U.S. SMALL COMPANY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1998
(unaudited)
(expressed in U.S. dollars)
Shares Value
------ ----------
COMMON STOCKS (85.5%)
COMMERCIAL SERVICES (4.5%)
12,600 Boise Cascade Office Products
Corp.*..................... $ 155,925
23,100 Century Business Services,
Inc.* ..................... 278,644
600 Doubleclick, Inc.*........... 83,869
7,900 Labor Ready, Inc.*........... 310,075
23,300 Moore Corp., Ltd............. 233,000
----------
1,061,513
----------
CONSUMER DURABLES (2.4%)
6,800 Fossil, Inc.*................ 209,525
7,200 NVR Inc.*.................... 346,500
----------
556,025
----------
CONSUMER NON-DURABLES (1.8%)
1,900 Canandaigua Brands, Inc.*.... 98,088
7,500 International Multifoods Corp. 165,938
3,200 Tarrant Apparel Group*....... 151,600
----------
415,626
----------
CONSUMER SERVICES (3.1%)
7,000 CD Radio, Inc.*.............. 174,125
21,300 Extended Stay America*....... 223,650
10,100 Foodmaker, Inc.*............. 243,663
18,900 Protection One, Inc.*........ 89,775
----------
731,213
----------
ELECTRONIC TECHNOLOGY (10.8%)
4,800 Aware, Inc.*................. 267,450
11,100 Comverse Technology, Inc. *.. 715,950
1,200 Cordant Technologies......... 55,350
12,600 Cymer, Inc.*................. 231,525
10,900 DSP Communications*.......... 297,025
31,500 Mentor Graphics Corp.*....... 382,922
20,000 Neomagic Corp.*.............. 233,125
4,100 Network Appliance, Inc....... 206,409
4,600 Semtech Corp.*............... 149,500
----------
2,539,256
----------
ENERGY MINERALS (1.7%)
33,200 Pioneer National Resources Co.* 388,025
----------
FINANCE (17.3%)
15,000 Avis Rent A Car, Inc.*....... 470,625
800 Bank United Corp............. 32,450
4,300 Cornerstone Property's, Inc.. 70,144
3,400 E-Trade Group, Inc.*......... 392,913
7,300 Everen Capital Corp.......... 214,438
6,500 First Bancorp................ 167,781
3,300 FirstMerit Corp.............. 91,678
4,100 Forest City Enterprises, Inc. 101,219
11,000 Imperial Bancorp*............ 211,750
16,500 LNR Property Corp............ 323,813
18,100 Meristar Hospitality Corp.... 416,300
3,100 PMI Group, Inc. (The)........ 173,019
15,500 Prison Realty Trust.......... 302,250
16,000 Republic Securities Financial
Corp....................... 139,250
8,800 Sky Financial Group, Inc.*... 247,775
5,620 Sovereign Bancorp, Inc....... 76,748
14,100 Trammell Crow Co.*........... 253,800
12,300 United Rental, Inc.*......... 366,694
----------
4,052,647
----------
HEALTH SERVICES (2.0%)
1,200 Alternative Living Services,
Inc.* ..................... 26,700
19,600 Apria Healthcare Group, Inc.* 306,250
10,260 Orthodontic Centers of
America, Inc.*............. 126,968
----------
459,918
----------
HEALTH TECHNOLOGY (3.4%)
1,900 Andrx Corp.*................. 149,862
2,600 Idec Pharmaceuticals Corp.*.. 131,625
10,700 Liposome, Inc.*.............. 135,756
12,500 Wesley Jessen VisionCare,
Inc.*...................... 383,594
----------
800,837
----------
INDUSTRIAL SERVICES (1.2%)
15,700 Integrated Electrical
Services, Inc.*............ 269,844
----------
MISCELLANEOUS (0.6%)
600 CMG Information Services, Inc. 152,419
----------
NON-ENERGY MINERALS (3.5%)
57,300 Armco, Inc.*................. 293,662
7,200 Centex Construction Products,
Inc........................ 254,700
4,400 Southdown, Inc............... 281,875
----------
830,237
----------
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1998 (continued)
(unaudited)
(expressed in U.S. dollars)
Shares Value
------ ----------
PROCESS INDUSTRIES (2.1%)
16,600 Crompton & Knowles Corp.*.... $ 336,150
7,100 Myers Industries............. 160,637
----------
496,787
----------
PRODUCER MANUFACTURING (9.6%)
9,300 Astec Industries, Inc.*...... 362,119
4,600 Coltec Industries, Inc.*..... 99,475
16,900 Dal-Tile International, Inc.* 190,125
9,100 Hanover Compressor Co.*...... 261,056
7,500 Lincoln Electronics Holdings
Corp....................... 154,219
19,400 Meritor Automotive, Inc...... 411,037
7,800 Polycom, Inc.*............... 190,856
9,625 Superior Telecom, Inc........ 240,023
10,700 Terex Corp.*................. 338,387
----------
2,247,297
----------
RETAIL TRADE (5.2%)
4,000 American Eagle Outfitters*... 299,375
11,100 Ann Taylor Stores Corp.*..... 527,250
14,700 Central Garden & Pet Co.*.... 208,556
78,900 Southland Corp.*............. 193,552
----------
1,228,733
----------
TECHNOLOGY SERVICES (5.3%)
3,900 Broadvision, Inc.*........... 226,566
2,200 CNET, Inc.*.................. 282,081
7,800 Entrust Technologies, Inc.*.. 191,587
800 Excite, Inc.*................ 117,050
800 Exodus Communications, Inc.*. 72,075
700 Infoseek Corp.*.............. 35,853
1,800 Lycos, Inc.*................. 179,719
500 Mindspring Enterprises, Inc.* 48,484
1,200 PSInet, Inc.*................ 61,125
1,400 USweb Corp.*................. 31,544
----------
1,246,084
----------
TRANSPORTATION (1.8%)
23,500 American Freightways Corp.*.. 404,641
400 USFreightways Corp........... 15,013
----------
419,654
----------
UTILITIES (9.2%)
8,100 CMP Group Inc.*.............. 156,937
17,100 Omnipoint Corp.*............. 305,662
8,800 ONEOK, Inc................... 245,850
6,000 Pacific Gateway Exchange,
Inc.* ..................... 240,187
10,500 Philadelphia Suburban Corp... 236,906
