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JUNE 30, 2000
BERGER INSTITUTIONAL PRODUCTS TRUST
SEMI-ANNUAL REPORT
[BERGER FUNDS LOGO]
BERGER IPT-SMALL COMPANY GROWTH FUND
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This report reflects the financial position of the Fund at June 30, 2000 and the
results of operations and changes in its net assets for the periods indicated.
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Berger IPT-Small Company Growth Fund
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Table of Contents
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BERGER IPT-SMALL COMPANY GROWTH FUND
Portfolio Manager Commentary .................................................4
Schedule of Investments ......................................................5
FINANCIAL STATEMENTS
Statement of Assets and Liabilities ..........................................8
Statement of Operations ......................................................9
Statements of Changes in Net Assets .........................................10
FINANCIAL HIGHLIGHTS ........................................................11
NOTES TO FINANCIAL STATEMENTS ...............................................12
</TABLE>
This material must be preceded or accompanied by a prospectus. Berger
Distributors LLC ~ Member NASD (8/00)
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
PORTFOLIO MANAGER COMMENTARY JAY W. TRACEY III
MARK S. SUNDERHUSE
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As of June 5, 2000, Berger Funds announced the appointment of Jay W. Tracey III
and Mark Sunderhuse as interim co-managers of the Berger IPT-Small Company
Growth Fund. We are pleased to have them at the helm of the Fund.
Performance
Against the backdrop of a highly volatile market, the Berger IPT-Small Company
Growth Fund (the "Fund") significantly outpaced the performance of its
benchmarks for the six-month period ended June 30, 2000. The Fund gained 18.97%
compared with 3.04% for the Russell 2000 Index(1) and 1.23% for the Russell 2000
Growth Index(2) over this period.
Period in Review
The year began on a positive note as the strong fourth quarter 1999 move in
technology stocks and small-cap stocks continued. On March 10, however,
profit-taking and renewed fears of rising interest rates set in, dragging down
prices and marking the beginning of a correction in these stocks that continued
well into the second quarter. Investors fled to large-cap stocks, which they
perceive to be less risky in volatile markets, and to stocks in lower-valuation
sector groups such as financials, consumer and energy.
Ironically, the greatest positive contributor to the Fund's strong performance
this reporting period was its exposure to the sector that was battered the worst
by market force-technology. In the second quarter alone, the technology sector
within the Russell 2000 Index declined nearly 15% and the technology-heavy
Nasdaq Composite Index declined more than 13%. In contrast, the Fund's
technology positions, as a group, were about even for the quarter. Gains in
holdings such as Forrester Research, Mercury Interactive, Sapient and Macromedia
were strong enough to offset declines in other technology holdings. We see this
performance as an example that stock selection can make a significant difference
in a portfolio's performance, especially in a universe of small-cap, emerging
growth stocks in which the stock market tends to be less efficient.
Elsewhere in the portfolio, stocks in the healthcare sector turned in positive
performances. The Fund's biotechnology positions, in particular, staged good
rebounds in the second quarter following a sharp first-quarter correction. The
fundamental outlook here remains bright.
Consumer stocks were mixed but generally down. Radio stock prices continued to
contract, despite strong advertising trends, because of rising interest rates
and concerns that "dot-com" advertising will tail off, even though this type of
advertising makes up only a small portion of radio companies' total revenue.
Looking Ahead
Going forward, our outlook for the technology sector in general remains
positive. Revenue and earnings growth rates in this sector remain very high,
attributable to the continued rapid pace of the Internet build-out and to
aggressive implementation of e-commerce initiatives by corporations worldwide.
High stock valuations will remain an issue, however, as investors seek to find a
comfortable timeframe to evaluate a company's future earnings potential. Before
the correction, investors seemed to be willing to pay for earnings three to four
years or more into the future; now investors appear to be focusing only one to
two years out, on average. The good news about this correction is that much of
the speculative froth is gone and that stocks of leading, well-positioned
technology companies have once again begun to perform better.
We expect volatility to remain at relatively high levels for the foreseeable
future, as uncertainties remain about the growth rate of the economy, the extent
of any future interest rate increases and, later this year, the outcome of
upcoming elections. We will continue to focus on well-managed, leading small-cap
growth companies that address open-ended growth opportunities with
well-conceived business plans. In addition, we will look for companies that
possess the competitive advantage to sustain superior revenue and earnings
growth rates over the long term.
Past performance is no guarantee of future results.
