<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL EMERGING MARKETS FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1999
(UNAUDITED)
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
OBJECTIVE Long-term capital appreciation through active
management of a diversified portfolio of equities
in countries with emerging markets and developing
economies.
LAUNCH DATE February 14, 1997
FUND SIZE $139.7m
PERFORMANCE Total return from May 1, 1999 through October 31,
1999
<TABLE>
<S> <C> <C>
- MCBT - Global Emerging Markets Fund (excluding all transaction fees) 6.2%
- MCBT - Global Emerging Markets Fund (including all transaction fees) 5.8%
- Morgan Stanley Capital International - Emerging Markets Free Index 7.2%
<CAPTION>
Annualized total return from February 14, 1997 through October 31, 1999
<S> <C> <C>
- MCBT - Global Emerging Markets Fund (excluding all transaction fees) -4.4%
- MCBT - Global Emerging Markets Fund (including all transaction fees) -5.1%
- Morgan Stanley Capital International - Emerging Markets Free Index -7.9%
(from March 1, 1997 through October 31, 1999)
</TABLE>
PORTFOLIO Over the six months to 31 October, the MSCI
COMMENTS Emerging Markets Free index has risen by over 7%.
Over the same period the price of the Global
Emerging Markets Fund rose by almost 6%.
Our focus remains on Asia. With substantial market
appreciation in early 1999, our strategy of
favouring the region and emphasising the Asian
markets has been largely correct. During the
summer, a bank scandal in Indonesia and the
political events in East Timor triggered a sharp
fall in both the Indonesian currency and
stockmarket. With the announcement of the
bankruptcy of Daewoo in South Korea and fears of
recidivism in Thailand, those markets also fell.
The result was that the portfolio underperformed
in the summer. During October, a gradual
resolution to the Daewoo affair has led to renewed
enthusiasm for South Korean equities, and the
results of the election in Indonesia were taken
positively. As a result we are again outperforming
the index.
1
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
PORTFOLIO OUTLOOK
COMMENTS -------
(continued)
Looking ahead, we will continue to favour Asia. We
believe that the markets of North Asia are more
likely to outperform. We have taken advantage of
recent strength in Indonesia to reduce our
holdings there and to switch funds into South
Korea, China and Taiwan. The economic argument for
these markets is the most favourable, and the pace
of corporate reform the most impressive.
In Latin America we favour the largest markets of
Mexico and Brazil. Economic prospects for the
region are improving as commodity prices continue
to rise.
In the central European, Middle Eastern and
African markets, the outlook is also encouraging.
The economic recovery in western Europe has a
direct and positive impact on central European
countries. In the Middle East, after the recent
Israeli elections the peace process has taken a
further step forward. Egypt is benefiting from the
strength in the oil price this year and economic
prospects look hopeful.
Firmer commodity prices will also help South
Africa, and the recent run in precious metal
prices is of particular benefit. In the coming
year growth should begin to recover and interest
rates will have scope to fall, providing a
supportive backdrop to the market.
The short term outlook may well be clouded by
fears about Y2K. But with underlying economic
improvements evident in all regions, we consider
the longer-term outlook favourable.
INVESTMENT James Fairweather, Chief Investment Officer
MANAGER PROFILE for Martin Currie Investment Management LTD,
oversees the management of the MCBT Global
Emerging Markets Fund. All funds are managed
on a team basis with a named director heading
each team.
James Fairweather spent three years with Montague
Loebl Stanley & Co as an institutional sales and
economics assistant. He moved into Eurobond sales
for 18 months with Kleinwort Benson before joining
Martin Currie in 1984. He had worked in their Far
East, North American and continental European
investment teams. Appointed director in 1987,
James became head of their continental European
team in 1992. Chairman of the international
strategy group, he was appointed deputy chief
investment officer in 1994 with overall
responsibility for ther investments in emerging
markets. James was promoted to chief investment
officer in 1997.
The international strategy group sets limits for
regional allocation. The managers of the funds are
responsible for the selection of countries within
those regions, sectors, and stocks.
