(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EMERGING ASIA
FUND, INC.
ANNUAL REPORT
OCTOBER 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
FUND TALK 4 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 7 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 8 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 19 Notes to the financial statements.
REPORT OF INDEPENDENT 24 The auditors' opinion.
ACCOUNTANTS
PROXY VOTING RESULTS 25 Shareholder proxy voting results.
DIVIDENDS AND DISTRIBUTIONS 26 Dividend reinvestment and cash
purchase plan.
OTHER FUND INFORMATION 29 Changes and updates.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY
ACT OF 1940 THAT FROM TIME TO TIME THE FUND MAY PURCHASE AT MARKET PRICES
SHARES OF
ITS COMMON STOCK IN THE OPEN MARKET.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. IT IS NOT A PROSPECTUS,
CIRCULAR OR
REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE OF SHARES OF THE
FUND OR OF ANY
SECURITIES MENTIONED
IN THE REPORT.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets have been fairly positive this year, no one can
predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Most Asian markets provided
poor returns during the 12
months ended October 31, 1995.
The Morgan Stanley Far East
ex-Japan Free Index - a
measure of Far East markets
excluding Japan - had a total
return of -7.54% during the
period. Difficulties in these
markets began in the latter part of
1994, when interest rate
increases and Mexico's
devaluation of the peso in
December triggered a significant
exodus of capital away from
emerging markets and back to
the U.S. Hong Kong was one of
the only stock markets that
posted a positive return during
the period. According to Morgan
Stanley Capital International, the
Hong Kong stock market
returned 0.8% for the 12 months
ended October 31, 1995. While
interest rates declined in most
developed countries during the
period, rates in most developing
Asian countries - where
economic growth remained
relatively strong - did not,
impacting companies' borrowing
costs and helping to cause
mounting trade deficits.
Performance in Asian markets
during the 12-month period ranged
from Korea (down 1.96%) and
Singapore (down 7.7%) to the
Philippines (down 22.36%) and
Taiwan (down 26.99%).
An interview with Peter Phillips, Portfolio Manager of Fidelity Advisor
Emerging Asia Fund, Inc.
Q. PETER, HOW HAS THE FUND PERFORMED?
A. For the 12 months ended October 31, 1995, the fund had a total return of
- -11.08%, based on net asset value. (See Financial Highlights on page 18.)
This compares to a total return of -13.29% for the customized Morgan
Stanley Capital International Combined Asia ex-Japan (Free) including
Taiwan index during the same time period. Remember, however, that this is a
closed-end fund that trades on the New York Stock Exchange. So we also need
to look at the fund's market value return, which reflects gains or losses
in the fund's share price over the period. The market value return was
- -19.82%. This means that if you bought a share of the fund a year ago at
$15.125, you could have sold it on October 31, 1995, for $11.875.
Q. WHAT FACTORS CONTRIBUTED TO PERFORMANCE?
A. Positive contributions came from stock selection in Taiwan, Indonesia,
Thailand, Hong Kong and India. Negative contributions came from stock
picking in Singapore and the Philippines. Underweighting Malaysia also
contributed negatively to returns.
Q. HOW WOULD YOU DESCRIBE THE ENVIRONMENT IN WHICH YOU WERE INVESTING?
A. During the past six months, there was a pickup in investor sentiment,
with most markets achieving positive returns. Interest rate-sensitive
markets such as Hong Kong and Malaysia have benefited from a growing
anticipation that U.S. interest rates would decline over the next year.
Taiwan has been the weakest market, declining by 30% in the past six
months. This has been the result of China/Taiwan political friction and a
number of banking fraud cases. However, the economies in Asia have
experienced some slowing in economic growth. The latest round of corporate
results have either been in line with expectations or slightly below.
Interim results in Singapore have been particularly weak, reflecting poor
conditions in the ship repair sector. However, the electronics sector
across the region has reported results above expectations, benefiting from
strong exports.
Q. HOW DID THE FUND'S WEIGHTINGS CHANGE DURING THE PERIOD?
A. The fund's exposure to Thailand increased, particularly in the banking
sector. I expect earnings to be above expectations as interest margins are
maintained and loan growth remains strong. Also, the exposure to Malaysia
increased in the financial and consumer sectors on the basis that interest
rates had peaked and cash flow generation would receive greater focus by
investors. A large holding was Public Bank, a conservatively managed bank
that was increasing its loan portfolio and benefiting from its Hong Kong
finance subsidiary. In the consumer sector, the fund increased its holding
in Kian Joo Can, which benefited from its expansion into manufacturing
plastic beverage bottles. The investment in Taiwan was reduced as many
commodity prices - especially plastics and paper - showed signs of peaking.
Among the major holdings, there was an emphasis on the Hong Kong financial
sector and companies that could benefit from lower interest rates.
Q. WHAT OTHER STRATEGIES DID YOU EMPLOY DURING THE PERIOD?
A. Within the Taiwan holding, about one-third was invested in the
electronic sector. These companies, mainly integrated circuit
manufacturers, continued to benefit from the worldwide PC boom. While
oversupply continued to be a concern, I think demand will exceed supply
through 1996. In India, the fund increased its exposure to large
manufacturing companies such as Bajaj Auto and Tata Engineering &
Locomotive Ltd. These automotive companies have reported earnings above
expectations, and benefited from strong volume. Finally, across the region,
the fund continued to emphasize the consumption sector. Recently, the
exposure to this sector was increased in Indonesia via the automotive
company, Astra. Astra has been under a cloud due to its yen exposure.
