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<SEC-DOCUMENT>0000088053-04-000174.txt : 20040308
<SEC-HEADER>0000088053-04-000174.hdr.sgml : 20040308
<ACCEPTANCE-DATETIME>20040308161746
ACCESSION NUMBER:		0000088053-04-000174
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040308
EFFECTIVENESS DATE:		20040308

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KOREA FUND INC
		CENTRAL INDEX KEY:			0000748691
		IRS NUMBER:				133226146
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		N-CSRS
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04058
		FILM NUMBER:		04654995

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVE
		STREET 2:		C/O SCUDDER STEVENS & CLARK INC
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		6173305464
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSRS
<SEQUENCE>1
<FILENAME>kor.htm
<DESCRIPTION>SEMIANNUAL REPORT
<TEXT>
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<PRE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM N-CSRS

Investment Company Act file number 811-4058

                              THE KOREA FUND, INC.
                             ----------------------
               (Exact Name of Registrant as Specified in Charter)

                                 345 Park Avenue
                            New York, New York 10154
                  --------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, including Area Code: (617) 295-2663
                                                            --------------

                               Salvatore Schiavone
                             Two International Place
                           Boston, Massachusetts 02110
                     ---------------------------------------
                     (Name and Address of Agent for Service)

Date of fiscal year end:        6/30

Date of reporting period:       12/31/03

<PAGE>

ITEM 1.  REPORT TO STOCKHOLDERS

</PRE>

<P ALIGN="JUSTIFY">[Scudder Investments logo]
 <BR>
</P>
<TABLE WIDTH="500" BGCOLOR="#CCCCCC" CELLPADDING="0" CELLSPACING="0">
<TR>
<TD ALIGN="LEFT"  VALIGN="TOP" COLSPAN="3" BGCOLOR="#CCCCCC">
<P ALIGN="LEFT"><FONT SIZE="+3">The Korea Fund, Inc.</FONT>
</P>
<H1 ALIGN="LEFT">Semiannual Report to Stockholders</H1>
<H1 ALIGN="LEFT">December 31, 2003</H1>
<P ALIGN="LEFT">A closed-end investment company seeking long-term capital appreciation
through investment in Korean securities.
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
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<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION280"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">The Korea Fund, Inc.</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="RIGHT">
</P>
</TD>
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<BR>
<H2 ALIGN="LEFT">Investment Objective and Policies</H2>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   long-term capital appreciation through investment in Korean securities
</P>
<H2 ALIGN="LEFT">Investment Characteristics</H2>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   investments in a broad spectrum of Korean industries
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   closed-end investment company
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   first United States investment company authorized to invest in Korean securities
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   a vehicle for international diversification through participation in the Korean
economy
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   a vehicle providing investments in some less liquid Korean opportunities
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION270"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">General Information</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
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<P ALIGN="RIGHT">
</P>
</TD>
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</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Executive Offices</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">The Korea Fund, Inc.<BR>
345 Park Avenue<BR>
New York, NY 10154
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Automated <BR>
Information Line</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Scudder Closed-End Fund Info Line<BR>
(800) 349-4281
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Web Site</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">www.TheKoreaFund.com</H3>
<P ALIGN="LEFT">or visit our Direct Link:
</P>
<H3 ALIGN="LEFT">CEF.Scudder.com (Do not use www.)</H3>
<P ALIGN="LEFT">Obtain monthly fact sheets, financial reports,
press releases and webcasts when available.
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Transfer Agent and Registrar</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Scudder Investments Service Company<BR>
P.O. Box 219066<BR>
Kansas City, MO 64121-9066
</P>
<P ALIGN="LEFT">For account information: 1-800-294-4366
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Dividend Reinvestment <BR>
Plan Agent</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">UMB Bank, N.A.
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Legal Counsel</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Debevoise &amp; Plimpton
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Custodian</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Brown Brothers Harriman &amp; Co.
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Subcustodian </H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Citibank, N.A. - Seoul office
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Independent Auditors</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">PricewaterhouseCoopers LLP
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="2">
<H3 ALIGN="LEFT">New York Stock Exchange Symbol - KF</H3>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION260"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">Contents</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#letter">&lt;Click Here&gt;</A></FONT> Portfolio Management Review
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#other">&lt;Click Here&gt;</A></FONT>  Other Information
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#invsum">&lt;Click Here&gt;</A></FONT> Investment Summary
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#portsum">&lt;Click Here&gt;</A></FONT>        Portfolio Summary
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#portfolio">&lt;Click Here&gt;</A></FONT>      Investment Portfolio
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#fins">&lt;Click Here&gt;</A></FONT>   Financial Statements
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#high">&lt;Click Here&gt;</A></FONT>   Financial Highlights
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#notes">&lt;Click Here&gt;</A></FONT>  Notes to Financial Statements
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#ria">&lt;Click Here&gt;</A></FONT><FONT COLOR="#000000">      Report of Independent Auditors</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#drip">&lt;Click Here&gt;</A></FONT>   Dividend Reinvestment and Cash Purchase Plan
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#smr">&lt;Click Here&gt;</A></FONT>    Stockholder Meeting Results
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#ps">&lt;Click Here&gt;</A></FONT>     Privacy Statement
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><I><FONT SIZE="-2">Investments in funds involve risks. The fund may focus its investments in certain
geographical regions, thereby increasing its vulnerability to developments in that region.
Investing in foreign securities presents certain unique risks not associated with domestic
investments, such as currency fluctuation and political and economic changes and
market risks. This may result in greater share price volatility. Shares of closed-end funds
frequently trade at a discount to net asset value. The price of the fund's shares is
determined by a number of factors, several of which are beyond the control of the fund.
Therefore, the fund cannot predict whether its shares will trade at, below or above net
asset value.</FONT></I>
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2">This report is sent to the stockholders of The Korea Fund, Inc. for their information. It is not a
prospectus, circular, or representation intended for use in the purchase or sale of shares of the fund
or of any securities mentioned in the report.</FONT></I>
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2">Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any
bank. Fund shares involve investment risk, including possible loss of principal.</FONT></I>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION250"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="letter" ID="letter"></A>Portfolio Management Review</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