2
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
ASSET ALLOCATION
(% of net assets)
RAW DATA FOR PIE CHARTS
Pacific Basin 37%
Latin America 22%
Europe 11%
Other Areas 11%
Africa 7%
Middle East 7%
ST Investment 7%
Other Net Assets -2%
-------
TOTAL: 100%
<TABLE>
<CAPTION>
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
AFRICA
<S> <C> <C>
Sasol Limited (South Africa) 1.6
Anglo American Corporation (South Africa) 1.4
EUROPE
Alpha Credit Bank (Greece) 1.0
LATIN AMERICA
Telefonos de Mexico, ADR (Mexico) 3.6
MIDDLE EAST
Orbotech Limited (Israel) 0.7
OTHER AREAS
Indian Opportunities Fund (Investment Companies) 5.5
Near East Opportunities Fund (Investment Companies) 2.9
Mahindra & Mahindra, GDR (India) 2.1
PACIFIC BASIN
PT Bank Pan Indonesia, TBK (Indonesia) 4.0
Samsung Electronics
Corporation (South Korea) 2.7
</TABLE>
3
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCK, PREFERRED STOCK, RIGHTS
AND WARRANTS - 94.7%
AFRICA - 6.9%
KENYA - 0.0%
KENYA COMMERCIAL BANK 1 $ 0
----------
TOTAL KENYA - (COST $1) 0
----------
SOUTH AFRICA - 6.9%
ANGLO AMERICAN CORPORATION 37,750 2,009,253
BARLOW LIMITED 250,000 1,218,728
NEDCOR INVESTMENT BANK HOLDINGS * 96,500 56,546
NEDCOR LIMITED 76,500 1,504,175
SANLAM LIMITED 1,400,000 1,606,524
SAPPI LIMITED 125,000 1,035,614
SASOL LIMITED 325,000 2,221,788
----------
TOTAL SOUTH AFRICA - (COST $8,471,908) 9,652,628
----------
TOTAL AFRICA - (COST $8,471,909) 9,652,628
----------
EUROPE - 10.6%
CROATIA - 0.9%
PLIVA D.D., GDR 112,500 1,223,438
----------
TOTAL CROATIA - (COST $1,694,654) 1,223,438
----------
CZECH REPUBLIC - 0.9%
CESKE RADIOKOMUNIKACE * 38,200 1,227,175
----------
TOTAL CZECH REPUBLIC - (COST $733,927) 1,227,175
----------
GREECE - 3.4%
ALPHA CREDIT BANK 17,962 1,373,592
HELLENIC TELECOMMUNICATION ORGANIZATION SA (OTE) 119,600 2,534,221
STET HELLAS TELECOMMUNICATIONS SA, ADR * 43,750 940,625
----------
TOTAL GREECE - (COST $4,483,622) 4,848,438
----------
HUNGARY - 1.8%
BORSODCHEM RT., GDR 21,000 635,250
MATAV RT., ADR 32,200 927,763
OTP BANK RT., GDR 21,500 968,037
----------
TOTAL HUNGARY - (COST $2,479,716) 2,531,050
----------
LUXEMBOURG - 0.1%
QUILMES INDUSTRIAL SA, PREFERRED, ADR 14,700 153,431
----------
TOTAL LUXEMBOURG - (COST $127,781) 153,431
----------
POLAND - 1.6%
BANK HANDLOWY W WARSZAWIE, GDR 46,000 650,900
ELEKTRIM SPOLKA AKCYJNA SA 95,000 821,780
TELEKOMUNIKACJA POLSKA SA 142,500 726,750
----------
TOTAL POLAND - (COST $2,494,851) 2,199,430
----------
</TABLE>
See notes to financial statements.
