[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
PART OF CREDIT SUISSE ASSET MANAGEMENT
ANNUAL
REPORT
OCTOBER 31, 2000
WARBURG PINCUS
EMERGING MARKETS FUND
(INSTITUTIONAL CLASS)
More complete information about the Fund, including charges and expenses, is
provided in the PROSPECTUS, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-WARBURG (800-927-2874) or by writing to Warburg Pincus
Funds, P.O. Box 9030, Boston, MA 02205-9030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3147. Warburg Pincus Funds are advised by
Credit Suisse Asset Management, LLC.
<PAGE>
FROM TIME TO TIME, THE FUND'S INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY WAIVE
SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD BE
LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.
RETURNS ARE HISTORICAL AND INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS.
THE VIEWS OF THE FUND'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF OCTOBER 31, 2000; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT ("CSAM") OR ANY AFFILIATE, ARE NOT FDIC INSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE. FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------
December 6, 2000
Dear Shareholder:
For the period February 11, 2000 (inception date) through October 31, 2000,
the Institutional Class shares of Warburg Pincus Emerging Markets Fund had a
loss of 36.54%, vs. a loss of 27.15% for the Morgan Stanley Emerging Markets
Free Index.
The period was a volatile and ultimately negative one for emerging stock
markets. The group initially rallied, buoyed by optimism over global economic
growth and a dissipation of "Y2K" computer bug worries (emerging markets were
believed to be quite vulnerable to the potential glitch). However, turmoil hit
these stocks in April and May, reflecting concerns over interest rates within
developed markets and a sharp downturn in the NASDAQ, the technology-heavy U.S.
stock index. These factors curbed investors' appetite for risk, to put it
mildly. Emerging stock markets languished over the remainder of the period, with
rising energy costs and a weakening euro adding to the uncertainty.
Against this backdrop, the Fund had a loss, hindered by the difficult
environment for emerging stock markets and by weakness in certain areas, most
specifically the telecommunications and electronics sectors. In terms of sector
attribution, factors that supported the Fund included well-timed overweightings
in China, Mexico and Turkey.
We made few major changes to the Fund during the period with respect to
regional emphasis. Our primary focus was on Asia, with a continued emphasis on
North Asian economies, most specifically South Korea, Taiwan and China. Our
favorable view on these markets is based on their potential to benefit from
rising export demand, in particular for software and semiconductor products. In
addition, we believe that valuations on a number of stocks here are compelling,
both in absolute terms and compared to emerging-market technology stocks
broadly. We generally continued to avoid Southeast Asia, reflecting the more
attractive stocks we saw elsewhere from a risk/reward perspective.
We ended the period with an underweighting in Eastern/Central Europe, based
on our general concerns over the region's vulnerability to a weak euro and high
oil prices. However, we maintained an overweighting in Turkey, reflecting our
optimism over the country's ongoing International Monetary Fund-sanctioned
financial reforms (though we scaled back this position late in the period based
on valuation considerations). We also established a modest position in Russia,
where we believe the macroeconomic and
1
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
political environment is improving, some near-term financial-market
uncertainties notwithstanding. One weighting we pared during the period was
Hungary, where we saw declining potential for positive market catalysts.
Our Latin America exposure remained concentrated on Mexico and Brazil, the
region's dominant economies. We raised our Mexican weighting in late June, in
the belief that its market had fully discounted any unfavorable July election
results. We then pared our weighting back to a roughly neutral position after
the market rallied on the victory of the reform-minded opposition candidate. We
ended the period with a modest overweighting in Brazil, which stands to benefit
from an improving inflation and interest-rate backdrop. Elsewhere in the region,
we established a small position in Chile.
With regard to sector allocation, areas of emphasis for the Fund continued to
include information-technology ("IT") companies, a number of which in our view
have good longer-term prospects. Our IT holdings remained concentrated in Asia
and Israel. We ended the period with an overweighting in telecommunications
services, where our holdings included Asian cellular stocks and Latin American
fixed-line names. Within the financial segment, our focus was on companies that
stand to benefit from financial and economic reforms, particularly within Europe
and Latin America.
Looking ahead, emerging markets could remain weak over the next few months
and perhaps beyond. Clearly, investors are concerned that a slowing global
economy will hamper the group's earnings prospects, especially within certain
areas. In addition, ongoing volatility in the technology area could continue to
suppress investors' risk tolerance. However, we see grounds for optimism
regarding these markets over the longer term. The group's valuations currently
range from reasonable to very compelling. Indeed, we believe that a large number
of these stocks have been oversold, priced to a "worst case" scenario in many
cases. Barring another surge in oil prices or a recession in developed
economies, this stands to draw increased investor attention to the group. For
our part, we will continue to focus on markets where we see attractive
valuations, potential for strong domestic liquidity and some degree of
insulation from global concerns.
Richard Watt
Portfolio Manager
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR
EMERGING-MARKET INVESTMENTS. THESE ARE DETAILED IN THE FUND'S PROSPECTUS, WHICH
SHOULD BE READ CAREFULLY BEFORE INVESTING.
2
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN INSTITUTIONAL CLASS SHARES OF WARBURG PINCUS
EMERGING MARKETS FUND SINCE INCEPTION AS OF OCTOBER 31, 2000
The graph below illustrates a hypothetical investment of $10,000 in
Institutional Class shares of Warburg Pincus Emerging Markets Fund (the "Fund")
from February 11, 2000 (inception) to October 31, 2000, compared to the Morgan
Stanley Emerging Markets Free Index ("MS Emerging Markets Free Index")* for the
same time period.
