<PAGE>
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MORGAN STANLEY
DEAN WITTER
INDIA INVESTMENT
FUND, INC.
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FIRST QUARTER REPORT
MARCH 31, 2000
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
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DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
John S.Y. Chu
DIRECTOR
Gerard E. Jones
DIRECTOR
Gerard Lahausse de la Louviere
DIRECTOR
John A. Levin
DIRECTOR
Fergus Reid
DIRECTOR
Samuel T. Reeves
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
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INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
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ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
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CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
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SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
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LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
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INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
---------
For the three months ended March 31, 2000, the Morgan Stanley Dean Witter India
Investment Fund, Inc. (the "Fund") had a total return, based on net asset value
per share, of -6.24% compared to 10.40% for the U.S. dollar adjusted Bombay
Stock Exchange (BSE) National Index (the "Index"). For the period from the
Fund's commencement of operations on February 25, 1994 through March 31, 2000,
the Fund's total return, based on net asset value per share, was 52.49% compared
to 3.19% for the Index. On March 31, 2000, the closing price of the Fund's
shares on the New York Stock Exchange was $13 3/16 , representing a 37.7%
discount to the Fund's net asset value per share.
The first quarter of the new millennium was one of the most turbulent quarters
that we have seen in the current bull market cycle, with an exceptional level of
volatility in the technology, media, telecommunications (TMT) universe. We feel
good about being able to come through the first quarter with the Fund still
positioned to capture the opportunities being created by the unprecedented
technological revolution but also positioned in a way which does not subject the
Fund to too much risk or high turnover.
As you are probably only too aware, we are going through an extraordinary phase
in the current market cycle as it is distinctly different from the past bull
market phases. Never before has the market seen such divergence on a sector-wide
basis. In fact, many stocks outside the TMT segment are trading close to their
52-week lows in India. This contradicts the popular notion that a bull market is
typically a tide that lifts all boats even though there is usually a group of
superior performers.
In such an environment, it is easy to become further drawn to the momentum of
the cycle and sharply tilt the Fund in favor of the apparent winning strategy.
While we are alert to the fact that the global economy is witnessing a
technological revolution, which would obviously benefit companies in the TMT
universe, history shows that sentiment tends to become over-extended leading to
stretched valuations. We are not sure whether we have reached such a point in
this cycle but think it is important to stick to the basic principles of
investing.
Our investment philosophy, which has over time held us in good stead through
many bull and bear market cycles, is to invest in companies with high return on
equity, enterprising managements and sound business models. We have adhered to
these basic ground rules when investing in technology companies and find enough
strong candidates in the TMT field that meet our criteria. The point here is
that exposure to the technology revolution can be gained by holding on to a
basic investment philosophy and any dilution of such a strategy is fraught with
risk.
Another way of tracking risk is to be conscious of the Fund's position vis-a-vis
the Index. On a sector-wide basis, our Fund is roughly in line with index
weights. Given the uncertainty surrounding the valuations and of how long the
cycle will last, we have decided to have a sector- neutral strategy and yet be
very discriminating when it comes to buying the companies in the sectors.
Accordingly, our exposure to the TMT universe is around 45 percent, which is
line with the Index.
We think it will pay over time to not get carried away by some sort of a herd
instinct and still participate in a technological revolution, where India finds
itself to be at the frontier. It is also important to recognize that the game of
waiting to exit at the right time, i.e. when the market turns sour on technology
stocks, is an extremely difficult one and has humbled many a great investor in
the past. Bear markets sneak in and don't come widely announced. It all then
suggests that the best way to enjoy this extraordinary period is to participate
in it but with all the standard risk parameters firmly in place.
Sincerely,
/s/ Harold J. Schaaff, Jr.
Harold J. Schaaff, Jr.*
PRESIDENT AND DIRECTOR
April 2000
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
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DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR
THE FUND, ARE AVAILABLE ON OUR WEBSITE AT
www.msdw.com/institutional/investmentmanagement.
