SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
THE BRAZIL FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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2
Other Soliciting Material Pursuant to Rule 14a-6(b)
The following is the text of slides that may be shown to shareholders of the
Brazil Fund, Inc.:
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[LOGO] The Brazil Fund, Inc.
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[LOGO] Overview
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June 2004
[LOGO] The Fund
Ticker: BZF
Inception date April 8, 1988
Starting Net Assets: $138.5MM, $11.54 per share
Second Tranche: $61.7MM, November 1995
Distributions: $274.7MM, $19.23 per share
Net Assets at 04/30/04 $388.1MM, $24.38 per share
Price at 04/30/04 $20.45
Average Annualized Total Return Since Inception
NAV (04/30/04) 13.38%
Market Price (04/30/04) 11.59%
Past results are not necessarily indicative of future performance of the fund.
Investment return and principal value will fluctuate, therefore current
performance may be lower or higher than the figures shown.
Foreign security markets generally exhibit greater price volatility and are less
liquid than the US market. Additionally, this fund focuses its investments in
certain geographical regions, thereby increasing its vulnerability to
developments in that region and potentially subjecting the fund's shares to
greater price volatility.
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[LOGO] Commitment to Good Corporate Governance
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[LOGO] Board Considers the
Interests of All Stockholders
o The Board seeks to treat all stockholders fairly and equally
o Carrousel group is asking shareholders to withhold votes from board's
nominees
o Carrousel group may have different interests from those seeking long-term
capital appreciation through investment in Brazilian securities
[LOGO] The Carrousel group
o The Carrousel group includes:
o The Carrousel Fund Ltd. and The Carrousel Fund II Limited, both Cayman
Island funds that engage in closed-end funds arbitrage
o Carrousel Capital Ltd., the manager of the funds
o Bruno Sangle - Ferriere, who is said to control the Carrousel funds'
investment manager, was "head of non standard arbitrage," "mainly taking
positions in....closed-end funds" at Societe Generale before he formed
Carrousel Capital in 2000
o Carrousel last year filed a 13D saying it might make stockholder proposals,
but after the fund's stock price rose, sold about half its holdings and
made no proposals
[LOGO] Corporate Governance -
New Initiatives
o On May 10, the Board appointed the Chairman of the Committee on Independent
Directors to be Chairman of the Board.
o The Fund's Board believes its appointment of a financially literate
independent director as Chairman reaffirms the Board's long-standing
commitment to:
o Strong, independent oversight of the Fund's operations
o Progressive governance practices that seek to protect and serve the
interests of the Fund and its stockholders
o Committee on Independent Directors has engaged an independent consultant to
advise it
[LOGO] Corporate Governance -
Independence of Board
o The Fund has always had a majority of independent directors
o Only one director is affiliated with the investment manager
o Wholly independent audit and nominating committees
o Independent directors meet in executive session at every Board Meeting
[LOGO] Experienced Directors
Each of the Fund's candidates has the experience needed to represent the best
interests of All of the Fund's shareholders.
o Ronaldo A. De Frota Nogueira. Brazilian. Director and CEO of IMF Editora
Ltd., the Brazilian financial publisher. Chairman of the Certification
Committee and Director of APIMEC Nacional, the Brazilian Association of
Investment Professionals and Analysts, and is a member of the Board of
Association of Certified International Investment Analysts. Independent
director. Over 40 years experience in the Brazilian financial community.
o Susan Kaufman Purcell. Vice President of the Council of the Americas and
the Americas Society. Formerly Senior Fellow at the Council on Foreign
Relations, a member of the U. S. Department of State Policy Planning Staff
and a professor at UCLA and at Columbia. Dr. Purcell's books include
"Brazil Under Cardoso," "Europe and Latin America in the World Economy,"
and "Latin America: US Policy After the Cold War." Independent director.
o Vincent J. Esposito. Managing Director of Deutsche Asset Management. Only
Fund director affiliated with Fund's manager. Over 20 years of professional
experience developing and building investment products and establishing
global joint ventures and new business opportunities in asset management.
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[LOGO] Portfolio Performance and Current Strategy
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[LOGO] The Brazil Fund, Inc.
The Fund has regularly outperformed the Brazilian stock market index and other
benchmarks
Performance Comparison as of April 30, 2004
10 Yr.
12 Month - 3 Yr Avg. 5 Yr Avg. Avg.
YTD Cumul. Annual Annual Annual Since
(4/30/04) Return (%) (%) (%) (%) Inception
The Brazil Fund: NAV -11.35% 48.50% 9.82% 11.00% 9.72% 13.38%
Brazil Fund Stock Price -14.61% 45.48% 12.07% 9.57% 7.54% 11.59%
Bovespa Index ($) -12.97% 53.45% -0.71% -0.49% 6.33% N/A
IFCI - Brazil -13.96% 45.70% 5.26% 8.07% N/A N/A
Past results are not necessarily indicative of future performance of the fund.
