<PAGE>
THE BERGER FUNDS
ANNUAL REPORT
[PHOTO]
BERGER NEW GENERATION FUND
-----------------------------------------------
BERGER SELECT FUND
-----------------------------------------------
BERGER SMALL COMPANY GROWTH FUND
-----------------------------------------------
BERGER SMALL CAP VALUE FUND
-----------------------------------------------
BERGER MID CAP GROWTH FUND
-----------------------------------------------
BERGER MID CAP VALUE FUND
-----------------------------------------------
BERGER 100 FUND
-----------------------------------------------
BERGER/BIAM INTERNATIONAL FUND
-----------------------------------------------
BERGER GROWTH AND INCOME FUND
-----------------------------------------------
BERGER BALANCED FUND
-----------------------------------------------
<PAGE>
The Berger Funds are presenting a combined annual report which includes the
Berger New Generation Fund, Berger Select Fund, Berger Small Company Growth
Fund, Berger Small Cap Value Fund, Berger Mid Cap Growth Fund, Berger Mid Cap
Value Fund, Berger 100 Fund, Berger BIAM/International Fund, Berger Growth and
Income Fund, and Berger Balanced Fund. This report reflects the financial
position of each Fund at September 30, 1998 and the results of their operations
and changes in their net assets for the periods indicated, in a single document.
<PAGE>
<TABLE>
<C> <S>
2 A LETTER FROM THE PRESIDENT
THE BERGER FUNDS
4 Berger New Generation Fund
11 Berger Select Fund
16 Berger Small Company Growth Fund
23 Berger Small Cap Value Fund~Investor
Shares/Institutional Shares
30 Berger Mid Cap Growth Fund
36 Berger Mid Cap Value Fund
43 Berger 100 Fund
49 Berger/BIAM International Fund
53 Berger Growth and Income Fund
59 Berger Balanced Fund
65 BERGER FUNDS NOTES TO FINANCIAL STATEMENTS
70 BERGER/BIAM INTERNATIONAL PORTFOLIO (TO BE
READ IN CONJUNCTION WITH THE BERGER/BIAM
INTERNATIONAL FUND)
76 BERGER/BIAM INTERNATIONAL PORTFOLIO NOTES TO
FINANCIAL STATEMENTS
79 FINANCIAL HIGHLIGHTS
</TABLE>
To obtain a prospectus for any of the Berger Funds, which contains more
complete information, including management fees, charges and expenses, call
1.800.333.1001. Please read it carefully before you invest. Berger
Distributors, Inc. ~ Distributor
www.bergerfunds.com
[LOGO]
<PAGE>
A Letter from the President
DEAR
FELLOW
SHAREHOLDERS
Thank you for investing
with The Berger Funds.
Our knowledge, experience and energy
is dedicated to uncovering and investing in the special companies that will
help you achieve your long-term financial goals. We understand the importance
of your investment and we will continue to provide you with the highest level
of investment management.
This past year has been a challenging one for fund managers and investors, to
say the least. The clouds over the market appear to be lifting, however, and we
believe that 1999 holds exciting potential for investors.
Although market turbulence buffeted our funds as well as all the nation's mutual
funds recently, it had a bright side in that share prices of many solid
companies came down to levels not seen in years. Our portfolio managers took
advantage of the opportunity to buy these companies, and, as a result, our funds
are benefiting from the market's subsequent rebound. Regardless of the market's
ups and downs, we always concentrate on intensive, fundamental, company by
company research to find quality companies for every Berger fund.
Despite the market's volatility, The Berger Funds had several significant
accomplishments this fiscal year. Launched just last year, the Berger Balanced
Fund,(1) managed by Patrick Adams and John Jares, proved to be a "fund for all
seasons," weathering the most difficult market conditions in years to emerge as
the top-performing fund in the country for the year ended September 30, 1998.(1)
Our Select Fund,(1) also managed by Patrick Adams, and our Mid Cap Growth
Fund,(1) managed by Amy Selner, have been among the leaders of their peer groups
since their launch on December 30, 1997. Our Berger Small Cap Value Fund,
managed by Bob Perkins, recently was named to MONEY(2) Magazine's list of the
top 100 funds in the country and SMARTMONEY(3) included it among the nation's 20
best funds.
We introduced the Berger Mid Cap Value Fund this past year and feel very
fortunate that Tom Perkins, a 30-year veteran manager, has joined with his
brother Bob to pilot this Fund. With over a half century of experience between
them, the Perkins brothers are a combination that we believe is difficult to
beat.
I am proud of The Berger Fund's commitment to helping abandoned, homeless and
runaway children through a groundbreaking program we created with Covenant
House, the nation's largest privately funded child care agency. Remember, we are
donating to Covenant House the first year's custodian fee for every new
traditional or Roth IRA opened in 1998.
Over the year, we continued to upgrade and expand our Web site and shareholder
services. The Mutual Funds Education Alliance recognized our efforts with two
national awards for excellence in shareholder communications. I encourage you to
visit - and use - our Web site at www.bergerfunds.com. It's chock full of useful
information and is a convenient and easy way to access your account.
2
<PAGE>
Given the unsettling events in the world's financial markets over the last
several months, it was no wonder that many investors felt a bit uncomfortable.
But the wisdom of the advice that Bill Berger first gave investors over 40 years
ago has never been more apparent. As Bill has so often said, history shows that
the most successful investors are those who keep their long-term goals firmly in
mind and who summon the courage and patience to stand firm during trying times.
It isn't always easy to do so. We know that. We also know that we can rely on
the same clear, proven investment philosophy that has guided us successfully
through both the bull -- and the bear -- markets of the past quarter century.
Each day we are dedicated to earning the trust you place in us.
God bless you,
[SIGNATURE]
JERRY LAVIN,
PRESIDENT
This material must be preceded or accompanied by a prospectus, which includes
more complete information including risks, fees and expenses. Please read it
carefully before you invest. Berger Distributors, Inc. ~ Distributor
1. Past performance does not guarantee future results. Investment returns and
principal value will fluctuate, and you may have a gain or loss when you sell
shares. To obtain the average annual total returns for the Berger Funds for the
one-, five-, and ten-year periods ended September 30, 1998, see the 'Performance
Overview' section for each Fund in the annual report that follows. Returns for
the Balanced Fund were primarily generated during a period of higher-than-normal
trading activity undertaken in a response to market conditions during the
Fund's initial period of operations and before it became fully invested.
Investments in small companies may involve greater risks, including price
volatility, and rewards than investments in larger companies.
2. MONEY, June 1998, page 70 MONEY'S selection criteria included quantitative
analysis of fund performance and editorial opinions of the magazine's reporting
staff.
3. Smart Money, September 1998, page 107 SMARTMONEY'S selection criteria
included funds that are open to new investors along with funds with above
average risk-adjusted performance, low sales fees and expenses and low minimum
initial investments. Selection also included SMARTMONEY'S editorial opinion of
the manager's long term consistency of style.
3
<PAGE>
..............................
BERGER
NEW GENERATION
FUND
PORTFOLIO MANAGER'S COMMENTARY
[BERGER NEW GENERATION FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BENGX
- - Fund Number 344
</TABLE>
PERFORMANCE
The past twelve months have seen emerging growth stocks underperform the broad
stock market as measured by the Standard & Poor's (S&P) 500 index. The Berger
New Generation Fund (the "Fund") declined by -13.99%(1) during the twelve months
ended September 30, 1998, compared with a positive return of 9.08% for the S&P
500.(2) The Russell 2000,(3) an index of small cap stocks, declined by -19.02%
over the same period. Although our Fund is not strictly a small cap fund, its
current structure is more closely aligned with the Russell 2000 than the S&P
500, which is composed primarily of large, established companies.
Our Fund's fiscal year began and ended during difficult periods. In October
1997, the market began to focus on the emerging crisis in Asia. That month ended
with a sharp stock market decline, with volume and price movements reminiscent
of the 1987 crash. This proved to be at least an intermediate bottom for larger
cap stocks, but emerging growth stocks, and especially smaller cap stocks,
continued down through mid-January. This divergence of performance is typical in
periods of economic uncertainty because investors tend to shorten their
investment horizons and become more risk averse, favoring such defensive
vehicles as U.S. Treasury bonds and utility stocks. As a result, the market was
dominated by a few large companies, which had very strong stock performances
despite valuations that were extremely high by almost any measure.
Once the market had declined sufficiently and it became apparent that the U.S.
economy was holding up and valuations were improving, investors reentered the
market and assumed more risk by buying emerging growth stocks. The rally was
brief, however, running only about three months.
By mid-summer, both the Russell 2000 and the S&P 500 had significantly declined.
The decline is attributable to the global spread of the Asian financial crisis.
Russia and parts of Eastern Europe are variously collapsing/troubled; Latin
America, particularly Brazil, is considered to be at risk; Mexico is shaky,
given its dependence on oil exports for a significant part of its GDP. The
so-called "Asian Contagion" is seen lapping against our shores, and there are
scattered signs that the U.S. economy is beginning to weaken. After an
unprecedented seven-plus year expansion, this shouldn't come as a surprise.
Global economic concerns, the crisis in Washington and a market selling at very
high levels combined in a recipe for correction, if not a bear market.
PERIOD IN REVIEW
Typical of its historical performance, our Fund did very well during good
periods in the market and fairly poorly during down periods. The aggressive
nature of our investments, coupled with an attempt to ride out storms in our
core holdings, increase our Fund's volatility. There were bright spots, however.
Our Internet-related stocks, such as Yahoo!, TMP Worldwide and Mindspring
Enterprises, had outstanding returns. MCI WorldCom continued its strong
performance in the stock market and its redefining leadership in the
telecommunications industry.
Information technology services stocks, in which we have held a substantial
position, were a disappointment, especially in the last quarter. While
fundamentals at these companies remain strong, the market quickly and violently
discounted uncertainty in corporate spending and brought these stocks down
dramatically.
LOOKING AHEAD
Although this has been, and remains, a very difficult time to invest in stocks
that carry above-average risk, we believe it quite possible that we have seen
the worst and that 1999 could be a great year for emerging growth stocks.
We are pleased to announce that Amy Selner, Vice President of Berger Associates,
assumed the management of this Fund on November 20, 1998. Amy's appointment as
Portfolio Manager of this Fund is anticipated to be for an interim period until
a successor manager is appointed. Amy is currently the Portfolio Manager of the
Berger Mid Cap Growth Fund and the Berger Small Company Growth Fund and has more
than seven years of experience in the investment industry.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P 500 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.
3. The Russell 2000 index is an unmanaged index, with dividends reinvested,
which consists of 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.
THE BERGER FUNDS 4 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF BERGER NEW
GENERATION FUND VS.
S&P 500 INDEX AND COST OF LIVING INDEX
BERGER NEW COST OF
GENERATION S&P 500 LIVING
FUND INDEX INDEX
<S> <C> <C> <C>
3/29/96 $10,000 $10,000 $10,000
6/30/96 $11,290 $10,467 $10,064
9/30/96 $11,820 $10,791 $10,135
12/31/96 $11,555 $11,690 $10,186
3/31/97 $9,643 $12,004 $10,276
6/30/97 $11,977 $14,098 $10,295
9/30/97 $15,547 $15,153 $10,353
12/31/97 $14,354 $15,589 $10,360
3/31/98 $16,286 $17,762 $10,417
6/30/98 $16,392 $18,348 $10,469
9/30/98 $13,371 $16,526 $10,495
BERGER NEW GENERATION FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -13.99%
Life of Fund 12.27%
(3/29/96)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 5 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER NEW GENERATION FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (93.12%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
BANKS - SOUTHEAST (0.84%)
50,000 Net.B@nk, Inc.* $ 950,000
- --------------------------------------------------------------------------------
BUILDING - HEAVY CONSTRUCTION (1.10%)
40,000 Dycom Industries, Inc.* 1,245,000
- --------------------------------------------------------------------------------
CHEMICALS - SPECIALTY (0.21%)
51,300 North American Scientific, Inc.* 243,675
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - ADVERTISING (2.59%)
50,000 Outdoor Systems, Inc.* 975,000
- --------------------------------------------------------------------------------
60,000 TMP Worldwide, Inc.* 1,968,750
- --------------------------------------------------------------------------------
2,943,750
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - BUSINESS SERVICES (1.21%)
80,000 First Consulting Group, Inc.* 1,370,000
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - MISCELLANEOUS (6.51%)
40,000 Diamond Technology Partners, Inc.* 660,000
- --------------------------------------------------------------------------------
45,500 Forrester Research, Inc.* 1,660,750
- --------------------------------------------------------------------------------
75,000 Inspire Insurance Solutions, Inc.* 1,771,875
- --------------------------------------------------------------------------------
25,000 Paychex, Inc. 1,289,062
- --------------------------------------------------------------------------------
65,000 The Profit Recovery Group International, Inc.* 2,031,250
- --------------------------------------------------------------------------------
7,412,937
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - STAFFING (3.03%)
60,000 AHL Services, Inc.* 1,965,000
- --------------------------------------------------------------------------------
40,000 On Assignment, Inc.* 1,480,000
- --------------------------------------------------------------------------------
3,445,000
- --------------------------------------------------------------------------------
COMPUTER - LOCAL NETWORKS (1.12%)
28,000 Ascend Communications, Inc.* 1,274,000
- --------------------------------------------------------------------------------
COMPUTER - MEMORY DEVICES (1.01%)
20,000 EMC Corp.* 1,143,750
- --------------------------------------------------------------------------------
COMPUTER - MINI/MICRO (1.97%)
30,000 Apple Computer, Inc. 1,143,750
- --------------------------------------------------------------------------------
22,000 Sun Microsystems, Inc.* 1,095,875
- --------------------------------------------------------------------------------
2,239,625
- --------------------------------------------------------------------------------
COMPUTER - PERIPHERAL EQUIPMENT (3.39%)
30,000 American Power Conversion* 1,130,625
- --------------------------------------------------------------------------------
55,000 Micros Systems, Inc.* 1,650,000
- --------------------------------------------------------------------------------
75,000 Splash Technology Holdings, Inc.* 1,068,750
- --------------------------------------------------------------------------------
3,849,375
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (93.12%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER - SERVICES (4.92%)
50,000 Consentric Network Corp.* $ 1,050,000
- --------------------------------------------------------------------------------
50,000 Metro Information Services, Inc.* 1,593,750
- --------------------------------------------------------------------------------
80,000 Tier Technologies, Inc. Class B* 1,320,000
88,600 Whittman-Hart, Inc.* 1,628,025
- --------------------------------------------------------------------------------
5,591,775
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - DESKTOP (1.99%)
25,000 Gemstar International Group Limited* 1,159,375
- --------------------------------------------------------------------------------
10,000 Microsoft Corp.* 1,100,625
- --------------------------------------------------------------------------------
2,260,000
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - EDUCATION (1.67%)
50,000 CBT Group Public Limited Company ADR * 675,000
- --------------------------------------------------------------------------------
28,000 Electronic Arts, Inc.* 1,228,500
- --------------------------------------------------------------------------------
1,903,500
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (6.79%)
28,000 BMC Software, Inc.* 1,681,750
- --------------------------------------------------------------------------------
32,500 Compuware Corp.* 1,913,437
- --------------------------------------------------------------------------------
37,000 Documentum, Inc.* 1,466,125
- --------------------------------------------------------------------------------
30,000 J.D. Edwards & Company* 1,440,000
- --------------------------------------------------------------------------------
30,000 New Era Of Networks, Inc.* 1,222,500
- --------------------------------------------------------------------------------
7,723,812
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - INTERNET (5.93%)
15,000 America Online, Inc. 1,668,750
- --------------------------------------------------------------------------------
30,000 Earthlink Network, Inc.* 1,237,500
- --------------------------------------------------------------------------------
25,000 Exodus Communication, Inc.* 609,375
- --------------------------------------------------------------------------------
15,000 Mindspring Enterprises, Inc.* 622,500
- --------------------------------------------------------------------------------
90,000 Spyglass, Inc.* 1,147,500
- --------------------------------------------------------------------------------
43,000 Verio, Inc.* 1,064,250
- --------------------------------------------------------------------------------
3,000 Yahoo, Inc.* 388,500
- --------------------------------------------------------------------------------
6,738,375
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - MEDICAL (2.73%)
40,000 Access Health, Inc.* 1,475,000
- --------------------------------------------------------------------------------
32,000 HBO & Company 924,000
- --------------------------------------------------------------------------------
35,000 Quadramed Corp.* 704,375
- --------------------------------------------------------------------------------
3,103,375
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - SECURITY (1.92%)
55,000 Axent Technologies, Inc.* 1,024,375
- --------------------------------------------------------------------------------
33,000 Network Associates, Inc.* 1,171,500
- --------------------------------------------------------------------------------
2,195,875
- --------------------------------------------------------------------------------
ELECTRICAL - CONNECTORS (1.36%)
65,000 AFC Cable Systems, Inc.* 1,543,750
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 6 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER NEW GENERATION FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (93.12%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (6.05%)
72,000 Applied Micro Circuits Corp.* $ 1,071,000
- --------------------------------------------------------------------------------
20,000 Broadcom Corporation* 1,420,000
- --------------------------------------------------------------------------------
18,000 Intel Corporation 1,543,500
- --------------------------------------------------------------------------------
35,000 Micron Technology, Inc. 1,065,312
- --------------------------------------------------------------------------------
70,000 Sipex Corporation * 1,776,250
- --------------------------------------------------------------------------------
6,876,062
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT BROKERS (0.76%)
105,000 Knight/Trimark Group, Inc.* 866,250
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (0.45%)
31,800 TeleBanc Financial Corporation* 512,775
- --------------------------------------------------------------------------------
FOOD - DAIRY PRODUCTS (0.67%)
50,000 Horizon Organic Holding Corporation* 762,500
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (3.31%)
35,000 Comcast Corporation Class A 1,631,875
- --------------------------------------------------------------------------------
23,000 Cox Communications, Inc. Class A* 1,256,375
- --------------------------------------------------------------------------------
48,750 Tele-Communications TCI Ventures Group Class
A* 874,453
- --------------------------------------------------------------------------------
3,762,703
- --------------------------------------------------------------------------------
MEDIA-RADIO/TV (2.00%)
48,600 Capstar Broadcasting Corporation* 750,262
- --------------------------------------------------------------------------------
30,000 Jacor Communications, Inc.* 1,518,750
- --------------------------------------------------------------------------------
2,269,012
- --------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (0.69%)
15,000 American Home Products Corp. 785,625
- --------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (1.00%)
80,000 Theragenics Corporation* 1,135,000
- --------------------------------------------------------------------------------
MEDICAL - GENERIC DRUGS (2.54%)
55,000 Mylan Laboratories, Inc. 1,622,500
- --------------------------------------------------------------------------------
25,000 Watson Pharmaceuticals, Inc.* 1,268,750
- --------------------------------------------------------------------------------
2,891,250
- --------------------------------------------------------------------------------
MEDICAL - HOSPITALS (2.03%)
37,000 Province Healthcare Co.* 1,260,312
- --------------------------------------------------------------------------------
25,000 Universal Health Services, Inc.* 1,043,750
- --------------------------------------------------------------------------------
2,304,062
- --------------------------------------------------------------------------------
MEDICAL - INSTRUMENTS (1.45%)
40,000 Xomed Surgical Products, Inc.* 1,645,000
- --------------------------------------------------------------------------------
MEDICAL - PRODUCTS (1.74%)
35,000 Biomet Corp. 1,214,062
- --------------------------------------------------------------------------------
35,000 Sterigenics International, Inc.* 765,625
- --------------------------------------------------------------------------------
1,979,687
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (93.12%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL - WHOLESALE DRUG/SUNDRIES (1.11%)
25,000 Bergen Brunswig Corp. Class A $ 1,264,062
- --------------------------------------------------------------------------------
MEDICAL/DENTAL SERVICES (1.29%)
45,000 ICON PLC ADR* 1,468,125
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (0.88%)
60,000 Veritas DGC, Inc.* 1,001,250
- --------------------------------------------------------------------------------
OIL & GAS - U.S. EXPLORATION & PRODUCTION (0.52%)
15,000 Anadarko Petroleum Corporation 589,687
- --------------------------------------------------------------------------------
POLLUTION CONTROL - SERVICES (6.20%)
24,800 American Disposal Services, Inc.* 965,650
- --------------------------------------------------------------------------------
53,800 Casella Waste Systems, Inc. Class A* 1,829,200
- --------------------------------------------------------------------------------
54,000 Steris Corp.* 1,525,500
- --------------------------------------------------------------------------------
40,000 Superior Services, Inc.* 1,127,500
- --------------------------------------------------------------------------------
90,000 U.S. Liquids, Inc.* 1,597,500
- --------------------------------------------------------------------------------
7,045,350
- --------------------------------------------------------------------------------
RETAIL - SUPERMARKETS (0.20%)
5,450 Whole Foods Market, Inc.* 229,581
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - CELLULAR (1.28%)
57,000 American Tower Corp. 1,453,500
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (3.95%)
62,000 Com21, Inc.* 1,108,250
- --------------------------------------------------------------------------------
80,000 Ortel Corporation* 1,280,000
- --------------------------------------------------------------------------------
27,000 Tellabs, Inc.* 1,074,937
- --------------------------------------------------------------------------------
25,000 Uniphase Corp.* 1,025,000
- --------------------------------------------------------------------------------
4,488,187
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (4.16%)
90,000 Crown Castle International Corp.* 866,250
- --------------------------------------------------------------------------------
43,000 Global Crossing Ltd.* 897,625
- --------------------------------------------------------------------------------
38,000 MCI Worldcom, Inc.* 1,857,250
- --------------------------------------------------------------------------------
25,000 MediaOne Group, Inc.* 1,110,937
- --------------------------------------------------------------------------------
4,732,062
- --------------------------------------------------------------------------------
TRANSPORTATION - SERVICES (0.55%)
52,400 United Road Services, Inc.* 625,525
- --------------------------------------------------------------------------------
Total Common Stocks
(cost $95,833,878) 105,864,829
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 7 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER NEW GENERATION FUND
SCHEDULE OF INVESTMENTS
REPURCHASE AGREEMENT (4.66%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
$5,303,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998, to be repurchased at
$5,303,788 on October 1, 1998, collateralized
by U.S. Treasury Bond, 5.75% - March 10, 2000,
with a value of $5,410,905. $ 5,303,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $5,303,000) 5,303,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.08%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
1,375,000 Federal Home Loan Mortgage Corp. Discount Note
-5.16%, 10/20/98 1,371,255
- --------------------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp. Discount Note
-5.13%, 10/13/98 998,296
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(cost $2,369,551) 2,369,551
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments
(cost $103,506,429) (99.86%) 113,537,380
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities (0.14%) 155,211
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 113,692,591
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
PLC Public Limited Company.