* HAROLD J. SCHAAFF, JR. WAS ELECTED PRESIDENT AND DIRECTOR OF THE FUND ON MARCH
15, 2000. MR. SCHAAFF JOINED MORGAN STANLEY DEAN WITTER IN 1989 AND IS A
MANAGING DIRECTOR OF MORGAN STANLEY & CO. INCORPORATED AND MORGAN STANLEY DEAN
WITTER INVESTMENT MANAGEMENT INC. HE FORMERLY SERVED AS GENERAL COUNSEL AND
SECRETARY OF MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
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HISTORICAL TOTAL RETURN (%)
INFORMATION ------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
---------------------- --------------------- ---------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Fiscal Year to Date -20.08% -- -6.24% -- 10.40% --
One Year 44.52 44.52% 68.36 68.36% 70.95 70.95%
Five Year 25.60 4.66 81.03 12.60 30.18 5.42
Since Inception* -5.06 -0.85 52.49 7.17 3.19 0.52
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
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RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
ENDED
MARCH 31,
1994* 1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share....... $13.99 $ 8.91 $ 8.81 $ 8.83 $ 9.19 $ 22.59 $ 21.18
Market Value Per Share.......... $11.25 $ 9.13 $ 9.50 $ 8.38 $ 6.75 $ 16.50 $ 13.19
Premium/(Discount).............. -19.6% 2.5% 7.8% -5.1% -26.6% -27.0% -37.7%
Capital Gains Distributions..... $0.17 -- -- -- -- -- --
Fund Total Return (2)........... 0.72% -36.31% -1.12% 0.23% 4.08% 145.81% -6.24%
Index Total Return (3).......... -7.88% -31.53% -6.49% 6.43% -20.98% 88.41% 10.40%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The Bombay Stock Exchange (BSE) National Index is a market capitalization
weighted index including the equity shares of 100 companies from the
"Specified" and the "Non-specified" list of the 5 major stock exchanges,
namely, Bombay, Calcutta, Delhi, Ahmedabad and Madras.
* The Fund commenced operations on February 25, 1994.
3
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Portfolio Summary as of March 31, 2000 (Unaudited)
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DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (96.7%)
Short-Term Investments (3.3%)
</TABLE>
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INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Automobiles (8.8%)
Chemicals (5.7%)
Diversified Telecommunication Services (4.5%)
Electrical Equipment (2.6%)
Food Products (3.6%)
IT Consulting & Services (26.9%)
Other (17.7%)
Software (5.1%)
Pharmaceuticals (6.1%)
Media (14.9%)
Machinery (4.1%)
</TABLE>
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TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
----------
<S> <C>
1. Infosys Technology Ltd. 26.9%
2. Zee Telefilms Ltd. 14.8
3. Hero Honda Motors Ltd. 5.5
4. Software Solution Integrated Ltd. 2.8
5. Global Tele-Systems Ltd. 2.7
6. Tata Tea Ltd. 2.7
7. Bharat Heavy Electricals Ltd. 2.6
8. Tata Engineering & Locomotive Co. Ltd. 2.6
9. Cipla Ltd. 2.5
10. Housing Development Finance Corp., Ltd. 1.9
----
65.0%
----
----
</TABLE>
4
<PAGE>
FINANCIAL STATEMENTS
---------
STATEMENT OF NET ASSETS (UNAUDITED)
---------
MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
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<S> <C> <C>
COMMON STOCKS (96.5%)
(Unless otherwise noted)
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AUTO COMPONENTS (1.5%)
Apollo Tyres Ltd. 2,475 U.S.$ 7
Elgi Tyres & Tread Ltd. 310,100 1,459
Motherson Sumi Systems Ltd. 2,350 7
Motor Industries Co., Ltd. 39,942 3,377
MRF Ltd. 138,280 4,368
Rane Brakes & Lining Ltd. 7,200 15
Rane Madras Ltd. 213,100 393
S.K.F. Bearings Ltd. 55,256 886
--------------
10,512
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AUTOMOBILES (8.8%)
Hero Honda Motors Ltd. 1,713,869 38,129
Patheja Bros. Forgings & Stamp Ltd. 450,000 --@
Tata Engineering & Locomotive Ltd. 5,840,887 18,139
TVS Suzuki Ltd. 614,622 4,652
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60,920
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BANKS (1.6%)
HDFC Bank Ltd. 1,557,900 9,147