However, strong volume growth and increasing returns from its finance
subsidiary will more than offset the negative impact from the strong yen.
Q. PETER, WHAT'S AHEAD FOR THE NEXT SIX MONTHS?
A. My outlook for the next six months is that the stock markets are likely
to be less volatile than they were during the past 18 months. Economic
growth in the region remains strong with the export sector, infrastructure
spending and consumption all contributing to this strong growth. Some
pockets of weakness, such as the current weakness in the Hong Kong and
Singapore consumer sectors are likely to persist. In the long term, the
fund could yield strong results, but in the short term, anything can
happen.
FUND FACTS
GOAL: to achieve long-term
capital appreciation through
investments in equity and
debt securities of Asian
emerging market issuers
START DATE: March 25, 1994
TRADING SYMBOL: FAE
SIZE: as of October 31, 1995,
more than $117 million
MANAGER: Peter Phillips,
since March 1994; joined
Fidelity in 1987
(checkmark)
PETER PHILLIPS ON THE CHINESE
ECONOMY:
"The Chinese economy
continues to show signs of
weakness. The slowdown
initiated by the government in
July 1993 is continuing with
tight credit controls. Recent
corporate results from
Chinese companies have
been terrible, with margins
being squeezed and large bad
debt problems.
"However, inflation is
decreasing, reported
corruption seems to be
declining and trade and
investment flows remain
strong. The Hong Kong and
Taiwan economies continue
to strengthen ties with
Mainland China. I expect the
fund to continue to focus on
companies in Taiwan and
Hong Kong rather than
investing directly in Chinese
companies."
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF OCTOBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Hutchison Whampoa Ltd. Ord. 4.2 4.1
Sun Hung Kai Properties Ltd. 3.5 2.3
Bangkok Bank Ltd. (For. Reg.) 2.8 2.4
Malayan Banking BHD 2.8 2.0
HSBC Holdings PLC 2.5 0.0
Korea Electric Power Corp. 2.1 1.8
New World Development Co. Ltd. 2.0 1.1
Thai Military Bank Ltd. (For. Reg.) 1.9 1.0
Swire Pacific Ltd. Class A 1.9 1.9
Singapore Press Holdings Ltd. (For. 1.8 1.4
Reg.)
TOP FIVE MARKET SECTORS AS OF OCTOBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Banks 22.3 14.0
Real Estate 10.0 7.8
Electronics 5.9 6.7
Electrical Equipment 5.7 5.6
Electric Utilities 4.1 4.2
ASSET ALLOCATION
AS OF OCTOBER 31, 1995 AS OF APRIL 30, 1995
Row: 1, Col: 1, Value: 3.0
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 47.7
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 2.5
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 46.0
Row: 1, Col: 4, Value: 50.0
Stocks 97.7%
Bonds 0.5%
Short-term
investments 1.8%
Stocks 98.3%
Bonds 0.5%
Short-term
investments 1.2%
INVESTMENTS OCTOBER 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.7%
SHARES VALUE (NOTE 1)
BANGLADESH - 0.1%
Advanced Chemical Industries 50,000 $ 161,964
HONG KONG - 24.1%
Cheung Kong Holdings Ltd. (warrants) (a) 3,600,000 810,213
China Light & Power Co. Ltd. (warrants) (a) 4,000,000 475,987
Consolidated Electric Power Asia Ltd. 310,000 627,514
Dah Sing Financial Holdings Ltd. 194,800 440,935
First Pacific Co. Ltd. 714,101 822,048
Great Eagle Holdings Ltd. 156,000 427,768
Hang Seng Bank 90,000 753,754
Hong Kong & China Gas Co. Ltd. 876,052 1,422,070
Hong Kong Telecommunications Ltd. 623,200 1,088,200
HSBC Holdings PLC 189,800 2,761,825
Hutchison Whampoa Ltd. Ord. 840,000 4,628,458
International Bank of Asia Ltd. 106,000 63,068
JCG Holdings Ltd. 1,344,000 982,189
Manhattan Card Co. Ltd. 810,000 345,737
New World Development Co. Ltd. 561,000 2,184,122
New World Infrastructure Ltd. 163,786 288,113
Sun Hung Kai Properties Ltd. 486,000 3,881,689
Swire Pacific Ltd. Class A 284,000 2,130,560
Varitronix International Ltd. 180,000 343,409
Wharf Holdings Ltd. (b) 412,000 1,390,866
Wing Hang Bank Ltd. 288,000 927,554
26,796,079
INDIA - 6.4%
Apollo Hospitals Enterprises Ltd. 100,000 97,953
Bajaj Auto Ltd. 27,500 603,557
BPL Ltd. 22,000 56,287
Cosmo Films Ltd. 27,000 112,895
Crompton Greaves Ltd. 25,000 152,778
Digital Equipment Ltd. (a) 70,000 184,211
East India Hotels Ltd. 12,000 181,053
