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Investment Company Act of 1940 File No. 811-7440
Securities And Exchange Commission
Washington, D.C. 20549
_________________
Form N-1A
[X] Registration Statement Under The Investment Company Act of 1940
[X] Amendment No. 9
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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
MARCH 26, 1999
INTRODUCTION
DIMENSIONAL EMERGING MARKETS VALUE FUND INC. (the "Fund"),
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401, (310)
395-8005, offers its shares 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.
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
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DIMENSIONAL EMERGING MARKETS VALUE FUND INC.................................1
Investment Objective and Policies.....................................1
Fund Characteristics and Policies.....................................1
Portfolio Construction................................................2
SECURITIES LOANS............................................................3
RISK FACTORS................................................................4
Foreign Securities....................................................4
Investing in Emerging Markets.........................................4
Malaysian Securities..................................................6
Foreign Currencies and Related Transactions...........................7
Borrowing.............................................................7
Portfolio Strategies..................................................7
Futures Contracts and Options on Futures..............................7
Year 2000 Issue.......................................................8
MANAGEMENT OF THE FUND......................................................8
Consulting Services...................................................9
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES............................9
PURCHASE OF SHARES.........................................................10
Cash Purchases........................................................10
In Kind-Purchases.....................................................11
VALUATION OF SHARES........................................................12
Net Asset Value......................................................12
Public Offering Price................................................14
EXCHANGE OF SHARES.........................................................13
REDEMPTION OF SHARES.......................................................14
Redemption Procedure.................................................14
Redemption of Small Accounts.........................................15
In-Kind Redemptions..................................................15
SERVICE PROVIDERS..........................................................16
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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 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
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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
for 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, Greece, Hungary,
Indonesia, Israel, Malaysia, Mexico, Philippines, Poland, Portugal, South
Korea, Thailand and Turkey. Countries that may be approved in the future
include but are not limited to Colombia, Czech Republic, India, Jordan,
Nigeria, Pakistan, 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.
The Fund may purchase, for liquidity, or for temporary defensive
purposes during periods in which market or economic or political conditions
warrant, 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
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.
PORTFOLIO CONSTRUCTION
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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 (the "Code"). 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 investments 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. However, management
believes that, 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.
Generally, securities will be purchased with the expectation that
they will be held for longer than one year. However, securities, including
those eligible for purchase, 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
compensation on the loan, as well as amounts equal to any
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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
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subsequent to investment in the securities of a particular country, the
Fund, among other things, might discontinue the purchase 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
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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.
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.
MALAYSIAN SECURITIES
As of September 18, 1998, the Fund discontinued further investment
in Malaysian securities as a consequence of certain restrictions imposed by
the Malaysian government on the repatriation of assets by foreign investors
such as 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 Lumpur Stock Exchange, that
operated to severely constrain or prohibit foreign investors, including the
Fund, from repatriating assets. Pursuant to these regulations, the Fund was
not 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 stopped investing
additional funds in Malaysia effective September 10, 1998. On February 4,
1999, the Malaysian government announced the imposition of a levy on
repatriation of portfolio capital. The levy replaced the 12-month holding
period imposed under the September 1, 1998 exchange control rules. The
amount of the levy depends on the duration that funds have been held in
Malaysia. With respect to funds invested in Malaysia prior to February 15,
1999, which includes all the funds so invested by the Fund, profits from
investment made during the 12-month holding period are exempt from
imposition of a levy. A levy will be imposed, however, on the amount of
capital that is repatriated. Although there is some confusion in the market
concerning the mechanics of the levy, it appears that any principal
repatriated after one year from September 1, 1998 will not attract any
levy. Principal amounts that are repatriated within one year will be
subject to a levy at a decreasing rate, depending on the duration the
principal is held. The Advisor is closely monitoring the situation to
determine when to begin divesting the Fund of its Malaysian assets without
adverse affect.
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With respect to the current Malaysian investments owned, the Fund
is presently valuing the securities in good faith at fair value by
discounting the U.S. dollar-ringgit currency exchange rate. Pending further
clarification from Malaysian regulatory authorities regarding the controls
identified above, the Fund is treating its investments in Malaysian
securities as illiquid. As of February 26, 1999 Malaysian securities
constitute approximately 8.03% of the Fund's net asset value.