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<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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</TABLE>
<BR>
<P ALIGN="LEFT"><FONT SIZE="-1">In the following interview, Portfolio Manager John Lee discusses The Korea Fund,
Inc.'s strategy and the market environment during the six-month period ended
December 31, 2003. </FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  How did Korea's stock market perform during the
second half of the year?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B><FONT COLOR="#000000">  </FONT><FONT COLOR="#000000">Korean stocks delivered a strong return during the
second half. As the recovery in global growth continued to
pick up steam, investors became more aggressive and more
willing to move cash into riskier areas of the financial
markets, such as emerging-markets equities. The KOSPI
closed the year at 810, representing a return of 21.01% for
the six-month reporting period and 29.19% for the
calendar year. This marked a substantial rally off of its low
of 515, set on March 17. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Although Korea performed well, it lagged other Asian
markets due to ongoing concern about corporate
scandals, tension with North Korea and continued
sluggishness in its consumer sector. We believe, however,
that these problems are short-term in nature and that
the fundamental underpinning of Korea's market
remains strong.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  How did the fund perform?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B><FONT COLOR="#000000">  </FONT><FONT COLOR="#000000">For the six-month period ended December 31, 2003,
the net asset value (NAV) total return of The Korea Fund
was 20.82%. Its share price - quoted on the NYSE -
returned 24.27% to close at $18.35 per share,
representing a discount of 12.49% to NAV. This compares
with a discount of 14.93% on June 30 and 16.36% one
year ago. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Performance was helped by continued strength among the
fund's holdings in small- and mid-cap stocks, where we
continued to find a wealth of attractive opportunities. On
the negative side, the fund's underweight position in
Samsung Electronics was a detractor for both the
six-month reporting period and the full calendar year. We
are underweight in Samsung because the stock makes up
almost 30% of the total Korean stock market. In order to
manage risk and maintain appropriate diversification in
the fund, we are compelled to underweight Samsung. At
the times when the stock performs well, as it did during
the second half of the year, the fund's relative performance
will only partially reflect that strong showing. </FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  What is your current view on the economic and
political backdrop in Korea?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B><FONT COLOR="#000000">  </FONT><FONT COLOR="#000000">Like the rest of the world, Korea experienced stronger
economic growth in 2003 than in the previous year. This
strength was largely export-driven, as all of Korea's most
important trading partners - China, the United States
and Japan - exhibited improving growth. China, in
particular, has emerged as an important market for Korea's
goods given its geographic proximity and the favorable
relations between the two countries. For many Korean
companies, it is now the largest market. Steel, automotive
and specialty chemicals companies, in particular, have
benefited. We expect that the trend of Korean companies
capitalizing on China's growth is not a short-term
phenomenon; this story should continue to play out over
the next decade.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">While the export picture remains strong, domestic
consumption in Korea continued to struggle. Confidence
in the recovery remained tenuous and while personal debt
levels have stabilized somewhat, Korean consumers remain
burdened with relatively high levels of debt. Our belief,
however, is that continued growth will lead to a recovery
in the consumer sector. And the outlook for growth is
positive. Gross domestic product is expected to grow by
4% to 5% in 2004, and some economists are even
expecting growth in the 6% to 7% range. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The political backdrop was not as favorable as the
economic picture, and this was the primary reason why
Korea underperformed other Asian markets in the second
half of the year. First, elections are near, and the concern
among investors is that the reform process will stall until
the election is completed. Second, there have been many
high-profile investigations and/or arrests of politicians and
corporate officers. News on this front pressures stock
prices in the short term. We believe there is a more
positive aspect to these investigations, however, in that
they demonstrate that reform is indeed taking place and
that both the government and corporations are becoming
more transparent. Third, investors have remained cautious
due to the ongoing nuclear saber-rattling from North
Korea. But as we have stated in the past, relations between
the North and the South continue to improve, so we view
any short-term market weakness that results from news
out of North Korea as a potential buying opportunity. </FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  How is the portfolio positioned?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B><FONT COLOR="#000000">  </FONT><FONT COLOR="#000000">We continue to focus on the fastest-growing sectors in
Korea. We are overweight in industries such as technology,
telecommunications and financials. At the same time, we
are underweight in traditional, slower-growth industries.
We believe that this is the best way to capitalize on Korea's
long-term potential. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">We continue to build the fund's position in small- and
mid-cap companies. Given that the large-cap sector is
heavily followed by the global research community, it is
easier to identify inefficiencies in an area of the market
that does not receive as much attention as we believe it
should. As a result, we are able to use our fundamental
research capabilities and presence &quot;on the ground&quot; in
Korea to find fast-growing companies at attractive
valuations. Additionally, the closed-end structure of the
fund allows us to seek opportunities in less liquid areas of
the market, since we do not have to plan for shareholder
redemptions. A small-cap company that performed
particularly well for the fund was Internet Auction. (As of
12/31/03, the position in Internet Auction was sold.) In
November, eBay - which previously owned 50% of
Internet Auction - announced its intention to buy the
remaining stake. This was a distinct positive for Internet
Auction's stock price. Fund performance also was helped
by our positions in S-Oil Corp. and SK Corp., two small
oil refining companies; Korea Iron &amp; Steel Co., Ltd.,
which is directly benefiting from China's growing need for
raw materials; Oriental Fire &amp; Marine Insurance Co.; and
Korean Reinsurance Co. We are still adding to the fund's
position in small- and mid-cap companies as we continue
to find opportunities in this area.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Samsung Electronics Co., Ltd. and SK Telecom Co., Ltd.
(SKT) remain two of the fund's largest holdings. Samsung
produced a strong return during the second half of the
year as its improving fundamentals attracted the attention
of global investors. The company is gaining market share
across all of its business lines as its brand image improves
among consumers worldwide. Samsung has also been
helped by the semiconductor cycle. As the lowest-cost
maker of computer chips in the world, it has benefited as
the global economic recovery has caused chip prices to
rise. These positive changes have been reflected in the
company's stock price. SKT, in contrast, was a laggard in
2003 as the consensus view was that the company's growth
prospects are limited. However, it still has a dominant
market share of 55%, and we do not foresee a meaningful
decline from this level. We are also encouraged by the fact
that the company is increasing its dividend and improving
its corporate governance practices. As a result, we believe
SKT represents a value at its current level.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  Do you think stocks in Korea represent an
attractive value?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B><FONT COLOR="#000000">  </FONT><FONT COLOR="#000000">Yes, we believe that the market is attractively valued in
relation both to other Asian markets and to its historical
levels. The small-cap sector, in particular, offers a wealth
of outstanding values when measured against small-cap
stocks in other markets around the world. In our view,
these valuation levels represent a disconnect relative to the
positive developments that continue to take place in
Korea. The country is on track for strong growth in 2004,
corporate governance continues to improve, interest rates
are low and dividend payouts continue to increase. Also, it
is important not to underestimate the potential impact of
the rise in Chinese demand expected in the coming
decade. Looking beyond the underlying fundamentals to
the market itself, we see two factors that could support
demand for stocks. First, the ownership level of Korean
stocks among Korean local investors is currently at a low
level, meaning that there is room for meaningful upside.
Second, Korea is introducing a retirement plan system
similar to the 401(k) in the United States, meaning that
Korean citizens will have another avenue through which
they can participate in the stock market. Given this strong
underpinning, we believe Korean stocks continue to
represent an investment opportunity even after their 29%
gain in 2003.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">Q:  What is the fund doing to address the discount at
which its shares trade from net asset value?</FONT></B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1" COLOR="#3300d9">A:</FONT></B>  Shares of the fund, like those of most closed-end
investment companies, often trade at a discount from net
asset value.
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund's directors review this situation carefully. On
January 21, 2004, the fund's board of directors authorized
a tender for 10% of the fund's outstanding shares at 95%
of net asset value, and announced a program for
comparable repurchases of shares, each for 10% of the
fund's outstanding shares at 95% of net asset value, in the
first quarter of 2005 and the first quarter of 2006, in each
case if the fund's shares traded at an average discount of
15% of more during a measuring period ending the
preceding December 31.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund's investment objective is to seek long-term
capital appreciation through investment in securities,
primarily equity securities, of Korean companies. Over the
years, the fund has achieved superior investment
performance. The fund's manager believes that the fund's
closed-end structure has helped the fund to achieve its
strong historical record of investment performance. As a
closed-end fund, for example, the fund has been able to
invest in smaller and newer and less liquid companies that
have performed well.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Before deciding upon the tender offer and the program
announced on January 21, the fund's board considered not
only the discount but also other relevant factors. Those
factors included the fund's investment objective, the fund's
investment performance, and the possible adverse effects
several alternatives would have on portfolio management,
on the fund's expense ratio, and on investment results for
Fund shareholders. Actions such as self-tenders for a large
percentage of the fund's shares or repeated sizable
self-tenders continuing indefinitely would pose serious
risks to shareholders who have bought fund shares for
long-term capital appreciation through investment in
Korean companies. Those risks include substantially
higher expense ratios and jeopardy to investment results
because of the need to maintain greater portfolio liquidity. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund believes its tender offer and program for future
tender offers represent a carefully considered and balanced
approach, consistent with the fund's investment objective
and the interests of shareholders. The fund's board intends
to keep close track of the discount and of ways to address
it, together with the factors referred to earlier, so as to be
able to assess what is in the best interest of the fund and
its shareholders in the future, in light of market conditions
and other circumstances at the time.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund's board and the fund's manager believe the
tender offer and program announced by the fund on
January 21 are significant steps to address the discount,
without unduly affecting portfolio management and the
fund's ability to deliver investment results to shareholders.</FONT>
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The views expressed in this report reflect those of the portfolio managers only through the
end of the period of the report as stated on the cover, except for the last question and
answer, which discusses a subsequent event, as described in the Notes to Financial
Statements on page 33 of this report. The managers' views are subject to change at any
time based on market and other conditions and should not be construed as a
recommendation.</FONT></I>
</P>
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<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION240"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="other" ID="other"></A>Other Information</H1>
</TD>
</TR>

<TR>
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<P ALIGN="RIGHT">
</P>
</TD>
</TR>

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<P ALIGN="RIGHT">
</P>
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</TABLE>
<BR>
<H2 ALIGN="LEFT">Investment Manager</H2>
<P ALIGN="LEFT">Deutsche Investment Management Americas Inc. (&quot;DeIM&quot;), with
headquarters at 345 Park Avenue, New York, NY, is the investment manager
for the fund. DeIM and its predecessors have more than 80 years of experience
managing mutual funds. DeIM provides a full range of investment advisory
services to institutional and retail clients. DeIM is also responsible for selecting
brokers and dealers and for negotiating brokerage commissions and dealer
charges.
</P>
<P ALIGN="LEFT">Deutsche Asset Management is the marketing name in the US for the asset
management activities of Deutsche Bank AG, DeIM, Deutsche Asset
Management, Inc., Deutsche Investment Trust Management Company
Limited (&quot;DeITMC&quot;), Deutsche Bank Trust Company Americas and Scudder
Trust Company.
</P>
<P ALIGN="LEFT">Deutsche Asset Management is a global asset management organization that
offers a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform
brings together a wide variety of experience and investment insight across
industries, regions, asset classes and investing styles.
</P>
<P ALIGN="LEFT">DeIM is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
fund, retail, private and commercial banking, investment banking and
insurance.
</P>
<P ALIGN="LEFT">Deutsche Asset Management also manages the assets of other closed-end
investment companies which invest primarily in foreign securities: Scudder
New Asia Fund, Inc., The Brazil Fund, Inc., Scudder Global High Income
Fund, Inc., The Germany Fund, Inc., The New Germany Fund, Inc. and The
Central Europe and Russia Fund, Inc. In addition, Deutsche Asset
Management manages open-end mutual funds which invest in domestic and
international markets.
</P>
<H2 ALIGN="LEFT">Korean Advisor</H2>
<P ALIGN="LEFT">DeITMC, located at 3rd Floor, Seian Building, 116 Shinmoonro-1 Ka,
Changro-ku, Seoul, Korea, serves as subadvisor to the fund. DeITMC renders
investment advisory and management services with regard to the fund's
portfolio. From time to time, DeITMC makes specific investment
recommendations, which then are evaluated by DeIM's portfolio managers in
light of their own expertise and information from other sources in making
investment decisions for the fund.
</P>
<H2 ALIGN="LEFT">Dividend Reinvestment and Cash Purchase Plan</H2>
<P ALIGN="LEFT">The fund's Dividend Reinvestment and Cash Purchase Plan offers you a
convenient way to have your dividends and capital gain distributions
reinvested in shares of the fund. We believe this Plan is attractive for
stockholders. Its features are more fully described on page <A HREF="#drip">35</A>. You may obtain
more detailed information by requesting a copy of the Plan from the Transfer
Agent. All correspondence (including notifications) should be directed to:
The Korea Fund Dividend Reinvestment and Cash Purchase Plan,
c/o Scudder Investments Service Company, P.O. Box 219066, Kansas City,
MO 4121-9066, 1-800-294-4366.
</P>
<H2 ALIGN="LEFT"><FONT COLOR="#000000">Resignation of Nicholas Bratt</FONT></H2>
<P ALIGN="LEFT"><FONT COLOR="#000000">On September 2, 2003, the Board of Directors accepted the resignation of
Nicholas Bratt as a Director, President and member of the Executive and
Valuation Committees of the fund, effective August 21, 2003, and approved a
decrease in the size of the Board to seven members. The Board then elected
Richard T. Hale as President of the fund.</FONT>
</P>
<H2 ALIGN="LEFT"><FONT COLOR="#000000">Change in Officer</FONT></H2>
<P ALIGN="LEFT"><FONT COLOR="#000000">Effective December 4, 2003, Judith Hannaway no longer serves as Vice
President of the fund.</FONT>
</P>
<H2 ALIGN="LEFT"><FONT COLOR="#000000">Proxy Voting </FONT></H2>
<P ALIGN="LEFT"><FONT COLOR="#000000">A description of the fund's policies and procedures for voting proxies for
portfolio securities can be found on our Web site- scudder.com (Type &quot;proxy
voting&quot; in the search field) - or on the SEC's Web site - www.sec.gov. To
obtain a written copy without charge, call us toll free at (800) 621-1048.</FONT>
</P>
<H2 ALIGN="LEFT">Share Repurchases</H2>
<P ALIGN="LEFT">The Board of Directors of The Korea Fund, Inc. has authorized the fund to
effect periodic repurchases of its shares in the open market from time to time
when the fund's shares trade at a discount to their NAV. Subject to periodic
review by the fund's Board of Directors, repurchases may be made at such time
and in such amounts as the fund's Manager believes will further the
achievement of the fund's objectives. Depending on market conditions,
available funds, regulatory requirements and alternative investment
opportunities, such repurchases are limited to (1) 5% of the shares
outstanding at the beginning of the calendar year, plus (2) an estimate of
shares to be issued in connection with the current calendar year's dividends,
plus (3) the number of shares authorized for purchase in the previous calendar
year that have not been purchased. In measuring the number of shares
authorized for repurchase, the shares relating to the current calendar year's
dividends are estimated at 50% of the number of shares issued in connection
with the prior calendar year's dividends or until such time during the calendar
year that the fund's Manager has a more accurate projection of the calendar
year's dividends. Repurchases made based on this estimate shall continue to
have been authorized, even if the actual dividend or related share issuance is
lower. During the six-month period ended December 31, 2003, there were
191,700 fund shares repurchased by the fund pursuant to the share repurchase
plan as described above, representing 0.4% of the shares outstanding as of
June 30, 2003.
</P>
<H2 ALIGN="LEFT">Net Asset Value</H2>
<P ALIGN="LEFT">The fund's NAV is published weekly on Monday and the fund's Market Value
is published every weekday in <I>The Wall Street Journal</I> under the heading
&quot;Closed End Funds.&quot; The fund's NAV is also published in <I>The New York
Times</I> and <I>Barron's.</I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION230"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="invsum" ID="invsum"></A>Investment Summary      </FONT><FONT COLOR="#000000">as of December 31, 2003</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Past results are not necessarily indicative of future performance of the fund.
Investment return and principal value will fluctuate.</FONT></B>
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Historical Information </FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="11">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Total Return (%)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Market Value</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Net Asset
Value (a)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Index (b)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Index (c)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Average
Annual</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Current
Quarter</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">20.03</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">13.92</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11.54</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">16.23</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">One Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">34.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">34.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">29.19</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">29.19</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Three Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">112.57</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.58</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">101.14</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">26.23</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">68.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">18.87</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">60.66</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">17.10</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Five Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">146.07</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">19.73</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">172.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">22.16</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">45.58</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">7.80</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">44.14</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">7.58</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Ten Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">8.46</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.82</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">79.28</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-36.83</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-4.49</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-6.40</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-.66</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Per Share Information and Returns (a)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="10">
<P ALIGN="CENTER"><FONT SIZE="-2" COLOR="#000000">Yearly periods ended December 31</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
</TR>

