.................................. 7,763,250 159,450
*DMCI Holdings, Inc.................................. 9,600,000 571,809
*EEI Corporation..................................... 3,489,000 130,781
*Fil-Estate Land, Inc................................ 13,422,000 496,217
*Filinvest Land, Inc................................. 15,691,000 1,168,262
Guoco Holdings (Philippines), Inc.................... 15,440,000 348,836
*House of Investments, Inc........................... 792,000 17,284
*Kepphil Shipyard, Inc............................... 3,921,400 78,528
*Kuok Philippine Properties, Inc..................... 16,340,000 167,805
*Megaworld Properties & Holdings, Inc................ 17,570,000 338,318
*Metro Pacific Corp.................................. 21,430,000 891,310
*Mondragon International Philippines, Inc............ 2,464,000 55,669
*Negros Navigation Co., Inc.......................... 955,000 17,163
*PDCP Development Bank............................... 409,000 162,760
*Philippine National Bank............................ 646,000 1,227,315
*Philippine Realty & Holdings Corp................... 19,630,000 201,591
*Philippine Savings Bank............................. 528,000 267,727
*Pryce Properties Corp............................... 1,480,000 49,397
RFM Corp............................................. 1,820,000 256,996
*Republic Glass Holding Corp......................... 780,000 21,227
*Robinson's Land Corp. Series B...................... 8,224,000 443,398
*SM Development Corp................................. 10,236,400 268,064
*Southeast Asia Cement Holdings, Inc................. 35,908,000 497,825
*Steniel Manufacturing Corp.......................... 713,000 10,983
*Trans-Asia Oil & Energy............................. 1,140,000 17,854
*Universal Rightfield Property Holdings, Inc......... 13,760,000 211,964
Universal Robina Corp................................ 6,993,000 1,256,762
Urban Bank, Inc...................................... 14,950 34,544
*Vitarich Corp....................................... 541,000 8,195
*William, Gothong & Aboitiz, Inc..................... 6,085,000 293,704
------------
TOTAL -- PHILIPPINES
(Cost $13,593,782)................................... 11,635,505
------------
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<TABLE>
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<S> <C> <C>
THAILAND -- (5.1%)
COMMON STOCKS -- (4.9%)
Advanced Info Service Public Co., Ltd. (Foreign)..... 124,500 $ 690,468
American Standard Sanitaryware (Thailand) Public Co.
Ltd. (Foreign)..................................... 4,150 19,522
*Aromatics (Thailand) Public Co., Ltd. (Foreign)..... 1,556,000 154,097
Ayudhya Insurance Public Co., Ltd. (Foreign)......... 13,000 43,451
*Bangkok Land Public Co., Ltd. (Foreign)............. 256,400 12,061
*Bangkok Rubber Public Co., Ltd. (Foreign)........... 377,200 93,389
*Bangkok Steel Industry Public Co., Ltd. (Foreign)... 84,000 3,951
*Bank of Asia Public Co., Ltd. (Foreign)............. 188,100 47,735
Bank of Ayudhya Public Co., Ltd. (Foreign)........... 2,298,000 640,072
Banpu Public Co., Ltd. (Foreign)..................... 25,000 79,846
*Big C Supercenter Public Co., Ltd. (Foreign)........ 1,050,000 200,173
*Capetronic International (Thailand) Public Co.,
Ltd................................................ 1,031,700 130,272
*Capital Nomura Securities Public Co., Ltd.
(Foreign).......................................... 732,000 312,627
*Central Pattana Public Co., Ltd. (Foreign).......... 395,000 124,690
*Ch Karnchang Public Co., Ltd. (Foreign)............. 384,800 385,848
*Charoen Pokphand Feedmill Public Co., Ltd.
(Foreign).......................................... 8,100 8,222
*Christiani and Nielson (Thai) Public Co., Ltd.
(Foreign).......................................... 56,779 1,125
*First Bangkok City Bank Public Co., Ltd.
(Foreign).......................................... 460,200 33,042
International Cosmetics Public Co., Ltd. (Foreign)... 113,000 148,279
*Italian-Thai Development Public Co., Ltd............ 118,100 82,603
*Italian-Thai Development Public Co., Ltd.