Essel Packaging Ltd. 12,000 60,326
Essel Packaging Ltd. (New) (a) 4,000 18,000
Finolex Pipes Ltd. (a) 500 559
Grasim Industries Ltd. 30,000 475,263
Gujarat Gas Co. Ltd. 30,000 121,053
Himalayan Fund NV ISI (warrants) (a) 12,943 6,472
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - CONTINUED
Hindalco Industries Ltd. GDR 10,000 $ 310,000
Housing Development Finance Corp. Ltd. (a) 12,300 979,447
India Cements Ltd. 25,000 202,485
Indian Rayon & Industries, Inc. GDR 4,000 45,000
Indian Rayon & Industries, Inc. GDR (b) 17,000 191,250
Industrial Credit & Investments Corp. Ltd. 90,000 249,778
Jai Prakash Industries Ltd. 80,000 92,398
Kotak Mahindra Finance Ltd. 19,000 83,447
Larsen and Toubro Ltd. 59,100 423,032
Mahindra & Mahindra Ltd. 30,000 286,579
Maral Overseas Ltd. (a) 45,000 48,684
Mukand Ltd. 15,000 115,658
Procter & Gamble Ltd. 10,000 124,269
Reliance Industries Ltd. GDS 10,000 147,500
RS Software Ltd. 30,000 28,289
Shyam Telecom Ltd. 16,800 68,281
Tata Engineering & Locomotive Ltd. 32,000 373,743
Tata Engineering & Locomotive Ltd. GDR 12,500 254,750
Tube Investments of India Ltd. GDR 35,000 112,000
TVS Suzuki 18,000 134,211
Unitech Ltd. 35,000 132,018
Zee Telefilms Ltd. 136,000 663,703
7,136,929
INDONESIA - 5.1%
Astra International PT (For. Reg.) 376,500 754,327
Bank Danamon PT (For. Reg.) 52,500 76,288
Bank Dagang Nas Indonesia PT 427,000 380,747
Bukaka Teknik Utama (For. Reg.) 36,500 54,244
Gadjah Tunggal PT (For. Reg.) 113,500 72,468
Gudang Garam PT Perusahaan 132,000 1,147,953
Indocement Tunggal Prakarsa PT (For. Reg.) 123,000 454,954
Indofood Sukses Makmur (For. Reg.) 70,000 323,646
Indosat (Indonesia Satellite) sponsored ADR 22,400 742,000
Kabelmetal PT (For. Reg.) 120,000 110,964
Panin Bank PT (For. Reg.) 232,500 255,945
Sampoerna Hanjaya Mandala (For. Reg.) 74,500 688,904
Semen Cibinong PT (For. Reg.) 53,000 138,860
Semen Gresik (For. Reg.) 44,500 115,610
Tempo-Scan Pacific (For. Reg.) 55,000 295,465
5,612,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 4.7%
Hyundai Engineering and Construction Co. Ltd. (a) 100 $ 5,438
Hyundai Engineering and Construction Co. Ltd. (RFD) 6 312
Hyundai Motor Service Co. Ltd. 2,200 118,186
Hyundai Motor Co. Ltd. sponsored GDR 7,500 129,375
Keumkang Ltd. 2,000 160,001
Korea Electric Power Corp. 52,000 2,285,257
Korea Mobile Telecommunications Corp. 390 345,516
LG Chemical Ltd. 648 15,329
LG Electronics, Inc. (RFD) (a) 349 14,915
Pohang Iron & Steel Co. Ltd. 4,000 379,502
Samsung Electronics Co. Ltd.:
(vtg.) 5,991 1,335,144
(bonus issued 3/95) (a) 732 161,200
(bonus issued 7/95) (a) 83 17,953
Shinhan Bank 10,100 230,459
Shinhan Bank (New) 1,854 37,315
5,235,902
MALAYSIA - 15.0%
Arab Malaysian Corp. BHD 100,000 336,449
Berjaya Sports Toto BHD 600,000 1,251,353
EON (Edaran Otomobil Nasional) BHD 171,000 1,345,794
Genting BHD 82,500 710,969
Kian Joo Can Factory BHD 271,500 1,068,372
Kwong Yik Bank BHD 422,000 871,815
Malayan Banking BHD 385,000 3,105,755
Malaysian Airlines Systems BHD 245,000 670,044
Malaysian Assurance Alliance BHD 48,000 194,550
New Straits Times Press BHD 80,000 251,845
Nylex Malaysia SDN BHD 304,000 891,215
Pacific & Orient BHD (a) 69,000 188,706
Petronas Gas BHD (a) 28,000 94,757
Petronas Gas BHD (warrants) (a) 26,000 45,426
Public Bank BHD (For. Reg.) 650,000 1,151,008
RJ Reynolds BHD 143,000 292,612
Resorts World BHD 114,000 556,262
Rothmans of Pall Mall Malaysia BHD 190,000 1,405,607
Tan Chong Motor Holdings BHD 170,000 159,882
Time Engineering BHD 189,000 483,424
United Engineers BHD 160,000 994,786
YTL Corp. BHD 103,000 559,331
16,629,962
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PAKISTAN - 0.9%
Askari Commercial Bank (a) 86,250 $ 97,674
Askari Commercial Bank (rights) (a) 37,500 18,002
Askari Leasing Ltd. (a) 71,700 69,152
Askari Leasing Ltd. (rights) (a) 71,700 43,377
DG Kahn Cement Ltd. 100 99
Hub Power Co. Ltd. GDR (a) 42,000 693,000
National Development Leasing Corp. 43,750 21,865
Nishat Tek Ltd. (a) 1,630 1,358
Pak Electron Ltd. (a) 50 77
Sui Southern Gas Pipelines Ltd. (a) 19,000 16,798
961,402
PHILIPPINES - 2.8%
Ayala Land, Inc. Class B 360,000 415,225
Benpress Holdings Corp. GDR (a) 1,400 8,050