Total Return
Since Inception
02/11/00
(Institutional Class shares)
-36.54%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
MS Emerging
Markets
Fund Free Index
-------- ----------
02/11/00 10000 10000
03/31/00 9074.1 10049
04/30/00 7959.07 9096.35
05/31/00 7762.8 8720.68
06/30/00 8029.38 9027.64
07/31/00 7643.97 8563.62
08/31/00 7665.07 8605.58
09/30/00 6809.34 7854.32
10/31/00 6346.3 7284.88
FUND
----
Total Return Since Inception
(2/11/00 to 9/30/00) ............. -31.91%
------------
* The Morgan Stanley Emerging Markets Free Index is a market-capitalization
weighted index of emerging-market countries determined by Morgan Stanley. The
index includes only those countries open to non-local investors.
3
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (87.9%)
BRAZIL (10.8%)
ENERGY (2.6%)
Petroleo Brasileiro SA ADR (Common shares) (1) 22,200 $ 645,187
Petroleo Brasileiro SA ADR (Preference shares) 37,300 989,177
----------
1,634,364
----------
FOOD & DRUG RETAILING (1.3%)
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar ADR 23,700 844,312
----------
FOOD, BEVERAGE & TOBACCO (1.6%)
Companhia de Bebidas das Americas (Ambev) ADR 44,875 1,012,492
----------
MATERIALS (1.3%)
Companhia Vale do Rio Doce ADR 36,000 841,500
----------
TELECOMMUNICATION SERVICES (3.5%)
Embratel Participacoes SA ADR 56,500 914,594
Tele Norte Leste Participacoes SA ADR 59,455 1,315,442
----------
2,230,036
----------
UTILITIES (0.5%)
Centrais Electricas Brasileiras ADR 33,600 298,425
----------
TOTAL BRAZIL 6,861,129
----------
CHILE (1.5%)
FOOD & DRUG RETAILING (0.4%)
Distribucion y Servicio SA ADR 15,400 275,275
----------
FOOD, BEVERAGE & TOBACCO (0.5%)
Compania Cervecerias Unidas SA ADR (1) 15,000 289,688
----------
TELECOMMUNICATION SERVICES (0.0%)
Companhia de Telecomunicaciones de Chile SA ADR (1) 100 1,525
----------
UTILITIES (0.6%)
Enersis SA ADR (1) 21,400 379,850
----------
TOTAL CHILE 946,338
----------
CHINA (5.4%)
ENERGY (1.8%)
PetroChina Co., Ltd. 5,348,000 1,124,619
----------
REAL ESTATE (0.1%)
China Resources Enterprises Co., Ltd. 40,000 45,135
----------
TELECOMMUNICATION SERVICES (2.0%)
China Unicom ADR (1) 63,265 1,296,933
----------
TRANSPORTATION (0.6%)
Guangshen Railway Co., Ltd. 3,121,476 380,236
----------
UTILITIES (0.9%)
Huaneng Power International, Inc. ADR 36,700 559,675
----------
TOTAL CHINA 3,406,598
----------
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
EGYPT (0.0%)
BANKS (0.0%)
Commercial International Bank, Ltd. 26 $ 228
----------
TOTAL EGYPT 228
----------
GREECE (2.8%)
BANKS (1.2%)
Alpha Credit Bank 20,705 763,644
----------
TELECOMMUNICATION SERVICES (1.6%)
Hellenic Telecommunication Organization SA ADR 113,200 990,500
----------
TOTAL GREECE 1,754,144
----------
HONG KONG (5.9%)
AUTOMOBILES & COMPONENTS (0.1%)
Denway Motors, Ltd. (1) 428,000 69,149
----------
CAPITAL GOODS (1.3%)
Citic Pacific, Ltd. 212,000 850,844
----------
CONSUMER DURABLES & APPAREL (0.1%)
Guangdong Kelon Electrical Holdings Co., Ltd. 40,738 7,574
Li & Fung, Ltd. 20,000 37,185
----------
44,759
----------
DIVERSIFIED FINANCIALS (0.0%)
Beijing Enterprises Holding Co. 11,100 10,105
----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.3%)
Legend Holdings, Ltd. 944,000 798,888
----------
TELECOMMUNICATION SERVICES (3.1%)
China Mobile, Ltd. (1) 2,500 16,108
China Mobile, Ltd. ADR (1) 64,400 1,972,250
----------
1,988,358
----------
TOTAL HONG KONG 3,762,103
----------
HUNGARY (1.3%)
BANKS (0.5%)
OTP Bank RT 5,364 248,497
OTP Bank RT ADR 1,400 64,858
----------
313,355
----------
PHARMACEUTICALS & BIOTECHNOLOGY (0.2%)
Gedeon Richter 3,000 144,750
----------
TELECOMMUNICATION SERVICES (0.6%)
Matav RT ADR 14,800 347,800
----------
TOTAL HUNGARY 805,905
----------
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
INDIA (3.6%)
AUTOMOBILES & COMPONENTS (0.2%)
Mahindra & Mahindra, Ltd. (1) 1,750 $ 4,787
Mahindra and Mahindra, Ltd. GDR 31,400 86,350
----------
91,137
----------
BANKS (0.3%)
State Bank of India, Ltd. GDR 32,100 216,675
----------
CAPITAL GOODS (0.0%)
Larsen & Toubro, Ltd. 2,093 6,621
Larsen & Toubro, Ltd. GDR 1,800 11,340
----------
17,961
----------
DIVERSIFIED FINANCIALS (0.0%)
Morgan Stanley India Investment Fund, Inc. (1) 100 1,056
----------
ENERGY (0.2%)
Hindustan Petroleum Corp., Ltd. 32,400 73,989
Reliance Industries, Ltd. 4,659 30,157
----------
104,146
----------
FOOD, BEVERAGE & TOBACCO (0.4%)
ITC Agro-Tech, Ltd. GDR 15,200 275,880
----------
MATERIALS (1.1%)
Grasim Industries, Ltd. 500 2,170
Hindalco Industries, Ltd. GDR 12,500 190,000
Reliance Industries, Ltd. GDR 36,804 493,174
----------
685,344
----------
PHARMACEUTICALS & BIOTECHNOLOGY (0.2%)
Ranbaxy Laboratories, Ltd. (1) 7,200 124,200
----------
SOFTWARE & SERVICES (0.8%)
Infosys Technologies, Ltd. ADR (1) 3,500 481,250
Pentamedia Graphics, Ltd. 200 1,487
SSI, Ltd. (1) 8,400 38,892
----------
521,629
----------
TELECOMMUNICATION SERVICES (0.4%)
Videsh Sanchar Nigam, Ltd. ADR 30,800 227,150
----------
TOTAL INDIA 2,265,178
----------
ISRAEL (3.8%)
SOFTWARE & SERVICES (2.2%)
Check Point Software Technologies, Ltd. (1) 8,809 1,395,125
----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.6%)
Orbotech, Ltd. (1) 18,850 997,872
----------
TOTAL ISRAEL 2,392,997
----------
</TABLE>
See Accompanying Notes to Financial Statements.
