INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited)
(expressed in U.S. dollars)
Shares Value
COMMON STOCKS & WARRANTS (98.50%)
AUSTRALIA (1.7%)
ENERGY
21,350 Woodside Petroleum, Ltd. $169,828
GOLD MINES
26,250 RGC, Ltd. 95,190
MATERIALS
6,935 CRA, Ltd. 103,406
23,715 WMC, Ltd. 140,555
-------
243,961
MULTI-INDUSTRY
67,000 Pacific Dunlop, Ltd. 180,785
-------
TOTAL AUSTRALIA 689,764
FRANCE (8.6%)
BANKING
8,300 Banque National de Paris. 354,099
3,560 Societe Generale 398,910
-------
753,009
CAPITAL EQUIPMENT
4,000 Alcatel Alsthom 444,787
CONSUMER DURABLES
1,480 Peugeot SA 147,328
CONSUMER NON-DURABLES
440 Bongrain SA 166,607
1,190 LVMH 290,542
-------
457,149
MEDIA & ADVERTISING
2,040 Canal Plus 368,399
5,240 Havas SA 392,338
3,070 Television Francaise 1 296,138
-------
1,056,875
RETAIL
582 Comptoirs Modernes 271,730
SERVICES
3,045 Accor SA 436,677
-------
TOTAL FRANCE 3,567,555
GERMANY (9.5%)
BANKING
16,350 Commerzbank AG 438,536
9,110 Depfa Bank AG 495,532
-------
934,068
CAPITAL EQUIPMENT
660 Linde A.G. 482,100
1,500 MAN A.G. 432,209
8,020 Siemens AG 434,390
-------
1,348,699
ENERGY
7,030 VEBA AG 362,095
INSURANCE
3,000 Allianz AG 582,053
MULTI-INDUSTRY
19,200 Metallgesellshaft AG 396,905
PHARMACEUTICALS
3,770 Merck KGaA* 149,555
RETAIL
1,560 Metro AG* 151,334
-------
TOTAL GERMANY 3,924,709
---------
HONG KONG (4.0%)
BANKING
36,000 Dao Heng Bank Group, Ltd. 171,019
INSURANCE
157,000 National Mutual Asia, Ltd. 162,138
HONG KONG (continued)
MATERIALS
396,000 C.P. Pokphand Co. $123,966
MULTI-INDUSTRY
29,000 Guoco Group, Ltd. 137,765
23,000 Hutchison Whampoa, Ltd. 170,722
21,000 Jardine Matheson Hldgs., Ltd. 115,500
17,000 Swire Pacific, Ltd. 131,124
555,111
REAL ESTATE
20,000 Cheung Kong Hldgs., Ltd. 175,563
31,000 New World Development
Co., Ltd. 178,881
15,000 Sun Hung Kai Properties, Ltd. 162,654
-------
517,098
TELECOMMUNICATIONS
72,800 Hong Kong Telecommunications, Ltd. 124,991
-------
TOTAL HONG KONG 1,654,323
INDIA (3.0%)
CONSUMER DURABLES
18,625 Ashok Leyland, Ltd. 137,359
5,635 Bajaj Auto, Ltd. 185,955
-------
323,314
FINANCE
19,900 Industrial Credit & Investment Corp. of India, Ltd. 216,412
MATERIALS
9,815 Grasim Industries, Ltd. 107,965
61,135 Indo Gulf Fertilisers and Chemicals Corp., Ltd. 55,021
17,655 Reliance Industries, Ltd. 350,893
5,525 Southern Petrochemicals Industries Corp., Ltd. 17,266
------
531,145
PHARMACEUTICALS
6,355 Ranbaxy Laboratories, Ltd. 157,286
-------
TOTAL INDIA 1,228,157
INDONESIA (1.5%)
BANKING
49,000 Bank Bali 117,963
213,938 Bank Dagang Nasional 213,498
30,563 Bank Dagang Nasional (Warrants) 10,691
------
342,152
MATERIALS
40,000 Semen Cibinong 118,107
