UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number |
811-06574 |
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The Latin American Discovery Fund, Inc. | ||||||
(Exact name of registrant as specified in charter) | ||||||
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522 Fifth Avenue, New York, New York |
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10036 | ||||
(Address of principal executive offices) |
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(Zip code) | ||||
Sara Furber | ||||||
522 Fifth Avenue, New York, New York 10036 | ||||||
(Name and address of agent for service) | ||||||
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Registrants telephone number, including area code: |
212-296-6963 |
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Date of fiscal year end: |
December 31, 2011 |
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Date of reporting period: |
March 31, 2011 |
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Item 1. Schedule of Investments.
The Funds schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:
The Latin American Discovery Fund, Inc.
Portfolio of Investments
First Quarter Report
March 31, 2011 (unaudited)
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Shares |
|
Value |
| |
Common Stocks (99.0%) |
|
|
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| |
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|
|
|
|
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Argentina (1.0%) |
|
|
|
|
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Commercial Banks |
|
|
|
|
| |
Banco Macro SA ADR |
|
15,700 |
|
$ |
629 |
|
|
|
|
|
|
| |
Diversified Telecommunication Services |
|
|
|
|
| |
Telecom Argentina SA ADR |
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42,700 |
|
1,059 |
| |
|
|
|
|
1,688 |
| |
Brazil (70.3%) |
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|
|
|
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Beverages |
|
|
|
|
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Cia de Bebidas das Americas (Preference) ADR |
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245,800 |
|
6,959 |
| |
|
|
|
|
|
| |
Commercial Banks |
|
|
|
|
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Banco Bradesco SA (Preference) |
|
58,080 |
|
1,186 |
| |
Banco Bradesco SA ADR |
|
337,110 |
|
6,995 |
| |
Banco do Brasil SA |
|
159,200 |
|
2,881 |
| |
Banco Nacional SA (Preference) (a)(b)(c) |
|
95,420,000 |
|
|
| |
Investimentos Itau SA (Preference) |
|
491,094 |
|
3,850 |
| |
Itau Unibanco Holding SA (Preference) |
|
193,001 |
|
4,599 |
| |
Itau Unibanco Holding SA (Preference) ADR |
|
332,142 |
|
7,988 |
| |
|
|
|
|
27,499 |
| |
Diversified Financial Services |
|
|
|
|
| |
BM&F Bovespa SA |
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649,800 |
|
4,716 |
| |
|
|
|
|
|
| |
Food Products |
|
|
|
|
| |
BRF - Brasil Foods SA |
|
269,502 |
|
5,089 |
| |
|
|
|
|
|
| |
Health Care Providers & Services |
|
|
|
|
| |
Amil Participacoes SA |
|
140,320 |
|
1,649 |
| |
Diagnosticos da America SA |
|
67,400 |
|
867 |
| |
|
|
|
|
2,516 |
| |
Household Durables |
|
|
|
|
| |
MRV Engenharia e Participacoes SA |
|
272,100 |
|
2,177 |
| |
PDG Realty SA Empreendimentos e Participacoes |
|
707,780 |
|
3,971 |
| |
|
|
|
|
6,148 |
| |
Household Products |
|
|
|
|
| |
Hypermarcas SA (a) |
|
215,900 |
|
2,856 |
| |
|
|
|
|
|
| |
Metals & Mining |
|
|
|
|
| |
Gerdau SA ADR |
|
173,200 |
|
2,165 |
| |
Metalurgica Gerdau SA (Preference) |
|
35,145 |
|
524 |
| |
Vale SA |
|
19,206 |
|
628 |
| |
Vale SA (Preference) |
|
36,912 |
|
1,071 |
| |
Vale SA (Preference) ADR |
|
623,245 |
|
18,398 |
| |
Vale SA ADR |
|
94,500 |
|
3,152 |
| |
|
|
|
|
25,938 |
| |
Oil, Gas & Consumable Fuels |
|
|
|
|
| |
OGX Petroleo e Gas Participacoes SA (a) |
|
334,900 |
|
4,031 |
| |
Petroleo Brasileiro SA (Preference) |
|
331,726 |
|
5,793 |
| |
Petroleo Brasileiro SA ADR |
|
359,573 |
|
13,852 |
| |
|
|
Shares |
|
Value |
| |
Ultrapar Participacoes SA (Preference) |
|
173,200 |
|
$ |
2,867 |
|
|
|
|
|
26,543 |
| |
Real Estate Management & Development |
|
|
|
|
| |
BR Malls Participacoes SA |
|
181,200 |
|
1,887 |
| |
Multiplan Empreendimentos Imobiliarios SA |
|
42,900 |
|
887 |
| |
|
|
|
|
2,774 |
| |