6
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
MALAYSIA (3.8%)
BANKS (1.3%)
Malayan Banking BHD 211,000 $ 844,027
----------
HOTELS RESTAURANTS & LEISURE (1.1%)
Genting BHD 77,405 197,593
Resorts World 132,000 231,007
Tanjong PLC 130,000 242,902
----------
671,502
----------
TECHNOLOGY HARDWARE & EQUIPMENT (0.6%)
Digi.com BHD (1) 234,000 351,011
----------
UTILITIES (0.8%)
Tenaga Nasional BHD 160,351 519,047
----------
TOTAL MALAYSIA 2,385,587
----------
MEXICO (10.4%)
BANKS (2.1%)
Grupo Financiero Banamex Accival SA de CV Class O (1) 408,444 634,205
Grupo Financiero Bancomer SA de CV Class O (1) 1,154,810 714,350
----------
1,348,555
----------
FOOD, BEVERAGE & TOBACCO (2.2%)
Coca-Cola Femsa SA ADR 28,126 539,668
Grupo Modelo SA de CV Class C 321,143 855,691
----------
1,395,359
----------
MATERIALS (0.5%)
Cemex SA de CV ADR (1) 16,534 349,281
Kimberly-Clark de Mexico SA de CV Class A 17 43
----------
349,324
----------
MEDIA (1.1%)
Grupo Televisa SA (1) 12,700 687,388
----------
RETAILING (1.6%)
Wal-Mart de Mexico SA de CV (1) 42,000 1,011,579
----------
TELECOMMUNICATION SERVICES (2.9%)
Telefonos de Mexico SA ADR 34,000 1,833,875
----------
TOTAL MEXICO 6,626,080
----------
POLAND (0.5%)
TELECOMMUNICATION SERVICES (0.5%)
Telekomunikacja Polska SA 58,725 300,806
----------
TOTAL POLAND 300,806
----------
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
RUSSIA (3.2%)
ENERGY (2.5%)
Lukoil Holding ADR 16,700 $ 891,780
Surgutneftegaz ADR 50,700 651,495
----------
1,543,275
----------
UTILITIES (0.7%)
Unified Energy Systems ADR 37,200 470,580
----------
TOTAL RUSSIA 2,013,855
----------
SINGAPORE (0.0%)
BANKS (0.0%)
Oversea-Chinese Banking Corp., Ltd. 242 1,544
----------
MEDIA (0.0%)
Singapore Press Holdings, Ltd. 39 558
----------
TOTAL SINGAPORE 2,102
----------
SOUTH AFRICA (7.5%)
BANKS (1.5%)
Standard Bank Investment Corp., Ltd. 266,671 934,945
----------
CAPITAL GOODS (1.1%)
Imperial Holdings, Ltd. (1) 103,677 725,609
----------
DIVERSIFIED FINANCIALS (0.4%)
Johnnic Holdings, Ltd. 19,993 227,479
----------
FOOD, BEVERAGE & TOBACCO (1.1%)
South African Breweries PLC 120,223 720,527
----------
INSURANCE (1.4%)
Liberty Group, Ltd. (1) 120,305 918,383
----------
MATERIALS (2.0%)
Anglogold, Ltd. 14,101 401,100
Anglo American Platinum Corp., Ltd. 5,900 230,114
De Beers Consolidated Mines, Ltd. ADR 22,000 613,250
----------
1,244,464
----------
TOTAL SOUTH AFRICA 4,771,407
----------
SOUTH KOREA (9.5%)
BANKS (1.9%)
Housing & Commercial Bank of Korea 39,017 938,155
Housing & Commercial Bank of Korea GDR 1,823 44,208
Kookmin Bank 18,700 213,722
----------
1,196,085
----------
MATERIALS (0.6%)
Pohang Iron & Steel Co., Ltd. 5,600 325,427
Pohang Iron & Steel Co., Ltd. ADR 1,800 28,463
----------
353,890
----------
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
SOUTH KOREA (cont'd)
TECHNOLOGY HARDWARE & EQUIPMENT (2.1%)
Samsung Electro-Mechanics Co. (1) 8,750 $ 280,010
Samsung Electronics Co., Ltd. 8,605 1,078,026
----------
1,358,036
----------
TELECOMMUNICATION SERVICES (3.2%)
Korea Telecom Corp. 12,047 709,606
Korea Telecom Corp. ADR 1,800 66,375