(1) The Russell 2000 Index is an unmanaged index, with dividends reinvested,
which consists of the common stocks of 2,000 U.S. companies. It is a generally
recognized indicator used to measure overall performance of small company
stocks. One cannot invest directly in an index.
(2) The Russell 2000 Growth Index is an unmanaged index, with dividends
reinvested, which consists of common growth stocks included in the Russell 2000
Index. Companies in this index tend to exhibit higher price-to-book and
price-earnings ratios. It is a generally recognized indicator used to measure
overall small-company growth stock performance in the U.S. stock market. One
cannot invest directly in an index.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
PERFORMANCE OVERVIEW
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Berger IPT-Small Company Growth Fund
Comparison of Change in Value for Berger IPT-Small Company Growth
Fund vs. Russell 2000 Index
[GRAPH]
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6/30/00
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Berger IPT-Small Company Growth Fund $ 27,982
Russell 2000 Index $ 15,675
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AVERAGE ANNUAL TOTAL RETURN AS OF JUNE 30, 2000
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One Year 96.83%
Life of the Fund (5/1/96) 27.99%
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Past performance is no guarantee of future results. Fund performance shown
reflects the unusually favorable market conditions that existed in 1999 which
likely are not sustainable as market conditions change. Investment returns and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
SCHEDULE OF INVESTMENTS (UNAUDITED)
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June 30, 2000
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Shares Value
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COMMON STOCK (90.72%)
Banks - West/Southwest (0.73%)
14,380 Silicon Valley Bancshares* $ 612,947
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Building - Construction Products/Miscellaneous (0.52%)
23,620 Advanced Lighting Technologies, Inc.* 436,970
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Building - Heavy Construction (0.91%)
16,615 Dycom Industries, Inc.* 764,290
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Commercial Services - Miscellaneous (6.69%)
15,180 Diamond Technology Partners, Inc.* 1,335,840
32,680 Forrester Research, Inc.* 2,379,512
31,660 The Corporate Executive Board Co.* 1,895,642
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5,610,994
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Commercial Services - Schools (0.83%)
26,200 Devry, Inc.* 692,662
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Computer - Optical Recognition (0.98%)
45,890 Robotic Vision Systems, Inc.* 826,020
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June 30, 2000
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Shares Value
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COMMON STOCK (90.72%) - CONTINUED
Computer - Services (1.38%)
17,900 Internap Network Services Corp.* $ 743,129
22,782 MarchFirst, Inc.* 415,771
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1,158,900
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Computer Software - Desktop (1.43%)
12,380 Macromedia, Inc.* 1,196,991
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Computer Software - Educational/Entertainment (1.25%)
21,890 Smartforce PLC - Spon. ADR* 1,050,720
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Computer Software - Enterprise (3.56%)
13,550 Mercury Interactive Corp.* 1,310,962
56,270 ONYX Software Corp.* 1,670,515
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2,981,477
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Electrical - Equipment (0.48%)
19,490 Manufacturers Services Ltd.* 400,763
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Electrical - Scientific Instruments (1.93%)
15,030 Newport Corp.* 1,613,846
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Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
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SCHEDULE OF INVESTMENTS (UNAUDITED)
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June 30, 2000
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Shares Value
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COMMON STOCK (90.72%) - CONTINUED
Electronic - Laser System Component (1.64%)
28,720 Cymer, Inc.* $ 1,371,380
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Electronic - Semiconductor Equipment (7.03%)
24,980 DuPont Photomasks, Inc.* 1,711,130
29,100 Mattson Technology, Inc.* 945,750
4,500 Numerical Technologies, Inc.* 218,812
25,890 PRI Automation, Inc.* 1,692,963
18,030 Veeco Instruments Inc.* 1,320,697
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5,889,352
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Electronic - Semiconductor Manufacturing (3.26%)
8,830 Applied Micro Circuits Corp.* 871,962
6,980 Cree Research Inc.* 931,830
22,320 PLX Technology, Inc.* 926,280
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2,730,072
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Electronic Products - Miscellaneous (4.59%)
24,100 American Superconductor Corp.* 1,162,825
11,400 Proxim, Inc.* 1,128,243
63,380 Universal Electronics Inc.* 1,556,771
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3,847,839
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Financial Services - Miscellaneous (0.51%)
10,850 Investors Financial Service Corp. 430,609
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Insurance - Brokers (0.66%)
18,380 Pre-Paid Legal Services, Inc.* 549,126
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Internet - E*Commerce (0.35%)
