<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
ANNUAL REPORT
December 31, 1997
BERGER IPT-100 FUND
BERGER IPT-GROWTH AND INCOME FUND
BERGER IPT-SMALL COMPANY GROWTH FUND
BERGER/BIAM IPT-INTERNATIONAL FUND
Berger Institutional Products Trust is presenting a combined annual report
which includes the Berger IPT-100 Fund, Berger IPT-Growth and Income Fund,
Berger IPT-Small Company Growth Fund, and Berger/BIAM IPT-International Fund.
The report reflects the financial position of each Fund at December 31, 1997,
the results of their operations for the periods ending December 31, 1997 and the
changes in their net assets, and financial highlights for the periods ended
December 31, 1997 and for the period May 1, 1996 (commencement of investment
operations) through December 31, 1996, in a single document. The Berger/BIAM
IPT-International Fund commenced investment operations on May 1, 1997.
Table of Contents
BERGER IPT-100 FUND
Portfolio Manager's Letter ...............................................1
Schedule of Investments ..................................................3
BERGER IPT-GROWTH AND INCOME FUND
Portfolio Managers' Letter ...............................................8
Schedule of Investments .................................................10
BERGER IPT-SMALL COMPANY GROWTH FUND
Portfolio Manager's Letter ..............................................15
Schedule of Investments .................................................17
BERGER/BIAM IPT-INTERNATIONAL FUND
Portfolio Managers' Letter ..............................................23
Schedule of Investments .................................................26
Financial Statements .......................................................29
Notes to Financial Statements ..............................................33
Financial Highlights .......................................................38
Report of Independent Accountants ..........................................40
<PAGE>
BERGER IPT-100 FUND
Portfolio Manager's Commentary Patrick S. Adams
Performance
This was a significant transition year for the Berger IPT -- 100 Fund (the
"Fund"). Pat Adams took over the helm of your Fund in early February and
undertook a significant restructuring. Unfortunately, the market environment was
at cross-purposes with our investment approach for fully half of the year. As a
result, the Fund's annual total return of 13.76%/1/ for the year ended December
31, 1997 lagged the Standard & Poor's (S&P) 500/2/ annual total return of 33.36%
for the same period.
Year in Review
We began repositioning the Fund's portfolio in February, doing what we call
"weeding the garden." We pulled older stocks that may have reached their full
potential or that had not been performing up to expectations and made growing
room for newer names. We repositioned the Fund slowly and carefully and
completed most of the moves we felt were necessary by the end of June. The
second quarter saw a strong rotation in the market, largely in response to the
Federal Reserve Board's interest rate increase. In a "flight to quality,"
skittish investors sought refuge in large, liquid "blue chip" or "index" stocks,
which, while very expensive, are viewed by many as "safe" investments in a
volatile market. This environment was inhospitable to our investment style,
which emphasizes reasonably priced, high-quality companies with a history of
strong, consistent earnings growth.
The difference between second and third quarter Fund performance was like night
and day. After disappointing results in the second quarter, we outperformed
broad market averages and were very competitive in our peer group of funds in
the third quarter. This was the result of two factors. First, our restructuring
efforts began to bear fruit, and, second, the market broadened out and investors
rediscovered the merits of the types of stocks held in our Fund.
In the fourth quarter the market caught the "Asian flu", and so did the Fund. We
significantly lagged the S&P 500 this quarter -- 4.83% total return for the Fund
compared to 2.87% for the index. Southeast Asia's economic woes, which
potentially may result in a decline in Gross Domestic Product growth worldwide,
spooked a U.S. stock market that had experienced more than two years of
unprecedented growth. As we saw in the second quarter, the market again turned
defensive and rushed to large cap stocks. Once again, that hurt your Fund
because we do not invest in many of the very expensive, big name, defensive
stocks heavily favored by the market this quarter.
In addition, the technology sector, in which we are heavily weighted, was
negatively impacted by the Asian downturn. Investors believe, somewhat unfairly,
that technology companies, especially manufacturers, have a high exposure to
Asian countries. Yet, personal computer sales in Asia (excluding China and
Japan) account for less than 10% of worldwide totals.
We don't believe that the performance of technology stocks in the fourth quarter
indicates problems in the industry or in many companies. Although slightly
slower growth rates in computer sales are likely in the future, we think
technology stocks will come back strong in 1998, particularly if fourth quarter
1997 and first quarter 1998 earnings reports reveal continued strong
fundamentals. For this reason, we used the fourth quarter downturn in technology
as a buying opportunity and increased our technology holdings from 21.4% of
total Fund assets on September 30 to 28.9% on December 31.
We also took advantage of lower prices to add to our energy holdings, increasing
this small sector weighting from 1.5% on September 30 to 5.9% at year-end. We
took some profits in healthcare because we believe this sector looks
overextended.
1
<PAGE>
Looking Ahead
We are optimistic about economic prospects for 1998. As investors put Asian
problems in perspective and recognize the U.S. economy's strengths (strong
employment, low inflation, steady growth rates), we believe the markets will
broaden out once again. We believe this will provide a far more favorable
backdrop for our growth at a reasonable price investment style.
/1/ Performance figures are based on historical results, including reinvestment
of dividends and capital gains, and are not intended to be indicative of
future performance. 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.
/2/ The S&P 500 is an unmanaged index, with dividends reinvested, which
consists of the common stocks of 500 publicly traded U.S. companies. One
cannot invest directly in an index.
-----------------------------
Berger IPT-100 Fund
Average Annual Total Return
As of December 31, 1997
-----------------------------
1 Year Since Inception
5/1/96
-----------------------------
13.8% 10.5%
-----------------------------
[LINE GRAPH APPEARS HERE]
Comparison of Change in Value of $10,000 Investment
in Berger IPT-100 Fund
vs. S&P 500 and Cost of Living Index
Initial Investment $10,000 Value of Shares
Berger IPT-100 Fund S&P 500 Cost of Living Index
------------------- ------- --------------------
5/1/96 10,000 10,000 10,000
6/30/96 9,780 10,309 10,026
9/30/96 10,080 10,625 10,096
12/31/96 10,390 11,510 10,147
3/31/97 10,030 11,821 10,237
6/30/97 11,250 13,880 10,256
9/30/97 12,420 14,918 10,313
12/31/97 11,820 15,345 10,333
Past performance is not predictive of future performance.
2
<PAGE>
BERGER
IPT-100 Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock 88.4%
Auto/Truck-Original Equipment 1.5%
400 Lear Corporation* $ 19,000
----------
Banks-Money Center 3.6%
240 Chase Manhattan Corporation 26,280
300 Nationsbank Corporation 18,244
----------
44,524
----------
Beverages-Soft Drinks 1.8%
600 PepsiCo, Inc. 21,863
----------
Commercial Services-Misc 0.8%
450 Medpartners, Inc. 10,069
----------
Computer-Graphics 1.8%
900 Cadence Design Systems, Inc.* 22,050
----------
Computer-Local Networks 1.9%
600 Bay Networks, Inc.* 15,338
150 Cisco Systems, Inc.* 8,363
----------
23,701
----------
Computer-Mini/Micro 2.2%
200 Compaq Computer Corporation 11,288
400 Sun Microsystems* 15,950
----------
27,238
----------
Computer-Services 2.0%
300 Computer Sciences Corporation* 25,050
----------
Computer-Software 6.1%
200 BMC Software, Inc.* 13,125
100 Microsoft Corporation* 12,925
885 Parametric Technology Corporation* 41,927
200 Peoplesoft Inc.* 7,800
----------
75,777
----------
Diversified Operations 1.0%
200 Dupont EI DE Nemours 12,013
----------
3
<PAGE>
BERGER
IPT-100 Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Electrical-Semiconductor Equipment 3.6%
500 Applied Materials, Inc.* $ 15,063
200 KLA Tenor Corporation* 7,725
750 Lam Research Corporation* 21,938
----------
44,726
----------
Electrical-Semiconductor Manufacturing 7.6%
285 Linear Technology Corporation 16,423
360 Maxim Integrated Products, Inc.* 12,420
365 Motorola, Inc. 20,828
750 National Semiconductor Corporation* 19,453
700 Xilinx, Inc.* 24,544
----------
93,668
----------
Electrical-Equipment 2.8%
500 Honeywell, Inc. 34,250
----------
Finance-Consumer Loans 1.0%
100 Household International, Inc. 12,756
----------
Finance-Mortgage & Related Services 3.1%