7,900 TNP Enterprises, Inc......... 246,875
16,400 Vanguard Cellular Systems,
Inc.* ..................... 374,637
7,600 Viatel, Inc.*................ 349,125
----------
2,156,179
----------
TOTAL COMMON STOCKS
(identified cost $18,098,649) $20,052,294
-----------
Principal
Amount
---------
TIME DEPOSIT (4.3%)
$1,000,000 State Street Bank (Cayman)
4.50%, 05/04/99
(identified cost $1,000,000) $1,000,000
-----------
TOTAL INVESTMENTS
(identified cost $19,098,649) (a) .................. 89.8% $21,052,294
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ..... 10.2 2,397,588
---- -----------
NET ASSETS ........................................ 100.0% $23,449,882
===== ===========
- ----------
* Non-income producing security
(a) The aggregate cost for federal income tax purposes is $19,098,649, the
aggregate gross unrealized appreciation is $3,027,640, and the aggregate
gross unrealized depreciation is $1,073,995, resulting in net unrealized
appreciation of $1,953,645.
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
(expressed in U.S. dollars)
(unaudited)
ASSETS:
Investments in securities, at value
(identified cost $19,098,649) (Note 1) ............ $21,052,294
Cash ................................................ 2,187,801
Receivables for:
Contributions .................................... 366,675
Dividends and other receivables .................. 7,081
-----------
Total Assets ................................ 23,613,851
-----------
LIABILITIES:
Payables for:
Withdrawals ...................................... 104,799
Investment advisory fee (Note 2) ................. 12,543
Administrative fee (Note 2) ...................... 675
Foreign withholding taxes ........................ 10,919
Margin variation on futures ...................... 5,250
Accrued expenses and other liabilities ........... 29,783
-----------
Total Liabilities ........................... 163,969
-----------
NET ASSETS ............................................. $23,449,882
===========
Net Assets Consist of:
Paid-in capital...................................... $21,189,243
Net unrealized appreciation.......................... 2,260,639
-----------
Net Assets ............................................. $23,449,882
===========
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999
(expressed in U.S. dollars)
(unaudited)
INVESTMENT INCOME:
Income:
Dividends ............................................. $ 100,783
Interest .............................................. 20,160
-----------
Total Income ...................................... 120,943
-----------
Expenses:
Investment advisory fee (Note 2) ...................... 94,077
Custody fee (Note 3) .................................. 17,698
Administrative fee (Note 2) ........................... 5,066
Trustees' fees and expenses (Note 2) .................. 3,747
Amortization of organization expenses (Note 1) ........ 1,260
Miscellaneous expenses ................................ 5,129
-----------
Total Expenses ........................................ 126,977
Fees paid indirectly (Note 3) ..................... (16,135)
-----------
Net Expenses ...................................... 110,842
-----------
Net Investment Income ............................. 10,101
-----------
NET REALIZED AND UNREALIZED GAIN/LOSS (Notes 1 and 3):
Net realized loss on investments ......................... (6,329,040)
Net change in unrealized depreciation on investments ..... 5,938,022
-----------
Net Realized and Unrealized Loss ...................... (391,018)
-----------
Net Decrease in Net Assets Resulting from Operations ..... $ (380,917)
===========
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
For the
six months ended For the
April 30, 1999 year ended
(unaudited) October 31, 1998
---------------- ----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................................... $ 10,101 $ 29,501
Net realized gain (loss) on investments.......................... (6,329,040) 11,223,450
Net change in unrealized appreciation on investments............. 5,938,022 (16,859,557)
----------- ------------
Net decrease in net assets resulting from operations .......... (380,917) (5,606,606)
----------- ------------
Capital transactions:
Proceeds from contributions...................................... 7,241,680 4,897,021
Value of withdrawals............................................. (16,201,528) (10,950,104)
----------- ------------
Net decrease in net assets resulting from capital
transactions................................................ (8,959,848) (6,053,083)
----------- ------------
Total decrease in net assets................................. (9,340,765) (11,659,689)
NET ASSETS:
Beginning of period.................................................. 32,790,647 44,450,336
----------- ------------
End of period ....................................................... $23,449,882 $ 32,790,647
=========== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
FINANCIAL HIGHLIGHTS
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
For the period
For the January 17, 1995
six months ended For the years ended October 31, (commencement of
April 30, 1999 ------------------------------------ operations) to
(unaudited) 1998 1997 1996 October 31, 1995