<TR>
<TD COLSPAN="12" ALIGN="CENTER" VALIGN="BOTTOM"><IMG SRC="kor_psi40.gif" ALT="kor_psi40"></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1994</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1995</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1996</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1997</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1998</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">1999</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2000</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2001</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2002</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2003</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net Asset
Value ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">20.65</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">20.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">13.55</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">4.44</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">9.59</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">23.13</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">12.79</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">15.89</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">16.56</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">20.97</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Income
Dividends ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.06</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.17</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.18</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.30</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Capital Gains
Distributions ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.15</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.36</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.60</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1.53</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">.67</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total Return (%)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">24.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">4.26</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-30.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-66.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">115.99</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">141.19</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-44.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">42.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">9.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000">(a)  Total investment returns reflect changes in net asset value per share during each period and
assume that dividends and capital gains distributions, if any, were reinvested. These percentages
are not an indication of the performance of a shareholder's investment in the Fund based on
market price.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(b)  Korea Stock Price Index (&quot;KOSPI&quot;) in US Dollars.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(c)  KOSPI in local terms.</FONT></I><BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">KOSPI is a capitalization-weighted index of all common shares on the Korea Stock Exchanges. Index
returns assume reinvestment of all dividends and unlike Fund returns, do not reflect any fees or
expenses. It is not possible to invest directly into an index.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION220"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="portsum" ID="portsum"></A>Portfolio Summary     </FONT><FONT COLOR="#000000">as of December 31, 2003</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Asset Allocation</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">12/31/03</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/03</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Common Stocks</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">87%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">88%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Preferred Stocks</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">12%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Cash Equivalents</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Corporate Bonds</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">100%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">100%</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Sector Diversification<BR>
</FONT></B><FONT SIZE="-2" COLOR="#ffffff">(Sector breakdown of the Fund's equity securities)</FONT>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">12/31/03</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/03</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Information Technology</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">24%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">23%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Financials</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">21%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">20%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Consumer Discretionary</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">16%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">14%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Telecommunications Services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">11%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">15%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Materials</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">9%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">12%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Industrials</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">8%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">7%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Consumer Staples</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">6%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">6%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Energy</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">4%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">2%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">Utilities</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">1%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2" COLOR="#000000">1%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">100%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">100%</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">Asset allocation and sector diversification are subject to change.</FONT></I>
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Ten Largest Equity Holdings at December 31, 2003 </FONT></B><FONT SIZE="-2" COLOR="#ffffff">(62.5% of Portfolio)</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     1.      Samsung Electronics Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Manufacturer of major electronics</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">16.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     2.      Kookmin Bank</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Provider of commercial banking services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">8.4%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     3.      SK Telecom Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Provider of mobile telecommunication services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">8.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     4.      Samsung Fire &amp; Marine Insurance Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Provider of insurance products</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">6.8%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     5.      POSCO</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Manufacturer of hot and cold rolled steel products</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">6.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     6.      Hyundai Motor Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Manufacturer of motor vehicles</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     7.      Hankook Tire Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Manufacturer of tires, tire tubes and aluminum alloy wheels</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     8.      Shinsegae Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Operator of discount stores</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     9.      Samsung SDI Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Leading manufacturer of CRT and picture tubes</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.0%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">     10.     Samsung Electro-Mechanics Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2" COLOR="#000000">Manufacturer of precision electronic parts</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">2.8%</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">Portfolio holdings are subject to change.</FONT></I>
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">For more complete details about the Fund's investment portfolio, see page <A HREF="#portfolio">17</A>. A monthly Fact Sheet is
available upon request. Information concerning portfolio holdings of the Fund as of a month end is
available upon request no earlier than 15 days after the month end. Please call 1-800-349-4281.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION210"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="portfolio" ID="portfolio"></A>Investment Portfolio      </FONT><FONT COLOR="#000000">as of December 31, 2003</FONT></H1>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="JUSTIFY">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000"><BR>
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="JUSTIFY" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="JUSTIFY">
</P>
<P ALIGN="JUSTIFY">
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Common Stocks 86.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Consumer Discretionary 10.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Auto Components 3.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hankook Tire Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">4,464,307</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">33,692,883</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Automobiles 0.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nexen Tire Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">400,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">4,125,786</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotels, Restaurants &amp; Leisure 2.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hotel Shilla Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">608,391</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,800,894</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Kangwon Land, Inc.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,518,330</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">18,079,904</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Paradise Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">369,425</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,171,008</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">22,051,806</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Internet &amp; Catalog Retailing 1.6%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Home Shopping, Inc.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">332,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">16,805,518</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Media 1.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Cheil Communications, Inc.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">35,400</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,135,599</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Plenus, Inc.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">137,800</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,322,667</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Qrix Networks, Inc.* (d) (e)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">120,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,515,723</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">9,973,989</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Multiline Retail 1.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shinsegae Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">80,003</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">19,455,656</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Textiles, Apparel &amp; Luxury Goods 0.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">BYC Co., Ltd.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">39,530</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">1,322,639</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Consumer Staples 5.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Beverages 1.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hite Brewery Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">50,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,664,570</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nam Yang Dairy Products Co., Ltd.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">43,390</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">10,915,723</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">14,580,293</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#3300d9">Food Products 1.9%</FONT></B><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">CJ Corp.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">99,606</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,187,029</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nong Shim Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">71,079</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">14,245,603</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">19,432,632</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Household Products 0.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Household &amp; Health Care Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">51,511</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">1,343,390</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Tobacco 1.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">KT&amp;G Corp. 144A (GDR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">890,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">7,809,750</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">KT&amp;G Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">652,870</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11,332,838</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">19,142,588</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Energy 3.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Oil &amp; Gas</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Petrochemical Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">231,700</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,401,476</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">S-Oil Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">970,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">22,787,421</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SK Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">439,700</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">10,102,960</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">38,291,857</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Financials 18.9%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Banks 10.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Kookmin Bank (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,257,217</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">47,573,091</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Kookmin Bank*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,027,798</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">38,483,170</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Koram Bank Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">714,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">8,388,260</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Exchange Bank*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,191,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11,614,491</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shinhan Financial Group Co. Ltd. 144A (ADR)*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">208,798</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6,691,976</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">112,750,988</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Financials 1.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dongwon Financial Holding Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">10</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Good Morning Shinhan Securities Co.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,410,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6,503,145</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hankang Restructuring Fund (h)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,724,310</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,631,651</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Card Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,284,591</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,280,151</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nong Shim Holdings Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">22,521</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">702,542</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Securities Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">130,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,779,874</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">15,897,373</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 6.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korean Reinsurance Co.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">89,060</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,949,996</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Oriental Fire &amp; Marine Insurance Co. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">584,860</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">7,258,640</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Fire &amp; Marine Insurance Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">979,625</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">56,271,960</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">66,480,596</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Health Care 0.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Biotechnology</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Life Sciences Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">12,933</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">358,979</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Industrials 7.9%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Commercial Services &amp; Supplies 1.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Information Service, Inc.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">105,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,477,987</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">S1 Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">564,270</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11,119,786</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">14,597,773</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Industrial Conglomerates 2.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Anycell, Inc. (b) (d) (e)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,250,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">0</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Daeyang E&amp;C Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,300,348</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,441,288</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Halla Climate Control Co.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">60,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,408,805</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hyundai Mobis*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">350,480</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">18,839,218</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">29,689,311</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Machinery 2.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">HS R&amp;A Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">192,400</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">909,967</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hyundai Heavy Industries*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">425,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">13,364,780</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Climate Control Co., Ltd.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">827,630</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,642,459</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samyoung Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">126,140</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,009,120</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SeAH Steel Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">210,310</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,266,234</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">23,192,560</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Trading Companies &amp; Distributors 0.8%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Jahwa Electronics Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">829,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">7,864,042</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Transportation Infrastructure 0.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Express Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">301,880</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">4,961,717</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Information Technology 19.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Equipment &amp; Instruments 6.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dae Duck Electronics Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">360,901</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,586,312</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hankuk Electric Glass Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">92,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6,056,184</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hyundai Autonet Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,612,700</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">4,287,010</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Electro-Mechanics Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">792,605</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">26,220,769</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung SDI Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">245,306</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">28,901,881</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SE Co., Ltd. (b) (d) (e) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">636,950</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,677,168</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">70,729,324</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Semiconductor Equipment &amp; Products 12.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">351,049</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">132,765,701</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Materials 9.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals 1.6%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Fine Chemical Co.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">83,333</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">936,404</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Chemical Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">212,486</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">9,800,193</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Fine Chemicals Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">425,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">5,827,044</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">16,563,641</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Metals &amp; Mining 7.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Aldex Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">500,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">381,551</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dongkuk Steel Mill Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,170,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">9,622,491</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Iron &amp; Steel Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">227,200</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,238,910</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">POSCO</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">443,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">60,552,621</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">POSCO (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">72,608</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">2,466,494</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">76,262,067</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Telecommunication Services 10.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Telecommunication Services 2.6%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hanaro Telecom, Inc.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,468,800</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">4,021,494</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">KT Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">621,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">23,225,660</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">27,247,154</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Wireless Telecommunication Services 8.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SK Telecom Co., Ltd. (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">608,135</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">11,341,718</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SK Telecom Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">440,850</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">73,567,421</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">84,909,139</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Utilities 0.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electric Utilities</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korea Electric Power Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">260,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">4,665,828</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2" COLOR="#000000"><B>Total Common Stocks </B>(Cost $446,945,994)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">889,155,230</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Preferred Stocks 12.4%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Consumer Discretionary 5.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Automobiles 3.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hyundai Motor Co., Ltd. (2nd)*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">738,593</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">14,059,590</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hyundai Motor Co., Ltd. 144A (GDR) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,020,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">25,519,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">39,578,590</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotels, Restaurants &amp; Leisure 0.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Hotel Shilla Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">32,070</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">123,439</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Multiline Retail 1.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shinsegae Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">55,784</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">12,536,782</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Consumer Staples 0.9%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Beverages </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">CJ Corp.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">297,200</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6,056,151</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">CJ Corp. 2nd* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">50,335</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,846,672</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">CJ Corp. 3rd* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">30,201</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,058,618</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nam Yang Dairy Products Co., Ltd.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,160</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">86,088</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">9,047,529</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Energy 0.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Oil &amp; Gas </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">S-Oil Corp.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">32,040</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">486,309</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Financials 1.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Financials 0.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Investment and Securities Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">470,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">1,554,843</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 1.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Fire &amp; Marine Insurance Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">533,850</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">13,586,874</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Health Care 0.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Health Care Providers &amp; Services </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Household &amp; Health Care Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">46,788</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">674,846</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Information Technology 4.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Semiconductor Equipment &amp; Products </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">198,201</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">40,803,644</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Electro-Mechanics Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">180,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">3,033,962</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung SDI Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">34,318</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">1,971,307</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">45,808,913</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Materials 0.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Chemical Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">193,003</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">3,965,261</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2" COLOR="#000000"><B>Total Preferred Stocks </B>(Cost $36,428,338)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">127,363,386</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">Principal
Amount (g)</FONT></B>
</P>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="JUSTIFY" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="JUSTIFY">
</P>
<P ALIGN="JUSTIFY">
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Convertible Bonds 0.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Diversified Financials</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Credit Card Ltd., 3.0%, 2/12/2009 <BR>
(Cost $2,501,040)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">6,000,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">2,516,462</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Corporate Bonds 0.0%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Consumer Staples</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Haitai Confectionary Loan Certificates, 0.5%, 11/28/2009
(Cost $6,702) (d) (f)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">40,222,324</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">27,697</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000"><BR>
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<BR>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Cash Equivalents 1.0%,</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Scudder Cash Management QP Trust, 1.11% (c)
(Cost $10,707,682)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">10,707,682</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">10,707,682</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2" COLOR="#000000"><B>Total Investment Portfolio - 100.0%</B> (Cost $496,589,756) (a)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#000000">1,029,770,457</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000">*    Non-income producing security.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(a)  The cost for federal income tax purposes was $498,859,796. At December 31, 2003, net
unrealized appreciation for all securities based on tax cost was $530,910,661. This consisted of
aggregate gross unrealized appreciation for all securities in which there was an excess of value
over tax cost of $561,426,249 and aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over value of $30,515,588.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(b)  Affiliated issuers (see Notes to Financial Statements).</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(c)  Scudder Cash Management QP Trust is also managed by Deutsche Investment Management
Americas Inc. The rate shown is the annualized seven-day yield at period end.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(d)  Securities valued at fair value by management and approved in good faith following procedures
approved by the Directors, amounted to $4,220,588 (0.4% of net assets at December 31, 2003).
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 December 31, 2003
aggregated $6,330,480. The securities may also have certain restrictions as to resale.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(e)  Included in (d) above are restricted securities with a value which aggregated $4,192,891 (0.4% of
net assets at December 31, 2003). No quoted market price exists for these private placement
securities. </FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">     The issuers of these securities have given the Fund a put option, payable on demand. Information
concerning such private placement securities at December 31, 2003 is as follows:</FONT></I><BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Security</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Acquisition Date</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Cost ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Anycell, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        12/22/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        2,020,774</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Qrix Networks, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7/28/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        2,686,367</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SE Co., Ltd. </FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        12/22/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,616,637</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT">
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     6,323,778</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000">(f)  Company in restructuring process, principal only subject to repayment.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(g)  Principal amount stated in Korean Won.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">(h)  Managed by Deutsche Investment Management Americas Inc.</FONT></I><BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">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.</FONT></I>
</P>
<P ALIGN="LEFT">
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION200"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="fins" ID="fins"></A>Financial Statements</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Assets and Liabilities </FONT></B><FONT SIZE="-2" COLOR="#ffffff">as of December 31, 2003</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1" COLOR="#000000">Assets</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Investments in securities, at value:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Unaffiliated issuers (cost $453,653,015)</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       975,354,540</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Affiliated issuers (cost $32,229,059)</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        43,708,235</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Investment in Scudder Cash Management QP Trust, at value
(cost $10,707,682)</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        10,707,682</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total investments in securities, at value (cost $496,589,756)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,029,770,457</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Korean Won, at value (cost $15,374,028)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        15,403,231</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Receivable for investments sold</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        515,101</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dividends receivable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        15,176,223</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Interest receivable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        25</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Other assets</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        47,106</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total assets</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,060,912,143</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1" COLOR="#000000">Liabilities</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Payable for investments purchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        2,593,221</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dividends payable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        14,901,571</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Accrued management fee</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        812,026</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Other accrued expenses and payables</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        966,792</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total liabilities</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        19,273,610</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net assets, at value</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    1,041,638,533</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1" COLOR="#000000">Net Assets</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net assets consist of:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Undistributed net investment income</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        6,156,018</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net unrealized appreciation (depreciation) on:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Investments</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        533,180,701</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Won related transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        43,456</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Accumulated net realized gain (loss)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (14,856,037)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Cost of 337,000 shares held in treasury</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (4,841,633)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Paid-in capital</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        521,956,028</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net assets, at value</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     1,041,638,533</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net Asset Value</FONT></B><FONT SIZE="-2" COLOR="#000000"> per share ($1,041,638,533 / 49,671,902 shares of common
stock issued and outstanding, $.01 par value, 200,000,000 shares
authorized)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.97</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Operations </FONT></B><FONT SIZE="-2" COLOR="#ffffff">for the six months ended December 31, 2003</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1" COLOR="#000000">Investment Income</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Income:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Dividends - unaffiliated issuers (net of foreign taxes withheld of
$3,040,873)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       15,393,222</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Dividends - affiliated issuers (net of foreign taxes withheld of $150,621)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        763,930</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Interest (net of foreign taxes withheld of $5,026) </FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        720,340</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Interest - Scudder Cash Management QP Trust</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        19,129</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total Income </FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        16,896,621</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Expenses:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Management fee</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        4,772,943</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Services to shareholders</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        16,133</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Custodian and accounting fees</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        748,620</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Auditing</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        61,600</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Legal</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        310,254</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Directors' fees and expenses</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        92,000</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Reports to shareholders</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        53,800</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Stock exchange listing fees</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        43,840</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Other</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        86,166</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total expenses, before expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        6,185,356</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (11,675)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Total expenses, after expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        6,173,681</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net investment income (loss)</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     10,722,940</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1" COLOR="#000000">Realized and Unrealized Gain (Loss) on Investment Transactions</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net realized gain (loss) from:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,629,332</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Won related transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        256,524</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,885,856</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net unrealized appreciation (depreciation) during the period on:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        168,646,738</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Won related transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (174,720)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        168,472,018</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net gain (loss) on investment transactions</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     170,357,874</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net increase (decrease) in net assets resulting from operations</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    181,080,814</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Changes in Net Assets</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-1" COLOR="#000000">Increase (Decrease) in Net Assets</FONT></B>
<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" >
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Six Months
Ended
December 31,
2003</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Year Ended
June 30, 2003</FONT></B>
</P>
</TD>
</TR>