700 Green Tree Financial Corporation 18,331
965 The Money Store* 20,265
----------
38,596
----------
Household-Audio/Visual 1.0%
200 Philips Electronics NV Holdings 12,100
----------
Insurance-Life 1.5%
400 Conseco, Inc. 18,175
----------
Insurance-Property/Casualty/Title 0.8%
100 Hartford Financial Services 9,356
----------
Leisure-Hotels & Motels 3.3%
500 Hilton Hotels Corporation 14,875
75 Marriott International, Inc. 5,194
478 Promus Hotels Corporation* 20,055
----------
40,124
----------
Leisure-Gaming 0.7%
400 Mirage Resorts* 9,100
----------
4
<PAGE>
BERGER
IPT-100 Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Leisure-Services 0.9%
200 Royal Caribbean Cruises Ltd. $ 10,663
----------
Machinery-Construction/Mining 0.8%
200 Caterpillar, Inc. 9,713
----------
Medical-Dental-Supplies 1.4%
560 Omnicare, Inc. 17,360
----------
Medical-Drug/Diversified 1.1%
200 Johnson & Johnson 13,175
----------
Medical-Hospitals 0.8%
300 Tenet Healthcare Corporation* 9,938
----------
Medical-Outpatient/Home Care 0.7%
300 Phycor, Inc.* 8,100
----------
Office-Equipment & Automation 1.2%
200 Xerox Corporation 14,763
----------
Oil & Gas-Drilling 1.3%
400 Noble Drilling* 12,250
80 Transocean Offshore, Inc. 3,855
----------
16,105
----------
Oil & Gas - Field Services 1.8%
100 BJ Services Co.* 7,194
300 Halliburton Co. 15,581
----------
22,775
----------
Oil & Gas - International Integrated 0.9%
200 Texaco, Inc. 10,875
----------
Oil & Gas - Machinery & Equipment 1.9%
400 Baker Hughes, Inc. 17,450
100 Cooper Cameron Corporation* 6,100
----------
23,550
----------
Paper & Paper Products 1.6%
400 Kimberly-Clark Corporation 19,725
----------
5
<PAGE>
BERGER
IPT-100 Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Pollution Control-Equipment 2.0%
820 United States Filter Corporation* $ 24,549
----------
Pollution Control-Services 3.4%
400 Allied Waste Industries, Inc.* 9,325
850 USA Waste Industries, Inc.* 33,363
----------
42,688
----------
Retail-Apparel/Shoe 1.8%
200 Nordstrom, Inc. 12,075
300 TJX Companies 10,313
----------
22,388
----------
Retail-Department Stores 1.1%
310 Federated Department Stores, Inc.* 13,349
----------
Retail-Mail Order & Direct 0.5%
168 Cendant Corporation* 5,782
----------
Retail-Miscellaneous/Diversified 2.1%
1,100 Republic Industries, Inc.* 25,644
----------
Retail-Restaurants 1.2%
300 McDonald's Corporation $ 14,325
----------
Retail/Wholesale Computers 1.7%
800 CHS Electronics, Inc.* 13,700
200 Tandy Corporation 7,713
----------
21,413
----------
Retail/Wholesale-Office Supply 1.9%
500 Office Depot* 11,969
800 Officemax 11,400
----------
23,369
----------
Retail/Wholesale-Building Products 0.8%
200 Lowes Cos., Inc. 9,538
----------
Telecommunications-Equipment 3.1%
400 Nokia Corporation ADR 28,000
200 Tellabs, Inc.* 10,575
----------
38,575
----------
6
<PAGE>
BERGER
IPT-100 Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Telecommunications-Services 0.4%
100 Teleport Communications Group, Inc. Class A* 5,488
----------
Textile-Apparel Manufacturing 5.1%
400 Jones Apparel Group, Inc.* 17,200
600 Liz Claiborne, Inc. 25,088
600 Tommy Hilfiger Corporation* 21,061
----------
63,349
----------
Tobacco 0.7%
200 Philip Morris Companies, Inc. 9,063
----------
Common Stock Total (Cost $1,086,242) 1,090,398
----------
U.S. Government Obligations 17.8%
120,000 FHLMA Discount Notes 4.90% 1/2/98 119,988
100,000 FNMA Discount Notes 5.74% 1/6/98 99,921
----------
U.S. Government Obligations Total (Cost $219,909) 219,909
----------
Total Portfolio Investments (Cost $1,306,151)** $1,310,307
----------
Total liabilities, less cash and other assets -6.2% (76,415)
----------
Net Assets 100.0% $1,233,892
==========
- ----------------------------
Percentages indicated are based on net assets of $1,233,892.
*Non-income producing securities.
**Cost for federal income tax purposes is $1,308,156.
See notes to financial statements.
7
<PAGE>
BERGER IPT-GROWTH AND INCOME FUND
Portfolio Manager's Commentary Sheila Ohlsson and Patrick S. Adams
Performance
The past year was a very challenging one for stock market investors. The market
began 1997 with incredible strength, led by large cap, big name "index" stocks
such as Coke, Gillette and Procter & Gamble. After broadening out during the
second and third quarters, the market ended the year in extreme volatility as
concerns related to the turmoil in Southeast Asia began to adversely affect the
U.S. stock market, and, once again, drove investors to index stocks that they
consider to be safer havens in market storms. Because index stocks often are
quite pricey, they usually do not fit our "growth at a reasonable price"
investment style. As a result, the 24.99%/1/ annual total return of the Berger
IPT-Growth & Income Fund (the "Fund") lagged the 33.36% return on the Standard &
Poor's (S&P) 500/2/.
Year in Review
Technology stocks were particularly hard hit by aftershocks from the Asian
crisis because these types of companies are thought to have the greatest
exposure to this region, both in terms of sales and manufacturing. Earlier in
the year, the Fund had as much as 20% of its total assets invested in the
technology sector. As of December 31, we had reduced our holdings to 11.2% of
total assets. This said, however, we also continue to believe that technology is
driving the U.S. and world economies, and that, longer term, this sector will
prove to be fertile ground for new investment opportunities. The early months of
1998 should give investors a better idea of what to expect in the future.
Oil services remained an important industry for the Fund in 1997, with
approximately 8.7% of total Fund assets invested in this group. Investor
concerns about exploration and production budgets for 1998, however,
precipitated a significant correction that negatively impacted Fund performance.
We believe that these concerns are overblown, that the fundamentals of the
sector are intact and that investors will return to the group in 1998. In fact,
stocks in this group are selling at very reasonable valuations relative to what
we believe will be solid earnings growth in 1998 and 1999.
Healthcare and consumer stocks continue to be defensive sectors for the Fund and
have little or no Asian exposure. During what we anticipate to be a choppy
market in early 1998, we plan to allocate a greater portion of Fund assets to
these groups. Financial stocks continue to be the Fund's largest sector
allocation, with 23.7% of total assets invested in this group. A potential
slowdown in U.S. economic growth, caused by problems in Asia, could actually
benefit interest-rate sensitive financial stocks because a slowdown would
greatly reduce the likelihood that the Federal Reserve Board would raise
interest rates.
Looking Ahead
In terms of the Asian downturn, we see three potential implications for U.S.
companies in the near term:
1. For companies that manufacture goods in Asia, it's a net positive, given
that local currency devaluations lead to cheaper U.S. dollar costs.
2. For companies that sell to Asia, it's a net negative as revenue growth
generated in that region will slow down, at least for a period of time.
3. Cheaper Asian exports will keep downward pressure on prices of competitive,
U.S. manufactured goods.
8
<PAGE>
We believe that fallout from the Asian situation will likely result in slower
near-term U.S. economic growth. Slower growth should, as we noted above, make it
less likely that the Fed will raise interest rates. Slower growth also can be a
negative, however, because the pricing environment may not be quite as robust as
it has been.
Going forward, we will continue to look for the highest quality companies
selling at reasonable valuations. Overall, we feel 1998 will be a challenging
market environment and that it will be even more imperative to be exceptionally
discriminating in our stock selection.
/1/ Performance figures are based on historical results, including reinvestment
of dividends and capital gains, and are not intended to be indicative of
future performance. 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.
/2/ The S&P 500 is an unmanaged index, with dividends reinvested, which
consists of the common stocks of 500 publicly traded U.S. companies. One
cannot invest directly in an index.
----------------------------------
Berger IPT-Growth & Income Fund
Average Annual Total Return
As of December 31, 1997
----------------------------------
1 Year Since Inception
5/1/96
----------------------------------
25.0% 21.9%
----------------------------------
[LINE GRAPH APPEARS HERE]
Comparison of Change in Value of $10,000 Investment
in Berger IPT-Growth and Income Fund
vs. S&P 500 and Cost of Living Index
Initial Investment $10,000 Value of Shares
Berger IPT-Growth &
Income Fund S&P 500 Cost of Living Index
------------------- ------- --------------------
5/1/96 10,000 10,000 10,000
6/30/96 10,020 10,309 10,026
9/30/96 10,400 10,625 10,096
12/31/96 11,140 11,510 10,147
3/31/97 11,190 11,821 10,237
6/30/97 12,320 13,880 10,256
9/30/97 14,110 14,918 10,313
12/31/97 13,924 15,345 10,333
Past performance is not predictive of future performance.
