<PAGE> 1
June 30, 2000
Berger Institutional
Products Trust
Semi-Annual Report
[BERGER FUNDS LOGO]
BERGER IPT-INTERNATIONAL FUND
<PAGE> 2
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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3
Berger IPT-International Fund
TABLE OF CONTENTS
================================================================================
<TABLE>
<S> <C>
BERGER IPT-INTERNATIONAL FUND
Portfolio Manager Commentary ................................................ 4
Schedule of Investments ..................................................... 5
FINANCIAL STATEMENTS
Statement of Assets and Liabilities ......................................... 9
Statement of Operations ..................................................... 10
Statements of Changes in Net Assets ......................................... 11
FINANCIAL HIGHLIGHTS ........................................................ 12
NOTES TO FINANCIAL STATEMENTS ............................................... 13
</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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4
BERGER IPT- PORTFOLIO MANAGER COMMENTARY BANK OF IRELAND ASSET
INTERNATIONAL FUND MANAGEMENT (U.S.) LTD.
===============================================================================
Performance
There was significant divergence in the performance of developed international
equity markets during the first six months of the year 2000. During the first
quarter, half of the markets in the 22 countries that make up the MSCI World
Index registered gains and half registered losses (as measured in U.S. dollars).
This divergence was even more pronounced during the second quarter, as just nine
of the 22 countries posted positive performances. During this volatile period,
the Berger IPT-International Fund (the "Fund") lost 2.66% compared with the
3.95% loss registered by its index, the MSCI EAFE Index.1
Period in Review
Divergence also aptly describes the performance of the portfolio this reporting
period. During the first quarter, the most significant positive contribution to
performance came from stocks in the Growth in Telecommunications theme,
including Vodafone AirTouch. Yet, in the second quarter, the portfolio's
telecommunication stocks were the biggest contributors to negative performance,
reversing some of the gains achieved early in the year. The portfolio's largest
holding, Vodafone AirTouch, saw its stock price decline in the second quarter,
along with those of other mobile phone operators, as investors worried about the
cost of acquiring licenses and building new infrastructure. The price of NTT
DoCoMo retreated, primarily as a result of profit-taking following significant
appreciation over the last year. Murata Manufacturing also was hit by
profit-taking as well as by investor concern that capacity increases within the
industry could depress prices. Although we anticipate continued strong demand
for Murata's products going forward, we have significantly reduced our holdings
in the company. The price of Rohm Co., the Japanese maker of custom-designed
chips, also declined, despite the company's 28% increase in net income, which
beat market forecasts.
Another example of divergence: Financial stocks in the portfolio were
underperformers during the first quarter and among the strongest performers the
following quarter. Second-quarter standouts included ING and AXA.ING has begun
to increase its position in the life insurance business and is reducing surplus
capital through acquisitions. During the second quarter, ING acquired U.S.-based
Reliastar in a move seen as the first step toward an increased presence in the
U.S. market. AXA announced that revenue for the first three months of the year
rose by 33% compared with the same period last year.
Pharmaceutical stocks in the Healthcare Needs theme turned in solid performances
the past three months. Notable performers were Novartis, AstraZeneca and
Aventis. Aventis' earnings growth accelerated because of sales increases in a
number of its high-profit drugs, including the allergy medicine Allegra.
Looking Forward
Rising interest rates across the world, excluding Japan, are putting additional
pressures on already stretched valuations in many stocks. The decline in share
prices was largely concentrated in technology stocks, which are or have been at
extremely high valuations relative to their earnings, if indeed they have
earnings at all. This environment has led to a return--in the short term at
least--to a value orientation in investment decisions as investors look to the
fundamentals of companies.
Nevertheless, across the globe, technology stocks were showing signs of recovery
at the end of this reporting period, and the immediate crisis of confidence
appears to be over. There is now a greater degree of reality in investor
perceptions about the technology, media and telecom (TMT) sectors. A series of
profit warnings from high-profile technology companies and some aborted Initial
Public Offerings (IPOs) have emphasized the fact that not everybody will be a
winner in the new economy.