4
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
EUROPE - CONTINUED
RUSSIA - 1.0%
BRUNSWICK RUSSIAN GROWTH FUND * 2,279 $ 174,677
LUKOIL HOLDING, ADR 39,000 1,228,500
------------
TOTAL RUSSIA - (COST $2,212,000) 1,403,177
------------
UNITED KINGDOM - 0.9%
OLD MUTUAL PLC * 593,000 1,254,781
------------
TOTAL UNITED KINGDOM - (COST $1,188,844) 1,254,781
------------
TOTAL EUROPE - (COST $15,415,395) 14,840,920
LATIN AMERICA - 21.7%
ARGENTINA - 0.5%
PEREZ COMPANC, ADR 58,500 712,969
------------
TOTAL ARGENTINA - (COST $628,224) 712,969
------------
BRAZIL - 7.5%
ARACRUZ CELULOSE SA 23,000 471,500
COMPANHIA BRASILEIRA DE DISTRIBUICAO, GDR 17,300 378,438
COMPANHIA CERVEJARIA BRAHMA, ADR 50,000 625,000
COMPANHIA PARANAENSE DE ENERGIA-COPEL 49,000 324,625
COMPANHIA SIDERURGICA NACIONAL 21,183,000 563,216
COMPANHIA VALE DO RIO DOCE, ADR 31,500 618,502
ELECTROBRAS, ADR 155,000 1,317,500
ELETROPAULO METROPOLITANA - ELECTRICIDADE DE SAO PAULO SA * 6,844,627 323,886
EMBRATEL PARTICIPACOES SA 43,000 553,625
PETROBRAS PETROLEO BRASILEIRO SA, PREFERRED 7,766,931 1,235,467
TELE CENTRO SUL PARTICIPACOES SA 18,608 1,111,828
TELE NORTE LESTE PARTICIPACOES SA 42,040 709,425
TELE SUDESTE CELULAR PARTICIPACOES SA, ADR 30,000 600,000
TELEBRAS, ADR * 28,040 1,314
TELESP PARTICIPACOES SA 64,040 1,036,647
ULTRAPAR PARTICIPACOES SA, ADR * 11,000 122,375
USINAS SIDERURGICAS DE MINAS GERAIS SA, PREFERRED, ADR 170,000 525,938
------------
TOTAL BRAZIL - (COST $9,081,194) 10,519,286
------------
CHILE - 1.6%
COMPANIA DE TELEFONOS DE CHILE, ADR 53,683 895,835
ENERSIS SA, ADR 15,000 337,500
SOCIEDAD QUIMICA Y MINERA, ADR 21,900 636,469
VINA CONCHA Y TORO 9,500 327,750
------------
TOTAL CHILE - (COST $2,715,764) 2,197,554
------------
MEXICO - 11.1%
ALFA SA DE CV, CL A, SERIES A 333,000 1,278,371
CEMEX SA DE CV, ADR, SERIES B * 57,528 1,294,380
CIFRA SA DE CV, SERIES V * 400,653 630,241
CONTROLADORA COMERCIAL MEXICANA SA DE CV 340,000 281,565
DESC SA DE CV, ADR 24,800 393,700
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
LATIN AMERICA - CONTINUED
MEXICO - CONTINUED
FOMENTO ECONOMICO MEXICANO SA DE CV 29,500 $ 967,969
GRUPO CARSO 148,000 620,516
GRUPO FINANCIERO BANAMEX, CL B * 225,000 562,968
GRUPO FINANCIERO BANCOMER, SA DE CV 2,100,000 489,481
GRUPO INDUSTRIAL SALTILLO SA DE CV, SERIES B 100,000 260,612
GRUPO IUSACELL SA DE CV, ADR * 30,000 356,250
GRUPO MODELO SA DE CV, CL C 255,000 623,439
GRUPO TELEVISA, ADR * 23,800 1,011,500
KIMBERLY-CLARK DE MEXICO 200,000 640,865
ORGANIZACION SORIANA SA DE CV 170,000 629,630
TELEFONOS DE MEXICO, ADR 59,000 5,044,500
TUBOS DE ACERO DE MEXICO SA, ADR 45,000 492,187
------------
TOTAL MEXICO - (COST $12,540,810) 15,578,174
------------
PERU - 1.0%
COMPANIA DE MINAS BUENAVENTURA SA, ADR, SERIES B 40,000 680,000
TELEFONICA DEL PERU, ADR, CL B 58,000 670,625
------------
TOTAL PERU - (COST $1,395,562) 1,350,625
------------
TOTAL LATIN AMERICA - (COST $26,361,554) 30,358,608
-----------
MIDDLE EAST - 6.7%
EGYPT - 2.7%
COMMERCIAL INTERNATIONAL BANK 87,500 1,048,469
EASTERN COMPANY FOR TOBACCO & CIGARETTES 30,000 709,155
EFG HERMES HOLDING SAE, GDR 66,480 817,704
EGYPTIAN COMPANY FOR MOBILE SERVICES * 7,546 194,656
TORAH PORTLAND CEMENT 50,984 1,025,626
------------
TOTAL EGYPT - (COST $3,683,492) 3,795,610
------------
ISRAEL - 1.9%
BANK HAPOALIM LIMITED 360,000 856,134
ECI TELECOMMUNICATIONS LIMITED 20,000 582,500
INTERNET GOLD * 30,000 225,000
ORBOTECH LIMITED * 13,000 1,015,625
------------