(Foreign).......................................... 438,300 306,560
*Jasmine International Public Co., Ltd. (Foreign).... 470,400 116,464
Kang Yong Electric Public Co., Ltd. (Foreign)........ 91,500 151,783
*Kiatnakin Finance and Securities Public Co., Ltd.
(Foreign).......................................... 36,000 4,189
Krung Thai Bank Public Co., Ltd...................... 2,168,500 343,610
Krung Thai Bank Public Co., Ltd. (Foreign)........... 2,605,300 419,273
*Laguna Resorts & Hotels Public, Ltd. Foreign........ 282,500 112,783
*Land and House Public Co., Ltd. (Foreign)........... 146,877 51,820
*MK Real Estate Development Public Co., Ltd.
(Foreign).......................................... 23,625 1,228
*Modernform Group Public Co., Ltd. (Foreign)......... 46,000 5,638
Nakornthon Bank Public Co., Ltd. (Foreign)........... 838,600 97,584
SHARES VALUE+
------------ ------------
*Nawarat Patanakarn Public Co., Ltd. (Foreign)....... 6,400 $ 269
*New Imperial Hotel Public Co., Ltd. (Foreign)....... 32,000 17,925
*Padaeng Industry Public Co., Ltd (Foreign).......... 561,500 84,802
Phoenix Pulp and Paper Public Co., Ltd. (Foreign).... 171,400 98,664
*Post Publishing Public Co., Ltd. (Foreign).......... 23,000 21,639
*Premier Enterprises Public Co., Ltd. (Foreign)...... 32,000 317
*Quality Houses Public Co., Ltd. (Foreign)........... 847,000 56,620
*Saha Pathana Inter-Holding Public Co., Ltd.
(Foreign).......................................... 203,600 111,529
Saha Pathanapibul Public Co., Ltd. (Foreign)......... 24,200 17,001
*Sahaviriya Steel Industries Public Co., Ltd.
(Foreign).......................................... 3,075,300 175,122
*Samart Corp. Public Co., Ltd. (Foreign)............. 288,200 85,625
*Securities One Public Co., Ltd. (Foreign)........... 624,000 64,887
Shangri-la Hotel Public Co., Ltd. (Foreign).......... 257,900 108,549
Shangri-la Hotel Public Co., Ltd. Bangkok............ 2,600 1,094
Shinawatra Computer and Communications Public Co.,
Ltd. (Foreign)..................................... 102,800 348,690
*Shinawatra Satellite Public Co., Ltd................ 478,600 145,156
*Shinawatra Satellite Public Co., Ltd. (Foreign)..... 865,400 262,470
*Siam City Bank Public Co., Ltd. (Foreign)........... 319,100 1,580
*Siam City Cement Public Co., Ltd. (Foreign)......... 116,121 163,875
Siam Commercial Bank Public Co., Ltd. (Foreign)...... 338,333 192,663
*Siam Pulp & Paper Co., Ltd. (Foreign)............... 461,100 376,734
*Siam Pulp-Paper Co., Ltd............................ 171,400 140,040
*Sino-Thai Engineering and Construction Public Co.,
Ltd. (Foreign)..................................... 21,200 3,202
*Srithai Superware Public Co., Ltd. (Foreign)........ 21,000 4,003
*TPI Polene Public Co., Ltd. (Foreign)............... 271,162 23,498
*Tanayong Public Co., Ltd. (Foreign)................. 1,521,800 71,588
*Thai German Ceramic Industry Public Co., Ltd.
(Foreign).......................................... 58,000 10,052
Thai Glass Industries Public Co., Ltd. (Foreign)..... 60,000 100,272
Thai Military Bank Public Co., Ltd. (Foreign)........ 4,857,000 901,894
*Thai Packaging and Printing Public Co., Ltd.
(Foreign).......................................... 29,500 1,096
*Thai Petrochemical Industry Public Co., Ltd.
