<Page>
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OMB APPROVAL
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OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response....... 5.0
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05921
---------------------------------------------
THE TURKISH INVESTMENT FUND, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1221 AVENUE OF THE AMERICAS 22ND FLOOR NEW YORK, NY 10020
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
RONALD E. ROBISON
1221 AVENUE OF THE AMERICAS 34th FLOOR NEW YORK, NY 10020
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-221-6726
----------------------------
Date of fiscal year end: 10/31
--------------------------
Date of reporting period: 4/30/03
-------------------------
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
The Fund's semi-annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
<Page>
2003 SEMI-ANNUAL REPORT
APRIL 30, 2003
[MORGAN STANLEY LOGO]
THE TURKISH INVESTMENT FUND, INC.
MORGAN STANLEY
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
The Turkish Investment Fund, Inc.
DIRECTORS AND OFFICERS
Mitch Merin William G. Morton, Jr.
CHAIRMAN OF THE DIRECTOR
BOARD OF DIRECTORS
Michael Nugent
Ronald E. Robison DIRECTOR
PRESIDENT AND DIRECTOR
Fergus Reid
John D. Barrett II DIRECTOR
DIRECTOR
Stefanie V. Chang
Thomas P. Gerrity VICE PRESIDENT
DIRECTOR
Lorraine Truten
Gerard E. Jones VICE PRESIDENT
DIRECTOR
James W. Garrett
Joseph J. Kearns TREASURER
DIRECTOR
Mary E. Mullin
Vincent R. McLean SECRETARY
DIRECTOR
Michael Leary
C. Oscar Morong, Jr. ASSISTANT TREASURER
DIRECTOR
INVESTMENT ADVISERS
Morgan Stanley Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Morgan Stanley Investment Management Limited
25 Cabot Square
Canary Wharf
London EI4 4QA
England
ADMINISTRATOR
JPMorgan Chase Bank
73 Tremont Street
Boston, Massachusetts 02108
CUSTODIAN
JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
STOCKHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10030
(800) 278-4353
LEGAL COUNSEL
Clifford Chance US LLP
200 Park Avenue
New York, New York 10166
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726 or visit our website at www.morganstanley.com/im.
(C) 2003 Morgan Stanley
<Page>
THE TURKISH INVESTMENT FUND, INC.
Overview
LETTER TO STOCKHOLDERS
For the six months ended April 30, 2003, The Turkish Investment Fund, Inc. (the
"Fund") had a total return, based on net asset value per share, of 18.04%
compared to 17.69% for the U.S. dollar adjusted Morgan Stanley Capital
International (MSCI) Turkey Index (the "Index"). On April 30, 2003, the closing
price of the Fund's shares on the New York Stock Exchange was $4.46,
representing a 13.7% discount to the Fund's net asset value per share.
MARKET REVIEW
During the six months ending April 30, 2003, Turkey was among the most volatile
global markets, falling as much as 24.7% (Index return) in March before
rebounding in April and eventually returning 17.7%. During this period the
market fell and rebounded more than 25% on two occasions.
In November 2002, after under-performing for most of the year, the market surged
+41.7% following November 3rd elections making it the best performing global
equity market during the month. The equity market rebounded due to prospects
that the winning party, the Pro-Islamic Justice and Development Party (AKP),
would live up to campaign vows to support European Union (EU) reforms and the
economic stabilization program backed by a $16 billion dollar loan from the
International Monetary Fund (IMF). The AKP won nearly two thirds of the seats in
parliament allowing for the formation of a single party government after years
of fractious and unstable coalition governments. In December, however, overall
performance was muted due to the EU council's decision to start accession
negotiations late in 2004 on concerns over the crisis in Iraq. During March,
Turkey, which was the market most negatively affected by the U.S. led war in
Iraq, benefited in April from a surge in domestic sentiment. This surge in
sentiment was a result of policy decisions by the IMF (a disbursement of $700
million dollars in loans) and the Central Bank lowering rates. Prospects that
Turkish construction companies will share in the reconstruction of Iraq, coupled
with lower global oil prices and an improved outlook for tourism has only helped
sentiment. Despite uncertainties over global growth and geo-political concerns
in the Middle East, so far the period under review has proved to be a positive
one for Turkish equities as the market has managed to return +17.4% year-to-date
on the back of a strong +33.6% return month-to-date in April of 2003.