SK Telecom Co., Ltd. 5,937 1,265,733
----------
2,041,714
----------
UTILITIES (1.7%)
Korea Electric Power Corp. (1) 45,510 1,016,258
Korea Electric Power Corp. ADR (1) 2,600 31,688
----------
1,047,946
----------
TOTAL SOUTH KOREA 5,997,671
----------
TAIWAN (11.0%)
BANKS (1.8%)
Bank Sinopac (1) 902,900 375,280
Chinatrust Commercial Bank 1,228,600 778,318
----------
1,153,598
----------
CONSUMER DURABLES & APPAREL (1.6%)
Far Eastern Textile, Ltd. 1,212,000 996,270
----------
MATERIALS (1.4%)
China Steel Corp. 399,000 230,572
Formosa Plastics Corp. 442,000 703,433
----------
934,005
----------
TECHNOLOGY HARDWARE & EQUIPMENT (6.2%)
Asustek Computer, Inc. 122,000 606,986
Hon Hai Precision Industry 45,500 237,624
Macronix International Co., Ltd. ADR (1) 1,935 27,332
Taiwan Semiconductor Manufacturing Co., Ltd. (1) 525,000 1,589,931
Taiwan Semiconductor Manufacturing Co., Ltd. ADR (1) 1,000 22,688
United Microelectronics Co., Ltd. (1) 471,620 830,730
Via Technologies, Inc. (1) 71,000 509,025
Winbond Electronics Corp. (1) 102,765 99,399
----------
3,923,715
----------
TOTAL TAIWAN 7,007,588
----------
TURKEY (6.3%)
BANKS (2.2%)
Dogan Yayin Holding AS (1) 60,564,486 789,418
Yapi Ve Kredi Bankasi AS (1) 68,502,224 591,910
----------
1,381,328
----------
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONT'D)
TURKEY (cont'd)
CONSUMER DURABLES & APPAREL (0.6%)
Vestel Elektronik Sanayi Ve Ticaret AS (1) 1,900,000 $ 389,566
-----------
DIVERSIFIED FINANCIALS (2.9%)
Koc Holding AS 9,676,166 616,441
Turkiye Is Bankasi AS Class C 63,832,800 1,215,308
-----------
1,831,749
-----------
TELECOMMUNICATION SERVICES (0.6%)
Turkcell Iletisim Hizmetleri AS ADR (1) 37,900 414,531
-----------
TOTAL TURKEY 4,017,174
-----------
UNITED STATES (0.6%)
SOFTWARE & SERVICES (0.6%)
AsiaInfo Holdings, Inc. (1) 33,100 401,338
-----------
TOTAL UNITED STATES 401,338
-----------
TOTAL COMMON STOCKS (Cost $60,052,214) 55,718,228
-----------
PREFERRED STOCKS (0.5%)
BRAZIL (0.5%)
BANKS (0.5%)
Banco Itau SA (1) 3,837,808 298,633
-----------
ENERGY (0.0%)
Petroleo Brasileiro SA 1 27
-----------
TOTAL BRAZIL 298,660
-----------
TAIWAN (0.0%)
BANKS (0.0%)
Taishin International Bank 735 225
-----------
TOTAL TAIWAN 225
-----------
TOTAL PREFERRED STOCKS (Cost $303,917) 298,885
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ -----
<S> <C> <C>
RIGHT (0.0%)
THAILAND (0.0%)
TELECOMMUNICATION SERVICES (0.0%)
TelecomAsia Corp. Public Co., Ltd. (Cost $0) 1 191,874 $ 0
-----------
SHORT TERM INVESTMENTS (5.8%)
Institutional Money Market Trust 604,224 604,224
RBB Money Market Portfolio 3,063,331 3,063,331
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $3,667,555) 3,667,555
-----------
TOTAL INVESTMENTS AT VALUE (94.2%) (Cost $64,023,686 (2)) 59,684,668
OTHER ASSETS IN EXCESS OF LIABILITIES (5.8%) 3,700,902
-----------
NET ASSETS (100.0%) $63,385,570
===========
</TABLE>
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
GDR = Global Depository Receipt
--------------------------------------------------------------------------------
(1) Non-income producing security.
(2) Cost for federal income tax purposes is $65,384,434.
