SEMI-ANNUAL REPORT
June 30, 1996
BERGER INSTITUTIONAL PRODUCTS TRUST
BERGER IPT-100 FUND
BERGER IPT-GROWTH AND INCOME FUND
BERGER IPT-SMALL COMPANY GROWTH FUND
Berger Institutional Products Trust is presenting a combined
semi-annual report which includes the Berger IPT-100 Fund,
Berger IPT-Growth and Income Fund and Berger IPT-Small Company
Growth Fund. The report reflects the financial position of
each Fund at June 30, 1996 and the results of their operations
and changes in their net assets for the period May 1, 1996
(date operations commenced) to June 30, 1996 in a single document.
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Berger IPT-100 Fund
Portfolio Manager's Letter 2
Schedule of Investments 3
Berger IPT-Growth and Income Fund
Portfolio Manager's Letter 5
Schedule of Investments 6
Berger IPT-Small Company Growth Fund
Portfolio Manager's Letter 8
Schedule of Investments 9
Financial Statements 12
Notes to Financial Statements 15
Financial Highlights 17
</TABLE>
PORTFOLIO MANAGER'S LETTER
Berger IPT-100 Fund
Dear Shareholder:
We are very pleased to submit to you the inaugural semi-annual
report for the Berger IPT-100 Fund. The Fund commenced operations on
May 1, 1996 in what has proven to be both an interesting and exciting
time for equity market investors. At inception, it was the opinion of
management that while we continue to be extremely bullish on the long
term prospects for equity investors, a degree of near term caution was
warranted. We undertook a strategy of identifying those stocks which
we feel offer the best long term growth potential and would make solid
long term portfolio holdings. We further elected to be very patient
in executing these purchase decisions while the market digests some
of the near term uncertainties currently clouding the environment.
At quarter end, approximately 70% of portfolio assets were invested
in high quality growth stocks while the balance remains in short term
cash equivalents awaiting future investment. Total return since inception
has been (2.2)% while the S&P 500 and S&P Midcap indices have returned
3.1% and (0.1)% respectively.*
As we look to the second half of the year we see many questions
which need to be answered before this market has the opportunity to move
significantly higher. While we don't believe any of our near term concerns
pose serious threats to the long term outlook, we do believe that the next
several months could be very choppy as we work our way through these question
marks. Stronger than expected economic growth has pushed long term interest
rates higher and early signs of inflationary pressures are emerging in many
industries. The onset of the political season in this election year could
also lead to some uncertainties in the bond market. The market is also
adjusting to a significant slowing in the rate of earnings per share growth
in Corporate America and a tremendous lack of future earnings visibility.
In spite of the near-term outlook, we strongly believe that any price
weakness in quality growth stocks will prove to be an exceptional buying
opportunity for long term investors. We continue to identify a great number
of companies which, in our opinion, have the ability to deliver highly
predictable, above average rates of earnings per share growth; well managed
companies operating in environments dynamic enough to yield strong earnings
results. We believe that the economy will slow in the second half of the
year which should allow the upward pressure on interest rates to abate, as
well as, provide for a moderation of inflationary expectations. We expect
that in a slower growth environment investors will seek out those growth
companies which posses a higher degree of earnings predictability and
visibility.
We look optimistically toward the future and appreciate the trust
and confidence exhibited by your investment in the Berger IPT-100 Fund.