---------------- ------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Ratios/Supplemental Data:
Net assets, end of period
(000's omitted) ...................... $23,450 $32,791 $44,450 $57,934 $51,226
Ratios as a percentage of
average net assets:
Expenses paid by
Portfolio ........................ 0.77%1 0.79% 0.77% 0.77% 0.77%1
Expenses paid by
commissions2 ..................... -- -- -- 0.05% 0.05%1
Expenses offset
arrangements ..................... 0.11%1 0.10% 0.09% 0.08% 0.05%1
------- ------- ------- ------- -------
Total expenses .................. 0.88%1 0.89% 0.86% 0.90% 0.87%1
======= ======= ======= ======= =======
Ratio of net investment
income to average
net assets ........................... 0.07%1 0.07% 0.10% 0.26% 0.25%1
Portfolio turnover rate ............... 105% 158% 63% 51% 115%
</TABLE>
- ----------
1 Annualized.
2 A portion of the Portfolio's security transactions are directed to certain
unaffiliated brokers which in turn use a portion of the commissions they
received from the Portfolio to pay other unaffiliated service providers on
behalf of the Portfolio for services provided for which the Portfolio 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 an 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 and received a
contribution of certain assets and liabilities, including securities, with a
value of $33,464,236 (including $1,223,663 of unrealized appreciation) on that
date from the 59 Wall Street Company Fund in exchange for a beneficial interest
in the Portfolio. 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
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. Futures Contracts. To hedge against anticipated future changes in
interest rates or securities prices, U.S. Small Company Portfolio may
enter into financial futures contracts for the delayed delivery of
securities or contracts based on financial indices at a fixed price on a
future date. The Portfolio is required to deposit either in cash or
securities an amount equal to a certain percentage of the contract amount.
Subsequent payments are made or received by the Portfolio each day,
dependent on the daily fluctuations in the value of amount. Subsequent
payments are made or received by the Portfolio each day, dependent on the
daily fluctuations in the value of the underlying security or securities
or index, and are recorded for financial statement purposes as unrealized
gains or losses by the Portfolio. The Portfolio recognizes a realized gain
or loss when the contract is closed or expires. Should interest rates or
securities prices move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
If forecasts of interest rates and other market factors are
incorrect, investment performance will diminish compared to what
performance would have been if these investment techniques were not used.
Even if the forecasts are correct, there is risk that the positions may
correlate imperfectly with the asset or liability being hedged. Other
risks of entering into these transactions are that a liquid secondary
market may not always exist, or that another party to a transaction may
not perform.
C. 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.
<PAGE>
U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (continued)
(expressed in U.S. dollars)
(unaudited)
D. 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 provisions
for federal income taxes is necessary.
E. 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, 1999, the Portfolio incurred $94,077 for advisory services.
Administrative Fee. The Portfolio has an administrative agreement with
Brown Brothers Harriman Trust Company (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 59 Wall Street
Administrators for which 59 Wall Street Administrators receives such
compensation as is from time to time agreed upon. For the six months ended April
30, 1999, the Portfolio incurred $5,066 for administrative services.
Trustees 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, 1999, the Portfolio incurred $3,747 for Trustee fees.
3. Investment Transactions. For the six months ended April 30, 1999, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $27,928,075 and $38,639,676, respectively. For that
same period, the portfolio paid brokerage commissions of $57,621 to Brown
Brothers Harriman & Co. for transactions executed on its behalf. Custody fees
for the portfolio were reduced by $16,135 as a result of an expense offset
arrangement with the Portfolio's custodian.
4. Financial Futures Contracts. As of April 30, 1999, U.S. Small Company
Portfolio held open futures contracts. The contractual amount of a futures
contract represents the investment the Portfolio has in a particular contract
and does not necessarily represent the amounts potentially subject to risk. The
measurements of futures contracts is meaningful only when all related and
offsetting transactions are considered. A summary of obligations under open
futures contracts at April 30,1999 is as follows:
Unrealized
Position Contracts Index Depreciation
------- --------- ----- -----------
Long 15 Russell 2000 $306,994
As of April 30, 1999, the Portfolio had segregated sufficient cash and/or
securities to cover margin requirements on open futures contracts.