Overall stock selection was the primary driver to the Fund's out-performance
while sector allocation remains mixed. The strongest contribution to relative
performance came from stock selection within sectors such as industrials and
consumer discretionary. Stock selection within financials detracted from
performance; however the impact to performance was mitigated due to our
underweight in the sector relative to the Index. Sector allocations to consumer
staples and industrials were the only other significant detractors during the
period in review.
We remain constructive on the country given falling interest rates as inflation
remains in check and the government advances its privatization efforts. Gross
domestic product growth in 2003-4 is expected to average 5.6%, driven by lower
real interest rates as well as a pick-up in private investment and consumption.
In our opinion, Turkey continues to trade at attractive valuations and is likely
to be a net benefactor from post-war Iraq reconstruction efforts and as a result
we remain overweight industrials and export-oriented stocks. We maintain an
underweight in financials as we remain cautious on Turkey's daunting debt
profile and high real rates. With the political backdrop still a risk, and with
U.S.-Turkey relations under strain we will closely monitor for any slippage on
the IMF program, fiscal policy and resurgence in tensions between the government
and the military.
Sincerely,
Ronald E. Robison
President and Director May 2003
2
<Page>
THE TURKISH INVESTMENT FUND, INC.
STATEMENT OF NET ASSETS
STATEMENT OF NET ASSETS April 30, 2003 (unaudited)
<Table>
<Caption>
VALUE
SHARES (000)
- ------------------------------------------------------------------
TURKISH COMMON STOCKS (100.0%)
(UNLESS OTHERWISE NOTED)
==================================================================
AUTOMOBILES (7.7%)
Tofas Turk Otomobil
Fabrikasi AS 786,667,000 (a) $ 2,236
- ------------------------------------------------------------------
BANKS (8.6%)
Akbank TAS 447,418,652 1,586
Turkiye Is Bankasi
AS 298,674,500 (a) 920
- ------------------------------------------------------------------
2,506
==================================================================
BEVERAGES (2.2%)
Anadolu Efes Biracilik ve
Malt Sanayii AS 32,353,000 (a) 646
==================================================================
BUILDING PRODUCTS (6.5%)
Trakya Cam Sanayii AS 778,972,460 1,890
==================================================================
COMMERCIAL SERVICES & SUPPLIES (3.1%)
Alarko Holding AS 57,348,000 905
==================================================================
CONSTRUCTION MATERIALS (11.7%)
Adana Cimento Sanayii
Turk Anonim Sirketi 177,588,000 941
Akcansa Cimento AS 892,867,000 2,481
- ------------------------------------------------------------------
3,422
==================================================================
DIVERSIFIED FINANCIALS (2.9%)
Koc Holding AS 83,610,000 (a) 844
==================================================================
HOUSEHOLD DURABLES (9.4%)
Arcelik AS 281,805,200 (a) 2,736
==================================================================
INDUSTRIAL CONGLOMERATES (11.7%)
Enka Insaat ve Sanayi AS 97,948,196 (a) 3,409
==================================================================
MEDIA (7.0%)
Dogan Burda Rizzoli Dergi
Yayincilik ve Pazarlama
AS 346,551,000 946
Dogan Yayin Holding AS 675,000,000 (a) 936
Hurriyet Gazetecilik ve
Matbaacilik AS 82,206,720 186
- ------------------------------------------------------------------
2,068
==================================================================
MULTILINE RETAIL (7.9%)
Carsi Buyuk Magazacilik
AS 1,822,910,000 (a) 2,317
==================================================================
OIL & GAS (13.3%)
Tupras-Turkiye Petrol
Rafinerileri AS 558,782,000 3,890
==================================================================
WIRELESS TELECOMMUNICATION SERVICES (8.0%)
Turkcell Iletisim Hizmetleri
AS 369,267,168 (a) 2,217
Turkcell Iletisim Hizmetleri
AS ADR 7,800 (a) 116
- ------------------------------------------------------------------
2,333
==================================================================
<Caption>
VALUE
(000)
- ------------------------------------------------------------------
TOTAL TURKISH COMMON STOCKS
(Cost $26,613) $ 29,202
==================================================================
<Caption>
FACE
AMOUNT
(000)
- ------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (0.9%)
(INTEREST BEARING DEMAND ACCOUNT)
==================================================================
Turkish Lira
(Cost $272) TRL 426,194,207 272
==================================================================
TOTAL INVESTMENTS (100.9%)
(Cost $26,885) 29,474
==================================================================
<Caption>
AMOUNT
(000)