Trading Companies & Distributors |
|
|
|
|
| |
Mills Estruturas e Servicos de Engenharia SA (a) |
|
89,100 |
|
980 |
| |
|
|
|
|
|
| |
Wireless Telecommunication Services |
|
|
|
|
| |
Vivo Participacoes SA ADR |
|
109,700 |
|
4,430 |
| |
|
|
|
|
116,448 |
| |
Chile (3.9%) |
|
|
|
|
| |
Airlines |
|
|
|
|
| |
Lan Airlines SA ADR |
|
32,651 |
|
835 |
| |
|
|
|
|
|
| |
Beverages |
|
|
|
|
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Cia Cervecerias Unidas SA |
|
78,141 |
|
924 |
| |
|
|
|
|
|
| |
Food & Staples Retailing |
|
|
|
|
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Cencosud SA |
|
140,057 |
|
1,007 |
| |
|
|
|
|
|
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Independent Power Producers & Energy Traders |
|
|
|
|
| |
Empresa Nacional de Electricidad SA |
|
1,038,805 |
|
1,927 |
| |
Empresa Nacional de Electricidad SA ADR |
|
3,500 |
|
195 |
| |
|
|
|
|
2,122 |
| |
Metals & Mining |
|
|
|
|
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Antofagasta PLC |
|
70,306 |
|
1,535 |
| |
|
|
|
|
6,423 |
| |
Colombia (0.9%) |
|
|
|
|
| |
Oil, Gas & Consumable Fuels |
|
|
|
|
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Pacific Rubiales Energy Corp. |
|
52,616 |
|
1,452 |
| |
|
|
|
|
|
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Mexico (19.5%) |
|
|
|
|
| |
Beverages |
|
|
|
|
| |
Fomento Economico Mexicano SAB de CV ADR |
|
63,000 |
|
3,698 |
| |
|
|
|
|
|
| |
Commercial Banks |
|
|
|
|
| |
Grupo Financiero Banorte SAB de CV Series O |
|
769,099 |
|
3,621 |
| |
|
|
|
|
|
| |
Construction & Engineering |
|
|
|
|
| |
Empresas ICA SAB de CV (a) |
|
642,700 |
|
1,462 |
| |
|
|
|
|
|
| |
Consumer Finance |
|
|
|
|
| |
Compartamos SAB de CV (a) |
|
471,200 |
|
849 |
| |
|
|
|
|
|
| |
Food & Staples Retailing |
|
|
|
|
| |
Grupo Comercial Chedraui SA de CV (a) |
|
520,100 |
|
1,679 |
| |
|
|
Shares |
|
Value |
| |
Wal-Mart de Mexico SAB de CV Series V |
|
943,972 |
|
$ |
2,833 |
|
|
|
|
|
4,512 |
| |
Household Durables |
|
|
|
|
| |
Desarrolladora Homex SAB de CV ADR (a) |
|
48,644 |
|
1,326 |
| |
|
|
|
|
|
| |
Metals & Mining |
|
|
|
|
| |
Grupo Mexico SAB de CV Series B |
|
880,100 |
|
3,300 |
| |
|
|
|
|
|
| |
Wireless Telecommunication Services |
|
|
|
|
| |
America Movil SAB de CV, Class L ADR |
|
234,005 |
|
13,596 |
| |
|
|
|
|
32,364 |
| |
Panama (1.4%) |
|
|
|
|
| |
Airlines |
|
|
|
|
| |
Copa Holdings SA, Class A |
|
44,603 |
|
2,355 |
| |
|
|
|
|
|
| |
Peru (2.0%) |
|
|
|
|
| |
Commercial Banks |
|
|
|
|
| |
Credicorp Ltd. |
|
31,700 |
|
3,326 |
| |
Total Common Stocks (Cost $103,322) |
|
|
|
164,056 |
| |
|
|
|
|
|
| |
Short-Term Investment (0.9%) |
|
|
|
|
| |
Investment Company (0.9%) |
|
|
|
|
| |
Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (d) (Cost $1,529) |
|
1,528,904 |
|
1,529 |
| |
Total Investments (99.9%) (Cost $104,851) + |
|
|
|
165,585 |
| |
Other Assets in Excess of Liabilities (0.1%) |
|
|
|
119 |
| |
Net Assets (100.0%) |
|
|
|
$ |
165,704 |
|
(a) |
|
Non-income producing security. |
(b) |
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Security has been deemed illiquid at March 31, 2011. |
(c) |
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At March 31, 2011, the Fund held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Funds Directors. |
(d) |
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The Fund invests in the Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (the Liquidity Fund), an open-end management investment company managed by the Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by the Liquidity Fund with respect to assets invested by the Fund in the Liquidity Fund. |
+ |
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At March 31, 2011, the U.S. Federal income tax cost basis of investments was approximately $104,851,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was approximately $60,734,000 of which approximately $61,988,000 related to appreciated securities and approximately $1,254,000 related to depreciated securities. |
ADR |
|
American Depositary Receipt |
Fair Value Measurement Information:
The following is a summary of the inputs used to value the Funds net assets as of March 31, 2011. (See Notes to the Portfolio of Investments for further information regarding fair value measurement.)
