<PAGE> 1
BERGER INSTITUTIONAL PRODUCTS TRUST
ANNUAL REPORT
December 31, 1999
Berger IPT-Small Company Growth Fund
This report reflects the financial position of the Fund at
December 31, 1999 and the results of operations and changes in its
net assets for the periods indicated.
<PAGE> 2
(2) Portfolio Manager Commentary
(3) Schedule of Investments
(6) Statement of Assets and Liabilities
(7) Statement of Operations
(8) Statements of Changes in Net Assets
(9) Financial Highlights
(10) Notes to Financial Statements
(13) Report of Independent Accountants
[BERGER FUNDS LOGO]
<PAGE> 3
Berger Funds December 31, 1999 Annual Report 2
BERGER IPT-
SMALL COMPANY
GROWTH FUND
Portfolio Manager Commentary Amy K. Selner
PERFORMANCE
For the year ended December 31, 1999, the Berger IPT- Small Company Growth Fund
(the "Fund") had a total return of 91.45%.(1) This significantly outdistanced
the gains registered by the Russell 2000 Index(2) and the Russell 2000 Growth
Index,(3) which were 21.26% and 43.09%, respectively, over this time period.
As a group, small-cap stocks performed in step with large-cap stocks from the
October 8, 1998, market trough until mid-January 1999 when interest rate fears
crept into the marketplace. Small caps then dramatically underperformed large
caps through March.
Between April and June, small caps (as measured by the Russell 2000)
outperformed large caps (as measured by the S&P 500 Index(4)) by nearly 8%. This
was the best quarterly outperformance of small caps since the fourth quarter
1992 and was attributable to the more attractive relative valuations of small
caps compared with large caps after a very difficult first quarter 1999.
In the quarter ended September 30, the stock market faltered on renewed interest
rate fears, and both small- and large-cap stocks performed poorly. During the
fourth quarter of 1999, small caps outperformed large caps by 3.57%; the Russell
2000 returned 18.44%, while the S&P 500 returned 14.87%.
YEAR IN REVIEW
Despite this up-and-down year for small-cap stocks, our Fund was able to
considerably outperform its benchmarks.
The Fund remains heavily weighted in industries in which growth prospects are
the most visible and consistent. Technology, our largest sector, continues to
have the greatest long-term growth fundamentals. We believe that the growth
prospects are explosive for the Internet infrastructure in particular.
Therefore, we continue to focus on telecommunication and broadband companies,
which provide the plumbing that enables broad acceptance of Internet
applications and services. Similarly, companies such as Powerwave Technologies,
which supplies components for wireless communications, have been strong
holdings.
We have seen a pickup in the information technology services group. We believe
some large contract orders from companies transitioning to internet-centric
strategies may continue to drive growth in the group. Semiconductor stocks
continued to show solid revenue growth, and improving Asian economies should
help sustain this trend.
Our Fund lowered its exposure to the healthcare group over this fiscal year.
Uncertainty surrounding prescription drug benefits and the government's impact
on drug pricing caused the healthcare sector to underperform compared with the
broader market. One bright spot in the sector was biotechnology stocks. Emerging
biotechnology companies such as Biocryst Pharmaceutical and Cephalon boosted
Fund performance.
Our energy weighting contributed to the Fund's outperformance in the first six
months of 1999. Although there are worries that OPEC will irrationally increase
oil production, we remain positive on the long-term supply/demand fundamentals
within the sector.
Within the consumer group, radio stocks continue to be solid performers. The
environment for radio advertising was robust in 1999, and we expect this group's
strong fundamentals to carry into next year.
LOOKING AHEAD
Going forward, we continue to favor the technology sector, particularly the
telecommunication and broadband infrastructure companies that support the
Internet. We believe the software companies offering solutions that migrate
companies to the efficiencies of the Internet will enjoy strong growth. We
expect semiconductors to continue their strong fundamentals into next year as
well.