Benpress Holdings Corp. GDR (a)(b) 6,930 41,580
C & P Homes, Inc. (a)(b) 19,000 12,236
Filinvest Land, Inc. Ord. (a) 117,000 31,488
Meralco Class B 114,000 850,288
Megaworld Properties & Holdings, Inc. (a) 290,000 144,944
Philippine Long Distance Telephone Co. sponsored ADR 18,200 1,021,475
Republic Glass Holdings Corp. 500,000 140,331
SM Prime Holdings, Inc. (a) 1,529,400 411,603
3,077,220
SINGAPORE - 9.0%
Berger International 370,000 219,802
Cerebos Pacific Ltd. 28,000 174,257
City Developments Ltd. 117,000 724,010
Datacraft Asia Ltd. 220,000 135,300
DBS Land Ltd. 150,000 443,423
Development Bank of Singapore Ltd. (For. Reg.) 158,000 1,810,184
Hong Leong Finance Ltd. (For. Reg.) 110,000 332,956
Keppel Corp. Ltd. 87,000 713,720
Singapore Finance Ltd. 92,000 142,489
Singapore Finance Ltd. (warrants) (a) 11,000 5,757
Singapore International Airlines Ltd. 124,000 1,148,798
Singapore Land Ltd. 43,000 240,240
Singapore Press Holdings Ltd. (For. Reg.) 126,000 1,969,307
United Overseas Bank Ltd. (For. Reg.) 224,400 1,967,864
10,028,107
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN (FREE CHINA) - 17.2%
Acer, Inc. 798,636 $ 1,834,788
Asia Cement Corp. 605,000 892,244
Cathay Construction Co. Ltd. 249,000 269,419
Cathay Life Insurance Co. Ltd. 168,000 706,562
China Development 462,471 1,310,966
China Motor Co. Ltd. 320,000 450,587
China Steel Corp. 1,810,000 1,428,577
Compeq Manufacturing Co. Ltd. 199,000 553,044
Evergreen Marine 495,000 742,858
Far Eastern Textile Ltd. 609,500 621,086
First International Computer (a) 7,560 9,272
Formosa Chemical & Fibre 1,395,576 1,158,369
Formosa Plastic 535,730 762,294
Kinpo Electronics, Inc. (a) 47 47
Mosel Vitelic, Inc. (a) 121,000 383,351
Mosel Vitelic, Inc. (rights) (a) 20,207 374
Nan Ya Plastics Corp. 527,952 762,965
Phoenixtec Power Co. (a) 225,000 437,711
Siliconware Precision Industries Co. Ltd. (a) 252,793 618,236
Standard Foods Taiwan Ltd. (a) 294,000 675,436
Taiwan Glass 487,025 859,021
Taiwan Polypropylene Co. Ltd. 239,442 324,733
Taiwan Secom Co. (a) 292,500 731,602
Taiwan Semiconductor Manufacturing Co. Ltd. (a) 486,000 1,512,728
Taiwan Styrene Monomer (a) 120,000 176,085
United Micro Electronics Corp. 585,000 1,430,689
Yung Shin Pharmaceutical Industries Co. Ltd. 236,687 477,987
19,131,031
THAILAND - 12.2%
Advanced Information Services (For. Reg.) 44,600 737,278
Bangkok Bank Ltd. (For. Reg.) 306,000 3,161,534
Bangkok Expressway PCL (For. Reg.) (a) 110,000 178,124
Dynamic Eastern Finance Thailand
1991 Co. Ltd. (For. Reg.) (a) 175,000 375,522
Electricity Generating PCL (For. Reg.) 44,300 151,393
Finance One PCL (For. Reg.) 84,000 517,385
General Finance & Securities PCL (For. Reg.) (a) 30,000 133,519
Grammy Entertainment PCL (For. Reg.) (a) 27,000 255,355
Krung Thai Bank (For. Reg.) 382,000 1,517,981
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Matichon Newspaper Group 26,900 $ 134,687
National Finance & Securities PCL (For. Reg.) 122,000 557,520
PTT Exploration & Production (For.) (a) 35,300 319,825
Siam Cement PCL (For. Reg.) 8,000 436,161
Siam Commercial Bank PCL (For. Reg.) 30,000 350,487
Telecomasia Corp. PCL (For. Reg.) (a) 180,000 532,883
Thai Farmers Bank PCL 96,000 793,483
Thai Military Bank Ltd. (For. Reg.) 543,200 2,136,968
Thai Telephone & Telecommunication PCL (For. Reg.) (a) 100,000 675,541
United Communication Industry PCL (For. Reg.) 51,000 644,467
13,610,113
VIETNAM - 0.2%
Vietnam Enterprise Investments Ltd. (a)(b) 250,000 250,000
TOTAL COMMON STOCKS
(Cost $106,092,702) 108,631,084
CONVERTIBLE BONDS - 0.5%
PRINCIPAL
AMOUNT
INDIA - 0.5%
Essar Gujarat Ltd. euro 5 1/2%, 8/5/98 $ 250,000 246,250
Gujarat Ambuja Cement Ltd. euro
3 1/2%, 6/30/99 210,000 289,800
TOTAL CONVERTIBLE BONDS
(Cost $852,500) 536,050
REPURCHASE AGREEMENTS - 1.8%
MATURITY
AMOUNT
Investments in repurchase agreements,
(U.S. Treasury obligations) in a
joint trading account at 5.88%,
dated 10/31/95 due 11/1/95 $ 2,027,331 2,027,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $108,972,202) $ 111,194,134
LEGEND
(a) Non-income producing
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,885,932 or 1.6% of net
assets.
