Monthly Report

Deutsche Latin American Cos Tst PLC
18 September 2001




                     REPORT FOR THE MONTH OF AUGUST 2001

SUMMARY

The deteriorating international outlook for economic growth and corporate
earnings was reflected in weak equity markets in Latin America in August, as
the Latin America Free index fell by 5.3% over the month. Brazil was
particularly weak, falling by 10.4% in sterling terms as the Real continued to
depreciate. The Chilean market proved to be more resilient, rising by 1.8% as
it benefited from the defensive nature of its economy and the high weighting
of utility stocks in the MSCI Chile index. Our NAV fell by 7% in August,
underperforming the index largely due to our overweight Brazil position, while
our share price declined by 5.5%.

Last month's events have however been overshadowed by the terrorist attacks
last week in New York and Washington, which caused such tragic loss of life
and as yet unquantifiable damage to the US economy and in particular, to
consumer confidence. Although the US equity market was closed until 17
September, emerging markets suffered some heavy falls, with Brazil in
particular very weak and the currency depreciating further. Mexico was closed
for most of last week. It is premature to draw firm conclusions about the
impact of these events in what remains an unusually complex environment. We
have therefore kept our backward-looking comments relatively brief this month
with the objective of providing a more considered analysis in our next report.
However, there is little doubt that the short to medium-term impact on Latin
American economies and markets will be negative, as a likely recession in the
US will further slow demand for regional exports, reduce the flow of foreign
direct investment and impact borrowing costs as risk aversion rises. At the
same time, it seems that interest rate cuts will continue in the major
economies, as evidenced by the recent 50bp cut by the US Federal Reserve.



ARGENTINA

The Argentine market fell by 1.5% in sterling terms in August. Courtesy of the
IMF Argentina was again pulled back from the brink of default: such a move was
not our central scenario and, indeed, undermines the equity case for the
Southern Cone countries, in particular Brazil. By dispersing an immediate U$5
billion, the IMF has stemmed the outflow of bank deposits and reserves, while
by offering a further U$3 billion to aid the voluntary restructuring of
sovereign debt the IMF is encouraging the Argentine authorities to consider a
wider debt swap. This would be positive if achieved but the proposal will make
the necessary spending cuts by the provinces exceedingly difficult to
implement. We are left questioning Argentina's ability to meet the zero fiscal
deficit agreed with the IMF while the economy remains in recession; as a
result, the IMF disbursement should be recognised as buying time rather than
solving the problem. Nevertheless, the new global environment may mean more
willingness to support countries in short-term financial difficulties, such as
Argentina.


BRAZIL

Given the IMF bailout of Argentina in August we must now hold a more bearish
stance: the Brazilian economy will continue to be undermined by the weak
economic structure in place in Argentina. Even if Brazil continues to be
supported by the multilateral institutions, there is little opportunity for
currency appreciation in the near term and, consequently, inflationary
pressures will remain. Our expectation that interest rates could be cut to
15.5% over the next twelve months now looks too optimistic. The fiscal
performance of Brazil remains extremely impressive with the primary surplus
now 5% of GDP on an annualised basis, however higher interest costs have lead
to a deterioration of the nominal deficit, and foreign direct investment will
likely shrink further. To improve, Brazil needs a resolution in Argentina. We
have chosen to retain two significant stock overweight positions in Brazil;
Banco Itau and Ambev; these are both first-rate franchises in the banking and
beverage sectors respectively, with sustainable earnings growth.



CHILE

The first green shoots of recovery seem to be starting to show in Chile,
although downside risks remain significant. This realisation combined with the
strengthening currency helped the stock market to outperform in August.
Aggressive interest rate cuts in the first half, which took real rates to
3.5%, seem to have had some impact on consumers: retail sales rose by 3.8% yoy
in June, the strongest rise since April 2000, although they were weaker again
in July; the fact that unemployment was more or less flat at 9.8% in July
should help sustain confidence.



MEXICO

The Mexican market fell by 4.3% in sterling terms during August. Economic
releases reflected an economy slowing more sharply than expected, with
official estimates of economic growth in 2001 continuing to be revised down.
The economy grew at 6.8% last year and having shrunk in both Q1 and Q2 is now
officially in recession. It is the industrial sector which continues to bear
the brunt of the slowdown. Manufacturing has now recorded a 2.3% fall January
to June with construction output down 5.3% over the same period. Fixed capital
formation declined 5.5% in Q2 2001, with private consumption the only real
motor of demand.

