(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EMERGING ASIA
FUND, INC.
ANNUAL REPORT
OCTOBER 31, 1996
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 23 The auditors' opinion.
ACCOUNTANTS
PROXY VOTE RESULTS 24 Shareholder proxy voting results.
DIVIDENDS AND DISTRIBUTIONS 25 Dividend reinvestment and cash
purchase plan.
OTHER FUND INFORMATION 28 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
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first 10
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
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
Southeast Asian markets
turned in mixed results as returns
ran the gamut from positive to
negative across the region. For
the year ending October 31,
1996, the Morgan Stanley Capital
International Far East ex-Japan
Free Index returned 9.89%. Many
of the Asian tiger markets had
strong returns although South
Korea, Singapore, India and
Thailand were notable laggards.
Top markets such as Hong Kong
benefited from the rising value of
the property sector, solid
economic growth and stable
interest rates. The Philippines
also caught the eye of many
investors during the period in part
because of the archipelago's hot
property sector. Countries with
high savings rates - such as
Malaysia - continued to attract
investment. These countries
were able to undertake
large-scale projects such as
roads and airports. On the other
hand, slumping demand for
memory chips hurt leading
semiconductor producers in
South Korea and Singapore.
Additionally, despite shrinking
trade deficits in some countries,
declining export growth in the
region was a lingering concern
among investors.
An interview with Peter Phillips, Portfolio Manager of Fidelity Advisor
Emerging Asia Fund, Inc.
Q. HOW DID THE FUND PERFORM, PETER?
A. For the 12 months ended October 31, 1996, the fund had a total return of
14.81% based on net asset value. (See Financial Highlights on page 18.)
This compares to a total return of 13.52% for the blended Morgan Stanley
Capital International Combined ex-Japan (Free) including Taiwan Index and
the Morgan Stanley Capital International All Country Asia (Free) ex-Japan
Index during the same time period. [Note: Prior to September 3, 1996,
Morgan Stanley Capital International Index (MSCI) did not include Taiwan in
the latter index and, accordingly, the fund was compared to the customized
former Index. Starting on September 3, 1996, MSCI began to include Taiwan
in the latter Index, making the customized former index obsolete for
benchmark purposes. Going forward, the latter index will be the benchmark
index against which the fund is compared.] Since this is a closed-end fund
that trades on the New York Stock Exchange, 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 16.26%.
This means that if you bought a share of the fund one year ago at $11.875,
you could have sold it on October 31, 1996 for $13.75. You have to keep in
mind that all returns I've mentioned include reinvestment of dividends and
capital gains, if any.
Q. LET'S START WITH HONG KONG. IT REMAINS THE FUND'S LARGEST COUNTRY
WEIGHTING. WHY?
A. I believe that investing in Hong Kong is a way to capitalize on China's
economic recovery. In fact, during the period I increased the fund's
holdings in Hong Kong. My bottom-up research indicated that Hong Kong was
poised to outperform other markets in Asia in anticipation of the economy
strengthening in late 1996. It appeared that the property sector bottomed
out in early 1996 and that consumer confidence seemed to be improving.
Therefore, I've increased the fund's weightings in cyclical stocks - those
stocks that tend to rise with a booming economy - specifically in
construction companies and property developers such as Sun Hung Kai
Properties and New World Development.
Q. WHAT CHANGES HAVE YOU MADE TO THE FUND'S INVESTMENTS IN TAIWAN?
A. Despite continuing tensions between Taiwan and the People's Republic of
China, Taiwan has had the strongest market in Southeast Asia during the
past six months. The fund took profits in stocks such as Cathay Life
Insurance, China Development and Tatung.
Q. ALTHOUGH STILL THE LARGEST PORTION OF THE FUND'S INVESTMENTS, FINANCIAL
HOLDINGS HAVE BEEN REDUCED DURING THE PERIOD. WHAT'S YOUR STRATEGY?
A. While the fund took profits and reinvested the proceeds in other areas,
finance remained a strong and profitable area of focus for the fund.