INCOME TAX INFORMATION
At October 31,1995, the aggregate cost of investment securities for income
tax purposes was $108,997,252. Net unrealized appreciation aggregated
$2,196,882, of which $11,913,843 related to appreciated investment
securities and $9,716,961 related to depreciated investment securities.
At October 31, 1995, the fund had a capital loss carryforward of
approximately $2,183,000 all of which will expire on October 31, 2003.
For the period, interest and dividends from foreign countries were
$2,440,024 or $0.29 per share. Taxes accrued or paid to foreign countries
were $401,531 or $0.05 per share.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
Aerospace & Defense 0.6%
Basic Industries 6.3
Construction & Real Estate 15.0
Durables 4.5
Energy 0.4
Finance 28.5
Health 0.9
Holding Companies 1.4
Industrial Machinery &
Equipment 6.1
Media & Leisure 5.2
Nondurables 5.1
Repurchase Agreements 1.8
Services 1.1
Technology 8.3
Transportation 4.6
Utilities 10.2
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 111,194,134
agreements of $2,027,000) (cost $108,972,202) -
See accompanying schedule
Cash 363
Foreign currency held at value 6,586,976
New Taiwan dollars (cost $6,779,182)
Receivable for investments sold 305,328
Dividends receivable 196,782
Interest receivable 5,697
Deferred organization expenses 127,500
TOTAL ASSETS 118,416,780
LIABILITIES
Payable for investments purchased $ 368,252
Accrued management fee 97,957
Other payables and accrued expenses 197,062
TOTAL LIABILITIES 663,271
NET ASSETS $ 117,753,509
Net Assets consist of:
Paid in capital $ 118,177,524
Distributions in excess of net investment income (242,717)
Accumulated undistributed net realized gain (loss) on (2,208,384)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 2,027,086
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 8,447,093 shares outstanding $ 117,753,509
NET ASSET VALUE, ($117,753,509 (divided by) 8,447,093 shares) $13.94
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1995
INVESTMENT INCOME $ 2,353,576
Dividends
Interest 175,904
2,529,480
Less foreign taxes withheld (270,283)
TOTAL INCOME 2,259,197
EXPENSES
Management fee $ 1,207,437
Basic fee
Performance adjustment (20,522)
Transfer agent fees 12,929
Administrative fees and expenses 242,133
Directors' compensation 50,290
Custodian fees and expenses 295,184
Registration fees 383
Audit 89,086
Legal 49,178
Taiwan stock dividend tax 131,248
Amortization of organization expenses 38,250
Reports to shareholders 66,652
TOTAL EXPENSES 2,162,248
NET INVESTMENT INCOME 96,949
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized loss of (1,401,377)
$120,016 on sales of investments in affiliated issuers)
Foreign currency transactions (109,746) (1,511,123)
Change in net unrealized appreciation (depreciation) on:
Investment securities (13,754,250)
Assets and liabilities in foreign currencies (239,081) (13,993,331)
NET GAIN (LOSS) (15,504,454)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (15,407,505)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 25, 1994
OCTOBER 31, (COMMENCEMENT
1995 OF OPERATIONS) TO
OCTOBER 31, 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 96,949 $ 218,384
Net investment income
Net realized gain (loss) (1,511,123) 856,462
Change in net unrealized appreciation (depreciation) (13,993,331) 16,020,417
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (15,407,505) 17,095,263
FROM OPERATIONS
Distributions to shareholders (315,333) -
From net investment income
In excess of net investment income (746,725) -
From net realized gain (856,462) -
In excess of net realized gain (193,253) -
TOTAL DISTRIBUTIONS (2,111,773) -
Share transactions - 118,177,524
Net proceeds from sales of shares
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,519,278) 135,272,787
NET ASSETS
Beginning of period 135,272,787 -
End of period (including under (over) distribution of $ 117,753,509 $ 135,272,787
net investment income of $(242,717) and
$128,073, respectively)
OTHER INFORMATION - 8,447,093
Shares sold
</TABLE>
FINANCIAL HIGHLIGHTS D
YEAR ENDED MARCH 25, 1994
OCTOBER 31, (COMMENCEMENT
1995 OF OPERATIONS) TO
OCTOBER 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 16.01 $ 14.10
Income from Investment Operations
Net investment income .01 .03
Net realized and unrealized gain (loss) (1.83) 1.97
Total from investment operations (1.82) 2.00
Less Distributions (.04) H -
From net investment income
In excess of net investment income (.09) -
From net realized gain (.10) H -
In excess of net realized gain (.02) -
Total distributions (.25) -
Antidilution resulting from additional offering of shares - .02
Offering expenses - (.11)
Net asset value, end of period $ 13.94 $ 16.01
Market value, end of period $ 11.875 $ 15.125
TOTAL RETURN A (19.82)% .83% B
Market value F
Net asset value C (11.08)% 14.27% E
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 117,754 $ 135,273
Ratio of expenses to average net assets 1.79% 1.78% G
Ratio of net investment income to average net assets .08% .29% G
Portfolio turnover rate 69% 70% G
</TABLE>
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
B TOTAL MARKET VALUE RETURN INCLUDES THE ONE TIME SALES LOAD OF 6% PAID IN
CONNECTION WITH THE INITIAL PUBLIC OFFERING.