13,990 Ebenx Inc.* 296,413
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Internet - Network Security/Solutions (2.07%)
4,730 Redback Networks Inc.* 841,940
8,390 Sapient Corp.* 897,205
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1,739,145
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Internet - Software (4.47%)
17,950 Agile Software Corp.* 1,268,840
9,040 Ariba, Inc.* 886,343
11,540 CMGI Inc.* 528,676
23,650 Primus Knowledge Solutions* 1,064,250
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3,748,109
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Leisure - Products (0.75%)
25,220 Meade Instruments Corp.* 633,652
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Media - Radio/TV (5.54%)
62,460 Cox Radio, Inc.* 1,748,880
30,620 Emmis Communications Corp.* 1,266,902
17,380 Hispanic Broadcasting Corp.* 575,712
19,330 SBS Broadcasting SA* 1,053,485
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4,644,979
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June 30, 2000
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Shares Value
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COMMON STOCK (90.72%) - CONTINUED
Medical - Biomed/Genetics (11.09%)
30,640 BioCryst Pharmaceuticals, Inc.* $ 878,985
38,250 Cephalon, Inc.* 2,290,218
67,810 Creative Biomolecules, Inc.* 949,340
6,780 IDEC Pharmaceuticals Corp.* 795,378
17,110 Invitrogen Corp.* 1,286,725
28,220 LightPath Technologies, Inc. - Class A* 1,123,508
16,300 Medimmune, Inc.* 1,206,200
25,740 Regeneron Pharmaceuticals, Inc.* 767,373
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9,297,727
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Medical - Ethical Drugs (3.02%)
50,950 PathoGenesis Corp.* 1,324,700
19,730 Pharmacyclics, Inc.* 1,203,530
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2,528,230
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Medical - Instruments (3.30%)
3,260 Aclara Biosciences Inc.* 166,056
39,260 IDEXX Laboratories, Inc.* 898,072
42,830 Ventana Medical Systems, Inc.* 1,006,505
15,450 Visible Genetics Inc.* 697,181
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2,767,814
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Medical - Medical/Dental Services (1.13%)
27,395 Accredo Health, Inc.* 946,839
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Medical - Wholesale Drug/Sundries (2.53%)
34,660 Allscripts, Inc.* 797,180
17,760 Priority Healthcare Corp.* 1,319,790
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2,116,970
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Metal Products & Fabrication (0.80%)
22,970 Maverick Tube Corp.* 669,001
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Oil & Gas - Drilling (4.86%)
42,210 Marine Drilling Companies, Inc.* 1,181,880
23,980 Patterson Energy, Inc.* 683,430
21,590 Precision Drilling Corp.* 833,913
55,570 Pride International Inc.* 1,375,357
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4,074,580
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Oil & Gas - Field Services (1.62%)
52,280 Veritas DGC, Inc.* 1,359,280
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Oil & Gas - Machinery/Equipment (1.49%)
37,900 National-Oilwell, Inc.* 1,245,962
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Retail - Consumer Electronics (0.50%)
13,740 Tweeter Home Entertainment
Group, Inc.* 417,352
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Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
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SCHEDULE OF INVESTMENTS (UNAUDITED)
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June 30, 2000
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Shares/Par Value Value
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COMMON STOCK (90.72%) - CONTINUED
Retail - Miscellaneous Diversified (1.08%)
17,960 Michaels Stores, Inc.* $ 822,792
18,280 The Right Start, Inc.* 83,402
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906,194
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Retail - Super/Mini-Markets (1.45%)
29,350 Whole Foods Market, Inc.* 1,212,521
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Telecommunications - Equipment (3.34%)
23,780 Powerwave Technologies, Inc.* 1,046,320
13,260 Tollgrade Communications Inc.* 1,756,950
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2,803,270
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Telecommunications - Services (2.95%)
24,860 Advanced Radio Telecom Corp.* 363,577
68,950 Metrocall Inc.* 620,550
25,920 Viatel, Inc.* 740,340
56,210 WebLink Wireless Inc.* 744,782
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2,469,249
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Total Common Stock
(Cost $61,282,029) 76,042,245
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REPURCHASE AGREEMENT (4.43%)
$3,711,000 State Street Repurchase Agreement,
6.30% dated June 30, 2000, to be
repurchased at $3,712,948 on
July 3, 2000, collateralized by
FNMA Agency Note, 6.195% -
December 27, 2000, with a value
of $3,785,513 3,711,000
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Total Repurchase Agreement
(Cost $3,711,000) 3,711,000
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U.S. GOVERNMENT AGENCY OBLIGATIONS (11.92%)
$10,000,000 FHLMC Discount Note -
6.52%, 7/3/2000 9,996,377
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Total U.S. Government Agency Obligations
(Cost $9,996,377) 9,996,377
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Total Investments (Cost $74,989,406) (107.07%) 89,749,622
Total Other Assets, Less Liabilities (-7.07%) (5,929,033)
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Net Assets (100.00%) $ 83,820,589
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* Non-income producing security.