Generally, banks in the region are well-regulated and are growing faster
than their respective economies as trade finance, consumer credit and
leasing have expanded in most countries. Non-bank financial institutions
were also attractive, and stocks such as Manhattan Card, a credit-card
provider in Hong Kong, performed well during the period.
Q. WHAT OTHER CHANGES DID YOU MAKE TO THE FUND'S INVESTMENTS?
A. During the period, Thailand was one of the weakest of the emerging
markets of Asia, suffering from reduced corporate earnings, sluggish
exports, declining loan growth and weakness in the property market. As a
result, I reduced the fund's investments there in the property and banking
sectors. To capitalize on increasing consumer spending rates throughout the
region, the fund continues to hold its investments in Rothmans, a tobacco
company, and Kian Joo, a manufacturer of beverage cans. And, despite a
general upswing in Southeast Asian economies, I've underweighted cyclical
stocks such as electronics, steel and plastic due to large inventories and
expected oversupply.
Q. WHAT WAS MOST DISAPPOINTING DURING THE PERIOD?
A. The biggest disappointment was the drag on performance that came from
not owning the outperforming Taiwanese banks.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Recently, a number of commentators and economists have suggested that
the "Asian Miracle" is over. While it is unlikely that the significant
outperformance of the regional stock markets will re-occur anytime soon, I
don't think the outlook is as bleak as some market observers suggest. While
slowing export growth, currency instability and political uncertainty
remain a problem, intra-Asia investment and trade activity continue to grow
at a fast pace. If properly handled, I think this environment provides a
way for the best companies to compete, remain strong and grow.
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.
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
SIZE: as of October 31, 1996,
more than $134 million
MANAGER: Peter Phillips,
since 1994, joined Fidelity in
1987
(checkmark)
PETER PHILLIPS ON INVESTING IN
CHINA:
"Following a multi-year
campaign by the government
to reduce inflation, the Chinese
economy is finally beginning
to look healthier than it did just
one year ago. Credit is
becoming more available and
at the same time, credit
demand has diminished
slightly as many
manufacturers and
distributors have begun to
reduce inventories - helping
to smooth the domestic
economy from more volatile
levels.
"Hong Kong and Taiwan
continue to strengthen their
links with mainland China,
and I believe that investing in
Hong Kong and Taiwan is a
prudent way of participating in
China's economic recovery. In
spite of the improving
economic and political
conditions in mainland China,
there are still problems with
investing in mainland firms
because of the poor quality
of financial disclosure and
access to management."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF OCTOBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Sun Hung Kai Properties Ltd. 4.9 3.7
Hang Seng Bank Ltd. 4.4 2.2
Swire Pacific Ltd. Class A 3.9 3.7