Respectfully submitted,
Rodney L. Linafelter
President and Portfolio Manager
* Performance figures are based on historical results and are not
intended to be indicative of future performance. Performance figures do
not include the deduction of any charges or expenses attributable to any
particular variable insurance contract. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
TOP TEN HOLDINGS AS OF 6/30/96
% of Fund's
Investment
<S> <C>
1. Microsoft Corp. 2.5%
2. WorldCom Inc. 2.3%
3. HBO & Co. 2.2%
4. HFS Inc. 2.1%
5. Schlumberger Ltd. 2.1%
6. Tidewater Inc. 2.0%
7. Sonat Offshore Drilling Inc.1.9%
8. Boeing Co.d 1.8%
9. Mirage Resorts Inc. 1.8%
10. Halliburton Co. 1.7%
</TABLE>
BERGER IPT-100 FUND
<TABLE>
<CAPTION>
Schedule of Investments / June 30, 1996
Shares, Units or
Principal Amount Market Value
COMMON STOCK - 68.8%
<S> <C> <C> <C>
Aerospace/Defense - 1.8%
50 Boeing Co. $ 4,356
Auto/Truck - Original Equipment - 1.4%
100 Lear Corp.* 3,525
Chemicals - Specialty - 1.6%
90 Praxair Inc. 3,803
Commercial Services - Misc. - 2.6%
125 AccuStaff Inc.* 3,406
80 APAC TeleServices Inc.* 2,880
6,286
Computer - Memory Devices - 0.9%
125 EMC Corp.* 2,328
Computer - Mini/Micro - 1.0%
70 Gateway 2000 Inc.* 2,380
Computer - Peripheral Equipment - 1.2%
60 Adaptec Inc.* 2,842
Computer - Services - 3.3%
50 Electronic Data Systems Inc. 2,687
80 HBO & Co. 5,420
8,107
Computer - Software - 2.5%
50 Microsoft Corp.* 6,006
Electronic - Military Systems - 1.2%
50 General Motors Corp. Cl H 3,006
Electronic - Misc. Components - 1.5%
100 Solectron Corp.* 3,787
Electronic - Scientific Instruments - 2.7%
90 Input/Output Inc.* 2,914
90 Thermo Electron Corp.* 3,746
6,660
Electronic - Semiconductor Manufacturing - 2.1%
60 MEMC Electronic Materials Inc.2,325
100 Sanmina Corp.* 2,700
5,025
Financial Services - Misc. - 1.6%
50 First Data Corp. 3,981
Leisure - Gaming - 2.9%
80 Mirage Resorts Inc.* 4,320
100 Trump Hotels & Casino Resorts 2,850
7,170
Leisure - Hotels & Motels - 2.1%
75 HFS Inc.* 5,250
Medical - Ethical Drugs - 0.7%
30 Elan Corp. PLC ADR* (Ireland) 1,714
Medical - Instruments - 1.1%
70 IDEXX Laboratories Inc.* 2,747
Medical - Products - 3.4%
75 Baxter International Inc. 3,544
50 Boston Scientific Corp.* 2,250
50 Guidant Corp. 2,462
8,256
Medical - Wholesale Drug/Sundries - 1.2%
40 Cardinal Health Inc. 2,885
Medical/Dental - Supplies - 1.5%
50 Luxottica Group SPA ADR (Ital)3,669
Office - Equipment & Automation - 0.7%
60 Danka Business Systems PLC ADR (United Kingdom)
1,755
Oil & Gas - Drilling - 2.9%
120 Reading & Bates Corp.* 2,655
90 Sonat Offshore Drilling Inc. 4,545
7,200
Oil & Gas - Field Services - 9.9%
100 BJ Services Co.* 3,513
75 Halliburton Co. 4,163
110 Petroleum Geo-Services A/S ADR* (Norway)
3,121
60 Schlumberger Ltd. 5,055
110 Tidewater Inc. 4,826
60 Western Atlas Inc.* 3,495
24,173
Oil & Gas - Machinery/Equipment - 2.5%
100 Baker Hughes Inc. 3,288
100 Dresser Industries Inc. 2,950
6,238
Retail - Apparel/Shoe - 2.8%
110 Gap Inc. 3,534
50 Gucci Group N.V.* (Netherlands3,225
6,759
Retail - Department Stores - 1.4%
100 Federated Department Stores In3,413
Retail/Wholesale - Auto Parts - 1.0%
70 AutoZone Inc.* 2,433
Shoes & Related Apparel - 1.6%
75 Nine West Group Inc.* 3,834
Telecommunications - Equipment - 0.9%
100 ECI Telecom Ltd. (Israel) 2,325
Telecommunications - Services - 4.7%
125 IntelCom Group Inc.* (Canada) 3,125
100 PanAmSat Corp.* 2,900
100 WorldCom Inc.* 5,538
11,563
Textile - Apparel Manufacturing - 1.2%
60 Jones Apparel Group Inc. 2,948
Transportation - Airline - 0.9%
100 America West Airlines Inc. Cl 2,200
TOTAL COMMON STOCK (Cost $172,053)
168,624
U.S. GOVERNMENT OBLIGATIONS - 30.4%
$75,000 U.S. Treasury Bills due 08/22/96
74,469
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $74,469) 74,469
TOTAL INVESTMENTS (Cost $246,522+) - 99.2% 243,093
OTHER ASSETS, LESS LIABILITIES - 0.8% 1,934
NET ASSETS - 100% $245,027
</TABLE>
* Non-Income Producing Security.