ADR American Depository Receipt.
See notes to financial statements.
THE BERGER FUNDS 8 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER NEW GENERATION FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 103,506,429
- --------------------------------------------------------------------------------
Investments, at value $ 113,537,380
- --------------------------------------------------------------------------------
Cash 625
- --------------------------------------------------------------------------------
Receivables
Investment securities sold 7,009,924
- --------------------------------------------------------------------------------
Fund shares sold 361,510
- --------------------------------------------------------------------------------
Dividends 3,365
- --------------------------------------------------------------------------------
Interest 788
- --------------------------------------------------------------------------------
Total Assets 120,913,592
- --------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 4,367,397
- --------------------------------------------------------------------------------
Fund shares redeemed 2,640,569
- --------------------------------------------------------------------------------
Accrued investment advisory fees 81,258
- --------------------------------------------------------------------------------
Accrued custodian and accounting fees 978
- --------------------------------------------------------------------------------
Accrued transfer agent fees 32,541
- --------------------------------------------------------------------------------
Accrued 12b-1 fees 22,572
- --------------------------------------------------------------------------------
Accrued audit fees 15,300
- --------------------------------------------------------------------------------
Accrued administrative service fees 903
- --------------------------------------------------------------------------------
Accrued shareholder report fees 59,483
- --------------------------------------------------------------------------------
Total Liabilities 7,221,001
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 113,692,591
- --------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- --------------------------------------------------------------------------------
Shares Outstanding 8,978,164
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 12.66
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
- --------------------------------------------------------------------------------
Dividends $ 80,079
- --------------------------------------------------------------------------------
Interest 371,826
- --------------------------------------------------------------------------------
Total Income 451,905
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 1,228,947
- --------------------------------------------------------------------------------
Administrative services fee 13,655
- --------------------------------------------------------------------------------
Accounting fees 20,015
- --------------------------------------------------------------------------------
Custodian fees 27,462
- --------------------------------------------------------------------------------
Transfer agent fees 423,688
- --------------------------------------------------------------------------------
Registration fees 39,778
- --------------------------------------------------------------------------------
12b-1 fees 341,375
- --------------------------------------------------------------------------------
Audit fees 31,862
- --------------------------------------------------------------------------------
Legal fees 8,434
- --------------------------------------------------------------------------------
Trustees' fees and expenses 14,055
- --------------------------------------------------------------------------------
Reports to shareholders 170,794
- --------------------------------------------------------------------------------
Other expenses 25,802
- --------------------------------------------------------------------------------
Gross Expenses 2,345,867
- --------------------------------------------------------------------------------
Less fees paid indirectly (1,350)
- --------------------------------------------------------------------------------
Less earnings credits (19,599)
- --------------------------------------------------------------------------------
Net Expenses 2,324,918
- --------------------------------------------------------------------------------
Net Investment Income (Loss) (1,873,013)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign currency
transactions 12,260,073
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (34,407,514)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions (22,147,441)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $(24,020,454)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 9 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER NEW GENERATION FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, September 30,
1998 1997
- ---------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (1,873,013) $ (1,616,800)
- ---------------------------------------------------------------------------------
Net realized gain (loss) on securities and
foreign currency transactions 12,260,073 5,045,424
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (34,407,514) 30,175,003
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations (24,020,454) 33,603,627
- ---------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income -- (5,581,496)
- ---------------------------------------------------------------------------------
Net realized gains on investments -- --
- ---------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders -- (5,581,496)
- ---------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 136,968,651 188,053,642
- ---------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions -- 5,397,637
- ---------------------------------------------------------------------------------
Payments for shares redeemed (189,419,648) (148,221,185)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Fund Share Transactions (52,450,997) 45,230,094
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets (76,471,451) 73,252,225
- ---------------------------------------------------------------------------------
NET ASSETS
Beginning of period 190,164,042 116,911,817
- ---------------------------------------------------------------------------------
End of period $ 113,692,591 $ 190,164,042
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 99,444,698 $ 153,763,792
- ---------------------------------------------------------------------------------
Undistributed (Distributions in excess of) net
investment income (12,177) (7,264)
- ---------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 4,229,119 (8,030,952)
- ---------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions 10,030,951 44,438,466
- ---------------------------------------------------------------------------------
Total $ 113,692,591 $ 190,164,042
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 9,617,032 15,166,296
- ---------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
dividends and distributions -- 498,856
- ---------------------------------------------------------------------------------
Shares redeemed (13,557,048) (12,636,703)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Shares (3,940,016) 3,028,449
- ---------------------------------------------------------------------------------
Shares outstanding, beginning of period 12,918,180 9,889,731
- ---------------------------------------------------------------------------------
Shares outstanding, end of period 8,978,164 12,918,180
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 10 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
SELECT
FUND
PORTFOLIO MANAGER'S COMMENTARY PATRICK S. ADAMS
[BERGER SELECT FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BESLX
- - Fund Number 214
</TABLE>
PERFORMANCE
The Berger Select Fund (the "Fund") commenced operations on December 31, 1997.
At the end of our first fiscal year, and after only nine months of operation,
our Fund significantly outpaced its benchmark, gaining 32.60%(1) year to date
through September 30, 1998, compared with 6.03% for the Standard & Poor's (S&P)
500.(2)
The key to our consistent outperformance in a highly volatile market has been
stock selection and active management. Our Fund is a nondiversified Fund that
focuses on growth companies, with current emphasis on mid- to large-sized
companies. Generally, we seek to achieve our objective of capital appreciation
by taking larger positions in a smaller number of securities. Our core portfolio
usually will number 20 to 30 stocks. This permits us to focus on companies with
proven track records and with what we believe are superior potential earnings
growth that is not yet fully reflected in the company's stock price.
PERIOD IN REVIEW
We benefited this year from a relatively high cash position, particularly in the
highly volatile quarter ended September 30. We found what we believe to be
interesting and attractively priced potential buys in the market during the
quarter, and we could have completely reduced our cash position. But we decided
to wait to get a little more confidence in the strength of the market before
investing more of our available cash.
Areas in which we have focused are technology stocks (27.2% of total Fund
assets) and retail and consumer cyclical stocks sensitive to the U.S. economy
(9.9% and 8.5%, respectively, of total Fund assets). We continue to believe that
technology, despite its short-term volatility, is a core long-term growth sector
with many favorably priced stocks and improving fundamentals. Retail and
consumer cyclical sectors traditionally have benefited from lower interest
rates. Although the Fed's 1/4% rate cut on September 29 was not as large as the
market hoped for, it is a step in the right direction and may be just the first
in a series of rate reductions.
LOOKING AHEAD
We believe the U.S. economy is generally in good shape but that the tight
monetary policy has put severe pressure on our global trading partners. We are
hopeful the Fed will continue to lower rates, which should help improve investor
confidence. Although 1998 third and fourth calendar quarter earnings reports are
likely to show negative trends, once we get those behind us, we may begin to see
increased confidence in 1999 earnings estimates and global growth rates. We
believe in the meantime the down market is offering up many great investment
opportunities that we will carefully evaluate for the portfolio. Our current
positioning in technology and consumer stocks sensitive to the domestic economy
should result in positive earnings potential as the market recovers.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P 500 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.
THE BERGER FUNDS 11 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF BERGER SELECT
FUND VS.
S&P 500 INDEX AND COST OF LIVING INDEX
BERGER COST OF
SELECT S&P 500 LIVING
FUND INDEX INDEX
<S> <C> <C> <C>
12/31/97 $10,000 $10,000 $10,000
3/31/98 $13,710 $11,394 $10,056
6/30/98 $14,220 $11,770 $10,105
9/30/98 $13,260 $10,601 $10,130
BERGER SELECT FUND*
TOTAL RETURN
As of September 30, 1998
Life of Fund 32.60%
(12/31/97)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 12 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SELECT FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (62.52%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
BANKS - MONEY CENTER (1.70%)
13,200 NationsBank Corporation $ 706,200
- --------------------------------------------------------------------------------
COMPUTER - GRAPHICS (14.48%)
235,400 Cadence Design Systems, Inc.* 6,017,412
- --------------------------------------------------------------------------------
COMPUTER - LOCAL NETWORKS (3.71%)
14,100 Ascend Communications, Inc.* 641,550
- --------------------------------------------------------------------------------
30,000 3Com Corporation* 901,875
- --------------------------------------------------------------------------------
1,543,425
- --------------------------------------------------------------------------------
COMPUTER - MEMORY DEVICES (1.22%)
20,000 Storage Technology Corp.* 508,750
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (1.99%)
15,000 Tyco International 828,750
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (7.80%)
25,000 Altera Corp.* 878,125
- --------------------------------------------------------------------------------
15,700 Maxim Integrated Products, Inc.* 437,637
- --------------------------------------------------------------------------------
10,000 Texas Instruments, Inc. 527,500
- --------------------------------------------------------------------------------
40,000 Xilinx, Inc.* 1,400,000
- --------------------------------------------------------------------------------
3,243,262
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS (3.37%)
7,000 Associates First Capital Corp. Class A 456,750
- --------------------------------------------------------------------------------
25,200 Household International, Inc. 945,000
- --------------------------------------------------------------------------------
1,401,750
- --------------------------------------------------------------------------------
INSURANCE - LIFE (1.84%)
25,000 Conseco, Inc. 764,062
- --------------------------------------------------------------------------------
LEISURE - SERVICES (3.03%)
15,000 Carnival Corporation 477,187
- --------------------------------------------------------------------------------
29,400 Royal Caribbean Cruises Ltd. 780,937
- --------------------------------------------------------------------------------
1,258,124
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (0.99%)
12,300 Chancellor Media Corporation* 410,512
- --------------------------------------------------------------------------------
MEDICAL - BIOMED/GENETICS (1.91%)
20,000 Centocor, Inc.* 792,500
- --------------------------------------------------------------------------------
MEDICAL - HOSPITALS (1.38%)
20,000 Tenet Healthcare Corporation* 575,000
- --------------------------------------------------------------------------------
PAPER & PAPER PRODUCTS (2.87%)
29,500 Kimberly-Clark Corp. 1,194,750
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (62.52%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
POLLUTION CONTROL - SERVICES (1.92%)
16,600 Waste Management, Inc. $ 797,836
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (5.31%)
50,000 Sears Roebuck & Co. 2,209,375
- --------------------------------------------------------------------------------
RETAIL - MISCELLANEOUS/DIVERSIFIED (1.30%)
20,000 Barnes & Noble, Inc.* 540,000
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE OFFICE SUPPLIES (3.24%)
60,000 Office Depot, Inc.* 1,346,250
- --------------------------------------------------------------------------------
TEXTILE - APPAREL MANUFACTURING (4.46%)
45,200 Tommy Hilfiger Corporation* 1,853,200
- --------------------------------------------------------------------------------
Total Common Stocks
(cost $26,043,415) 25,991,158
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (15.93%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
$ 725,000 Federal Home Loan Discount Note - 5.00%,
10/1/98 725,000
- --------------------------------------------------------------------------------
1,100,000 Federal Home Loan Discount Note - 5.45%,
10/2/98 1,099,833
- --------------------------------------------------------------------------------
900,000 Federal Home Loan Discount Note - 5.42%,
10/19/98 897,562
- --------------------------------------------------------------------------------
3,900,000 Federal National Mortgage Corp. Discount Note -
5.42%, 10/5/98 3,897,655
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(cost $6,620,050) 6,620,050
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (4.56%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
1,896,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998, to be repurchased at
$1,896,282 on October 1, 1998, collateralized
by U.S. Treasury Bond, 5.86% - November 7,
2000, with a value of $1,936,488. 1,896,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $1,896,000) 1,896,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (cost $34,559,465) (83.01%) 34,507,208
- --------------------------------------------------------------------------------
Other assets, less liabilities (16.99%) 7,063,798
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 41,571,006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See notes to financial statements.
THE BERGER FUNDS 13 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SELECT FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 34,559,465
- -------------------------------------------------------------------------------
Investments, at value $ 34,507,208
- -------------------------------------------------------------------------------
Cash 554,651
- -------------------------------------------------------------------------------
Receivables
Investment securities sold 8,283,810
- -------------------------------------------------------------------------------
Fund shares sold 2,919,464
- -------------------------------------------------------------------------------
Dividends 12,771
- -------------------------------------------------------------------------------
Interest 283
- -------------------------------------------------------------------------------
Total Assets 46,278,187
- -------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 4,373,081
- -------------------------------------------------------------------------------
Fund shares redeemed 273,021
- -------------------------------------------------------------------------------
Accrued investment advisory fees 21,811
- -------------------------------------------------------------------------------
Accrued custodian and accounting fees 5,020
- -------------------------------------------------------------------------------
Accrued transfer agent fees 5,940
- -------------------------------------------------------------------------------
Accrued 12b-1 fees 7,270
- -------------------------------------------------------------------------------
Accrued audit fees 11,300
- -------------------------------------------------------------------------------
Accrued administrative service fees 290
- -------------------------------------------------------------------------------
Accrued shareholder report fees 1,473
- -------------------------------------------------------------------------------
Accrued other expenses 7,975
- -------------------------------------------------------------------------------
Total Liabilities 4,707,181
- -------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 41,571,006
- -------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- -------------------------------------------------------------------------------
Shares Outstanding 3,136,271
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 13.26
- -------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period From
December 31, 1997(1)
to
September 30, 1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 84,921
- --------------------------------------------------------------------------------
Interest 404,894
- --------------------------------------------------------------------------------
Total Income 489,815
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 143,347
- --------------------------------------------------------------------------------
Administrative services fee 1,910
- --------------------------------------------------------------------------------
Accounting fees 6,726
- --------------------------------------------------------------------------------
Custodian fees 15,346
- --------------------------------------------------------------------------------
Transfer agent fees 22,068
- --------------------------------------------------------------------------------
Registration fees 12,085
- --------------------------------------------------------------------------------
12b-1 fees 47,782
- --------------------------------------------------------------------------------
Audit fees 12,800
- --------------------------------------------------------------------------------
Legal fees 6,020
- --------------------------------------------------------------------------------
Trustees' fees and expenses 1,972
- --------------------------------------------------------------------------------
Reports to shareholders 12,296
- --------------------------------------------------------------------------------
Other expenses 143
- --------------------------------------------------------------------------------
Gross Expenses 282,495
- --------------------------------------------------------------------------------
Less fees paid indirectly (6,615)
- --------------------------------------------------------------------------------
Less earnings credits (1,520)
- --------------------------------------------------------------------------------
Net Expenses 274,360
- --------------------------------------------------------------------------------
Net Investment Income (Loss) 215,455
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions 2,235,808
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (52,257)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions 2,183,551
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,399,006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 14 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SELECT FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
December 31, 1997(1) to
September 30, 1998
- ------------------------------------------------------------------------------------
<S> <C>
FROM OPERATIONS
Net investment income (loss) $ 215,455
- ------------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions 2,235,808
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (52,257)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations 2,399,006
- ------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income --
- ------------------------------------------------------------------------------------
Net realized gains on investments --
- ------------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders --
- ------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 70,190,167
- ------------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions --
- ------------------------------------------------------------------------------------
Payments for shares redeemed (31,018,167)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 39,172,000
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 41,571,006
- ------------------------------------------------------------------------------------
NET ASSETS
Beginning of period --
- ------------------------------------------------------------------------------------
End of period $ 41,571,006
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 39,172,000
- ------------------------------------------------------------------------------------
Undistributed net investment income (loss) 215,455
- ------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 2,235,808
- ------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions (52,257)
- ------------------------------------------------------------------------------------
Total $ 41,571,006
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C>
Shares sold 5,378,776
- ------------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
distributions --
- ------------------------------------------------------------------------------------
Shares redeemed (2,242,505)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 3,136,271
- ------------------------------------------------------------------------------------
Shares outstanding, beginning of period --
- ------------------------------------------------------------------------------------
Shares outstanding, end of period 3,136,271
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 15 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
SMALL COMPANY
GROWTH FUND
PORTFOLIO MANAGER'S COMMENTARY
[BERGER SMALL COMPANY GROWTH FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BESCX
- - Fund Number 345
</TABLE>
PERFORMANCE
Against the backdrop of one of the most turbulent markets in recent memory, the
Berger Small Company Growth Fund (the "Fund") had a total return of -24.70%(1)
for the fiscal year ended September 30, 1998, compared with -19.02% for the
Russell 2000(2) and -24.83% for the Russell 2000 Growth Index,(3) which is a
more accurate comparison for our Fund.