C TOTAL RETURN BASED ON NET ASSET VALUE REFLECTS THE EFFECT OF CHANGES IN
THE NET ASSET VALUE ON THE PERFORMANCE OF THE FUND, AND ASSUMES DIVIDENDS
AND CAPITAL GAINS DISTRIBUTIONS, IF ANY, WERE REINVESTED. THIS PERCENTAGE
IS 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 OF THE FUND.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E TOTAL NET ASSET VALUE RETURN DOES NOT INCLUDE THE EFFECT OF ANTIDILUTION,
OFFERING EXPENSES AND THE ONE TIME SALES LOAD.
F TOTAL RETURN BASED ON MARKET VALUE REFLECTS THE EFFECT OF CHANGES IN THE
FUND'S MARKET VALUE AND ASSUMES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS,
IF ANY, WERE REINVESTED.
G ANNUALIZED
H THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Emerging Asia Fund, Inc. (the fund), a Maryland
corporation, is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as a non-diversified closed-end management
investment company. The fund issued 7,093 shares of its common stock to
Fidelity Management & Research Company (FMR) on March 17, 1994 for an
aggregate purchase price of $100,011. On March 25, 1994, and April 25,
1994, the fund issued 7,750,000 and 690,000 shares of common stock,
respectively, in its initial public offering.
There are 100,000,000 shares of $.001 par value common stock authorized.
Commencing in the first calender quarter of 1997, and on each calendar
quarter thereafter, the Board of Directors of the fund may, under certain
circumstances, conduct a tender offer to repurchase ten percent of the
fund's outstanding shares of common stock at a price equal to the net asset
value per share at the time of repurchase.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Directors.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
Equity securities that have reached the limit for aggregate foreign
ownership may trade at a premium to the local share price. If the
broker-quoted premium is not readily available as a result of limited share
activity, the securities are valued at the last sale price of the local
shares in the principal market in which such securities are normally
traded.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to U.S. federal
income taxes to the extent that it distributes substantially all of its
taxable income for its fiscal year. The fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. The fund
accrues such taxes as applicable, based upon its current interpretation of
the tax rules and regulations that exist in markets in which it invests.
The schedule of investments includes information regarding income taxes
under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain. In addition, stock dividends received (except those which have
resulted from capitalization of capital surplus) are taxable at 20% of the
par value of the stock dividends received.
EXPENSES. The fund incurred organization and offering expenses in
connection with its initial issuance of shares. The organization expenses
of $191,250 are being amortized on a straight-line basis for a five-year
period beginning at the commencement of operations of the fund. The
offering expenses of $926,487 were paid from the proceeds of the offering
and charged to capital.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
Pursuant to the fund's Dividend Reinvestment and Cash Purchase Plan (the
Plan), shareholders may elect to have all distributions automatically
reinvested in fund shares. Shareholders who do not participate in the Plan
will receive all distributions in cash paid by check in dollars. If the
market price per share on the valuation date equals or exceeds net asset
value per share on that date, the fund will issue new shares to
participants at net asset value. If the net asset value is less than 95% of
the market price on the valuation date, then shares will be issued at 95%
of the market price. The valuation date will be the dividend or
distribution payment date or, if that date is not a New York Stock Exchange
trading date, the next preceding trading date. If the net asset value
exceeds the market price of fund shares at such time, the Plan Agent will
purchase shares of stock valued at market price on the valuation date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for foreign
currency transactions, passive foreign investment companies (PFIC) and
losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
between net investment income and realized and unrealized gain (loss).
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
The fund invests in new securities offered by some foreign companies by
making applications in the public offerings. The full or a portion of the
issue price is paid at the time of the application and recorded as
application money for new issues. Upon allotment, this amount plus the
remaining amount of issue price is recorded as cost of investments.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $78,780,917 and $83,997,470, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment manager, FMR receives a fee that
is computed daily at an annual rate of 1.00% of the fund's average net
assets. The fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .25%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. The fund's
performance adjustment took effect in March, 1995.
ADVISER FEE. FMR and the fund entered into an investment advisory agreement
with Fidelity International Investment Advisors (FIIA), an affiliate of
FMR, pursuant to which FIIA is responsible for the management of the fund's
portfolio in accordance with the fund's investment policies and for making
decisions to buy or sell securities. FMR pays FIIA a portion of its
management fee, including any performance adjustment.
SUB-ADVISER FEE. FIIA, on behalf of the fund, has entered into a
sub-advisory agreement with Fidelity Investments Japan Limited (FIJ), an
affiliate of FMR, to provide advisory services concerning fund assets
invested in Japanese and other securities. FIIA pays FIJ a portion of its
fee based on the assets managed by FIJ.
ADMINISTRATIVE FEE. Fidelity International Limited (FIL), an affiliate of
FMR Corp., has entered into a Fund Management Agreement with the fund to
provide, or arrange to provide, administrative services to the fund
including maintaining the fund's accounting records. As the fund's
administrative manager, FIL receives a monthly fee at an annual rate of
.20% of the fund's average net assets. FIL has contracted all of these
services to Fidelity Service Co., a division of FMR Corp.
5. CONCENTRATION OF RISK.
The fund's relatively large investment in countries with limited or
developing capital markets may involve greater risks than investments in
more developed markets and the prices of such investments may be volatile.