We remain optimistic about the market in 2000. The U.S. economy is undeniably
robust, and international economies continue to grow in concert. We expect
productivity to continue to grow and to fuel low inflationary growth into 2000.
If inflation fears are stoked by the upcoming economic data, the Fed may raise
rates again. This will be the largest risk factor in the market.
We would need to see a period of greater operating profit growth for small caps
in order for them to outperform their large-cap peers. We believe our bias
toward technology will be beneficial in the year 2000. Global economies appear
to be strengthening in concert, which will benefit technology stocks because
they often garner over 50% of earnings internationally.
(1) Past performance does not guarantee future results. 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 the common stocks of 2000 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.
(3) 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.
(4) The S&P 500 Index is an unmanaged index, with dividends reinvested, which
consists of the common stocks of 500 publicly traded U.S. companies. It is a
generally recognized indicator used to measure overall performance of the U.S.
stock market. One cannot invest directly in an index.
<PAGE> 4
3 Berger Funds December 31, 1999 Annual Report BERGER IPT-
SMALL COMPANY
GROWTH FUND
PERFORMANCE OVERVIEW
COMPARISON OF CHANGE IN VALUE OF BERGER IPT-SMALL COMPANY GROWTH FUND VS.
RUSSELL 2000 STOCK INDEX AND COST OF LIVING INDEX
Berger IPT-
Small Company
Growth Fund
$23,520
[CHART] Russell 2000
Stock Index
$15,213
Cost of
Living Index
$10,768
BERGER IPT-SMALL COMPANY GROWTH FUND*
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
As of December 31, 1999
- --------------------------------------
<S> <C>
1 year 91.45%
Since Inception (5/1/96) 26.24%
</TABLE>
* Performance figures are historical and do not represent future results.
Investment returns and principal value will vary, and you may have a loss
when you sell shares.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
December 31, 1999
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK (93.66%)
- --------------------------------------------------------------------------------
<S> <C>
BANKS - WEST/SOUTHWEST (0.50%)
4,190 Silicon Valley Bancshares* $ 207,405
- --------------------------------------------------------------------------------
BUILDING - HEAVY CONSTRUCTION (1.10%)
10,290 Dycom Industries, Inc.* 453,403
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - MISCELLANEOUS (3.50%)
10,670 Diamond Technology Partners, Inc.* 916,953
- --------------------------------------------------------------------------------
9,480 The Corporate Executive Board Co.* 529,695
- --------------------------------------------------------------------------------
1,446,648
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - SCHOOLS (0.91%)
20,200 Devry, Inc.* 376,225
- --------------------------------------------------------------------------------
COMPUTER - SERVICES (2.53%)
3,900 Internap Network Services Corp.* 674,700
- --------------------------------------------------------------------------------
6,910 Whittman-Hart, Inc.* 370,548
- --------------------------------------------------------------------------------
1,045,248
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - DESKTOP (1.82%)
10,290 Macromedia, Inc.* 752,456
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - EDUCATIONAL/ENTERTAINMENT (1.41%)
17,400 CBT Group PLC ADR* 582,900
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCK (93.66%) - CONTINUED
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (8.05%)
8,830 Aspect Development, Inc.* $ 604,855
- --------------------------------------------------------------------------------
4,350 Mercury Interactive Corp.* 469,528
- --------------------------------------------------------------------------------
9,260 New Era of Networks, Inc.* 441,007
- --------------------------------------------------------------------------------
3,570 Peregrine Systems, Inc.* 294,971
- --------------------------------------------------------------------------------
10,320 SAGA Systems, Inc.* 205,755
- --------------------------------------------------------------------------------
12,530 TSI International Software Ltd.* 709,511
- --------------------------------------------------------------------------------
4,195 VERITAS Software Corp.* 600,409
- --------------------------------------------------------------------------------
3,326,036
- --------------------------------------------------------------------------------
ELECTRONIC - LASER SYSTEM/COMPONENT (1.42%)
12,760 Cymer, Inc.* 586,960
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (6.20%)
9,300 DuPont Photomasks, Inc.* 448,725
- --------------------------------------------------------------------------------
9,460 Etec Systems, Inc.* 424,517
- --------------------------------------------------------------------------------
15,770 PRI Automation, Inc.* 1,058,584
- --------------------------------------------------------------------------------
5,910 Teradyne, Inc.* 390,060
- --------------------------------------------------------------------------------
5,140 Veeco Instruments Inc.* 240,616
- --------------------------------------------------------------------------------