Our Fund's fiscal year began and ended during difficult periods. In October
1997, the market began to focus on the emerging crisis in Asia and the month
ended with a sharp stock market decline. This proved to be at least an
intermediate bottom for larger cap stocks, but small cap stocks continued down
through mid-January. This is typical in periods of economic uncertainty because
investors tend to shorten their investment horizons and become more risk-averse.
As a result, the market was dominated by a few large companies, which were very
strong despite valuations that were extremely high by most measures.
Small stocks had their day, briefly, from mid-January to mid-April. But by
mid-summer both the Russell 2000 and S&P 500 declined further. The decline is
attributable to the global spread of the Asian financial crisis. Russia and
parts of Eastern Europe are variously collapsing/troubled; Latin America,
particularly Brazil, is considered to be at risk; Mexico is shaky, given its
dependence on oil exports for a significant part of its GDP. The so-called
"Asian Contagion" is seen lapping against our shores, and there are scattered
signs that the U.S. economy is beginning to weaken. After an unprecedented
seven-plus year expansion, this shouldn't come as a surprise. Global economic
concerns, the crisis in the White House and a market selling at very high levels
combined is a recipe for correction, if not a bear market.
PERIOD IN REVIEW
Typical of its historical performance, our Fund did very well during good
periods in the market and fairly poorly during down periods. The aggressive
nature of our investments, coupled with an attempt to ride out storms in our
core holdings, increases our Fund's volatility. There were bright spots,
however.
Our Internet-related stocks, such as Yahoo!, CMG Information Services and Lycos,
had outstanding returns. TSI International, a leader in software automation and
one of our larger holdings, also was a stellar stock.
Broadcasting stocks, in which we have held a substantial position, were a
disappointment, especially in the last quarter. Although fundamentals at radio
companies remain strong, the market quickly and violently discounted a slowdown
in consumer spending and brought these stocks down to valuations not seen since
the 1991 recession. Staffing companies were also hurt by this market sentiment.
After closing our Fund to new investors in November 1997, we reopened it in May
1998 because, given the year's sharp pullback in small stocks, assets declined
to levels that made our Fund more manageable. In addition, we changed our
investment parameters to correspond with those of the Russell 2000. Instead of
being limited primarily to stocks with under $1 billion market capitalization at
the time of purchase, we now can invest in stocks at the upper limit of the
Russell 2000 parameter. This monthly adjusted parameter, which expands in strong
markets and contracts in weak ones, will enable us to align our Fund more
closely with the market's changing definition of small cap stocks.
LOOKING AHEAD
This market decline has been extremely painful, but there are encouraging signs
on the horizon. Valuations are no longer excessive. In our opinion, the market
is now in a fair value range. And small cap stocks, we believe, are now even
more attractively valued than the market overall.
The decline in the stock market has, we believe, taken into account slower
earnings growth and a possible recession. If there is a recession, depending on
its length and severity, the market may have already "paid for it" with the
recent decline.
Although this has been and remains a very trying time to invest in small cap
stocks, we believe it quite possible that we have seen the worst and that 1999
could be a great year for small cap stocks.
We are pleased to announce that Amy Selner, Vice President of Berger Associates,
assumed management of this Fund on November 20, 1998. Amy has been the portfolio
manager of the Berger Mid Cap Growth Fund since its inception and has more than
seven years of experience in the investment industry. We look forward to her
continued success in the management of this fund.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 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
small company growth stock performance in the U.S. stock market. One cannot
invest directly in an index.
THE BERGER FUNDS 16 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF BERGER SMALL
COMPANY GROWTH FUND VS. RUSSELL 2000 INDEX AND
COST OF LIVING INDEX
BERGER
SMALL RUSSELL COST OF
COMPANY 2000 LIVING
GROWTH FUND INDEX INDEX
<S> <C> <C> <C>
12/30/93 $10,000 $10,000 $10,000
9/30/94 $10,960 $10,003 $10,247
9/30/95 $14,457 $12,343 $10,508
9/30/96 $18,982 $13,964 $10,823
9/30/97 $22,338 $18,599 $11,056
9/30/98 $16,821 $15,062 $11,207
BERGER SMALL COMPANY GROWTH FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -24.70%
Life of Fund 11.57%
(12/30/93)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 17 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (84.54%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
CHEMICALS - SPECIALTY (0.27%)
316,300 North American Scientific, Inc.* $ 1,502,425
- ---------------------------------------------------------------------------------
COMMERCIAL SERVICES - ADVERTISING (2.65%)
270,000 HA-LO Industries, Inc.* 7,897,500
- ---------------------------------------------------------------------------------
250,000 Lamar Advertising Company* 7,000,000
- ---------------------------------------------------------------------------------
14,897,500
- ---------------------------------------------------------------------------------
COMMERCIAL SERVICES - MISCELLANEOUS (2.62%)
105,000 CMG Information Services, Inc.* 5,591,250
- ---------------------------------------------------------------------------------
150,000 Medquist, Inc.* 4,743,750
- ---------------------------------------------------------------------------------
128,600 ProBusiness Services, Inc.* 4,372,400
- ---------------------------------------------------------------------------------
14,707,400
- ---------------------------------------------------------------------------------
COMMERCIAL SERVICES - SCHOOLS (2.13%)
511,000 Devry, Inc.* 11,976,562
- ---------------------------------------------------------------------------------
COMMERCIAL SERVICES - STAFFING (4.20%)
350,000 Accustaff, Inc.* 5,096,875
- ---------------------------------------------------------------------------------
236,400 AHL Services, Inc.* 7,742,100
- ---------------------------------------------------------------------------------
400,000 Labor Ready, Inc.* 5,850,000
- ---------------------------------------------------------------------------------
75,000 Personnel Group of America, Inc.* 923,437
- ---------------------------------------------------------------------------------
230,000 Select Appointments PLC ADR 3,996,250
- ---------------------------------------------------------------------------------
23,608,662
- ---------------------------------------------------------------------------------
COMPUTER - MEMORY DEVICES (0.90%)
100,000 Network Appliance, Inc.* 5,062,500
- ---------------------------------------------------------------------------------
COMPUTER - SERVICES (4.20%)
65,000 Cambridge Technology Partners, Inc.* 1,450,312
- ---------------------------------------------------------------------------------
270,000 Ciber, Inc.* 5,450,625
- ---------------------------------------------------------------------------------
300,000 Icon CMT Corporation* 3,337,500
- ---------------------------------------------------------------------------------
245,000 USWeb Corp.* 3,200,312
- ---------------------------------------------------------------------------------
550,000 Whittman-Hart, Inc.* 10,106,250
- ---------------------------------------------------------------------------------
23,544,999
- ---------------------------------------------------------------------------------
COMPUTER SOFTWARE - DESKTOP (0.86%)
368,600 Docucorp International, Inc.* 1,566,550
- ---------------------------------------------------------------------------------
200,500 Macromedia, Inc.* 3,258,125
- ---------------------------------------------------------------------------------
4,824,675
- ---------------------------------------------------------------------------------
COMPUTER SOFTWARE - EDUCATION (0.66%)
275,000 CBT Group PLC ADR* 3,712,500
- ---------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (4.96%)
150,200 Aspen Technology, Inc.* 4,017,850
- ---------------------------------------------------------------------------------
110,000 Mercury Interactive Corporation* 4,365,625
- ---------------------------------------------------------------------------------
190,500 Sapient Corp.* 6,500,812
- ---------------------------------------------------------------------------------
375,000 TSI International Software Ltd.* 12,984,375
- ---------------------------------------------------------------------------------
27,868,662
- ---------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (84.54%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE - INTERNET (3.17%)
180,000 Lycos, Inc.* $ 6,086,250
- ---------------------------------------------------------------------------------
180,000 Onsale, Inc.* 3,003,750
- ---------------------------------------------------------------------------------
269,200 Verio, Inc.* 6,662,700
- ---------------------------------------------------------------------------------
16,000 Yahoo, Inc.* 2,072,000
- ---------------------------------------------------------------------------------
17,824,700
- ---------------------------------------------------------------------------------
COMPUTER SOFTWARE - MEDICAL (3.05%)
258,300 Eclipsys Corporation* 5,908,612
- ---------------------------------------------------------------------------------
180,000 HBO & Company 5,197,500
- ---------------------------------------------------------------------------------
300,000 Quadramed Corp.* 6,037,500
- ---------------------------------------------------------------------------------
17,143,612
- ---------------------------------------------------------------------------------
COSMETICS/PERSONAL CARE (1.00%)
390,000 NBTY, Inc.* 3,071,250
- ---------------------------------------------------------------------------------
100,000 Twin Lab Corp.* 2,562,500
- ---------------------------------------------------------------------------------
5,633,750
- ---------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (0.85%)
200,000 Pittway Corporation Class A* 4,775,000
- ---------------------------------------------------------------------------------
ELECTRONIC - MEASURING INSTRUMENTS (1.50%)
126,100 Waters Corporation* 8,448,700
- ---------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (2.02%)
90,000 Etec Systems, Inc.* 2,345,625
- ---------------------------------------------------------------------------------
407,200 Integrated Process Equipment Co.* 3,054,000
- ---------------------------------------------------------------------------------
125,000 PRI Automation, Inc.* 1,562,500
- ---------------------------------------------------------------------------------
240,900 Teradyne, Inc.* 4,396,425
- ---------------------------------------------------------------------------------
11,358,550
- ---------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (1.92%)
200,000 Maxim Integrated Products, Inc.* 5,575,000
- ---------------------------------------------------------------------------------
220,000 Vitesse Semiconductor Corp.* 5,197,500
- ---------------------------------------------------------------------------------
10,772,500
- ---------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS (1.27%)
275,000 Safeguard Scientifics, Inc.* 7,132,812
- ---------------------------------------------------------------------------------
FINANCE - INVESTMENT MANAGEMENT (0.34%)
106,400 Affiliated Managers Group, Inc.* 1,915,200
- ---------------------------------------------------------------------------------
FINANCE - MORTGAGE & RELATED SERVICES (0.60%)
331,700 Resource America, Inc. 3,337,731
- ---------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (2.62%)
225,000 Concord EFS, Inc.* 5,807,812
- ---------------------------------------------------------------------------------
290,000 Nova Corp.* 8,899,375
- ---------------------------------------------------------------------------------
14,707,187
- ---------------------------------------------------------------------------------
FUNERAL SERVICES & RELATED (1.40%)
470,000 Stewart Enterprises, Inc. 7,872,500
- ---------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 18 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (84.54%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
HOUSEHOLD/OFFICE FURNITURE (2.06%)
310,000 Herman Miller, Inc. $ 6,122,500
- ---------------------------------------------------------------------------------
250,000 Knoll, Inc.* 5,468,750
- ---------------------------------------------------------------------------------
11,591,250
- ---------------------------------------------------------------------------------
MEDIA - RADIO/TV (7.16%)
250,000 Chancellor Media Corporation* 8,343,750
- ---------------------------------------------------------------------------------
80,000 Clear Channel Communications, Inc.* 3,800,000
- ---------------------------------------------------------------------------------
270,000 Cox Radio, Inc.* 9,483,750
- ---------------------------------------------------------------------------------
151,700 Emmis Communications Class A* 5,726,675
- ---------------------------------------------------------------------------------
215,000 Heftel Broadcasting Corp.
Class A* 8,116,250
- ---------------------------------------------------------------------------------
221,000 Scandinavian Broadcasting Systems S.A.* 4,696,250
- ---------------------------------------------------------------------------------
40,166,675
- ---------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETICS (1.34%)
116,500 Medimmune, Inc.* 7,543,375
- ---------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (1.33%)
260,000 Jones Pharma, Inc. 7,475,000
- ---------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (1.21%)
12,600 Forest Laboratories, Inc.* 433,125
- ---------------------------------------------------------------------------------
450,000 Theragenics Corporation* 6,384,375
- ---------------------------------------------------------------------------------
6,817,500
- ---------------------------------------------------------------------------------
MEDICAL - INSTRUMENTS (1.38%)
325,000 IDEXX Laboratories, Inc.* 7,759,375
- ---------------------------------------------------------------------------------
MEDICAL - OUTPATIENT/HOME CARE (1.41%)
329,999 Total Renal Care Holdings, Inc.* 7,919,976
- ---------------------------------------------------------------------------------
MEDICAL/DENTAL SERVICES (3.60%)
230,000 Boron Lepore And Associates* 8,711,250
- ---------------------------------------------------------------------------------
450,000 Renal Care Group, Inc.* 11,531,250
- ---------------------------------------------------------------------------------
20,242,500
- ---------------------------------------------------------------------------------
OFFICE - EQUIPMENT & AUTOMATION (0.60%)
150,000 Daisytek International Corp.* 3,375,000
- ---------------------------------------------------------------------------------
OIL & GAS - DRILLING (0.56%)
150,000 Atwood Oceanics, Inc.* 3,121,875
- ---------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (2.50%)
340,000 BJ Services Co.* 5,525,000
- ---------------------------------------------------------------------------------
586,300 Paradigm Geophysical Ltd.*# 3,444,512
- ---------------------------------------------------------------------------------
305,000 Veritas DGC, Inc.* 5,089,687
- ---------------------------------------------------------------------------------
14,059,199
- ---------------------------------------------------------------------------------
OIL & GAS - MACHINERY/EQUIPMENT (0.60%)
405,000 Varco International, Inc.* 3,391,875
- ---------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (84.54%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS - U.S. EXPLORATION & PRODUCTION (1.41%)
320,000 Ocean Energy, Inc.* $ 4,200,000
- ---------------------------------------------------------------------------------
385,700 Swift Energy Company* 3,736,468
- ---------------------------------------------------------------------------------
7,936,468
- ---------------------------------------------------------------------------------
POLLUTION CONTROL - SERVICES (6.40%)
249,000 Allied Waste Industries, Inc.* 5,820,375
- ---------------------------------------------------------------------------------
108,800 American Disposal Services, Inc.* 4,236,400
- ---------------------------------------------------------------------------------
332,000 Eastern Environmental Services, Inc.* 10,043,000
- ---------------------------------------------------------------------------------
600,000 Newpark Resources, Inc.* 4,125,000
- ---------------------------------------------------------------------------------
518,750 Tetra Tech, Inc.* 11,671,875
- ---------------------------------------------------------------------------------
35,896,650
- ---------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (1.87%)
344,000 K & G Men's Center, Inc.* 2,236,000
- ---------------------------------------------------------------------------------
185,700 Pacific Sunwear Of California, Inc.* 4,131,825
- ---------------------------------------------------------------------------------
240,000 The Men's Wearhouse, Inc.* 4,140,000
- ---------------------------------------------------------------------------------
10,507,825
- ---------------------------------------------------------------------------------
RETAIL - HOME FURNISHINGS (0.28%)
60,000 Cost Plus, Inc.* 1,597,500
- ---------------------------------------------------------------------------------
RETAIL - MAIL ORDER & DIRECT (0.43%)
99,000 Black Box Corporation* 2,400,750
- ---------------------------------------------------------------------------------
RETAIL - MISCELLANEOUS/DIVERSIFIED (0.60%)
256,100 Cash America International, Inc. 2,849,111
- ---------------------------------------------------------------------------------
25,000 Guitar Center, Inc.* 468,750
- ---------------------------------------------------------------------------------
3,317,861
- ---------------------------------------------------------------------------------
RETAIL - SUPERMARKETS (0.22%)
30,000 Whole Foods Market, Inc.* 1,263,750
- ---------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (4.63%)
200,000 ADTRAN, Inc.* 4,250,000
- ---------------------------------------------------------------------------------
390,000 Antec Corp.* 5,996,250
- ---------------------------------------------------------------------------------
25,700 Gilat Satellite Networks Ltd.* 1,156,500
- ---------------------------------------------------------------------------------
490,000 Pairgain Technologies, Inc.* 3,981,250
- ---------------------------------------------------------------------------------
135,000 Uniphase Corp.* 5,535,000
- ---------------------------------------------------------------------------------
250,000 World Access, Inc.* 5,062,500
- ---------------------------------------------------------------------------------
25,981,500
- ---------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (1.76%)
125,000 ICG Communications, Inc.* 2,109,375
- ---------------------------------------------------------------------------------
180,000 Metromedia Fiber Network, Inc.* 5,895,000
- ---------------------------------------------------------------------------------
80,000 Winstar Communications, Inc.* 1,900,000
- ---------------------------------------------------------------------------------
9,904,375
- ---------------------------------------------------------------------------------
Total Common Stocks
(cost $447,255,328) 474,898,406
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 19 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.71%)
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
<C> <S> <C>
$ 20,000,000 Federal Home Loan Mortgage Note - 5.42%,
10/19/98 $ 19,945,800
- ---------------------------------------------------------------------------------
4,000,000 Federal Home Loan Mortgage Note - 5.45%,
10/2/98 3,999,394
- ---------------------------------------------------------------------------------
25,000,000 Federal National Mortgage Association Note -
5.42%, 10/5/98 24,984,952
- ---------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(cost $48,930,146) 48,930,146
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (4.36%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
24,488,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998, to be repurchased at
$24,491,639 on October 1, 1998, collateralized
by U.S. Treasury Bond, 5.60% - August 24,
2000, with a value of $24,977,931. 24,488,000
- ---------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $24,488,000) 24,488,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
PREFERRED STOCK NON-CONVERTIBLE (0.53%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
COMPUTER - PERIPHERAL EQUIPMENT (0.53%)
665,000 Candescent Technologies Corp.* @X 2,992,500
- ---------------------------------------------------------------------------------
Total Preferred Stock Non-Convertible
(cost $3,657,500) 2,992,500
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Total Investments (cost $524,330,974) (98.14%) 551,309,052
- ---------------------------------------------------------------------------------
Other assets, less liabilities (1.86%) 10,432,445
- ---------------------------------------------------------------------------------
Net Assets (100.00%) $ 561,741,497
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
PLC - Public Limited Company.
ADR - American Depository Receipt.
@ - Valued in good faith.
# The Investment Company Act of 1940 defines affiliates as those companies in
which a fund holds 5% or more of the outstanding voting securities. Following is
a summary of the transactions with the affiliates for the year ended September
30, 1998:
<TABLE>
<CAPTION>
Tower Paradigm
Semiconductor Geophysical Ltd.
