U.S. SMALL COMPANY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1996
(expressed in U.S. dollars)
(unaudited)
Shares Value
------ -----
COMMON STOCKS (99.8%)
BANKS (5.6%)
6,440 Deposit Guaranty Corp. ................................ $ 307,510
7,690 First Commercial Corp. ................................ 239,351
9,790 FirstMerit Corp. ...................................... 297,983
20,200 Imperial Bancorp* ..................................... 487,325
8,570 Keystone Financial, Inc. .............................. 279,596
10,210 ONBANcorp, Inc. ....................................... 339,483
4,900 Provident Bancorp, Inc. ............................... 251,737
2,500 Silicon Valley Bancshares* ............................ 58,750
10,161 Summit Bancorporation ................................. 360,716
8,990 Union Planters Corp. .................................. 270,824
5,280 Zions Bancorporation .................................. 394,680
-----------
3,287,955
-----------
COMMERCIAL SERVICES (4.5%)
12,060 Corrections Corp.
of America* ......................................... 768,825
19,230 HA-LO Industries, Inc.* ............................... 661,031
34,605 NFO Research, Inc.* ................................... 804,566
11,570 Richfood Holdings, Inc. ............................... 378,194
-----------
2,612,616
-----------
CONSUMER DURABLES (2.7%)
28,220 Arctco, Inc. .......................................... 273,381
5,370 Broderbund Software Corp.* ............................ 236,280
28,180 Continental Homes
Holding Corp. ....................................... 644,618
9,520 Oakwood Homes Corp. ................................... 424,830
-----------
1,579,109
-----------
CONSUMER NON-DURABLES (5.4%)
32,300 Authentic Fitness Corp. ............................... 771,163
59,190 Hudson Foods, Inc. -
Class A ............................................. 784,267
14,430 Interstate Bakeries Corp. ............................. 342,713
12,725 Nautica Enterprises Inc.* . ........................... 588,531
10,000 Platinum
Entertainment, Inc.* ............................... 121,250
16,160 Riviana Foods, Inc. ................................... 297,950
11,830 Timberland Co. - Class A* . ........................... 261,739
-----------
3,167,613
-----------
CONSUMER SERVICES (2.2%)
22,065 Applebee's International, Inc. ........................ 579,206
11,250 Grand Casinos, Inc.* .................................. 364,219
40,000 Host Marriot Services Corp.* .......................... 315,000
-----------
1,258,425
-----------
ELECTRONIC TECHNOLOGY (14.9%)
17,860 Brooktrout Technology, Inc.* .......................... 754,585
15,920 Cognex Corp.* ......................................... 421,880
32,880 Cypress Semiconductor
Corp.* ............................................. 464,430
22,700 Helix Technology Corp. ................................ 855,506
14,390 In Focus Systems, Inc.* ............................... 730,293
11,060 Integrated Device
Technology, Inc.* .................................. 163,826
38,000 Integrated Measurement
Systems, Inc.* ..................................... 726,750
25,360 International Rectifier
Corp.* ............................................. 570,600
9,780 Kemet Corp.* .......................................... 233,497
15,820 Komag Inc.* ........................................... 531,948
10,580 Maxim Integrated
Products, Inc.* .................................... 364,349
3,720 Novellus Systems, Inc.* ............................... 202,740
10,050 Read-Rite Corp.* ...................................... 209,166
18,960 Sanmina Corp.* ........................................ 668,340
12,450 SCI Systems, Inc.* .................................... 534,572
21,110 Thermedics, Inc.* ..................................... 638,577
2,660 U.S. Robotics Corp.* .................................. 416,623
9,230 VLSI Technology, Inc.* ................................ 160,948
-----------
8,648,630
-----------
ENERGY MINERALS (2.1%)
54,960 Plains Resources, Inc.* ............................... 638,910
15,920 Pogo Producing Co. .................................... 575,110
-----------
1,214,020
-----------
FINANCE (9.1%)
15,220 Charter One Financial, Inc. ........................... 533,651
9,800 Fahnestock Viner
Holdings, Inc. ..................................... 114,537
9,390 Finova Group, Inc. .................................... 521,145
28,090 First Indiana Corp. ................................... 698,739
26,690 Manufactured Home
Communities, Inc. .................................. 503,774
16,100 PHH Corp. ............................................. 915,687
13,810 Roosevelt Financial
Group, Inc. ........................................ 265,843
43,376 Security Capital
Industrial Trust ................................... 748,236
