UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
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Investment Company Act file number 811-4058
Korea Fund, Inc.
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(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154
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(Address of principal executive offices) (Zip code)
Charles Rizzo
Two International Place
Boston, Massachusetts 02110
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(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 295-3488
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Date of fiscal year end: 06/30
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Date of reporting period: 3/31/05
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Form N-Q is to be used by registered management investment companies, other than
small business investment companies registered on Form N-5 (ss.ss. 239.24 and
274.5 of this chapter), to file reports with the Commission, not later than 60
days after the close of the first and third fiscal quarters, pursuant to rule
30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-4). The
Commission may use the information provided on Form N-Q in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609. The OMB has reviewed this collection of information under the
clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS
The Korea Fund, Inc.
Investment Portfolio as of March 31, 2005 (unaudited)
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Shares Value ($)
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Common Stocks 80.8%
Consumer Discretionary 12.8%
Auto Components 4.4%
Halla Climate Control Corp. 600,000 5,252,585
Hankook Tire Co., Ltd. 4,464,307 49,896,489
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55,149,074
Automobiles 0.7%
Nexen Tire Corp. 400,000 9,059,577
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Hotels Restaurants & Leisure 2.2%
Hotel Shilla Co., Ltd. 858,391 5,629,625
Kangwon Land, Inc. 1,471,530 22,025,855
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27,655,480
Internet & Catalog Retail 0.3%
LG Home Shopping, Inc. 56,200 4,360,965
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Media 0.8%
Cheil Communications, Inc. 57,600 9,755,982
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Multiline Retail 4.2%
Shinsegae Co., Ltd. 135,787 41,919,472
Taegu Department Store Co., Ltd. (b) 1,336,800 11,847,563
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53,767,035
Textiles, Apparel & Luxury Goods 0.2%
BYC Co., Ltd. (b) 39,530 2,355,062
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Consumer Staples 5.5%
Beverages 1.6%
Hite Brewery Co., Ltd. 50,000 4,825,209
Nam Yang Dairy Products Co., Ltd. (b) 33,641 15,818,393
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20,643,602
Food Products 1.9%
CJ Corp. 99,606 7,081,786
Crown Confectionary Co., Ltd. 46,200 6,096,307
Nhong Shim Co., Ltd. 38,229 10,917,193
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24,095,286
Tobacco 2.0%
KT&G Corp. 144A (GDR) 413,800 6,695,284
KT&G Corp. 552,570 17,956,484
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24,651,768
Energy 6.9%
Oil & Gas 6.9%
S-Oil Corp. 827,300 64,196,199
SK Corp. 408,800 24,153,619
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88,349,818
Financials 12.7%
Banks 4.5%
Jeonbuk Bank (b) 2,787,695 12,133,542
Kookmin Bank (ADR)* 100,917 4,505,944
Kookmin Bank * 909,198 40,602,786
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57,242,272
Diversified Financial Services 0.7%
LG Card Co., Ltd.* 171,600 4,883,545
Samsung Securities Co., Ltd. 164,720 4,136,249
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9,019,794
Insurance 7.5%
Korean Reinsurance Co. 1,643,310 8,948,798
Oriental Fire & Marine Insurance Co. (b) 584,860 11,403,474
Samsung Fire & Marine Insurance Co., Ltd. 979,625 74,183,321
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94,535,593
Health Care 0.5%
Pharmaceuticals 0.5%
Choongwae Pharma Corp. 88,600 2,146,292
Yuhan Corp. 48,798 4,324,786
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6,471,078
Industrials 7.5%
Commercial Services & Supplies 2.3%
Insun ENT Co., Ltd. 377,203 7,224,617
S1 Corp. 564,270 22,670,818
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29,895,435
Electrical Equipment 0.4%
Ace Digitech Co. Ltd.* 423,300 5,002,068
Industrial Conglomerates 3.0%
Anycell, Inc. (b)(c)(d)(g) 1,250,000 0
Daeyang E&C Ltd.* 1,153,948 4,170,349
Hyundai Mobis 350,480 22,847,638
SFA Engineering Corp. (b) 466,200 10,742,570