(Foreign).......................................... 1,621,700 176,664
Thai Rung Union Carbide Public Co., Ltd.............. 103,700 64,829
</TABLE>
13
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Thai Rung Union Carbide Public Co., Ltd. (Foreign)... 217,000 $ 135,659
*Thai Telephone & Telecommunication Public Co., Ltd.
(Foreign).......................................... 882,000 148,492
*Thai Wah Public Co., Ltd. (Foreign)................. 21,000 1,404
*Vinythai Public Co., Ltd. (Foreign)................. 2,492,900 271,571
------------
TOTAL COMMON STOCKS
(Cost $21,687,320)................................... 9,211,880
------------
INVESTMENT IN CURRENCY -- (0.2%)
*Thailand Baht
(Cost $365,824).................................... 360,266
------------
RIGHTS/WARRANTS -- (0.0%)
*Bank of Ayudhya Public Co., Ltd. (Foreign) Rights
06/10/98........................................... 2,298,000 71,119
*Securities One Public Co., Ltd. (Foreign) Warrants
1998-2001.......................................... 161,000 0
*Siam Commercial Bank Public Co., Ltd. (Foreign)
Warrants open expiration........................... 333 0
------------
TOTAL RIGHTS/WARRANTS
(Cost $0)............................................ 71,119
------------
TOTAL -- THAILAND
(Cost $22,053,144)................................... 9,643,265
------------
INDONESIA -- (1.3%)
COMMON STOCKS -- (1.3%)
PT Argo Pantes Tbk................................... 271,250 12,602
PT Astra International Tbk........................... 2,188,800 203,383
PT Berlian Laju Tanker Tbk........................... 431,600 63,976
PT Branta Mulia Tbk.................................. 126,000 3,903
PT Charoen Pokphand Tbk.............................. 210,000 5,111
PT Dankos Laboratories............................... 94,500 3,972
PT Gajah Tunggal Tbk................................. 1,488,000 19,752
PT Gt Kabel Indonesia Tbk............................ 360,000 3,982
PT Hanjaya Mandala Sampoerna Tbk..................... 910,000 306,016
PT Hero Supermarket Tbk.............................. 220,000 19,469
PT Indah Kiat Pulp & Paper Corp...................... 4,815,196 788,324
SHARES VALUE+
------------ ------------
PT Indocement Tunggal Prakarsa....................... 166,000 $ 39,663
*PT Indofood Sukses Makmur........................... 42,330 5,900
PT Indorama Synthetics Tbk........................... 535,320 90,009
*PT Inti Indorayo Utama.............................. 411,500 27,312
PT Jakarta International Hotel and Development Tbk... 1,590,000 87,942
PT Japfa Comfeed Indonesia Tbk....................... 124,000 2,881
PT Kalbe Farma Tbk................................... 409,600 19,936
*PT Lippo Land Development Tbk....................... 386,400 11,113
PT Mayorah Indah..................................... 577,572 26,834
PT Modern Photo Tbk.................................. 250,000 22,124
PT Pakuwon Jati Tbk.................................. 396,000 8,323
PT Panasia Indosyntec Tbk............................ 403,200 6,244
*PT Polysindo Eka Perkasa Tbk........................ 2,064,000 178,088
PT Semen Cibinong Tbk................................ 743,400 29,604
PT Semen Gresik...................................... 600,000 321,237
PT Summarecon Agung.................................. 258,587 5,149
PT Surya Toto Indonesia.............................. 46,400 10,060
PT Tigaraksa Satria Tbk.............................. 68,400 20,580
PT Unggul Indah Corp. Tbk............................ 292,596 38,840
------------
TOTAL -- INDONESIA
(Cost $13,317,123)................................... 2,382,329
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FACE
AMOUNT
------------
<CAPTION>
(000)
<S> <C> <C>
TEMPORARY CASH
INVESTMENTS -- (2.0%)
Repurchase Agreement, Chase Manhattan Bank N.A. 5.20%,
06/01/98 (Collateralized by U.S. Treasury Notes
5.50%, 01/31/03, valued at $3,857,319) to be
repurchased at $3,778,731.