Although indices have broadened out somewhat since the beginning of the year,
the two-tier market is still evident, particularly in the UK, where a number of
quality companies are trading at low multiples relative to their growth rates.
Following very strong performance in many of our stocks over the past 12 months,
particularly in the TMT sectors, we have taken profits and switched funds into
lower-valued, more attractive investments.
We continue to believe that a stable or rising interest-rate background is
likely to challenge overstretched stock valuations in the coming months,
particularly for companies whose earnings are uncertain or are some distance
into the future. We believe that the performance of markets will continue to
broaden from TMT stocks into other sectors that have been largely ignored in the
momentum-driven markets of the last two years. We will look to take advantage of
opportunities to position the portfolio to benefit from this market broadening.
Past performance is no guarantee of future results.
(1)The Morgan Stanley Capital International EAFE Index represents major overseas
stock markets. It is an unmanaged index. One cannot invest directly in an index.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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5
Berger IPT-International Fund
PERFORMANCE OVERVIEW
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Berger IPT-International Fund
Comparison of Change in Value for Berger IPT-International Fund vs. MSCI EAFE
Index Graph
[GRAPH]
<TABLE>
<CAPTION>
6/30/00
<S> <C>
Berger IPT-International Fund $14,523
MSCI EAFE Index $15,160
</TABLE>
AVERAGE ANNUAL TOTAL RETURN AS OF JUNE 30, 2000
<TABLE>
<S> <C>
One Year 20.24%
Life of the Fund (5/1/97) 12.49%
</TABLE>
Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Investments in the Fund are not insured by the
Federal Deposit Insurance Corporation, are not deposits and are not obligations
of, or endorsed or guaranteed, in any way by, any bank.
================================================================================
SCHEDULE OF INVESTMENTS (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 2000
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Country/Shares Company Industry Value
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<S> <C> <C> <C>
COMMON STOCK (97.48%)
Australia (3.70%)
1,125 Brambles Industries Ltd. Transport $ 34,544
3,490 National Australia Bank Ltd. Banks 58,238
6,862 News Corp. Ltd. Media & Photography 94,403
9,040 Telstra Corp. Ltd. Telecommunications Services 36,661
4,137 Westpac Banking Corp. Ltd. Banks 29,818
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253,664
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China (1.14%)
14,000 China Unicom Ltd.* Telecommunications Services 29,721
234,000 PetroChina Co. Ltd.* Oil & Gas 48,627
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78,348
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Denmark (0.58%)
590 Tele Danmark - Class B Telecommunications Services 39,814
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France (10.89%)
1,800 Alcatel Alsthom* Information Technology Hardware 118,200
1,802 Aventis S.A. Pharmaceuticals 131,680
986 AXA S.A. Insurance 155,480
680 Michelin - Class B Automobiles 21,845
1,000 Total S.A. - Class B Oil & Gas 153,509
1,877 Vivendi Diversified Industrials 165,867
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746,581
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</TABLE>
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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BERGER IPT-
INTERNATIONAL FUND
================================================================================
SCHEDULE OF INVESTMENTS (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 2000
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Country/Shares Company Industry Value
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (97.48%) - CONTINUED
Germany (3.50%)
930 Bayerische HypoVereinsbank A.G. Banks $ 60,145
2,703 Bayerische Motoren Werk A.G. DM Automobiles 81,772
2,039 E. On A.G. Diversified Industrials 98,423