9
<PAGE>
BERGER
IPT-Growth & Income Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock 77.3%
Auto Manufacturers-Domestic 1.3%
400 Ford Motor Co. $ 19,475
-----------
Banks-Money Center 1.0%
140 Chase Manhattan Corporation 15,330
-----------
Banks-Northeast 1.6%
420 State Street Corporation 24,439
-----------
Banks-Super Regional 1.7%
650 Norwest Corporation 25,106
-----------
Chemicals-Basic 0.6%
200 Monsanto Co. 8,400
-----------
Commercial Services-Security/Safety 1.6%
472 Diebold, Inc. 23,895
-----------
Computer-Local Networks 2.8%
750 Cisco Systems, Inc.* 41,813
-----------
Computer-Memory Devices 0.4%
185 Microchip Technology, Inc.* 5,550
-----------
Computer-Services 1.9%
600 HBO & Company 28,800
-----------
Computer-Software 3.0%
200 Cambridge Technology Partners* 8,325
700 Computer Associates International 37,013
-----------
45,338
-----------
Cosmetics/Personal Care 1.2%
300 Avon Products* 18,413
-----------
Electrical-Measuring Instruments 0.6%
500 Mettler Toledo International* 8,625
-----------
Electrical-Semiconductor Equipment 0.2%
100 Lam Research Corporation* 2,925
-----------
Electrical-Equipment 0.9%
200 Honeywell, Inc. 13,700
-----------
Finance-Consumer Loans 0.9%
100 Student Loan Marketing Holding Corp. 13,913
-----------
10
<PAGE>
BERGER
IPT-Growth & Income Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Finance-Equity REIT 7.7%
700 Crescent Real Estate Equities Co. $ 27,563
1,050 Innkeepers USA Trust 16,275
991 Patriot American Hospitality Operating Co. 28,553
740 Starwood Hotels & Resource Trust 42,828
-----------
115,219
-----------
Finance-Investment Bankers 1.4%
500 Charles Schwab Corporation 20,969
-----------
Finance Services-Miscellaneous 4.0%
400 American Express 35,700
400 Morgan Stanley, Dean Witter, Discover & Co.* 23,650
-----------
59,350
-----------
Food-Miscellaneous Preparation 0.9%
250 Sara Lee Corporation 14,078
-----------
Household-Housewares 1.3%
455 Sunbeam Corporation 19,167
-----------
Insurance-Multi Line 0.9%
200 MGIC Investment Corporation 13,300
-----------
Insurance-Property/Casualty/Title 2.1%
570 Mercury General Corporation 31,493
-----------
Medical-Dental-Supplies 0.6%
200 Steris Corporation* 9,650
-----------
Medical-Ethical Drugs 3.9%
410 Eli Lilly Co. 28,546
400 Pfizer, Inc. 29,825
-----------
58,371
-----------
Medical-Hospitals 0.4%
200 Tenet Healthcare Corporation* 6,625
-----------
Medical-Products 1.7%
400 Guidant Corporation 24,900
-----------
Medical-Wholesale Drug/Sundries 4.8%
400 Bergen Brunswig Corporation, Class A 16,850
510 McKesson Corporation 55,176
-----------
72,026
-----------
Office-Equipment & Automation 1.5%
300 Xerox Corporation 22,144
-----------
11
<PAGE>
BERGER
IPT-Growth & Income Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Oil & Gas-Drilling 3.2%
500 Falcon Drilling Company, Inc.* $ 17,531
700 Noble Drilling* 21,438
400 Precision Drilling* 9,750
-----------
48,719
-----------
Oil & Gas-Field Services 4.6%
300 BJ Services Co.* 21,581
400 Petroleum Geo Services ADR* 25,900
265 Schlumberger, Ltd. 21,333
-----------
68,814
-----------
Real Estate Operations 2.4%
1,400 Trammell Crow* 36,050
-----------
Retail-Apparel/Shoe 2.6%
300 Nordstrom, Inc. 18,113
600 TJX Companies 20,625
-----------
38,738
-----------
Retail-Drug Stores 1.2%
295 Rite Aid Corporation 17,313
-----------
Retail-Mail Order & Direct 1.8%
400 Cendant Corporation* 13,750
300 Williams Sonoma, Inc.* 12,563
-----------
26,313
-----------
Retail-Major Discount Chains 0.6%
140 Dayton-Hudson Corporation 9,450
-----------
Retail-Miscellaneous Diversified 1.9%
700 Hertz 28,175
-----------
Retail/Wholesale-Computers 0.7%
260 Tandy Corporation 10,026
-----------
Retail/Wholesale-Office Supply 0.5%
500 Officemax 7,125
-----------
12
<PAGE>
BERGER
IPT-Growth & Income Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Telecommunications-Equipment 2.3%
200 Nokia Corporation ADR $ 14,000
400 Tellabs, Inc.* 21,150
-----------
35,150
-----------
Transportation-Airline 1.2%
286 US Airways Group, Inc.* 17,875
-----------
Utility-Telephone 3.5%
1,000 Cincinnati Bell, Inc. 31,000
300 SBC Communications, Inc. 21,975
-----------
52,975
-----------
Common Stock Total (Cost $1,046,304) 1,159,737
-----------
Convertible Preferred 0.6%
Leisure-Services
100 Royal Caribbean Cruises 8,506
-----------
Convertible Preferred Total (Cost $7,881) 8,506
-----------
Convertible Bonds 4.6%
Commercial Services-Miscellaneous 0.6%
4,000 Career Horizons, Inc. 7.00% due 11/1/02 8,495
-----------
Medical-Nursing Homes 1.3%
18,000 Assisted Living 6.00% due 11/1/02 19,530
-----------
Oil & Gas-Drilling 0.9%
10,000 Diamond Offshore Drilling 3.75% due 2/15/17 13,525
-----------
Pollution Control-Equipment 0.2%
2,000 U.S. Filter Corporation 6.00% due 9/15/05 3,425
-----------
Pollution Control-Services 0.4%
4,000 United Waste Systems 4.50% due 6/1/01 5,550
-----------
Retail-Miscellaneous Diversified 1.3%
10,000 Pier One Imports 5.75% due 10/1/03 19,019
-----------
Convertible Bonds Total (Cost $70,712) 69,544
-----------
13
<PAGE>
BERGER
IPT-Growth & Income Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
U.S. Government Obligations 17.3%
110,000 FHLMA Discount Notes 4.90% 1/2/98 $ 109,985
150,000 FNMA Discount Notes 5.59% 1/5/98 149,908
------------
U.S. Government Obligations Total (Cost $259,893) 259,893
------------
Total Investments (Cost $1,384,790)** $ 1,497,680
------------
Total cash and other assets, less liabilities 0.2% 3,438
------------
Net assets 100.0% $ 1,501,118
============
- ---------------------
Percentages indicated are based on net assets of $1,501,118.
ADR-American Depository Receipts.
*Non-income producing securities.
**Cost for federal income tax purposes is $1,385,608.
See notes to financial statements.
14
<PAGE>
BERGER IPT-SMALL COMPANY GROWTH FUND
Portfolio Manager's Commentary Bill Keithler
Performance
Against the backdrop of one of the most turbulent stock markets in recent
memory, the Fund's annual total return was 21.21%/1/ compared to 22.36% for the
Russell 2000/2/. The Russell 2000 Growth index/3/, which is a more accurate
comparison for the Fund, was up 12.86% for the 12-month period ending December
31, 1997.
Year in Review
The year began with the Dow Jones Industrial Average hitting new highs, while
the prices of most smaller capitalization growth stocks were declining. In the
first quarter, the small cap Russell 2000 index was down 5% and the large cap
Dow and Standard & Poor's (S&P) 500 indices were up. After bottoming in late
April, small cap stocks exploded upward in a rally that extended through late
September. Most small cap out performance occurred in May, when this Fund was up
15.45% during that month. Everything changed during the fourth quarter; the
market generally, and small caps in particular, turned down on concerns about an
economic crises in Asia. Small cap stocks quickly fell out of favor as investors
shifted to high quality, "safer" investments such as large cap stocks, U.S.
Treasury bonds and companies whose earnings prospects are less (or not)
dependent on foreign business. Technology companies, which typically have
significant business in Asia, became the market's prime target.
Although it has been difficult to find safe havens among smaller cap growth
stocks in this market, some stocks/sectors performed relatively well for the
Fund, including Allied Waste Industries (Environmental Services), CCA Prison
Realty (Real Estate Services), Incyte Pharmaceuticals (Pharmaceuticals-
Biomedical), Boron LePore and Associates (Healthcare Services), Lycos Inc. (New
Age Media) and Rexall-Sundown (Consumer Products). Business service stocks
generally did well, including advertising-related industries (radio and
outdoor), computer services, consulting and education. These companies are U.S.-
based and relatively insensitive to the economic cycle. Poor performing sectors
included technology, especially semiconductor capital equipment companies, and
energy services.
Technology holdings were relatively unchanged during the third and fourth
quarters, although the composition of the holdings changed with the expansion of
telecommunication companies, at the expense of semiconductor and other
electronics companies. In September, we had 30.6% of total Fund assets invested
in technology sectors; by year-end, the percentage was 29.1%. Also, we boosted
our healthcare and business services exposure because these sectors exhibit many
of the characteristics favored by the current market environment and contain
many stocks with attractive valuations. We selectively took profits in the
consumer sector, particularly among retailers, and to a lesser extent, in energy
services.
Looking Ahead
Our outlook for 1998 is somewhat cautious. Although there is evidence of factors
that have historically been favorable to the performance of small cap stocks, we
feel these stocks will remain under pressure a while longer. Earnings reports
are starting to come out and a spate of companies are pre-announcing earnings
disappointments, which usually cause stocks to be weak. Many of these shortfalls
are being blamed on weak demand in Asia. It remains to be seen if Asia is,
indeed, the source of the problem and how much more the situation could worsen.
Specifically, we need to see if Asia's economic weakness spreads to other
economies, including the U.S., due to weak demand and heightened competition
from lower cost importers. Until the magnitude of the crisis becomes clearer, we
believe the market will continue to be risk averse and to favor bonds, larger
companies and low-valued stocks.
In addition, there is concern about the prospect of a deflationary environment
in which prices actually fall. The Asian crisis has heightened focus on this
prospect because of the dramatically lower costs Asian countries now enjoy
relative to the U.S. Even before the crisis, however, there were signs of
deflation detectable in the general lack of pricing power at both the wholesale
and retail level. While deflation is constructive for bond prices and, hence,
interest rates, companies find it very difficult to continue to grow earnings
when prices are falling. In such an environment stock prices don't usually
advance.
15
<PAGE>
A full-scale deflation, such as occurred in the 1930s, in our opinion, is a
worst case scenario and highly unlikely. We believe that Asian events will have
a negative impact on the U.S. economy, but not a catastrophic one. Once the
magnitude of the Asian situation is determined, the market can return its focus
to individual company fundamentals, which, in many cases, remain outstanding.
Many small cap stocks have been sold down to levels that are near historic lows
and we believe could present excellent buying opportunities. It is always
difficult to buy into a panic, but if one is correct in their assessment of the
investment merits of a purchased stock, it quite often turns out to be a
rewarding decision.
/1/ Performance figures are based on historical results, including reinvestment
of dividends and capital gains, and are not intended to be indicative of
future performance. 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.
/2/ The Russell 2000 Index is an unmanaged index, with dividends reinvested,
which consists of common stocks of 2000 U.S. companies with market
capitalizations of $172 million to $1.1 billion. It is a generally
recognized indicator used to measure overall performance of small company
stocks. One cannot invest directly in an index.
/3/ The Russell 2000 Growth Index is an unmanaged index composed of those
Russell 2000 securities with a greater-than-average growth orientation.
Securities in this index generally have higher price-to-book and price-
earnings ratios than those in the Russell 2000 Value Index.