Hutchison Whampoa Ltd. Ord. 3.6 3.1
Cheung Kong Holdings Ltd. 3.6 2.4
New World Development Co. Ltd. 2.9 1.7
Korea Electric Power Corp. 2.5 1.3
Hong Kong & China Gas Co. Ltd. 2.3 1.4
Cathay Life Insurance Co. Ltd. 2.2 3.1
Telekom Malaysia BHD 2.1 2.4
TOP FIVE MARKET SECTORS AS OF OCTOBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Finance 26.5 30.7
Construction & Real Estate 20.2 16.6
Utilities 13.1 13.3
Media & Leisure 6.2 8.1
Transportation 5.5 6.0
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF OCTOBER 31, 1996 AS OF APRIL 30, 1996
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 49.0
Row: 1, Col: 4, Value: 49.0
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 4, Value: 50.0
Stocks 98.3%
Short-term
Investments 1.7%
Stocks 100.0%
Short-term
Investments 0.0%
INVESTMENTS OCTOBER 31, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.3%
SHARES VALUE (NOTE 1)
BANGLADESH - 0.0%
Advanced Chemical Industries 7,550 $ 62,658
BERMUDA - 0.3%
FPB Bank Holding Co. Ltd. 498,000 214,150
Mandarin Oriental International Ltd. 123,000 166,050
380,200
HONG KONG - 33.7%
Cheung Kong Holdings Ltd. 590,000 4,730,866
Dah Sing Financial Holdings Ltd. 154,800 547,552
Great Eagle Holdings Ltd. 159,959 514,082
HSBC Holdings PLC 29,800 610,421
Hang Seng Bank Ltd. 497,000 5,897,384
Hong Kong & China Gas Co. Ltd. 1,737,262 3,055,633
Hong Kong & Shanghai Hotels 346,000 635,421
Hong Kong Telecommunications Ltd. 1,103,200 1,944,390
Hutchison Whampoa Ltd. Ord. 686,000 4,790,875
Hysan Development Co. Ltd. 233,000 747,316
JCG Holdings Ltd. 760,000 707,690
Johnson Electric Holdings Ltd. 125,000 273,208
Manhattan Card Co. Ltd. 1,216,000 601,536
National Mutual Asia Ltd. 264,000 221,929
New World Development Co. Ltd. 652,945 3,800,021
Sime Darby Hongkong Ltd. 142,000 168,038
Sun Hung Kai Properties Ltd. 578,000 6,578,205
Swire Pacific Ltd. Class A 594,000 5,243,074
Television Broadcast Ltd. Ord. 165,000 578,296
Varitronix International Ltd. 180,000 328,238
Wharf Holdings Ltd. (b) 498,000 2,054,551
Wing Hang Bank Ltd. 188,000 756,163
44,784,889
INDIA - 6.0%
Bajaj Auto Ltd. 17,500 468,750
Bharat Petroleum Corp. Ltd. 40,000 319,888
Brooke Bond Lipton India Ltd. 20,000 183,753
Crompton Greaves Ltd. 25,000 98,039
Digital Equipment Ltd. 70,000 144,608
East India Hotels Ltd. 18,000 273,259
Essel Packaging Ltd. 4,050 12,706
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - CONTINUED
Gujarat Ambuja Cement Ltd. GDR 35,280 $ 273,420
Gujarat Gas Co. Ltd. 30,000 97,689
Hindalco Industries Ltd. 5,750 85,235
Hindustan Lever Ltd. 40,550 892,171
Hindustan Petroleum Corp. Ltd. 36,900 325,603
Housing Development Finance Corp. Ltd. 9,000 590,702
ITC Ltd. 70,000 592,409
India Cements Ltd. 25,000 70,028
Industrial Credit & Investments Corp. Ltd. (a) 158,300 266,000
Industrial Development Bank of India 80,000 234,174
Kotak Mahindra Finance Ltd. 500 1,029
Mahanagar Telephone Nigam Ltd. (a) 148,500 939,957
Mahindra & Mahindra Ltd. 50,000 441,176
Mukand Ltd. 500 1,275
Procter & Gamble India Ltd. 10,000 143,417
Ranbaxy Laboratories Ltd. 8,900 154,503
State Bank of India 112,000 718,524
Tata Engineering & Locomotive Ltd. 16,000 184,202
