OMB APPROVAL
OMB Number: 3235-0578
Expires: April 30, 2010
Estimated average burden
hours per response. . . 10.5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANYInvestment Company Act File Number: 811-04058
Registrant Name: The Korea Fund, Inc.
Address of Principal Executive Offices: 4 Embarcadero Center, 30th Floor, San Francisco, CA 94111
Name and Address of Agent for Service: Brian S. Shlissel – 1345 Avenue of the Americas, New York, NY 10105
Registrant’s telephone number, including area code: 212-739-3369
Date of Fiscal Year End: June 30, 2008
Date of Reporting Period: September 30, 2007
Form N-Q is to be used by the registered management investment company, other than a small business investment company registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b 1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Schedule of Investments
The Korea Fund, Inc. Schedule of Investments
September 30, 2007 (unaudited)
Shares
Value*
COMMON STOCK—99.1%
Airlines—1.2%
210,406
Korean Air Lines Co., Ltd. (b)
$14,179,198
Auto Components—2.9%
588,193
Hankook Tire Co., Ltd.
12,016,676
216,756
Hyundai Mobis
22,941,836
34,958,512
Capital Markets—2.0%
358,649
Korea Investment Holdings Co., Ltd. (b)
23,454,587
Chemicals—1.1%
129,609
LG Chem Ltd. (b)
13,571,327
Commercial Banks—3.0%
429,770
Kookmin Bank
35,447,325
Commercial Services & Supplies—1.6%
310,109
S1 Corp.
18,589,434
Construction & Engineering—7.0%
265,628
GS Engineering & Construction Corp.
45,911,988
239,800
Hyundai Development Co.
22,303,289
155,077
Hyundai Engineering & Construction Co., Ltd. (a)(b)
14,740,762
82,956,039
Consumer Finance—6.0%
336,716
Samsung Card Co., Ltd. (a)
20,787,209
775,094
Shinhan Financial Group Co., Ltd.
50,197,388
70,984,597
Diversified Consumer Services—1.7%
66,807
MegaStudy Co., Ltd.
20,304,905
Diversified Industrials—5.6%
413,260
LG Corp. (b)
28,358,167
516,264
Samsung Corp. (b)
37,787,374
66,145,541
Electrical Equipment—1.5%
382,130
LG Philips LCD Co., Ltd. (a)(b)
18,209,580
Electronic Equipment & Instruments—1.4%
636,950
SE Co., Ltd. (a)(c)
0
271,463
SFA Engineering Corp. (b)
16,074,338
16,074,338
Food & Staples Retailing—3.2%
54,749
Shinsegae Co., Ltd.
37,997,030
The Korea Fund, Inc. Schedule of Investments
September 30, 2007 (unaudited) (continued)
Shares
Value*
Hotels, Restaurants & Leisure—1.4%
166,306
Hana Tour Service, Inc.
$16,670,763
Insurance—5.4%
650,220
Korean Reinsurance Co. (b)
9,186,719
257,742
Samsung Fire & Marine Insurance Co., Ltd.
55,325,688
64,512,407
Internet Software & Services—5.2%
552,013
LG Dacom Corp. (b)
16,686,502
194,064
NHN Corp. (a)
44,685,638
61,372,140
Machinery—1.0%
109,189
Doosan Heavy Industries and Construction Co., Ltd.
11,478,033
Media—2.1%
52,938
Cheil Communications, Inc.
15,669,020
1,171,880
ON*Media Corp. (a)
9,065,843
24,734,863
Metals & Mining—10.6%
298,105
Dongkuk Steel Mill Co., Ltd.
15,654,216
152,495
POSCO
110,351,663
126,005,879
Pharmaceuticals—1.1%
63,255
Yuhan Corp. (b)
13,426,992
Retail—0.9%
93,278
Hyundai Department Store Co., Ltd.
11,178,101
Road & Rail—1.8%
164,755
Korea Express Co., Ltd. (a)
21,698,780
Semi-conductors—10.9%
155,061
Samsung Electronics Co., Ltd. (e)
97,027,634
434,770
Samsung Techwin Co., Ltd.
32,962,141
129,989,775
Shipbuilding—15.7%
940,000
Daewoo Shipbuilding & Marine Engineering Co., Ltd.
59,126,844
185,677
Hyundai Heavy Industries Co., Ltd.
85,407,219
788,000
Samsung Heavy Industries Co., Ltd.
41,632,978
186,167,041
Tobacco—2.4%
359,626
KT&G Corp.