Comparison of Change in Value of $10,000 Investment
in Berger IPT-Small Company Growth Fund
vs. Russell 2000 and Cost of Living Index
Initial Investment $10,000 Value of Shares
------------------------------------
Berger IPT-Small Company Growth Fund
Average Annual Total Return
As of December 31, 1997
------------------------------------
1 Year Since Inception
(5/1/96)
------------------------------------
21.2% 11.9%
------------------------------------
[LINE GRAPH APPEARS HERE]
Berger IPT-Small Company
Growth Fund Russell 2000 Cost of Living Index
------------------------ ------------ --------------------
5/1/96 10,000 10,000 10,000
6/30/96 10,530 9,967 10,026
9/30/96 10,720 10,001 10,096
12/31/96 9,950 10,521 10,147
3/31/97 8,920 9,977 10,237
6/30/97 10,380 11,595 10,256
9/30/97 12,380 13,320 10,313
12/31/97 12,060 12,874 10,333
Past performance is not predictive of future performance
16
<PAGE>
BERGER
IPT-Small Company Growth Fund
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock 80.9%
Commercial Services-Advertising 0.9%
600 Lamar Advertising Company* $ 23,850
-----------
Commercial Services-Miscellaneous 2.5%
1,000 FPA Medical Management, Inc.* 18,625
2,100 Labor Ready, Inc.* 40,425
500 Select Appointments* 9,125
-----------
68,175
-----------
Commercial Services-Schools 1.8%
1,500 Devry, Inc.* 47,813
-----------
Computer-Graphics 0.8%
400 Applied Graphics Technologies, Inc.* 21,300
-----------
Computer-Local Networks 0.3%
300 Daou Systems, Inc.* 9,375
-----------
Computer-Memory Devices 0.2%
200 Microchip Technology, Inc.* 6,000
-----------
Computer-Services 8.1%
600 Ciber, Inc.* 34,800
50 Gartner Group, Inc.* 1,863
1,100 HBO & Company 52,800
1,000 Lycos, Inc.* 41,375
774 Technology Solutions Company* 20,414
800 Whittman-Hart, Inc.* 27,400
600 Yahoo, Inc.* 41,550
-----------
220,202
-----------
Computer-Software 5.8%
1,000 Cambridge Technology Partners* 41,625
700 CBT Group PLC ADR* 57,488
2,100 Macromedia, Inc.* 17,456
1,500 Quadramed Corporation* 41,250
-----------
157,819
-----------
17
<PAGE>
BERGER
IPT-Small Company Growth Fund
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- -------------------------------------------------------------------------------
Cosmetics/Personal Care 2.2%
400 Nature's Bounty* $ 13,350
1,500 Rexall Sundown, Inc.* 45,281
-----------
58,631
-----------
Electronics-Measuring Equipment 2.3%
1,300 Genrad, Inc.* 39,244
600 Waters Corporation* 22,575
-----------
61,819
-----------
Electronics-Miscellaneous Components 0.6%
470 Chicago Miniature Lamp, Inc.* 15,863
-----------
Electronics-Parts Distributors 0.6%
600 Kent Electronics Corporation* 15,075
-----------
Electronics-Semiconductor Equipment 2.0%
600 Ade Corporation* 10,500
300 Asyst Technologies Corporation* 6,525
300 Etec System, Inc.* 13,950
600 FEI Company* 7,463
500 Kulicke & Soffa Industries, Inc.* 9,313
300 PRI Automation, Inc.* 8,663
-----------
56,414
-----------
Electronics-Semiconductor Manufacturing 1.8%
500 Cree Research, Inc.* 9,375
1,000 Maxim Integrated Products, Inc.* 34,500
500 Tower Semiconductor Ltd.* 5,000
-----------
48,875
-----------
Finance-Consumer Loans 0.7%
1,500 Delta Financial Corporation* 20,063
-----------
Finance-Equity REIT 1.6%
1,000 CCA Prison Realty Trust 44,625
-----------
Finance-Mortgage & Related Services 0.5%
1,200 Capital Trust Class A* 13,500
-----------
18
<PAGE>
BERGER
IPT-Small Company Growth Fund
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- -------------------------------------------------------------------------------
Finance-SBIC & Commercial 2.3%
800 Safeguard Scientifics, Inc.* $ 25,100
700 Sirrom Capital Corporation 36,488
-----------
61,588
-----------
Financial Services-Miscellaneous 1.3%
1,000 Pre-Paid Legal Services, Inc.* 34,188
-----------
Household/Office Furniture 0.9%
800 Knoll, Inc.* 25,700
-----------
Insurance-Accident & Health 1.0%
1,175 Healthcare Recoveries, Inc.* 26,144
-----------
Leisure-Hotels & Motels 0.5%
1,100 Suburban Lodges Of America, Inc.* 14,644
-----------
Leisure-Products 0.4%
500 The North Face, Inc.* 11,000
-----------
Media-Books 1.4%
1,000 Scholastic Corporation* 37,500
-----------
Media-Television/Radio 5.4%
789 Chancellor Media Corporation* 58,879
500 Clear Channel Communications* 39,719
1,200 Cox Radio, Inc. Class A* 48,300
-----------
146,898
-----------
Medical-Biomedical/Genetics 2.1%
500 Incyte Pharmaceuticals, Inc.* 22,500
800 Medimmune, Inc.* 34,300
-----------
56,800
-----------
Medical-Dental-Supplies 2.6%
1,400 Mentor Corporation 51,100
600 Omnicare, Inc. 18,600
-----------
69,700
-----------
19
<PAGE>
BERGER
IPT-Small Company Growth Fund
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Medical-Drug/Diversified 1.8%
1,800 Boron LePore & Associates* $ 49,500
-----------
Medical-Ethical Drugs 1.9%
200 Jones Medical Industries 7,650
500 Medicis Pharmaceutical Corporation* 25,563
480 Theragenics Corporation* 17,280
-----------
50,493
-----------
Medical-Outpatient/Home Care 3.2%
600 Harbinger Corporation* 16,875
500 HEALTHSOUTH Corporation* 13,875
125 Phycor, Inc.* 3,375
900 Renal Care Group, Inc.* 28,800
900 Total Renal Care Holdings, Inc.* 24,750
-----------
87,675
-----------
Medical-Products 0.8%
600 Parexel International Corporation* 22,200
-----------
Oil & Gas-Drilling 1.2%
400 Atwood Oceanics, Inc.* 18,950
700 Marine Drilling Company, Inc.* 14,525
-----------
33,475
-----------
Oil & Gas-Field Services 0.8%
300 BJ Services Co.* 21,581
-----------
Oil & Gas-US Exploration & Production 1.6%
500 Barrett Resources Co.* 15,125
800 St. Mary Land & Exploration Company 28,000
-----------
43,125
-----------
20
<PAGE>
BERGER
IPT-Small Company Growth Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Pollution Control-Services 2.7%
1,250 Allied Waste Industries, Inc.* $ 29,141
1,000 Eastern Environmental Services, Inc.* 22,000
1,200 Newpark Resources, Inc.* 21,000
-----------
72,141
-----------
Real Estate Operations 1.9%
1,200 Fairfield Communities, Inc.* 52,950
Retail-Apparel/Shoe 1.6%
500 Men's Warehouse, Inc.* 17,375
900 Pacific Sunwear of California* 26,606
-----------
43,981
-----------
Retail-Mail Order & Direct 1.1%
800 Black Box Corporation* 28,300
50 Onsale, Inc.* 900
-----------
29,200
-----------
Retail-Miscellaneous Diversified 1.8%
500 Guitar Center, Inc.* 11,500
800 Michaels Stores, Inc.* 23,400
600 Petco Animal Supplies, Inc.* 14,400
-----------
49,300
-----------
Retail-Restaurants 1.0%
1,200 Dave & Buster's, Inc.* 27,000
-----------
Retail-Supermarkets 1.3%
1,000 Wild Oats Markets, Inc.* 36,063
-----------
Telecommunications-Equipment 3.0%
2,000 Brightpoint, Inc.* 27,750
500 Comverse Technology, Inc.* 19,500
700 Pairgain Technologies, Inc.* 13,563
800 Premisys Communications* 20,900
-----------
81,713
-----------
21
<PAGE>
BERGER
IPT-Small Company Growth Fund December 31, 1997
Schedule of Investments
Shares, Units or
Principal Amount Market Value
- --------------------------------------------------------------------------------
Telecommunications-Services 3.8%
850 ACC Corporation* $ 42,925
1,700 ICG Communications, Inc.* 46,325
600 Winstar Communications, Inc.* 14,963
------------
104,213
------------
Tobacco 0.8%
800 Consolidated Cigar Holdings, Inc.* 22,045
------------
Common Stock Total (Cost $2,025,805) 2,200,216
------------
U.S. Government Obligations 19.1%
120,000 FHLMA Discount Notes 4.90% 1/2/98 119,984
50,000 FNMA Discount Notes 5.59% 1/5/98 49,969
170,000 FNMA Discount Notes 5.74% 1/6/98 169,864
180,000 FNMA Discount Notes 5.64% 1/9/98 179,773
------------
U.S. Government Obligations Total
(Cost $519,590) 519,590
------------
Total Investments (Cost $2,545,395)** $ 2,719,806
Total liabilities, less cash and other assets 0.0% (247)
------------
Net Assets 100.0% $ 2,719,559
============
- ---------------------------------
Percentages indicated are based on net assets of $2,719,559.
ADR-American Depository Receipts.
*Non-income producing securities.
**Cost for federal income tax purposes is $2,545,735.
See notes to financial statements.
22
<PAGE>
BERGER/BIAM IPT-INTERNATIONAL FUND
Portfolio Manager's Commentary Bank of Ireland Asset Management (U.S.) Ltd.
Performance
The Berger/BIAM IPT-International Fund (the "Fund") had a total return of -
2.10%/1/ for the period ended December 31, 1997 compared to 2.06% for the MSCI
EAFE Index/2/. The Fund's performance was aided primarily by holdings in
Positive Banking, Healthcare Needs and Leading Consumer Franchises. Laggards,
not surprisingly, were those themes and companies with exposure to Southeast
Asia and the Pacific Rim.