Tata Engineering & Locomotive Ltd. GDR 7,500 90,000
Tube Investments of India Ltd. GDR unit 11,667 14,220
Videsh Sanchar Nigam Ltd. 15,000 399,160
Zee Telefilms Ltd. 100 316
8,016,213
INDONESIA - 6.4%
Astra International PT (For. Reg.) 490,500 1,021,306
Bank Bira (For. Reg.) 165,000 161,154
Bank International Indonesia PT (For. Reg.) 510,595 822,021
Citra Marga Nusadhala Persada PT (For. Reg.) 420,000 306,530
Gudang Garam PT (For. Reg.) 424,000 1,692,871
Indah Kiat Pulp & Paper (For. Reg.) 677,322 530,681
Indo Rama Synthetics PT (For. Reg.) 61,000 174,151
Kalbe Farma (For. Reg.) 400,000 472,245
Lippo Securities PT (For. Reg.) 720,000 440,476
Panin Bank PT (For. Reg.) 232,500 232,071
Ramayana Lestari Sentosa PT (For. Reg.) (a) 120,000 203,495
Semen Gresik (For. Reg.) 167,500 481,798
Telkom PT (For. Reg.) 1,290,000 1,924,507
Tempo-Scan Pacific (For. Reg.) 53,000 87,602
8,550,908
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 4.9%
Cho Hung Bank Co. Ltd. 6,500 $ 68,182
Hyundai Engineering & Construction Co. Ltd. (a) 4,800 147,791
Hyundai Motor Co. Ltd. sponsored GDR (a) 7,500 78,750
Hyundai Motor Service Co. Ltd. 2,200 71,092
Hyundai Motor Service Co. Ltd. (New) (a) 285 8,899
Korea Electric Power Corp. 114,000 3,352,737
Korea Mobile Telecommunications Corp. 980 980,296
Korea Exchange Bank 39,000 382,802
Lg Information & Communications Ltd. 1,400 142,330
Pohang Iron & Steel Co. Ltd. 4,000 254,886
Samsung Electronics Co. Ltd. (vtg.) 17 1,195
Samsung Fire & Marine Insurance 910 474,907
Shinhan Bank 22,094 440,997
Sungmi Telecom Co. 220 47,416
6,452,280
MALAYSIA - 17.1%
Affin Holdings BHD 216,000 555,578
Amway Holding BHD (a) 50,000 298,761
Berjaya Sports Toto BHD 600,000 2,255,550
Carlsberg Brewery BHD 42,000 294,171
Ekran BHD Ord. 123,000 515,927
EON (Edaran Otomobil Nasional) BHD 202,000 1,886,431
Jaya Tiasa Holdings BHD 40,000 226,346
Kian Joo Can Factory BHD 271,500 1,482,609
Kwong Yik Bank BHD 21,000 57,754
Magnum Corp. BHD 135,000 232,915
Malayan Banking BHD 181,000 1,790,590
Nylex Malaysia SDN BHD 164,000 360,176
Petronas Dagangan BHD 90,000 265,324
Public Bank BHD (For. Reg.) 449,333 842,799
Resorts World BHD 205,000 1,176,249
Rothmans of Pall Mall Malaysia BHD 190,000 1,872,106
Sime Darby BHD (a) 542,000 1,919,552
Telekom Malaysia BHD 312,000 2,753,195
Time Engineering BHD 128,000 250,216
United Engineers BHD 293,000 2,318,864
YTL Corp. BHD 254,500 1,369,633
22,724,746
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PAKISTAN - 0.0%
Askari Commercial Bank (a) 55 $ 31
Askari Leasing Ltd. (a) 71,700 23,829
DG Kahn Cement Ltd. (a) 110 22
National Development Leasing Corp. (a) 12,500 2,049
Pak Electron Ltd. (a) 55 18
Sui Southern Gas Pipelines Ltd. (a) 1,755 1,320
27,269
PHILIPPINES - 2.7%
Ayala Land, Inc. Class B 814,000 867,275
Benpress Holdings Corp. GDR (a)(b) 6,930 50,243
Benpress Holdings Corp. GDR (a) 57,400 416,150
Filinvest Land, Inc. Ord. (a) 278,000 94,148
Manila Electric Co. Class B 147,400 1,082,504
Petron Corp. 1,600,000 468,798
Philippine Commercial International Bank 23,000 297,565
Pilipino Telephone Corp. (a) 308,000 272,489
3,549,172
SINGAPORE - 10.4%
City Developments Ltd. 129,000 1,015,892