+ Also represents cost for tax purposes.
See notes to financial statements.
PORTFOLIO MANAGER'S LETTER
Berger IPT-Growth and Income Fund
Dear Shareholder:
We are very pleased to submit to you the inaugural semi-annual
report of the Berger IPT-Growth and Income Fund. The Fund commenced
operations on May 1, 1996 in what has proven to be both an interesting
and exciting time for equity market investors. At inception, it was
the opinion of management that while we continue to be extremely bullish
on the long term prospects for equity investors, a degree of near term
caution was warranted. We undertook a strategy of identifying those
stocks which we feel offer above average long term earnings growth
potential and generally, some moderate level of dividend income which
will become the core of our portfolio. We further elected to be very
patient in executing these purchase decisions while the market digests
some of the near term uncertainties currently clouding the environment.
As of quarter end, we had invested approximately 90% of portfolio assets
in common stocks and convertible bonds of companies which we believe have
exciting long term growth potential. Total return since inception has
been 0.2% versus the S&P 500 which has returned a comparable term
performance of 3.1%.*
As we look to the second half of the year we see many questions
which need to be answered before this market has the opportunity to move
significantly higher. While we do not believe any of our near-term concerns
pose serious threats to the long term outlook, we do believe that the next
several months could be very choppy as we work our way through these
questions marks. Stronger than expected economic growth has pushed long
term interest rates higher and early signs of inflationary pressures are
emerging in many industries. The onset of the political season in this
election year could also lead to some uncertainties in the bond market.
The market is also adjusting to a significant slowing in the rate of
earnings per share growth in Corporate America and a tremendous lack of
future earnings visibility.
In spite of the near-term outlook, we strongly believe that any
price weakness in quality growth stocks will prove to be an exceptional
buying opportunity for long term investors. We continue to identify a
great number of companies which, in our opinion, have the ability to
deliver highly predictable, above average rates of earnings per share
growth while paying out moderate levels of dividend income; well managed
companies operating in environments dynamic enough to yield strong earnings
results. We believe that the economy will slow in the second half of the
year which should allow the upward pressure on interest rates to abate,
as well as, provide for a moderation of inflationary expectations.
We expect that in a slower growth environment investors will seek out
those growth companies which possess a higher degree of earnings
predictability and visibility.
We look optimistically toward the future and appreciate the trust
and confidence exhibited by your investment in the Berger IPT-Growth and
Income Fund.
Respectfully submitted,
Rodney L. Linafelter
President and Portfolio Manager
* Performance figures are based on historical results and are not
intended to be indicative of future performance. Performance figures do
not include the deduction of any charges or expenses attributable to any
particular variable insurance contract. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