-------------------------------------------------------------------------
<S> <C> <C>
Market Value at 9/30/97 $ 12,918,750 --
- ----------------------------------------------------------------------------
Purchases at Cost -- $ 4,104,100
- ----------------------------------------------------------------------------
Sales at Cost 6,696,127 --
- ----------------------------------------------------------------------------
Change in Unrealized Appreciation/
(Depreciation) (6,222,623) (659,588)
- ----------------------------------------------------------------------------
Market Value at 9/30/98 -- 3,444,512
- ----------------------------------------------------------------------------
Dividend Income -- --
- ----------------------------------------------------------------------------
Realized Gain (Loss) (330,583) --
- ----------------------------------------------------------------------------
</TABLE>
/X/ SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES
<TABLE>
<CAPTION>
Fair Value as a
Security Name Date Acquired Cost Fair Value % of Net Assets
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Candescent Technologies Corporation
Preferred Stock 5/1/96 $3,657,500 $2,992,500 .53%
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 20 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30, 1998
- ------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 524,330,974
- ------------------------------------------------------------------------
Investments, at value $ 551,309,052
- ------------------------------------------------------------------------
Cash 666
- ------------------------------------------------------------------------
Receivables
Investment securities sold 15,926,123
- ------------------------------------------------------------------------
Fund shares sold 446,778
- ------------------------------------------------------------------------
Dividends 29,577
- ------------------------------------------------------------------------
Interest 3,639
- ------------------------------------------------------------------------
Total Assets 567,715,835
- ------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 4,482,297
- ------------------------------------------------------------------------
Fund shares redeemed 367,953
- ------------------------------------------------------------------------
Accrued investment advisory fees 422,950
- ------------------------------------------------------------------------
Accrued custodian and accounting fees 27,366
- ------------------------------------------------------------------------
Accrued transfer agent fees 270,067
- ------------------------------------------------------------------------
Accrued 12b-1 fees 117,486
- ------------------------------------------------------------------------
Accrued audit fees 19,300
- ------------------------------------------------------------------------
Accrued administrative service fees 4,700
- ------------------------------------------------------------------------
Accrued shareholder report fees 262,219
- ------------------------------------------------------------------------
Total Liabilities 5,974,338
- ------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 561,741,497
- ------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ------------------------------------------------------------------------
Shares Outstanding 155,807,548
- ------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE $ 3.61
- ------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30, 1998
- -----------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 684,444
- -----------------------------------------------------------------------
Interest 2,843,303
- -----------------------------------------------------------------------
Total Income 3,527,747
- -----------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------
Investment advisory fees 6,984,024
- -----------------------------------------------------------------------
Administrative services fee 77,601
- -----------------------------------------------------------------------
Accounting fees 86,442
- -----------------------------------------------------------------------
Custodian fees 77,720
- -----------------------------------------------------------------------
Transfer agent fees 2,003,506
- -----------------------------------------------------------------------
Registration fees 40,598
- -----------------------------------------------------------------------
12b-1 fees 1,940,155
- -----------------------------------------------------------------------
Audit fees 40,165
- -----------------------------------------------------------------------
Legal fees 52,117
- -----------------------------------------------------------------------
Trustees' fees and expenses 81,963
- -----------------------------------------------------------------------
Reports to shareholders 923,554
- -----------------------------------------------------------------------
Other expenses 68,963
- -----------------------------------------------------------------------
Gross Expenses 12,376,808
- -----------------------------------------------------------------------
Less fees paid indirectly (15,675)
- -----------------------------------------------------------------------
Less earnings credits (70,936)
- -----------------------------------------------------------------------
Less fees waived by the advisor (914,269)
- -----------------------------------------------------------------------
Net Expenses 11,375,928
- -----------------------------------------------------------------------
Net Investment Income (Loss) (7,848,181)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions 121,247,337
- -----------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (310,416,907)
- -----------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions (189,169,570)
- -----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $(197,017,751)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 21 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, September 30,
1998 1997
- ----------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (7,848,181) $ (8,257,780)
- ----------------------------------------------------------------------------------
Net realized gain (loss) on securities and
foreign currency transactions 121,247,337 78,747,991
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (310,416,907) 48,945,864
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations (197,017,751) 119,436,075
- ----------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income -- --
- ----------------------------------------------------------------------------------
Net realized gains on investments (77,784,883) (34,716,279)
- ----------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders (77,784,883) (34,716,279)
- ----------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 215,916,354 413,578,028
- ----------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions 75,634,304 33,942,130
- ----------------------------------------------------------------------------------
Payments for shares redeemed (357,691,265) (501,022,213)
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Fund Share Transactions (66,140,607) (53,502,055)
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets (340,943,241) 31,217,741
- ----------------------------------------------------------------------------------
NET ASSETS
Beginning of period 902,684,738 871,466,997
- ----------------------------------------------------------------------------------
End of period $ 561,741,497 $ 902,684,738
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 432,291,776 $ 504,096,047
- ----------------------------------------------------------------------------------
Undistributed net investment income (loss) (65,655) (36,953)
- ----------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 102,537,298 61,230,659
- ----------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions 26,978,078 337,394,985
- ----------------------------------------------------------------------------------
Total $ 561,741,497 $ 902,684,738
- ----------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 45,416,641 92,035,384
- ----------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
distributions 17,507,928 8,062,261
- ----------------------------------------------------------------------------------
Shares redeemed (76,360,381) (114,558,245)
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Shares (13,435,812) (14,460,600)
- ----------------------------------------------------------------------------------
Shares outstanding, beginning of period 169,243,360 183,703,960
- ----------------------------------------------------------------------------------
Shares outstanding, end of period 155,807,548 169,243,360
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 22 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
SMALL CAP
VALUE FUND
PORTFOLIO MANAGER'S COMMENTARY ROBERT H. PERKINS
[BERGER SMALL CAP VALUE FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol - Investor Shares BSCVX
- Institutional Shares OMNIX
- - Fund Number - Investor Shares 120
- Institutional Shares 403
</TABLE>
PERFORMANCE
The Berger Small Cap Value Fund (the "Fund") had a total return for the fiscal
year ended September 30, 1998 of -10.98%(1) (investor shares) and -10.65%(1)
(institutional shares). This return trailed the 0.44% and 9.08% gains of the Dow
Jones Industrial Average(2) and Standard & Poor's (S&P) 500(2) respectively, but
outperformed the -19.02% return of the Russell 2000(3) index over the same
period, which is a more accurate comparison of our Fund.
Our Fund lagged the broad market indexes because of the two-tier market that
existed this year. Investor concerns about events in Asian and developing
nations surfaced early in the year, diminished in the middle of the year and
returned with a vengeance recently. As a result, for most of the year investors
favored the large cap companies that dominate the broad indexes. Large companies
are perceived to be safe harbors in turbulent waters and offer higher liquidity
than small companies. Even though large stocks were also battered during the
last quarter, they have outperformed small stocks for the year-to-date period.
We bettered the performance of the small stock index largely because we consider
the downside risk of each investment before its upside potential. We focus on
undervalued stocks whose prices have already been beaten down to low levels. For
example, one of our core strategies is to invest approximately 15% of total Fund
assets in fallen growth stocks. These are stocks that we define as having
temporary problems, are 50--70% off their highs, are selling at two to four
times cash and have no debt. Although the prices of some of our holdings fell
still further because of cyclical and market problems, we believe our approach
enabled us to minimize losses.
PERIOD IN REVIEW
The year's volatile market gave us many opportunities to add to our fallen
growth stock holdings, especially in capital goods and communications. Our
relatively high cash position gave us the flexibility to take advantage of those
opportunities. We increased positions in some of our existing fallen growth
stock holdings over the year and added new positions. We believe the companies
we own are survivors. They have exceedingly strong balance sheets. We feel risk
is minimized, and the companies have excellent upside potential over the next 18
months as long-term growth rates reassert themselves.
Some of our best performers for the fiscal year were in the communications area.
Two of our largest holdings -- Jones Intercable and Centennial Cellular --
benefited from moves that better positioned them for eventual buyout in an
industry moving toward consolidation.
One of the major sector changes we made in the portfolio over the year was to
reduce our holdings in the underperforming consumer sector. We sold a few stocks
in this sector, including Eagle Hardware, when we felt they had reached their
price objective.
We increased exposure to the energy sector from 3.7% of Fund assets on September
30, 1997, to 6.8% on September 30, 1998. Stocks in the oil services industry had
been severely depressed by the decline in energy prices. We were able to acquire
some good companies at excellent prices. Recent moves included adding Marine
Drilling and BJ Services to the portfolio and increasing our investment in Key
Energy.
We also increased our Real Estate Investment Trust (REIT) holdings this year.
REIT yields, which historically have a lower yield than Treasury bonds, were
7--8% this year compared with 6% for bonds. REITs continue to give our Fund
attractive returns with little downside risk.
Although our exposure in the financial sector was reduced over the year, we did
enjoy good returns from the sale of three holdings that were bought by other
financial institutions.
LOOKING AHEAD
Although small stocks have taken a beating, we are optimistic that the historic
long-term superior returns of small stocks will reassert themselves. We have
often stated that the market can be very inefficient in the short term but
highly efficient in the long term. We believe we are in one of the inefficient
periods. By many measures, the small stock market relative to the broad market
has reached historic lows and appears poised for a rebound. We believe the
rebound will occur once the broad market sorts itself out and, particularly,
when the large company market leaders return to more realistic price levels.
Until then, patience is the watchword for small stock investors.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 Dow Jones Industrial Average and the S&P 500 are unmanaged indexes, with
dividends reinvested. One cannot invest directly in an index.
3. The Russell 2000 index is an unmanaged index, with dividends reinvested,
which consists of 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.
THE BERGER FUNDS 23 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL CAP VALUE FUND
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INVESTOR SHARES
COMPARISON OF CHANGE IN VALUE OF
BERGER SMALL CAP VALUE FUND VS.
RUSSELL 2000 INDEX AND COST OF LIVING INDEX
BERGER SMALL
CAP RUSSELL COST OF
VALUE FUND 2000 LIVING
INVESTOR SHARES INDEX INDEX
<S> <C> <C> <C>
9/30/88 $10,000 $10,000 $10,000
9/30/89 $12,567 $12,151 $10,434
9/30/90 $10,013 $8,854 $11,077
9/30/91 $11,877 $12,849 $11,452
9/30/92 $12,696 $13,996 $11,795
9/30/93 $16,533 $18,641 $12,112
9/30/94 $19,399 $19,129 $12,471
9/30/95 $22,598 $23,606 $12,788
9/30/96 $26,268 $26,706 $13,172
9/30/97 $38,962 $35,569 $13,456
9/30/98 $34,685 $28,805 $13,639
BERGER SMALL CAP VALUE FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -10.98%
5 Year 15.97%
10 Year 13.24%
*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. Performance
data for the Investor Shares include
periods prior to the adoption of class
designations on February 14, 1997, and
therefore do not reflect the 0.25% per year
12b-1 fee applicable to the Investor Shares.
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
COMPARISON OF CHANGE IN VALUE OF BERGER SMALL
CAP VALUE FUND VS.
RUSSELL 2000 INDEX AND COST OF LIVING INDEX
BERGER RUSSELL COST OF
SMALL CAP 2000 LIVING
VALUE FUND INDEX INDEX
<S> <C> <C> <C>
9/30/88 $250,000 $250,000 $250,000
9/30/89 $314,187 $303,783 $260,851
9/30/90 $250,320 $221,356 $276,920
9/30/91 $296,936 $321,222 $286,311
9/30/92 $317,397 $349,892 $294,866
9/30/93 $413,331 $466,037 $302,796
9/30/94 $484,980 $478,230 $311,770
9/30/95 $564,955 $590,138 $319,699
9/30/96 $656,703 $667,645 $329,299
9/30/97 $976,237 $889,229 $336,394
9/30/98 $872,289 $720,129 $340,985
BERGER SMALL CAP VALUE FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -10.65%
5 Year 16.11%
10 Year 13.31%
*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.
</TABLE>
THE BERGER FUNDS 24 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Omni Investment 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 Small Cap Value Fund
(constituting Berger Omni Investment Trust, formerly known as The Omni
Investment Fund, hereafter referred to as the "Trust") at September 30, 1998,
the results of its operations for the year then ended and the changes in its net
assets and the financial highlights for the year then ended and for the period
January 1, 1997 through September 30, 1997, in conformity with generally
accepted accounting principles. 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 generally accepted
auditing standards 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 September 30, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above. The financial statements of The Omni Investment Fund for the
year ended December 31, 1996 were audited by other independent accountants whose
report dated January 24, 1997 expressed an unqualified opinion on those
financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 25 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (84.31%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
AUTO/TRUCK - ORIGINAL EQUIPMENT (0.21%)
41,600 Simpson Industries, Inc. $ 418,600
- --------------------------------------------------------------------------------
BANKS - NORTHEAST (4.96%)
100,000 Banknorth Group, Inc. 2,925,000
- --------------------------------------------------------------------------------
102,700 Community Bank Systems, Inc. 2,933,368
- --------------------------------------------------------------------------------
230,000 Peoples Heritage Financial Group, Inc. 4,125,625
- --------------------------------------------------------------------------------
9,983,993
- --------------------------------------------------------------------------------
BANKS - SOUTHEAST (5.01%)
100,000 CCB Financial Corporation 10,075,000
- --------------------------------------------------------------------------------
BUILDING - CONSTRUCTION PRODUCTS/MISCELLANEOUS (1.69%)
152,400 Juno Lighting, Inc. 3,409,950
- --------------------------------------------------------------------------------
COMPUTER - INTEGRATED SYSTEMS (1.03%)
420,000 Hypercom Corporation* 2,073,750
- --------------------------------------------------------------------------------
COMPUTER - MEMORY DEVICES (1.43%)
140,000 SMART Modular Technologies, Inc.* 2,878,750
- --------------------------------------------------------------------------------
COMPUTER - PERIPHERAL EQUIPMENT (1.27%)
180,000 Splash Tecnology Holdings, Inc.* 2,565,000
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS - MISCELLANEOUS (4.12%)
400,000 Jostens, Inc. 8,300,000
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (4.08%)
390,000 Federal Signal Corporation 8,214,375
- --------------------------------------------------------------------------------
ELECTRICAL - MISCELLANEOUS COMPONENTS (2.04%)
290,000 Sawtek, Inc.* 4,096,250
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (4.78%)
320,000 Brooks Automation, Inc.* 3,180,000
- --------------------------------------------------------------------------------
166,500 CFM Technologies, Inc. 1,227,937
- --------------------------------------------------------------------------------
70,000 Etec Systems, Inc.* 1,824,375
- --------------------------------------------------------------------------------
315,000 Speedfam International, Inc.* 3,386,250
- --------------------------------------------------------------------------------
9,618,562
- --------------------------------------------------------------------------------
FINANCE - EQUITY REIT (7.84%)
130,000 Gables Residential Trust 3,485,625
- --------------------------------------------------------------------------------
670,000 IRT Property Co. 6,783,750
- --------------------------------------------------------------------------------
290,000 Summit Properties, Inc. 5,510,000
- --------------------------------------------------------------------------------
15,779,375
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (84.31%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
FINANCE - PUBLIC INVESTMENT FUND - FOREIGN (4.60%)
176,300 Central European Value Fund, Inc. $ 1,608,737
- --------------------------------------------------------------------------------
253,000 Emerging Markets Telecommunications Fund 2,229,562
- --------------------------------------------------------------------------------
180,000 GT Global Eastern Europe Fund 888,750
- --------------------------------------------------------------------------------
258,000 Latin America Equity Fund, Inc. 1,757,625
- --------------------------------------------------------------------------------
480,000 Morgan Stanley Asia Pacific Fund, Inc. 2,790,000
- --------------------------------------------------------------------------------
9,274,674
- --------------------------------------------------------------------------------
FINANCE - SAVINGS & LOANS (6.53%)
80,000 Life Financial Corp.* 405,000
- --------------------------------------------------------------------------------
230,000 Riverview Bancorp 3,220,000
- --------------------------------------------------------------------------------
220,000 Saint Paul Bancorp 4,798,750
- --------------------------------------------------------------------------------
300,000 Warren Bancorp Inc. 2,775,000
- --------------------------------------------------------------------------------
80,000 Webster Financial Corp. 1,950,000
- --------------------------------------------------------------------------------
13,148,750
- --------------------------------------------------------------------------------
MACHINE - TOOLS & RELATED PRODUCTS (0.25%)
90,800 PPT Vision, Inc.* 499,400
- --------------------------------------------------------------------------------
MACHINERY - MATERIALS HANDLING/AUTOMATION (0.87%)
150,000 Cognex Corporation 1,743,750
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (5.41%)
230,000 Jones Intercable, Inc.* 5,922,500
- --------------------------------------------------------------------------------
200,000 Jones Intercable, Inc. Class A* 4,975,000
- --------------------------------------------------------------------------------
10,897,500
- --------------------------------------------------------------------------------
MEDIA - NEWSPAPERS (2.71%)
380,000 Hollinger International, Inc. 5,462,500
- --------------------------------------------------------------------------------
MEDIA - PERIODICALS (1.45%)
210,000 Playboy Enterprises, Inc.* 2,913,750
- --------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG/SUNDRIES (2.18%)
480,000 Perrigo Company* 4,380,000
- --------------------------------------------------------------------------------
OIL & GAS - DRILLING (1.94%)
340,000 Marine Drilling Companies* 3,910,000
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (1.74%)
375,000 Key Energy Group* 3,492,187
- --------------------------------------------------------------------------------
OIL & GAS - U.S. EXPLORATION & PRODUCTION (2.16%)
255,000 Chieftain International, Inc. 4,350,937
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (1.09%)
172,500 Just For Feet, Inc.* 2,199,375
- --------------------------------------------------------------------------------
RETAIL - MAIL ORDER & DIRECT (0.99%)
550,000 Spiegel, Inc. Class A* 1,993,750
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 26 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (84.31%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
RETAIL - RESTAURANTS (0.96%)
285,000 Landry's Seafood Restaurants, Inc.* $ 1,923,750
- --------------------------------------------------------------------------------
SHOES & RELATED APPAREL (1.76%)
325,000 Wolverine World Wide, Inc. 3,534,375
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - CELLULAR (2.34%)
147,000 Centennial Cellular Corp. Class A* 4,704,000
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (1.19%)
300,000 Remec, Inc.* 2,390,625
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (1.27%)
692,100 General Communication, Inc.* 2,552,118
- --------------------------------------------------------------------------------
TEXTILE - MILL PRODUCTS (0.51%)
161,300 Congoleum Corporation* 1,028,291
- --------------------------------------------------------------------------------
TRANSPORTATION - SERVICES (1.52%)
110,000 Expeditors International 3,052,500
- --------------------------------------------------------------------------------
TRANSPORTATION - SHIP (4.38%)
410,000 Knightsbridge Tankers Ltd. 8,815,000
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost $192,030,909) 169,680,837
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (9.75%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
650,000 Federal Home Loan Mortgage Corporation
Discount Note - 5.00%, 10/1/98 650,000
- --------------------------------------------------------------------------------
7,000,000 Federal Home Loan Mortgage Corporation
Discount Note - 5.42%, 10/19/98 6,981,030
- --------------------------------------------------------------------------------
2,000,000 Federal Home Loan Mortgage Corporation
Discount Note - 5.16%, 10/20/98 1,994,553
- --------------------------------------------------------------------------------
10,000,000 Federal National Mortgage Corporation
Discount Note - 5.42%, 10/5/98 9,993,977
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $19,619,560) 19,619,560
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (4.47%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
9,004,000 State Street Repurchase Agreement, 5.35%
dated September 30, 1998 to be repurchased at
$9,005,338 on October 1, 1998, collateralized
by U.S. Treasury Bond - October 9, 1998, with
a value of $9,186,975 $ 9,004,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(Cost $9,004,000) 9,004,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
STOCK WARRANTS (0.93%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
OIL & GAS - FIELD SERVICES (0.93%)
180,000 BJ Services Co.
Total Stock Warrants (Cost $2,079,307) 1,867,500
- --------------------------------------------------------------------------------
Total Investments (Cost $222,733,776) (99.46%) 200,171,897
- --------------------------------------------------------------------------------
Other assets, less liabilities (0.54%) 1,079,909
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 201,251,806
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See notes to financial statements.