2,562,502
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (4.66%)
4,740 Applied Micro Circuits Corp.* 603,165
- --------------------------------------------------------------------------------
12,770 Cree Research Inc.* 1,090,238
- --------------------------------------------------------------------------------
4,470 MIPS Technologies, Inc. 232,440
- --------------------------------------------------------------------------------
1,925,843
</TABLE>
<PAGE> 5
BERGER IPT- Berger Funds December 31, 1999 Annual Report 4
SMALL COMPANY
GROWTH FUND
<TABLE>
<CAPTION>
December 31, 1999
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCK (93.66%) - CONTINUED
- --------------------------------------------------------------------------------
ELECTRONIC PRODUCTS - MISCELLANEOUS (6.43%)
4,350 Plug Power Inc.* $ 122,887
- --------------------------------------------------------------------------------
8,020 Powerwave Technologies, Inc.* 468,167
- --------------------------------------------------------------------------------
10,250 Proxim, Inc.* 1,127,500
- --------------------------------------------------------------------------------
20,400 Universal Electronics Inc.* 938,400
- --------------------------------------------------------------------------------
2,656,954
- --------------------------------------------------------------------------------
FINANCE - MORTGAGE & RELATED SERVICES (0.23%)
11,850 Resource America, Inc. 93,318
- --------------------------------------------------------------------------------
FINANCE - SAVINGS & LOANS (0.35%)
6,170 Webster Preferred Capital Corp. 145,380
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (0.79%)
9,110 Metris Companies Inc. 325,113
- --------------------------------------------------------------------------------
INSURANCE - BROKERS (0.60%)
10,330 Pre-Paid Legal Services* 247,920
- --------------------------------------------------------------------------------
INTERNET - E*COMMERCE (0.32%)
1,380 Ebenx Inc.* 62,445
- --------------------------------------------------------------------------------
400 Internet Capital Group, Inc.* 68,000
- --------------------------------------------------------------------------------
130,445
- --------------------------------------------------------------------------------
INTERNET - ISP/CONTENT (3.50%)
3,830 China.com Corp.* 301,133
- --------------------------------------------------------------------------------
4,470 Commerce One, Inc.* 878,355
- --------------------------------------------------------------------------------
3,050 Homestore.com, Inc.* 226,462
- --------------------------------------------------------------------------------
420 Internet Initiative Japan Inc. ADR* 40,818
- --------------------------------------------------------------------------------
1,446,768
- --------------------------------------------------------------------------------
INTERNET - NETWORK SECURITY/SOLUTIONS (4.06%)
5,110 Sapient Corp.* 720,190
- --------------------------------------------------------------------------------
16,460 Spyglass, Inc.* 624,194
- --------------------------------------------------------------------------------
7,500 USWeb Corp.* 333,281
- --------------------------------------------------------------------------------
1,677,665
- --------------------------------------------------------------------------------
INTERNET - SOFTWARE (7.75%)
5,730 Agile Software Corp.* 1,244,752
- --------------------------------------------------------------------------------
2,770 Ariba, Inc.* 491,328
- --------------------------------------------------------------------------------
2,200 CMGI Inc.* 609,125
- --------------------------------------------------------------------------------
7,150 Primus Knowledge Solutions, Inc.* 323,984
- --------------------------------------------------------------------------------
5,620 Razorfish Inc.* 534,602
- --------------------------------------------------------------------------------
3,203,791
- --------------------------------------------------------------------------------
MEDIA - PERIODICALS (0.29%)
4,960 Martha Stewart Living Omnimedia, Inc. 119,040
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (8.05%)
9,830 Cox Radio, Inc.* 980,542
- --------------------------------------------------------------------------------
10,030 Cumulus Media Inc.* 509,022
- --------------------------------------------------------------------------------
4,470 Emmis Communications Corp.* 557,143
- --------------------------------------------------------------------------------
5,010 Hispanic Broadcasting Corp.* 462,015
- --------------------------------------------------------------------------------
10,570 Salem Communications Corp.* 239,146
- --------------------------------------------------------------------------------
11,930 SBS Broadcasting SA* 580,841
- --------------------------------------------------------------------------------
3,328,709
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCK (93.66%) - CONTINUED
- --------------------------------------------------------------------------------
MEDICAL - BIOMED/GENETICS (7.57%)
18,590 BioCryst Pharmaceuticals, Inc.* $ 548,405
- --------------------------------------------------------------------------------
17,280 Cephalon, Inc.* 597,240