TOTAL ISRAEL - (COST $2,307,785) 2,679,259
------------
TURKEY - 2.1%
AKSIGORTA AS 25,000,000 766,999
DOGAN SIRKETLER GRUBU HOLDING AS 10,608,000 119,149
EREGLI DEMIR VE CELIK FABRIKALARI TAS 33,000,000 823,678
TURKIYE GARANTI BANKASI AS 48,000,000 409,343
VESTEL ELEKTRONIK SANAYI VE TICARET AS * 5,800,000 711,775
------------
TOTAL TURKEY - (COST $2,603,197) 2,830,944
------------
TOTAL MIDDLE EAST - (COST $8,594,474) 9,305,813
------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
OTHER AREAS - 11.5%
INDIA - 3.1%
HINDALCO INDUSTRIES LIMITED, GDR 23,000 $ 485,875
MAHINDRA & MAHINDRA, GDR 373,300 2,921,072
RELIANCE INDUSTRIES LIMITED, GDR 81,500 1,003,469
------------
TOTAL INDIA - (COST $5,184,416) 4,410,416
------------
INVESTMENT COMPANIES - 8.4%
INDIAN OPPORTUNITIES FUND (a)* 523,000 7,635,800
NEAR EAST OPPORTUNITIES FUND (b)* 260,000 4,043,000
------------
TOTAL INVESTMENT COMPANIES - (COST $8,880,875) 11,678,800
------------
TOTAL OTHER AREAS - (COST $14,065,291) 16,089,216
------------
PACIFIC BASIN - 37.3%
CHINA - 1.4%
GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED 1,150,000 1,021,433
SHANDONG INTERNATIONAL POWER DEVELOPMENT COMPANY LIMITED * 6,080,000 970,483
------------
TOTAL CHINA - (COST $2,701,982) 1,991,916
------------
HONG KONG - 2.8%
CHINA TELECOM (HONG KONG) LIMITED * 758,000 2,595,456
NEW WORLD INFRASTRUCTURE LIMITED * 1,050,000 1,216,451
------------
TOTAL HONG KONG - (COST $4,011,176) 3,811,907
------------
INDONESIA - 4.2%
PT BANK PAN INDONESIA, TBK 48,292,000 5,635,828
PT BANK PAN INDONESIA, TBK, WARRANTS 7/08/2002 5,124,000 201,821
PT TELEKOMUNIKASI INDONESIA, ADR 720 6,615
------------
TOTAL INDONESIA - (COST $2,568,798) 5,844,264
------------
SOUTH KOREA - 15.5%
DAEWOO SECURITIES 97,037 1,241,782
HOUSING & COMMERCIAL BANK KOREA * 98,755 2,609,865
KOOKMIN BANK 160,800 2,506,845
KOOKMIN BANK, RIGHTS 11/04/1999 16,151 98,293
KOREA ELECTRIC POWER CORPORATION 67,730 1,981,928
KOREA TELECOM CORPORATION, ADR * 72,670 2,561,617
LG ELECTRONICS INCORPORATED 63,569 2,082,753
POHANG IRON & STEEL COMPANY 22,601 2,713,251
SAMSUNG CORPORATION * 118,023 1,869,476
SAMSUNG ELECTRONICS CORPORATION 22,968 3,829,596
SK TELECOM COMPANY LIMITED 168 193,981
------------
TOTAL SOUTH KOREA - (COST $14,348,789) 21,689,387
------------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PACIFIC BASIN - CONTINUED
TAIWAN - 9.9%
CHINA STEEL CORPORATION 2,630,700 $ 2,023,615
D-LINK CORPORATION 594,245 992,906
EVERGREEN MARINE CORPORATION 1,962,000 1,837,055
FUBON INSURANCE COMPANY, GDR 25,000 230,000
PACIFIC ELECTRICAL WIRE & CABLE COMPANY LIMITED 2,572,000 1,240,593
POWERCHIP SEMICONDUCTOR CORPORATION, GDR * 70,000 840,000
TAIWAN SEMICONDUCTOR MANUFACTURING 491,738 2,185,847
UNITED WORLD CHINESE COMMERCIAL BANK 2,171,193 2,751,638
YUANTA SECURITIES CORPORATION 1,742,000 1,740,902
------------
TOTAL TAIWAN - (COST $13,883,013) 13,842,556
------------
THAILAND - 2.5%
TELECOMASIA CORPORATION PUBLIC COMPANY LIMITED * 2,100,000 1,618,313
THAI PETROCHEMICAL INDUSTRY PUBLIC COMPANY LIMITED * 4,000,000 1,839,140
------------
TOTAL THAILAND - (COST $3,950,978) 3,457,453
------------
INVESTMENT COMPANIES - 1.0%
THE CHINA HEARTLAND FUND (b) * 184,944 1,412,972
------------
TOTAL INVESTMENT COMPANIES - (COST $1,000,000) 1,412,972
------------
TOTAL PACIFIC BASIN - (COST $42,464,736) 52,050,455
------------
TOTAL COMMON STOCK, PREFERRED STOCK, RIGHTS
AND WARRANTS - (COST $115,373,359) + 132,297,640
============
</TABLE>
See notes to financial statements.