<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Operations:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Net investment income (loss)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       10,722,940</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       8,594,471</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net realized gain (loss) on investment transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,885,856</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (12,249,480)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net unrealized appreciation (depreciation) on
investment transactions during the period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        168,472,018</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (83,104,499)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net increase (decrease) in net assets resulting from
operations</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        181,080,814</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (86,759,508)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Distributions to shareholders from:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Net investment income</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (14,901,571)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (8,788,367)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net realized gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (33,705,384)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Fund share transactions:</FONT><BR>
<FONT SIZE="-2" COLOR="#000000">Cost of shares repurchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (3,183,146)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (912,981)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Cost of shares reacquired</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (72,052)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net increase (decrease) in net assets from Fund share
transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (3,183,146)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (985,033)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Increase (decrease) in net assets</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        162,996,097</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (130,238,292)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net assets at beginning of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        878,642,436</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,008,880,728</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net assets at end of period (including undistributed
net investment income of $6,156,018 and $10,334,649,
respectively)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    1,041,638,533</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    878,642,436</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1" COLOR="#000000">Other Information</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shares outstanding at beginning of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        49,863,602</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        49,939,049</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shares repurchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (191,700)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (70,300)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shares reacquired</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (5,147)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net increase (decrease) in Fund shares</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (191,700)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (75,447)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Shares outstanding at end of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        49,671,902</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        49,863,602</FONT>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2" COLOR="#000000">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1F0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="high" ID="high"></A>Financial Highlights</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="MIDDLE">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Years Ended June 30,</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2003<SUP>a</SUP></FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2003</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2002</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2001</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2000</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">1999</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1" COLOR="#000000">Per Share Operating Performance</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net asset value, beginning of
period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    17.62</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.20</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    13.01</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.04</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    17.72</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    5.63</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<I><FONT SIZE="-2" COLOR="#000000">Income (loss) from investment operations</FONT></I><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net investment income (loss)<SUP>b</SUP></FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .22</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .17</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .11</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .17</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .05</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .04</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net realized and unrealized gain
(loss) on investment transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        3.42</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (1.90)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7.20</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (5.61)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        2.27</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        12.05</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Total from investment
operations</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        3.64</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (1.73)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7.31</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (5.44)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        2.32</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        12.09</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<I><FONT SIZE="-2" COLOR="#000000">Less distributions from:</FONT></I><BR>
<FONT SIZE="-2" COLOR="#000000">Net investment income</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.30)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.18)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.18)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net realized gains on investment
transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.67)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.12)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (1.41)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Total distributions</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.30)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.85)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (.12)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (1.59)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Antidilution (dilution) resulting
from repurchases and reinvestment
of distributions for shares at value</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .01</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .00<SUP>c</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .00<SUP>c</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Net asset value, end of period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.97</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    17.62</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.20</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    13.01</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    20.04</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    17.72</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2" COLOR="#000000">Market value, end of period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    18.35</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    14.99</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    16.44</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    10.58</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    14.06</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">$    14.88</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1" COLOR="#000000">Total Return</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Per share net asset value (%)<SUP>d</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        20.82<SUP>**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (8.34)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        56.39</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (25.01)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        13.09</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        214.74</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Per share market value (%)<SUP>d</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        24.27<SUP>**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (4.29)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        56.71</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (13.16)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        (5.46)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        135.64</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1" COLOR="#000000">Ratios to Average Net Assets and Supplemental Data</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Net assets, end of period ($ millions)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,042</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        879</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,009</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        651</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,002</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        886</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Ratio of expenses before expense
reductions (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.25<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.26</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.21</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.24</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.20</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.36</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Ratio of expenses after expense
reductions (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.25<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.26</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.21</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.23</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.19</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.36</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Ratio of net investment income
(loss) (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.09<SUP>e**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .99</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .69</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1.18</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .24</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        .37</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Portfolio turnover rate (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        15<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        18</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        40</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        31</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        10</FONT>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000"><SUP>a</SUP> For the six months ended December 31, 2003.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000"><SUP>b</SUP> Based on average shares outstanding during the period.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000"><SUP>c</SUP> Amount is less than $.005 per share.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000"><SUP>d</SUP> Total return based on net asset value reflects changes in the Fund's net asset value during the
period. Total return based on market value reflects changes in market value. Each figure includes
reinvestments of distributions. These figures will differ depending upon the level of any discount
from or premium to net asset value at which the Fund's shares trade during the period.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000"><SUP>e</SUP> The ratio for six months ended December 31, 2003 has not been annualized since the Fund
believes it would not be appropriate because the Fund, which has a June 30 year-end, earns
substantially less dividend income in the second half of its year than in the first half of each year.</FONT></I><BR>
<I><FONT SIZE="-2" COLOR="#000000">*    Annualized      **      Not annualized</FONT></I><BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1E0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="notes" ID="notes"></A>Notes to Financial Statements</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">A. Significant Accounting Policies</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Korea Fund, Inc. (the &quot;Fund&quot;) is registered under the Investment Company Act
of 1940, as amended (the &quot;1940 Act&quot;), as a closed-end, non-diversified management
investment company organized as a Maryland corporation.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America which require the use of
management estimates. Actual results could differ from those estimates. The policies
described below are followed consistently by the Fund in the preparation of its
financial statements.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Security Valuation.</FONT></B> Investments are stated at value determined as of the close of
regular trading on the New York Stock Exchange on each day the exchange is open
for trading. Equity securities are valued at the most recent sale price reported on the
exchange (US or foreign) or over-the-counter market on which the security is traded
most extensively. Securities for which no sales are reported are valued at the
calculated mean between the most recent bid and asked quotations on the relevant
market or, if a mean cannot be determined, at the most recent bid quotation. Debt
securities are valued by independent pricing services approved by the Directors of the
Fund. If the pricing services are unable to provide valuations, securities are valued at
the most recent bid quotation or evaluated price, as applicable, obtained from one or
more broker-dealers. Such services may use various pricing techniques which take
into account appropriate factors such as yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other data, as well as broker quotes.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Money market instruments purchased with an original or remaining maturity of sixty
days or less, maturing at par, are valued at amortized cost. Investments in open-end
investment companies and Scudder Cash Management QP Trust are valued at their
net asset value each business day.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Securities and other assets for which market quotations are not readily available or for
which the above valuation procedures are deemed not to reflect fair value are valued
in a manner that is intended to reflect fair value as determined in accordance with
procedures approved by the Directors.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Foreign Currency Translations.</FONT></B> The books and records of the Fund are maintained
in US dollars. Investment securities and other assets and liabilities denominated in a
foreign currency are translated into US dollars at the prevailing exchange rates at
period end. Purchases and sales of investment securities, income and expenses are