The trade deficit has been remarkably stable given the slowdown in exports and
the peso's strength against the U$ dollar; this improvement is largely driven
by declining internal demand, with consumer goods imports down by 8.5% y/y. We
remain slightly overweight Mexican equities with a bias towards the most
defensive names.



ANDEAN MARKETS

Although the Andean markets, particularly Peru (+3.3%) outperformed during
August, they have become increasingly marginal within a Latin American
portfolio as companies are delisted and liquidity deteriorates. During the
month, US utility AES made a tender offer for the incumbent Venezuelan telecom
operator, CANTV. If this offer is accepted by minority shareholders it will be
the last liquid listed equity in Venezuela.



NET ASSET VALUE
                                                             Fully diluted

                            31/08/01        31/07/01      31/08/01   31/07/01

                              76.5p           82.3p        81.5p      86.0p


MID-MARKET SHARE PRICE                    31/08/01          31/07/01

Ordinary Shares                             64.25p            68.00p

Warrants                                    15.50p            17.75p


NAV based on total assets less current liabilities of £36.7 million (£39.5
million).
                                                        Market exposure

                                                   31/08/01            31/07/01
                                                        %                   %
EQUITIES

Brazil                                                 32.7                33.2

Chile                                                  10.8                 9.8

Mexico                                                 37.4                37.4

Venezuela                                               0.6                 1.1

TOTAL PORTFOLIO                                        81.5                81.5

Net Current Assets                                     18.5                18.5
                                                   --------            --------
TOTAL                                                 100.0               100.0
                                                   --------            --------

Based on total assets of £47.1 million (£50.0 million).

GEARING
Gearing at                                         31/08/01            31/07/01

                                                      28.2%               26.6%
                                                       ====                ====


 LARGEST HOLDINGS (market value £33.8 million equal to 88.1% of total        
  portfolio)                                                                  
                                                 Country   £000's   % of      
                                                                    portfolio 

  Telmex                                         Mexico      5,612        14.6

  Petrobras                                      Brazil      3,405         8.9

  Banco Itau                                     Brazil      2,617         6.8

  Ambev                                          Brazil      2,263         5.9

  Wal-Mart de Mexico                             Mexico      1,855         4.8

  Cemex                                          Mexico      1,439         3.7

  Vale do Rio Doce                               Brazil      1,377         3.6

  Femsa                                          Mexico      1,337         3.5

  Grupo Modelo                                   Mexico      1,333         3.5

  America Movil                                  Brazil      1,324         3.4

  G.F BBVA-Bancomer                              Mexico      1,214         3.2

  Grupo Televisa                                 Mexico      1,165         3.0

  Enersis                                        Chile         888         2.3

  Telecom de Chile                               Chile         838         2.2

  Brasil Telecom                                 Brazil        787         2.0

  Sirder Nacional                                Brazil        764         2.0

  Eletrobras Centrais                            Brazil        754         2.0

  D & S                                          Chile         716         1.9

  Kimberly-Clark de Mexico                       Mexico        702         1.8

  Tele Norte Leste                               Brazil        679         1.8

  Copel Parana Energy                            Brazil        606         1.6

  Consorcio                                      Mexico        556         1.4

  Coca-Cola Femsa                                Mexico        532         1.4

  Gerdau                                         Brazil        528         1.4

  Unibanco                                       Brazil        526         1.4

FINANCIAL CALENDAR

Half year                                                        31 August 2001

For further information, contact Rosie Bichard at Deutsche Investment Trust
Managers Limited on 020-7545-6000.

For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a recently established
scheme through which shareholders, who hold their shares on the Company's main
register, can use their dividends to purchase further shares) contact Mark
Pope on 020-7545-0520, e-mail address: [e-mail]. Further details of
Deutsche Latin American Companies Trust including the latest annual, interim
and monthly reports can be found on the Deutsche Asset Management website
located at www.deam-uk.com/uk/invest/.

Issued by Deutsche Latin American Companies Trust PLC and approved by Deutsche
Investment Trust Managers Limited, regulated by the Investment Management
Regulatory Organisation and manager of Deutsche Latin American Companies Trust
PLC. Investors should be aware that past performance is not necessarily a
guide to future returns, values can fall as well as rise and investors may not
get back the amount they invested. Fluctuations in exchange rates may also
affect the value of your investment. Investment in Deutsche Latin American
Companies Trust PLC presents those risks associated with emerging markets
which may at times be illiquid and/or volatile.