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37,760,557
Machinery 0.4%
Samsung Climate Control Co., Ltd. (b) 827,630 4,832,935
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Trading Companies & Distributors 0.6%
Jahwa Electronics Co., Ltd. 779,900 7,649,241
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Transportation Infrastructure 0.8%
Korea Express Co., Ltd.* 301,880 10,404,530
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Information Technology 20.0%
Communications Equipment 0.2%
INTOPS Co., Ltd. 162,500 3,344,412
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Computers & Peripherals 0.2%
Ahnlab, Inc.* 119,466 2,105,801
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Electronic Equipment & Instruments 4.0%
Dae Duck Electronics Co., Ltd. 360,901 2,946,203
Hankuk Electric Glass Co., Ltd. 142,400 6,667,770
Interflex Co., Ltd. (b) 667,800 11,245,081
Mtekvision Co., Ltd.* 83,200 2,461,999
Samsung SDI Co., Ltd. 209,956 21,605,516
SE Co., Ltd. (b)(c)(d) 636,950 1,969,496
Simm Tech Co., Ltd.* 631,213 3,717,040
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50,613,105
Semiconductors & Semiconductor Equipment 15.6%
NEPES Corp.* 4,990 50,121
Phicom Corp.* (b) 1,060,000 5,323,486
Samsung Electronics Co., Ltd. (h) 340,299 168,222,647
Seoul Semiconductor Co., Ltd. (b) 1,003,900 24,220,138
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197,816,392
Materials 11.5%
Chemicals 1.4%
LG Chemical Ltd. 212,486 8,578,952
Samsung Fine Chemicals Co., Ltd. 425,000 8,663,220
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17,242,172
Construction Materials 0.4%
Sungshin Cement Co., Ltd. 276,200 5,330,891
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Containers & Packaging 0.4%
Youlchon Chemical Co., Ltd. 351,300 4,497,194
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Metals & Mining 9.3%
Dongkuk Steel Mill Co., Ltd. 1,170,900 22,138,139
Korea Iron & Steel Co., Ltd. 227,200 5,705,170
POSCO 443,000 87,683,899
Samwoo EMC Co., Ltd. (b) 754,800 3,114,340
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118,641,548
Telecommunication Services 3.4%
Wireless Telecommunication Services
SK Telecom Co., Ltd. 258,420 43,515,332
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Total Common Stocks (Cost $336,852,778) 1,025,763,999
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Principal
Amount ($) Value ($)
Convertible Bond 0.0%
Consumer Staples
Haitai Confectionery Loan Certificates, Zero Coupon,
11/28/2009 (c)(e)(f) 11,658,888 10,352
(Cost $0) ----------
Shares Value ($)
Preferred Stocks 15.6%
Consumer Discretionary 5.6%
Automobiles
Hyundai Motor Co. (GDR) 144A 3,020,000 45,843,600
Hyundai Motor Co. (2nd) 738,593 25,892,576
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71,736,176
Consumer Staples 1.4%
Food Products
CJ Corp. 297,200 12,965,002
CJ Corp. (2nd) 50,335 2,760,866
CJ Corp. (3rd) (convertible) 30,201 1,582,170
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17,308,038
Energy 0.7%
Oil & Gas
S-Oil Corp. 156,040 8,359,011
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Financials 2.2%
Diversified Financial Services 0.5%
Daishin Securities Co., Ltd. 665,500 6,618,956
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Insurance 1.7%
Samsung Fire & Marine Insurance Co., Ltd. 533,850 21,238,346
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Information Technology 5.3%
Electronic Equipment & Instruments 0.2%
Samsung SDI Co., Ltd. 34,318 2,264,211
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Semiconductors & Semiconductor Equipment 5.1%
Samsung Electronics Co., Ltd. (h) 198,201 65,091,121
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Materials 0.4%
Chemicals
LG Chemical Ltd. 193,003 5,464,142
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Total Preferred Stocks (Cost $38,433,288) 198,080,001
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Cash Equivalents 0.2%
Scudder Cash Management QP Trust, 2.69% (a)
(Cost $2,471,595) 2,471,595 2,471,595
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% of
Net Assets Value ($)
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Total Investment Portfolio (Cost $377,757,661) 96.6 1,226,325,947
Other Assets and Liabilities, Net 3.4 42,927,607
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Net Assets 100.0 1,269,253,554
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For information on the Fund's policies regarding the valuation of investments
and other significant accounting policies, please refer to the Fund's most
recent semi-annual or annual financial statements.
* Non-income producing security.