TOP TEN HOLDINGS AS OF 6/30/96
% of Fund's
Investment
<S> <C>
1. Lilly (Eli) & Co. 4.0%
2. WorldCom Inc. - 5% due 08/03 2.9%
3. Nike Inc. Cl B 2.9%
4. Baker Hughes Inc. 2.6%
5. Dole Food Company Inc. 2.6%
6. PepsiCo Inc. 2.5%
7. 3Com Corp.144A-10.25%due11/01 2.5%
8. Chrysler Corp. 2.5%
9. Enron Corp. 2.4%
10. Frontier Corp. 2.4%
BERGER IPT-GROWTH AND INCOME FUND
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments / June 30, 1996
Shares, Units or
Principal Amount Market Value
COMMON STOCK - 70.0%
<S> <C> <C> <C>
Aerospace/Defense - 2.4%
70 Boeing Co. $ 6,099
Auto Manufacturers - Domestic - 2.5%
100 Chrysler Corp. 6,200
Beverages - Alcoholic - 2.1%
70 Anheuser-Busch Companies Inc5,250
Beverages - Soft Drinks - 2.5%
180 PepsiCo Inc. 6,367
Building - Hand Tools - 1.7%
110 Black & Decker Corp. 4,249
Building - Heavy Construction - 2.1%
80 Fluor Corp. 5,230
Chemicals - Basic - 2.3%
175 Monsanto Co. 5,687
Computer - Mainframes - 2.0%
50 International Business Machines Corp.
4,950
Computer - Mini/Micro - 1.6%
40 Hewlett-Packard Co 3,985
Computer - Services - 3.9%
60 Computer Sciences Corp.* 4,485
100 Electronic Data Systems Inc.5,375
9,860
Consumer Products - Misc. - 1.7%
100 Duracell International Inc. 4,313
Diversified Operations - 4.3%
110 Alco Standard Corp. 4,978
150 Corning Inc. 5,756
10,734
Electronic - Military Systems - 2.4%
100 General Motors Corp. Cl H 6,012
Finance - Equity REIT - 2.2%
150 Crescent Real Estate Equiti 5,512
Food - Canned - 2.6%
150 Dole Food Company Inc. 6,450
Leisure - Photo Equipment/Related - 2.2%
70 Eastman Kodak Co. 5,442
Medical - Drug/Diversified - 6.3%
100 American Home Products Corp.6,013
100 Astra AB Cl A Sponsored ADR (Sweden)
4,375
110 Johnson & Johnson 5,445
15,833
Medical - Ethical Drugs - 4.0%
155 Eli Lilly & Co. 10,075
Medical - Products - 1.9%
100 Baxter International Inc. 4,725
Office Supplies Manufacturing - 2.1%
150 Deluxe Corp. 5,325
Oil & Gas - Field Services - 4.5%
100 Halliburton Co. 5,550
70 Schlumberger Ltd. 5,898
11,448
Oil & Gas - Machinery/Equipment - 5.0%
200 Baker Hughes Inc. 6,575
200 Dresser Industries Inc. 5,900
12,475
Oil & Gas - Production/Pipeline - 2.4%
150 Enron Corp. 6,131
Shoes & Related Apparel - 2.9%
70 Nike Inc. Cl B 7,193
Utility - Telephone - 2.4%
200 Frontier Corp. 6,125
TOTAL COMMON STOCK (Cost $175,008)
175,670
CONVERTIBLE PREFERRED STOCK - 3.3%
Computer - Software - 1.0%
50 Wang Laboratories Inc. 144A 6.5% Cv Pfd Series B**
2,369
Funeral Services & Related - 2.3%
60 SCI Finance LLC $3.125 Cv Pfd Series A
5,797
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $8,101) 8,166
CONVERTIBLE DEBENTURES - 14.7%
Computer - Local Networks - 2.5%
4,000 3Com Corp. 144A - 10.25% due 11/01/01**
6,260
Computer - Services - 2.3%
3,000 First Financial Management Corp. - 5% due 12/15/99
5,671
Electronic - Scientific Instruments - 2.4%
3,000 Thermo Electron Corp. 144A - 5% due 04/15/01**
6,030
Medical - Outpatient/Home Care - 2.3%
3,000 HEALTHSOUTH Corp. - 5% due 04/01/01
5,738
Retail - Department Stores - 2.3%
5,000 Federated Department Stores Inc. - 5% due 10/01/03
5,825
Telecommunications - Services - 2.9%
5,000 WorldCom Inc. - 5% due 08/15/03
7,212
TOTAL CONVERTIBLE DEBENTURES
(Cost $36,237) 36,736
U.S. GOVERNMENT OBLIGATIONS - 15.0%
$ 38,000 U.S. Treasury Bills due 08/22/96
37,731
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $37,731) 37,731
TOTAL INVESTMENTS (Cost $257,077+) - 103.0% 258,303
OTHER ASSETS, LESS LIABILITIES - (3.0)% (7,411)
NET ASSETS - 100% $250,892
</TABLE>
* Non-Income Producing Security.