8
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
SHORT TERM INVESTMENT - 7.6%
STATE STREET BANK AND TRUST COMPANY REPURCHASE AGREEMENT ,
4.600%, 11/01/1999 (c) $ 10,660,000 $ 10,660,000
-------------
TOTAL SHORT TERM INVESTMENT - (COST $10,660,000) 10,660,000
-------------
TOTAL INVESTMENTS - (COST $126,033,359) - 102.3% 142,957,640
CASH, RECEIVABLES AND OTHER ASSETS, LESS
LIABILITIES - (2.3)% (3,229,293)
-------------
NET ASSETS - 100.0% $139,728,347
=============
</TABLE>
* Non-income producing security.
(a) The Indian Opportunities Fund is managed by Martin Currie Bermuda Ltd.,
an affiliate of Martin Currie Inc. Martin Currie Inc. does not receive
advisory fees on the portion of net assets represented by affiliated
investment companies.
(b) Martin Currie Investment Management Ltd., which is affiliated to Martin
Currie Inc., provides investment management services to the China
Heartland and Near East Opportunities Funds. Martin Currie Inc. does not
receive advisory fees on the portion of net assets represented by
affiliated investment companies.
(c) The repurchase agreement, dated 10/29/99, $10,660,000 par, due 11/1/99,
is collateralized by United States Treasury Notes, 5.750%, due 8/15/03,
with a market value of $10,874,955.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as follows:
Automobiles 2.1%, Banks 14.7%, Brewery 1.0%, Broadcasting 1.6%, Building
& Construction 0.9%, Cement 1.6%, Chemicals 1.6%, Computer services 0.2%,
Computer 0.7%, Construction 0.9%, Diversified 3.1%, Drugs & Health Care
0.9%, Electric Utilities 3.8%, Electrical Equipment 1.5%, Electronics
5.5%, Financial Services 4.4%, Food & Beverages 0.3%, Household
Appliances & Home Furnishings 0.7%, Insurance 1.9%, Investment Companies
9.5%, Liquor 0.2%, Metals 0.3%, Mining 2.4%, Oil & Gas 3.9%, Paper 1.5%,
Petroleum Services 1.3%, Retail Trade 1.1%, Semi-Conductor Manufacturing
Equipment 2.2%, Steel 5.3%, Telecommunications 17.8%, Tobacco 0.5%,
Transportation 1.3%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $115,373,359) (Note B) $ 132,297,640
Investments in repurchase agreements, at value (Note B) 10,660,000
-----------------
Total Investments 142,957,640
-----------------
Cash 892
Foreign currency, at value (cost $258,394) (Note B) 259,153
Receivable for investments sold 2,505,037
Receivable for currency sold 3,503,099
Dividend and interest receivable 161,364
Foreign tax reclaims receivable 231
Deferred organization expense (Note B) 5,803
-----------------
TOTAL ASSETS 149,393,219
-----------------
LIABILITIES
Payable to custodian bank for foreign currency settlements (cost $907,163) 911,753
Payable for investments purchased 4,936,370
Payable for currency purchased 3,505,224
Management fee payable (Note C) 267,637
Administration fee payable (Note C) 8,766
Trustees fees payable (Note C) 2,923
Accrued expenses and other liabilities 32,199
-----------------
TOTAL LIABILITIES 9,664,872
-----------------
TOTAL NET ASSETS $ 139,728,347
=================
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 135,720,040
Undistributed net investment loss (605,922)
Accumulated net realized loss on investment and foreign currency transactions (11,588,978)
Net unrealized appreciation on investment and foreign currency transactions 16,203,207
-----------------
TOTAL NET ASSETS $ 139,728,347
=================
NET ASSET VALUE PER SHARE $ 8.39
($139,728,347 / 16,650,935 shares of beneficial interest outstanding) =================
</TABLE>
See notes to financial statements.