16,000 TCF Financial Corp. ................................... 566,000
13,706 United Companies
Financial Corp. .................................... 440,305
-----------
5,307,917
-----------
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1996 (continued)
(expressed in U.S. dollars)
(unaudited)
Shares Value
------ -----
HEALTH SERVICES (8.3%)
6,800 Community Health
Systems, Inc.* ..................................... $ 294,950
15,210 Lincare Holdings, Inc.* ............................... 589,388
8,870 Medaphis Corp.* ....................................... 408,574
11,030 Omnicare, Inc. ........................................ 661,800
36,360 Orthodontic Centers of
America, Inc.* ..................................... 1,427,130
12,900 PhyCor, Inc.* ......................................... 633,713
15,715 Vencor, Inc.* ......................................... 530,381
9,050 Vivra, Inc.* .......................................... 286,206
-----------
4,832,142
-----------
HEALTH TECHNOLOGY (2.5%)
14,270 Idexx Laboratories, Inc.* . ........................... 636,799
7,500 Invacare Corp. ........................................ 193,125
12,480 Sybron International Corp.* ........................... 315,120
7,070 Watson
Pharmaceuticals, Inc.* ............................. 337,592
-----------
1,482,636
-----------
INDUSTRIAL SERVICES (8.6%)
17,500 Carbo Ceramics, Inc.* ................................. 381,719
12,000 Granite Construction, Inc. ............................ 237,750
15,680 Input/Output, Inc.* ................................... 544,880
21,630 J. Ray McDermott, S.A.* ............................... 527,231
57,140 Pride Petroleum
Services, Inc.* .................................... 942,810
6,600 Sanifill, Inc.* ....................................... 286,275
18,980 Seacor Holdings, Inc.* ................................ 790,042
8,310 Sonat Offshore
Drilling, Inc. ..................................... 456,011
31,390 USA Waste Services, Inc.* . ........................... 816,140
-----------
4,982,858
-----------
INSURANCE (7.1%)
16,530 Allied Group, Inc. .................................... 593,014
19,750 Commerce Group, Inc. .................................. 395,000
10,605 Orion Capital Corp. ................................... 470,597
14,610 Penncorp Financial
Group, Inc. ........................................ 447,431
63,290 Presidential Life Corp. ............................... 621,033
15,700 Protective Life Corp. ................................. 545,575
20,000 United Insurance Co., Inc.* ........................... 425,000
34,490 US Facilities Corp. ................................... 631,598
-----------
4,129,248
-----------
NON-ENERGY MINERALS (4.7%)
26,660 Chaparral Steel Co. ................................... 403,232
20,620 Fibreboard Corp.* ..................................... 528,388
36,090 Republic Group, Inc. .................................. 500,749
28,820 Roanoke Electric
Steel Corp. ........................................ 392,673
18,790 Rouge Steel Co. - Class A ............................. 420,426
7,590 Texas Industries, Inc. ................................ 485,760
-----------
2,731,228
-----------
PROCESS INDUSTRIES (3.7%)
14,330 Chesapeake Corp. ...................................... 413,779
7,270 Crown Vantage, Inc.* .................................. 122,681
6,650 Cytec Industries, Inc.* ............................... 551,119
27,650 Mercer
International, Inc. - SBI* ......................... 623,853
16,000 Northland Cranberries, Inc. ........................... 428,000
-----------
2,139,432
-----------
PRODUCER MANUFACTURING (3.7%)
13,020 AGCO Corp. ............................................ 328,755
36,360 Cascade Corp. ......................................... 581,760
31,420 Global Industrial
Technologies, Inc.* ................................ 577,343
18,000 Kennametal, Inc. ...................................... 681,750
-----------
2,169,608
-----------
RETAIL TRADE (4.2%)
24,400 CompUSA, Inc.* ........................................ 844,850
11,040 Eckerd Corp.* ......................................... 527,160
9,690 Fastenal Co. .......................................... 372,459
24,540 Sunglass Hut
International, Inc.* ............................... 723,930
-----------
2,468,399
-----------
TECHNOLOGY SERVICES (4.2%)
13,320 America Online, Inc.* ................................. 852,480
9,570 American Management
Systems, Inc.* ..................................... 253,605
8,220 Sterling Software, Inc.* .............................. 639,105
9,740 Sungard Data
Systems, Inc.* ..................................... 326,290
14,685 System Software
Assoc., Inc. ....................................... 347,851
-----------
2,419,331
-----------
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1996 (continued)
(expressed in U.S. dollars)
(unaudited)