28,058,414
Wireless Telecommunications Services—2.4%
122,458
SK Telecom Co., Ltd. (b)
28,202,209
Total Common Stock (cost—$509,685,251)
1,176,367,810
The Korea Fund, Inc. Schedule of Investments
September 30, 2007 (unaudited) (continued)
Principal
Amount
(000)
Value*
CONVERTIBLE BONDS—0.0%
Consumer Staples—0.0%
WON 2,161
Haitai Confectionery Loan Certificates, zero coupon, 11/28/09 (a)(d)
(cost—$0)
$0
Shares
SHORT-TERM INVESTMENT—5.7%
Collateral Invested for Securities on Loan (g)—5.7%
67,809,418
BNY Institutional Cash Reserves Fund, 5.438% (cost—$67,809,418)
67,809,418
Total Investments (cost—$577,494,669) (f)—104.8%
1,244,177,228
Liabilities in excess of other assets—(4.8)%
(56,719,527)
Net Assets—100.0%
$1,187,457,701
Notes to Schedule of Investments:
*
Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments, for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security, are fair-valued, in good faith, pursuant to guidelines established by the Board of Directors. The Fund’s investments are valued daily using prices supplied by dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the last quoted mean price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. The prices used by the Fund to value securities may differ from the value that would be realized if the securities were sold. The Fund’s net asset value is normally determined as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (‘‘NYSE’’) on each day the NYSE is open for business.
The prices of certain equity securities or other financial instruments may be determined at a time prior to the close of regular trading on the NYSE. When fair valuing securities, the Fund may, among other things, consider significant events (which may be considered to include changes in the value of U.S. securities or securities indices) that occur after the close of the relevant market and before the time the Fund’s net asset value is calculated. With respect to Korean equity securities, the Fund may fair value securities using modeling tools provided by third-party vendors. The Fund has retained a statistical research service to assist in determining the fair value of Korean equity securities. This service utilizes statistics and programs based on historical performance of markets and other economic data to assist in making fair value estimates. Fair value estimates used by the Fund for Korean equity securities may differ from the value realized from the sale of those securities.
(a)
Non-income producing.
(b)
All or portion of security on loan. Aggregate market value of loaned securities is $64,776,419; cash collateral of $67,809,418 was received with which the Fund purchased short-term investments.
(c)
The Fund may purchase securities that are subject to legal or contractual restrictions on resale (“restricted securities”). Restricted securities are securities which have not been registered with the Securities and Exchange Commission under the Securities Act of 1933. The Fund may be unable to sell a restricted security and it may be more difficult to determine a market value for a restricted security. Moreover, if adverse market conditions were to develop during the period between the Fund’s decision to sell a restricted security and the point at which the Fund is permitted or able to sell such security, the Fund might obtain a price less favorable than the price that prevailed when it decided to sell. This investment practice, therefore, could have the effect of increasing the Fund’s liquidity. The future value of these securities is uncertain and there may be changes in the estimated value of these securities.
Restricted
Security
Acquisition
Date
Cost
Value
% of
Net Assets
SE Co., Ltd.
12/22/00
$1,616,637
$0
0%
(d) Company in restructuring process, principal only subject to repayment.
(e) At September 30, 2007, 8.17% of the Fund’s net assets were invested in Samsung Electronics Co., Ltd.
(f) Fair-valued security—Securities with an aggregate value of $1,155,580,601, representing 97.32% of net assets, were fair-valued
utilizing modeling tools provided by a third-party vendor.(g) Security purchased with the cash proceeds from securities on loan.
Glossary:
WON—Korean Won
Item 2. Controls and Procedures
(a) The registrant’s President and Chief Executive Officer and Principal Financial Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17CFR270.30a-3(c)), as amended are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3 (d)) under the Act (17 CFR270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3. Exhibits
(a) Exhibit 99.302 Cert. – Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: The Korea Fund, Inc.
By:
/s/ Robert Goldstein
Robert Goldstein
President and Chief Executive Officer
Date: November 26, 2007
By:
/s/ Brian S. Shlissel
Brian S. Shlissel
Treasurer, Principal Financial & Accounting Officer
Date: November 26, 2007
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 date indicated.
By:
/s/ Robert Goldstein
Robert Goldstein
President and Chief Executive Officer
Date: November 26, 2007
By:
/s/ Brian S. Shlissel
Brian S. Shlissel
Treasurer, Principal Financial & Accounting Officer
Date: November 26, 2007