- ------------------------------------------------------------------
OTHER ASSETS (1.1%)
Receivable for
Investments Sold $318
Other 10 328
==================================================================
LIABILITIES (-2.0%)
Payable For:
Investments Purchased (375)
Overdraft Payable (80)
Stockholder Reporting
Expenses (39)
Professional Fees (34)
Investment Advisory
Fees (21)
Directors' Fees
and Expenses (17)
Custodian Fees (10)
Administrative
Fees (4)
Other Liabilities (14) (594)
==================================================================
NET ASSETS (100%)
Applicable to 5,649,846, issued and
outstanding $0.01 par value shares
(30,000,000 shares authorized) $ 29,208
==================================================================
NET ASSET VALUE PER SHARE $ 5.17
==================================================================
AT APRIL 30, 2003, NET ASSETS CONSISTED OF:
Common Stock $ 56
Paid-in Capital 65,590
Undistributed (Distributions in Excess of) Net
Investment Income 138
Accumulated Net Realized Gain (Loss) (39,167)
Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations 2,591
==================================================================
TOTAL NET ASSETS $ 29,208
==================================================================
</Table>
(a) -- Non-income producing.
ADR -- American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
3
<Page>
THE TURKISH INVESTMENT FUND, INC.
Financial Statements
<Table>
<Caption>
SIX MONTHS ENDED
APRIL 30, 2003
(UNAUDITED)
STATEMENT OF OPERATIONS (000)
- ---------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of $15 of foreign taxes withheld) $ 395
Interest 2
=====================================================================================================================
TOTAL INVESTMENT INCOME 397
=====================================================================================================================
EXPENSES
Investment Advisory Fees 129
Professional Fees 36
Custodian Fees 30
Administrative Fees 21
Stockholder Reporting Expenses 25
=====================================================================================================================
TOTAL EXPENSES 241
=====================================================================================================================
NET INVESTMENT INCOME (LOSS) 156
=====================================================================================================================
NET REALIZED GAIN (LOSS) ON:
Investments 1,929
Foreign Currency Transactions 1
=====================================================================================================================
NET REALIZED GAIN (LOSS) 1,930
=====================================================================================================================
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments 2,312
Foreign Currency Translations 2
=====================================================================================================================
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) 2,314
=====================================================================================================================
NET REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) 4,244
=====================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $4,400
=====================================================================================================================
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2002
STATEMENT OF CHANGES IN NET ASSETS (000) (000)
- ---------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income (Loss) $ 156 $ (148)
Net Realized Gain (Loss) 1,930 (20,927)
Change in Unrealized Appreciation (Depreciation) 2,314 22,143
=====================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,400 1,068
=====================================================================================================================
Distributions from and/or in excess of:
Net Investment Income -- (26)
=====================================================================================================================
Capital Share Transactions:
Repurchase of Shares (434,459 shares in 2002) -- (1,952)
=====================================================================================================================
TOTAL INCREASE (DECREASE) 4,400 (910)
=====================================================================================================================
Net Assets:
Beginning of Period 24,808 25,718
- --------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT
INCOME OF $138 AND $(18), RESPECTIVELY) $ 29,208 $ 24,808
=====================================================================================================================
</Table>
The accompanying notes are an integral part of the financial statements.