** Pursuant to Rule 144A, resale is restricted to qualified
institutional buyers.
+ Also represents cost for tax purposes.
See notes to financial statements.
PORTFOLIO MANAGER'S LETTER
Berger IPT-Small Company Growth Fund
Dear Shareholder:
The Berger IPT-Small Company Growth Fund has been a bit of a
roller coaster since inception on May 1, 1996. The Fund in its first
two months of existence returned 5.3%*. This compares with a return
of (0.3)% for the Russell 2000 Index in the same time period.
The market, we believe, is at a critical juncture. The series
of conflicting economic reports have caused wild gyrations in the market
as the future direction of the economy, interest rates and inflation
remain unclear. The market has clearly focused on the Federal Reserve's
intentions to raise rates. The primary point of focus with respect to
inflation is the uptick in wage inflation. While this measure is moving
up slightly after years of quiescence, thus far productivity improvements
have offset this modest increase. Most recently, a flat employment cost
index and several other indications of slower economic growth have emerged.
The current consensus is that the Federal Reserve is unlikely to raise
rates in the short term.
For the time being, we believe the environment favors a resumption
of strong performances by smaller cap stocks. The recent sharp correction
in the market has created valuations which may allow more upside potential
for the smaller stocks. The main impetus to this performance is the expected
faster growth of earnings by smaller stocks than by larger cap stocks. In
addition, critical to this performance is a continuance of the moderate
growth which has characterized this phase of the economic cycle. Too
strong an economy would likely lead to higher rates and concerns about
inflation. Too slow a rate of growth would give rise to recession fears,
which would cause investors to become more risk averse and shun the higher
risk small cap sectors.
Finally, I want to thank you for your willingness to trust Berger
Associates with the management of your assets. It is a charge we take very
seriously and we hope to ingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
2. AGREEMENTS
Berger serves as the Trust's investment advisor. As compensation for
its services to the Trust, Berger receives an investment advisory fee which is
accrued daily at the applicable rate and paid monthly. The fee is based on an
annual rate of each portfolio's average net assets as follows: IPT-100 and
IPT-G&I at .75 of 1% of average daily net assets; IPT-SCG at .90 of 1% of
average daily net assets. Berger has agreed to waive its advisory fee to the
extent the Funds' normal operating expenses in any fiscal year, including the
management fee but excluding brokerage commissions, interest, taxes and
extraordinary expenses, of each of the IPT-100 and the IPT-G&I exceed 1.00%,
and normal operating expenses in any fiscal year of the IPT-SCG exceed 1.15%
of the Funds' average daily net assets.
The Trust has entered into an administrative services agreement with
Berger. The administrative services agreement provides for an annual fee of
.01 of 1% of the average daily net assets of each Fund, computed daily and
payable monthly.
The Trust has also entered into a recordkeeping and pricing agreement
with Investors Fiduciary Trust Company ("IFTC"), who also serves as each Fund's
custodian and transfer agent. The recordkeeping and pricing agreement provides
for the monthly payment of a base fee per Fund plus a fee computed as a
percentage of average daily net assets on a total relationship basis. IFTC's
fees for custody, recordkeeping and pricing, or transfer agency services are
subject to reduction by credits earned by each Fund, based on the cash balances
of the Fund held by IFTC as custodian or by credits received from directed
brokerage transactions. For the period May 1, 1996 (date operations commenced)
to June 30, 1996, the IPT-100, IPT-G&I and the IPT-SCG Funds received $16, $17
and $75, respectively, in earnings and brokerage credits and paid IFTC fees
(after earnings and brokerage credits) of $574, $424 and $1,134, respectively,
for services rendered.
Certain officers and directors of Berger are also officers and trustees
of the Trust. Trustees who are not affiliated with Berger did not receive
trustees' fees from the IPT-100, IPT-G&I and IPT-SCG Funds for the period ended
June 30, 1996.