Investment return and principal value will fluctuate, therefore current
performance may be lower or higher than the figures shown.
Total investment returns reflect changes in net asset value per share during
each period and assume that dividends and capital gain 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.
[LOGO] The Brazil Fund, Inc.
Market Structure by Industry
IFCI Brazil Brazil Fund iShares
(as of 5/19/04) (as of 4/30/04) (as of 4/30/04)
Industry % of Equity % of Equity % of Equity
-------- ----------- ----------- -----------
Banking 14.90% 9.67% 10.89%
Consumer Staples 10.07% 17.07% 10.61%
Materials 27.08% 24.58% 26.30%
Manufacturing 4.19% 15.44% 4.14%
Oil & Gas 23.65% 11.89% 25.85%
Communications 13.97% 8.50% 12.88%
Utilities 5.13% 6.81% 7.39%
Other 0.56%
* Sectors are subject to change
[LOGO] The Brazil Fund, Inc.
Top Ten Holdings as of April 30, 2004
Brazil Fund iShares
Company % of Equity Company % of Equity
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Petrobras 11.89% Petrobras 25.85%
Banco Itau 9.67% Vale Rio Doce 12.03%
WEG - PN 8.52% AMBev 6.44%
Vale Rio Doce 7.22% Banco Itau SA 4.33%
Ambev 7.16% Banco Bradesco 3.89%
Gerdau 5.26% Tele Norte Leste 3.49%
Sider Nacional 5.12% Embraer 3.07%
Votorantim 4.74% Unibanco 2.67%
Aracruz 4.22% Aracruz 2.62%
Souza Cruz 3.97% CEMIG 2.60%
* Holdings are subject to change
[LOGO] Fund's manager believes economic signs for
investing in Brazil are promising
o Increasing quarterly seasonally adjusted sales
o Increasing quarterly seasonally adjusted industrial output
o Declining real interest rate
o Decrease in inflation
o Reduction in current account deficit
o Strong rise in exports relative to imports
o Recent increase in foreign direct investment
o Leveling debt to GDP ratio
o Less debt is dollar-denominated
The opinions and forecasts expressed are those of Paul Rogers as of June 14,
2004, and may not actually come to pass. This information is subject to change
at any time, based on market and other conditions.
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[LOGO] Appendix A
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Additional Information Regarding
the Brazilian Market
[LOGO] The Brazil Fund, Inc.
BZF vs BOVESPA INDEX 10 YR TOTAL RETURN
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE.
CHART DATA:
Date Brazil Fund Bovespa Index
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4/29/1994 0.000 0.000
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5/31/1994 0.540 0.280
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6/30/1994 3.780 0.420
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7/29/1994 24.320 24.150
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8/31/1994 45.410 66.350
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9/30/1994 51.890 78.410
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10/31/1994 49.190 57.470
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11/30/1994 54.590 52.730
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12/30/1994 51.870 42.390
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1/31/1995 40.360 28.040
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2/28/1995 20.810 6.660
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3/31/1995 15.560 -7.740
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4/28/1995 21.950 15.910
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5/31/1995 22.530 13.830
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6/30/1995 16.720 8.440
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7/31/1995 24.850 14.790
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8/31/1995 18.460 25.770
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9/29/1995 24.270 35.830
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10/31/1995 13.100 19.090
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11/30/1995 11.090 25.730
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12/29/1995 9.880 22.780
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1/31/1996 31.330 45.970
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2/29/1996 17.680 39.860
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3/29/1996 12.480 39.120
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4/30/1996 12.480 44.280
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5/31/1996 21.580 59.260
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6/28/1996 24.180 66.860
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7/31/1996 11.830 67.980
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8/30/1996 11.830 70.730
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9/30/1996 13.780 75.120
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10/31/1996 9.230 76.220
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11/29/1996 9.230 78.880
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12/31/1996 20.250 87.810
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1/31/1997 26.330 111.130
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2/28/1997 36.470 132.840
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3/31/1997 35.740 136.880
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4/30/1997 40.560 160.180
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5/30/1997 50.210 192.790
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6/30/1997 69.500 223.570
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7/31/1997 66.060 229.460
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8/29/1997 43.660 169.470
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9/30/1997 54.340 198.330
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10/31/1997 18.860 125.820
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11/28/1997 18.170 134.790
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12/31/1997 31.030 153.240
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1/30/1998 26.740 139.900
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2/27/1998 32.590 159.300
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3/31/1998 43.770 191.220
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4/30/1998 42.590 182.850
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5/29/1998 18.310 137.320
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6/30/1998 13.610 131.950
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7/31/1998 27.320 155.190
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8/31/1998 -22.040 52.420
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9/30/1998 -21.650 54.190
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10/30/1998 -13.820 63.740
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11/30/1998 -3.240 99.290
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12/31/1998 -13.600 55.680
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1/29/1999 -23.030 6.840
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2/26/1999 -22.040 18.740
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3/31/1999 2.490 72.620