4
<Page>
THE TURKISH INVESTMENT FUND, INC.
SELECTED PER SHARE DATA AND RATIOS Financial Highlights
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ------------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.39 $ 4.23 $ 17.69 $ 9.52 $ 4.94 $ 8.74
- -----------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 0.03+ (0.03) 0.06 (0.12) 0.05 0.14
Net Realized and Unrealized Gain (Loss)
on Investments 0.75 0.18 (10.30) 8.03 4.58 (3.80)
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.78 0.15 (10.24) 7.91 4.63 (3.66)
- -----------------------------------------------------------------------------------------------------------------------
Distributions from and/or in excess of:
Net Investment Income -- (0.00)# -- (0.03) (0.12) (0.14)
Net Realized Gain -- -- (3.23) -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.00)# (3.23) (0.03) (0.12) (0.14)
- -----------------------------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Share Repurchase
Program -- 0.01 0.01 0.29 0.07 --
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 5.17 $ 4.39 $ 4.23 $ 17.69 $ 9.52 $ 4.94
=======================================================================================================================
PER SHARE MARKET VALUE, END OF
PERIOD $ 4.46 $ 4.07 $ 4.41 $ 13.38 $ 8.19 $ 4.31
=======================================================================================================================
TOTAL INVESTMENT RETURN:
Market Value 9.58%** (7.64)% (55.14)% 63.60% 94.34% (42.36)%
Net Asset Value (1) 18.04%** 3.86% (67.47)% 86.09% 97.06% (42.39)%
=======================================================================================================================
RATIOS, SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(THOUSANDS) $29,208 $ 24,808 $25,718 $108,138 $62,476 $34,551
- -----------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.76%* 1.86%@ 1.94% 1.26% 1.96% 1.71%
Ratio of Net Investment Income (Loss) to
Average Net Assets 1.14%* (0.49)% 0.83% (0.57)% 0.66% 1.76%
Portfolio Turnover Rate 99%** 164% 163% 155% 175% 68%
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Annualized
** Not Annualized
(1) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. This percentage is not an indication of the performance of a
stockholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
@ The effect of the reversal of the deferred directors' fees in fiscal year
2002 was to decrease the expense ratio by 0.23%.
+ Per share amount is based on average shares outstanding.
# Amount is less than $0.005 per share.
The accompanying notes are an integral part of the financial statements.
5
<Page>
THE TURKISH INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS April 30, 2003 (unaudited)
The Turkish Investment Fund, Inc. (the "Fund") was incorporated in Maryland
on September 27, 1988 and is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended. The Fund's investment objective is long-term capital appreciation
through investments primarily in equity securities of Turkish corporations.
A. ACCOUNTING POLICIES: The following significant accounting policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies. Such policies are consistently followed by the
Fund in the preparation of its financial statements. Accounting principles
generally accepted in the United States of America may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: In valuing the Fund's assets, all listed securities,
for which market quotations are readily available are valued at the last
sales price on the valuation date, or if there was no sale on such date at
the mean between the current bid and asked prices. Securities which are
traded over-the-counter are valued at the mean of current bid and asked
prices obtained from reputable brokers. Short-term securities which mature
in 60 days or less are valued at amortized cost. For all other securities
and investments for which market values are not readily available,
including restricted securities, and where prices determined in accordance
with aforementioned procedures are not reflective of fair market value,
values are determined in good faith, under fair valuation procedures
adopted by the Board of Directors, although actual calculations may be done
by others.
2. REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements under
which the Fund lends excess cash and takes possession of securities with an
agreement that the counterparty will repurchase such securities. In
connection with transactions in repurchase agreements, a bank as custodian
for the Fund takes possession of the underlying securities (collateral),
with a market value at least equal to the amount of the repurchase
transaction, including principal and accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Fund has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy by
the counterparty to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
3. FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in Turkish lira are
translated into U.S. dollars at the mean of the bid and asked prices of
such currency against U.S. dollars last quoted by a major bank as follows:
--investments, other assets and liabilities at the prevailing rate of
exchange on the valuation date;
--investment transactions and investment income at the prevailing rate of
exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rate and market values at the close of the period, the Fund does not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rate from the fluctuations arising from
changes in the market prices of the securities held at period end.
Similarly, the Fund does not isolate the effect of changes in the foreign
exchange rate from the fluctuations arising from changes in the market
prices of securities sold during the period. Accordingly, realized and
unrealized foreign currency gains (losses) due to securities transactions
are included in the reported net realized and unrealized gains (losses) on
investment transactions and balances.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of foreign
currency exchange contracts, disposition of foreign currency, currency
gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amount of
investment income and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains (losses) from valuing foreign currency
denominated assets and liabilities at period end exchange rates are
reflected as a component of unrealized appreciation (depreciation) on
investments and foreign currency translations in the Statement of Net
Assets. The change in net unrealized currency gains (losses) on foreign
currency translations for the period is reflected in the Statement of
Operations.
6
<Page>
A significant portion of the Fund's net assets consists of equity
securities denominated in Turkish lira. Changes in currency exchange rates
will affect the value of and investment income from securities. Turkish
securities are often subject to greater price volatility, limited
capitalization and liquidity, and higher rates of inflation than securities
of companies based in the United States. In addition, Turkish securities
may be subject to substantial governmental involvement in the economy and
greater social, economic and political uncertainty.
The Fund may use derivatives to achieve its investment objectives. The Fund may
engage in transactions in futures contracts on foreign currencies, stock
indices, as well as in options, swaps and structured notes. Consistent with the
Fund's investment objectives and policies, the Fund may use derivatives for
non-hedging as well as hedging purposes.
Following is a description of derivative instruments that the Fund has utilized
and their associated risks:
4. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign
currency exchange contracts generally to attempt to protect securities and
related receivables and payables against changes in future foreign exchange
rates and, in certain situations, to gain exposure to a foreign currency. A
foreign currency exchange contract is an agreement between two parties to
buy or sell currency at a set price on a future date. The market value of
the contract will fluctuate with changes in currency exchange rates. The
contract is marked-to-market daily and the change in market value is
recorded by the Fund as unrealized gain or loss. The Fund records realized
gains or losses when the contract is closed equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risk may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
5. OTHER: Security transactions are accounted for on the date the securities
are purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the specific identified cost basis. Interest
income is recognized on the accrual basis. Dividend income is recorded on
the ex-dividend date (except certain dividends which may be recorded as
soon as the Fund is informed of such dividends) net of applicable
withholding taxes.
B. ADVISERS: Morgan Stanley Investment Management Inc. and Morgan Stanley
Investment Management Limited (the "Advisers") provide investment advisory
services to the Fund under the terms of an Investment Advisory Agreement (the
"Agreement"). Under the Agreement, advisory fees are computed weekly and payable
monthly at an annual rate of 0.95% of the Fund's first $50 million of average
weekly net assets, 0.75% of the next $50 million of average weekly net assets
and 0.55% of average weekly net assets in excess of $100 million.
C. ADMINISTRATOR: JPMorgan Chase Bank, through its corporate affiliate J.P.
Morgan Investor Services Co. (the "Administrator"), provides administrative
services to the Fund under an Administration Agreement. The Administrator is
paid a fee computed weekly and payable monthly at an annual rate of 0.02435% of
the Fund's average weekly net assets, plus $24,000 per annum. In addition, the
Fund is charged for certain out-of-pocket expenses incurred by the Administrator
on its behalf.