THE BERGER FUNDS 27 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $222,733,776
- --------------------------------------------------------------------------------
Investments, at value $200,171,897
- --------------------------------------------------------------------------------
Cash 439
- --------------------------------------------------------------------------------
Receivables
Investment securities sold 80,947
- --------------------------------------------------------------------------------
Fund shares sold 2,227,648
- --------------------------------------------------------------------------------
Dividends 163,775
- --------------------------------------------------------------------------------
Interest 1,339
- --------------------------------------------------------------------------------
Total Assets 202,646,045
- --------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 780,325
- --------------------------------------------------------------------------------
Fund shares redeemed 301,166
- --------------------------------------------------------------------------------
Accrued investment advisory fees 140,019
- --------------------------------------------------------------------------------
Accrued custodian and accounting fees 5,753
- --------------------------------------------------------------------------------
Accrued transfer agent fees 29,598
- --------------------------------------------------------------------------------
Accrued 12b-1 fees 21,223
- --------------------------------------------------------------------------------
Accrued legal fees 50,000
- --------------------------------------------------------------------------------
Accrued audit fees 20,300
- --------------------------------------------------------------------------------
Accrued administration fees 1,555
- --------------------------------------------------------------------------------
Accrued shareholder report fees 2,999
- --------------------------------------------------------------------------------
Accrued other expenses 41,301
- --------------------------------------------------------------------------------
Total Liabilities 1,394,239
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING (PAR VALUE $0.01,
UNLIMITED SHARES AUTHORIZED) $201,251,806
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Investor shares (based on net assets of $108,464,932 and
6,170,628 shares outstanding) $ 17.58
- --------------------------------------------------------------------------------
Institutional shares (based on net assets of $92,786,874 and
5,263,458 shares outstanding) $ 17.63
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 3,080,643
- --------------------------------------------------------------------------------
Interest 1,018,309
- --------------------------------------------------------------------------------
Total Income 4,098,952
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 1,515,167
- --------------------------------------------------------------------------------
Administrative services fee 16,835
- --------------------------------------------------------------------------------
Accounting fees 29,550
- --------------------------------------------------------------------------------
Custodian fees 22,895
- --------------------------------------------------------------------------------
Transfer agent fees - Investor Shares 142,403
- --------------------------------------------------------------------------------
Transfer agent fees - Institutional Shares 32,892
- --------------------------------------------------------------------------------
Registration fees - Investor Shares 57,374
- --------------------------------------------------------------------------------
Registration fees - Institutional Shares 39,850
- --------------------------------------------------------------------------------
12b-1 fees - Investor Shares 228,703
- --------------------------------------------------------------------------------
Audit fees 39,477
- --------------------------------------------------------------------------------
Legal fees 83,321
- --------------------------------------------------------------------------------
Trustees' fees and expenses 13,718
- --------------------------------------------------------------------------------
Reports to shareholders 113,139
- --------------------------------------------------------------------------------
Other expenses 9,723
- --------------------------------------------------------------------------------
Gross Expenses 2,345,047
- --------------------------------------------------------------------------------
Less earnings credits (9,929)
- --------------------------------------------------------------------------------
Net Expenses 2,335,118
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Investment Income (Loss) 1,763,834
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign currency
transactions 8,773,953
- --------------------------------------------------------------------------------
Net realized gain (loss) on distributions from investment
companies 1,525,046
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (38,226,428)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions (27,927,429)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $(26,163,595)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 28 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER SMALL CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
January 1, 1997
Year Ended to
September 30, September 30,
1998 1997
- ---------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 1,763,834 $ 285,658
- ---------------------------------------------------------------------------------
Net realized gain (loss) on securities and
foreign currency transactions 8,773,953 13,448,833
- ---------------------------------------------------------------------------------
Net realized gain (loss) on distributions
from investment companies 1,525,046 --
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (38,226,428) 7,588,958
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (26,163,595) 21,323,449
- ---------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Investor Shares (589,238) --
- ---------------------------------------------------------------------------------
Net investment income - Institutional
Shares (706,938) --
- ---------------------------------------------------------------------------------
Net realized gains on investments -
Investor Shares (7,188,217) --
- ---------------------------------------------------------------------------------
Net realized gains on investments -
Institutional Shares (6,438,165) --
- ---------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends
and Distributions to Shareholders (14,922,558) --
- ---------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 202,677,074 73,022,239
- ---------------------------------------------------------------------------------
Net asset value of shares issued in
reinvestment of distributions 12,934,335 --
- ---------------------------------------------------------------------------------
Payments for shares redeemed (86,934,213) (16,725,574)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Derived from Fund Share Transactions 128,677,196 56,296,665
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 87,591,043 77,620,114
- ---------------------------------------------------------------------------------
NET ASSETS
Beginning of period 113,660,763 36,040,649
- ---------------------------------------------------------------------------------
End of period $ 201,251,806 $ 113,660,763
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 212,849,779 $ 84,196,745
- ---------------------------------------------------------------------------------
Undistributed net investment income (loss) 3,106,054 261,863
- ---------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 7,857,852 13,537,606
- ---------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of securities and foreign currency
transactions (22,561,879) 15,664,549
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Total $ 201,251,806 $ 113,660,763
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<CAPTION>
Period from January 1,
Year Ended 1997* to September 30,
September 30, 1998 1997
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investor Shares
Shares sold 6,176,175 $126,575,125 2,806,894 $ 53,663,252
- ---------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends
and distributions 365,158 7,272,450 -- --
- ---------------------------------------------------------------------------------
Shares redeemed (2,848,965) (57,717,019) (328,634) (6,417,911)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in
Shares 3,692,368 76,130,556 2,478,260 47,245,341
- ---------------------------------------------------------------------------------
Shares outstanding, beginning
of period 2,478,260 47,245,341 -- --
- ---------------------------------------------------------------------------------
Shares outstanding, end of
period 6,170,628 $123,375,897 2,478,260 $ 47,245,341
- ---------------------------------------------------------------------------------
Institutional Shares
Shares sold 3,808,007 $ 76,101,949 978,728 $ 19,358,987
- ---------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends
and distributions 283,736 5,661,885 -- --
- ---------------------------------------------------------------------------------
Shares redeemed (1,446,163) (29,217,194) (546,934) (10,307,663)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in
Shares 2,645,580 52,546,640 431,794 9,051,324
- ---------------------------------------------------------------------------------
Shares outstanding, beginning
of period 2,617,878 36,924,332 2,186,084 27,873,008
- ---------------------------------------------------------------------------------
Shares outstanding, end of
period 5,263,458 $ 89,470,972 2,617,878 $ 36,924,332
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
* For the period from January 1, 1997 through September 30, 1997 for the
Institutional Shares and for the period from February 14, 1997 (Commencement of
Investor Shares) through September 30, 1997 for the Investor Shares.
See notes to financial statements.
THE BERGER FUNDS 29 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
MID CAP
GROWTH FUND
PORTFOLIO MANAGER'S COMMENTARY AMY K. SELNER
[BERGER MID CAP GROWTH FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol --
- - Fund Number 215
</TABLE>
PERFORMANCE
The Berger Mid Cap Growth Fund (the "Fund") commenced operations on December 31,
1997. Year-to-date through September 30, 1998, our Fund had a return of 9.30%(1)
compared with -7.08% for the Standard & Poor's (S&P) MidCap 400.(2)
The S&P MidCap 400 index closely matched the performance of the larger S&P 500
index this year until mid-May. At that time, both indexes were up 15% year to
date and the Berger Mid Cap Growth Fund was up more than 31%. The relative
performance of the S&P MidCap 400 stocks versus the larger stocks of the S&P 500
diverged after mid-May through the end of the third quarter as the MidCap 400
index slid down 20% while the S&P 500 index corrected down only 10%. During that
period of economic uncertainty, volatility soared, and investors preferred the
liquidity and predictability of the larger cap stocks to the detriment of mid
and small cap stocks. Our Fund, however, considerably outperformed the S&P
MidCap 400 index for the nine-month period January 1 -- September 30 because of
solid stock selection and sector weightings.
During this correction, the market continued to focus on the financial crisis
that began in Asia and is spreading throughout the world. Japan is sinking
further into recession, Russia has collapsed, Europe is slowing rapidly and
Latin America is at risk. The U.S. economy, too, is showing signs of slowing. A
coordinated cut in global interest rates, however, may provide more favorable
conditions to both U.S and global economies.
PERIOD IN REVIEW
During the first half of 1998, our Fund was heavily weighted in two sectors,
technology and healthcare. By September 30, we had increased our healthcare
weighting to 20.1% of total Fund assets and continued to lower the risk profile
of our technology holdings. Defensive drug and drug distributor stocks continued
to provide high visibility of earnings and strong revenue growth in a volatile
market environment. Strong performers included drug distributor McKesson, the
Fund's largest holding, along with Forrest Laboratories and Watson
Pharmaceutical. In the technology sector, we escaped most of the bludgeoning of
the information technology industry because we sold our holdings early. We added
to our Internet exposure early in the third quarter, including Yahoo!, which
doubled in price over the quarter. We selectively added to our semiconductor
equipment stocks, which we believe are solid holdings going into the fourth
quarter.
In the consumer cyclical sector, radio stocks, which aided Fund performance in
the first half of the year, clipped performance a bit in the third quarter. The
market began to factor in the slowing of the overall economy late in the third
quarter. We severely cut back on our exposure to radio stocks along with other
vulnerable consumer cyclical stocks. Overall, our Fund was fortunately
underweighted in consumer cyclicals during the quarter, so this did not impair
performance much.
After being underweighted in the energy sector most of the year, we increased
our exposure in the third quarter. Although there is further downside to this
sector's fourth-quarter earnings, we believe energy is poised for market
leadership as inventory levels decrease and pricing stabilizes.
LOOKING AHEAD
Looking forward, we will continue our overweighting in the defensive healthcare
sector and add to our technology exposure as the earnings picture improves. In
the consumer staples sector, we view cable stocks as decent intermediate-term
values, with consistent earnings and high visibility. We continue to look for
leadership out of the energy sector as oil inventory levels come down and oil
pricing stabilizes. Our focus will be on stocks with high earnings visibility
and a stable outlook.
We expect the risk surrounding "Asian Contagion" to continue to fuel market
volatility. We will carefully monitor Asia and Latin America, specifically
Brazil and Mexico, for signs of further weakness. It appears that a coordinated
cut in global interest rates is increasingly likely, and we look for the major
central banks and governments of the world to make a coordinated move to arrest
the interim instability in world markets.
Inflation should remain suppressed. We expect more interest rate reductions to
complement the Fed's recent 1/4% rate cut. Though this lower interest rate
environment is favorable for stocks, overall market earnings are slowing.
Earnings expectations are coming down for the fourth quarter and 1999. The
market has already begun factoring in this weakness and may be close to "paying
for" the near-term earnings risk. Relative valuation of the S&P MidCap 400
versus the S&P 500 has not been this favorable since 1992. Once the market
stabilizes, we expect mid cap stocks to lead the way in the next upturn and to
outperform large cap stocks over the short term.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P MidCap 400 Stock Index is an unmanaged index, with dividends
reinvested, and is generally representative of the market for stocks for
mid-sized companies. One cannot invest directly in an index.
THE BERGER FUNDS 30 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF BERGER MID CAP
GROWTH FUND VS.
S&P 400 MID CAP INDEX AND COST OF LIVING INDEX
BERGER S&P 400 COST OF
MID CAP MID CAP LIVING
GROWTH FUND INDEX INDEX
<S> <C> <C> <C>
12/31/97 $10,000 $10,000 $10,000
3/31/98 $12,590 $11,099 $10,056
6/30/98 $13,290 $10,862 $10,105
9/30/98 $10,930 $9,293 $10,130
BERGER MID CAP GROWTH FUND*
TOTAL RETURN
As of September 30, 1998
Life of Fund 9.30%
(12/31/97)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 31 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (81.77%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
BANKS - SOUTHEAST (0.64%)
1,000 First Tennesse National Corp. $ 27,312
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - ADVERTISING (0.88%)
1,350 Lamar Advertising Company* 37,800
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - SCHOOLS (0.85%)
1,300 Apollo Group, Inc.* 36,237
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - EDUCATION (0.85%)
2,700 CBT Group PLC ADR* 36,450
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (0.53%)
300 Inktomi Corporation* 22,575
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - INTERNET (3.09%)
1,400 GeoCities* 32,550
- --------------------------------------------------------------------------------
1,800 Lycos, Inc.* 60,862
- --------------------------------------------------------------------------------
300 Yahoo, Inc.* 38,850
- --------------------------------------------------------------------------------
132,262
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - MEDICAL (2.46%)
4,600 Eclipsys Corporation* 105,225
- --------------------------------------------------------------------------------
COSMETICS/PERSONAL CARE (0.74%)
2,050 Rexall Sundown, Inc.* 31,646
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (4.71%)
1,600 Etec Systems, Inc.* 41,700
3,000 KLA - Tencor Corp.* 74,625
- --------------------------------------------------------------------------------
900 Kulicke & Soffa Industries, Inc.* 12,262
- --------------------------------------------------------------------------------
4,000 Teradyne, Inc.* 73,000
- --------------------------------------------------------------------------------
201,587
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (10.38%)
1,200 Broadcom Corporation* 85,200
- --------------------------------------------------------------------------------
3,750 Credence Systems Corporation* 50,390
- --------------------------------------------------------------------------------
1,570 Linear Technology Corp. 78,500
- --------------------------------------------------------------------------------
2,420 Maxim Integrated Products, Inc.* 67,457
- --------------------------------------------------------------------------------
1,500 Micron Technology, Inc. 45,656
- --------------------------------------------------------------------------------
3,200 Vitesse Semiconductor Corp.* 75,600
- --------------------------------------------------------------------------------
1,200 Xilinx, Inc.* 42,000
- --------------------------------------------------------------------------------
444,803
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS (1.67%)
2,750 Safeguard Scientifics, Inc.* 71,328
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (2.15%)
3,000 Nova Corp.* 92,062
- --------------------------------------------------------------------------------
INSURANCE - LIFE (0.63%)
600 eBay, Inc.* 27,037
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (81.77%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
LEISURE - SERVICES (1.16%)
1,600 SFX Entertainment, Inc.* $ 49,800
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (5.92%)
2,300 Comcast Corporation Class A 107,237
- --------------------------------------------------------------------------------
1,800 Cox Communications, Inc. Class A* 98,325
- --------------------------------------------------------------------------------
2,000 Echostar Communications Corp. Class A* 48,000
- --------------------------------------------------------------------------------
253,562
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (7.11%)
1,800 Chancellor Media Corporation* 60,075
- --------------------------------------------------------------------------------
1,606 Clear Channel Communications, Inc. 76,285
- --------------------------------------------------------------------------------
2,500 Heftel Broadcasting Corp. Class A* 94,375
- --------------------------------------------------------------------------------
750 Jacor Communications, Inc.* 37,968
- --------------------------------------------------------------------------------
1,200 Univision Communications, Inc.* 35,700
- --------------------------------------------------------------------------------
304,403
- --------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (1.94%)
2,890 Jones Pharma, Inc. 83,087
- --------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (0.76%)
950 Forest Laboratories, Inc.* 32,656
- --------------------------------------------------------------------------------
MEDICAL - GENERIC DRUGS (4.96%)
3,500 Mylan Laboratories, Inc. 103,250
- --------------------------------------------------------------------------------
2,150 Watson Pharmaceuticals, Inc.* 109,112
- --------------------------------------------------------------------------------
212,362
- --------------------------------------------------------------------------------
MEDICAL - INSTRUMENTS (2.45%)
4,400 IDEXX Laboratories, Inc.* 105,050
- --------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG/SUNDRIES (5.67%)
2,300 Bergen Brunswig Corp. Class A 116,293
- --------------------------------------------------------------------------------
1,380 McKesson Corporation 126,442
- --------------------------------------------------------------------------------
242,735
- --------------------------------------------------------------------------------
MEDICAL/DENTAL - SUPPLIES (1.74%)
2,500 Allegiance Corporation 74,375
- --------------------------------------------------------------------------------
OIL & GAS - DRILLING (0.96%)
2,800 Noble Drilling Corp.* 41,300
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (2.50%)
2,800 BJ Services Co. 45,500
- --------------------------------------------------------------------------------
3,700 Veritas DGC, Inc.* 61,743
- --------------------------------------------------------------------------------
107,243
- --------------------------------------------------------------------------------
OIL & GAS - MACHINERY/EQUIPMENT (0.72%)
1,100 Cooper Cameron Corporation* 30,937
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 32 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (81.77%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS - U.S. EXPLORATION & PRODUCTION (2.39%)
1,600 Anadarko Petroleum Corporation $ 62,900
- --------------------------------------------------------------------------------
3,000 Ocean Energy, Inc.* 39,375
- --------------------------------------------------------------------------------
102,275
- --------------------------------------------------------------------------------
POLLUTION CONTROL - SERVICES (3.85%)
2,200 Allied Waste Industries, Inc.* 51,425
- --------------------------------------------------------------------------------
4,020 Steris Corp.* 113,565
- --------------------------------------------------------------------------------
164,990
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (1.84%)
5,000 Family Dollar Stores, Inc. 78,750
- --------------------------------------------------------------------------------
RETAIL - SUPERMARKETS (0.74%)
750 Whole Foods Market, Inc.* 31,591
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - CELLULAR (2.20%)
3,700 American Tower Corp. 94,350
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (1.44%)
1,500 Uniphase Corp.* 61,500
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (3.84%)
1,600 Global Crossing Ltd.* 33,400
- --------------------------------------------------------------------------------
2,200 Global Telesystems Group, Inc.* 74,250
- --------------------------------------------------------------------------------
2,600 McLeodUSA, Inc.* 56,875
- --------------------------------------------------------------------------------
164,525
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost $3,816,370) 3,501,815
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (16.67%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
290,000 Federal Home Loan Mortgage Corp. Discount Note -
5.13%, 10/13/98 $ 289,504
- --------------------------------------------------------------------------------
425,000 Federal Home Loan Mortgage Corp. Discount Note -
5.45%, 10/2/98 424,949
- --------------------------------------------------------------------------------
714,453
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(cost $714,453) 714,453
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (4.65%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
$ 199,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998, to be repurchased at
$199,030 on October 1, 1998, collateralized by
U.S. Treasury Bond, 5.64% - April 20, 2000, with
a value of $207,353. 199,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $199,000) 199,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (cost $4,729,823) (103.09%) 4,415,268
- --------------------------------------------------------------------------------
Total Liabilities, Less Cash and other assets (-3.09%) (132,547)
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 4,282,721
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
PLC - Public Limited Company.
ADR - American Depository Receipt.
See notes to financial statements.