10
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1999 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 112,707
Dividend income 885,333
Foreign taxes withheld (133,009)
-----------------
TOTAL INVESTMENT INCOME 865,031
-----------------
EXPENSES
Management fee (Note C) 528,296
Custodian fee 135,534
Administration fee (Note C) 54,625
Audit fee 12,602
Legal fees 4,537
Transfer agent fee 3,226
Trustees fees (Note C) 2,521
Amortization of deferred organization expenses (Note B) 1,284
Miscellaneous expenses 8,959
-----------------
TOTAL EXPENSES 751,584
-----------------
NET INVESTMENT INCOME 113,447
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 12,408,551
Net realized loss on foreign currency transactions (161,640)
Net unrealized depreciation on:
Investments (5,738,905)
Foreign currency transactions (286,874)
-----------------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 6,221,132
-----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,334,579
=================
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year
October 31, 1999 Ended
(Unaudited) April 30, 1999
----------- --------------
<S> <C> <C>
NET ASSETS at beginning of period $ 131,628,560 $ 99,831,879
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 113,447 1,077,312
Net realized gain (loss) on investment transactions 12,408,551 (17,714,151)
Net realized loss on foreign currency transactions (161,640) (518,499)
Net unrealized appreciation (depreciation) on:
Investments (5,738,905) 18,462,789
Foreign currency transactions (286,874) (425,985)
--------------- ---------------
Net increase in net assets from operations 6,334,579 881,466
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (199,259)
In excess of net investment income -- (539,254)
--------------- ---------------
Total Distributions -- (738,513)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 1,908,468 30,915,215
Reinvestment of dividends and distributions to shareholders -- 738,513
Cost of shares repurchased (143,260) --
--------------- ---------------
Total increase in net assets from capital share transactions 1,765,208 31,653,728
--------------- ---------------
NET INCREASE IN NET ASSETS 8,099,787 31,796,681
--------------- ---------------
NET ASSETS at end of period (includes undistributed net investment $ 139,728,347 $ 131,628,560
=============== ===============
losses of ($605,922) and ($719,369), respectively)
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 234,164 5,212,543
Shares issued in reinvestment of distributions to shareholders -- 117,598
Less shares repurchased (16,354) --
--------------- ---------------
Net share transactions 217,810 5,330,141
=============== ===============
</TABLE>
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Six Months
Ended Year Year February 14, 1997*
October 31, 1999 Ended Ended Through
(Unaudited) April 30, 1999 April 30, 1998 April 30, 1997
------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of period $ 8.010 $ 8.990 $ 10.020 $ 10.000
------------- ------------- ------------- --------
Net investment income 0.007 0.081 0.004 0.055
Net realized and unrealized loss on investment
and foreign currency transactions 0.373 (1.016) (0.883) (0.035)
------------- ------------- ------------- -------------
Total from investment operations 0.380 (0.935) (0.879) 0.020
------------- ------------- ------------- -------------
Less distributions:
Net investment income 0.000 (0.012) (0.086) 0.000
In excess of net investment income 0.000 (0.033) (0.053) 0.000
Net realized gains 0.000 0.000 (0.058) 0.000
------------- ------------- ------------- -----------
Total distributions 0.000 (0.045) (0.197) 0.000
------------- ------------- ------------- -----------
Paid in capital from subscription and
redemption fees 0.000 0.000 0.046 0.000
------------- ------------- ------------- -------------
Net asset value, end of period $ 8.390 $ 8.010 $ 8.990 $ 10.020
============= ============= ============= =============
TOTAL INVESTMENT RETURN (1) (2) 4.74% (10.26)% (8.21)% 0.20%
- ----------------------- ============ ============ ============ ============
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $139,728,347 $131,628,560 $ 99,831,879 $ 50,095,856
Operating expenses, net, to average net assets (Note C) 1.07%(3) 1.12% 1.14% 1.33%(3)
Operating expenses, gross, to average net assets (Note C) 1.07%(3) 1.12% 1.14% 1.33%(3)
Net investment income to average net assets 0.16%(3) 1.16% 0.98% 2.83%(3)
Portfolio turnover rate 69% 140% 89% 0%
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and no
purchase premiums or redemption fees. (2) Periods less than one year are not
annualized.