The prevailing low interest rate environment worldwide has been one of the main
linchpins of equity market strength. Accordingly, on a thematic basis, Positive
Banking Environment added significant value to the portfolio in 1997. U.K.-
quoted Barclays Bank performed very well during the second half of the year and
was the biggest contributor to the theme's overall performance. Barclays' upward
move was prompted by the release in August of larger-than-expected pre-tax
profits and the simultaneous announcement of an expanded share buy-back program.
Banco de Santander also benefited from good-earnings news during the first half
of the year. Later it announced the sale of its stake in the U.S. bank, First
Union, and said that it plans to use the proceeds to strengthen its balance
sheet following an ambitious acquisition drive in Latin America.
The top performer in Healthcare Needs was Novartis, the Fund's largest holding.
In the first full year since Novartis was created by the merger of Ciba Geigy
and Sandoz, it became apparent that the benefits of the alliance were having a
much quicker-than-anticipated impact on performance. Glaxo Wellcome also was an
impressive performer during 1997. Even though its best-selling drug, Zantac,
came off patent, new drugs to treat asthma, AIDS and migraine, among others, are
expected to increase Glaxo's sales by 50% per annum over the next few years.
Additionally, the company's research and development pipeline is well primed.
Consumer oriented stocks in Leading Consumer Franchises did well during the
year. The largest holding in this theme, B.A.T. Industries, hit the news in the
fourth quarter when it announced a merger between its financial services
divisions and Zurich Insurance Group. This ended the company's year-long search
for a means to release value for shareholders. The proposed merger will create
an insurance giant with a market capitalization of approximately $37.3 billion,
which would make the new entity the second largest insurer in Europe. The merger
of Guinness and Grand Metropolitan was completed in December and the new
company, which is called Diageo, is now the world's largest beverage company.
On the negative side, themes with companies quoted in, or with earnings exposure
to, Southeast Asia and the Pacific Basin suffered during the year, including
Infrastructural Development and Expanding Financial Services in Developing
Markets. Another poor performer was Increased Consumer Spending in the Pacific
Basin, which saw companies such as Indonesia-quoted HM Sampoerna and
Philippines-quoted San Miguel hurt by the regional crisis.
Year In Review
Global equity markets, with the notable exception of Southeast Asia and the Far
East, performed very strongly during 1997. The almost universal phenomena of
steady economic growth and low inflation, which, for the last three years have
been the springboards for rising share prices, underpinned the strong stock
market performances.
Europe generally did well during the year on the back of lower interest rates,
increased signs of economic recovery and evidence that management was paying
greater attention to shareholders' interests. Despite fallout from the Asian
crisis, European equity markets rallied to finish 1997 in a display of strength.
The Swiss bourse was the best performing Continental European market over the
year, and the Dutch and German exchanges also had good showings.
23
<PAGE>
In the U.K., strong corporate earnings, particularly from the financial services
sector and the expectation of corporate restructuring, provided the foundation
for a solid year in the equity market. The main factor driving the market
upwards over the year was a sharp fall in long-term interest rates. The U.K.
economy is showing some signs of slowing down, with an apparent loss of momentum
in industrial production and consumer spending.
The seven worst performing equity markets during 1997 were located in Asia,
which experienced a succession of economic and political crises in the second
half of the year. The Nikkei Stock Index/3/ managed to gain 22% during the
second quarter in spite of disarray in the country's financial sector and the
poor state of the domestic economy. However, the gain was short lived. During
the second half of the year, Japan suffered from effects of the currency and
political crises that started in Thailand in May and continued across Southeast
Asia and into the Far East during the remainder of the year. The structural
problems in Asia were exacerbated by the head-in-the-sand approach of political
leaders in the region.
Looking Ahead
While Asia is trying to shake off the hangover of its property binge, we are
unlikely to allocate any further funds to the region unless, and until, we see
an overwhelming and decisive policy response by the various governments in the
region. We believe this action is necessary to make the currencies bottom out
and cause a turnaround in current account deficits. Until then, over capacity in
sectors such as airlines, chemicals, steel, automobiles, cement and electronics,
as well as excessive leverage in the region's financial systems, is likely to
continue to undermine share prices. Asia's rehabilitation will be slow because
its governments have been reluctant to admit the extent of their problems and
this recalcitrance has damaged, rather than restored, confidence in the region.
For seven years, Japanese authorities have been attempting to tiptoe through the
minefield that is their domestic financial sector. Problems throughout Asia now
make reform in Japan even more urgent, and markets will be waiting for the
Japanese to tackle their problems head on. To do this, the authorities must make
a major move to reflate the economy from within because the easy route, i.e.,
external stimulation via the weak yen, has already failed.
On a macro-economic level, Japan has, thus far, failed to deal with the problems
it faces. Selective Japanese companies, however, that have bitten the bullet in
recent years and their restructured operations have delivered strong earnings
growth, despite worsening GDP forecasts for the country as a whole.
Consequently, during the second half of 1997 we invested in a number of Japanese
companies which, on a relative valuation basis, look attractive compared to
their global peers. We continue to monitor other Japanese companies for value
opportunities.
24
<PAGE>
In Europe and the U.K., the push for European Monetary Union will continue to
play a strong role in equity market performance in 1998. As a result, merger and
acquisition activity is expected to remain strong. Financial stocks are most
likely to benefit from the moves but pharmaceuticals and telecommunications also
are likely to stay high on the list of good performing stocks.
/1/Performance figures are based on historical results and are not intended to
be indicative of future performance. 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.
/2/The Morgan Stanley Capital International EAFE Index represents major overseas
stock markets. It is an unmanaged index. One cannot invest directly in an
index.
/3/The Nikkei Stock Index is a price-weighted index of 225 top-rated Japanese
companies listed on the Tokyo Stock Exchange.
Comparison of Change in Value of $10,000 Investment
in Berger/BIAM IPT-International Fund
vs. EAFE and Cost of Living Index
Initial Investment $10,000 Value of Shares
-------------------------------------
Berger/FIAM IPT-International Fund
Average Annual Total Return
As of December 31, 1997
-------------------------------------
Since Inception
(5/1/97)
-------------------------------------
-2.1%
-------------------------------------
[LINE GRAPH APPEARS HERE]
Berger
IPT-International Cost of
Fund EAFE Living Index
---- ---- ------------
5/1/97 10,000 10,000 10,000
6/30/97 10,170 11,243 10,006
9/30/97 10,300 11,171 10,062
12/31/97 9,790 10,304 10,081
Past performance is not predictive of future performance.
25
<PAGE>
Berger/BIAM
IPT-International Fund December 31, 1997
Schedule of Investments
<TABLE>
<CAPTION>
Shares, Units or
Principal Amount Industry Market Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 96.8%
Australia 6.3%
700 Broken Hill Proprietary + Resources $ 6,499
4,800 National Australia Bank Financials 67,015
13,400 News Corporation Media 73,943
6,950 Telstra Corporation Ltd.* + Utilities 14,671
2,700 WMC Ltd. Resources 9,411
-----------
171,539
-----------
France 2.4%
440 Michelin B Auto Goods 22,159
390 Total Co. Francase Perole Class B Utilities 42,458
-----------
64,617
-----------
Germany 6.7%
825 Hoechst Healthcare 28,900
123 Mannesmann Electrical/Engineering 62,169
560 Siemens + Electrical/Engineering 33,162
580 Veba Ag Utilities 39,506
31 Viag Ag + Utilities 16,703
-----------
180,440
-----------
Great Britain 31.6%
8,000 B.A.T. Industries Tobacco/Financial Services 73,203
2,725 Barclays PLC + Financials 72,824
9,800 BTR PLC Conglomerates 29,784
3,450 Cable & Wireless PLC Telecommunications 30,486
2,700 Cadbury Schweppes Food Manufacturing 27,360
3,450 Diageo Ordinary* Tobacco/Financial Services 31,882
1,350 EMI Group PLC Class B Leisure & Entertainment 11,327
3,200 General Electric Co. PLC Electrical/Engineering 20,851
2,400 Glaxo Wellcome PLC Healthcare 57,083
3,150 Granada Group PLC Leisure & Entertainment 48,387
2,070 Kingfisher PLC Retailer/Consumer Goods 28,993
4,624 Ladbroke Group PLC Entertainment/Leisure/Toys 20,163
4,720 Lloyds TSB Group Financials 61,355
1,100 Premier Farnell Distributor of Components 7,958
5,125 Prudential Corporation PLC Insurance 62,133
4,600 Safeway PLC Retailer/Consumer Goods 26,061
2,000 Scottish Power PLC + Utilities 17,772
7,340 Shell Transport & Trading Company + Utilities 53,343
2,400 Siebe PLC Electrical/Engineering 47,371
3,550 TI Group PLC Electrical/Engineering 27,207
5,900 Vodafone Group PLC Telecommunications 42,781
1,575 Zeneca Group PLC Healthcare 55,593
-----------
853,917
-----------
Hong Kong 1.8%
2,000 HSBC Holdings PLC Financials 49,308
-----------
</TABLE>
26
<PAGE>
Berger/BIAM
IPT-International Fund December 31, 1997
Schedule of Investments
<TABLE>
<CAPTION>
Shares, Units or
Principal Amount Industry Market Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indonesia 0.8%
7,000 Gudang Garam Tobacco $ 10,659
8,000 HM Sampoerna Tobacco 6,036
11,500 Telekomunikasi Telecommunications 6,116
-----------
22,811
-----------
Ireland 0.6%
5,850 Smurfit (Jefferson) Forestry & Paper Products 16,530
-----------
Italy 1.8%
1,123 Eni Spa Itl + Oil 6,367
6,700 Telecom Italia * + Utilities 42,797
-----------
49,164
-----------
Japan 15.0%
3,000 Canon, Inc. Retailer/Consumer Goods 69,931
2,000 Dia Nippon Printing Media 37,572
2,000 Honda Motor + Automobiles 73,458
2,000 Kao Corporation Food & Grocery 28,831
100 Keyence Corporation* Electronics & Instruments 14,799
1,000 Murata Manufacturing Co. + Electronics & Instruments 25,151
2,000 Shiseido Co. Health & Personal Care 27,298
800 Sony Corporation + Household Durables & Appliances 71,158
2,000 Takeda Chemical Health & Personal Care 57,049
-----------
405,247
-----------
Malaysia 0.4%
2,000 Hume Industries Malaysia Infrastructure/Property 2,097
4,000 RHB Capital* Financials 1,933
7,000 Sime Darby Bhd Conglomerates 6,728
2,000 United Engineers** Infrastructure/Property 833
-----------
11,591
-----------
Mexico 0.5%
4,650 Grupo Financiero Banamex* Financials 13,900
-----------
Netherlands 9.4%
1,575 ABN-Amro Holdings Financials 30,700
1,800 Elsevier Media 29,134
2,655 ING Groep Financials 111,886
800 Koninklijke PTT Utilities 33,398
625 Nutricia Ver Bedrijven Food Manufacturing 18,967
550 Royal Dutch Petroleum Utilities 30,207
-----------
254,292
-----------
Philippines 0.2%
5,000 San Miguel Food & Drinks 6,111
-----------
Portugal 0.3%
450 Electricidade De Portugal Utilities 8,525
-----------
Singapore 3.8%
4,000 City Development Infrastructure/Property 18,544
4,000 Development Bank of Singapore Financials 34,235
3,000 Fraser and Neave Food & Drinks 13,016
3,000 Singapore Press Holdings Media 37,623
-----------
103,418
-----------
</TABLE>
27
<PAGE>
Berger/BIAM
IPT-International Fund December 31, 1997
Schedule of Investments
<TABLE>
<CAPTION>
Shares, Units or
Principal Amount Industry Market Value
- ----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Spain 1.2%
1,010 Banco de Santander Financials $ 33,743
------------
Switzerland 13.9%
35 Alusuisse Lonz + Conglomerates 33,588
44 Nestle SA Food Manufacturing 65,880
82 Novaritis AG-RE + Healthcare 132,928
5 Roche Holding AG Healthcare 49,607
50 Schw Ruckverischer Insurance 93,429
------------
375,432
------------
Total Common Stock (Cost $2,687,444) 2,620,585
------------
Repurchase Agreement 1.3%
34,000 Repurchase Agreement with State Street Bank, 5.00% dated
December 31, 1997, to be repurchased at $34,009 on January 2, 1998,
collateralized by Federal National Mortgage Association Notes, 5.00% -
August 25, 2019 with a value of 39,200 (Cost $34,000) 34,000
------------
98.1%
Total Investments (Cost $2,721,444)*** $ 2,654,585
------------
1.9%
Total cash and other assets, less liabilities 51,246
------------
Net Assets 100.0% $ 2,705,831
============
</TABLE>
- --------------------------------
Percentages indicated are based on net assets of $2,705,831.