PHARMACEUTICALS
90,000 Kalbe Farma 88,889
SERVICES
88,000 Citra Marga Nusaphala Persada 76,955
------
TOTAL INDONESIA 626,103
IRELAND (1.2%)
CONSUMER NON-DURABLES
200,000 Waterford Wedgewood, Plc. 261,183
PHARMACEUTICALS
7,678 Elan Corp., Plc., ADR* 261,052
-------
TOTAL IRELAND 522,235
ITALY (3.0%)
BANKING
45,030 Istituto Mobiliare Italiano SpA (IMI) . 383,584
ENERGY
78,600 Ente Nazionale
Idrocarbun SpA (ENI)* 398,928
RETAIL
800 Rinascente SpA (Warrants)* 395
ITALY (continued)
TELECOMMUNICATIONS
147,100 Telecom Italia Mobile SpA 462,647
-------
TOTAL ITALY 1,245,554
JAPAN (30.3%)
BANKING
53,000 Asahi Bank, Ltd. 324,426
84,000 Daiwa Bank, Ltd. 271,320
85,000 Long Term Credit Bank of Japan 228,345
56,000 Mitsui Trust and Banking Co., Ltd. 319,408
65,000 Sakura Bank, Ltd. 343,601
47,000 Sumitomo Trust and Banking Co., Ltd. 388,782
-------
1,875,882
CAPITAL EQUIPMENT
71,000 Ishikawajima Harina Heavy Industries Co., Ltd. 264,568
44,000 JGC Corp. 227,045
2,200 Kandenko 17,072
13,200 Kurita Water Industries, Ltd. 278,694
11,000 Tostem Corp. 258,242
-------
1,045,621
CONSUMER ELECTRONICS
12,000 Canon Inc. 284,555
14,000 Canon Sales Co., Inc. 290,070
550 Canon Sales Co., Inc. (Warrants) 53,355
19,000 Sharp Corp. 246,977
4,000 Sony Corp. 291,173
-------
1,166,130
CONSUMER NON-DURABLES
9,000 Fuji Photo Film Co. 343,877
4,200 Nintendo Co., Ltd. 304,739
7,400 Sony Music Entertainment (Japan), Inc. 254,177
-------
902,793
ELECTRIC COMPONENTS
13,000 Denki Kogyo Co., Ltd. 88,486
4,800 Kyocera Corp. 287,391
45 Kyocera Corp (Warrants). 35,437
4,700 Mabuchi Motor Co., Ltd. 238,082
10,000 Matsushita Communications Industrial Co., Ltd. 258,400
33,000 Minebea Co., Ltd. 275,574
9,000 Murata Mfg. Co., Ltd. 331,823
24,000 NGK Spark Plug Co. 240,123
40 NGK Spark Plug Co. (Warrants) 21,000
4,000 Rohm Company Ltd. 305,038
5,000 TDK Corp. 360,421
-------
2,441,775
FINANCE
7,500 Orix Corp. 378,737
43,000 Yamaichi Securities Co., Ltd. 112,467
-------
491,204
INDUSTRIAL ELECTRONICS
17,000 Hitachi, Ltd. 154,016
INSURANCE
38,000 Yasuda Fire & Marine Insurance Co. 176,027
MATERIALS
15,000 Bridgestone Corp. 319,061
83,000 Kawasaki Steel Corp. 245,204
65,000 Mitsui Petrochemical Industries 305,708
20,000 Sumitomo Electric Industries, Ltd. 271,005
24,000 Tokyo Steel Manufacturing. 257,139
-------
1,398,117
MULTI-INDUSTRY
101,274 Prospect Japan Fund Ltd. 544,854
17,000 Sumitomo Corp. 114,373
659,227
JAPAN (continued)
PHARMACEUTICALS
12,000 Taisho Pharmaceutical 296,845
17,000 Yamanouchi Pharmaceutical Co., Ltd. 362,942
-------
659,787
RETAIL
4,500 Autobacs Seven Co., Ltd. 299,563
5,000 Ito-Yokado Co., Ltd. 239,887
7,000 Kato Denki Co., Ltd. 54,043