translated into US dollars at the prevailing exchange rates on the respective dates of
the transactions.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment income
accrued and the US dollar amount actually received. That portion of both realized
and unrealized gains and losses on investments that results from fluctuations in
foreign currency exchange rates is not separately disclosed but is included with net
realized and unrealized gains and losses on investment securities.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">At December 31, 2003, the exchange rate for Korean Won was US $.00084 to W 1.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Taxes.</FONT></B> The Fund's policy is to comply with the requirements of the Internal Revenue
Code, as amended, which are applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Accordingly, the Fund paid no
federal income taxes and no federal income tax provision was required. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">At June 30, 2003, the Fund had a net tax basis capital loss carryforward of
approximately $8,464,000 which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until June 30, 2011, the
expiration date.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">In addition, from November 1, 2002 through June 30, 2003, the Fund incurred
approximately $6,008,000 of net realized capital losses. As permitted by tax
regulations, the Fund intends to elect to defer these losses and treat them as arising in
the fiscal year ending June 30, 2004.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Under the United States - Korea Income Tax Treaty (the &quot;Treaty&quot;), as presently in
effect, the government of Korea imposes a nonrecoverable withholding tax and
resident tax aggregating 16.5% on dividends and 13.2% on interest earned by the
Fund from Korean issuers. Under the Treaty, there is no Korean withholding tax on
realized capital gains.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Distribution of Income and Gains.</FONT></B> Distributions of net investment income, if any,
are made annually. Net realized gains from investment transactions, in excess of
available capital loss carryforwards, would be taxable to the Fund if not distributed,
and, therefore, will be distributed to shareholders at least annually.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The timing and characterization of certain income and capital gains distributions are
determined annually in accordance with federal tax regulations which may differ
from accounting principles generally accepted in the United States of America. These
differences primarily relate to investments in passive foreign investment companies,
foreign denominated securities and certain securities sold at a loss. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions for a
reporting period may differ significantly from distributions during such period.
Accordingly, the Fund may periodically make reclassifications among certain of its
capital accounts without impacting the net asset value of the Fund. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">At June 30, 2003, the Fund's components of distributable earnings (accumulated
losses) on a tax basis were as follows:</FONT>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Undistributed ordinary income*</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       10,489,770</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Undistributed net long-term capital gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Capital loss carryforwards</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       (8,464,000)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Unrealized appreciation (depreciation) on investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       362,108,803</FONT>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000">*    For tax purposes short-term capital gains distributions are considered ordinary income distributions.</FONT></I><BR>
<P ALIGN="LEFT"><FONT COLOR="#000000">In addition, the tax character of distributions paid to shareholders by the Fund is
summarized as follows:</FONT>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" ROWSPAN="2">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-1" COLOR="#000000">Years Ended June 30,</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2003</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">2002</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Distributions from ordinary income*</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       10,785,723</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Distributions from long-term capital gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       31,708,028</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">$       5,992,069</FONT>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><FONT COLOR="#000000">The tax character of current year distributions will be determined at the end of the
current fiscal year.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Dividend Income.</FONT></B> Dividend income is recorded on the ex-dividend date net of
foreign withholding taxes. Korean-based corporations have generally adopted
calendar year-ends, and their corporate actions are normally approved, finalized and
announced by their boards of directors and shareholders in the first quarter of each
calendar year. Generally, estimates of their dividends are made available during the
prior December and have a late-December ex-dividend date. Accordingly, Fund
management has evaluated the evolution of the estimation process and the impact of
the December ex-dividend date activity and has determined that dividend estimates
are to be recorded by the Fund on ex-dividend date; any subsequent adjustments
thereto by Korean corporations are to be recorded when announced. Therefore,
dividend income from Korean equity investments is earned primarily in the last
calendar quarter of each year, and will be received primarily in the first calendar
quarter of each year. Certain other dividends and related withholding taxes, if
applicable, from Korean securities may be recorded subsequent to the ex-dividend
date as soon as the Fund is informed of such dividends and taxes.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Other.</FONT></B> Investment transactions are accounted for on a trade date plus one basis for
daily net asset value calculations. However, for financial reporting purposes,
investment transactions are reported on trade date. Interest income is recorded on the
accrual basis. Realized gains and losses from investment transactions are recorded on
an identified cost basis.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">B. Purchases and Sales of Securities</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">During the six months ended December 31, 2003, purchases and sales of investment
securities (excluding short-term investments) aggregated $69,256,449 and
$87,917,703, respectively.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">C. Related Parties</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Management Agreement.</FONT></B> Under the Management Agreement with Deutsche
Investment Management Americas Inc. (&quot;DeIM&quot; or the &quot;Manager&quot;), the Manager
directs the investments of the Fund in accordance with its investment objectives,
policies and restrictions. The Manager determines the securities, instruments and
other contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Manager provides certain
administrative services in accordance with the Management Agreement. The
management fee payable monthly under the Agreement is equal to an annual rate of
1.15% of the first $50,000,000 of the Fund's month-end net assets, 1.10% of the
next $50,000,000 of such net assets, 1% of the next $250,000,000 of such net assets,
0.95% of the next $400,000,000 of such net assets, 0.90% of the next $300,000,000
of such net assets, and 0.85% of such net assets in excess of $1,050,000,000 of the
Fund's month-end net assets. Deutsche Investment Trust Management Company
Limited (&quot;DeITMC&quot;) serves as subadvisor to the Fund. DeITMC renders investment
advisory and management services with regard to the Fund's portfolio. From time to
time, DeITMC makes specific investment recommendations, which then are
evaluated by DeIM's portfolio managers in light of their own expertise and
information from other sources in making investment decisions for the Fund. The
market value of Hankang Restructuring Fund, which is managed by the Manager,
has been excluded from the net assets used to calculate the management fee. For the
six months ended December 31, 2003, the Manager did not impose a portion of its
fee amounting to $11,675, and the portion imposed amounted to $4,761,268 which
was equivalent to an annualized effective rate of 0.96% of the Fund's average
month-end net assets.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Service Provider Fees.</FONT></B> </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Scudder Investments Service Company (&quot;SISC&quot;), an affiliate of the Manager, is
the transfer, dividend-paying and shareholder service agent for the Fund. Pursuant to
a sub-transfer agency agreement between SISC and DST Systems, Inc. (&quot;DST&quot;),
SISC has delegated certain transfer agent and dividend- paying agent functions to
DST. SISC compensates DST out of the shareholder servicing fee it receives from the
Fund. For the six months ended December 31, 2003, the amount charged to the
Fund by SISC aggregated $8,100, of which $5,400 is unpaid at December 31, 2003.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Scudder Service Corporation (&quot;SSC&quot;), a subsidiary of the Manager, is the shareholder
communications agent of the Fund. For the six months ended December 31, 2003,
the amount charged to the Fund by SSC aggregated $7,500, all of which is unpaid at
December 31, 2003.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Scudder Fund Accounting Corporation (&quot;SFAC&quot;), also a subsidiary of the Manager,
is responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. Pursuant to a
sub-accounting agreement between SFAC and State Street Bank and Trust Company
(&quot;SSB&quot;), SFAC has delegated all accounting functions to SSB. SFAC compensates
SSB out of the accounting fee it receives from the Fund. For the six months ended
December 31, 2003, the amount charged to the Fund by SFAC aggregated
$195,740, of which $26,948 is unpaid at December 31, 2003.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Directors' Fees and Expenses.</FONT></B> The Fund pays each Director not affiliated with the
Manager retainer fees plus specified amounts for attended board and committee
meetings.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000"><B><FONT SIZE="-1">Scudder Cash Management QP Trust.</FONT></B> Pursuant to an Exemptive Order issued by
the SEC, the Fund may invest in the Scudder Cash Management QP Trust (the
&quot;QP Trust&quot;) and other affiliated funds managed by the Manager. The QP Trust seeks
to provide as high a level of current income as is consistent with the preservation of
capital and the maintenance of liquidity. The QP Trust does not pay the Manager a
management fee for the affiliated funds' investments in the QP Trust.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">D. Foreign Investment and Exchange Controls in Korea</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Foreign Exchange Transaction Act, the Presidential Decree relating to such Act
and the regulations of the Minister of Finance and Economy issued thereunder
impose certain limitations and controls which generally affect foreign investors in
Korea. The Fund has obtained from the Minister of Finance and Economy a license
to invest in Korean securities and to repatriate income received from dividends and
interest earned on, and net realized capital gain from, its investments in Korean
securities or to repatriate from investment principal up to 10% of the net asset value
(taken at current value) of the Fund (except upon termination of the Fund, or for
expenses in excess of Fund income, in which case the foregoing restriction shall not
apply). The Minister of Finance and Economy may, when it deems it to be in the
public interest, modify the Fund's license to invest in Korean securities or, according
to the terms of the license, revoke it in the event of the Fund's noncompliance with
conditions of the license or a material violation of Korean law. The Minister of
Finance and Economy may issue orders when it deems that transactions cannot be
normally concluded due to natural disaster, warfare, uprising, sudden change in
economic conditions, or other incidents similar thereto, or order the temporary
closing of the securities market or take other necessary measures. Under the Foreign
Exchange Transaction Act, the Minister of Finance and Economy has the power, with
prior public notice of scope and duration, to suspend all or a part of foreign exchange
transactions when emergency measures are deemed necessary in case of radical change
in the international or domestic economic situation. The Fund could be adversely
affected by delays in, or the refusal to grant, any required governmental approval for
such transactions.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Currently there are certain restrictions with respect to investing in equity securities of
certain designated public corporations and telecommunication corporations listed on
the Korea Stock Exchange. As of December 31, 2003, four of the Fund's holdings
had an ownership limit still in place, LG Home Shopping, Inc., SK Telecom Co. Ltd.
and Qrix Networks, Inc., all of which had a foreign ownership limit of 49% and
Korea Electric Power Corp. which had a foreign ownership limit of 40%.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">E. Investing in the Korean Market</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Investing in the Korean market may involve special risks and considerations not
typically associated with investing in the United States of America. These risks
include revaluation of currency, high rates of inflation, Korean taxes, repatriation
restrictions on income and capital, corporate bankruptcy and future adverse political,
social and economic developments. Moreover, securities issued in this market may be
less liquid, subject to government ownership controls, delayed settlements and their
prices more volatile than those of comparable securities in the United States of
America.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">F. Ownership of the Fund</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">At December 31, 2003, The President and Fellows of Harvard College held
approximately 24% of the outstanding shares of the Fund.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">G. Line of Credit</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Fund and several other affiliated funds (the &quot;Participants&quot;) share in a
$1.25 billion revolving credit facility administered by J.P. Morgan Chase Bank for
temporary or emergency purposes that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated, pro rata based upon net assets, among each of the Participants.
Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may
borrow up to a maximum of 5 percent of its net assets under the agreement.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">H. Transactions in Securities of Affiliated Issuers</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">An affiliated issuer is a company in which the Fund has ownership of at least 5% of
the voting securities. A summary of the Fund's transactions during the six months
ended December 31, 2003 with companies which are or were affiliates is as follows:</FONT>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Affiliate</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Common/Preferred
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Purchases
Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Sales
Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Realized
Gain/
(Loss) ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Dividend
Income ($)*</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Anycell, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,250,000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">BYC Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        39,530</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        15,185</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,322,639</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">LG Home