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
--------------------------------------------------------------------------------
ASSETS
Investments at value (Cost - $64,023,686) $59,684,668
Foreign currency (Cost - $2,905,212) 2,816,158
Receivable for investments sold 52,653
Receivable for Fund shares sold 1,556,175
Dividends, interest and reclaim receivable 26,449
Receivable from investment adviser 67,900
Prepaid expenses and other assets 64,868
-----------
Total Assets 64,268,871
-----------
LIABILITIES
Advisory fee payable 54,721
Administrative fee payable 2,611
Directors' fee payable 2,826
Payable for investments purchased 713,819
Payable for Fund shares redeemed 40,091
Accrued expenses payable 61,452
Other liabilities 7,781
-----------
Total Liabilities 883,301
-----------
NET ASSETS
Capital stock, $0.001 par value 7,017
Paid-in capital 108,495,400
Accumulated undistributed net investment income 185,785
Accumulated net realized loss from investments
and foreign currency transactions (40,874,777)
Net unrealized depreciation from investments
and foreign currency translations (4,427,855)
-----------
Net Assets $63,385,570
===========
COMMON SHARES
Net assets $60,481,869
-----------
Shares outstanding 6,696,304
-----------
Net asset value, offering price and
redemption price per share $ 9.03
===========
ADVISOR SHARES
Net assets $ 66,421
-----------
Shares outstanding 7,567
-----------
Net asset value, offering price
and redemption price per share $ 8.78
===========
INSTITUTIONAL SHARES
Net assets $ 2,837,280
-----------
Shares outstanding 313,520
-----------
Net asset value, offering price
and redemption price per share $ 9.05
===========
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 3,284,632
Interest 204,651
Foreign Taxes Withheld (133,268)
------------
Total investment income 3,356,015
------------
EXPENSES:
Investment advisory fees 1,124,537
Shareholder servicing/distribution fees 217,229
Administrative Services fees 177,220
Interest expense 148,803
Custodian/Sub-custodian fees 139,131
Transfer agent fees 138,325
Printing fees 104,108
Registration fees 80,562
Legal fees 40,920
Audit fees 17,721
Offering/Organizational costs 7,386
Directors fees 5,375
Insurance expense 2,238
------------
2,203,555
Less: fees waived and
transfer agent offsets (728,419)
------------
Total expenses 1,475,136
------------
Net investment income 1,880,879
------------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
AND FOREIGN CURRENCY RELATED ITEMS:
Net realized gain from investments (net of
capital gains taxes of $1,479,574) 18,272,445
Net realized loss from foreign currency transactions (524,520)
Net change in unrealized appreciation
(depreciation) from investments (15,159,359)
Net change in unrealized appreciation (depreciation)
from foreign currency translations (net of
estimated deferred capital gain taxes
of $(46,366)) (1,275,338)
------------
Net realized and unrealized gain from investments
and foreign currency related items 1,313,228
------------
Net increase in net assets resulting from operations $ 3,194,107
============
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,880,879 $ 361,573
Net realized gain from investments
and foreign currency transactions
(net of capital gains taxes of
$1,479,574 and $722,400, respectively.) 17,747,925 2,606,242
Net change in unrealized appreciation
(depreciation) from investments
and foreign currency translations (net of
estimated deferred capital gains taxes
of $(46,366) and $46,366, respectively.) (16,434,697) 20,089,488
------------- -------------
Net increase in net assets
resulting from operations 3,194,107 23,057,303
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 341,488,567 164,611,366
Exchange value of shares due to merger 7,789,270 0
Net asset value of shares redeemed (356,911,101) (180,058,486)
------------- -------------
Net decrease in net assets
from capital share transactions (7,633,264) (15,447,120)
------------- -------------
Net increase (decrease) in net assets (4,439,157) 7,610,183
NET ASSETS:
Beginning of year 67,824,727 60,214,544
------------- -------------
End of year $ 63,385,570 $ 67,824,727
============= =============
UNDISTRIBUTED NET INVESTMENT INCOME: $ 185,785 $ 0
============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(For an Institutional Class share of the Fund Outstanding Throughout The Period)
--------------------------------------------------------------------------------
FEBRUARY 11, 2000
(INCEPTION DATE)
THROUGH OCTOBER 31, 2000
------------------------
PER-SHARE DATA
Net asset value, beginning of period $14.26
------
INVESTMENT ACTIVITIES:
Net investment income 0.07
Net losses on investments and foreign currency
related items (both realized and unrealized) (5.28)
------
Total from investment activities (5.21)
------
NET ASSET VALUE, END OF PERIOD $ 9.05
======
Total return (36.54)%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $2,837
Ratio of expenses to average net assets (2) 1.37%
Ratio of net investment income to average net assets .70%
Decrease reflected in above operating expense ratios
due to waivers/reimbursements .77%
Portfolio turnover rate 232.47%
--------------------------------------------------------------------------------
(1) Non annualized.
(2) Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Institutional Class shares' expenses by .02% for the period ended
October 31, 2000. The Institutional Class shares' operating expense ratios
after reflecting these arrangements was 1.35% for the period ended October
31, 2000.
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Emerging Markets Fund (the "Fund"), a Maryland
Corporation, is registered under the 1940 Act as a non-diversified, open-end
management investment company.
The Investment objective for the Fund is to seek growth of capital.
The Fund offers three classes of shares, one class being referred to as the
Common Class, one class being referred to as the Advisor Class, and one class
being referred to as the Institutional Class. Common, Advisor, and Institutional
shares of the Fund represent an equal pro rata interest in the Fund, except that
they bear different expenses which reflect the difference in the range of
services provided to them. Common Class shares for the Fund bear expenses paid
pursuant to a shareholder servicing and distribution plan at an annual rate of
.25% of the average daily net asset value of the Fund's Common Class shares.
Institutional Class shares of the Fund are not subject to shareholder servicing
or distribution fees. Advisor Class shares bear expenses paid pursuant to a
distribution plan at an annual rate not to exceed .75% of the average daily net
asset value of the Fund's Advisor Class shares. Advisor Class shares are
currently bearing expenses of .50% of average daily net assets.
Effective close of business on February 11, 2000, the Fund acquired all of
the net assets of the Warburg Pincus Emerging Markets II Fund ("Emerging Markets
II") in a tax-free exchange of shares. The shares exchanged were 119,041 shares
(valued at $1,697,652) of the Common Class of the Fund for 79,472 shares of the
Common Class of Emerging Markets II and 427,128 shares (valued at $6,091,618) of
the Institutional Class of the Fund for 285,285 shares of the Institutional
Class of Emerging Markets II. The Emerging Markets II net assets of $7,789,270
at that date, which consisted of $1,364,481 of unrealized appreciation, were
combined with those of the Fund. The aggregate net assets of Emerging Markets II
and the Fund immediately before the acquisition were $7,789,270 and
$124,330,766, respectively and the combined net assets of the Fund were
$132,120,036.
The net asset value of the Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. The Fund's investments are
valued at market value, which is generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
last reported bid price. If market quotations are not readily available,
securities and other assets are valued by another method that the
16
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
Board of Directors believes accurately reflects fair value. Debt obligations
that will mature in 60 days or less are valued on the basis of amortized cost,
which approximates market value, unless the Board determines that using this
method would not reflect an investment's value.