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.
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.
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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, as a result, more than 5% of its net
assets would then consist of initial margin deposits and premiums required
to establish such positions 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 are 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 Code may limit the ability
of the Fund to invest in futures contracts and options on futures
contracts.
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 particular concern with foreign entities. The Advisor has
taken steps to ensure that its computers and those of service providers
(e.g., custodians) of the Fund and Feeder Portfolio will operate properly.
The Fund and Feeder Portfolio may be negatively affected if the Advisor's
efforts prove inadequate, and/or year 2000 problems hurt portfolio
securities and 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.
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For the fiscal year ended November 30, 1998, 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.
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 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 $28 billion.
CONSULTING SERVICES
The Advisor has entered into a Consulting Services Agreement with
Dimensional Fund Advisors Ltd. ("DFAL") and DFA Australia Limited ("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. The Advisor owns 100% of
the outstanding shares of DFAL and beneficially owns 100% of DFA Australia.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
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.
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).
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.
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
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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.
One shareholder of the Fund is an open-end investment company that seeks
to achieve its investment objective by investing all of its investable assets
in the Fund (the "Feeder Portfolio"). The Feeder Portfolio has the same
investment objective, policies and limitations as the Fund. The master-feeder
structure is unlike many other investment
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companies that directly acquire and manage their own portfolio of securities.
The investment experience of the Feeder Portfolio will correspond directly
with the investment experience of the Fund.
CASH PURCHASES
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 Value 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 Value 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
11
<PAGE>
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
NET ASSET VALUE
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 mean between the most recent
bid and asked prices 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
12
<PAGE>
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 over-the-counter 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 over-the-counter 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.
13
<PAGE>
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
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. 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. 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 over-the-counter 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.")
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.
REDEMPTION PROCEDURE
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
14
<PAGE>
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.
REDEMPTION OF SMALL ACCOUNTS
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.
IN-KIND REDEMPTIONS
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.
15
<PAGE>
SERVICE PROVIDERS
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
16
<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
March 26, 1999
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
March 26, 1999 ("Part A"). A free copy of the Fund's Part A and annual
report to shareholders can be obtained from the Fund by writing to the Fund
at the above address or by calling the above telephone number. Information
from the Fund's annual report to shareholders is incorporated by reference
into this statement of additional information.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
FUND CHARACTERISTICS AND POLICIES 1
BROKERAGE COMMISSIONS 1
INVESTMENT LIMITATIONS 2
FUTURES CONTRACTS 4
CASH MANAGEMENT PRACTICES 5
CONVERTIBLE DEBENTURES 5
DIRECTORS AND OFFICERS 6
SERVICES TO THE FUND 8
ADVISORY FEES 9
GENERAL INFORMATION 9
SHAREHOLDER RIGHTS 10
PRINCIPAL HOLDERS OF SECURITIES 10
PURCHASE OF SHARES 11
REDEMPTION OF SHARES 11
TAXATION OF THE FUND 11
CALCULATION OF PERFORMANCE DATA 12
FINANCIAL STATEMENTS 14
</TABLE>
<PAGE>
FUND CHARACTERISTICS AND POLICIES
The following information supplements the information set forth in Part
A. Capitalized terms not otherwise defined in this SAI have the meaning
assigned to them in Part A.
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.
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.
BROKERAGE COMMISSIONS
For the fiscal years ending November 30, 1998, 1997 and 1996, the Fund
paid brokerage commissions of $638,643, $79,005 and $14,699, 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 have
assisted in the sale of the Fund's shares and 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 1998 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
or to brokers which are affiliates of the Fund or affiliates of affiliates.
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.
1
<PAGE>
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;
2
<PAGE>
(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.
3
<PAGE>
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 net
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
4
<PAGE>
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.
CASH MANAGEMENT PRACTICES
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). The Fund may also invest in money
market mutual funds for temporary cash management purposes.
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.
CONVERTIBLE DEBENTURES
The Fund may invest up to 5% of its assets in convertible debentures
issued by non-U.S. companies organized in Approved Markets. 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.