(3) Annualized.
See notes to financial statements.
13
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on May
20, 1994. The Trust offers five funds which have differing investment objectives
and policies: Opportunistic EAFE Fund, Global Emerging Markets Fund, Japan Small
Companies Fund, Asia Pacific ex Japan Fund (formerly "Emerging Asia Fund") and
EMEA Fund, (the "Funds"). The MCBT Global Emerging Markets Fund (the "Fund")
commenced investment operations on February 14, 1997. The Fund's Declaration of
Trust permits the Board of Trustees to issue an unlimited number of full and
fractional shares of beneficial interest, without par value.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices. Unlisted
securities for which market quotations are readily available are valued at the
mean of the most recent quoted bid and asked prices. Prices for securities which
are primarily traded in foreign markets are furnished by quotation services
expressed in the local currency's value and are translated into U.S. dollars at
the current rate of exchange. Short-term securities and debt securities with a
remaining maturity of 60 days or less are valued at their amortized cost.
Options and futures contracts are valued at the last sale price on the market
where such options or futures contract is principally traded. Options traded
over-the-counter are valued based upon prices provided by market makers in such
securities or dealers in such currencies. Securities for which current market
quotations are unavailable or for which quotations are not deemed by the
investment adviser to be representative of market values are valued at fair
value as determined in good faith by the Trustees of the Fund, or by persons
acting pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value or market price of which is at least equal to the
principal amount, including interest, of the repurchase transaction. To the
extent that any repurchase transaction exceeds one business day, the value of
the collateral is marked-to-market on a daily basis to ensure the adequacy of
the collateral. In the event of default of the obligation to repurchase, the
Fund has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. Under certain circumstances, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal proceedings that
could delay or increase the cost of such realization or retention.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on the
date of purchase or sale. Realized gains and losses from security transactions
are determined on the basis of identified cost.
INVESTMENT INCOME - Dividend income is recorded on 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.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars at a current
rate of exchange of such currency to determine the value of investments, other
assets and liabilities on the date of any determination of net asset value of
the Fund. Purchases and sales of securities and income and expenses are
converted at the prevailing rate of exchange on the respective dates of such
transactions.
The Fund may realize currency gains or losses between the trade and settlement
dates on security transactions. To minimize such currency gains or losses, the
Fund may enter into forward foreign currency contracts.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
14
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 not segregated in the Statement of Operations from the effects of
changes in market prices of those securities, and are included with the net
realized and unrealized gain or loss on investment securities.
FORWARD FOREIGN CURRENCY CONTRACTS - A forward foreign currency contract
("Forward") is an agreement between two parties to buy and sell a currency at a
set price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily and
the change in the market value is recorded by the Fund as an unrealized gain or
loss. When the Forward is closed, the Fund records a realized gain or loss equal
to the difference between the value at the time it was opened and the value at
the time it was closed. The Fund may enter into Forwards in connection with
planned purchases and sales of securities, to hedge specific receivables or
payables against changes in future exchange rates or to hedge the U.S. dollar
value of portfolio securities denominated in a foreign currency. There were no
open forward foreign currency contracts at October 31, 1999.
Although forward currency contracts limit the risk of loss due to a decline in
the value of hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Funds could
be exposed to additional risks if the counterparties to the contracts are unable
to meet the terms of their contracts.
EXPENSES - Expenses directly attributable to the Fund are charged to the Fund.
Expenses not directly attributable to a particular Fund are either split evenly
among the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct or
approve. Certain costs incurred in connection with the organization of the Trust
and each Fund have been deferred and are being amortized on a straight line
basis over a five year period starting on each Fund's commencement of
operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends from
net investment income, if any, and distributes its net realized capital gains,
if any, at least annually. All distributions will be reinvested in shares of the
Fund at the net asset value unless the shareholder elects in the subscription
agreement either to receive cash in respect of all distributions or to receive
cash with respect to distributions of income and to reinvest in shares of the
Fund with respect to distributions of realized capital gains. Income and capital
gain distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for passive foreign
investment companies (PFIC's), foreign currency transactions, losses deferred
due to wash sales, post October 31 losses and excise tax regulations. Permanent
book and tax differences relating to shareholder distributions will result in
reclassifications to paid-in-capital. Distributions are recorded on the
ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - Effective through September 30 1998,
there was a purchase premium for cash investments into the Fund of 1.00% of the
amount invested and a redemption fee on cash redemptions of 1.00% of the amount
redeemed. All purchase premiums and redemption fees were paid to and retained by
the Fund and are recorded as paid-in-capital. These fees were intended to offset
brokerage and transaction costs arising in connection with the purchase and
redemption. The purchase and redemption fees could be waived by the Manager,
however, if these brokerage and transaction costs are minimal or in other
circumstances at the Manager's discretion. Effective October 1, 1998, the Fund
eliminated all such fees.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for U.S.
federal income tax purposes. Each Fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute substantially all of their
taxable income, including realized capital gains, if any, for the fiscal year.