Shopping, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        332,900</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        697,545</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        16,805,518</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Nam Yang Dairy
Products Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        44,550</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        26,489</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        11,001,811</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Oriental Fire &amp;
Marine Insurance</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        584,860</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,993,778</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7,258,640</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">Samsung Climate
Control Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        827,630</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        17,342</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        5,642,459</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">SE Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        636,950</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        7,369</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2" COLOR="#000000">        1,677,168</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     </FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     1,993,778</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     </FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     </FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     763,930</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">     43,708,235</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2" COLOR="#000000">*    Net of foreign taxes withheld.</FONT></I><BR>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">I. Common Stock</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Shares issued in fiscal 2002 for the Dividend Reinvestment Plan were reacquired in
the open market and retired in fiscal 2003.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">J. Share Repurchases</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Fund has a share repurchase plan to effect periodic repurchases of its shares in
the open market from time to time when the Fund's shares trade at a discount to
their net asset value per share. During the six months ended December 31, 2003 and
the year ended June 30, 2003, the Fund purchased 191,700 and 70,300 shares of
common stock on the open market at a total cost of $3,183,146 and $912,981,
respectively. The average discount of these purchases, comparing the purchase price
to the net asset value at the time of purchase, was 16.0% and 16.0%, respectively.
These shares are held in treasury.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">K. Subsequent Event</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">On January 21, 2004, the Fund's Board of Directors approved a tender offer for up
to 10% of its outstanding shares of common stock for cash, at a price per share equal
to 95% of the net asset value on the business day after the day on which the offer
expires. The tender offer commenced on January 23, 2004 and remained open
through February 23, 2004.  The tender offer was fully subscribed for the maximum
limit of 10% of Fund shares outstanding.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Board also had approved a program of making additional repurchase offers, one
in the first quarter of 2005 and one in the first quarter of 2006. Each additional
repurchase offer would be for 10% of the Fund's shares, would be at a price of 95%
of net asset value at the close of business on the day after the offer expires, and would
be made, subject to fiduciary and other applicable requirements, if the Fund's shares
traded on the New York Stock Exchange at an average weekly discount from net asset
value greater than 15% during a 13-week measuring period ending the preceding
December 31. The Fund might at its option pay for shares repurchased in these
additional offers with portfolio securities rather than cash, depending in part on
whether the Fund is able to obtain an appropriate ruling from the Internal Revenue
Service.</FONT>
</P>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1D0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="ria" ID="ria"></A>Report of Independent Auditors</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT"><FONT COLOR="#000000">To the Board of Directors and the Shareholders of
The Korea Fund, Inc.:</FONT></H2>
<P ALIGN="LEFT"><FONT COLOR="#000000">In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all material
respects, the financial position of The Korea Fund, Inc. (the &quot;Fund&quot;) at
December 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated therein, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as &quot;financial statements&quot;) are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with 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 December 31, 2003
by correspondence with the custodian and brokers, provide a reasonable basis
for our opinion.</FONT>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><FONT COLOR="#000000">Boston, Massachusetts<BR>
February 27, 2004</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><FONT COLOR="#000000">  PricewaterhouseCoopers LLP</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1C0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="drip" ID="drip"></A>Dividend Reinvestment and Cash
Purchase Plan</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">The Plan</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund's Dividend Reinvestment and Cash Purchase Plan (the &quot;Plan&quot;) offers you
an automatic way to reinvest your dividends and capital gains distributions in shares
of the fund. The Plan also provides for cash investments in fund shares of $100 to
$3,000 semiannually through Scudder Investments Service Company or its delegate
(the &quot;Transfer Agent&quot;) and UMB Bank, N.A. (the &quot;Plan Agent&quot;). The Transfer Agent
provides record keeping services for participants in the Plan. If you would like a copy
of the Plan, please call the Transfer Agent at 1-800-294-4366.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Automatic Participation</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Each stockholder of record is automatically a participant in the Plan unless the
stockholder has instructed the Transfer Agent in writing otherwise. Such a notice
must be received by the Transfer Agent not less than 10 days prior to the record date
for a dividend or distribution in order to be effective with respect to that dividend or
distribution. A notice which is not received by that time will be effective only with
respect to subsequent dividends and distributions. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Stockholders who do not participate in the Plan will receive all distributions in cash
paid by check in dollars mailed directly to the stockholder by the Transfer Agent, as
dividend paying agent.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Shares Held by a Nominee</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">If your shares are held in the name of a brokerage firm, bank, or other nominee as
the stockholder of record, please consult your nominee (or any successor nominee) to
determine whether it is participating in the Plan on your behalf. Many nominees are
generally authorized to receive cash dividends unless they are specifically instructed
by a client to reinvest. If you would like your nominee to participate in the Plan on
your behalf, you should give your nominee instructions to that effect as soon as
possible.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Pricing of Dividends and Distributions</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">If the market price per share on the payment date for the dividend or distribution
(the &quot;Valuation Date&quot;) equals or exceeds net asset value per share on that date, the
fund will issue (i) shares of the fund's common stock that are issued but not
outstanding (&quot;Treasury Stock&quot;) to the extent shares of Treasury Stock are available,
and then (ii) to the extent shares of Treasury Stock are not available, newly issued
shares of the fund's common stock to participants at the greater of the following on
the Valuation Date: (a) net asset value or (b) 95% of the market price. The Valuation
Date will be the dividend or distribution payment date or, if that date is not a New
York Stock Exchange trading date, the next preceding trading date. If the net asset
value exceeds the market price of fund shares at such time, the Plan Agent will use
the dividend or distribution (less each participant's pro rata share of brokerage
commissions) to buy fund shares in the open market for the participants' account.
Such purchases will be made on or shortly after the payment date for such dividend
or distribution, and in no event more than 45 days after such date except where
temporary curtailment or suspension of purchase is necessary to comply with federal
securities law. In either case, for Federal income tax purposes, the stockholder receives
a distribution equal to the market value on the Valuation Date of new shares issued.
State and local taxes may also apply. If the fund should declare an income dividend or
net capital gains distribution payable only in cash, the Plan Agent will, as agent for
the participants, buy fund shares in the open market, on the New York Stock
Exchange or elsewhere, for the participants' account on, or shortly after, the payment
date.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Voluntary Cash Purchases</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Participants in the Plan have the option of making additional cash payments to the
Transfer Agent, semiannually, in any amount from $100 to $3,000, for investment in
the fund's shares. The Plan Agent will use all such monies received from participants
to purchase fund shares in the open market on or about February 15 and August 15.
Any voluntary cash payments received more than 30 days prior to these dates will be
returned by the Transfer Agent, and interest will not be paid on any uninvested cash
payments. To avoid unnecessary cash accumulations, and also to allow ample time for
receipt and processing by the Transfer Agent, it is suggested that participants send in
voluntary cash payments to be received by the Transfer Agent approximately ten days
before February 15, or August 15, as the case may be. A participant may withdraw a
voluntary cash payment by written notice, if the notice is received by the Transfer
Agent not less than 48 hours before such payment is to be invested.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Participant Plan Accounts</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Transfer Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information needed
by participants for personal and tax records. Shares in the account of each plan
participant will be held by the Transfer Agent in non-certificated form in the name of
the participant, and each participant will be able to vote those shares purchased
pursuant to the Plan at a stockholder meeting or by proxy. </FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">No Service Fee to Reinvest</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's and/or Transfer Agent's
fees for the handling of the reinvestment of dividends and capital gains distributions
will be paid by the fund. There will be no brokerage commissions with respect to
shares issued directly by the fund as a result of dividends or capital gains distributions
payable either in stock or in cash. However, participants will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of any dividends or capital gains
distributions.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Costs for Cash Purchases</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">With respect to purchases of fund shares from voluntary cash payments, each
participant will be charged $0.75 for each such purchase. Each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan Agent's
open market purchases of fund shares in connection with voluntary cash payments
made by the participant.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Brokerage charges for purchasing small amounts of stock for individual accounts
through the Plan are expected to be less than the usual brokerage charges for such
transactions, because the Plan Agent will be purchasing stock for all participants in
blocks and pro-rating the lower commission thus attainable.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Amendment or Termination</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">The fund reserves the right to terminate the Plan. Notice of the termination will be
sent to the participants of the Plan at least 30 days before the record date for a
dividend or distribution. The Plan also may be amended by the fund, but (except
when necessary or appropriate to comply with applicable law, rules or policies of a
regulatory authority) only by giving at least 30 days' written notice to participants in
the Plan.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">A participant may terminate his account under the Plan by written notice to the
Transfer Agent. If the written notice is received 10 days before the record day of any
distribution, it will be effective immediately. If received after that date, it will be
effective as soon as possible after the reinvestment of the dividend or distribution.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">If a participant elects to sell his shares before the Plan is terminated, the Plan Agent
will deduct a $2.50 fee plus brokerage commissions from the sale transaction.</FONT>
</P>
<P ALIGN="LEFT"><B><FONT COLOR="#000000">Transfer Agent Address and Telephone Number</FONT></B>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">You may obtain more detailed information by requesting a copy of the Plan from the
Transfer Agent. All correspondence (including notifications) should be directed to:
The Korea Fund Dividend Reinvestment and Cash Purchase Plan, c/o Scudder
Investments Service Company, P.O. Box 219066, Kansas City, MO 64121-9066,
1-800-294-4366. </FONT>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1B0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="smr" ID="smr"></A>Stockholder Meeting Results</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><FONT COLOR="#000000">The Annual Meeting of Stockholders (the &quot;Meeting&quot;) of The Korea Fund, Inc.
(the &quot;fund&quot;), was held on October 1, 2003, at the offices of Deutsche
Investment Management Americas Inc. (part of Deutsche Asset Management),
345 Park Avenue, New York, NY 10154.  At the Meeting, the following
matter was voted upon by the stockholders (the resulting votes are presented
below).</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">To elect two Directors of the fund to hold office for a term of three years, or
until their respective successors shall have been duly elected and qualified:</FONT>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Number of Votes:</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#000000">Directors</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">For</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#000000">Withheld</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><FONT SIZE="-2" COLOR="#000000">Kenneth C. Froewiss </FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2" COLOR="#000000">36,029,168</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2" COLOR="#000000">347,778</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><FONT SIZE="-2" COLOR="#000000">Ronaldo A. da Frota Nogueira</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2" COLOR="#000000">36,029,918</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2" COLOR="#000000">347,028</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION1A0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000"><A NAME="ps" ID="ps"></A>Privacy Statement</FONT></H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
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</TR>