State Bank of India Ltd. GDR 466,457 2,152
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11,299
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CHEMICALS (5.7%)
Agrevo India Ltd. 591,960 5,702
Asian Paints (India) Ltd. 546,757 5,329
Castrol (India) Ltd. 629,260 4,431
Coates of India Ltd. 178,150 531
Colour-Chem Ltd. 64,602 2,063
ICI India Ltd. 402,078 1,245
Indo Gulf Corp., Ltd. 5,930,270 5,679
Monsanto Chemicals of India 90,000 2,600
Novartis India Ltd. 407,957 8,281
Reliance Industries Ltd. 650 5
Sudarshan Chemicals Ltd. 234,552 243
Supreme Industries Ltd. 832,900 3,343
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39,452
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COMMERCIAL SERVICES & SUPPLIES (1.1%)
Marico Industries Ltd. 283,200 1,624
Modi Xerox Ltd. 1,077,400 2,592
Tata Donnelley Ltd. 293,250 2,153
Thermax Ltd. 514,687 974
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7,343
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CONSTRUCTION MATERIALS (0.3%)
Gujarat Ambuja Cements 462,861 2,261
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CONTAINERS & PACKAGING (0.5%)
Essel Packaging Ltd. 368,075 3,546
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</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
--------------------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIALS (2.0%)
Housing Development Finance
Corp., Ltd. 1,398,270 U.S.$ 12,905
ICICI Ltd. - New 50 --@
Sundaram Finance Ltd. 144,800 392
Tata Finance Ltd. 355,000 728
UTI Mastergain 24,300 7
UTI-MasterShares Ltd. 5,250 2
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14,034
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DIVERSIFIED TELECOMMUNICATION SERVICES (4.5%)
Global Tele-Systems Ltd. 364,953 18,495
Mahanagar Telephone Nigam Ltd. 508,237 2,739
Videsh Sanchar Nigam Ltd. 232,712 9,821
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31,055
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ELECTRIC UTILITIES (0.5%)
Jyoti Structures Ltd. 167,700 209
Tata Power Co., Ltd. 1,900,966 2,932
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3,141
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ELECTRICAL EQUIPMENT (2.6%)
Bharat Heavy Electricals Ltd. 6,338,286 18,172
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ELECTRONIC EQUIPMENT & INSTRUMENTS(0.3%)
ITW Signode India Ltd. 1,077,500 1,674
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ENERGY EQUIPMENT & SERVICES (0.0%)
Renewable Energy Ltd. 47,800 --@
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FOOD PRODUCTS (3.6%)
Britannia Industries Ltd. 12,500 178
Smithkline Beecham Consumer
Health Care Ltd. 656,468 6,023
Tata Tea Ltd. 2,078,977 18,310
--------------
24,511
--------------
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HEALTH CARE EQUIPMENT & SUPPLIES (0.0%)
Bausch & Lomb India Ltd. 100 --@
--------------
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HOTELS RESTAURANTS & LEISURE(0.5%)
EIH Ltd. 58,322 191
Indian Hotels Co., Ltd. 519,317 2,895
--------------
3,086
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HOUSEHOLD DURABLES(0.5%)
Carrier Aircon Ltd. 242,834 501
Phillips India Ltd. 799,510 1,981
Samtel Colour Ltd. 513,700 727
--------------
3,209
--------------
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INTERNET SOFTWARE & SERVICES (0.3%)
India Info.com Private Ltd. 532,875 2,347
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IT CONSULTING & SERVICES (26.9%)
Infosys Technology Ltd. 908,570 185,506
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--------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
--------------------------------------------------------------------------------
<S> <C> <C>
MACHINERY (4.1%)
Chicago Pneumatic India Ltd. 324,940 U.S.$ 446
Cummins India Ltd. 454,360 4,158
Esab India Ltd. 564,850 479
Escorts Ltd. 771,111 2,618
Lakshmi Synthetic Machinery Ltd. 137,700 28
Larsen & Toubro Ltd. 777,500 5,127
Punjab Tractors Ltd. 442,570 7,735
Rand Engine Valves 195,700 291