(Cost $3,777,000).................................. $3,777 3,777,000
------------
TOTAL INVESTMENTS -- (100.0%)
(Cost $189,113,335).................................. $188,900,500
------------
------------
- --------------------
+See Note B to Financial Statements.
*Non-Income Producing Securities
++Approximates cost for federal income purposes.
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<S> <C>
ASSETS:
Investments at Value (Cost of $189,113).................................................... $ 188,900
Cash....................................................................................... 633
Receivable for Dividends and Interest...................................................... 686
Receivable for Fund Share Sold............................................................. 35
Other Assets............................................................................... 2
---------
Total Assets........................................................................... 190,256
---------
LIABILITIES:
Payable for Investment Securities Purchased................................................ 1,370
Deferred Chilean Repatriation Tax.......................................................... 660
Accrued Expenses........................................................................... 169
---------
Total Liabilities...................................................................... 2,199
---------
NET ASSETS applicable to 12,482,657 shares outstanding $.01 par value shares (authorized
200,000,000 shares)...................................................................... $ 188,057
---------
---------
NET ASSET VALUE............................................................................ $ 15.07
---------
---------
PUBLIC OFFERING PRICE PER SHARE............................................................ $ 15.15
---------
---------
NET ASSETS CONSIST OF:
Paid-In Capital............................................................................ $ 163,351
Undistributed Net Investment Income........................................................ 591
Undistributed Net Realized Gain............................................................ 25,019
Accumulated Net Realized Foreign Exchange Loss............................................. (744)
Unrealized Net Foreign Exchange Gain....................................................... 53
Unrealized Depreciation of Investment Securities and Foreign Currency...................... (213)
---------
Total Net Assets....................................................................... $ 188,057
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes Withheld and Repatriation of $189)....................... $ 3,290
Interest................................................................................. 221
---------
Total Investment Income............................................................ 3,511
---------
EXPENSES
Investment Advisory Services............................................................. 100
Accounting & Transfer Agent Fees......................................................... 123
Custodian's Fee.......................................................................... 357
Legal Fees............................................................................... 21
Audit Fees............................................................................... 8
Directors' Fees and Expenses............................................................. 21
Organization Costs....................................................................... 8
Other.................................................................................... 22
---------
Total Expenses..................................................................... 660
---------
NET INVESTMENT INCOME.................................................................... 2,851
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on Investment Securities............................................... 25,032
Net Realized Loss on Foreign Currency Transactions....................................... (744)
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency............................................. (34,861)
Deferred Chilean Repatriation Tax...................................................... 205
Translation of Foreign Currency Denominated Amounts.................................... 30
---------
NET LOSS ON INVESTMENT SECURITIES AND FOREIGN CURRENCY................................... (10,338)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....................................... $ (7,487)
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENTS OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MAY 31, NOV. 30,
1998 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income.................................................................... $ 2,851 $ 3,841
Net Realized Gain on Investment Securities............................................... 25,032 197
Net Realized Gain (Loss) on Foreign Currency Transactions................................ (744) 6
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency............................................... (34,861) (5,295)
Deferred Chilean Repatriation Tax........................................................ 205 1,568
Translation of Foreign Currency Denominated Amounts...................................... 30 9
------------ -----------
Net Increase (Decrease) in Net Assets Resulting from Operations...................... (7,487) 336
------------ -----------
Distributions From:
Net Investment Income.................................................................... (5,417) (506)
Net Realized Gain........................................................................ (204) (209)
------------ -----------