D. CUSTODIAN: JPMorgan Chase Bank serves as custodian for the Fund. Custody
fees are payable monthly based on assets held in custody, investment purchase
and sales activity and account maintenance fees, plus reimbursement for certain
out-of-pocket expenses.
E. FEDERAL INCOME TAXES: It is the Fund's intention to continue to qualify as
a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the financial
statements. Dividend income and distributions to stockholders are recorded on
the ex-dividend date.
The tax character of distributions paid may differ from the character of
distributions shown on the Statements of Changes in Net Assets due to short-term
capital gains being treated as ordinary income for tax purposes. The tax
character of distributions paid during 2002 and 2001 were as follows:
<Table>
<Caption>
2002 DISTRIBUTIONS 2001 DISTRIBUTIONS
PAID FROM: PAID FROM:
(000) (000)
-------------------------- -------------------------
LONG-TERM LONG-TERM
ORDINARY CAPITAL ORDINARY CAPITAL
INCOME GAIN INCOME GAIN
-----------------------------------------------------
$26 $-- $7,123 $12,512
</Table>
7
<Page>
The amount and character of income and capital gain distributions to be paid by
the Fund are determined in accordance with Federal income tax regulations, which
may differ from accounting principles generally accepted in the United States of
America. The book/tax differences are considered either temporary or permanent
in nature.
Temporary differences are attributable to differing book and tax treatments for
the timing of the recognition of gains and losses on certain investment
transactions and the timing of the deductibility of certain expenses.
Permanent differences may result in reclassifications among undistributed net
investment income (loss), accumulated net realized gain (loss) and paid-in
capital. Adjustments for permanent book-tax differences, if any, are not
reflected in ending undistributed net investment income (loss) for the purpose
of calculating net investment income (loss) per share in the financial
highlights.
At April 30, 2003, the U.S. Federal income tax cost basis of investments
(excluding foreign currency if applicable) was $26,613,000 and, accordingly, net
unrealized appreciation for U.S. Federal income tax purposes was $2,589,000, of
which $3,907,000 related to appreciated securities and $1,318,000 related to
depreciated securities.
At October 31, 2002, the Fund had a capital loss carryforward for U.S. Federal
income tax purposes of approximately $40,595,000 available to offset future
capital gains of which $15,443,000 will expire on October 31, 2009 and
$25,152,000 to expire on October 31, 2010. To the extent that capital gains are
offset, such gains will not be distributed to the stockholders.
F. OTHER: During the six months ended April 30, 2003, the Fund made purchases
and sales totaling $27,230,000 and $26,875,000, respectively, of investment
securities other than long-term U.S. Government securities and short-term
investments. There were no purchases or sales of long-term U.S. Government
securities.
Each Director of the Fund who is not an officer of the Fund or an affiliated
person as defined under the Investment Company Act of 1940, as amended, may
elect to participate in the Directors' Deferred Compensation Plan (the
"Compensation Plan"). Under the Compensation Plan, such Directors may elect
to defer payment of a percentage of their total fees earned as a Director of
the Fund. These deferred portions will be treated, based on an election by
the Director, as if they were either invested in the Fund's shares or
invested in U.S. Treasury Bills, as defined under the Compensation Plan. At
April 30, 2003, the deferred fees payable under the Compensation Plan totaled
$17,000 and are included in Directors' Fees and Expenses on the Statement of
Net Assets. The deferred portion of Directors' Fees and Expenses shown on the
Statement of Operations is impacted by fluctuations in the market value of
the investments selected by each Director. For the six months ended April 30,
2003, Other Expenses were reduced by approximately $3,000 due to these
fluctuations.
During the six months ended April 30, 2003, the Fund incurred $35,000 of
brokerage commissions with Morgan Stanley & Co., Incorporated, an affiliate of
the Advisers.