Cycle & Carriage Ltd. 26,000 273,005
Datacraft Asia Ltd. 393,000 463,740
DBS Land Ltd. 150,000 472,508
Development Bank of Singapore Ltd. (For. Reg.) 68,000 815,325
Hong Leong Finance Ltd. (For. Reg.) 360,000 1,098,262
Keppel Corp. Ltd. 151,000 1,124,867
Overseas Chinese Banking Corp. 185,400 2,117,730
Parkway Holdings Ltd. (a) 150,000 558,709
Singapore Finance Ltd. 110,400 158,218
Singapore Finance Ltd. (warrants) (a) 11,325 6,106
Singapore International Airlines Ltd. 165,000 1,451,579
Singapore Press Holdings Ltd. (For. Reg.) 93,000 1,543,952
United Industrial Corp. Ltd. 344,000 285,548
United Overseas Bank Ltd. (For. Reg.) 253,400 2,462,987
13,848,428
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN (FREE CHINA) - 10.7%
Acer, Inc. (a) 355,090 $ 505,429
Asia Cement Corp. 541,350 982,843
Cathay Construction Co. Ltd. 454,900 751,560
Cathay Life Insurance Co. Ltd. 499,300 2,991,449
China Development Corp. 496,338 1,333,661
China Motor Co. Ltd. 438,000 675,926
China Steel Corp. 1,154,000 1,026,616
First International Computer (a) 10,674 15,271
Formosa Chemical & Fibre 417,000 505,730
Formosa Plastic 267,303 601,771
ICBC (International Commerce Bank of China) 244,000 722,077
Kinpo Electronics, Inc. 54 67
Nan Ya Plastics Corp. 31,964 61,514
Phoenixtec Power Company (a) 191,500 312,908
President Enterprises Corp. (a) 387,200 544,105
Tatung Co. 700,000 1,334,423
Taiwan Secom Co. (a) 242,250 791,667
Wan Hai Lines Ltd. 256,000 720,407
Yung Shin Pharmaceutical Industries Co. Ltd. 166,355 413,773
14,291,197
THAILAND - 5.9%
Bangkok Bank Ltd. (For. Reg.) 93,200 993,549
BEC World PCL (For. Reg.) (a) 22,000 210,386
Electricity Generating PCL (For. Reg.) 85,200 247,102
Finance One PCL (For. Reg.) 56,000 158,025
First Bangkok City Bank PCL (For. Reg.) 239,250 276,617
Grammy Entertainment PCL (For. Reg.) 8,100 92,063
Industrial Finance Corp. (For. Reg.) 98,000 288,066
Krung Thai Bank Ltd. (For. Reg.) 362,000 993,141
Krungthai Thanakit PCL (For. Reg.) 85,700 261,987
Matichon Newspaper Group PCL (For. Reg.) 26,900 104,374
National Finance & Securities PCL (For. Reg.) 62,000 117,852
Phatra Thanakit PCL (For. Reg.) 22,600 83,704
PTT Exploration & Production (For. Reg.) 65,300 936,696
Siam Cement PCL (For. Reg.) 26,200 895,411
Siam Commercial Bank PCL (For. Reg.) 30,000 272,781
Siam Makro PCL (For. Reg.) 43,000 183,696
Total Access Communication PCL 40,000 276,000
Total Access Communication PCL (For. Reg.) 20,000 137,958
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Thai Farmers Bank PCL 54,000 $ 412,698
Thai Farmers Bank PCL (For. Reg.) (warrants) (a) 6,750 -
Thai Military Bank Ltd. (For. Reg.) 395,800 915,234
7,857,340
VIETNAM - 0.2%
Vietnam Enterprise Investments Ltd. (a)(b) 250,000 252,500
TOTAL COMMON STOCKS
(Cost $117,359,985) 130,797,800
CASH EQUIVALENTS - 1.7%
MATURITY
AMOUNT
Investments in repurchase agreements,
(U.S. Treasury obligations) in a joint
trading account at 5.54%, dated
10/31/96 due 11/1/96 $ 2,258,347 2,258,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $119,617,985) $ 133,055,800
LEGEND
1. Non-income producing
2. 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 $2,357,294 or 1.8% of net
assets.