Shares Value
------ -----
TELECOMMUNICATIONS (2.7%)
11,410 Aspect Telecommunications
Corp.* ............................................. $ 656,075
10,040 Picturetel Corp.* ..................................... 340,105
10,660 Stratacom, Inc.* ...................................... 554,986
-----------
1,551,166
-----------
TRANSPORTATION (0.8%)
11,420 Comair Holdings, Inc. ................................. 423,254
500 Eagle USA Airfreight, Inc.* ........................... 15,375
-----------
438,629
-----------
UTILITIES (2.8%)
24,970 Indiana Energy, Inc. .................................. 596,159
9,410 KN Energy, Inc. ....................................... 301,120
31,110 Laclede Gas Co. ....................................... 731,085
690 NUI Corp. ............................................. 12,851
-----------
1,641,215
-----------
TOTAL INVESTMENTS (identified cost $43,425,433) (a) .. 99.8% $ 58,062,177
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ....... 0.2 106,299
----- ------------
NET ASSETS ........................................... 100.0% $ 58,168,476
===== ============
- ---------
* non-income producing security.
(a) The aggregate cost for federal income tax purposes is $43,425,433, the
aggregate gross unrealized appreciation is $15,845,245, and the aggregate
gross unrealized depreciation is $1,208,501, resulting in net unrealized
appreciation of $14,636,744.
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(expressed in U.S. dollars)
(unaudited)
ASSETS:
Investments in securities, at value
(identified cost $43,425,433) (Note 1) ................ $58,062,177
Cash ..................................................... 568,352
Dividends receivable ..................................... 19,078
Deferred organization expenses (Note 1) .................. 9,442
-----------
Total Assets ......................................... 58,659,049
-----------
LIABILITIES:
Payables for:
Investments purchased .................................. 410,000
Investment advisory fee (Note 2) ....................... 29,824
Trustees' fee (Note 2) ................................. 4,620
Administrative fee (Note 2) ............................ 1,606
Accrued expenses and other liabilities ................. 44,523
-----------
Total Liabilities .................................... 490,573
-----------
NET ASSETS .................................................. $58,168,476
===========
Net Assets Consist of:
Paid-in capital .......................................... $43,531,732
Net unrealized appreciation on investments ............... 14,636,744
-----------
Net Assets .................................................. $58,168,476
===========
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF OPERATIONS
For the six months ended April 30, 1996
(expressed in U.S. dollars)
(unaudited)
INVESTMENT INCOME:
Income:
Dividends (net of foreign withholding tax of $29,914) .. $ 208,465
Interest ............................................... 71,981
-----------
Total Income ......................................... 280,446
-----------
Expenses:
Investment advisory fee (Note 2) ....................... 171,338
Custodian fee (Note 3) ................................. 27,908
Administrative fee (Note 2) ............................ 9,226
Trustees' fees and expenses (Note 2) ................... 5,422
Amortization of organization expenses (Note 1) ......... 1,266
Miscellaneous .......................................... 32,323
-----------
Total Expenses ......................................... 247,483
Fees paid indirectly (Note 3) ........................ (44,508)
-----------
Net Expenses ......................................... 202,975
-----------
Net Investment Income ................................ 77,471
-----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments .......................... 2,112,431
Net change in unrealized appreciation on investments ...... 7,256,566
-----------
Net Realized and Unrealized Gain ....................... 9,368,997
-----------
Net Increase in Net Assets Resulting from Operations ...... $ 9,446,468
===========
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
(expressed in U.S. dollars)
For the period
For the six January 17, 1995
months ended (commencement of
April 30, 1996 operations) to
(unaudited) October 31, 1995
------------ ----------------
INCREASE IN NET ASSETS:
Operations:
Net investment income ................... $ 77,471 $ 110,048
Net realized gain on investments ........ 2,112,431 2,365,906
Net change in unrealized appreciation
on investments ....................... 7,256,566 6,156,515
------------ ------------
Net increase in net assets
resulting from operations .......... 9,446,468 8,632,469
------------ ------------
Capital Transactions:
Proceeds from contributions ............. 1,814,287 76,125,240
Value of withdrawals .................... (4,318,698) (33,631,390)