Revathi-CP Equipment Ltd. 298,550 1,734
Shriram Honda Power
Equipment Ltd. 318,330 598
Sundaram Fasteners Ltd. 394,550 4,977
--------------
28,191
--------------
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MEDIA (14.9%)
New Delhi Television Ltd. 333,300 1,032
ZEE Telefilms Ltd. 4,345,720 101,865
--------------
102,897
--------------
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METALS & MINING (0.0%)
Tata Iron & Steel Co., Ltd. 100 --@
--------------
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PERSONAL PRODUCTS (0.6%)
Procter & Gamble Hygiene & Health
Care Ltd. 70,191 939
Reckitt & Coleman of India Ltd. 697,531 3,363
--------------
4,302
--------------
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PHARMACEUTICALS (6.1%)
Cipla Ltd. 667,335 17,157
Dabur India Ltd. 490,591 9,218
E. Merck (India) Ltd. 336,125 2,390
Glaxo India Ltd. 35,000 361
Hoechst Marion Roussel India Ltd. 268,505 2,864
Lupin Laboratories Ltd. 435,890 3,869
Pfizer Ltd. 50 1
Smithkline Beecham Pharmaceuticals
(India) Ltd. 341,084 1,737
(a)Strides Arcolab Ltd. 540,000 4,608
Sun Pharmaceutical Industries Ltd. 5,400 79
--------------
42,284
--------------
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ROAD & RAIL (1.4%)
Container Corp. of India Ltd. 2,802,314 9,827
--------------
--------------------------------------------------------------------------------
SOFTWARE (5.1%)
Fujitsu ICIM Ltd. 434,265 7,391
Hughes Software Systems 88,000 7,100
Software Solution Integrated Ltd. 283,400 19,220
Tata Infotech Ltd. 115,575 1,100
--------------
34,811
--------------
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SPECIALTY RETAIL (0.7%)
Titan Industries Ltd. 2,377,005 4,907
--------------
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
--------------------------------------------------------------------------------
<S> <C> <C>
TEXTILES & APPAREL (0.6%)
Bata India Ltd. 783,036 U.S.$ 1,958
Delta International 570,000 --@
Madura Coats Ltd. 269,550 131
Mahavir Spinning Mills Ltd. 10,000 12
Rajapalayam Mills 10 --@
Shopper Stop 444,400 1,631
Vardhaman Spinning & General Mills Ltd. 332,450 422
--------------
4,154
--------------
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TOBACCO(1.8%)
ITC Ltd. 740,151 12,477
--------------
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TOTAL COMMON STOCKS
(Cost U.S.$396,096) 665,918
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FACE
AMOUNT
(000)
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FIXED INCOME SECURITIES (0.0%)
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CONTAINERS & PACKAGING (0.0%)
Garware Plastics & Polyester Ltd.
16.00%, 5/1/05
(Cost U.S.$377) INR 277 183
--------------
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SHORT-TERM INVESTMENTS (1.2%)
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REPURCHASE AGREEMENT (1.2%)
Chase Securities, Inc., 5.90%,
Dated 3/31/00, Due 4/3/00,
to be repurchased at U.S.$8,531,
collateralized by U.S.$8,690
Federal Home Loan, 7.10%,
due 3/21/02, valued at
U.S.$8,699 (Cost U.S.$8,527) U.S.$ 8,527 8,527
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FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (2.1%)
Indian Rupee (Cost U.S.$14,110) INR 614,779 14,100
--------------
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TOTAL INVESTMENTS (99.8%)
(Cost U.S.$419,110) 623,583 688,728
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OTHER ASSETS AND LIABILITIES (0.2%)
Other Assets U.S.$ 17,126
Liabilities (15,491) 1,635
-------------- --------------
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NET ASSETS (100%)
Applicable to 32,600,492 issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$690,363
--------------
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NET ASSET VALUE PER SHARE U.S.$ 21.18
--------------
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</TABLE>
(a) -- 144A Security certain conditions for public sale may exist.
@ -- Value is less than U.S.$500.
GDR -- Global Depositary Receipt
6