INCOME TAX INFORMATION
At October 31, 1996, the aggregate cost of investment securities for income
tax purposes was $119,619,861. Net unrealized appreciation aggregated
$13,435,939, of which $21,426,290 related to appreciated investment
securities and $7,990,351 related to depreciated investment securities.
The fund hereby designates approximately $3,406,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
For the period, interest and dividends from foreign countries were
$2,581,819 or $0.31 per share. Taxes accrued or paid to foreign countries
were $425,449 or $0.05 per share.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
Aerospace & Defense 0.8%
Basic Industries 3.2
Cash Equivalents 1.7
Construction & Real Estate 20.2
Durables 4.2
Energy 1.5
Finance 26.5
Health 1.0
Holding Companies 1.7
Industrial Machinery &
Equipment 5.5
Media & Leisure 6.2
Nondurables 4.1
Retail & Wholesale 1.7
Services 1.5
Technology 1.6
Transportation 5.5
Utilities 13.1
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1996
ASSETS
Investment in securities, at value (including repurchase $ 133,055,800
agreements of $2,258,000) (cost $119,617,985) -
See accompanying schedule
Cash 1,047
Foreign currency held at value 1,871,069
New Taiwan dollars (cost $1,871,027)
Receivable for investments sold 545,387
Dividends receivable 127,751
Deferred organizational expenses 89,250
TOTAL ASSETS 135,690,304
LIABILITIES
Payable for investments purchased $ 779,772
Accrued management fee 115,941
Other payables and accrued expenses 180,526
TOTAL LIABILITIES 1,076,239
NET ASSETS $ 134,614,065
Net Assets consist of:
Paid in capital $ 118,177,525
Distributions in excess of net investment income (404,110)
Accumulated undistributed net realized gain (loss) on 3,403,716
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 13,436,934
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 8,447,093 shares outstanding $ 134,614,065
NET ASSET VALUE ($134,614,065 (divided by) 8,447,093 shares) $15.94
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1996
INVESTMENT INCOME $ 2,515,027
Dividends
Interest 169,196
2,684,223
Less foreign taxes withheld (425,449)
TOTAL INCOME 2,258,774
EXPENSES
Management fee $ 1,317,006
Basic fee
Performance adjustment 20,696
Transfer agent fees 14,241
Administrative fees and expenses 263,659
Directors' compensation 43,752
Custodian fees and expenses 273,652
Registration fees 250
Audit 80,397
Legal 50,291
Amortization of organization expenses 38,250
Reports to shareholders 28,085
Miscellaneous 22,447
Total expenses before reductions 2,152,726
Expense reductions (5,979) 2,146,747
NET INVESTMENT INCOME 112,027
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 6,234,238
Foreign currency transactions (388,731) 5,845,507
Change in net unrealized appreciation (depreciation) on:
Investment securities 11,215,883
Assets and liabilities in foreign currencies 193,965 11,409,848
NET GAIN (LOSS) 17,255,355
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 17,367,382
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 112,027 $ 96,949
Net investment income
Net realized gain (loss) 5,845,507 (1,511,123)
Change in net unrealized appreciation (depreciation) 11,409,848 (13,993,331)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 17,367,382 (15,407,505)
FROM OPERATIONS
Distributions to shareholders (112,027) (315,333)
From net investment income
In excess of net investment income (394,799) (746,725)
From net realized gain - (856,462)
In excess of net realized gain - (193,253)
TOTAL DISTRIBUTIONS (506,826) (2,111,773)
TOTAL INCREASE (DECREASE) IN NET ASSETS 16,860,556 (17,519,278)
NET ASSETS
Beginning of period 117,753,509 135,272,787
End of period (including distributions in excess of net $ 134,614,065 $ 117,753,509
investment income of $404,110 and $242,717,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED MARCH 25, 1994
OCTOBER 31, (COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31,
1996 1995 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA H
Net asset value, beginning of period $ 13.94 $ 16.01 $ 14.10
Income from Investment Operations
Net investment income .01 .01 .03
Net realized and unrealized gain (loss) 2.05 (1.83) 1.97
Total from investment operations 2.06 (1.82) 2.00
Less Distributions
From net investment income (.01) (.04) -
In excess of net investment income (.05) (.09) -
From net realized gain - (.10) -
In excess of net realized gain - (.02) -
Total distributions (.06) (.25) -
Antidilution resulting from additional - - .02
offering of shares
Offering expenses - - (.11)
Net asset value, end of period $ 15.94 $ 13.94 $ 16.01
Market value, end of period $ 13.750 $ 11.875 $ 15.125
TOTAL RETURN B 16.26% (19.82)% .83% D
Market value E
Net asset value C, F 14.81% (11.08)% 14.27% G
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 134,614 $ 117,754 $ 135,273
Ratio of expenses to average net assets 1.63% 1.68% 1.70% A,
J J
Ratio of net investment income to average net .09% .08% .29% A
assets
Portfolio turnover rate 63% 69% 70% A
Average commission rate I $ .0134
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL MARKET VALUE RETURN INCLUDES ONE TIME SALES LOAD OF 6% PAID IN
CONNECTION WITH THE INITIAL PUBLIC OFFERING.