ADR - American Depositary Receipt.
FHLMC - Federal Home Loan Mortgage Corp.
FNMA - Federal National Mortgage Association.
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
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STATEMENT OF ASSETS AND LIABILITIES
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June 30, 2000
(Unaudited)
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ASSETS
Investments, at cost $ 74,989,406
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Investments, at value $ 89,749,622
Cash 349,961
Receivables
Investment securities sold 1,059,205
Fund shares sold 1,348,737
Dividends 186
Interest 649
Investment held as collateral on loaned securities 24,059,687
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Total Assets 116,568,047
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LIABILITIES
Payables
Investment securities purchased 8,573,126
Fund shares redeemed 54,595
Collateral on securities loaned 24,059,687
Accrued investment advisory fees 51,466
Accrued custodian and accounting fees 3,037
Accrued transfer agent fees 2,580
Accrued audit fees 2,724
Accrued shareholder reporting fees 243
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Total Liabilities 32,747,458
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NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 83,820,589
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COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 62,322,028
Accumulated net investment loss (168,016)
Undistributed net realized gain on investments 6,906,361
Net unrealized appreciation of securities and
foreign currency transactions 14,760,216
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$ 83,820,589
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SHARES OUTSTANDING (PAR VALUE $0.01, UNLIMITED
SHARES AUTHORIZED) 2,996,843
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Net Asset Value, Offering and Redemption
Price Per Share $ 27.97
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</TABLE>
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Financial Statements
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STATEMENT OF OPERATIONS
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Six Months Ended
June 30, 2000
(Unaudited)
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INVESTMENT INCOME
Income
Dividends $ 3,639
Interest 133,749
Securities lending income 22,904
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Total Income 160,292
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EXPENSES
Investment advisory fees 276,683
Accounting fees 7,447
Custodian fees 20,123
Transfer agent fees 8,591
Registration fees 292
Audit fees 5,638
Legal fees 1,642
Trustees' fees and expenses 2,024
Shareholder reporting fees 6,672
Other expenses 1,246
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Gross Expenses 330,358
Less earnings credits (2,050)
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Net Expenses 328,308
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Net Investment Loss (168,016)
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on securities and foreign
currency transactions 6,098,117
Net change in unrealized appreciation on
securities and foreign currency transactions 903,919
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Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions 7,002,036
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Net Increase in Net Assets Resulting from Operations $ 6,834,020
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</TABLE>
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-Small Company Growth Fund
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STATEMENTS OF CHANGES IN NET ASSETS
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Six Months Ended Year Ended
June 30, 2000 December 31,
(Unaudited) 1999
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FROM OPERATIONS
Net investment loss $ (168,016) $ (83,681)
Net realized gain on securities and foreign
currency transactions 6,098,117 2,133,648
Net change in unrealized appreciation on
securities and foreign currency transactions 903,919 12,267,043
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Net Increase in Net Assets Resulting from Operations 6,834,020 14,317,010
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FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 60,600,663 39,787,939
Payments for shares redeemed (24,948,903) (22,628,443)
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Net Increase in Net Assets Derived from Fund Share Transactions 35,651,760 17,159,496
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Net Increase in Net Assets 42,485,780 31,476,506
NET ASSETS
Beginning of period 41,334,809 9,858,303
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End of period $ 83,820,589 $ 41,334,809
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Accumulated net investment loss $ (168,016) --
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TRANSACTIONS IN FUND SHARES
Shares sold 2,245,057 2,575,054
Shares redeemed (1,006,137) (1,619,624)
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NET INCREASE IN SHARES 1,238,920 955,430
Shares outstanding, beginning of period 1,757,923 802,493
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Shares outstanding, end of period 2,996,843 1,757,923
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See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Financial Highlights
FINANCIAL HIGHLIGHTS
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BERGER IPT-SMALL COMPANY GROWTH FUND
For a Share Outstanding Throughout the Period
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Six Months Ended Years Ended December 31,
June 30, 2000 -----------------------------------------------------
(Unaudited) 1999 1998 1997
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Net asset value, beginning of period $ 23.51 $ 12.28 $ 12.06 $ 9.95
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From investment operations
Net investment income (loss) (0.06) -- -- 0.00(5)
Net realized and unrealized gains (losses) from
investments and foreign currency transactions 4.52 11.23 0.23 2.11