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<P ALIGN="RIGHT">
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<BR>
<P ALIGN="LEFT"><FONT COLOR="#000000">This privacy statement is issued by Deutsche Investment Management Americas Inc.,
Deutsche Asset Management, Inc., Scudder Distributors, Inc., Scudder Investor
Services, Inc., Scudder Trust Company and the Scudder Funds, including The Brazil
Fund, Inc. and The Korea Fund, Inc.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">We never sell customer lists or individual client information.<B> <FONT SIZE="-1">We consider privacy
fundamental to our client relationships and adhere to the policies and
practices described below to protect current and former clients' information.</FONT>
</B>Internal policies are in place to protect confidentiality, while allowing client needs to
be served. Only individuals who need to do so in carrying out their job
responsibilities may access client information. We maintain physical, electronic and
procedural safeguards that comply with federal standards to protect confidentiality.
These safeguards extend to all forms of interaction with us, including the Internet.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">In the normal course of business, clients give us nonpublic personal information on
applications and other forms, on our websites, and through transactions with us or
our affiliates. Examples of the nonpublic personal information collected are name,
address, Social Security number and transaction and balance information. To be able
to serve our clients, certain of this client information is shared with affiliated and
nonaffiliated third party service providers such as transfer agents, custodians, and
broker-dealers to assist us in processing transactions and servicing your account with
us. In addition, we may disclose all of the information we collect to companies that
perform marketing services on our behalf or to other financial institutions with
which we have joint marketing agreements. The organizations described above that
receive client information may only use it for the purpose designated by the
companies listed above.</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">We may also disclose nonpublic personal information about you to other parties as
required or permitted by law. For example, we are required or we may provide
information to government entities or regulatory bodies in response to requests for
information or subpoenas, to private litigants in certain circumstances, to law
enforcement authorities, or any time we believe it necessary to protect the firm. </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Questions on this policy may be sent to: </FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">Scudder Investments<BR>
Attention: Correspondence - Chicago<BR>
P.O. Box 219415<BR>
Kansas City, MO 64121-9415</FONT>
</P>
<P ALIGN="LEFT"><FONT COLOR="#000000">September 2003</FONT>
</P>
<BR>
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<TD ALIGN="LEFT" VALIGN="BOTTOM"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION190"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000">Notes</FONT></H1>
</TD>
</TR>