THE BERGER FUNDS 33 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30, 1998
- ------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 4,729,823
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Investments, at value $ 4,415,268
- ------------------------------------------------------------------------------------
Cash 2,248
- ------------------------------------------------------------------------------------
Receivables
Investment securities sold 29,330
- ------------------------------------------------------------------------------------
Fund shares sold 877
- ------------------------------------------------------------------------------------
Dividends 767
- ------------------------------------------------------------------------------------
Interest 30
- ------------------------------------------------------------------------------------
Due from Management Company 865
- ------------------------------------------------------------------------------------
Total Assets 4,449,385
- ------------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 138,175
- ------------------------------------------------------------------------------------
Fund shares redeemed 9,601
- ------------------------------------------------------------------------------------
Accrued investment advisory fees 2,619
- ------------------------------------------------------------------------------------
Accrued custodian and accounting fees 2,635
- ------------------------------------------------------------------------------------
Accrued transfer agent fees 1,648
- ------------------------------------------------------------------------------------
Accrued 12b-1 fees 873
- ------------------------------------------------------------------------------------
Accrued audit fees 9,300
- ------------------------------------------------------------------------------------
Accrued administrative service fees 35
- ------------------------------------------------------------------------------------
Accrued shareholder report fees 523
- ------------------------------------------------------------------------------------
Accrued other expenses 1,255
- ------------------------------------------------------------------------------------
Total Liabilities 166,664
- ------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 4,282,721
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ------------------------------------------------------------------------------------
Shares Outstanding 391,801
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.93
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period from
December 31,
1997(1) to
September
30, 1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 4,817
- --------------------------------------------------------------------------------
Interest 25,729
- --------------------------------------------------------------------------------
Total Income 30,546
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 20,111
- --------------------------------------------------------------------------------
Administrative services fee 268
- --------------------------------------------------------------------------------
Accounting fees 6,726
- --------------------------------------------------------------------------------
Custodian fees 8,464
- --------------------------------------------------------------------------------
Transfer agent fees 6,363
- --------------------------------------------------------------------------------
Registration fees 2,316
- --------------------------------------------------------------------------------
12b-1 fees 6,704
- --------------------------------------------------------------------------------
Audit fees 10,800
- --------------------------------------------------------------------------------
Legal fees 821
- --------------------------------------------------------------------------------
Trustees' fees and expenses 270
- --------------------------------------------------------------------------------
Reports to shareholders 2,860
- --------------------------------------------------------------------------------
Other expenses 19
- --------------------------------------------------------------------------------
Gross Expenses 65,722
- --------------------------------------------------------------------------------
Less fees waived by the advisor (12,269)
- --------------------------------------------------------------------------------
Less earnings credits (554)
- --------------------------------------------------------------------------------
Net Expenses 52,899
- --------------------------------------------------------------------------------
Net Investment Income (Loss) (22,353)
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign currency
transactions 71,188
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on securities
and foreign currency transactions (314,555)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and Foreign
Currency Transactions (243,367)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (265,720)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 34 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
December 31, 1997(1) to
September 30, 1998
- --------------------------------------------------------------------------------
<S> <C>
FROM OPERATIONS
Net investment income (loss) $ (22,353)
- --------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions 71,188
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on securities and foreign currency transactions (314,555)
- --------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations (265,720)
- --------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income --
- --------------------------------------------------------------------------------
Net realized gains on investments --
- --------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders --
- --------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 8,005,977
Net asset value of shares issued in reinvestment of
dividends and distributions --
- --------------------------------------------------------------------------------
Payments for shares redeemed (3,457,536)
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 4,548,441
- --------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 4,282,721
- --------------------------------------------------------------------------------
NET ASSETS
Beginning of period --
- --------------------------------------------------------------------------------
End of period $ 4,282,721
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 4,548,441
- --------------------------------------------------------------------------------
Undistributed net investment income (loss) (88)
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 48,923
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions (314,555)
- --------------------------------------------------------------------------------
Total $ 4,282,721
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C>
Shares sold 670,860
- --------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
distributions --
- --------------------------------------------------------------------------------
Shares redeemed (279,059)
- --------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 391,801
- --------------------------------------------------------------------------------
Shares outstanding, beginning of period --
- --------------------------------------------------------------------------------
Shares outstanding, end of period 391,801
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 35 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
MID CAP
VALUE FUND
CO-PORTFOLIO THOMAS M. PERKINS
MANAGERS' COMMENTARY ROBERT H. PERKINS
[BERGER MID CAP VALUE FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BEMVX
- - Fund Number 216
</TABLE>
PERFORMANCE
We are pleased to welcome you as fellow shareholders in the Berger Mid Cap Value
Fund (the "Fund") and to report to you about our first month and a half of
investment activity. Our Fund commenced operations on August 12, 1998. Between
that date and the close of our fiscal year on September 30, our Fund had a total
return of -6.70%.(1) The S&P MidCap 400(2) had a loss of -8.23% and the S&P
500(3) a loss of -5.99% during that same period.
The S&P 500 has done relatively better as money continued to flow to the largest
stocks in the market. Our decline was smaller than that of the MidCap 400
primarily because we retained cash reserves of about 20%. We have been cautious
about the market near term, so we have invested our cash gradually.
Our Fund is focused primarily on companies with market capitalizations of
$1--$15 billion. We build our portfolio stock by stock, investing in companies
that have strong positions in their industries, solid balance sheets, positive
cash flows and good earnings prospects. In many cases, temporary problems in
these companies have created below-average valuations and favorable long-term
risk/ reward opportunities. As the short-term problems recede, we believe there
is the potential for significant appreciation and superior long-term results.
This approach is similar to that of the Berger Small Cap Value Fund.
PERIOD IN REVIEW
In the short term, our Fund has suffered with the market's decline. However, and
more important, this period of market weakness has also provided an unusually
good opportunity to assemble a diverse portfolio of stocks at very reasonable
valuations. On average, we are buying stocks that have already experienced a
bear market, are down more than 35% in price from their most recent 52-week high
and have moderate debt on their balance sheet.
Our Fund's largest sector investments are in the financial and consumer stocks.
Our biggest financial holdings are two REITs, Mack-Cali Realty and Liberty
Property. Our second largest commitments in the financial sector are in several
regional banks that have strong franchises in their respective markets, have
virtually no foreign exposure and are down 20% in price.
Our consumer sector contains many fallen growth stocks. Our largest holding is
Payless Shoe Source, the largest discount family shoe retailer in the U.S. With
the stock down almost 50% since March, Payless carries no debt and has positive
cash flow and rising earnings. Wolverine Worldwide is our second largest
consumer holding. The company manufacturers several popular shoe lines,
including Hush Puppies and Wolverine work boots. Wolverine Worldwide's earnings
have increased for 26 consecutive quarters and are expected to continue to grow.
Its stock is down more than 60% since March. Payless and Wolverine have both
aggressively bought back their stock at prices above our purchase price.
LOOKING AHEAD
The stock market has suffered recently from continuing weakness in emerging
economies and Japan and from the volatile effects of a financial flight to
quality (in currency, loans and assets). With interest rates at 30-year lows, we
believe the stock market is now more reasonably valued, assuming corporate
earnings are sustained at current levels. However, high volatility can be
expected as long as economic and political uncertainty remain. We will use this
period of uncertainty as an opportunity to invest in solid companies that we
believe are temporarily undervalued. Although these stocks could continue to be
weak in the near term, we believe their intrinsic value will be reflected
eventually in substantially higher stock prices.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P MidCap 400 Stock Index is an unmanaged index, with dividends
reinvested, and is generally representative of the market for stocks for
mid-sized companies. One cannot invest directly in an index.
3. The S&P 500 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.
THE BERGER FUNDS 36 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF
BERGER MID CAP VALUE FUND VS.
S&P 400 MID CAP INDEX AND
COST OF LIVING INDEX
BERGER S&P 400 COST OF
MID CAP MID CAP LIVING
VALUE FUND INDEX INDEX
<S> <C> <C> <C>
8/12/98 $10,000 $10,000 $10,000
8/31/98 $8,950 $8,130 $10,012
9/30/98 $9,330 $8,910 $10,012
BERGER MID CAP VALUE FUND*
TOTAL RETURN
As of September 30, 1998
Life of Fund -6.70%
(8/12/98)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 37 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP VALUE FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (70.61%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
AEROSPACE/DEFENSE EQUIPMENT (0.94%)
4,000 Sundstrand Corporation $ 185,500
- --------------------------------------------------------------------------------
BANKS - MIDWEST (1.44%)
9,000 Associated Banc-Corp. 282,937
- --------------------------------------------------------------------------------
BANKS - NORTHEAST (1.46%)
16,000 Peoples Heritage Financial Group, Inc. 287,000
- --------------------------------------------------------------------------------
BANKS - SOUTHEAST (0.51%)
1,000 CCB Financial Corporation 100,750
- --------------------------------------------------------------------------------
BUILDING PRODUCTS - WOOD (0.58%)
4,000 Willamette Industries, Inc. 114,750
- --------------------------------------------------------------------------------
BUILDING - PAINT & ALLIED PRODUCTS (1.21%)
11,000 The Sherwin Williams Company 237,875
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - MISCELLANEOUS (2.40%)
17,500 The Dun & Bradstreet Corporation 472,500
- --------------------------------------------------------------------------------
COMPUTER - PERIPHERAL EQUIPMENT (0.72%)
15,000 Adaptec, Inc.* 142,500
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (0.48%)
4,500 Federal Signal Corporation 94,781
- --------------------------------------------------------------------------------
ELECTRICAL - CONNECTORS (0.59%)
4,000 Molex Incorporated 116,000
- --------------------------------------------------------------------------------
ELECTRONIC - MISCELLANEOUS COMPONENTS (0.24%)
1,000 Solectron Corp.* 48,000
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (4.80%)
5,000 Etec Systems, Inc.* 130,312
- --------------------------------------------------------------------------------
5,500 KLA-Tencor Corp.* 136,812
- --------------------------------------------------------------------------------
5,500 Novellus Systems, Inc.* 144,375
- --------------------------------------------------------------------------------
14,000 Speedfam International, Inc.* 150,500
- --------------------------------------------------------------------------------
21,000 Teradyne, Inc.* 383,250
- --------------------------------------------------------------------------------
945,249
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (2.26%)
12,000 Analog Devices, Inc.* 192,750
- --------------------------------------------------------------------------------
9,000 Sanmina Corp.* 253,125
- --------------------------------------------------------------------------------
445,875
- --------------------------------------------------------------------------------
FINANCE - EQUITY REIT (4.97%)
4,000 Crescent Real Estate Equities Co. 101,000
- --------------------------------------------------------------------------------
18,000 Liberty Property Trust 428,625
- --------------------------------------------------------------------------------
15,000 Mack-Cali Realty Corp. 450,000
- --------------------------------------------------------------------------------
979,625
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (70.61%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
FINANCE - INVESTMENT BROKERS (2.63%)
11,500 Legg Mason, Inc. $ 302,593
- --------------------------------------------------------------------------------
7,000 The Bear Stearns Companies, Inc. 216,562
- --------------------------------------------------------------------------------
519,155
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT MANAGEMENT (0.87%)
4,000 Morgan Stanley Dean Witter & Co. 172,250
- --------------------------------------------------------------------------------
FINANCE - PUBLIC INVESTMENT FUND (0.85%)
7,000 H & Q Healthcare Investors Fund 91,875
- --------------------------------------------------------------------------------
7,000 H & Q Life Science Investments Fund 76,125
- --------------------------------------------------------------------------------
168,000
- --------------------------------------------------------------------------------
FINANCE - PUBLIC INVESTMENT FUND - FOREIGN (1.56%)
15,000 Emerging Markets Telecommunications Fund 132,187
- --------------------------------------------------------------------------------
30,000 Morgan Stanley Asia Pacific Fund, Inc. 174,375
- --------------------------------------------------------------------------------
306,562
- --------------------------------------------------------------------------------
FINANCE - SAVINGS & LOANS (1.91%)
10,000 Sovereign Bancorp, Inc. 133,125
- --------------------------------------------------------------------------------
10,000 Webster Preferred Capital Corp. 243,750
- --------------------------------------------------------------------------------
376,875
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (1.86%)
7,500 Heller Financial, Inc.* 180,000
- --------------------------------------------------------------------------------
6,500 MBNA Corporation 186,062
- --------------------------------------------------------------------------------
366,062
- --------------------------------------------------------------------------------
INSURANCE - DIVERSIFIED (1.14%)
6,000 Travelers Group, Inc.* 225,000
- --------------------------------------------------------------------------------
INSURANCE - PROPERTY/CASUALTY/TITLE (3.08%)
5,000 CNA Financial Corporation* 187,500
- --------------------------------------------------------------------------------
5,000 Everest Reinsurance Holdings, Inc. 186,562
- --------------------------------------------------------------------------------
6,000 Ohio Casualty Corporation 232,500
- --------------------------------------------------------------------------------
606,562
- --------------------------------------------------------------------------------
LEISURE - TOYS/GAMES/HOBBY (1.42%)
9,500 Hasbro, Inc. 280,250
- --------------------------------------------------------------------------------
MACHINERY - FARM (0.77%)
7,000 Case Corp. 152,250
- --------------------------------------------------------------------------------
MACHINERY - MATERIALS HANDLING/AUTOMATION (0.41%)
7,000 Cognex Corporation* 81,375
- --------------------------------------------------------------------------------
MEDIA - NEWSPAPERS (0.77%)
10,500 Hollinger International, Inc. 150,937
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 38 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP VALUE FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (70.61%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL - ETHICAL DRUGS (0.39%)
7,000 Dura Pharmaceuticals, Inc.* $ 76,562
- --------------------------------------------------------------------------------
MEDICAL - HEALTH MAINTENANCE ORGANIZATION (1.16%)
14,000 Humana, Inc.* 229,250
- --------------------------------------------------------------------------------
MEDICAL/DENTAL - SUPPLIES (1.02%)
9,000 Dentsply International, Inc. 201,375
- --------------------------------------------------------------------------------
OFFICE - EQUIPMENT & AUTOMATION (1.68%)
14,000 HON Industries, Inc. 330,750
- --------------------------------------------------------------------------------
OIL & GAS - DRILLING (0.60%)
8,000 Noble Drilling Corp.* 118,000
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (2.52%)
20,000 BJ Services Co.* 325,000
- --------------------------------------------------------------------------------
6,000 Halliburton Co. 171,375
- --------------------------------------------------------------------------------
496,375
- --------------------------------------------------------------------------------
OIL & GAS - INTERNATIONAL SPECIALTY (1.28%)
6,500 Murphy Oil Corporation 251,875
- --------------------------------------------------------------------------------
OIL & GAS - U.S. EXPLORATION & PRODUCTION (1.71%)
9,000 Apache Corporation 241,312
- --------------------------------------------------------------------------------
3,000 Noble Affiliates, Inc. 95,625
- --------------------------------------------------------------------------------
336,937
- --------------------------------------------------------------------------------
OIL & GAS - U.S. INTEGRATED (2.69%)
5,000 Kerr-McGee Corporation 227,500
- --------------------------------------------------------------------------------
3,000 Unocal Corporation 108,750
- --------------------------------------------------------------------------------
5,500 USX-Marathon Corp. 194,906
- --------------------------------------------------------------------------------
531,156
- --------------------------------------------------------------------------------
PAPER & PAPER PRODUCTS (1.30%)
6,500 Union Camp 255,937
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (3.79%)
12,500 Payless Shoe Source, Inc.* 517,187
- --------------------------------------------------------------------------------
8,000 Ross Stores Inc. 229,000
- --------------------------------------------------------------------------------
746,187
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (2.44%)
7,000 Consolidated Stores Corporation* 137,375
- --------------------------------------------------------------------------------
7,000 Dillard's, Inc. 198,187
- --------------------------------------------------------------------------------
6,500 Saks Incorporated* 145,843
- --------------------------------------------------------------------------------
481,405
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (70.61%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
RETAIL - RESTAURANTS (1.62%)
14,000 Cracker Barrel Old Country Store, Inc. $ 318,511
- --------------------------------------------------------------------------------
SHOES & RELATED APPAREL (2.43%)
44,000 Wolverine World Wide, Inc. 478,500
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT (0.53%)
15,000 Premisys Communications, Inc.* 105,000
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (1.07%)
3,000 Telebras-Telecomunicacoes Brasileiras S.A.* 211,312
- --------------------------------------------------------------------------------
TEXTILE - APPAREL MANUFACTURING (1.19%)
12,500 Nautica Enterprises, Inc.* 233,593
- --------------------------------------------------------------------------------
TRANSPORTATION - SERVICES (0.56%)
4,000 Expeditors International of Washington, Inc. 111,000
- --------------------------------------------------------------------------------
TRANSPORTATION - SHIPPING (1.09%)
10,000 Knightsbridge Tankers Ltd. 215,000
- --------------------------------------------------------------------------------
UTILITY - GAS DISTRIBUTION (1.67%)
7,000 National Fuel Gas Company 329,000
- --------------------------------------------------------------------------------
Total Common Stocks
(cost $14,810,755) 13,916,345
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (30.37%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
5,000,000 Federal Home Loan Mortgage Corp. Discount
Note - 5.40%, 10/19/98(1) 4,986,500
- --------------------------------------------------------------------------------
1,000,000 Federal National Mortgage Corp. Discount Note
-5.42%, 10/5/98 999,397
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $5,985,897) 5,985,897
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 39 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP VALUE FUND
SCHEDULE OF INVESTMENTS
REPURCHASE AGREEMENT (1.59%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
$ 314,000 State Street Repurchase Agreement, 5.35%
dated September 30, 1998, to be repurchased
at $314,047 on October 1, 1998,
collateralized by U.S. Treasury Bond, 5.81% -
April 5, 2000, with a value of $325,280. $ 314,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(Cost $314,000) 314,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (Cost $21,110,652) (102.57%) 20,216,242
- --------------------------------------------------------------------------------
Liabilities, less other assets (-2.57%) (505,786)
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 19,710,456
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPEN FUTURES CONTRACTS AT SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Number of Opening Market Current Market
Contracts Contract Type Value Value Realized Gain
- ------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
12 Long S&P 400 Mid Cap Stock Index $ 1,841,000 $ 1,867,200 $ 26,200
- ------------------------------------------------------------------------------------------------------------------
December 98 Futures
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
1. Collateral for futures contracts.
See notes to financial statements.