The books and records of the Fund are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate
at the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting period and realized gains and losses on
the settlement of foreign currency transactions are reported in the results of
operations for the current period. The Fund does not isolate that portion of
realized gains and losses on investments in equity securities which are due to
changes in the foreign exchange rate from that which are due to changes in
market prices of equity securities. The Fund isolates that portion of realized
gains and losses on investments in debt securities which are due to changes in
the foreign exchange rate from that which are due to changes in market prices of
debt securities.
The Fund may invest in securities of foreign countries and governments which
involve certain risks in addition to those inherent in domestic investments.
Such risks generally include, among others, currency risks (fluctuations in
currency exchange rates), information risk (key information may be inaccurate or
unavailable) and political risk (expropriation, nationalization or the
imposition of capital or currency controls or punitive taxes). Other risks of
investing in foreign securities include liquidity and valuation risks.
The Fund's investments in securities of issuers located in less developed
countries considered to be "emerging markets" involve risks in addition to those
generally applicable to foreign securities. Focusing on emerging (less
developed) markets involves higher levels of risk, including increased currency,
information, liquidity, market, political and valuation risks. Deficiencies in
regulatory oversight, market infrastructure, shareholder protections and company
laws could expose the Fund to operational and other risks as well. Some
countries may have restrictions that could limit the Fund's access to attractive
opportunities. Additionally, emerging markets often face serious economic
problems (such as high external debt, inflation and unemployment) that could
subject the Fund to increased volatility or substantial declines in value.
17
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Income, expenses (excluding class-specific expenses,
principally distribution and shareholder servicing fees) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares. The cost of investments sold
is determined by use of the specific identification method for both financial
reporting and income tax purposes.
The Fund may enter into forward currency contracts for the purchase or sale
of a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. The
Fund will enter into forward foreign currency contracts primarily for hedging
purposes. Forward foreign currency contracts are adjusted by the daily exchange
rate of the underlying currency and any gains or losses are recorded for
financial statement purposes as unrealized until the contract settlement date or
an offsetting position is entered into. At October 31, 2000, the Fund had no
open forward foreign currency contracts.
Dividends from net investment income and distributions of net realized
capital gains, if any, are declared and paid at least annually for the Fund.
However, to the extent that a net realized capital gain can be reduced by a
capital loss carryover, such gain will not be distributed. Income and capital
gain distributions are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
No provision is made for federal taxes as it is the Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code of 1986, as amended (the
"Code"), and make the requisite distributions to its shareholders which will be
sufficient to relieve it from federal income and excise taxes.
The Fund may be subject to taxes imposed by countries in which they invest,
with respect to their investments in issuers existing or operating in such
countries. Such taxes are generally based on income earned or repatriated and
capital gains realized on the sale of such investments. The Fund accrues such
taxes when the related income or capital gains are earned.
18
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
Costs incurred in connection with the organization and offering of shares
have been deferred and are being amortized over a period of five years and one
year, respectively, from the date the Fund commenced its operations.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund, along with other Funds advised by Credit Suisse Asset
Management, LLC, the Funds' investment adviser ("CSAM"), may transfer uninvested
cash balances to a pooled cash account, which is invested in repurchase
agreements secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by the Funds' custodian bank until
the agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default or bankruptcy by the other party to the agreement,
retention of the collateral may be subject to legal proceedings. At October 31,
2000, the Fund had no investments in repurchase agreements.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
The Fund has an arrangement with its transfer agent whereby interest earned
on uninvested cash balances is used to offset a portion of the transfer agent
expense.
For the year ended October 31, 2000, the Fund received credits or
reimbursements under this arrangement in the amount of $17,326.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
CSAM serves as the Fund's investment advisor. For its investment advisory
services, CSAM receives a fee of 1.25% of the Fund's average daily net assets.
For the year ended October 31, 2000, investment advisory fees and waivers
were:
GROSS NET
ADVISORY FEE WAIVER ADVISORY FEE
------------ ---------- ------------
$1,124,537 $(711,093) $413,444
19
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate of
CSAM, and PFPC Inc. ("PFPC"), an indirect, wholly-owned subsidiary of PNC
Financial Services Group, serve as the Fund's co-administrators. For its
administrative services, CSAMSI currently receives a fee calculated at an annual
rate of .10% of the Fund's average daily net assets.
For the year ended October 31, 2000, administrative services fees earned by
CSAMSI amounted to $57,162.
For its administrative services through July 31, 2000, PFPC received a fee,
exclusive of out-of-pocket expenses, based on the following fee structure:
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -------------------------------
First $250 million .12% of average daily net assets
Next $250 million .10% of average daily net assets
Next $250 million .08% of average daily net assets
Over $750 million .05% of average daily net assets
Effective August 1, 2000, for its administrative services, PFPC receives a
fee, exclusive of out-of-pocket expenses, based on the following fee structure:
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ ---------------------------------
First $500 million .11% of average daily net assets
Next $1 billion .09% of average daily net assets
Over $1.5 billion .07% of average daily net assets
For the year ended October 31, 2000, administrative service fees earned by
PFPC (including out of pocket expenses) amounted to $120,058.
Provident Distributors, Inc. ("PDI") served as the distributor of the Fund's
shares until August 1, 2000. On August 1, 2000, CSAMSI replaced PDI as
distributor to the Fund. No compensation was payable by the Fund to PDI for
distribution services. Pursuant to a distribution plan adopted by the Fund
pursuant to Rule 12b-1 under the 1940 Act, CSAMSI receives a fee for its
distribution services. This fee is calculated at an annual rate of .25% of the
average daily net assets of the Common Class shares of the Fund and at an annual
rate of .50% of the Advisor Class shares of the Fund. CSAMSI may use this fee to
compensate service organizations for shareholder servicing and distribution
services.