------------ ------------
Net (decrease) increase in net assets
resulting from capital transactions (2,504,411) 42,493,850
------------ ------------
Total increase in net assets ...... 6,942,057 51,126,319
NET ASSETS:
Beginning of period ....................... 51,226,419 100,100
------------ ------------
End of period ............................. $ 58,168,476 $ 51,226,419
============ ============
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
FINANCIAL HIGHLIGHTS
(expressed in U.S. dollars)
For the period
For the six January 17, 1995
months ended (commencement
April 30, 1996 of operations) to
(unaudited) October 31, 1995
----------- ----------------
Ratios/Supplemental Data:
Net assets, end of
period (000's omitted) ................. $58,168 $ 51,226
Expenses as a percentage of average net assets*:
Expenses paid by Portfolio .............. 0.77% 0.77%
Expenses paid by commissions** .......... 0.09% 0.05%
Expense offset arrangements ............. 0.08% 0.05%
---- ----
Total expenses ................... 0.94% 0.87%
Ratio of net investment income
to average net assets* .................. 0.29% 0.25%
Portfolio turnover rate ...................... 31% 115%
Average commission rate paid per share ....... $ 0.08 $ 0.08
- ----------
* Annualized.
** A portion of the Fund's securities transactions are directed to certain
unaffiliated brokers which in turn use a portion of the commissions they
receive from the Portfolio to pay other unaffiliated service providers on
behalf of the Portfolio for services provided for which the Fund would
otherwise be obligated to pay.
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(expressed in U.S. dollars)
(unaudited)
1. Organization and Significant Accounting Policies. U.S. Small Company
Portfolio (the "Portfolio") is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company which
was organized as a trust under the laws of the State of New York on June 15,
1993. The Portfolio commenced operations on January 17, 1995. The Declaration of
Trust permits the Trustees to create an unlimited number of beneficial interests
in the Portfolio.
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America, and reflect the
following policies:
A. Valuation of Investments. (1) The value of investments listed on a
securities exchange is based on the last 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 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) short-term investments which mature in 60 days or less are
valued at amortized cost if their original maturity was 60 days or less, or
by amortizing their value on the 61st day prior to maturity, if their
original maturity when acquired by the Portfolio was more than 60 days,
unless this is determined not to represent fair value by the Trustees.
B. 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 except that, if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as a Portfolio is informed of
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.
C. 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. It is intended that the Portfolio's
assets will be managed in such a way that an investor in the Portfolio will
be able to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is necessary.
D. 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 the Adviser
receives 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, 1996, the Portfolio incurred $171,338 for advisory services.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (continued)
(expressed in U.S. dollars)
(unaudited)
Administrative Fee. The Portfolio has an administrative agreement with
Brown Brothers Harriman Trust Company (Cayman) Ltd. (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 services 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, but not in
excess of the amount paid to the Administrator. For the six months ended April
30, 1996, the Fund incurred $9,226 for administrative services.
Trustee Fee. Each Trustee of the Portfolio receives an annual retainer paid
by the Portfolio. Each Trustee is also reimbursed for out-of-pocket expenses
incurred in connection with board meetings. For the six months ended April 30,
1996, the Portfolio incurred $5,422 for Trustee fees.
3. Investment Transactions. For the six months ended April 30, 1996, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $20,571,734 and $15,693,826, respectively. For that
same period, the Portfolio paid brokerage commissions of $24,969 to Brown
Brothers Harriman & Co. for transactions executed on its behalf. Fees for the
Portfolio were reduced by $23,900 as a result of the Portfolio directing a
portion of its portfolio transactions to certain unaffiliated brokers.
Additionally, custody fees for the Portfolio were reduced by $20,608 as a result
of an expense offset arrangement with the Portfolio's custodian.