PLC-Public Limited Company.
*Non-income producing securities.
**Security is priced at fair value as determined by the Trustees.
***Cost for federal income tax purposes is $2,730,662.
+ Security has been designated as collateral for forward foreign currency
contracts.
See notes to financial statements.
28
<PAGE>
Statements of Assets and Liabilities
December 31, 1997
<TABLE>
<CAPTION>
Berger Berger Berger-IPT Berger/BIAM
IPT-100 IPT-Growth and Small Company IPT-International
Fund Income Fund Growth Fund Fund
-------------- -------------- ------------- -----------------
<S> <C> <C> <C> <C>
Assets
Investments at cost 1,306,151 1,384,790 2,545,395 2,721,444
- ------------------------------------------------------------------------------------------------------------------------------------
Investments at value $1,310,307 $1,497,680 $2,719,806 $2,654,585
Cash 5,174 2,246 5,191 393
Foreign cash (cost $32,662) - - - 31,436
Net unrealized appreciation on open forward - - - 9,087
currency contracts
Receivables
Fund shares sold 525 1,468 8,144 21,622
Investment securities sold - 43,447 3,019 -
Due from management company 17,701 16,177 21,199 32,471
Dividends 374 1,336 692 3,362
Interest - 589 - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 1,334,081 1,562,943 2,758,051 2,752,956
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payables
Investment securities purchased 87,400 49,927 - 24,089
Fund shares redeemed - - 22,683 -
Accrued investment advisory fees 748 1,335 2,133 2,003
Accrued audit fees 5,750 5,750 5,750 10,500
Accrued legal fees - - - 4,760
Accrued transfer agency fees 997 995 1,158 1,678
Accrued postage, printing & reports 182 155 269 778
Accrued custody fees 2,599 1,150 3,976 1,758
Accrued accounting fees 2,500 2,500 2,500 1,537
Accrued administration fees 13 13 23 22
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 100,189 61,825 38,492 47,125
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Shares Outstanding $1,233,892 $1,501,118 $2,719,559 $2,705,831
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Shares
Authorized (par value $.01) Unlimited Unlimited Unlimited Unlimited
- ------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding 111,085 112,089 225,472 276,381
Net Asset Value, Offering and Redemption Price
Per Share $ 11.11 $ 13.39 $ 12.06 $ 9.79
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
29
<PAGE>
Statements of Operations
For the year ended December 31, 1997
<TABLE>
<CAPTION>
Berger Berger Berger-IPT Berger/BIAM
IPT-100 IPT-Growth and Small Company IPT-International
Fund Income Fund Growth Fund Fund*
-------------- -------------- ------------- -----------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends $ 2,798 $ 6,881 $ 2,632 $ 21,933
Interest 6,724 7,824 12,000 7,715
Foreign tax withholding - - - (2,209)
- -------------------------------------------------------------------------------------------------------------------------------
Total Income 9,522 14,705 14,632 27,439
- -------------------------------------------------------------------------------------------------------------------------------
Expenses:
Advisory fees 5,119 4,872 11,890 13,368
Administration fees 68 58 131 148
Accounting fees 13,000 13,000 13,000 6,125
Audit fees 12,865 12,834 13,123 11,875
Transfer agent fees and expenses 8,045 7,835 8,391 3,504
Custodian fees and expenses 7,506 5,533 14,036 9,723
Reports to shareholders 1,788 1,613 1,838 1,407
Registration fees 11 11 10 114
Legal fees 13,809 16,257 13,454 9,827
Trustees' fees 402 397 463 549
Other expenses 101 79 359 249
- -------------------------------------------------------------------------------------------------------------------------------
Total Expenses 62,714 62,489 76,695 56,889
- -------------------------------------------------------------------------------------------------------------------------------
Less expenses reimbursed by advisor (55,910) (56,020) (61,554) (39,083)
Less fees paid indirectly (28) - - -
Less earnings credits (759) (785) (1,119) (3,211)
- -------------------------------------------------------------------------------------------------------------------------------
Expenses-Net 6,017 5,684 14,022 14,595
- -------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 3,505 9,021 610 12,844
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses)
from Investments and Foreign Currency Transactions:
Net realized gains (losses) from securities and
foreign currency transactions 81,346 46,735 (73,776) 4,516
Net change in unrealized appreciation (depreciation) from
securities and foreign currency transactions (23,122) 80,868 153,881 (58,827)
- -------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains (Losses) from
Investments and Foreign Currency Transactions 58,224 127,603 80,105 (54,311)
- -------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 61,729 $ 136,624 $ 80,715 $ (41 ,467)
===============================================================================================================================
</TABLE>
*For the period from May 1, 1997 (commencement of investment operations) to
December 31, 1997.
See notes to financial statements.
30
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Berger Berger
IPT-100 Fund IPT-Growth and Income Fund
---------------------------------------- ---------------------------------------
For the period from For the period from
Year ended May 1, 1996* to Year ended May 1, 1996* to
December 31, 1997 December 31, 1996 December 31, 1997 December 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From Operations
Net investment income $ 3,505 $ 933 $ 9,021 $ 3,245
Net realized gains (losses) from
securities and foreign currency transactions 81,346 (15,089) 46,735 (5,205)
Net changes in unrealized appreciation (depreciation)
from securities and foreign currency transactions (23,122) 27,278 80,868 32,022
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 61,729 13,122 136,624 30,062
- ------------------------------------------------------------------------------------------------------------------------------------
From Dividends and Distributions
to Shareholders
Net investment income (4,291) - (10,988) -
Net realized gains on investments (66,421) - (41,693) -
In excess of net realized gains on investments - - (1,809) -
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets from
Dividends and Distributions to Shareholders (70,712) - (54,490) -
- ------------------------------------------------------------------------------------------------------------------------------------
From Fund Share Transactions
Proceeds from shares sold 901,641 333,121 1,091,415 314,330
Issued in reinvestment of dividends 70,710 - 54,489 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total 972,351 333,121 1,145,904 314,330
Payment for shares redeemed (60,772) (14,947) (71,293) (19)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 911,579 318,174 1,074,611 314,311
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 902,596 331,296 1,156,745 344,373
Net Assets
Beginning of period 331,296 - 344,373 -
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 1,233,892 $ 331,296 $ 1,501,118 $ 344,373
====================================================================================================================================
Composition of Net Assets
Capital (par value and paid in surplus) $ 1,229,753 $ 318,174 $ 1,388,922 $ 314,311
Undistributed net investment income (loss) 147 933 1,278 3,245
Undistributed net realized gain (loss) from investments (164) (15,089) (1,972) (5,205)
Net unrealized appreciation (depreciation) from
investments and foreign currency transactions 4,156 27,278 112,890 32,002
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 1,233,892 $ 331,296 $ 1,501,118 $ 344,373
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares
Shares sold 77,915 33,339 82,469 30,917
Shares issued to shareholders in reinvestment of distributions 6,664 - 4,280 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total 84,579 33,339 86,749 30,917
Shares repurchased (5,379) (1,454) (5,575) (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 79,200 31,885 81,174 30,915
Shares outstanding, beginning of period 31,885 - 30,915 -
- ------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 111,085 31,885 112,089 30,915
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of investment operations.