20
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
For the year ended October 31, 2000, shareholder servicing and distribution
fees paid to CSAMSI were as follows:
SHAREHOLDER SERVICING
DISTRIBUTION FEE
--------------------
Common Class shares $ 216,842
Advisor Class shares 387
----------
$ 217,229
==========
3. LINE OF CREDIT
The Fund, together with other funds advised by CSAM, has established a $350
million committed and a $75 million uncommitted, unsecured, line of credit
facility ("Credit Facility") with Deutche Bank, AG as administrative agent,
State Street Bank and Trust Company as operations agents, Bank of Nova Scotia as
syndication agent and certain other lenders, for temporary or emergency purposes
primarily relating to unanticipated Fund share redemptions. Under the terms of
the Credit Facility, the Funds with access to the Credit Facility pay an
aggregate commitment fee at a rate of .075% per annum on the entire amount of
the Credit Facility which is allocated among the participating Funds in such
manner as is determined by the governing Boards of the various funds. In
addition, the participating Funds will pay interest on borrowings at the Federal
funds rate plus .50%. At October 31, 2000, there were no loans outstanding for
the Fund. During the year ending October 31, 2000, the Fund had the following
borrowings under the line of credit agreement.
AVERAGE MAXIMUM
AVERAGE DAILY INTEREST DAILY LOAN
LOAN BALANCE RATE % OUTSTANDING
------------- -------- -----------
$1,600,603 6.672% $13,366,000
4. INVESTMENTS IN SECURITIES
For the year ended October 31, 2000, purchases and sales of investment
securities (excluding short-term investments) were $336,329,007 and
$349,306,774, respectively.
21
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
4. INVESTMENTS IN SECURITIES -- (CONT'D)
At October 31, 2000, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for federal income tax purposes) was as follows:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
------------ ------------- --------------
$4,689,657 $(10,389,423) $(5,699,766)
5. CAPITAL SHARE TRANSACTIONS
The Fund is authorized to issue three billion full and fractional shares of
capital stock, $.001 par value per share, of which one billion are classified as
Common shares, one billion are classified as Advisor shares, and one billion are
classified as Institutional shares. Transactions in the classes of the Fund were
as follows:
<TABLE>
<CAPTION>
COMMON CLASS SHARES ADVISOR CLASS SHARES
--------------------------------------------------------- -----------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999 OCTOBER 31, 2000 OCTOBER 31,1999
--------------------------- --------------------------- -------------------- ------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
----------- ------------- ----------- ------------- ------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 29,336,126 $ 341,084,971 20,639,374 $ 164,584,361 19,088 $ 239,930 3,005 $ 27,005
Shares exchanged
due to merger 119,041 1,697,652 0 0 0 0 0 0
Shares
repurchased (30,071,481) (355,261,716) (22,454,708) (180,042,232) (16,175) (201,146) (2,367) (16,254)
----------- ------------- ----------- ------------- ------- --------- ------ --------
Net increase/
(decrease) (616,314) $ (12,479,093) (1,815,334) $ (15,457,871) 2,913 $ 38,784 638 $ 10,751
=========== ============= =========== ============= ======= ========= ====== ========
</TABLE>
INSTITUTIONAL CLASS SHARES
--------------------------
FOR THE YEAR ENDED
OCTOBER 31, 2000
--------------------------
SHARES VALUE
-------- -----------
Shares sold 12,601 $ 163,666
Shares exchanged
due to merger 427,128 6,091,618
Shares
repurchased (126,209) (1,448,239)
-------- -----------
Net increase 313,520 $ 4,807,045
======== ===========
22
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
6. NET ASSETS
At October 31, 2000, capital contributions, accumulated undistributed net
investment income, accumulated net realized gain (loss) from investments and
foreign currency transactions and current period dividends and distributions
have been adjusted for current period permanent book/tax differences which arose
principally from differing book/tax treatments of foreign currency, equity swap
transactions and foreign taxes on capital gains. The Fund reclassified
$1,695,094 from accumulated net realized loss on investments and foreign
currency transactions to accumulated undistributed net investment income. Net
investment income, net realized loss on investments and net assets were not
affected by these reclassifications.
7. CAPITAL LOSS CARRYOVER
At October 31, 2000, the Fund had capital loss carryovers of $39,514,029
expiring in 2006 available to offset possible future capital gains of the Fund.
Included in paid in capital are capital loss carryovers that were acquired as
a result of the merger between Emerging Markets II and the Fund. There may be
limitations on their use in accordance with IRS regulations.