- --------------------------------------------------------------------------------
6,120 IDEC Pharmaceuticals Corp.* 601,290
- --------------------------------------------------------------------------------
9,190 Invitrogen Corp.* 551,400
- --------------------------------------------------------------------------------
2,150 Maxygen* 152,650
- --------------------------------------------------------------------------------
4,100 Medimmune, Inc.* 680,087
- --------------------------------------------------------------------------------
3,131,072
- --------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (0.99%)
9,960 Pharmacyclics, Inc.* 410,850
- --------------------------------------------------------------------------------
MEDICAL - INSTRUMENTS (1.68%)
18,720 IDEXX Laboratories, Inc.* 301,860
- --------------------------------------------------------------------------------
15,810 Ventana Medical Systems, Inc.* 393,273
- --------------------------------------------------------------------------------
695,133
- --------------------------------------------------------------------------------
MEDICAL - MEDICAL/DENTAL SERVICES (1.03%)
11,350 Accredo Health, Inc.* 349,012
- --------------------------------------------------------------------------------
9,620 ProVantage Health Services, Inc.* 76,960
- --------------------------------------------------------------------------------
425,972
- --------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG/SUNDRIES (2.82%)
18,900 Allscripts, Inc.* 831,600
- --------------------------------------------------------------------------------
11,520 Priority Healthcare Corp.* 333,360
- --------------------------------------------------------------------------------
1,164,960
- --------------------------------------------------------------------------------
METAL PRODUCTS & FABRICATION (0.99%)
16,610 Maverick Tube Corp.* 410,059
- --------------------------------------------------------------------------------
OIL & GAS - DRILLING (1.49%)
16,820 Marine Drilling Co. 377,398
- --------------------------------------------------------------------------------
18,300 Patterson Energy, Inc.* 237,900
- --------------------------------------------------------------------------------
615,298
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (0.78%)
13,810 Paradigm Geophysical Ltd.* 67,755
- --------------------------------------------------------------------------------
18,260 Veritas DGC, Inc.* 255,640
- --------------------------------------------------------------------------------
323,395
- --------------------------------------------------------------------------------
OIL & GAS - U.S. EXPLORATION & PRODUCTION (2.59%)
13,850 Basin Exploration, Inc.* 244,106
- --------------------------------------------------------------------------------
9,350 Devon Energy Corp. 307,381
- --------------------------------------------------------------------------------
23,160 Forest Oil Corp.* 305,422
- --------------------------------------------------------------------------------
6,020 Stone Energy Corp.* 214,462
- --------------------------------------------------------------------------------
1,071,371
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (0.34%)
4,110 AnnTaylor Stores* 141,538
- --------------------------------------------------------------------------------
RETAIL - MISCELLANEOUS DIVERSIFIED (0.96%)
13,870 Michaels Stores, Inc.* 395,295
- --------------------------------------------------------------------------------
RETAIL - SUPER/MINI-MARKETS (0.98%)
8,760 Whole Foods Market, Inc.* 406,245
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
5 Berger Funds December 31, 1999 Annual Report BERGER IPT-
SMALL COMPANY
GROWTH FUND
<TABLE>
<CAPTION>
December 31, 1999
- --------------------------------------------------------------------------------
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCK (93.66%) - CONTINUED
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (3.76%)
5,510 Adaptive Broadband Corp.* $ 406,706
- --------------------------------------------------------------------------------
13,400 Aspect Communications Corp.* 524,275
- --------------------------------------------------------------------------------
1,770 Redback Networks Inc.* 314,175
- --------------------------------------------------------------------------------
6,680 Research in Motion, Ltd.* 308,532
- --------------------------------------------------------------------------------
1,553,688
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (3.21%)
3,910 Metasolv Software, Inc* 319,642
- --------------------------------------------------------------------------------
18,810 Viatel, Inc.* 1,008,686
- --------------------------------------------------------------------------------
1,328,328
- --------------------------------------------------------------------------------
Total Common Stock
(Cost $24,857,636) 38,713,933
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (3.23%)
- --------------------------------------------------------------------------------
$1,336,000 State Street Repurchase Agreement,
2.50% dated December 31, 1999,
to be repurchased at $1,336,278
on January 3, 2000, collateralized by
U.S. Treasury Note, 4.63% -
December 31, 2000, with a value
of $1,364,225 1,336,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(Cost $1,336,000) 1,336,000
