Monthly Report

Deutsche Latin American Cos Tst PLC
15 January 2003


                    Deutsche Latin American Companies Trust

                     REPORT FOR THE MONTH OF DECEMBER 2002


SUMMARY

The MSCI Latin American equity index declined 1.5% in sterling in December,
outperforming weak global markets. The region was led by Argentina, which was up
nearly 11.0% in sterling terms, and comprises approximately 2.0% of the
benchmark. Brazil was the largest contributor for the month, gaining 5.5% in
sterling terms, largely due to the positive market reaction to Lula's cabinet
appointments. The currency appreciated against the dollar (up 3.2%) however was
largely flat against the pound sterling. Mexico was the big loser for the month,
due to stock specific issues, and lost 7.7% in sterling terms. The Deutsche
Latin Investment Trust closed down 3.2% for the month, largely underperforming
the index due to its overweight position in Mexico, its lack of investments in
Argentina, its bias toward more defensive holdings in Brazil, and the Chilean
peso balance held from the earlier disposition of securities. For the year ended
31/12/02, the Trust returned -29.7% versus the benchmark of -32.0%.

BRAZIL

The Brazilian MSCI closed up 5.5% in sterling in December, with the currency
relatively stable versus the sterling. Lula announced his appointments to head
the Central Bank (Meirelles) and Minister of Finance (Palocci) which were well
received by the markets. In addition, positive comments from Lula's team
regarding the economic course and need for fiscal discipline further calmed the
markets. The Copom raised interest rates by 300 basis points, to 25.0% on 19
December, which was endorsed by Lula's new finance chief, Palocci. The trade
surplus for November came in strong again, and industrial production reported
good numbers (9.0% increase year over year through October.) As expected,
exports led the way, primarily oil, agribusiness and production of capital
goods. There are signs that internal demand may be picking up steam, however
with interest rates as high as they are, and unemployment still on the rise, the
consumer still lacks momentum. Inflation is on the rise, with annualised core
inflation pointing to a rate of 17.0%. The exchange rate has likely recovered
from the massive overshooting in September, and we do not expect much recovery
from here, particularly with the bias toward exports. Brazilian risk, as
measured by the C Bond, continued to tighten to 1500 over U.S. Treasuries, a
marked improvement from a few months ago. While Lula continues to be enjoying a
honeymoon period with the markets, the domestic debt dynamics remain a chronic
and increasingly challenging problem and his government will have to make some
very clear policy choices very soon: muddling through is not sustainable.

Unless there is a return to growth globally, and the capital markets turn more
friendly, the reduced capital inflows will take a toll on the long term
prospects for growth, reduction of interest rates, and strengthening of the
currency, which are so badly desired by Lula to address the country's needs.
Barring a significant improvement in the external environment, Lula will need to
make a deeper fiscal adjustment to restore solvency and confidence.

An analysis of stock performance for the month shows Petrobras the clear winner
in the index, up 13.0%, followed by the banks Itau and Bradesco, up roughly
16.0%, CVRD, up 8.0% and Eletrobras. The Trust had been underweight Petrobras
due to our assessment of the risk related to regulatory manipulation, as it
continues to be majority government controlled, and with rising inflation it may
be unable to pass on oil price increases to the consumer. The Trust's position
has more recently been brought in line with the benchmark, which continues to
rise on expectation of positive policy pronouncements. The Trust benefited most
from its overweight position in CVRD, and also by owning Aracruz, which was up
13.0% and the banks aforementioned. We are not convinced the electric sector
stands to benefit long term from a Lula administration, and consequently do not
own Eletrobras or other utilities.

While we have added to the Brazilian weighting in the past few weeks, our
reservation about the lingering problems facing Lula and his ability to
manoeuvre keeps us from shifting a higher proportion from Mexico for the time
being. We continue to like the commodity plays which will benefit from growing
demand in China (such as steel and iron ore), and companies, which can pass on
the higher inflation. We also are keen on balance sheet strength and debt
burdens given the continued high interest rate environment and lack of access to
the capital markets.

MEXICO

The Mexican market fell by 7.7% in sterling terms for the month, underperforming
the region, although outperforming the U.S. The currency weakened by over 5.0%
against sterling, (with the Corto increasing), although Cetes rates continued to
fall. Market sentiment benefited from the historic early approval of the 2003
budget, although external demand continues to be weak, which continues to hamper
domestic activity. The big news in December was Coca Cola Femsa's (KOF)
announcement of the purchase of Panamerican Beverages (PB), which caused KOF to
decline by 25.0% for the month, and PB to surge by 150.0%. The Trust did not own
PB based on its poor operating performance, and was overweight KOF which hurt
performance. This news greatly surprised the market and we expect KOF to recoup
the loss as it restructures the entity and adds value to the franchise. Two of
the other detractors from performance were Cemex and Walmex, where we are
overweight the benchmark and which both fell by over 8.0% for the month. Cemex
was plagued with less than stellar results in some of their operating markets
and expectations of lower volumes in Mexico and Walmex fell on the announcement
that they had lost the government voucher program which would impact their
yearly same store sales numbers. We expect Walmex to recoup its loss and
continue to add to the stock given its commanding market share, strong balance
sheet, and continued profitability despite a difficult economic environment.