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4/30/1999 22.090 89.520
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5/31/1999 10.030 79.020
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6/30/1999 18.570 82.070
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7/30/1999 3.500 61.780
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8/31/1999 0.480 52.510
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9/30/1999 6.510 60.500
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10/29/1999 7.520 65.760
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11/30/1999 24.600 98.660
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12/31/1999 51.120 163.410
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1/31/2000 44.490 154.690
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2/29/2000 47.550 176.710
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3/31/2000 41.420 183.550
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4/28/2000 23.040 138.600
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5/31/2000 20.490 127.160
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6/30/2000 39.890 157.090
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7/31/2000 43.470 156.950
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8/31/2000 50.100 163.960
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9/29/2000 39.890 139.550
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10/31/2000 30.700 116.260
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11/30/2000 17.430 86.290
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12/29/2000 41.790 116.900
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1/31/2001 60.960 148.270
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2/28/2001 45.870 115.340
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3/30/2001 31.380 84.510
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4/30/2001 37.590 88.890
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5/31/2001 31.810 72.130
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6/29/2001 30.690 74.660
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7/31/2001 26.800 56.430
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8/31/2001 19.130 39.630
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9/28/2001 2.220 10.270
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10/31/2001 7.650 16.820
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11/30/2001 22.920 43.630
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12/31/2001 35.730 62.600
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1/31/2002 32.930 46.130
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2/28/2002 46.850 64.920
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3/29/2002 50.010 58.050
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4/30/2002 53.350 53.710
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5/31/2002 40.970 41.490
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6/28/2002 15.220 10.010
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7/31/2002 -9.180 -21.340
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8/30/2002 3.290 -3.950
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9/30/2002 -21.110 -37.450
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10/31/2002 -2.400 -22.290
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11/29/2002 0.760 -20.370
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12/31/2002 2.840 -11.740
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1/31/2003 3.490 -13.420
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2/28/2003 -0.860 -20.000
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3/31/2003 9.220 -6.130
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4/30/2003 33.380 20.490
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5/30/2003 35.610 24.940
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6/30/2003 38.380 25.610
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7/31/2003 45.3200 26.870
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8/30/2003 64.7600 42.000
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9/29/2003 66.5200 51.68
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10/29/2003 83.3700 73.79
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11/28/2003 92.5300 89.97
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12/28/2003 127.5200 112.46
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1/27/2004 114.1300 106.4
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2/26/2004 120.7800 107
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3/31/2004 124.8600 111.12
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4/30/2004 94.2700 84.9
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[LOGO] The Brazil Fund, Inc.
Export Growth Remains Diversified
Exports and Imports Change in 2004
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Exports Imports
US$ mn % % change US$ mn % % change
Ore 155 16 49 Fuel & lubricants 165 29 29
Transport equipment 116 12 19 Fertilizers 119 21 184
Metallurgic products 107 11 18 Electronics 92 16 20
Mechanical equipment 103 10 50 Chemicals 68 12 23
Meats 92 9 35 Other chemicals 56 10 94
Wood 70 7 53 Plastics 32 6 21
Oil & derivatives 60 6 19 Mechanical equipment 20 4 3
Soy 58 6 16 Fibers 16 3 38
Paper & pulp 53 5 23 Precision instruments 15 3 11
Textiles 45 5 50 Copper 12 2 53
Electronics 27 3 18 Paper 10 2 30
Other 108 11 7 Other -41 -7 -3
Total 995 100 21 Total 562 100 15
Source: Banco Central Do Brasil
[LOGO]
Index and Risk Information
o Closed end funds, unlike open end funds, are not continuously offered.
There is a one time public offering and once issued, shares of closed end
funds are sold in the open market through a stock exchange. 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.
o The Bovespa Index is a total return index weighted by traded volume and is
comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange.
o IFCI - Brazil Index represents the S&P Brazil Investable Total Return
series. The term Investable indicates that the stocks and the weights in
the S&P index represents the amount that the foreign institutional
investors might buy by the virtue of the foreign institutional restrictions
plus factoring in minimum market capitalization and liquidity screens. This
particular index also measures the impact of reinvestment of gross cash
dividends on the price index.
o iShares MSCI Brazil Index Fund is an exchange-traded fund in the US. The
Fund's objective is to provide investment results that correspond to the
performance of publicly traded securities in the Brazilian market, as
measures by the MSCI Brazil (Free) Index. The Fund invests in a
representative sample of index stocks using a "portfolio sampling"
technique.
o Indices are not available for direct investment and include reinvestment of
distributions.
For more information please call: 800-349-4281
OR
Visit us on the web @ http:// cef.scudder.com 4/30 31830A