THE BERGER FUNDS 40 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 21,110,652
- --------------------------------------------------------------------------------
Investments, at value $ 20,216,242
- --------------------------------------------------------------------------------
Cash 771
- --------------------------------------------------------------------------------
Receivables
Investment securities sold 545,454
- --------------------------------------------------------------------------------
Fund shares sold 15,638
- --------------------------------------------------------------------------------
Dividends 18,853
- --------------------------------------------------------------------------------
Interest 47
- --------------------------------------------------------------------------------
Total Assets 20,797,005
- --------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,000,705
- --------------------------------------------------------------------------------
Fund shares redeemed 9,999
- --------------------------------------------------------------------------------
Accrued investment advisory fees 12,205
- --------------------------------------------------------------------------------
Variation margin payable 43,210
- --------------------------------------------------------------------------------
Accrued custodian and accounting fees 3,156
- --------------------------------------------------------------------------------
Accrued transfer agent fees 2,793
- --------------------------------------------------------------------------------
Accrued 12b-1 fees 4,068
- --------------------------------------------------------------------------------
Accrued audit fees 9,300
- --------------------------------------------------------------------------------
Accrued administrative service fees 163
- --------------------------------------------------------------------------------
Accrued shareholder report fees 950
- --------------------------------------------------------------------------------
Total Liabilities 1,086,549
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 19,710,456
- --------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- --------------------------------------------------------------------------------
Shares Outstanding 2,112,595
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 9.33
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period from
August 12,
1998(1)
to September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends $ 25,986
- --------------------------------------------------------------------------------
Interest 82,360
- --------------------------------------------------------------------------------
Total Income 108,346
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 20,015
- --------------------------------------------------------------------------------
Administrative services fee 267
- --------------------------------------------------------------------------------
Accounting fees 1,419
- --------------------------------------------------------------------------------
Custodian fees 1,737
- --------------------------------------------------------------------------------
Transfer agent fees 3,685
- --------------------------------------------------------------------------------
Registration fees 581
- --------------------------------------------------------------------------------
12b-1 fees 6,671
- --------------------------------------------------------------------------------
Audit fees 10,300
- --------------------------------------------------------------------------------
Legal fees 74
- --------------------------------------------------------------------------------
Reports to shareholders 990
- --------------------------------------------------------------------------------
Net Expenses 45,739
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Investment Income (Loss) 62,607
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY
TRANSACTIONS AND FUTURES CONTRACTS
Net realized gain (loss) on securities and foreign currency
transactions (122,356)
- --------------------------------------------------------------------------------
Net realized gain (loss) on futures contracts (431,756)
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (894,410)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments,
Foreign Currency Transactions and Futures Contracts (1,448,522)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (1,385,915)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 41 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER MID CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
August 12,
1998(1)
to September 30,
1998
- -------------------------------------------------------------
<S> <C>
FROM OPERATIONS
Net investment income (loss) $ 62,607
- -------------------------------------------------------------
Net realized gain (loss) on securities and
foreign currency transactions (122,356)
- -------------------------------------------------------------
Net realized gain (loss) on futures
contracts (431,756)
- -------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (894,410)
- -------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (1,385,915)
- -------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income --
- -------------------------------------------------------------
Net realized gains on investments --
- -------------------------------------------------------------
Net Decrease in Net Assets from Dividends
and Distributions to Shareholders --
- -------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 21,855,353
- -------------------------------------------------------------
Net asset value of shares issued in
reinvestment of dividends and
distributions --
- -------------------------------------------------------------
Payments for shares redeemed (758,982)
- -------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Derived from Fund Share Transactions 21,096,371
- -------------------------------------------------------------
Net Increase (Decrease) in Net Assets 19,710,456
- -------------------------------------------------------------
NET ASSETS
Beginning of period --
- -------------------------------------------------------------
End of period $ 19,710,456
- -------------------------------------------------------------
- -------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 21,096,371
- -------------------------------------------------------------
Undistributed net investment income (loss) 62,607
- -------------------------------------------------------------
Undistributed net realized gain (loss) from
investments and futures (554,112)
- -------------------------------------------------------------
Net unrealized appreciation (depreciation)
of securities and foreign currency
transactions (894,410)
- -------------------------------------------------------------
Total $ 19,710,456
- -------------------------------------------------------------
- -------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<CAPTION>
Period from
August 12,
1998(1)
to September 30,
1998
- -------------------------------------------------------------
<S> <C>
Shares sold 2,193,503
- -------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions --
- -------------------------------------------------------------
Shares redeemed (80,908)
- -------------------------------------------------------------
Net Increase (Decrease) in Shares 2,112,595
- -------------------------------------------------------------
Shares outstanding, beginning of period 0
- -------------------------------------------------------------
Shares outstanding, end of period 2,112,595
- -------------------------------------------------------------
- -------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 42 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
100 FUND
PORTFOLIO MANAGER'S COMMENTARY PATRICK S. ADAMS
[BERGER 100 FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BEONX
- - Fund Number 43
</TABLE>
PERFORMANCE
The Berger 100 Fund's (the "Fund") return for the fiscal year ended September
30, 1998 was -16.08%(1) compared with 9.08% for the S&P 500(2) and -6.31% for
the S&P MidCap 400.(3)
It was a difficult year, characterized by a highly volatile market. Concerns
about Asian economic problems surfaced in September and October 1997, causing a
flight to the large company, defensive stocks investors consider to be safer in
turbulent times. These concerns appeared to be shrugged off the following
quarter, and the market rebounded. Our Fund registered a gain of nearly 18% for
the quarter ended March 31 but gave back the gain as renewed fears about Asia
and disappointing first-quarter earnings results again drove investors to large
company stocks the following quarter.
The market continued correcting in the quarter ended September 30, suffering one
of its worst quarterly declines in this decade. The catalyst was investor
concerns about a declining global economy. Virtually all stocks were battered
this quarter, even the large, blue chip stocks that make up the Dow Jones
Industrial Average and the S&P 500. These stocks had their worst quarterly
performance since 1990 but, on a relative basis, held up better than small and
mid cap stocks.
PERIOD IN REVIEW
Against the market backdrop, the benefits we envisioned from the significant
Fund restructuring efforts we undertook the past 18 months could not be
realized. Our Fund's performance lagged that of the large company indexes like
the S&P 500 because we weighted our portfolio more heavily towards mid cap
stocks, which better fit our "growth at a reasonable price" investment style.
Ongoing and deepening concerns about the Asian economic crisis and its spread
into Japan, Russia and Latin America continued to drive investors to large
company stocks. This flight to quality further increased what were, in our
opinion, already extremely high prices for large companies and widened the gap
between large company and small to mid-sized company performance.
We have had a significant percentage of Fund assets invested in the technology
sector throughout the year. That hurt performance late last year and again in
the second and third quarter of 1998 because technology was the first sector to
experience problems when the Asian problems surfaced. We continue to believe
that technology, despite periods of short-term volatility, is a core long-term
growth sector that has many favorably priced stocks and improving fundamentals.
We're also focusing on the retail and consumer cyclical sectors because of their
sensitivity to the U.S. economy. This sector has traditionally benefited from
lower interest rates. Although the Federal Reserve Board's 1/4% rate cut on
September 29 was not as large as the market hoped for, it is a step in the right
direction and may be just the first in a series of rate reductions. In other
recent moves, we selectively added to our positions in financials and
healthcare, buying on market drops. We bought healthcare companies that we
perceived to serve niche markets.
A couple of individual companies, Cendant and Sunbeam, negatively impacted
performance this year in part because of questionable accounting practices.
Although these situations were beyond our control, we have instituted measures
that we hope will help protect the Fund from similar occurrences in the future.
We have since sold our full position in both companies.
LOOKING AHEAD
We believe the U.S. economy is generally in good shape but that the tight
monetary policy has put severe pressure on our global trading partners. We are
hopeful the Federal Reserve will continue to lower rates, which should help
improve investor confidence. Although 1998 third and fourth calendar quarter
earnings reports are likely to show negative trends, once we get those behind
us, we may begin to see increased confidence in 1999 earnings estimates and
global growth rates. In the meantime, we will continue to invest in attractively
priced, fundamentally sound stocks that we believe will benefit in a market
recovery and be strong performers over the long term.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P 500 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.
3. The S&P MidCap 400 Stock Index is an unmanaged index, with dividends
reinvested, and is generally representative of the market for stocks for
mid-sized companies. One cannot invest directly in an index.
THE BERGER FUNDS 43 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISION OF CHANGE IN VALUE OF BERGER 100 FUND
VS.
S&P 500 INDEX AND COST OF LIVING INDEX
COST OF
BERGER S&P 500 LIVING
100 FUND INDEX INDEX
<S> <C> <C> <C>
9/30/88 $10,000 $10,000 $10,000
9/30/89 $14,731 $13,293 $10,434
9/30/90 $12,250 $12,065 $11,077
9/30/91 $22,418 $15,820 $11,452
9/30/92 $23,980 $17,565 $11,795
9/30/93 $33,813 $19,845 $12,112
9/30/94 $32,627 $20,576 $12,471
9/30/95 $38,617 $26,689 $12,788
9/30/96 $42,231 $32,114 $13,172
9/30/97 $53,422 $45,098 $13,456
9/30/98 $44,814 $49,182 $13,639
BERGER 100 FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -16.08%
5 Year 5.79%
10 Year 16.18%
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Berger One Hundred Fund, Inc.___________________________________________________
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 One Hundred Fund (the
"Fund") at September 30, 1998, 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 four years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above. The financial statements of the Fund for
the year ended September 30, 1994 were audited by other independent accountants
whose report dated October 28, 1994 expressed an unqualified opinion on those
financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 44 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER 100 FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (92.50%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
AUTO/TRUCK - ORIGINAL EQUIPMENT (0.80%)
235,000 Lear Corp.* $ 10,281,250
- --------------------------------------------------------------------------------
BANKS - MONEY CENTER (5.74%)
405,000 Chase Manhattan Corp. 17,516,250
- --------------------------------------------------------------------------------
640,000 First Union Corporation 32,760,000
- --------------------------------------------------------------------------------
441,800 NationsBank Corporation 23,636,300
- --------------------------------------------------------------------------------
73,912,550
- --------------------------------------------------------------------------------
BEVERAGES - SOFT DRINKS (2.00%)
875,000 Pepsico, Inc. 25,757,812
- --------------------------------------------------------------------------------
COMPUTER - GRAPHICS (5.73%)
2,882,950 Cadence Design Systems, Inc.* 73,695,409
- --------------------------------------------------------------------------------
COMPUTER - LOCAL NETWORKS (5.77%)
1,377,600 3Com Corporation* 41,414,100
- --------------------------------------------------------------------------------
721,500 Ascend Communications, Inc.* 32,828,250
- --------------------------------------------------------------------------------
74,242,350
- --------------------------------------------------------------------------------
COMPUTER - MAINFRAMES (0.90%)
90,000 International Business Machines Corp. 11,520,000
- --------------------------------------------------------------------------------
COMPUTER - MINI/MICRO (2.39%)
550,000 Compaq Computer Corporation 17,393,750
- --------------------------------------------------------------------------------
269,200 Sun Microsystems, Inc.* 13,409,525
- --------------------------------------------------------------------------------
30,803,275
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (1.30%)
838 Structural Dynamics Research Corp.* 9,428
- --------------------------------------------------------------------------------
500,100 Synopsys, Inc.* 16,659,581
- --------------------------------------------------------------------------------
16,669,009
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (3.43%)
800,000 Tyco International Ltd. 44,200,000
- --------------------------------------------------------------------------------
ELECTRONIC - EQUIPMENT (1.05%)
210,700 Honeywell, Inc. 13,497,968
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (13.77%)
1,203,300 Altera Corp.* 42,265,913
- --------------------------------------------------------------------------------
230,000 Intel Corporation 19,722,500
- --------------------------------------------------------------------------------
1,699,500 Maxim Integrated Products, Inc.* 47,373,563
- --------------------------------------------------------------------------------
450,000 Texas Instruments, Inc. 23,737,500
- --------------------------------------------------------------------------------
1,263,600 Xilinx, Inc.* 44,226,000
- --------------------------------------------------------------------------------
177,325,476
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (92.50%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
FINANCE - CONSUMER LOANS (4.36%)
280,000 Associates First Capital Corp. Class A $ 18,270,000
- --------------------------------------------------------------------------------
1,008,700 Household International, Inc. 37,826,250
- --------------------------------------------------------------------------------
56,096,250
- --------------------------------------------------------------------------------
FINANCE - SAVINGS & LOANS (1.09%)
439,000 GreenPoint Financial Corp. 13,993,125
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - MISCELLANEOUS (2.03%)
1,089,100 Heller Financial, Inc.* 26,138,400
- --------------------------------------------------------------------------------
FOOD - FLOUR & GRAIN (1.79%)
741,700 Interstate Bakeries Corp. 22,992,700
- --------------------------------------------------------------------------------
INSURANCE - LIFE (1.66%)
700,000 Conseco, Inc. 21,393,750
- --------------------------------------------------------------------------------
LEISURE - HOTELS & MOTELS (1.23%)
575,572 Promus Hotel Corporation* 15,864,203
- --------------------------------------------------------------------------------
LEISURE - SERVICES (1.10%)
443,800 Carnival Corporation 14,118,387
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (0.55%)
80,100 Time Warner, Inc. 7,013,756
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (1.01%)
388,800 Chancellor Media Corporation* 12,976,200
- --------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETICS (3.59%)
150,000 Amgen, Inc.* 11,334,375
- --------------------------------------------------------------------------------
878,700 Centocor, Inc.* 34,818,488
- --------------------------------------------------------------------------------
46,152,863
- --------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (2.56%)
370,000 American Home Products Corp. 19,378,750
- --------------------------------------------------------------------------------
180,000 Warner-Lambert Company 13,590,000
- --------------------------------------------------------------------------------
32,968,750
- --------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (0.91%)
150,000 Lilly (Eli) & Co. 11,746,875
- --------------------------------------------------------------------------------
MEDICAL - HOSPITALS (0.95%)
425,000 Tenet Healthcare Corporation* 12,218,750
- --------------------------------------------------------------------------------
MEDICAL - PRODUCTS (1.25%)
269,900 Baxter International Inc. 16,059,050
- --------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG/SUNDRIES (1.28%)
324,600 Bergen Brunswig Corp. Class A 16,412,588
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 45 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER 100 FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (92.50%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
PAPER & PAPER PRODUCTS (3.09%)
981,500 Kimberly-Clark Corp. $ 39,750,750
- --------------------------------------------------------------------------------
POLLUTION CONTROL - EQUIPMENT (0.35%)
280,800 U.S. Filter Corporation* 4,492,800
- --------------------------------------------------------------------------------
POLLUTION CONTROL - SERVICES (2.78%)
743,600 Waste Management, Inc. 35,739,275
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (1.27%)
571,200 Ross Stores Inc. 16,350,600
- --------------------------------------------------------------------------------
RETAIL - CONSUMER ELECTRIC (0.52%)
160,700 Best Buy Co., Inc.* 6,669,050
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (4.48%)
929,600 Consolidated Stores Corporation* 18,243,400
- --------------------------------------------------------------------------------
787,200 Saks Incorporated* 17,662,800
- --------------------------------------------------------------------------------
495,000 Sears Roebuck & Co. 21,872,813
- --------------------------------------------------------------------------------
57,779,013
- --------------------------------------------------------------------------------
RETAIL - MISCELLANEOUS/DIVERSIFIED (1.53%)
1,353,100 Republic Industries, Inc.* 19,704,519
- --------------------------------------------------------------------------------
RETAIL - RESTAURANTS (0.93%)
200,000 McDonalds Corp. 11,937,500
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE COMPUTERS (0.85%)
1,008,350 CHS Electronics, Inc.* 10,965,806
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE OFFICE SUPPLIES (1.15%)
657,900 Office Depot, Inc.* 14,761,631
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE - AUTO PARTS (0.99%)
520,000 Autozone, Inc.* 12,805,000
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (92.50%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
RETAIL/WHOLESALE - BUILDING PRODUCTS (0.68%)
275,000 Lowes Cos., Inc. $ 8,748,437
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (1.66%)
175,000 MCI Worldcom, Inc.* 8,553,125
- --------------------------------------------------------------------------------
635,000 Nextel Communications, Inc.* 12,819,063
- --------------------------------------------------------------------------------
21,372,188
- --------------------------------------------------------------------------------
TEXTILE - APPAREL MANUFACTURING (3.98%)
1,249,900 Tommy Hilfiger Corporation* 51,245,900
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost $1,252,448,281) 1,190,373,215
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (1.35%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
$ 17,335,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998, to be repurchased at
$17,337,576 on October 1, 1998, collateralized
by U.S. Treasury Bond, 5.70% - August 18,
2000, with a value of $17,685,527 17,335,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(Cost $17,335,000) 17,335,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (Cost $1,269,783,281) (93.85%) 1,207,708,215
- --------------------------------------------------------------------------------
Other assets, less liabilities (6.15%) 79,120,031
- --------------------------------------------------------------------------------
Net Assets (100.00%) $1,286,828,246
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See notes to financial statements.
THE BERGER FUNDS 46 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER 100 FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- ----------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 1,269,783,281
- ----------------------------------------------------------------------------------
Investments, at value $ 1,207,708,215
- ----------------------------------------------------------------------------------
Cash 11,249
- ----------------------------------------------------------------------------------
Receivables
Investment securities sold 89,695,313
- ----------------------------------------------------------------------------------
Fund shares sold 302,081
- ----------------------------------------------------------------------------------
Dividends 891,927
- ----------------------------------------------------------------------------------
Interest 2,575
- ----------------------------------------------------------------------------------
Total Assets 1,298,611,360
- ----------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,565,050
- ----------------------------------------------------------------------------------
Fund shares redeemed 7,701,250
- ----------------------------------------------------------------------------------
Accrued investment advisory fees 819,250
- ----------------------------------------------------------------------------------
Accrued custodian and accounting fees 67,736
- ----------------------------------------------------------------------------------
Accrued transfer agent fees 760,141
- ----------------------------------------------------------------------------------
Accrued 12b-1 fees 273,083
- ----------------------------------------------------------------------------------
Accrued audit fees 30,300
- ----------------------------------------------------------------------------------
Accrued administrative service fees 10,923
- ----------------------------------------------------------------------------------
Accrued shareholder report fees 468,854
- ----------------------------------------------------------------------------------
Accrued other expenses 86,527
- ----------------------------------------------------------------------------------
Total Liabilities 11,783,114
- ----------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 1,286,828,246
- ----------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ----------------------------------------------------------------------------------
Shares Outstanding 107,324,847
- ----------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 11.99
- ----------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 9,801,588
- --------------------------------------------------------------------------------
Interest 7,084,499
- --------------------------------------------------------------------------------
Total Income 16,886,087
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 12,939,172
- --------------------------------------------------------------------------------
Administrative services fee 172,523
- --------------------------------------------------------------------------------
Accounting fees 182,199
- --------------------------------------------------------------------------------
Custodian fees 160,054
- --------------------------------------------------------------------------------
Transfer agent fees 3,779,181
- --------------------------------------------------------------------------------
Registration fees 161,467
- --------------------------------------------------------------------------------
12b-1 fees 4,313,057
- --------------------------------------------------------------------------------
Audit fees 62,625
- --------------------------------------------------------------------------------
Legal fees 86,455
- --------------------------------------------------------------------------------
Directors' fees and expenses 182,289
- --------------------------------------------------------------------------------
Reports to shareholders 1,650,483
- --------------------------------------------------------------------------------
Other expenses 172,849
- --------------------------------------------------------------------------------
Gross Expenses 23,862,354
- --------------------------------------------------------------------------------
Less fees paid indirectly (310,226)
- --------------------------------------------------------------------------------
Less earnings credits (103,092)
- --------------------------------------------------------------------------------
Net Expenses 23,449,036
- --------------------------------------------------------------------------------
Net Investment Income (Loss) (6,562,949)
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign currency
transactions 104,647,304
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (344,876,495)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions (240,229,191)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (246,792,140)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 47 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER 100 FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, September 30,
1998 1997
- -----------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (6,562,949) $ (7,681,112)
- -----------------------------------------------------------------------------------
Net realized gain (loss) on securities and
foreign currency transactions 104,647,304 626,966,523
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (344,876,495) (171,376,782)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (246,792,140) 447,908,629
- -----------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income -- --
- -----------------------------------------------------------------------------------
Net realized gains on investments (600,637,304) (270,495,436)
- -----------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders (600,637,304) (270,495,436)
- -----------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 290,185,487 221,412,748
- -----------------------------------------------------------------------------------
Net asset value of shares issued in
reinvestment of distributions 585,186,009 263,475,315
- -----------------------------------------------------------------------------------
Payments for shares redeemed (640,161,573) (775,959,151)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Fund Share Transactions 235,209,923 (291,071,088)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets (612,219,521) (113,657,895)
- -----------------------------------------------------------------------------------
NET ASSETS
Beginning of period 1,899,047,767 2,012,705,662
- -----------------------------------------------------------------------------------
End of period $ 1,286,828,246 $ 1,899,047,767
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 1,254,827,564 $ 1,026,116,791
- -----------------------------------------------------------------------------------
Undistributed net investment income (loss) (157,522) (93,723)
- -----------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 94,233,270 590,223,270
- -----------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions (62,075,066) 282,801,429
- -----------------------------------------------------------------------------------
Total $ 1,286,828,246 $ 1,899,047,767
- -----------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 19,158,620 11,630,377
- -----------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment
of distributions 42,594,228 14,694,636
- -----------------------------------------------------------------------------------
Shares redeemed (42,694,648) (40,551,993)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 19,058,200 (14,226,980)
- -----------------------------------------------------------------------------------
Shares outstanding, beginning of period 88,266,647 102,493,627
- -----------------------------------------------------------------------------------
Shares outstanding, end of period 107,324,847 88,266,647
- -----------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 48 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER/BIAM
INTERNATIONAL
FUND
PORTFOLIO MANAGER'S COMMENTARY BANK OF IRELAND ASSET
MANAGEMENT (U.S.) LTD.