Total Distributions.................................................................. (5,621) (715)
------------ -----------
Capital Share Transactions (1):
Capital Shares Issued.................................................................... 1,764 19,000
Shares Issued in Lieu of Cash Distributions.............................................. 5,621 715
Capital Shares Redeemed.................................................................. (25) --
------------ -----------
Net Increase from Capital Share Transactions......................................... 7,360 19,715
------------ -----------
Total Increase (Decrease)............................................................ (5,748) 19,336
------------ -----------
NET ASSETS
Beginning of Period...................................................................... 193,805 174,469
------------ -----------
End of Period............................................................................ $ 188,057 $ 193,805
------------ -----------
------------ -----------
(1) SHARE AMOUNTS:
Shares Issued............................................................................ 107 964
Shares Issued in Lieu of Cash Distributions.............................................. 365 47
Shares Redeemed.......................................................................... (1) --
------------ -----------
471 1,011
------------ -----------
------------ -----------
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS FEB. 2
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED TO
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1998 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
Net Asset Value, Beginning of Period.... $ 16.13 $ 15.86 $ 14.77 $ 17.10 $ 15.18 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................. 0.24 0.33 0.26 0.28 0.19 0.16
Net Gains on Securities (Realized and
Unrealized)......................... (0.83) 0.01 1.36 (2.29) 1.94 5.53
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations.... (0.59) 0.34 1.62 (2.01) 2.13 5.69
---------- ---------- ---------- ---------- ---------- ----------
Effect of Capital Changes............... -- -- -- -- -- (0.46)
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Net Investment Income................. (0.45) (0.05) (0.28) (0.29) (0.20) (0.05)
Net Realized Gain..................... (0.02) (0.02) (0.25) (0.03) (0.01) --
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions..................... (0.47) (0.07) (0.53) (0.32) (0.21) (0.05)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.......... $ 15.07 $ 16.13 $ 15.86 $ 14.77 $ 17.10 $ 15.18
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Total Investment Return (a)............. (3.73)%# 2.12% 12.41% (11.73)% 14.02% 52.32%#
Net Assets, End of Period (thousands)... $188,057 $ 193,805 $ 174,469 $ 157,054 $ 153,095 $ 134,232
Ratio of Expenses to Average Net
Assets................................ 0.66%* 0.62%(b) 0.59%(b) 0.58%(b) 0.80%(b) 0.73%*
Ratio of Net Investment Income to
Average Net Assets.................... 2.86%* 1.87%(b) 1.64%(b) 2.10%(b) 1.18%(b) 1.59%*
Portfolio Turnover Rate................. 40.38%* 0.49% 0.29% 5.73% 0.26% 0.28%*
Average Commission Rate................. $0.0013 $ 0.0008 $ 0.0016 N/A N/A N/A*
</TABLE>
- --------------
* Annualized
# Non-annualized
(a) Based on per share net asset value. Per share market price is not readily
determinable since fund shares are currently only sold at a public offering
price.
(b) Had certain waivers not been in effect, the ratios of expenses to average
net assets for the periods ended November 30, 1997, 1996, 1995 and 1994
would have been 1.02%, 0.99%, 0.98%, and 0.88%, respectively, and the ratios
of net investment income to average net assets for the periods ended
November 30, 1997, 1996, 1995 and 1994 would have been 1.47%, 1.24%, 1.70%
and 1.10%, respectively.
See accompanying Notes to Financial Statements.
18
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION:
Prior to November 21, 1997, Dimensional Emerging Markets Fund Inc. (the
"Fund") was organized as a closed-end management investment company registered
under the Investment Company Act of 1940, as amended. Effective November 21,
1997 the Fund was reorganized as an open-end management investment company.
B. SIGNIFICANT ACCOUNTING POLICIES:
The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Fund in preparation of its financial
statements. The preparation of financial statements in accordance with generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
1. SECURITY VALUATION: Securities held by the Fund which are listed on a
securities exchange and for which market quotations are readily available are
valued at the last quoted sale price of the day or, if there is no such reported
sale, at the mean between the most recent bid and asked prices. Price
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted securities for which market quotations are readily
available are valued at the mean between the most recent bid and asked prices.
Securities for which quotations are not readily available are determined in good
faith at fair value using methods determined by the Board of Directors.
2. FOREIGN CURRENCY TRANSLATIONS: Securities and other assets and
liabilities of the Fund whose values are initially expressed in foreign
currencies are translated to U.S. dollars at the mean price of such currency
against U.S. dollars last quoted by a major bank. Dividend and interest income
and certain expenses are translated to U.S. dollars at the ratio of exchange on
their respective accrual dates. Receivables and payables denominated in foreign
currencies are marked to market based on daily exchange rates and exchange gains
or losses are realized upon ultimate receipt or disbursement.