E TOTAL MARKET VALUE RETURN REFLECTS THE EFFECT OF CHANGES IN THE FUND'S
MARKET VALUE AND ASSUMES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS, IF ANY,
WERE REINVESTED.
F TOTAL NET ASSET VALUE RETURN REFLECTS THE EFFECTS OF CHANGES IN THE
FUND'S NET ASSET VALUE AND ASSUMES DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS, IF ANY, WERE REINVESTED. THIS PERCENTAGE IS NOT AN
INDICATION OF THE PERFORMANCE OF A SHAREHOLDERS' 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.
G TOTAL NET ASSET VALUE RETURN DOES NOT INCLUDE THE EFFECT OF ANTIDILUTION,
OFFERING EXPENSES AND THE ONE TIME SALES CHARGE.
H NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
J AMOUNTS HAVE BEEN ADJUSTED TO CONFORM WITH CURRENT PERIOD PRESENTATION.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1996
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.
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 up to 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 financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. 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 with remaining maturities of sixty days or less for
which quotations are not readily available 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
share 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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, 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 on most Taiwanese stocks
are taxable at 20% of the par value of the stock received.
DEFERRED ORGANIZATION EXPENSES. The fund incurred organization 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.
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), capital
loss carryforwards 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.
Distributions in excess of net investment
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 offering. Either all, 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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. 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 foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (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 for U.S. Treasury or Federal
Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment manager, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $83,928,689 and $79,670,398, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
subject to a performance adjustment (up to a maximum of (plus/minus) .25%
of the fund's average net assets over the performance period) based on the
fund's investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of 1.02% of average net assets after the performance
adjustment.
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, 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.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$5,535 under this arrangement.
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of the fund's expenses. During the period, the fund's custodian
fees were reduced by $444 under this arrangement.
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, 1996, 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, 1996, 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 11, 1996
PROXY VOTING RESULTS
The annual meeting of the fund's shareholders was held on June 19, 1996.
The results of votes taken among shareholders on proposals are listed
below.
PROPOSAL 1
To elect two Class II Directors (Messrs. Burkhead and Yunich) to serve for
a term expiring on the date on which the annual meeting of shareholders is
held in 1999, or until their successors are duly elected and qualified.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD (CLASS II DIRECTOR)
Affirmative 5,195,276 97.871
Withheld 112,988 2.129
TOTAL 5,308,264 100.00
DAVID L. YUNICH (CLASS II DIRECTOR)
Affirmative 5,192,525 97.820
Withheld 115,739 2.180
TOTAL 5,308,264 100.00
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent accountants
of the fund.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 5,229,967 98.525
Against 55,025 1.037
Abstain 23,272 0.438
TOTAL 5,308,264 100.00
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, North 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 Korea Fund, Inc., at Two Heritage Drive, North 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 The Chase
Manhattan 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
Pradip Darooka, 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)