54,000 Mitsukoshi, Ltd. 299,917
-------
893,410
SERVICES
141,000 Kawasaki Kisen Kaisha, Ltd. 244,377
4,000 Secom Co., Ltd. 237,917
-------
482,294
TELECOMMUNICATIONS
15,000 Japan Telecom Co., Ltd. 244,613
-------
TOTAL JAPAN 12,590,896
MALAYSIA (2.5%)
FINANCE
166,000 Public Finance, Bhd. 253,879
MULTI-INDUSTRY
158,000 Renong, Bhd. 216,473
REAL ESTATE
223,000 Bolton Properties, Bhd. 353,489
94,000 IOI Properties, Bhd. 224,630
578,119
TOTAL MALAYSIA 1,048,471
NETHERLANDS (5.0%)
FINANCE
13,515 Fortis Amev NV 509,856
MATERIALS
4,600 Akzo Nobel NV 592,619
MEDIA & ADVERTISING
37,160 Elsevier NV 595,079
TELECOMMUNICATIONS
11,100 Koninklijke PTT Nederland 394,251
-------
TOTAL NETHERLANDS 2,091,805
SOUTH KOREA (2.1%)
MULTI-INDUSTRY
75,000 CITC Seoul Access Trust* 870,750
SPAIN (3.0%)
ENERGY
10,700 Repsol SA 448,623
FINANCE
3,340 Argentaria SA. 148,947
MULTI-INDUSTRY
1,750 Corp Fin Alba 179,542
UTILITIES
17,630 Telefonica de Espana 451,587
-------
TOTAL SPAIN 1,228,699
SWEDEN (3.5%)
CAPITAL EQUIPMENT
12,600 Ericsson (LM) Telephone Co., ADR 398,333
CONSUMER DURABLES
6,470 Electrolux AB (B free) 371,142
6,140 Volvo AB (B free) 154,582
-------
525,724
FINANCE
13,000 Skandia Forsakrings AB 376,178
MULTI-INDUSTRY
3,090 Investor AB (B free) 135,106
-------
TOTAL SWEDEN 1,435,341
SWITZERLAND (5.7%)
BANKING
4,800 Credit Suisse AG 540,533
CONSUMER DURABLES
660 SMH AG 373,855
CONSUMER NON-DURABLES
455 Nestle AG 552,507
INSURANCE
570 Winterthur Insurance 409,104
PHARMACEUTICALS
377 Novartis AG 496,665
-------
TOTAL SWITZERLAND 2,372,664
UNITED KINGDOM (13.9%)
BANKING
90,000 Bank of Scotland 538,250
28,000 Barclays, Plc. 520,519
-------
1,058,769
ENERGY
56,975 PowerGen, Plc. 596,529
55,000 Energy Group, Plc. 436,791
-------
1,033,320
MATERIALS
26,600 RTZ Corp., Plc. 422,496
MULTI-INDUSTRY
110,000 Inchcape, Plc. 488,493
PHARMACEUTICALS
20,000 Glaxo Wellcome, Plc. 393,193
RETAIL
50,000 Marks & Spencer, Plc. 396,272
79,900 Safeway, Plc. 442,882
95,000 Storehoue, Plc. 340,276
-------
1,179,430
SERVICES
35,000 Railtrack Group, Plc. 264,060
38,000 Severn Co., Ltd. 464,992
-------
729,052
TELECOMMUNICATIONS
58,600 Carlton Communications, Plc. 480,577
-------
TOTAL UNITED KINGDOM 5,785,330
---------
TOTAL INVESTMENTS (identified cost $41,189,251)
(a)98.5% $40,882,356
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 1.5 609,838
NET ASSETS 100.0% $41,492,194
* non-income producing security
(a) The aggregate cost for federal income tax purposes is $41,189,251, the
aggregate gross unrealized appreciation is $4,062,977 and the aggregate gross
unrealized depreciation is $4,369,872 resulting in net unrealized depreciation
of $306,895.