The consequences of political, social or economic changes in these markets
may have disruptive effects on the market prices of the fund's investments
and the income they generate, as well as the fund's ability to repatriate
such amounts.
6. TAIWAN REPATRIATION
RESTRICTIONS.
Taiwan imposes a waiting period on the repatriation of both investment
income and capital. Amounts paid to Taiwan may be remitted out of Taiwan
after a waiting period, and realized capital gains and income on
investments may be remitted out of Taiwan only at the conclusion of the
fund's fiscal year.
7. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Panca Wiratama Sakti PT (For. Reg.) $ - $ 193,521 $ - $ -
8. QUARTERLY RESULTS OF
OPERATIONS (UNAUDITED).
NET INCREASE
NET NET (DECREASE)
INVESTMENT GAIN IN NET ASSETS
INVESTMENT INCOME (LOSS) ON RESULTING
INCOME (a) (LOSS) INVESTMENTS FROM OPERATIONS
PER PER PER PER
TOTAL SHARE TOTAL SHARE TOTAL SHARE TOTAL SHARE
1995
For the quarters ended:
January 31, 1995 $ 474,544 $ 0.06 $ (28,601) $ 0.00 $ (23,674,301) $
(2.80) $ (23,702,902) $ (2.81)
April 30, 1995 $ 449,570 $ 0.05 $ (68,087) $ (0.01) $ 6,761,237 $ 0.80 $
6,693,150 $ 0.80
July 31, 1995 $ 825,307 $ 0.10 $ 277,024 $ 0.03 $ 7,768,898 $ 0.92 $
8,045,922 $ 0.95
October 31, 1995 $ 509,776 $ 0.06 $ (83,387) $ (0.01) $ (6,360,288) $
(0.75) $ (6,443,675) $ (0.76)
(A) NET OF FOREIGN TAXES WITHHELD.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of Fidelity Advisor Emerging
Asia Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Emerging Asia Fund, Inc. at October 31, 1995, the results
of its operations for the year then ended, and the changes in its net
assets and the financial highlights for the periods indicated in conformity
with generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Fidelity Advisor Emerging Asia Fund, Inc.'s
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at
October 31, 1995, by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
December 8, 1995
PROXY VOTING RESULTS
The Annual Meeting of the fund's shareholders was held on June 14, 1995.
The results of votes taken among shareholders on proposals are listed
below.
PROPOSAL 1
To elect two Class I Directors (Messrs. Johnson and Witham) to serve for a
term expiring on the date on which the annual meeting of shareholders is
held in 1998, or until their successors are duly elected and qualified; to
elect two Class II Directors (Messrs. Burkhead and Yunich) to serve for a
term expiring on the date of which the annual meeting of shareholders is
held in 1996, or until their successors are duly elected and qualified; and
to elect one Class III Director (Mr. van den Hoven) to serve for a term
expiring on the date on which the annual meeting of shareholders is held in
1997, or until his successor is duly elected and qualified.
# OF % OF
SHARES VOTED SHARES VOTED
EDWARD C. JOHNSON 3RD (CLASS I DIRECTOR)
Affirmative 6,094,897 98.492
Withheld 93,313 1.508
TOTAL 6,188,210 100.000
BERTRAM H. WITHAM, JR. (CLASS I DIRECTOR)
Affirmative 6,094,897 98.492
Withheld 93,313 1.508
TOTAL 6,188,210 100.000
J. GARY BURKHEAD (CLASS II DIRECTOR)
Affirmative 6,094,897 98.492
Withheld 93,313 1.508
TOTAL 6,188,210 100.000
DAVID L. YUNICH (CLASS II DIRECTOR)
Affirmative 6,094,897 98.492
Withheld 93,313 1.508
TOTAL 6,188,210 100.000
HELMERT FRANS VAN DEN HOVEN (CLASS III DIRECTOR)
Affirmative 6,094,897 98.492
Withheld 93,313 1.508
TOTAL 6,188,210 100.000
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent accountants
of the fund.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 6,096,199 98.513
Against 54,707 0.884
Withheld 37,304 0.603
TOTAL 6,188,210 100.000
DIVIDENDS AND DISTRIBUTIONS
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The fund intends to distribute annually to shareholders substantially all
of its net investment income from dividends and interest earnings and
expects to distribute any net realized capital gains at least annually.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
adopted by the fund, shareholders may elect to have all distributions
automatically reinvested by State Street Bank and Trust Company (the "Plan
Agent") in fund shares, pursuant to the Plan. Shareholders who do not elect
to participate in the Plan will receive all distributions in cash paid by
check in U.S. dollars mailed directly to the shareholder by the Plan Agent.
Shareholders who would like additional information regarding the Plan or
wish to have distributions automatically reinvested should notify the fund,
c/o the Plan Agent for Fidelity Advisor Emerging Asia Fund, Inc., at Two
Heritage Drive, Quincy, Massachusetts 02171.