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Total from investment operations 4.46 11.23 0.23 2.11
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Less dividends and distributions
Dividends (in excess of net investment income) -- -- (0.01) --
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Total dividends and distributions -- -- (0.01) --
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Net asset value, end of period $ 27.97 $ 23.51 $ 12.28 $ 12.06
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Total Return(2) 18.97% 91.45% 1.87% 21.21%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $ 83,820,589 $ 41,334,809 $ 9,858,303 $ 2,719,559
Net expense ratio to average net assets(3) 1.01%(4) 1.15% 1.15% 1.15%
Ratio of net income (loss) to average net assets (0.52)%(4) (0.56)% (0.11)% 0.05%
Gross expense ratio to average net assets 1.01%(4) 1.53% 2.19% 5.81%
Portfolio turnover rate(2) 53% 179% 147% 194%
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Years Ended December 31,
--------------------------
1996(1)
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Net asset value, beginning of period $ 10.00
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From investment operations
Net investment income (loss) 0.01
Net realized and unrealized gains (losses) from
investments and foreign currency transactions (0.06)
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Total from investment operations (0.05)
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Less dividends and distributions
Dividends (in excess of net investment income) --
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Total dividends and distributions --
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Net asset value, end of period $ 9.95
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Total Return(2) (0.50)%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $ 291,362
Net expense ratio to average net assets(3) 1.15%(4)
Ratio of net income (loss) to average net assets 0.14%(4)
Gross expense ratio to average net assets 8.57%(4)
Portfolio turnover rate(2) 80%
</TABLE>
1. For the period from May 1, 1996 (commencement of investment operations) to
December 31, 1996.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor. Gross and net expenses do not include the
deduction of any charges attributable to any particular variable insurance
contract.
4. Annualized.
5. Amount represents less than $0.01 per share.
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
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1. Organization and Significant Accounting Policies
Organization
The Berger IPT-Small Company Growth Fund (the "Fund") is a series of the Berger
Institutional Products Trust (the "Trust"), a Delaware business trust,
established on October 17, 1995. The Trust is organized 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 the Fund, Berger IPT-Growth Fund, Berger
IPT-Growth and Income Fund, Berger IPT-New Generation Fund and Berger
IPT-International Fund (formerly Berger/BIAM IPT-International Fund)
(collectively the "Funds") are the only portfolios established under the Trust,
although others may be added in the future.
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 LLC ("Berger"), the investment advisor to the Funds and by BBOI Worldwide
LLC ("BBOI"), the former investment advisor to Berger IPT-International Fund.
Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
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 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 ask prices. Prices of
foreign securities are converted to U.S. dollars using exchange rates determined
prior to the close of the Exchange. Securities traded in the over-the-counter
market are valued at the mean between their current bid and ask 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 as determined in good faith pursuant to
consistently applied procedures established by the trustees of the Fund.
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 Fund's net asset value 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 that 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 of the
Fund.
Calculation Of Net Asset Value
The Fund's per share calculation of net asset value is determined by dividing
the total value of it assets, less liabilities, by the total number of shares
outstanding.
Federal Income Tax Status
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code ("Code") applicable to regulated investment companies and to distribute all
of its taxable income to shareholders. Therefore, no income tax provision is
required.
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.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 13
13
Notes to Financial Statements
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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 with the exception
that certain dividends from foreign securities are recorded as soon as the Fund
is informed of the ex-dividend date if such information is obtained subsequent
to the ex-dividend date. Interest income is recorded on the accrual basis and
includes accretion of discount. 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 are not directly allocable to a specific Fund of the
Trust, are allocated to the Fund 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 may differ from those estimates.
2. Agreements
Berger serves as the investment advisor to the Fund. As compensation for their
services to the Fund, Berger receives an investment advisory fee according to
the following annual rates of average daily net assets: .85% of the first $500
million; .80% of the next $500 million; and .75% over $1 billion. Such fee is
accrued daily and paid monthly. Berger has agreed to waive its advisory fee and
reimburse expenses to the Fund to the extent that normal operating expenses in
any given fiscal year (including the advisory fee but excluding brokerage
commissions, interest, taxes and extraordinary expenses) exceed 1.15% of the
average daily net assets of the Fund.
The Fund has entered into an administrative services agreement with Berger.
Berger currently provides these administrative services to the Fund at no cost.