DIRECTORS AND OFFICERS
The Board of Directors is responsible for establishing Fund policies and
for overseeing the management of the Fund. The names, dates of birth and
locations of the directors and
5
<PAGE>
officers of the Fund and a brief statement of their present positions and
principal occupations during the past five years are 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 of the following companies: Dimensional Fund Advisors
Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions
Group Inc., and Dimensional Investment Group Inc., Trustee, President and
Chairman-Chief Executive Officer of The DFA Investment Trust Company
(registered investment 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, DFA Investment
Dimensions Group Inc. and Dimensional Investment 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 companies). Director, DFA Investment
Dimensions Group Inc. and Dimensional Investment 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, DFA Investment Dimensions Group Inc. and Dimensional
Investment Group Inc., Hospital Fund, Inc. (investment management services)
and BIRR Portfolio Analysis, Inc. (software products). Chairman, Ibbotson
Associates, Inc., Chicago, IL (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,
DFA Investment Dimensions Group Inc. and Dimensional Investment Group Inc.
and 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, DFA
Investment Dimensions Group Inc., Dimensional Investment 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,
DFA Investment Dimensions Group Inc. and Dimensional Investment 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.
6
<PAGE>
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, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc., The DFA Investment Trust Company,
and Dimensional Fund Advisors Ltd.
Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA.
Truman Clark, (4/18/41), 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.
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, (for
all entities other than Dimensional Fund Advisors Ltd.), 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 from 1985-1993;
President, ANB Investment Management and Trust Company from 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 from 1989 to 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.
7
<PAGE>
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 from 1987 to 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, 1998, and the total compensation received from
all four registered investment companies for which the Advisor serves as
investment advisor during that same fiscal year.
<TABLE>
<CAPTION>
Aggregate Total Compensation from
Compensation Fund
Director from Fund and Fund Complex
- -------- ------------------------- --------------------
<S> <C> <C>
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
</TABLE>
SERVICES 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 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.
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
8
<PAGE>
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.
CUSTODIAN
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.
DISTRIBUTOR
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.
ADVISORY FEES
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, 1996, 1997 and 1998 the Fund paid management fees
to the Advisor for its services of $173,017, $203,976 and $182,009,
respectively. 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 pays DFAL quarterly fees of 12,500 pounds sterling and DFA
Australia fees of $13,000 per year for services to the Fund.
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.
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.
9
<PAGE>
SHAREHOLDER RIGHTS
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.
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.
PRINCIPAL HOLDERS OF SECURITIES
As of February 26, 1999 the following persons may be deemed to control
the Fund either by owning more than 25% of the voting securities of the Fund
directly or, through the operation of pass-through voting rights, by owning
more than 25% of the voting securities of the Feeder Portfolio which invests
its assets in the Fund:
State Street Bank and Trust Company, as Trustee 90.55%
of the BellSouth Master Pension Trust
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610.
As of February 26, 1999 the following shareholders owned beneficially at
least 5% of the outstanding shares of the Fund, as set forth below. Unless
otherwise indicated, the address of each shareholder is 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401.
State Street Bank and Trust Company, as Trustee 90.55%
of the BellSouth Master Pension Trust
10
<PAGE>
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610.
Emerging Markets Value Portfolio 9.45%
of DFA Investment Dimensions Group Inc.
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.
TAXATION OF THE FUND
11
<PAGE>
The Fund intends to qualify each year as a regulated investment company
under 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.
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.
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.
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.
CALCULATION OF PERFORMANCE DATA
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,
1998 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
12
<PAGE>
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.
Following are quotations of the annualized percentage total returns
over the one-, five-, and ten-year periods (or fractional portion thereof) ended
November 30, 1998, 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.
<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS* TEN YEARS
<S> <C> <C>
-5.30 1.58 8.36 (69 months)
- --------------------
</TABLE>
* 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
13
<PAGE>
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
PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P.), 2400
Eleven Penn Center, Philadelphia, PA 19103, are the Fund's independent
accountants. They audit the Fund's financial statements on an annual basis.
The audited financial statements and financial highlights of the Fund for its
fiscal year ended November 30, 1998, as set forth in the Fund's annual report
to shareholders, including the report of PricewaterhouseCoopers LLP, are
incorporated by reference into this SAI.
<PAGE>
DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
PART C
OTHER INFORMATION
Item 23. Exhibits.