On September 15, 1998, the Fund commenced a share repurchase program for
purposes of enhancing stockholder value and reducing the discount at which the
Fund's shares trade from their net asset value. For the six months ended April
30, 2003, the Fund did not repurchase shares. From the inception of the program
through April 30, 2003, the Fund has repurchased 1,396,709 of its shares at an
average discount of 17.31% from net asset value per share. The Fund expects to
continue to repurchase its outstanding shares at such time and in such amounts
as it believes will further the accomplishment of the foregoing objectives,
subject to review by the Board of Directors.
G. SUBSEQUENT EVENT: The Annual Meeting of the Stockholders of the Fund was
held on June 5, 2003. The following is a summary of the proposal presented and
the total number of shares voted:
PROPOSAL:
1. To elect the following Directors effective July 31, 2003:
<Table>
<Caption>
VOTES IN VOTES
FAVOR OF AGAINST
- ------------------------------------------------------------
Phillip J. Purcell 3,567,022 206,859
Charles A. Fiumefreddo 3,566,522 207,359
Michael Bozic 3,566,522 207,359
Edwin J. Garn 3,566,503 207,378
Wayne E. Hedien 3,566,503 207,378
Dr. Manuel H. Johnson 3,567,022 206,859
James F. Higgins 3,567,022 206,859
</Table>
8
<Page>
THE TURKISH INVESTMENT FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each stockholder will be deemed to have elected, unless American Stock Transfer
& Trust Company (the "Plan Agent") is otherwise instructed by the stockholder in
writing, to have all distributions automatically reinvested in Fund shares.
Participants in the Plan have the option of making additional voluntary cash
payments to the Plan Agent, annually, in any amount from $100 to $3,000, for
investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date in full and fractional shares. If the market price per share
equals or exceeds net asset value per share on the reinvestment date, the Fund
will issue shares to participants at net asset value. If net asset value is less
than 95% of the market price on the reinvestment date, shares will be issued at
95% of the market price. If net asset value exceeds the market price on the
reinvestment date, participants will receive shares valued at market price. The
Fund may purchase shares of its Common Stock in the open market in connection
with dividend reinvestment requirements at the discretion of the Board of
Directors. Should the Fund declare a dividend or capital gain distribution
payable only in cash, the Plan Agent will purchase Fund shares for participants
in the open market as agent for the participants.
The Plan Agent's fees for the reinvestment of dividends and distributions
will be paid by the Fund. However, each participant's account will be charged a
pro rata share of brokerage commissions incurred on any open market purchases
effected on such participant's behalf. A participant will also pay brokerage
commissions incurred on purchases made by voluntary cash payments. Although
stockholders in the Plan may receive no cash distributions, participation in the
Plan will not relieve participants of any income tax which may be payable on
such dividends or distributions.
In the case of stockholders, such as banks, brokers or nominees, that hold
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
stockholder as representing the total amount registered in the stockholder's
name and held for the account of beneficial owners who are participating in the
Plan.
Stockholders who do not wish to have distributions automatically reinvested
should notify the Plan Agent in writing. There is no penalty for
non-participation or withdrawal from the Plan, and stockholders who have
previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
The Turkish Investment Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
59 Maiden Lane
New York, New York 10030
1-800-278-4353
9
<Page>
ITEM 2. CODE OF ETHICS. Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual
reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual
reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable for semi-annual
reports.
ITEM 6. [RESERVED.]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. Not applicable for semi-annual reports.
ITEM 8. [RESERVED.]
ITEM 9. CONTROLS AND PROCEDURES.
The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal controls
or in other factors that could significantly affect the Fund's internal controls
subsequent to the date of their evaluation.
ITEM 10. EXHIBITS.
(a) Code of Ethics - Not applicable for semi-annual reports.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer attached hereto as part of EX-99.CERT.
<Page>
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 Turkish Investment Fund, Inc.
By: Ronald E. Robison
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: July 2, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: Ronald E. Robison
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: July 2, 2003
By: James W. Garrett
Name: James W. Garrett
Title: Principal Financial Officer
Date: July 2, 2003