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.63%)
- --------------------------------------------------------------------------------
$1,500,000 FHLMC Discount Note
4.50%, 1/5/2000 1,499,250
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $1,499,250) 1,499,250
- --------------------------------------------------------------------------------
Total Investments (Cost $27,692,886) (100.52%) 41,549,183
- --------------------------------------------------------------------------------
Total Other Assets, Less Liabilities (-0.52%) (214,374)
- --------------------------------------------------------------------------------
Net Assets (100.00%) $41,334,809
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corp.
PLC - Public Limited Company.
See notes to financial statements.
<PAGE> 7
Berger Funds December 31, 1999 Annual Report 6
FINANCIAL
STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
Berger IPT-
Small Company
Growth Fund December 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $27,692,886
- --------------------------------------------------------------------------------
Investments, at value $41,549,183
- --------------------------------------------------------------------------------
Cash 320,744
- --------------------------------------------------------------------------------
Receivables
- --------------------------------------------------------------------------------
Investment securities sold 981,456
- --------------------------------------------------------------------------------
Fund shares sold 719,440
- --------------------------------------------------------------------------------
Dividends 465
- --------------------------------------------------------------------------------
Interest 92
- --------------------------------------------------------------------------------
Due from Advisor 2,464
- --------------------------------------------------------------------------------
Total Assets 43,573,844
- --------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,874,960
- --------------------------------------------------------------------------------
Fund shares redeemed 321,173
- --------------------------------------------------------------------------------
Accrued investment advisory fees 26,001
- --------------------------------------------------------------------------------
Accrued custodian and accounting fees 9,364
- --------------------------------------------------------------------------------
Accrued transfer agent fees 1,544
- --------------------------------------------------------------------------------
Accrued audit fees 5,924
- --------------------------------------------------------------------------------
Other accrued expenses 69
- --------------------------------------------------------------------------------
Total Liabilities 2,239,035
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $41,334,809
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
- --------------------------------------------------------------------------------
Capital (par value and paid in surplus) $26,670,268
- --------------------------------------------------------------------------------
Undistributed net realized gain on investments 808,244
- --------------------------------------------------------------------------------
Net unrealized appreciation of securities
and foreign currency transactions 13,856,297
- --------------------------------------------------------------------------------
$41,334,809
- --------------------------------------------------------------------------------
Shares Outstanding (par value $0.01, unlimited shares authorized) 1,757,923
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $23.51
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 8
7 Berger Funds December 31, 1999 Annual Report FINANCIAL
STATEMENTS
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Berger IPT-
Small Company Year Ended
Growth Fund December 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 4,178
- --------------------------------------------------------------------------------
Interest 84,540
- --------------------------------------------------------------------------------
Total Income 88,718
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 132,056
- --------------------------------------------------------------------------------
Administrative services fees 862
- --------------------------------------------------------------------------------
Accounting fees 14,931
- --------------------------------------------------------------------------------
Custodian fees 38,602
- --------------------------------------------------------------------------------
Transfer agent fees 12,835
- --------------------------------------------------------------------------------
Audit fees 9,299
- --------------------------------------------------------------------------------
Legal fees 4,997
- --------------------------------------------------------------------------------
Trustees' fees and expenses 880
- --------------------------------------------------------------------------------
Shareholder reporting fees 15,412
- --------------------------------------------------------------------------------
Other expenses 624
- --------------------------------------------------------------------------------