The Fund does not isolate the effect of fluctuations in foreign exchange
rates from the effect of fluctuations in the market prices of securities held
whether realized or unrealized.
Realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from the disposition of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between amounts of interest,
dividends and foreign withholding taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid.
3. FEDERAL INCOME TAXES: It is the Fund's intention to continue to qualify
as a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for federal taxes is required in the financial
statements.
4. REPURCHASE AGREEMENTS: The Fund may purchase money market instruments
from financial institutions, such as banks and non-bank dealers, subject to the
seller's agreement to repurchase them at an agreed upon date and price. The
seller will be required on a daily basis to maintain the value of the collateral
subject to the agreement at not less than the repurchase price (including
accrued interest). The agreements are conditioned upon the collateral being
deposited under the Federal Reserve book-entry system or with the Fund's
custodian. If the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be subject to legal proceedings.
All open repurchase agreements were entered into on May 29, 1998.
5. FOREIGN MARKET RISKS: Investments in foreign markets may involve
certain considerations and risks not typically associated with investments in
the United States, including the possibility of future political and economic
19
<PAGE>
developments and the level of foreign governmental supervision and regulation of
foreign securities markets. These markets are generally smaller, less liquid and
more volatile than the major securities markets in the United States.
Consequently, acquisition and disposition of securities by the Fund may be
inhibited.
6. OTHER: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains and
losses on the sale of investment securities are those of specific securities
sold. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Costs
incurred by the Fund in connection with its organization are being amortized on
a straight-line basis over a five year period beginning at the commencement of
operations of the Fund.
Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of foreign investors. In
addition, if there is a deterioration in a country's balance of payments or for
other reasons, a country may impose temporary restrictions on foreign capital
remittances abroad. Amounts repatriated prior to the end of specified periods
may be subject to taxes as specified in the Fund's prospectus. The fund has
recorded deferred repatriation taxes relating to net unrealized appreciation on
its investment in Chile.
C. INVESTMENT ADVISOR:
Dimensional Fund Advisors Inc. (the "Advisor") provides investment advisory
services to the Fund. For the six months ended May 31, 1998, the fund paid the
Advisor a fee based on an annual effective rate of 0.10% of average net assets.
An investment committee of the Advisor approves all investment decisions
made by the Fund.
Certain officers of the Fund are also officers, directors and shareholders
of the Advisor.
D. PURCHASES AND SALES OF SECURITIES:
For the six months ended May 31, 1998, the Fund made the following purchases
and sales of investment securities other than U.S. Government securities and
temporary cash investments (amounts in thousands):
<TABLE>
<S> <C>
Purchases................................................... $ 43,499
Sales....................................................... 39,142
</TABLE>
E. INVESTMENT TRANSACTIONS:
At May 31, 1998, gross unrealized appreciation and depreciation for
financial reporting and Federal income tax purposes of investment securities and
foreign currencies were as follows (amounts in thousands):
<TABLE>
<S> <C>
Gross Unrealized Appreciation............................... $ 56,237
Gross Unrealized Depreciation............................... (56,450)
---------
Net......................................................... $ (213)
---------
---------
</TABLE>
F. LINE OF CREDIT
The Fund together with other DFA-advised portfolios, has entered into a $50
million unsecured line of credit with its domestic custodian bank. The Fund is
permitted to borrow, subject to its investment limitations, up to a maximum of
$50 million. Borrowings under the line are charged interest at the current
overnight federal funds rate plus a variable rate determined at the date of
borrowing. Each portfolio is individually, and not jointly liable for its
particular advances under the line. There is no commitment fee on the unused
portion of the line of credit. There were no borrowings under the line of credit
by the Fund during the six months ended May 31, 1998.
G. REIMBURSEMENT FEES:
Shares of the Fund are sold at a public offering price which is equal to the
current net asset value plus a reimbursement fee of 0.50% of such net asset
value. Reimbursement fees are recorded as an addition to paid in capital.
20