The Trust, on behalf of the Fund, has entered into a recordkeeping and pricing
agreement with State Street Bank & Trust ("State Street"), which also serves as
the Fund's custodian. The recordkeeping and pricing agreement provides for the
monthly payment of a base fee plus a fee computed as a percentage of average
daily net assets on a total relationship basis with other Berger Funds. State
Street's fees for custody, recordkeeping and pricing are subject to reduction by
credits earned by the Fund, based on the cash balances of the Fund held by State
Street as custodian.
DST Systems, Inc. ("DST"), an affiliate of Berger through a degree of common
ownership, provides shareholder accounting services to the Fund. DST Securities,
Inc., a wholly owned subsidiary of DST, is designated as an introductory broker
on certain portfolio transactions. The Fund receives an amount equal to the
brokerage commissions paid to DST Securities, Inc. as credits against transfer
agent fees and expenses. The Fund received no brokerage credits for the period
ended June 30, 2000.
Certain officers and/or directors of Berger are also officers and/or trustees of
the Trust. Trustees who are not affiliated with Berger received trustees' fees
totaling $2,024 from the Fund for the period ended June 30, 2000.
The Funds adopted a trustee fee deferral plan (the "Plan") which allows the
non-affiliated trustees to defer the receipt of all or a portion of the trustee
fees payable. The deferred fees are invested in various funds advised by Berger
until distribution in accordance with the Plan.
3. Investment Transactions
Purchases And Sales
Purchases and sales proceeds of investment securities (excluding short-term
securities) were $62,343,904 and $32,017,576, respectively, for the period ended
June 30, 2000.
There were no purchases or sales of long-term U.S. government securities during
the period.
Unrealized Appreciation, Unrealized Depreciation and Federal Tax Cost Of
Securities
At June 30, 2000, the federal tax cost of securities and composition of net
unrealized appreciation (depreciation) of investment securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Federal Unrealized Unrealized Appreciation/
Tax Cost Appreciation Depreciation (Depreciation)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 77,255,029 $ 16,632,671 $ (4,138,078) $ 12,494,593
--------------------------------------------------------------------------------
</TABLE>
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 14
14
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
================================================================================
Securities Lending
Under an agreement with State Street, the Fund has the ability to lend
securities to brokers, dealers and other financial institutions. Loans of
portfolio securities are collateralized by cash remitted from the borrower of
such securities in an amount equal to at least 102% of the market value of the
loaned securities at the time the loan is made. The cash collateral received is
invested in a money market fund and is evaluated daily to ensure that it exceeds
the current market value of the loaned securities. Income generated by such
investment, net of any rebates paid to the borrower, is split among the Fund and
State Street, as lending agent.
At June 30, 2000, the Fund had securities on loan with market values totaling
$23,341,239.
Income earned from securities lending transactions is included in securities
lending income in the Statement of Operations.
Repurchase Agreements
Repurchase agreements held by the Fund are fully collateralized by U.S.
government securities and such collateral is in the possession of the Fund's
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the repurchase agreements including accrued
interest. In the event of default on the obligation to repurchase, the Fund has
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
Concentration of Risk
The Fund may have elements of risk due to concentrated investments in specific
industries or foreign issuers located in a specific country. Such concentrations
may subject the Fund to additional risk resulting from future political or
economic conditions and/or possible impositions of adverse foreign governmental
laws or currency exchange restrictions. Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency Transactions in the Statement of Operations
includes fluctuations from currency exchange rates and fluctuations in market
value.
Federal Income Taxes
Dividends received by shareholders of the Fund which are derived from foreign
source income and foreign taxes paid by the Fund are to be treated, to the
extent allowable under the Code, as if received and paid by the shareholders of
the Fund.
The Fund distributes net realized capital gains, if any, to its 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 treatment of net operating
losses, foreign currency and tax allocations. Accordingly, these permanent
differences in the character of income and distributions between financial
statements and tax basis have been reclassified to paid-in-capital.
4. Line of Credit
The Fund is party to an ongoing agreement with certain banks that allows funds
managed by Berger, collectively, to borrow up to $150 million for temporary or
emergency purposes. Interest on the borrowings, if any, is charged to the Fund
at the Federal Funds Rate plus 50 basis points. In addition, the line of credit
requires a quarterly payment of a commitment fee based on the average daily
unused portion of the line of credit. The Fund had no line of credit borrowings
outstanding at June 30, 2000.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 15
[BERGER FUNDS LOGO]
IPTSCGSA