<TR>
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<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
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<P ALIGN="RIGHT">
</P>
</TD>
</TR>


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<TD ALIGN="LEFT" VALIGN="BOTTOM"><IMG SRC="new_section.gif" ALT="kor_NEW_SECTION180"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000">Notes</FONT></H1>
</TD>
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</P>
</TD>
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<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000">Notes</FONT></H1>
</TD>
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</P>
</TD>
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<TD ALIGN="LEFT" VALIGN="BOTTOM">
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<TD ALIGN="LEFT" VALIGN="BOTTOM">
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</P>
</TD>
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<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><FONT COLOR="#000000">Notes</FONT></H1>
</TD>
</TR>

<TR>
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<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="LEFT"><IMG SRC="kor_backcover0.gif" ALT="kor_backcover0">
</P>

<PRE>

ITEM 2.         CODE OF ETHICS.

                        Not applicable.

ITEM 3.         AUDIT COMMITTEE FINANCIAL EXPERT.

                        Not applicable.

ITEM 4.         PRINCIPAL ACCOUNTANT FEES AND SERVICES.

                        Not applicable.

ITEM 5.         [RESERVED]

ITEM 6.         [RESERVED]

ITEM 7.         DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
                CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

                        Not applicable.

ITEM 8.         [RESERVED]

ITEM 9.         CONTROLS AND PROCEDURES.

(a) The Chief Executive and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on the evaluation of the
Disclosure Controls and Procedures as of a date within 90 days of the filing
date of this report.

(b) During the filing period of the report, management identified issues
relating to the overall fund expense payment and accrual process. Management
discussed these matters with the Registrant's Audit Committee and auditors,
instituted additional procedures to enhance its internal controls and will
continue to develop additional controls and redesign work flow to strengthen the
overall control environment associated with the processing and recording of fund
expenses.

ITEM 10.        EXHIBITS.

(a)(1)   Certification  pursuant to Rule 30a-2(a) under the  Investment  Company
         Act of 1940 (17 CFR  270.30a-2(a))  is filed  and  attached  hereto  as
         Exhibit 99.CERT.

(b)      Certification  pursuant to Rule 30a-2(b) under the  Investment  Company
         Act of 1940 (17 CFR  270.30a-2(b))  is furnished and attached hereto as
         Exhibit 99.906CERT.


<PAGE>

Form N-CSR Item F

                                   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


By:                                 /s/Richard T. Hale
                                    ---------------------------
                                    Richard T. Hale
                                    Chief Executive Officer

Date:                               February 27, 2004
                                    ---------------------------


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

By:                                 /s/Richard T. Hale
                                    ---------------------------
                                    Richard T. Hale
                                    Chief Executive Officer

Date:                               February 27, 2004
                                    ---------------------------



By:                                 /s/Charles A. Rizzo
                                    ---------------------------
                                    Charles A. Rizzo
                                    Chief Financial Officer

Date:                               February 27, 2004
                                    ---------------------------

</PRE>


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end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>6
<FILENAME>cert.txt
<DESCRIPTION>CERTIFICATION
<TEXT>

                                             Deutsche Asset Management [LOGO]
                                             A Member of the Deutsche Bank Group



Chief Executive Officer
Form N-CSR Certification under Sarbanes Oxley Act






I, Richard T. Hale, certify that:

1.            I have reviewed this report, filed on behalf of The Korea Fund,
              Inc., on Form N-CSR;

2.            Based on my knowledge, this report does not contain any untrue
              statement of a material fact or omit to state a material fact
              necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other
              financial information included in this report, fairly present in
              all material respects the financial condition, results of
              operations, changes in net assets, and cash flows (if the
              financial statements are required to include a statement of cash
              flows) of the registrant as of, and for, the periods presented in
              this report;

4.            The registrant's other certifying officer(s) and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Rule 30a-3(c) under the Investment
              Company Act of 1940) and internal control over financial reporting
              (as defined in Rule 30a-3(d) under the Investment Company Act of
              1940) for the registrant and have:

                  (a)      Designed such disclosure controls and procedures, or
                           caused such disclosure controls and procedures to be
                           designed under our supervision, to ensure that
                           material information relating to the registrant,
                           including its consolidated subsidiaries, is made
                           known to us by others within those entities,
                           particularly during the period in which this report
                           is being prepared;

                  (b)      Designed such internal control over financial
                           reporting, or caused such internal control over
                           financial reporting to be designed under our
                           supervision, to provide reasonable assurance
                           regarding the reliability of financial reporting

<PAGE>

                           and the preparation of financial statements for
                           external purposes in accordance with generally
                           accepted accounting principles;

                  (c)      Evaluated the effectiveness of the registrant's
                           disclosure controls and procedures and presented in
                           this report our conclusions about the effectiveness
                           of the disclosure controls and procedures, as of a
                           date within 90 days prior to the filing date of this
                           report based on such evaluation; and

                  (d)      Disclosed in this report any change in the
                           registrant's internal control over financial
                           reporting that occurred during the registrant's most
                           recent fiscal half-year (the registrant's second
                           fiscal half-year in the case of an annual report)
                           that has materially affected, or is reasonably likely
                           to materially affect, the registrant's internal
                           control over financial reporting; and

5.            The registrant's other certifying officer(s) and I have disclosed
              to the registrant's auditors and the audit committee of the
              registrant's board of directors (or persons performing the
              equivalent functions):

                  (a)      All significant deficiencies and material weaknesses
                           in the design or operation of internal control over
                           financial reporting which are reasonably likely to
                           adversely affect the registrant's ability to record,
                           process, summarize, and report financial information;
                           and

                  (b)      Any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrant's internal control over
                           financial reporting.

February 27, 2004                                /s/Richard T. Hale
                                                 Richard T. Hale
                                                 Chief Executive Officer
                                                 The Korea Fund, Inc.

<PAGE>

                                             Deutsche Asset Management [LOGO]
                                             A Member of the Deutsche Bank Group



Chief Financial Officer
Form N-CSR Certification under Sarbanes Oxley Act






I, Charles A. Rizzo, certify that:

1.            I have reviewed this report, filed on behalf of The Korea Fund,
              Inc., on Form N-CSR;

2.            Based on my knowledge, this report does not contain any untrue
              statement of a material fact or omit to state a material fact
              necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other
              financial information included in this report, fairly present in
              all material respects the financial condition, results of
              operations, changes in net assets, and cash flows (if the
              financial statements are required to include a statement of cash
              flows) of the registrant as of, and for, the periods presented in
              this report;

4.            The registrant's other certifying officer(s) and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Rule 30a-3(c) under the Investment
              Company Act of 1940) and internal control over financial reporting
              (as defined in Rule 30a-3(d) under the Investment Company Act of
              1940) for the registrant and have:

                  (a)      Designed such disclosure controls and procedures, or
                           caused such disclosure controls and procedures to be
                           designed under our supervision, to ensure that
                           material information relating to the registrant,
                           including its consolidated subsidiaries, is made
                           known to us by others within those entities,
                           particularly during the period in which this report
                           is being prepared;

                  (b)      Designed such internal control over financial
                           reporting, or caused such internal control over
                           financial reporting to be designed under our
                           supervision, to provide reasonable assurance
                           regarding the reliability of financial reporting

<PAGE>

                           and the preparation of financial statements for
                           external purposes in accordance with generally
                           accepted accounting principles;

                  (c)      Evaluated the effectiveness of the registrant's
                           disclosure controls and procedures and presented in
                           this report our conclusions about the effectiveness
                           of the disclosure controls and procedures, as of a
                           date within 90 days prior to the filing date of this
                           report based on such evaluation; and

                  (d)      Disclosed in this report any change in the
                           registrant's internal control over financial
                           reporting that occurred during the registrant's most
                           recent fiscal half-year (the registrant's second
                           fiscal half-year in the case of an annual report)
                           that has materially affected, or is reasonably likely
                           to materially affect, the registrant's internal
                           control over financial reporting; and

5.            The registrant's other certifying officer(s) and I have disclosed
              to the registrant's auditors and the audit committee of the
              registrant's board of directors (or persons performing the
              equivalent functions):

                  (a)      All significant deficiencies and material weaknesses
                           in the design or operation of internal control over
                           financial reporting which are reasonably likely to
                           adversely affect the registrant's ability to record,
                           process, summarize, and report financial information;
                           and

                  (b)      Any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrant's internal control over
                           financial reporting.

February 27, 2004                                /s/Charles A. Rizzo
                                                 Charles A. Rizzo
                                                 Chief Financial Officer
                                                 The Korea Fund, Inc.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906
<SEQUENCE>7
<FILENAME>cert906.txt
<DESCRIPTION>906 CERTIFICATION
<TEXT>

                                             Deutsche Asset Management [LOGO]
                                             A Member of the Deutsche Bank Group



Chief Executive Officer
Section 906 Certification under Sarbanes Oxley Act






I, Richard T. Hale, certify that:

1.   I have reviewed this report, filed on behalf of The Korea Fund, Inc., on
     Form N-CSR;

2.   Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic
     report on Form N-CSR (the "Report") fully complies with the requirements of
     ss. 13 (a) or ss. 15 (d), as applicable, of the Securities Exchange Act of
     1934 and that the information contained in the Report fairly presents, in
     all material respects, the financial condition and results of operations of
     the Company.




February 27, 2004                                /s/Richard T. Hale
                                                 Richard T. Hale
                                                 Chief Executive Officer
                                                 The Korea Fund, Inc.

<PAGE>

                                             Deutsche Asset Management [LOGO]
                                             A Member of the Deutsche Bank Group



Chief Financial Officer
Section 906 Certification under Sarbanes Oxley Act






I, Charles A. Rizzo, certify that:

1.   I have reviewed this report, filed on behalf of The Korea Fund, Inc., on
     Form N-CSR;

2.   Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic
     report on Form N-CSR (the "Report") fully complies with the requirements of
     ss. 13 (a) or ss. 15 (d), as applicable, of the Securities Exchange Act of
     1934 and that the information contained in the Report fairly presents, in
     all material respects, the financial condition and results of operations of
     the Company.




February 27, 2004                                /s/Charles A. Rizzo
                                                 Charles A. Rizzo
                                                 Chief Financial Officer
                                                 The Korea Fund, Inc.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