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997
(unaudited)
(expressed in U.S. dollars)
ASSETS:
Investments in securities, at value (identified cost
$41,189,251) (Note 1) $40,882,356
Cash (including $362,527 in foreign currency) 376,035
Receivable for investments sold 831,608
Dividends and other receivalbles 222,173
--------------
Total Assets 42,312,172
LIABILITIES:
Payables for:
Investments purchased 787,710
Foreign withholding taxes 32,268
--------------
Total Liabilities 819,978
--------------
NET ASSETS $41,492,194 Net Assets Consist of:
Paid-in capital $41,799,935
Net unrealized appreciation (307,741)
--------------
Net Assets $41,492,194
--------------
See notes to financial statements
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO STATEMENT OF OPERATIONS For the Six Months April
30, 1997 (Unaudited) (Expressed in US Dollars)
INVESTMENT INCOME:
Income:
Dividends (net of foreign withholding tax of $58,107) $273,053
--------
Expenses:
Investment advisory fee (Note 2) 133,377
Expense reimbursement fee (Note 2) 44,796
Administrative fee (Note 2) 7,182
Amortization of organization expenses (Note 1) 2,593
-----------
Total Expenses 187,948
-----------
Net Investment Income 85,105
-----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3)
Net realized gain on:
Investments 924,827
Foreign exchange transactions (464,039)
-----------
460,788
-----------
Net change in unrealized appreciation on:
Investments (991,021)
Foreign currency translations (347,126)
-----------
(1,338,147)
-----------
Net Realized and Unrealized Loss (877,359)
-----------
Net Decrease in Net Assets Resulting from Operations $(792,254)
----------
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
(unaudited)
(expressed in U.S. dollars)
<S> <C> <C>
For the six For the year
months ended ended
APRIL 30, 1997 OCTOBER 31, 1996
INCREASE IN NET ASSETS:
Operations:
Net investment income $85,105 $237,627
Net realized gain on investments and foreign
exchange transactions 460,788 1,907,166
Net change in unrealized appreciation (depreciation)
on investments and foreign currency translations (1,338,147) 1,134,561
----------- ----------
Net increase in net assets resulting from operations (792,254) 3,279,354
------------ ----------
Capital Transactions:
Proceeds from contributions 2,800,000 9,914,234
Value of withdrawals -- (1,900,000)
------------ -----------
Net increase in net assets resulting from
capital transactions 2,800,000 8,014,234
------------- -----------
Total increase in net assets 2,007,746 11,293,588
NET ASSETS:
Beginning of period 39,484,448 28,190,860
------------ ------------
End of period $44,168,488 $39,484,448
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(expressed in U.S. dollars)
<S> <C> <C> <C>
For the period
April 1, 1995
For the six For the year (commencement of
months ended ended operations) to
APRIL 30, 1997 OCTOBER 31, 1996 OCTOBER 31, 1995
----------------- ------------------ ------------------
Supplemental Data:
Portfolio turnover rate 36% 56% 23%
Average commission rate paid
per share* $0.0188 $0.0191 $0.0152
<FN>
* Most foreign securities markets do not charge commissions based on a rate per
share but as a percentage of the principal value of the transaction. As a
result, the above rate is not indicative of the commission arrangements
currently in effect.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
(UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. International Equity
Portfolio (the "Portfolio") is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company which was
organized as a trust under the laws of the State of New York on August 15, 1994.
The Portfolio commenced operations on April 1, 1995. The Declaration of Trust
permits the Trustees to create an unlimited number of beneficial interests in
the Portfolio.
The Portfolio's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. (1) The value of investments listed on
either a domestic or foreign securities exchange is based on the last sale price
on that exchange prior to the time when assets are valued, or in the absence of
recorded sales, at the average of readily available closing bid and asked prices
on such exchange; (2) unlisted securities are valued at the average of the
quoted bid and asked prices in the over-the-counter market; (3) securities or
other assets for which market quotations are not readily available are valued at
fair value in accordance with procedures established by and under the general
supervision and responsibility of the Portfolio's Trustees. Such procedures
include the use of independent pricing services, which use prices based upon
yields or prices of securities of comparable quality, coupon, maturity and type;
indications as to the value from dealers; and general market conditions; (4) all
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the prevailing rates of exchange available at the
time of valuation; and (5) trading in securities on most foreign exchanges and
over-the-counter markets is normally completed before the close of the New York
Stock Exchange and may also take place on days on which the New York Stock
Exchange is closed. If events materially affecting the value of foreign
securities occur between the time when the exchange on which they are traded
closes and the time when the Portfolio's net assets are calculated, such
securities will be valued at fair value in accordance with procedures
established by and under the general supervision of the Portfolio's Trustees.