CHILE

The Chilean MSCI closed down 1.2% for the month in sterling, and the currency
weakened by 5.5% for the month. The currency decline hurt performance of the
Trust given the large Chilean peso balance (roughly 3.6% of the portfolio) which
is waiting to be repatriated from the sale of securities last quarter. We expect
the Central Bank to remit the funds in the next few days, which will give us
flexibility to invest outside the country. Economic data came in a bit better
than expected and the Central Bank kept interest rates unchanged at 3.0%. On a
positive note, the Free Trade negotiations with the U.S. were concluded and the
November trade balance showed signs of better than expected activity. We remain
underweight the market and focussed primarily on the bank and telephone sector
where we see the best opportunities for the moment.

ARGENTINA

The Argentine market led the region for the month, up nearly 11.0% with the
currency continuing to strengthen and gaining 4% in December. Economic data
continue to show a stabilised and somewhat improving economic situation and the
sense is that the country has hit bottom. Negotiations with the IMF remain at a
standstill, however, and the political picture leading into the March
Presidential election remain unclear, which was further exacerbated by the
recent resignation of the Central Bank President. While the lack of Argentine
investments cost the Trust 25 b.p. in performance in December, we remain
convinced for the moment that the risk outweighs the relative return for
companies in which we could invest.

PERU/ VENEZUELA

The Trust's sole Peruvian holding, Buenaventura, was a positive contributor to
performance as the stock was up 13.5% for the month on rising gold prices. Other
than Buenaventura, we do not see any other attractive opportunities in the
Peruvian market. The Venezuelan local market was essentially closed for the
month as the national strike paralysed the economy. The currency and index
weakened by 8.0% for the month in sterling terms. The Venezuelan oil industry
(the world's sixth largest producer) ground to a near halt, and the political
turmoil and riots persist. The OAS is leading the talks between the Chavez
government and the opposition, but as of the writing of this report has made no
headway. The economy is in a tailspin and recovery unlikely unless Chavez steps
down. We remain zero weighted this market for the foreseeable future.


NET ASSET VALUE
                                                                                                 Fully diluted
                                                              31/12/02        30/11/02         31/12/02         30/11/02

                                                                 56.7p           58.6p            65.9p            67.3p



MID-MARKET SHARE PRICE                                                     31/12/02              30/11/02

Ordinary Shares                                                            46.50p                47.50p
Warrants                                                                   7.75p                 8.75p


NAV based on total assets less current liabilities of £27.1 million (£28.0 million).


                                                                                          Market exposure
                                                                                         31/12/02               30/11/02
                                                                                                %                      %
EQUITIES

Brazil                                                                                       38.0                   35.8

Chile                                                                                         3.4                    3.4

Mexico                                                                                       50.8                   53.5

Peru                                                                                          2.7                    2.3

TOTAL PORTFOLIO                                                                              94.9                   95.0

Net Current Assets                                                                            5.1                    5.0
                                                                                         --------               --------
TOTAL                                                                                       100.0                  100.0
                                                                                         --------               --------
Based on total assets of £30.2 million (£31.2 million).



GEARING

Gearing at                                                                               31/12/02               30/11/02

                                                                                            11.5%                  11.5%
                                                                                             ====                   ====



LARGEST HOLDINGS (market value £28.7 million equal to 99.9% of total portfolio)

                                                                         Country                  £000's            % of
                                                                                                               portfolio

Telmex                                                                    Mexico                   3,635            12.7

Vale do Rio Doce                                                          Brazil                   2,676             9.3

Wal-Mart de Mexico                                                        Mexico                   2,440             8.5

Petrobras                                                                 Brazil                   2,018             7.0

G.F BBVA-Bancomer                                                         Mexico                   1,778             6.2

Cemex                                                                     Mexico                   1,498             5.2

Grupo Modelo                                                              Mexico                   1,415             4.9

Ambev                                                                     Brazil                   1,258             4.4

America Movil                                                             Mexico                   1,151             4.0

Grupo Televisa                                                            Mexico                   1,115             3.9

Brasil Telecom                                                            Brazil                     953             3.3

Tele Norte Leste                                                          Brazil                     942             3.3

Femsa                                                                     Mexico                     874             3.1

Coca-Cola Femsa                                                           Mexico                     845             3.0

Pao de Acucar                                                             Brazil                     821             2.9

Minas Buenaventura                                                        Peru                       820             2.9

Banco Itau                                                                Brazil                     775             2.7

Aracruz Celulose                                                          Brazil                     642             2.2

Telecom de Chile                                                          Chile                      631             2.2

Gerdau                                                                    Brazil                     548             1.9

Bco Bradesco                                                              Brazil                     520             1.8

Bco Santander                                                             Chile                      406             1.4

Kimberly-Clark de Mexico                                                  Mexico                     363             1.2

Votorantim Celolose                                                       Brazil                     306             1.1

GPO Industrial Saltillo                                                   Mexico                     222             0.8


FINANCIAL CALENDAR

Year End                                                     28 February 2003




For further information, contact Mark Pope at Deutsche Investment Trust Managers
Limited on 020-7545-0520.

For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a 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.deutsche-its.co.uk.

Issued by Deutsche Latin American Companies Trust PLC and approved by Deutsche
Investment Trust Managers Limited, regulated by the Financial Services Authority
and manager of Deutsche Latin American Companies Trust PLC. Investors should be
aware that past performance is not necessarily a guide to future returns, the
price of shares and the income from them may 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.


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