The Plan Agent will serve as agent for the shareholders in administering
the Plan. If the Directors of the fund declare an income dividend or a
capital gains distribution payable either in the fund's Common Stock or in
cash, as shareholders may have elected, non-participants in the Plan will
receive cash and participants in the Plan will receive Common Stock, to be
issued by the fund or purchased by the Plan Agent in the open market, as
provided below. If the market price per share on the valuation date equals
or exceeds net asset value per share on that date, the fund will issue new
shares to participants at net asset value or, if the net asset value is
less than 95% of the market price on the valuation date, then new shares
will be issued at 95% of the market price. The valuation date will be the
dividend or distribution payment date or, if that date is not a New York
Stock Exchange trading day, then the next preceding trading day. If net
asset value exceeds the market price of fund shares at such time, or if the
fund should declare a dividend or capital gains distribution payable only
in cash, the Plan Agent will, as agent for the participants, buy fund
shares in the open market on the New York Stock Exchange or elsewhere, with
the cash in respect of such dividend or distribution, for the participant's
account on, or shortly after, the payment date.
Participants in the Plan have the option of making additional payments to
the Plan Agent, annually, in any amount from $100 to $3,000 for investment
in the fund's Common Stock. The Plan Agent will use all such funds received
from participants to purchase fund shares in the open market on or about
February 15 of each year. Any voluntary cash payments received more than
thirty days prior to such date will be returned by the Plan Agent, and
interest will not be paid on any uninvested cash payments. To avoid
unnecessary cash accumulations, and also to allow ample time for receipt
and processing by the Plan Agent, it is suggested that participants send in
voluntary cash payments to be received by the Plan Agent approximately ten
days before an applicable purchase date as specified above. A participant
may withdraw a voluntary cash payment by written notice if the notice is
received by the Plan Agent not less than forty-eight hours before such
payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including
information needed by shareholders for personal and tax records. Shares in
the account of each Plan participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each
shareholder's proxy will include those shares purchased pursuant to the
Plan. In the case of shareholders such as banks, brokers or nominees, which
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from
time to time by the shareholder as representing the total amount registered
in the shareholder's name and held for the account of beneficial owners who
are participating in the Plan.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Plan Agent's fees for the handling of the
reinvestment of dividends and distributions and voluntary cash payments
will be paid by the fund. There will be no brokerage charges with respect
to shares issued directly by the fund as a result of dividends or capital
gains distributions payable either in stock or in cash. However, each
participant's account will be charged a prorata share of brokerage
commissions incurred with respect to the Plan Agent's open market purchases
in connection with the reinvestment of dividends or capital gains
distributions and voluntary cash
payments made by the participant. Brokerage charges for purchasing small
amounts of stock for individual accounts through the Plan are expected to
be less than the usual brokerage charges for such transactions, because the
Plan Agent will be purchasing stock for all participants in blocks and
prorating the lower commission thus attainable.
The reinvestment of dividends and distributions will not relieve
participants of any income tax which may be payable on such dividends and
distributions.
If your shares are held in your own name and you wish to receive all
dividends and capital gain distributions in cash rather than in shares, you
may withdraw from the Plan without penalty at any time by contacting the
Plan Agent. If your shares are held in nominee name, you should be able to
withdraw from the Plan without penalty at any time by sending written
notice to your nominee. If you withdraw, you will receive a share
certificate for all full shares or, if you wish, the Plan Agent will sell
your shares and send you the proceeds, after the deduction of brokerage
commissions. The Plan Agent will convert any fractional shares to cash at
the then-current market price and send you a check for the proceeds. Please
note that, if you participate in the Plan through a brokerage account, you
may not be able to continue as a participant if you transfer those shares
to another broker. Contact your broker or nominee or the Plan Agent to see
what is the best arrangement for you to participate in the Plan.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the fund reserves the right to amend or terminate the Plan as
applied to any voluntary cash payment made and any dividend or distribution
paid subsequent to notice of the change sent to members of the Plan at
least 30 days before the record date for such dividend or distribution. The
Plan also may be amended by the fund or Plan Agent by at least 30 days'
written notice to all participants in the Plan. All correspondence
concerning the Plan should be directed c/o the Plan Agent for Fidelity
Advisor Emerging Asia Fund, Inc., at Two Heritage Drive, Quincy,
Massachusetts 02171.
OTHER FUND INFORMATION
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts 02109, is custodian of the assets of the fund. The custodian
is responsible for the safekeeping of the fund's assets and the appointment
of the subcustodian banks and clearing agencies. The custodian takes no
part in determining the investment policies of the fund or in deciding
which securities are purchased or sold by the fund. However, the fund may
invest in obligations of the custodian and may purchase securities from or
sell securities to the custodian. The Bank of New York and Chemical Bank,
each headquartered in New York, also may serve as a special purpose
custodian of certain assets of the fund in connection with pooled
repurchase agreement transactions.
ADDRESS
Fidelity Advisor Emerging
Asia Fund, Inc.
82 Devonshire Street
Boston, MA
1-800-426-5523
INVESTMENT MANAGER
Fidelity Management &
Research Company
Boston, MA
INVESTMENT ADVISER
Fidelity International
Investment Advisors
Pembroke, Bermuda
SUB-ADVISER
Fidelity Investments Japan Limited
Tokyo, Japan
DIRECTORS AND OFFICERS
Edward C. Johnson 3d, Director and President
J. Gary Burkhead, Director and
Senior Vice President
Helmert Frans van den Hoven, Director
Bertram H. Witham, Jr., Director
David L. Yunich, Director
William Ebsworth, Vice President
Peter F. Phillips, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Stuart E. Fross, Assistant Secretary
John H. Costello, Assistant Treasurer
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
State Street Bank and Trust Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
LEGAL COUNSEL
Rogers & Wells
New York, NY
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
Boston, MA
(registered trademark)