-------------------------------------------------------------------------------------------------------------------
240,340
-------------------------------------------------------------------------------------------------------------------
Hong Kong (2.11%)
4,000 Cheung Kong (Holdings) Ltd. Real Estate 44,255
7,000 China Telecom Ltd.* Telecommunications Services 61,733
3,000 Hong Kong Electric Holdings Electricity 9,659
4,000 Sun Hung Kai Properties Ltd. Real Estate 28,734
-------------------------------------------------------------------------------------------------------------------
144,381
-------------------------------------------------------------------------------------------------------------------
Italy (3.09%)
7,770 ENI S.p.A.* Oil & Gas 44,933
12,155 Telecom Italia S.p.A. Telecommunications Services 167,304
-------------------------------------------------------------------------------------------------------------------
212,237
-------------------------------------------------------------------------------------------------------------------
Japan (19.39%)
300 ACOM Co. Ltd. Specialty & Other Finance 25,206
2,000 Bank of Tokyo-Mitsubishi Ltd.+ Banks 24,132
3,000 Canon, Inc. Electronic & Electrical Equipment 149,201
2,000 Fuji Photo Film Co. Ltd. Photo Equipment & Supplier 81,759
9,000 Hitachi Ltd. Information Technology Hardware 129,703
1,000 Honda Motor Co. Ltd. Automobiles 34,003
1,000 Hoya Corp. Electronic & Electrical Equipment 89,483
1,000 Kao Corp. Personal Care & Household Products 30,518
1,000 Murata Manufacturing Co. Ltd.+ Information Technology Hardware 143,361
4,000 NEC Corp. Information Technology Hardware 125,465
5 Nippon Telegraph & Telephone Corp. Telecommunications Services 66,406
4 NTT DoCoMo, Inc.+ Telecommunications Services 108,133
200 Rohm Co. Ltd. Information Technology Hardware 58,399
2,000 Shiseido Co. Ltd. Personal Care & Household Products 30,895
700 Sony Corp. Household Goods & Textiles 65,275
2,000 Takeda Chemical Industries Pharmaceuticals 131,116
300 Takefuji Corp. Specialty & Other Finance 36,198
-------------------------------------------------------------------------------------------------------------------
1,329,253
-------------------------------------------------------------------------------------------------------------------
Netherlands (12.06%)
3,335 ABN Amro Holdings N.V. Banks 81,797
3,054 Elsevier N.V. Media & Photography 37,044
1,167 Fortis N.V. Banks 34,010
640 Heineken N.V. Beverages 38,998
3,485 ING Groep N.V. Banks 235,844
2,345 Koninklijke Ahold N.V. Food & Drug Retailers 69,104
2,490 Koninklijke KPN N.V. Electronic & Electrical Equipment 111,506
1,705 Philips Electronics N.V. Household Goods & Textiles 80,508
1,225 Royal Dutch Petroleum Co. Oil & Gas 76,226
1,465 TNT Post Group N.V. Support Services 39,559
425 VNU N.V. Media & Photography 21,977
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826,573
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</TABLE>
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Berger IPT-International Fund
================================================================================
SCHEDULE OF INVESTMENTS (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 2000
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Country/Shares Company Industry Value
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<S> <C> <C> <C> <C>
COMMON STOCK (97.48%) - CONTINUED
New Zealand (0.11%)
2,178 Telecom Corp. of New Zealand Ltd. Telecommunications Services $ 7,610
---------------------------------------------------------------------------------------------------------------------------
Portugal (0.28%)
1,055 Electricidade de Portugal S.A. Electricity 19,180
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Singapore (1.26%)
3,757 Development Bank of Singapore Ltd. Banks 48,251
2,100 Oversea Chinese Banking Corp. Ltd. Banks 14,457
1,500 Singapore Press Holdings Ltd. Media & Photography 23,430
---------------------------------------------------------------------------------------------------------------------------
86,138
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South Korea (0.61%)
485 Korea Telecom Corp. - Spon. ADR Telecommunications Services 23,461