(a) Scudder Cash Management QP Trust is managed by Deutsche Investment
Management Americas Inc. The rate shown is the annualized seven-day yield at
period end.
(b) Affiliated issuers. An affiliated issuer is a company in which the Fund has
ownership of at least 5% of the voting securities. A summary of the Fund's
transactions during the nine months ended March 31, 2005 with companies which
are or were affiliates is as follows:
Common/ Realized
Preferred Purchase Sales Gain/ Dividend
Affiliate Shares Cost($) Cost($) (Loss)($) Income($)+ Value($)
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Anycell, Inc. 1,250,000 - - - - -
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BYC Co., Ltd. 39,530 - - - 22,185 2,355,062
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Co., Ltd. 1,003,900 4,775,077 - - 237,432 24,220,138
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Control Co., Ltd. 827,630 - - - 19,906 4,832,935
Interflex Co., Ltd. 667,800 8,039,630 - - 80,309 11,245,081
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Jeonbuk Bank 2,787,695 - - - 325,482 12,133,542
Marine Insurance Co. 584,860 - - - - 11,403,474
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Nam Yang Diary
Oriental Fire &
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Phicom Corp. 1,060,000 4,401,309 84,983 5,323,486
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Products Co., Ltd. 33,641 - 1,152,104 2,847,366 33,931 15,818,392
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Samsung Climate
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Samwoo EMC Co., Ltd. 754,800 2,092,375 - - 60,514 3,114,340
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SE Co., Ltd. 636,950 - - - - 1,969,496
Seoul Semiconductor
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SFA Engineering Corp. 466,200 5,302,292 280,324 10,742,570
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Store Co., Ltd. 1,336,800 4,316,669 - - - 11,847,563
Taegu Department
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Telephus Co., Ltd.++ - - 2,919,708 (3,206,483)
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28,927,352 4,071,812 (359,117) 1,145,066 115,006,079
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+ Net of foreign taxes withheld.
++ At March 31, 2005 the fund no longer held Telephus Co., Ltd.
(c) Securities valued at fair value by management and approved in good faith
following procedures approved by the Directors, amounted to $1,979,848 (0.2% of
net assets at March 31, 2005). Their values have been estimated by management in
the absence of readily ascertainable market values. However, because of the
inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for
the securities existed, and the difference could be material. The cost of these
securities at March 31, 2005 aggregated $3,637,411. The securities may also have
certain restrictions as to resale.
(d) The Fund may purchase securities that are subject to legal or contractual
restrictions on resale ("restricted securities"). Restricted securities are
securities which have not been registered with the Securities and Exchange
Commission under the Securities Act of 1933. The Fund may be unable to sell a
restricted security and it may be more difficult to determine a market value for
a restricted security. Moreover, if adverse market conditions were to develop
during the period between the Fund's decision to sell a restricted security and
the point at which the Fund is permitted or able to sell such security, the Fund
might obtain a price less favorable than the price that prevailed when it
decided to sell. This investment practice, therefore, could have the effect of
increasing the level of illiquidity of the Fund.
The issuer of SE Co., Ltd. has given the Fund a put option at cost, payable on
demand until it has an initial public offering. Information concerning such
private placement securities at March 31, 2005 is as follows:
Restricted Acquisition Value as % of
Securities Date Cost ($) Value ($) Net Assets
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Anycell, Inc. 12/22/2000 2,020,774 - -
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SE Co., Ltd. 12/22/2000 1,616,637 1,969,496 0.2%
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Total Restricted Securities 3,637,411 1,969,496 0.2%
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(e) Company in restructuring process, principal only subject to repayment.
(f) Principal amount stated in Koream Won.
(g) Company is in process of liquidation.
(h) At March 31, 2005, 19.1% of the Fund's investment portfolio is invested in
Samsung Electronics Co., Ltd.
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
ADR: American Depositary Receipt
GDR: Global Depositary Receipt
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.
Registrant: The Korea Fund, Inc.
By: /s/Julian Sluyters
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Julian Sluyters
Chief Executive Officer
Date: May 26, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Registrant: The Korea Fund, Inc.
By: /s/Julian Sluyters
--------------------------------------------
Julian Sluyters
Chief Executive Officer
Date: May 26, 2005
By: /s/Paul Schubert
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Paul Schubert
Chief Financial Officer
Date: May 26, 2005