Investment Type |
|
Level 1 |
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Level 2 |
|
Level 3 |
|
Total |
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Assets: |
|
|
|
|
|
|
|
|
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Common Stocks |
|
|
|
|
|
|
|
|
| ||||
Airlines |
|
$ |
3,190 |
|
$ |
|
|
$ |
|
|
$ |
3,190 |
|
Beverages |
|
11,581 |
|
|
|
|
|
11,581 |
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Commercial Banks |
|
35,075 |
|
|
|
|
|
35,075 |
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Construction & Engineering |
|
1,462 |
|
|
|
|
|
1,462 |
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Consumer Finance |
|
849 |
|
|
|
|
|
849 |
| ||||
Diversified Financial Services |
|
4,716 |
|
|
|
|
|
4,716 |
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Diversified Telecommunication Services |
|
1,059 |
|
|
|
|
|
1,059 |
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Food & Staples Retailing |
|
5,519 |
|
|
|
|
|
5,519 |
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Food Products |
|
5,089 |
|
|
|
|
|
5,089 |
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Health Care Providers & Services |
|
2,516 |
|
|
|
|
|
2,516 |
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Household Durables |
|
7,474 |
|
|
|
|
|
7,474 |
| ||||
Household Products |
|
2,856 |
|
|
|
|
|
2,856 |
| ||||
Independent Power Producers & Energy Traders |
|
2,122 |
|
|
|
|
|
2,122 |
| ||||
Metals & Mining |
|
30,773 |
|
|
|
|
|
30,773 |
| ||||
Oil, Gas & Consumable Fuels |
|
27,995 |
|
|
|
|
|
27,995 |
| ||||
Real Estate Management & Development |
|
2,774 |
|
|
|
|
|
2,774 |
| ||||
Trading Companies & Distributors |
|
980 |
|
|
|
|
|
980 |
| ||||
Wireless Telecommunication Services |
|
18,026 |
|
|
|
|
|
18,026 |
| ||||
Total Common Stocks |
|
164,056 |
|
|
|
|
|
164,056 |
| ||||
Short-Term Investment - Investment Company |
|
1,529 |
|
|
|
|
|
1,529 |
| ||||
Total Assets |
|
$ |
165,585 |
|
$ |
|
|
$ |
|
|
$ |
165,585 |
|
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investments valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of March 31, 2011, the Fund did not have any significant investments transfer between valuation levels.
Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.
|
|
Common Stocks (000) |
| |
Balance as of 12/31/10 |
|
$ |
|
|
Accrued discounts/premiums |
|
|
| |
Realized gain (loss) |
|
|
| |
Change in unrealized appreciation (depreciation) |
|
|
| |
Purchases |
|
|
| |
Sales |
|
|
| |
Transfers in for Level 3 |
|
|
| |
Transfers out of Level 3 |
|
|
| |
Balance as of 3/31/11 |
|
$ |
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at Level 3 at 3/31/11. |
|
$ |
|
|
Includes one or more securities which are valued at zero.
The Latin American Discovery Fund, Inc.
Notes to the Portfolio of Investments · March 31, 2011 (unaudited)
Security Valuation: Securities listed on a foreign exchange are valued at their closing price except as noted below. Unlisted securities and listed securities not traded on the valuation date for which market quotations are readily available are valued at the mean between the current bid and ask prices. Equity securities listed on a U.S. exchange are valued at the latest quoted sales price on the valuation date. Equity securities listed or traded on NASDAQ, for which market quotations are available, are valued at the NASDAQ Official Closing Price. Short-term debt securities purchased with remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors (the Directors) determines such valuation does not reflect the securities market value, in which case these securities will be valued at their fair value as determined in good faith under procedures adopted by the Directors.
All other securities and investments for which market values are not readily available, including restricted securities, and those securities for which it is inappropriate to determine prices in accordance with the aforementioned procedures, are valued at fair value as determined in good faith under procedures adopted by the Directors, although the actual calculations may be done by others. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuers financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
Most foreign markets close before the New York Stock Exchange (NYSE). Occasionally, developments that could affect the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If these developments are expected to materially affect the value of the securities, the valuations may be adjusted to reflect the estimated fair value as of the close of the NYSE, as determined in good faith under procedures established by the Directors.
Fair Value Measurement: Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosure (ASC 820), defines fair value as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds investments. The inputs are summarized in the three broad levels listed below.
· Level 1 unadjusted quoted prices in active markets for identical securities
· Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
· Level 3 significant unobservable inputs including the Funds own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuers financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.
Item 2. Controls and Procedures.
(a) The Funds principal executive officer and principal financial officer have concluded that the Funds disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, based upon such officers evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.
(b) There were no changes in the Funds internal control over financial reporting that occurred during the registrants fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Funds internal control over financial reporting.
Item 3. Exhibits.
(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
The Latin American Discovery Fund, Inc.
/s/ Sara Furber |
|
Sara Furber |
|
Principal Executive Officer |
|
May 24, 2011 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Sara Furber |
|
Sara Furber |
|
Principal Executive Officer |
|
May 24, 2011 |
|
|
|
/s/ Francis Smith |
|
Francis Smith |
|
Principal Financial Officer |
|
May 24, 2011 |
|