775 Pohang Iron & Steel Co. Ltd. - Spon. ADR Steel & Other Materials 18,600
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42,061
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Spain (2.45%)
7,094 Banco De Santander S.A.* Banks 74,927
4,326 Telefonica S.A.* Telecommunications Services 93,037
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167,964
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Sweden (1.16%)
4,020 Telefonaktiebolaget LM Ericsson - Class B Information Technology Hardware 79,807
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Switzerland (9.17%)
40 Alusuisse Lonza Group A.G.* Packaging 26,091
40 Lonza A.G. Reg. Chemicals 20,863
8 Givaudan Reg.* Personal Care & Household Products 2,437
75 Nestle S.A. Reg. Food Producers & Processors 150,262
69 Novartis A.G. Reg. Pharmaceuticals 109,407
10 Roche Holding A.G. Pharmaceuticals 97,444
59 Schweizerische Rueckversicherungs Reg. Insurance 120,378
695 Union Bank of Switzerland A.G. Reg. Banks 101,926
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628,808
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United Kingdom (25.98%)
1,180 3i Group PLC Investment Companies 24,314
5,305 Allied Zurich PLC Insurance 62,861
1,765 AstraZeneca PLC Pharmaceuticals 82,560
4,705 Barclays PLC Banks 117,210
1,668 British American Tobacco PLC Beverages 11,153
7,070 Cable & Wireless PLC Telecommunications Services 119,955
7,504 Cadbury Schweppes PLC Food Producers & Processors 49,380
8,763 Diageo PLC Beverages 78,791
3,108 Emi Group PLC* Media & Photography 28,275
4,025 Glaxo Wellcome PLC Pharmaceuticals 117,603
9,542 Granada Group PLC Leisure, Entertainment & Hotels 95,489
9,210 Hilton Group PLC Leisure, Entertainment & Hotels 32,398
13,680 Invensys PLC Engineering & Machinery 51,440
8,876 Lloyds TSB Group PLC Banks 83,979
</TABLE>
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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BERGER IPT-
INTERNATIONAL FUND
================================================================================
SCHEDULE OF INVESTMENTS (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 2000
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Country/Shares/Par Value Company Industry Value
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<S> <C> <C> <C> <C>
COMMON STOCK (97.48%) - CONTINUED
United Kingdom (25.98%) - continued
5,920 Marconi PLC Telecommunications Equipment $ 77,195
2,805 Old Mutual PLC* Banks/Insurance 6,177
1,700 Pearson PLC Media & Photography 54,130
7,855 Prudential PLC Life Assurance 115,290
1,010 Railtrack Group PLC Transport 15,719
3,100 Reuters Group PLC Media & Photography 52,973
450 RMC Group PLC Construction & Building Materials 5,867
18,163 Shell Transport & Trading Co. PLC Oil & Gas 151,881
2,060 The Peninsular and Oriental Steam Transport 17,678
Navigation Co.
2,760 TI Group PLC Engineering & Machinery 15,065
77,542 Vodafone AirTouch Group PLC Telecommunications Services 313,920
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1,781,303
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Total Common Stock (Cost $5,164,121) 6,684,062
-------------------------------------------------------------------------------------------------------------------
Repurchase Agreement (3.14%)
U.S.A. (3.14%)
$215,000 State Street Repurchase Agreement, 6.30%
dated June 30, 2000, to be repurchased at
$215,113 on July 3, 2000, collateralized by
FNMA Agency Note, 6.40% - December 21, 2001,
with a value of $223,875 215,000
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Total Repurchase Agreement (Cost $215,000) 215,000
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Total Investments (Cost $5,379,121) (100.62%) 6,899,062
Total Other Assets, Less Liabilities (-0.62%) (42,496)
-------------------------------------------------------------------------------------------------------------------
Net Assets (100.00%) $6,856,566
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</TABLE>
* Non-income producing security.
+ Security is designated as collateral for forward foreign currency contracts.
ADR - American Depositary Receipt.
FNMA - Federal National Mortgage Association.
PLC - Public Limited Company.