B. FOREIGN CURRENCY TRANSLATIONS. The accounting records of the
Portfolio are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars at the current rate of exchange of such currency
against the U.S. dollar to determine the value of investments, assets and
liabilities. Purchases and sales of securities, and income and expenses are
translated at the prevailing rate of exchange on the respective dates of such
transactions. Upon the purchase or sale of a security denominated in foreign
currency, the Portfolio may enter into forward foreign currency exchange
contracts for the purchase or sale, for a fixed amount of U.S. dollars of the
amount of foreign currency involved in the underlying security transaction. The
Portfolio isolates that portion of realized gain or loss on investments
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of such investments. Reported
net realized and unrealized gains and losses arise from the sales of portfolio
securities, sales of foreign currencies, currency gains or losses realized
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Portfolio's books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized appreciation or
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(EXPRESSED IN U.S. DOLLARS)
(UNAUDITED)
depreciation on foreign currency translations arise from changes in the
value of the assets and liabilities, excluding investments in securities, at
fiscal year end, arising from changes in the exchange rate.
C. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Portfolio may enter
into forward foreign currency exchange contracts ("contracts") in connection
with planned purchases or sales of securities, to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency, or to increase or
shift its exposure to a currency other than U.S. dollars. The Portfolio has no
specific limitation on the percentage of assets which may be committed to these
types of contracts. The Portfolio could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts
or if the value of the foreign currency changes unfavorably. The U.S. dollar
values of foreign currency underlying all contractual commitments held by the
Portfolio are determined using forward currency exchange rates supplied by a
quotation service.
D. ACCOUNTING FOR INVESTMENTS. Security transactions are accounted for
on the trade date. Realized gains and losses on security transactions are
determined on the identified cost method. Dividend income and other
distributions from portfolio securities are recorded on the ex-dividend date.
Dividend income is recorded net of foreign taxes withheld where recovery of such
taxes is not assured. Interest income is accrued daily.
E. FEDERAL INCOME TAXES. The Portfolio will be treated as a partnership
for federal income tax purposes. As such, each investor in the Portfolio will be
subject to taxation on its share of the Portfolio's ordinary income and capital
gains.
F. DEFERRED ORGANIZATION EXPENSES. Expenses incurred by the Portfolio
in connection with its organization are being amortized on a straight-line basis
over a five-year period.
2. TRANSACTIONS WITH AFFILIATES.
INVESTMENT ADVISORY FEE. The Portfolio has an investment advisory
agreement with Brown Brothers Harriman & Co. (the "Adviser") for which it pays
the Adviser a fee calculated daily and paid monthly at an annual rate equivalent
to 0.65% of the Portfolio's average daily net assets. For the six months ended
April 30, 1997, the Portfolio incurred $133,377 for advisory services.
ADMINISTRATIVE FEE. The Portfolio has an administrative agreement with
Brown Brothers Harriman Trust Company (Cayman) Limited (the "Administrator") for
which it pays the Administrator a fee calculated daily and paid monthly at an
annual rate equivalent to 0.035% of the Portfolio's average daily net assets.
The Administrator has a subadministration agreement with Signature Financial
Group (Cayman) Ltd. for which Signature Financial Group (Cayman) Ltd. receives
such compensation as is from time to time agreed upon. For the six months ended
April 30, 1997, the Portfolio incurred $7,182 for administrative services.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENT (CONTINUED)
(EXPRESSED IN U.S. DOLLARS)
(UNAUDITED)
EXPENSE REIMBURSEMENT FEE. Brown Brothers Harriman Trust Company
(Cayman) Limited pays certain expenses of the Portfolio and receives a fee from
the Portfolio, computed and paid monthly, such that after such fee the aggregate
expenses will not exceed 0.90% of the Portfolio's average daily net assets. For
the six months ended April 30, 1997, Brown Brothers Harriman Trust Company
(Cayman) Limited incurred $84,274 in expenses on behalf of the Portfolio. The
expense reimbursement agreement will terminate when the aggregate amount of fees
received by Brown Brothers Harriman Trust Co. (Cayman) Limited thereunder equals
the aggregate amount of expenses paid by Brown Brother Harriman Trust Company
(Cayman) Limited thereunder.
3. INVESTMENT TRANSACTIONS. For the six months ended April 30, 1997,
the cost of purchases and the proceeds of sales of investment securities other
than short-term investments were $16,069,023 and $ 14,222,988, respectively.
There were no purchases or sales of U.S. government obligations during the
period. Custody fees for the Portfolio paid pursuant to the expense
reimbursement agreement were reduced by approximately $16,400 as a result of an
expense offset arrangement with the Portfolio's custodian.