(a) Articles of Incorporation
(1) 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.
(2) Articles of Amendment dated December 7, 1998
are electronically filed herewith as Exhibit EX-99.b1.
(b) By-Laws.
By-laws of the Registrant.
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.
(c) 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.
(1) No specimen securities are issued on behalf of the
Registrant.
(2) Relevant portion of Articles of Amendment 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.
<PAGE>
(3) Relevant portion of By-Laws.
[To be filed by amendment.]
(d) 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.
(e) Underwriting or distribution contract between the Registrant
and a principal underwriter and agreements between principal
underwriters and dealers.
Not applicable.
(f) Bonus, profit sharing, pension or similar contracts or
arrangements wholly or partly for the benefit of directors or
officers of the Registrant in their official capacity;
Describe in detail any plan not included in a formal document.
Not Applicable.
(g) Custodian agreements and depository contracts under Section 17(f)
of the 1940 Act [15 U.S.C. 80a 17(f)] concerning the Registrant's
securities and similar investments, 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.
(h) Other material contracts not made in the ordinary course of
business to be performed in whole or in part on or after the
filing date of the Registration Statement.
(1) 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.
C-2
<PAGE>
File No.: 811-7440.
Filing Date: March 30, 1998.
(i) 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
(2) 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
(i) An opinion and consent of counsel regarding the legality of the
securities being registered, stating whether the securities will,
when sold, be legally issued, fully paid and non-assessable.
Not applicable.
(j) Any other opinions, appraisals or rulings and related consents
relied on in preparing the Registration Statement and required
by Section 7 of the 1933 Act [15 U.S.C.77g]. Consent of
Pricewaterhouse Coopers LLP is electronically filed herewith as
Exhibit EX-99.B11.
(k) Financial statements omitted from Item 23.
Not applicable.
(l) 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 or initial
stockholders that purchases were made for investment purposes
and not with the intention of redeeming or reselling.
Incorporated herein by reference to:
Filing: The Registrant's Registration Statement on
Form N-2.
File No.: 811-7440.
Filing Date: January 19, 1993.
C-3
<PAGE>
(m) Any plan entered into by Registrant under Rule
12b-1 and any agreements with any person relating to
the Plan's implementation.
Not applicable.
(n) Financial Data Schedule meeting the requirements of
rule 483 under the Securities Act of 1933
(ss.230.483 of this chapter). Financial Data Schedule
dated November 30, 1998 is electronically filed herewith
as Exhibit EX-27.
(o) Any plan entered into by Registrant under Rule
18f-3, any agreement with any person relating to the
plan's implementation, and any amendment to the plan
or agreement.
Not Applicable.
(p) 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 24. Persons Controlled by or Under Common Control with Registrant.
None.
Item 25. 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:
C-4
<PAGE>
"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 26. 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 27. 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 28. 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:
C-5
<PAGE>
<TABLE>
<S> <C>
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
</TABLE>
Item 29. Management Services.
None.
Item 30. Undertakings.
Not applicable.
C-6
<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 25 day of March, 1999.
DIMENSIONAL EMERGING MARKETS VALUE FUND INC.
(Registrant)
By: David G. Booth*
David G. Booth
President and Chairman
Chief Executive Officer
(Signature and Title)
*By:
--------------------------
CatherineL. Newell
Cather L. Newell
Attorney-in-Fact (Pursuant to a Power of Attorney)
C-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
EXHIBIT NO. EXHIBIT NO. DESCRIPTION
<S> <C> <C>
23(a)(2) EX-99.B1 Articles of Amendment dated December 7, 1998
23(j) EX-99.B11 Consent of PricewaterhouseCoopers LLP
23(n) EX-27.1 Financial Data Schedule dated November 30, 1998
</TABLE>
C-8
<PAGE>
EXHIBIT EX-99.B1
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.
/s/ Irene R. Diamant By: /s/ Michael T. Scardina
Irene R. Diamant, Secretary Michael T. Scardina, Vice President
<PAGE>
EXHIBIT EX-99.B11
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 November 30, 1999 on our audit of the
financial statements and financial highlights of Dimensional Emerging Markets
Value Fund, Inc. as of November 30, 1998 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
March 26, 1999
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