Outstanding Forward Foreign Currency Contracts
<TABLE>
<CAPTION>
Unrealized
Contract Maturity Value on Appreciation/
Currency Amount Date June 30, 2000 (Depreciation)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sell Japanese Yen 6,180,000 7/18/2000 $58,477 $775
Sell Japanese Yen 3,595,000 7/28/2000 34,104 463
Sell Japanese Yen 3,278,000 8/9/2000 31,166 (410)
Sell Japanese Yen 6,167,000 8/21/2000 58,753 (243)
Sell Japanese Yen 5,206,000 8/30/2000 49,675 (610)
Sell Japanese Yen 3,848,000 9/5/2000 36,756 367
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$268,931 $342
----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Financial Statements
FINANCIAL STATEMENTS
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 2000
(Unaudited)
-------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $5,379,121
-------------------------------------------------------------------------------------------------------------
Investments, at value $6,899,062
Cash 26,731
Foreign cash (cost $74,544) 75,175
Receivables
Investment securities sold 3,165
Fund shares sold 9,094
Dividends 14,521
Interest 38
Due from Advisor 4,881
Net unrealized appreciation on forward foreign currency contracts 342
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Total Assets 7,033,009
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LIABILITIES
PAYABLES
Investment securities purchased 121,420
Fund shares redeemed 40,864
Accrued investment advisory fees 4,770
Accrued custodian and accounting fees 2,989
Accrued transfer agent fees 1,269
Accrued audit fees 4,871
Accrued shareholder reporting fees 260
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Total Liabilities 176,443
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Net Assets Applicable to Shares Outstanding $6,856,566
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COMPONENTS OF NET ASSETS
CAPITAL (par value and paid in surplus) $5,068,650
Undistributed net investment income 38,463
Undistributed net realized gain on investments 230,481
Net unrealized appreciation of securities and foreign currency transactions 1,518,972
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$6,856,566
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Shares Outstanding (par value $0.01, unlimited shares authorized) 481,402
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NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $14.24
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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-
INTERNATIONAL FUND
================================================================================
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000
(Unaudited)
----------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 64,900
Interest 5,730
Foreign tax withholding (9,669)
----------------------------------------------------------------------------------------------------------------
Total Income 60,961
----------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 28,851
Accounting fees 7,715
Custodian fees 13,763
Transfer agent fees 6,887
Registration fees 292
Audit fees 7,235
Legal fees 1,286
Trustees' fees and expenses 226
Shareholder reporting fees 6,281
Other expenses 154
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Gross Expenses 72,690
----------------------------------------------------------------------------------------------------------------
Less fees waived and/or reimbursed by Advisor (33,609)
Less earnings credits (362)
----------------------------------------------------------------------------------------------------------------
Net Expenses 38,719
----------------------------------------------------------------------------------------------------------------
Net Investment Income 22,242
----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on securities and foreign currency transactions 307,995
Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions (448,741)
Net Realized and Unrealized Loss on Investments and Foreign Currency Transactions (140,746)
----------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations $(118,504)
----------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
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Financial Statements
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31,
(UNAUDITED) 1999
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 22,242 $ 27,828
Net realized gain on securities and foreign currency transactions 307,995 121,214
Net change in unrealized appreciation on securities and foreign currency transactions (448,741) 1,380,615
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Net Increase (Decrease) in Net Assets Resulting from Operations (118,504) 1,529,657
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FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income -- (34,474)
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Net Decrease in Net Assets from Dividends and Distributions to Shareholders -- (34,474)
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FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 3,638,125 1,641,409
Net asset value of shares issued in reinvestment of dividends and distributions -- 34,474
Payments for shares redeemed (2,785,316) (2,478,881)
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Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 852,809 (802,998)
----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets 734,305 692,185
NET ASSETS
Beginning of period 6,122,261 5,430,076
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End of period $ 6,856,566 $ 6,122,261
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Undistributed net investment income $ 38,463 $ 16,221
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TRANSACTIONS IN FUND SHARES
Shares sold 257,873 136,622
Shares issued to shareholders in reinvestment of dividends and distributions -- 2,400
Shares redeemed (194,843) (205,121)
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Net Increase (Decrease) in Shares 63,030 (66,099)
Shares outstanding, beginning of period 418,372 484,471
----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 481,402 418,372
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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 HIGHLIGHTS
================================================================================
BERGER IPT-INTERNATIONAL FUND
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Six Months Ended Years Ended December 31,
June 30, 2000 ----------------------------------------------------
(Unaudited) 1999 1998 1997(1)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.63 $ 11.21 $ 9.79 $ 10.00
------------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.04 0.03 0.08 0.05
Net realized and unrealized gains (losses) from
investments and foreign currency transactions (0.43) 3.47 1.50 (0.26)
------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.39) 3.50 1.58 (0.21)
------------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- (0.08) (0.14) --
Distributions (in excess of capital gains) -- -- (0.02) --
------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- (0.08) (0.16) --
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.24 $ 14.63 $ 11.21 $ 9.79
------------------------------------------------------------------------------------------------------------------------------
Total Return(2) (2.67)% 31.24% 16.13% (2.10)%
------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $ 6,856,566 $ 6,122,261 $ 5,430,076 $ 2,705,831
Net expense ratio to average net assets(3) 1.20%(4) 1.20% 1.20% 1.20%(4)
Ratio of net income (loss) to average net assets 0.68%(4) 0.51% 2.85% 0.86%(4)
Gross expense ratio to average net assets 2.23%(4) 2.46% 2.85% 3.83%(4)
Portfolio turnover rate(2) 19% 26% 20% 14%
</TABLE>
1. For the period from May 1, 1997 (commencement of investment operations) to
December 31, 1997.