3. INVESTMENT TRANSACTIONS
<TABLE>
<CAPTION>
A. Purchases and Sales
Purchases and sales of investment securities from May 1, 1996
(date operations commenced) to June 30, 1996 were as follows:
Berger IPT- Berger IPT- Berger IPT-
100 Fund Growth & Income Small Company
Fund Growth Fund
<S> <C> <C> <C>
Purchases of investment securities(excluding short-term securities)
$181,078 $255,616 $237,840
Sales of investment securities (excluding short-term securities)
$6,942 $34,804 $7,711
</TABLE>
There were no purchases or sales of long-term U.S. Government securities
during the period.
<TABLE>
<CAPTION>
At June 30, 1996, the composition of unrealized appreciation (the excess of
value over tax cost) and unrealized depreciation (the excess of tax cost over
value) for securities was as follows:
Berger IPT- Berger IPT- Berger IPT-
100 Fund Growth & Income Small Company
Fund Growth Fund
<S> <C> <C> <C>
Appreciation $6,894 $6,115 $26,133
Depreciation (10,323) (4,889) (10,959)
Net $(3,429) $1,226 $15,174
</TABLE>
B. Federal Income Tax Status
Dividends paid by the Funds from net investment income and distributions of
net realized short-term capital gains are, for Federal income tax purposes,
taxable as ordinary income to shareholders.
The Funds distribute net realized capital gains, if any, to their shareholders
at least annually, if not offset by capital loss carryovers. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to the differing treatments
for net operating losses and expiring capital loss carryforwards. Accordingly,
these permanent differences in the character of income and distributions between
financial statements and tax basis will be reclassified to paid-in-capital.
<TABLE>
<CAPTION>
Financial Highlights / June 30, 1996
For a Share Outstanding Throughout the Period May 1, 1996
(date operations commenced) to June 30, 1996
Berger IPT- Berger IPT- Berger IPT-
100 Fund Growth & Income Small Company
Fund Growth Fund
<S> <C> <C> <C>
Net asset value, beginning of period
$10.00 $10.00 $10.00
Income from investment operations:
Net investment income (loss)
.02 .04 .00
Net realized and unrealized gains (losses) on securities
(.22) (.01) .57
Total from investment operations
(.20) .03 .57
Less distributions:
Dividends (from net investment income)
.00 .00 .00
Distributions (from capital gains)
.00 .00 .00
Total distributions .00 .00 .00
Net asset value, end of period
$9.80 $10.03 $10.57
Total return (2.00)% 0.30% 5.70%
Ratios:
Net assets, end of period 245,027 250,892 265,472
Ratio of expenses to average net assets*+
1.00% 1.00% 1.15%
Ratio of net income (loss) to average net assets*+
1.11% 2.51% (.42)%
Portfolio turnover rate 4% 16% 3%
Average commission rate $.06 $.06 $.06
</TABLE>
* Annualized
+ Ratio reflects total expenses, including fees offset by earnings credits,
but does not include the deduction of any charges or expenses attributable
to any particular variable insurance contract.
Trustees of Berger Institutional Products Trust
Michael Owen, Chairman * Dennis E. Baldwin
William M.B. Berger * Louis R. Bindner, P.E. * Katherine A. Cattanach
Lucy Black Creighton * Paul R. Knapp * Gerard M. Lavin *
Harry T. Lewis, Jr. * Rodney L. Linafelter * William Sinclaire
OFFICERS:
Gerard M. Lavin
President
Berger Institutional Products Trust
Rodney L. Linafelter
President
Berger IPT-100 Fund and
Berger IPT-Growth and Income Fund
William R. Keithler
President
Berger IPT-Small Company Growth Fund
Kevin R. Fay
Vice President, Secretary and Treasurer
Berger Institutional Products Trust
Patricia M. Blaha
Assistant Secretary
Berger Institutional Products Trust
Susan G. Kohlman
Assistant Treasurer
Berger Institutional Products Trust
Investment Adviser
Berger Associates, Inc.
P.O. Box 5005
Denver, Colorado 80217
1-303-329-0200 or 1-800-333-1001
THE BERGER FUNDS
Together we can move mountains
1996