See notes to financial statements.
31
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Berger Berger/BIAM
IPT-Small Company Growth Fund IPT-International Fund
---------------------------------------- -----------------------------
For the
period from For the period from
Year ended May 1, 1996* to May 1, 1997* to
December 31, 1997 December 31, 1996 December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From Operations
Net investment income $ 610 $ 256 $ 12,844
Net realized gains (losses) from
securities and foreign currency transactions (73,776) (24,136) 4,516
Net changes in unrealized appreciation (depreciation)
from securities and foreign currency transactions 153,881 20,530 (58,827)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 80,715 (3,350) (41,467)
- ------------------------------------------------------------------------------------------------------------------------------------
From Dividends and Distributions
to Shareholders
Net investment income - - -
Net realized gains on investments - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets from
Dividends and Distributions to Shareholders - - -
- ------------------------------------------------------------------------------------------------------------------------------------
From Fund Share Transactions
Proceeds from shares sold 5,788,243 294,712 2,827,321
Issued in reinvestment of dividends - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,788,243 294,712 2,827,321
Payment for shares redeemed (3,440,761) - (80,023)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 2,347,482 294,712 2,747,298
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 2,428,197 291,362 2,705,831
Net Assets
Beginning of period 291,362 - -
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 2,719,559 $ 291,362 $ 2,705,831
====================================================================================================================================
Composition of Net Assets
Capital (par value and paid in surplus) $ 2,642,040 $ 294,712 $ 2,747,298
Undistributed net investment income (loss) 1,020 256 40,266
Undistributed net realized gain (loss) from investments (97,912) (24,136) (22,906)
Net unrealized appreciation (depreciation) from
investments and foreign currency transactions 174,411 20,530 (58,827)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 2,719,559 $ 291,362 $ 2,705,831
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares
Shares sold 494,997 29,268 284,348
Shares issued to shareholders in reinvestment of distributions - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total 494,997 29,268 284,348
Shares repurchased (298,793) - (7,967)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 196,204 29,268 276,381
Shares outstanding, beginning of period 29,268 - -
- ------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 225,472 29,268 276,381
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of investment operations.
See notes to financial statements.
32
<PAGE>
Berger Institutional Products Trust
Notes to Financial Statements
December 31, 1997
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
Berger Institutional Products Trust (the "Trust"), a Delaware business
trust, was established on October 17, 1995 as a diversified open-end management
investment company. The Trust is authorized to issue an unlimited number of
shares of beneficial interest in series or portfolios. Currently, the series
comprising Berger IPT-100 Fund ("IPT-100"), Berger IPT-Growth and Income Fund
("IPT-G&I"), Berger IPT-Small Company Growth Fund ("IPT-SCG") and Berger/BIAM
IPT-International Fund ("IPT-International"), (individually the "Fund" and
collectively the "Funds") are the only portfolios established under the Trust,
although others may be added in the future. The Funds commenced investment
operations on May 1, 1996, except for IPT-International which commenced
investment operations on May 1, 1997.
The Trust is registered under the Investment Company Act of 1940 and its shares
are registered under the Securities Act of 1933 (the "Acts"). Shares of each
Fund are fully paid and non-assessable when issued. All shares issued by a
particular Fund participate equally in dividends and other distributions by that
Fund. The Trust's shares are not offered directly to the public, but are sold
exclusively to insurance companies ("Participating Insurance Companies") as a
pooled funding vehicle for variable annuity and variable life insurance
contracts issued by separate accounts of Participating Insurance Companies and
to qualified plans. All costs incurred in organizing the Trust were paid by
Berger Associates, Inc. ("Berger"), the investment advisor to IPT-100, IPT-G&I
and IPT-SCG and by BBOI Worldwide LLC ("BBOI"), the investment advisor to IPT-
International.
On April 15, 1996, Berger purchased 25,000 shares of each of IPT-100, IPT-
G&I and IPT-SCG at a net asset value of $10.00 per share. On May 1, 1997, Berger
purchased a variable annuity contract through which it indirectly owns 200,000
shares of the IPT-International for $2 million. At December 31, 1997, Berger,
directly or indirectly, owned 24%, 23%, 11% and 72% of the outstanding shares of
IPT-100, IPT-G&I, IPT-SCG and IPT-International, respectively.
Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
The Funds are permitted to hold certain types of futures, forwards and
options (except for IPT-International, which may only hold forward foreign
currency exchange contracts) for the purpose of hedging the fund against
exposure to market value fluctuations. The use of such instruments may involve
certain risks as a result of unanticipated movements in the market. A lack of
correlation between the value of such investments and the assets being hedged,
or unexpected price movements, could render a Fund's hedging strategy
unsuccessful. In addition, there can be no assurance that a liquid secondary
market will exist for the instrument. Realized gains or losses on these
securities, if any, are included in Net Realized Gains (Losses) from Securities
and Foreign Currency Transactions in the Statements of Operations.
Investment Valuation
Securities are valued at the close of the regular trading session of the
New York Stock Exchange (the "Exchange") on each day that the Exchange is open.
Securities listed on national exchanges, the NASDAQ Stock Market and foreign
exchanges are valued at the last sale price on such markets, or, if no last sale
price is available, they are valued using the mean between their current bid and
asked prices. Securities that are traded on the over-the-counter market are
valued at the mean between their current bid and asked prices. Short-term
obligations maturing within sixty days are valued at amortized cost, which
approximates market value. Securities for which quotations are not readily
available are valued at fair values determined in good faith pursuant to
consistently applied procedures established by the trustees.
Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of the Exchange. The values of
foreign securities used in computing the net asset value of the shares in the
Funds are determined as of the earlier of such market close or the closing time
of the Exchange. Occasionally, events affecting the value of such securities may
occur between the times at which they are determined and the close of the
Exchange, or when the foreign market on which such securities trade is closed
but the Exchange is open, which will not be reflected in the computation of net
asset value. If during such periods, events occur which materially affect the
value of such securities, the securities will be valued at their fair market
value as determined in good faith pursuant to consistently applied procedures
established by the trustees.
33
<PAGE>
Calculation of Net Asset Value
The per share calculation of net asset value is determined by dividing the
total value of assets, less liabilities, by the total number of shares
outstanding.
Federal Income Taxes
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of their taxable income to shareholders. Therefore, no income tax provision is
required.
Dividends received by shareholders of the Funds which are derived from
foreign source income and foreign taxes paid by the Funds are to be treated, to
the extent allowable under the Code, as if received and paid by the shareholders
of the Funds.
Foreign Currency Translation
Assets and liabilities initially expressed in terms of foreign currencies
are translated into U.S. Dollars at the prevailing market rates as quoted by one
or more banks or dealers on the date of valuation. The cost of securities is
translated into U.S. dollars at the rates of exchange prevailing when such
securities were acquired. Income and expenses are translated into U.S. dollars
at rates of exchange prevailing when accrued.
Investment Transactions and Investment Income
Investment transactions are accounted for on the date investments are
purchased or sold. Dividend income is recorded on the ex-dividend date, except
if the ex-dividend date has passed, such dividends from foreign securities are
recorded as soon as the fund is informed of the ex-dividend date. Interest
income is recorded on the accrual basis and includes amortization of discounts
and premiums. Gains and losses are computed on the identified cost basis for
both financial statement and Federal income tax purposes for all securities.
Common Expenses
Certain expenses, which are not directly allocable to a specific Fund, are
allocated to the Funds' on the basis of relative net assets.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent 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 investment advisor to IPT-100, IPT-G&I and IPT-SCG and
BBOI serves as the investment advisor to IPT-International. Berger and Bank of
Ireland Asset Management (U.S.) Limited ("BIAM") each own 50% of BBOI. BBOI has
delegated the day-to-day portfolio management of IPT-International to BIAM. As
compensation for their services to the Funds, Berger and BBOI receive an
investment advisory fee, which is accrued daily at the applicable rate and paid
monthly. The fees are based on an annual rate of each Fund's average daily net
assets as follows: IPT-100 and IPT-G&I at .75 of 1% of average daily net assets;
IPT-SCG and IPT-International at .90 of 1% of average daily net assets. As sub-
advisor to IPT-International, BIAM receives a sub-advisory fee from BBOI at an
annual rate of .40 of 1% of the average daily net assets of the Fund. BIAM has
agreed to waive such sub-advisory fees for the period from May 1, 1997 to
October 15, 2000. Berger and BBOI have agreed to waive their advisory fees and
reimburse expenses to the Funds to the extent that normal operating expenses in
any fiscal year (including the advisory fee but excluding brokerage commissions,
interest, taxes and extraordinary expenses) exceed 1.00% of the average daily
net assets of both IPT-100 and IPT-G&I, 1.15% of the average daily net assets of
IPT-SCG and 1.20% of the average daily net assets of IPT-International.
IPT-100, IPT-G&I and IPT-SCG have entered into administrative services
agreements with Berger. The administrative services agreements provide for an
annual fee of .01 of 1% of the average daily net assets of each Fund accrued
daily and paid monthly. IPT-International has entered into an administrative
services agreement with BBOI. The administrative services agreement provides for
a fee at an annual rate of .01 of 1% of the average daily net assets of the Fund
accrued daily and paid monthly. BBOI has delegated the day-to-day administrative
duties to Berger. Berger receives a sub-administration fee from BBOI at an
annual rate of .20 of 1% of the average daily net assets of IPT-International.
Berger voluntarily waived such sub-administration fee for the period from May 1,
1997 to December 31, 1997.
34
<PAGE>
The Trust has 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.
DST Systems, Inc. ("DST"), an affiliate of Berger through a degree of
common ownership, provides shareholder accounting services to the Funds. DST
Securities, Inc., a wholly owned subsidiary of DST, is designated as an
introductory broker on certain portfolio transactions. The Funds receive an
amount equal to the brokerage commissions paid to DST Securities, Inc. as
credits against transfer agent fees and expenses. For the period ended December
31, 1997, the IPT-100 earned $28 for such credits. The IPT-G&I, IPT-SCG and IPT-
International earned no credits during such period.