8. OTHER FINANCIAL HIGHLIGHTS
The Fund offers three classes of shares, one class being referred to as the
Common Class, one class being referred to as the Advisor Class, and one class
being referred to as the Institutional Class. Common, Advisor, and Institutional
shares in each Fund represent an equal pro rata interest in each Fund. The
financial highlights for a Common Class share of the Fund as well as the
financial highlights for an Advisor Class share of the Fund are as follows:
23
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
8. OTHER FINANCIAL HIGHLIGHTS -- (CONT'D)
<TABLE>
<CAPTION>
COMMON CLASS
-----------------------------------------------
FOR THE YEAR ENDED OCTOBER 31,
-----------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of year $ 9.27 $ 6.59 $ 10.82 $ 12.19 $ 11.28
------- ------- ------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income 0.04 0.05 0.11 0.04 0.07
Net gains (losses) on investments and
foreign currency related items (both
realized and unrealized) (0.28) 2.63 (3.86) (1.34) 0.99
------- ------- ------- -------- --------
Total from investment activities (0.24) 2.68 (3.75) (1.30) 1.06
------- ------- ------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 (0.04) (0.03) (0.08)
Distributions from net realized gains 0.00 0.00 (0.44) (0.04) (0.07)
------- ------- ------- -------- --------
Total dividends and distributions 0.00 0.00 (0.48) (0.07) (0.15)
------- ------- ------- -------- --------
NET ASSET VALUE, END OF YEAR $ 9.03 $ 9.27 $ 6.59 $ 10.82 $ 12.19
======= ======= ======= ======== ========
Total return (2.59)% 40.67% (35.95)% (10.71)% 9.46%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $60,482 $67,783 $60,189 $155,806 $218,421
Ratio of expenses to average net assets(1) 1.67% 1.66% 1.65% 1.66% 1.62%
Ratio of net investment income to average
net assets .44% .55% 1.00% .24% .31%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .79% .73% .63% .46% .77%
Portfolio turnover rate 232.47% 196.07% 125.59% 92.48% 61.84%
</TABLE>
--------------------------------------------------------------------------------
(1) Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
theCommon Class shares' expenses by .02%, .01%, .00%, .01% and .01% for the
years ending October 31, 2000, 1999, 1998, 1997 and 1996, respectively. The
Common Class shares' operating expense ratios after reflecting these
arrangements were 1.65%, 1.65%, 1.65%, 1.65% and 1.61% for the years ended
October 31, 2000, 1999, 1998, 1997 and 1996, respectively.
24
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
8. OTHER FINANCIAL HIGHLIGHTS -- (CONT'D)
<TABLE>
<CAPTION>
ADVISOR CLASS
-------------------------------------------
FOR THE YEAR ENDED OCTOBER 31
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of year $ 9.03 $ 6.44 $ 10.87 $ 12.21 $11.30
------- ------- ------- ------- ------
INVESTMENT ACTIVITIES:
Net investment income (loss) 0.07 0.04 0.21 0.00 (0.08)
Net gains (losses) on investments
and foreign currency related items
(both realized and unrealized) (0.32) 2.55 (4.16) (1.33) 1.11
------- ------- ------- ------- ------
Total from investment activities (0.25) 2.59 (3.95) (1.33) 1.03
------- ------- ------- ------- ------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 (0.04) 0.00 (0.05)
Distributions from net realized gains 0.00 0.00 (0.44) (0.01) (0.07)
------- ------- ------- ------- ------
Total dividends and distributions 0.00 0.00 (0.48) (0.01) (0.12)
------- ------- ------- ------- ------
NET ASSET VALUE, END OF YEAR $ 8.78 $ 9.03 $ 6.44 $ 10.87 $12.21
======= ======= ======= ======= ======
Total return (2.77)% 40.22% (37.71)% (10.94)% 9.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $ 67 $ 42 $ 26 $ 266 $ 149
Ratio of expenses to average
net assets1 1.92% 1.91% 1.90% 1.90% 1.90%
Ratio of net investment income
(loss) to average net assets .29% .81% 1.01% (.09)% (.57)%
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .75% .80% .94% .58% .65%
Portfolio turnover rate 232.47% 196.07% 125.59% 92.48% 61.84%
</TABLE>
--------------------------------------------------------------------------------
(1) Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expense. These arrangements resulted in a reduction to
the Advisor Class shares' expenses by .02%, .01%, .00%, .00% and .00% for
each of the years ended October 31, 2000, 1999, 1998, 1997 and 1996,
respectively. The Advisor Class shares' operating expense ratios after
reflecting these arrangements were 1.90% for each of the years ended October
31, 2000, 1999, 1998, 1997 and 1996, respectively.
25
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
Warburg, Pincus Emerging Markets Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statement of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects the financial position of the Warburg, Pincus Emerging Markets
Fund, Inc. at October 31, 2000, the results of its operations and its financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' 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 auditing
standards generally accepted in the United States of America, 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, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania
December 15, 2000
26
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
SHAREHOLDER MEETING RESULTS (UNAUDITED)
--------------------------------------------------------------------------------
A special meeting of shareholders of Warburg, Pincus Emerging Markets II
Fund, Inc. (the "EM II Fund") was held on February 10, 2000. The following
matter was voted upon by the shareholders and the resulting votes are presented
below.
To approve the Agreement and Plan of Reorganization, dated December 1, 1999
and amended as of January 27, 2000, providing that (1) the EM II Fund would
transfer to Warburg, Pincus Emerging Markets Fund, Inc. (the "EM Fund") all or
substantially all of the EMIIFund's assets in exchange for shares of the EM Fund
and the assumption by the EM Fund of the EM II Fund's liabilities, (2) such
shares of the EM Fund would be distributed to the shareholders of the EM II Fund
in liquidation of the EM II Fund, and (3) the EM II Fund would be subsequently
terminated.
For 247,793.230 shares (52.61%)
Against 361.000 shares (0.07%)
Abstain 928.000 shares (0.20%)
The Agreement and Plan of Reorganization was subsequently implemented as of
the close of business on February 11, 2000.
A special meeting of shareholders of the Fund was held on July 14, 2000. The
following matter was voted upon by the shareholders and the resulting votes are
presented below.
To approve a Sub-Investment Advisory Agreement among the Fund, Credit Suisse
Asset Management, LLC and Credit Suisse Asset Management Limited.
For 3,610,721.950 shares (97.1%)
Against 43,367.288 shares (1.2%)
Abstain 64,453.665 shares (1.7%)
27
<PAGE>
This page intentionally left blank
<PAGE>
[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
PART OF CREDIT SUISSE ASSET MANAGEMENT
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) [ ] www.warburg.com
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. CSIEM-2-1000