In addition, by distributing substantially all of their net investment income,
realized capital gains and certain other amounts, if any, during the calendar
year, the Funds will not be subject to a federal excise tax.
15
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
INCOME TAXES (CONTINUED) - The Fund may be subject to taxes imposed by countries
in which it invests. Such taxes are generally based on income and/or capital
gains earned or repatriated. Taxes are accrued and applied to net investment
income, net realized gains and unrealized appreciation as such income and/or
gains are earned.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
income and expenses at the date of the financial statements. Actual results
could differ from these estimates.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. Under the
Management Contract, the Fund pays the Investment Manager a quarterly management
fee at the annual rate of 0.80% of the Fund's average net assets.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain administrative
services for the Fund. The Fund pays the Administrator a fee at the rate of
0.08% of the Fund's average net assets up to $125 million, 0.06% of the next
$125 million, and 0.04% of those assets in excess of $250 million, subject to
certain minimum requirements, plus certain out of pocket costs. State Street
Bank and Trust Company also receives fees and compensation of expenses for
certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive aggregate annual
fees of $20,000 ($10,000 per Trustee).
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the six months ended October 31, 1999 were $91,171,508
and $91,005,711 respectively.
The identified cost of investments in securities and repurchase agreements owned
for federal income tax purposes and their respective gross unrealized
appreciation and depreciation at October 31, 1999 were as follows:
<TABLE>
<CAPTION>
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
--------------- ------------ -------------- ---------------
<S> <C> <C> <C>
$ 126,033,359 $ 26,051,724 $ (9,127,443) $ 16,924,281
</TABLE>
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 1999 there was one shareholder who owned greater than 10%
of the Fund's outstanding shares, representing 100% of the Fund.
NOTE F - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange) in emerging markets.
Investing in foreign securities involves risks not typically found in investing
in U.S. markets. These include risks of adverse change in foreign economic,
political, regulatory and other conditions, and changes in currency exchange
rates, exchange control regulations (including currency blockage), expropriation
of assets or nationalization, imposition of withholding taxes on dividend or
interest payments and capital gains, and possible difficulty in obtaining and
enforcing judgments against foreign entities. Furthermore, issuers of foreign
securities are subject to different, and often less comprehensive, accounting,
reporting and disclosure requirements than domestic issuers. The securities of
some foreign companies and foreign securities markets are less liquid and at
times more volatile than securities of comparable U.S. companies and U.S.
securities markets.
16
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
CONCENTRATION OF RISK (CONTINUED) - The risks of investing in foreign securities
may be heightened in the case of investments in emerging markets or countries
with limited or developing capital markets. Security prices in emerging markets
can be significantly more volatile than in the more developed nations of the
world, reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets may have
relatively unstable governments, present the risk of nationalization,
restrictions on foreign ownership, imposition of withholding taxes on dividend
or interest payments and capital gains, or prohibitions on repatriation of
assets, and may have less protection for property rights than more developed
countries. Political change or instability may adversely affect the economies
and securities markets of such countries. The economies of individual countries
may differ favorably or unfavorably and significantly from the U. S. economy in
such respects as growth of gross domestic product or gross national product,
diversification, rate of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency, dependence on foreign assistance, vulnerability to
change in trade conditions, structural unemployment and balance of payments
position.
- -------------------------------------------------------------------------------
17
<PAGE>
MARTIN CURRIE BUSINESS TRUST
--------------------
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
Colin Winchester, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
--------------------
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
Scotland
011-44-131-229-5252
Regulated by IMRO
Registered Investment Adviser with the SEC
--------------------
- -------------------------------------------------------------------------------
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current Private
Placement Memorandum which contains important information concerning the Fund
and its current offering of shares.
- -------------------------------------------------------------------------------