Certain officers and directors of Berger and BBOI are also officers and trustees
of the Trust. Trustees who are not affiliated with Berger and BBOI received
trustees' fees totaling $402, $397, $463 and $549 from IPT-100, IPT-G&I IPT-SCG,
and IPT-International, respectively, for the year or period ended December 31,
1997.
3. INVESTMENT TRANSACTIONS
A. Purchases and Sales
Purchases and sales of investment securities (excluding short-term
securities) for the year or period ended December 31, 1997, were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
IPT-100 $ 2,061,398 $ 1,322,116
IPT-G&I 1,960,296 1,078,379
IPT-SCG 3,853,480 1,967,932
IPT-International* 2,962,517 267,278
* Represents the period from May 1, 1997 (commencement of investment operations)
through December 31, 1997.
There were no purchases or sales of long-term U.S. Government securities
during the year or period ended December 31, 1997.
B. Net Appreciation (Depreciation)
At December 31, 1997, 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:
Unrealized Unrealized
Fund Appreciation (Depreciation) Net
- --------------------------------------------------------------------------------
IPT-100 $ 60,519 $ (58,368) $ 2,151
IPT-G&I 120,074 (8,002) 112,072
IPT-SCG 313,718 (139,647) 174,071
IPT-International 198,624 (274,701) (76,077)
35
<PAGE>
C. Outstanding Forward Foreign Currency Contracts
The table below indicates IPT-International's outstanding forward currency
contracts at December 31, 1997:
<TABLE>
<CAPTION>
Unrealized
Contract Maturity Value on Appreciation
Currency Amount Date December 31, 1997 (Depreciation)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Buy Australian Dollar 25,000 1/2/98 $ 16,287 $ (100)
Buy Italian Lira 11,380,000 1/2/98 6,433 (31)
Sell Swiss Franc 70,000 1/7/98 48,393 256
Sell German Deutschemark 82,000 1/14/98 47,096 1,325
Sell British Pound 42,000 1/26/98 68,233 (969)
Sell Swiss Franc 59,000 1/30/98 42,186 1,677
Sell Swiss Franc 46,000 2/12/98 33,481 1,854
Sell British Pound 36,000 2/24/98 60,631 1,414
Sell Japanese Yen 4,402,000 2/27/98 35,160 1,115
Sell Japanese Yen 11,751,000 3/9/98 93,373 2,352
Sell Japanese Yen 4,402,000 3/16/98 34,328 194
----------------
$9,087
================
</TABLE>
36
<PAGE>
D. 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. Of the ordinary income distributions
declared for the year ended December 31, 1997, 3.16% and 3.72% qualified for the
dividends received deduction available to the corporate shareholders of IPT-100
and IPT-G&I Funds, respectively.
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 have been reclassified to paid-in-capital.
During the year or period ended December 31, 1997, the following
reclassifications were made:
IPT-SCG IPT International
- --------------------------------------------------------------------------------
Paid in Capital (154) ---
Undistributed Net
Investment Income 154 27,422
Undistributed Net
Realized Gain --- (27,422)
At December 31, 1997, the Funds had capital loss carryovers, which may be
used to offset future realized capital gains for Federal income tax purposes.
Additionally, IPT-SCG incurred and elected to defer post-October 31 net capital
losses of $43,056 to the year ended December 31, 1998. IPT-International
incurred and elected to defer post-October 31 net capital losses and currency
losses amounting to $31,115 to the year ended December 31, 1998.
At December 31, 1997, IPT-SCG Fund had $16,903 and $39,861 in capital loss
carryovers which expire in the years 2004 and 2005, respectively.
Net capital loss carryovers utilized in 1997 by IPT-100 and IPT-G&I Funds
amounted to $8,758 and $5,025, respectively.
37
<PAGE>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout
the Periods Presented
<TABLE>
<CAPTION>
Berger Berger
IPT-100 Fund IPT-Growth and Income Fund
---------------------------------------- ----------------------------------------
Year ended Period ended Year ended Period ended
December 31, 1997 December 31, 1996(a) December 31, 1997 December 31, 1996(a)
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.39 $ 10.00 $ 11.14 $ 10.00
----------------- ----------------- ----------------- ----------------
From Investment Operations
Net investment income (loss) 0.01 0.03 0.01 0.10
Net realized and unrealized
gains (losses) from investments 1.39 0.36 2.75 1.04
----------------- ----------------- ----------------- ----------------
Total from investment operations 1.40 0.39 2.76 1.14
Less dividends and distributions
Dividends (from net investment income) (0.04) - (0.10) -
Distributions (from capital gains) (0.64) - (0.39) -
Distributions in excess of capital gains - - (0.02) -
----------------- ----------------- ----------------- ----------------
Total dividends and distributions (0.68) - (0.51) -
----------------- ----------------- ----------------- ----------------
Net Asset Value, End of period $ 11.11 $ 10.39 $ 13.39 $ 11.14
================= ================= ================= =================
Total Return 13.76% 3.90%(d) 24.99% 11.40%(d)
================= ================= ================= =================
Ratios/Supplemental Data:
Net Assets at end of period $ 1,233,892 $ 331,296 $ 1,501,118 $ 344,373
Net expense ratio to average net assets 0.88% 0.93%(b) 0.87% 0.94%(b)
Ratio of net income to average net assets 0.51% 0.50%(b) 1.39% 1.80%(b)
Gross expenses to average net assets (c) 9.18% 7.69%(b) 9.62% 7.70%(b)
Portfolio turnover rate 246% 56%(d) 215% 60%(d)
Average Commission Rate $ 0.0600 $ 0.0590 $ 0.0605 $ 0.0756
</TABLE>
- -----------------------------
(a) For the period from May 1, 1996 (commencement of investment operations) to
December 31, 1996.
(b) Annualized.
(c) During the period, certain expenses were reduced as a result of voluntary
fee reductions, expenses reimbursements and/or earnings credits. If such
reductions had not occurred, the ratios would have been as indicated. Gross
and net expenses do not include the deduction of any charges attributable to
any particular variable insurance contract.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
See notes to financial statements.
38
<PAGE>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout
the Periods Presented
<TABLE>
<CAPTION>
Berger Berger/BIAM
IPT-Small Company Growth Fund IPT-International Fund
---------------------------------------- ----------------------------------------
Year ended Period ended Period ended
December 31, 1997 December 31, 1996(a) December 31, 1997(b)
----------------- -------------------- --------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.95 $ 10.00 $ 10.00
From Investment Operations
Net investment income (loss) 0.00 (f) 0.01 0.05
Net realized and unrealized
gains (losses) from investments 2.11 (0.06) (0.26)
-------------- ---------------- ----------------
Total from investment operations 2.11 (0.05) (0.21)
Less dividends and distributions
Dividends (from net investment income) - - -
Distributions (from capital gains) - - -
Distributions in excess of capital gains - - -
-------------- ---------------- ----------------
Total dividends and distributions - - -
-------------- ---------------- ----------------
Net Asset Value, End of period $ 12.06 $ 9.95 $ 9.79
============== ================ ================
Total Return 21.21% -0.50% (e) -2.10% (e)
============== ================ ================
Ratios/Supplemental Data:
Net Assets at end of period $ 2,719,559 $ 291,362 $2,705,831
Net expense ratio to average net assets 1.06% 0.95% (c) 0.98% (c)
Ratio of net income to average net assets 0.05% 0.14% (c) 0.86% (c)
Gross expenses to average net assets (d) 5.81% 8.57% (c) 3.83% (c)
Portfolio turnover rate 194% 80% (e) 14% (e)
Average Commission Rate $ 0.0601 $ 0.0391 $ 0.0220
</TABLE>
- -----------------------------
(a) For the period from May 1, 1996 (commencement of investment operations) to
December 31, 1996.
(b) For the period from May 1, 1997 (commencement of investment operations) to
December 31, 1997.
(c) Annualized.
(d) During the period, certain expenses were reduced as a result of voluntary
fee reductions, expenses reimbursements and/or earnings credits. If such
reductions had not occurred, the ratios would have been as indicated. Gross
and net expenses do not include the deduction of any charges attributable to
any particular variable insurance contract.
(e) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(f) Net investment income was less than $0.01 per share.
See notes to financial statements.
39
<PAGE>
Report of Independent Accountants
To the Board of Trustees and Shareholders of
Berger Institutional Products Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the portfolios constituting
Berger Institutional Products Trust (the "Trust") at December 31, 1997, the
results of each of their operations, the changes in each of their net assets and
the financial highlights for each of the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Denver, Colorado
January 30, 1998
40
<PAGE>
Trustees of Berger Institutional Products Trust
Michael Owen, Chairman * Dennis E. Baldwin
William M.B. Berger * Louis R. Bindner, P.E. * Katherine A. Cattanach
* Paul R. Knapp * Gerard M. Lavin * Harry T. Lewis, Jr.
* William Sinclaire
OFFICERS:
Gerard M. Lavin
President
Berger Institutional Products Trust
William R. Keithler
President
Berger IPT-Small Company Growth Fund
Patrick S. Adams
President
Berger IPT-100 Fund
Berger IPT-Growth & Income Fund
Sheila J. Ohlsson
Vice President
Berger IPT-Growth & Income Fund
Kevin R. Fay
Vice President, Secretary and Treasurer
Berger Institutional Products Trust
Janice M. Teague
Assistant Secretary
Berger Institutional Products Trust
David J. Schultz
Assistant Treasurer
Berger Institutional Products Trust
Investment Advisors
Berger Associates, Inc.
BBOI Worldwide LLC
P.O. Box 5005
Denver, Colorado 80217
1-303-329-0200 or 1-800-333-1001
THE BERGER FUNDS
Together we can move mountains.(TM)
(C)1998 Berger Associates, Inc.
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