Gross Expenses 230,498
- --------------------------------------------------------------------------------
Less fees waived and/or reimbursed by Advisor (57,324)
- --------------------------------------------------------------------------------
Less earnings credits (775)
- --------------------------------------------------------------------------------
Net Expenses 172,399
- --------------------------------------------------------------------------------
Net Investment Loss (83,681)
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on securities and foreign currency transactions 2,133,648
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on securities
and foreign currency transactions 12,267,043
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments
and Foreign Currency Transactions 14,400,691
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $14,317,010
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 9
FINANCIAL Berger Funds December 31, 1999 Annual Report 8
STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
Berger IPT-
Small Company
Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (83,681) $ (6,382)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign currency transactions 2,133,648 (1,141,963)
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on securities
and foreign currency transactions 12,267,043 1,414,843
- ----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 14,317,010 266,498
- ----------------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
In excess of net investment income -- (3,942)
- ----------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and Distributions to Shareholders -- (3,942)
- ----------------------------------------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 39,787,939 17,333,156
- ----------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment of dividends
and distributions -- 3,921
- ----------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed (22,628,443) (10,460,889)
- ----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 17,159,496 6,876,188
- ----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets 31,476,506 7,138,744
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 9,858,303 2,719,559
- ----------------------------------------------------------------------------------------------------------------------
End of period $ 41,334,809 $ 9,858,303
- ----------------------------------------------------------------------------------------------------------------------
Undistributed net investment income -- --
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN FUND SHARES
- ----------------------------------------------------------------------------------------------------------------------
Shares sold 2,575,054 1,480,619
- ----------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of dividends and distributions -- 331
- ----------------------------------------------------------------------------------------------------------------------
Shares repurchased (1,619,624) (903,929)
- ----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 955,430 577,021
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, beginning of period 802,493 225,472
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,757,923 802,493
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 10
9 Berger Funds December 31, 1999 Annual Report FINANCIAL
STATEMENTS
BERGER IPT - SMALL COMPANY GROWTH FUND
For a share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------------------------
1999 1998 1997 1996(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.28 $ 12.06 $ 9.95 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- -- 0.00(6) 0.01
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses) from
investments and foreign currency transactions 11.23 0.23 2.11 (0.06)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 11.23 0.23 2.11 (0.05)
- ----------------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (in excess of net investment income) -- (0.01) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- (0.01) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.51 $ 12.28 $ 12.06 $ 9.95
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(2) 91.45% 1.87% 21.21% (0.50)%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $ 41,334,809 $ 9,858,303 $ 2,719,559 $ 291,362
- ----------------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.15% 1.15% 1.15%(5) 1.15%(4)(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net assets (0.56)% (0.11)% 0.05% 0.14%(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.53% 2.19% 5.81% 8.57%(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(2) 179% 147% 194% 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. Restated to conform with new presentation standards.
6. Amount represents less than $0.01 per share.
See notes to financial statements.
<PAGE> 11
Berger Funds December 31, 1999 Annual Report 10
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
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-100 Fund ("IPT-100"),
Berger IPT-Growth and Income Fund ("IPT-G&I"), and Berger/BIAM IPT-International
Fund ("IPT-International") are the only portfolios established under the Trust,
although others may be added in the future. The Fund commenced operations on May
1, 1996.