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.
See notes to financial statements.
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 13
13
Notes to Financial Statements
NOTES TO FINANCIAL
STATEMENTS
June 30, 2000 (Unaudited)
================================================================================
1. Organization and Significant Accounting Policies
Organization
The Berger IPT-International Fund (the "Fund") (formerly Berger/BIAM
IPT-International 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-Small
Company Growth Fund and Berger IPT-New Generation 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.
On January 19, 2000, Berger and Bank of Ireland Asset Management (U.S.) Limited
("BIAM") entered into an agreement to dissolve BBOI. This agreement was approved
by shareholders on May 5, 2000. The dissolution of BBOI will have no effect on
the investment advisory services to the Fund. Upon approval of the new
management agreement, Berger became the Fund's advisor and BIAM continues to be
responsible for the day-to-day management of the Fund's portfolio as
sub-advisor. In connection with the dissolution, the Fund was renamed Berger
IPT-International Fund from Berger/BIAM IPT-International Fund.
At June 30, 2000, Berger indirectly owned 35% of the outstanding shares of the
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
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 14
14
NOTES TO FINANCIAL
STATEMENTS
June 30, 2000 (Unaudited)
================================================================================
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 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 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 may differ from those estimates.
2. Agreements
Berger serves as the investment advisor to the Fund. Berger has delegated the
day-to day portfolio management of the Fund to BIAM, which serves as investment
sub-advisor. 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. Effective May
12, 2000, this investment advisory fee charged to the Fund was reduced from .90%
of the Fund's average daily net assets as a result of the dissolution of BBOI.
As sub-advisor to the Fund, BIAM receives a sub-advisory fee from Berger based
on the average daily net assets of the Fund.
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 1.20% 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 $226 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 $1,970,004 and $1,222,073, 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:
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 15
15
Notes to Financial Statements
================================================================================
<TABLE>
<CAPTION>
Gross Gross Net
Federal Unrealized Unrealized Appreciation/
Tax Cost Appreciation Depreciation (Depreciation)
------------------------------------------------------------------------
<S> <C> <C> <C>
$5,421,002 $1,635,799 $(157,739) $1,478,060
------------------------------------------------------------------------
</TABLE>
Forward Contracts and Options
The Fund may only hold forward foreign currency exchange contracts for the
purpose of hedging the portfolio against exposure to market 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
instruments and the assets being hedged, or unexpected adverse price movements,
could render the 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 are included in Net Realized Gain
(Loss) on Investments and Foreign Currency Transactions 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.
At December 31, 1999, the Fund had $47,590 in net capital loss carryovers which
expire in the year 2006. The capital loss carryovers may be used to offset
future realized capital gains for federal tax purposes. The Fund incurred and
elected to defer post-October 31 currency losses amounting to $12,564 to the
year ended December 31, 2000.
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.
5. Other Matters
A special meeting of shareholders of the Fund was held on May 5, 2000, at which
shareholders approved the following proposals:
Proposal 1. Approval of a new investment advisory agreement naming Berger as
investment advisor to the Fund, replacing BBOI; and
Proposal 2. Approval of a new Sub-Advisory Agreement between Berger and BIAM.
The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/
For Against Abstain Total
----------------------------------------------------
<S> <C> <C> <C>
Proposal 1 384,729 49,213 16,444 450,386
Proposal 2 384,704 49,213 16,469 450,386
----------------------------------------------------
</TABLE>
Berger IPT Funds o June 30, 2000 Semi-Annual Report
<PAGE> 16
[BERGER FUNDS LOGO]
IPTINT'LSA