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"), formerly Berger Associates, Inc., the investment advisor
to the Fund and by BBOI Worldwide LLC ("BBOI"), the investment advisor to
IPT-International.
At December 31, 1999, Berger did not own, either directly or indirectly, any of
the outstanding shares of the Fund.
Effective September 30, 1999, Berger Associates, Inc. transferred its operating
assets and business to Berger. Accordingly, Berger now serves as investment
advisor to the Fund. The transfer did not result in any change to the investment
objectives or principal investment strategies of the Fund, or result in any
change to the day-to-day management of the Fund's investments.
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. Prices of foreign securities are converted to
U.S. dollars using exchange rates determined prior to the close of the Exchange.
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 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 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.
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.
<PAGE> 12
11 Berger Funds December 31, 1999 Annual Report NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- --------------------------------------------------------------------------------
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 and amortization of premium. 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. From January 1, 1999 to
September 30, 1999, Berger received an investment advisory fee at an annual rate
of .90% of the Fund's average daily net assets. Effective October 1, 1999 the
investment advisory fee charged to the Fund was reduced 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. From
January 1, 1999 to September 30, 1999, the administrative services agreement
provided for a fee at an annual rate of .01% of the average daily net assets of
the Fund. Effective October 1, 1999, Berger eliminated the fee charged to the
Fund for such services.
The Trust, on behalf of the Fund, has entered into a recordkeeping and pricing
agreement with Investors Fiduciary Trust Company ("IFTC") who also serves as the
Fund's custodian and transfer agent. 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. IFTC's
fees for custody, recordkeeping, pricing, and transfer agency services are
subject to reduction by credits earned by the 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 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. For the year ended December 31, 1999, the Fund received
no brokerage credits.
Certain officers and directors of Berger are also officers and trustees of the
Trust. Trustees who are not affiliated with Berger received trustees' fees
totaling $880 from the Fund for the year ended December 31, 1999.
The Trust adopted a trustee fee deferral plan (the "Plan") which allows the
trustees to defer the receipt of all or a portion of the trustee fees payable.
The deferred fees remain in the Fund and are invested in various funds advised
by Berger until distribution in accordance with the Plan.
<PAGE> 13
NOTES TO Berger Funds December 31, 1999 Annual Report 12
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
3 INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
PURCHASES AND SALES
Purchases and sales proceeds of investment securities (excluding short-term
securities) were $41,327,202 and $25,528,935, respectively, for the year ended
December 31, 1999.
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 December 31, 1999, the federal tax cost of securities and composition of net
unrealized appreciation (depreciation) for securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Federal Unrealized Unrealized Appreciation/
Tax Cost Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 28,174,042 $ 14,086,466 $ (711,325) $ 13,375,141
- --------------------------------------------------------------------------------
</TABLE>
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.
Fund distributions from ordinary income did not qualify for dividends received
deduction to corporate shareholders for the fiscal year ended December 31, 1999.
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. During the
year ended December 31, 1999, the following reclassifications were made:
<TABLE>
<CAPTION>
Undistributed Undistributed
Paid-in Net Investment Net Realized
Capital Income Gains
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
-- $ 83,681 $ (83,681)
- --------------------------------------------------------------------------------
</TABLE>
Net capital loss carryovers used to offset realized capital gains in 1999
amounted to $987,704.
<PAGE> 14
13 Berger Funds December 31, 1999 Annual Report
REPORT OF
INDEPENDENT
ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Institutional Products Trust
In our opinion, the accompanying statement of assets and liabilities, including
the schedule 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 Berger IPT - Small Company Growth
Fund (one of the portfolios constituting Berger Institutional Products Trust,
hereafter referred to as the "Trust") at December 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods indicated, in conformity with accounting principles generally
accepted in the United States. 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 auditing standards
generally accepted in the United States, 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, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Denver, Colorado
February 4, 2000
<PAGE> 15
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