[BERGER/BIAM INTERNATIONAL FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BBINX
- - Fund Number 349
</TABLE>
PERFORMANCE
The Berger/BIAM International Fund (the "Fund") had a total return of -8.46%(1)
for the year ended September 30, 1998. The MSCI EAFE Index(2) returned -8.08%
for the same period.
Global equity markets had a rocky end to the fourth quarter 1997, as the
troubles in Asia began to reverberate around the world. In early 1998, European
markets saw gains that were supported by low bond yields, a positive Wall Street
environment and surging liquidity, but the pace of economic recovery in parts of
continental Europe was reduced mid-year. In Japan, on the back of more evidence
of economic weakness, the government proposed measures aimed at restoring
confidence and boosting economic activity. By the end of February, however,
sentiment had turned negative again, following yet another uninspiring Japanese
government package. The Japanese market fell back during March as the yen
continued to weaken against the dollar throughout the month.
By mid-1998, the main concerns in the market were the emerging crisis in Russia,
plus the possibility of a global slowdown and the impact of this on corporate
profits. This, along with weak Wall Street support, led to a flight out of
equities and into bonds. Financial, industrial and cyclical stocks were
particularly hard hit by the downturn. The Japanese market continued its fall,
and the economic environment in the rest of Asia worsened. Core European markets
underperformed the more peripheral markets, which was attributed to
profit-taking in some of the large European stocks following announcements of a
mixed bag of corporate earnings results.
PERIOD IN REVIEW
Stocks in the Leading Consumer Franchises theme performed well in the first half
of 1998. Nestle, the world's largest foodmaker, announced that sales in the
first four months of 1998 rose by 6.2%. Cadbury Schweppes sales were up, as
sales of their Dr. Pepper and 7-Up beverages helped offset a slowdown in
chocolate sales growth.
However, several consumer stocks, including Sony and BMW, declined in the third
quarter of '98 mainly on fears of a slowdown in global consumer spending.
Stocks in the Healthcare Needs theme had a good first half of the year, led by
Zeneca, which announced a significant increase in profit and sales. Glaxo
Wellcome had a tremendous start to the year, but fell back after its merger with
SmithKline Beecham was aborted. The commercial logic for further consolidation
in the pharmaceutical sector remains sound, however, and should continue to
support share prices.
Performance bright spots were few and far between during the third quarter 1998.
Swiss pharmaceutical company Roche was one of the few positive performers. The
company reiterated its intentions to become one of the world's top three drug
companies, which led to expectations that it will move back into an acquisition
mode.
Stocks in our Growth in Telecommunications theme, which led our portfolio up for
the first half of the year, gave up some of their gains during the third
quarter. Alcatel Alsthom's share price fell when it announced that 1998
operating profits would be below expectations. Ironically, this plunge came
after Alcatel reported the largest half-year profit in French corporate history!
Mannesmann, the German-quoted telecommunications company, also fell, even though
its first-half pretax profits were 75% higher than the previous year.
Most of the portfolio's negative performers in the first half of the year were
stocks that had significant earnings exposure to Asia. Topping the list of
disappointments were stocks quoted in the Expanding Financial Services in
Developing Markets theme. The Positive Banking Environment theme had a tough
third quarter 1998, as banking stocks across the world sold off on fears of
their exposure to Russia and Latin America. Among the stocks hardest hit was
Barclays Bank, which saw its share price fall significantly in August and
September. The share price of Union Bank of Switzerland dropped after the bank
announced it was writing off a $550-million equity stake in the collapsed hedge
fund, Long-Term Capital Management.
LOOKING AHEAD
Despite the retreat of many markets in the third quarter 1998, we believe there
are many positive signs on the horizon for international equity markets. In
Europe, plans for the single currency on January 1, 1999, remain intact, which
should have a positive impact on European equity markets. Japan appears to be
inching closer to a solution to its banking crisis. We continue to find
compelling investment opportunities on a company-by-company basis in Japan, but,
given the current environment, it may be some time before their value
materializes.
We see continued short-term volatility in global equity markets, but we believe
that there is long-term potential in carefully selected international equities.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 Morgan Stanley Capital International EAFE Index represents major overseas
stock markets. It is an unmanaged index. One cannot invest directly in an index.
THE BERGER FUNDS 49 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL FUND
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF BERGER/BIAM
INTERNATIONAL FUND VS. EAFE INDEX AND COST
OF LIVING INDEX
BERGER/BIAM COST OF
INTERNATIONAL EAFE LIVING
FUND INDEX INDEX
<S> <C> <C> <C>
7/31/89 $10,000 $10,000 $10,000
9/30/89 $10,040 $9,989 $10,048
9/30/90 $10,760 $7,253 $10,667
9/30/91 $12,550 $8,871 $11,029
9/30/92 $14,860 $8,269 $11,359
9/30/93 $17,290 $10,482 $11,664
9/30/94 $19,010 $11,542 $12,010
9/30/95 $21,580 $12,247 $12,315
9/30/96 $24,120 $13,341 $12,685
9/30/97 $27,906 $15,008 $12,958
9/30/98 $25,545 $13,795 $13,135
BERGER/BIAM INTERNATIONAL FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -8.46%
5 Year 8.12%
Since Inception 10.77%
(7/31/89)
*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. Performance
figures are historical and, in part, reflect the
performance of a pool of assets advised by
BIAM (Bank of Ireland Asset Management) for
periods before the Fund commenced opera-
tions on October 11, 1996, adjusted to reflect
any increased expenses associated with oper-
ating the Fund. The asset pool was not
registered with the Securities and Exchange
Commission and therefore was not subject to
the investment restrictions imposed by law on
registered mutual funds. If the pool had been
registered, its performance might have been
adversely affected.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger/BIAM International Fund__________________________________________________
In our opinion, the accompanying statement of assets and liabilities 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/BIAM International Fund (one of the funds constituting Berger/BIAM
Worldwide Funds Trust, hereafter referred to as the "Fund") at September 30,
1998, the results of its operations for the year then ended, and the changes in
its net assets and the financial highlights for the year then ended and for the
period November 7, 1996 (commencement of investment operations) through
September 30, 1997, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 generally accepted auditing standards 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 provide a reasonable basis for the opinion expressed
above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 50 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30, 1998
- ------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investment in Berger/BIAM International Portfolio ("Portfolio"),
at value $ 16,542,839
- ------------------------------------------------------------------------------------
Receivable from fund shares sold 2,800
- ------------------------------------------------------------------------------------
Total Assets 16,545,639
- ------------------------------------------------------------------------------------
LIABILITIES
Payables
Fund shares redeemed 23,205
- ------------------------------------------------------------------------------------
Accrued administration fees 6,433
- ------------------------------------------------------------------------------------
Accrued 12b-1 fees 3,574
- ------------------------------------------------------------------------------------
Accrued other expenses 239
- ------------------------------------------------------------------------------------
Total Liabilities 33,451
- ------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 16,512,188
- ------------------------------------------------------------------------------------
Capital Shares
Authorized (par value $0.01) Unlimited
- ------------------------------------------------------------------------------------
Shares Outstanding 1,641,570
- ------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.06
- ------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIO
Interest and dividends (net of $43,205 foreign withholding
taxes) $ 733,706
- --------------------------------------------------------------------------------
Portfolio expenses (net of earnings credits and fee waivers
totaling $22,082) (172,813)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ALLOCATED FROM PORTFOLIO 560,893
- --------------------------------------------------------------------------------
FUND EXPENSES
Administrative services fee 84,522
- --------------------------------------------------------------------------------
Registration fees 14,581
- --------------------------------------------------------------------------------
12b-1 fees 46,957
- --------------------------------------------------------------------------------
Legal fees 2,120
- --------------------------------------------------------------------------------
Net Expenses 148,180
- --------------------------------------------------------------------------------
Net Investment Income (Loss) 412,713
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS ALLOCATED FROM PORTFOLIO
Net realized gain (loss) on securities and foreign currency
transactions (566,046)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (1,417,196)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions Allocated from Portfolio (1,983,242)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (1,570,529)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 51 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period From
Year Ended November 7, 1996(1)
September 30, to
1998 September 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 412,713 $ 85,181
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions allocated from Portfolio (566,046) 379,860
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions allocated from Portfolio (1,417,196) 1,488,886
- -------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations (1,570,529) 1,953,927
- -------------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (98,586) --
- -------------------------------------------------------------------------------------------
In excess of net realized gains on investments and
foreign currency transactions (595,013) --
- -------------------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders (693,599) --
- -------------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 14,273,535 25,761,342
- -------------------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions 671,358 --
- -------------------------------------------------------------------------------------------
Payments for shares redeemed (14,841,862) (9,041,984)
- -------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 103,031 16,719,358
- -------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets (2,161,097) 18,673,285
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 18,673,285 --
- -------------------------------------------------------------------------------------------
End of period $ 16,512,188 $ 18,673,285
- -------------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 16,217,301 $ 16,719,358
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 807,948 85,181
- -------------------------------------------------------------------------------------------
Undistributed (Distributions in excess of) net
realized gain (loss) from investments and
foreign currency transactions (584,751) 379,860
- -------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions 71,690 1,488,886
- -------------------------------------------------------------------------------------------
Total $ 16,512,188 $ 18,673,285
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 1,257,896 2,467,579
- -------------------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
distributions 64,871 --
- -------------------------------------------------------------------------------------------
Shares redeemed (1,310,950) (837,826)
- -------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 11,817 1,629,753
- -------------------------------------------------------------------------------------------
Shares outstanding, beginning of period 1,629,753 --
- -------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,641,570 1,629,753
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
See notes to financial statements.
THE BERGER FUNDS 52 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
GROWTH AND
INCOME FUND
CO-PORTFOLIO SHEILA J. OHLSSON
MANAGERS' COMMENTARY PATRICK S. ADAMS
[BERGER GROWTH AND INCOME FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BEOOX
- - Fund Number 44
</TABLE>
PERFORMANCE
Although the Berger Growth and Income Fund (the "Fund") ended its fiscal year by
outperforming the Standard & Poor's (S&P) 500 for the last quarter, we lagged
the index for the year ended September 30, 1998, losing -1.60%(1) compared with
the 9.08% gain for the S&P 500.(2)
The past year was characterized by a high degree of volatility. Initial concerns
about Asian economies rocked the stock market last September and October.
Technology stocks in particular took significant hits. Within a short time,
however, concerns were set aside and the market took off on a strong trend
upward, led by technology stocks. The Fund was underweighted in technology at
the time, with the belief that Asian problems held greater than average risk for
these stocks. In late January, the market looked past these risks, and
technology stocks moved sharply higher, causing the Fund to lag the index on a
relative basis.
Our Fund also underperformed because we were heavily weighted in oil service
stocks, the prices of which were driven down significantly by concerns of weak
commodity prices. After having eliminated the service companies from the
portfolio early in the year, we have once again taken a small position in the
energy sector. Believing that stock prices adequately reflected a negative
outlook for the oil industry, we took advantage of the opportunity to buy
attractively priced major oil companies, as well as oil service companies.
PERIOD IN REVIEW
One of the key moves we made during the year was the allocation of a portion of
the Fund into electric utilities. On September 30, 1997, the Fund had no
exposure to this group. Beginning in late July we took profits in stocks we felt
were overvalued and in essence locked in the profits by putting those assets to
work in utilities. By year end, 16.6% of total Fund assets were invested in
electric utilities. This was largely a defensive move. High yields and large
cash flows helped utilities such as Duke Energy and Florida Power & Light
perform strongly, even in a tough market.
In the healthcare sector, drug and drug distribution companies proved to be
excellent investments in the roller coaster market. They performed well when the
market went up and held up better than the average stock when the market was
down. We have 18.2% of Fund assets invested in the healthcare sector, which
includes drug distribution companies. We increased the weighting in distribution
companies, such as McKesson, and added other healthcare companies, such as
Cardinal Health, to the portfolio during the recent correction.
We significantly reduced our exposure to financials this year, dropping from
24.2% on September 30, 1997, to 4.0% on September 30, 1998. We sold all Real
Estate Investment Trust (REIT) holdings in January, which proved favorable as
REITs we held underperformed all year. Early in the third quarter, we also
eliminated our brokerage/ investment banking-related holdings. We now own only
Federal Home Loan Mortgage Corp. (Freddie Mac) and Federal National Mortgage
Corp. (Fannie Mae), which should benefit from increased home refinance activity
triggered by declining interest rates.
Over the year, our weighting in the technology sector ranged between 12% and 28%
of Fund assets. As of September 30, 1998, it stood at 27.4%. We are invested
only in what we believe to be the highest-quality technology companies,
including EMC, Dell and Intel. Although some fears about the impact of a
slowdown in Asia on technology companies have been realized, the technology
companies that we currently own in the portfolio provide products and services
that we believe businesses absolutely need in order to remain competitive.
LOOKING AHEAD
There is increasing concern that Asian problems could lead to general global
deflation. Although the U.S. economy still has the strongest equity market in
the world and continues to attract investment from around the world, we are not
immune to global trends. Corporate earnings reports for the third and fourth
quarters 1998 will be an important indicator of domestic strength. Given the
murky global picture, we will continue to closely monitor Fund holdings and
focus on the highest-quality names in industries we believe can hold up well
under a variety of economic scenarios.
We are pleased to announce that Tino Sellitto, Vice President of Berger
Associates, assumed management of the Fund on November 2, 1998, succeeding
Sheila Ohlsson and Pat Adams. Tino joined our investment team as a senior equity
analyst in January 1998 and has four years of experience in the investment
industry. We look forward to his insightful guidance of the Fund in the future.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P 500 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.
THE BERGER FUNDS 53 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF
BERGER GROWTH & INCOME FUND VS.
S&P 500 INDEX AND COST OF LIVING INDEX
BERGER S&P COST OF
GROWTH & 500 LIVING
INCOME FUND INDEX INDEX
<S> <C> <C> <C>
9/30/88 $10,000 $10,000 $10,000
9/30/89 $11,733 $13,293 $10,434
9/30/90 $9,953 $12,065 $11,077
9/30/91 $15,801 $15,820 $11,452
9/30/92 $17,059 $17,565 $11,795
9/30/93 $21,575 $19,845 $12,112
9/30/94 $22,202 $20,576 $12,471
9/30/95 $25,321 $26,689 $12,788
9/30/96 $28,021 $32,114 $13,172
9/30/97 $37,706 $45,098 $13,456
9/30/98 $37,102 $49,182 $13,639
BERGER GROWTH & INCOME FUND*
AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1998
1 Year -1.60%
5 Year 11.45%
10 Year 14.01%
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Berger Growth and Income Fund, Inc._____________________________________________
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 Growth and Income Fund (the
"Fund") at September 30, 1998, 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 four years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above. The financial statements of the Fund for
the year ended September 30, 1994 were audited by other independent accountants
whose report dated October 28, 1994 expressed an unqualified opinion on those
financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 54 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (76.89%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER - LOCAL NETWORKS (2.80%)
35,000 Ascend Communications, Inc.* $ 1,592,500
- --------------------------------------------------------------------------------
47,700 Cisco Systems, Inc.* 2,948,456
- --------------------------------------------------------------------------------
129,300 3Com Corporation* 3,887,081
- --------------------------------------------------------------------------------
8,428,037
- --------------------------------------------------------------------------------
COMPUTER - MINI/MICRO (5.67%)
125,000 Apple Computer, Inc.* 4,765,625
- --------------------------------------------------------------------------------
100,000 Compaq Computer Corporation 3,162,500
- --------------------------------------------------------------------------------
90,200 Dell Computer Corp.* 5,930,650
- --------------------------------------------------------------------------------
65,000 Sun Microsystems, Inc.* 3,237,812
- --------------------------------------------------------------------------------
17,096,587
- --------------------------------------------------------------------------------
COMPUTER - SERVICES (1.23%)
60,000 IMS Health, Inc. 3,716,250
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - DESKTOP (1.83%)
50,000 Microsoft Corp.* 5,503,125
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - ENTERPRISE (1.76%)
90,000 Compuware Corp.* 5,298,750
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (2.17%)
42,300 Monsanto Co. 2,384,662
- --------------------------------------------------------------------------------
75,000 Tyco International, Ltd. 4,143,750
- --------------------------------------------------------------------------------
6,528,412
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (1.05%)
125,000 Applied Materials, Inc.* 3,156,250
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (4.25%)
88,700 Intel Corporation 7,606,025
- --------------------------------------------------------------------------------
45,000 Linear Technology Corp. 2,250,000
- --------------------------------------------------------------------------------
56,000 Texas Instruments, Inc. 2,954,000
- --------------------------------------------------------------------------------
12,810,025
- --------------------------------------------------------------------------------
FINANCE - MORTGAGE & RELATED SERVICES (2.95%)
111,700 Freddie Mac 5,522,168
- --------------------------------------------------------------------------------
52,600 Fannie Mae 3,379,550
- --------------------------------------------------------------------------------
8,901,718
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (1.95%)
125,000 Comcast Corporation Class A 5,867,187
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (1.04%)
66,200 Clear Channel Communications, Inc.* 3,144,500
- --------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (3.97%)
120,400 American Home Products Corp. 6,305,950
- --------------------------------------------------------------------------------
75,000 Warner-Lambert Company 5,662,500
- --------------------------------------------------------------------------------
11,968,450
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (76.89%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL - ETHICAL DRUGS (6.43%)
75,000 Lilly (Eli) & Co. $ 5,873,437
- --------------------------------------------------------------------------------
43,200 Pfizer, Inc. 4,576,500
- --------------------------------------------------------------------------------
75,000 Pharmacia & Upjohn, Inc. 3,764,062
- --------------------------------------------------------------------------------
50,000 Schering-Plough Corp. 5,178,125
- --------------------------------------------------------------------------------
19,392,124
- --------------------------------------------------------------------------------
MEDICAL - PRODUCTS (2.81%)
94,000 Allergan, Inc. 5,487,250
- --------------------------------------------------------------------------------
50,000 Baxter International Inc. 2,975,000
- --------------------------------------------------------------------------------
8,462,250
- --------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG/SUNDRIES (2.99%)
29,600 Cardinal Health, Inc. 3,056,200
- --------------------------------------------------------------------------------
65,000 McKesson Corporation 5,955,625
- --------------------------------------------------------------------------------
9,011,825
- --------------------------------------------------------------------------------
MEDICAL/DENTAL - SUPPLIES (1.95%)
197,800 Allegiance Corporation 5,884,550
- --------------------------------------------------------------------------------
OIL & GAS - DRILLING (2.18%)
210,600 Noble Drilling Corp.* 3,106,350
- --------------------------------------------------------------------------------
100,000 Transocean Offshore, Inc. 3,468,750
- --------------------------------------------------------------------------------
6,575,100
- --------------------------------------------------------------------------------
OIL & GAS - FIELD SERVICES (1.00%)
60,000 Schlumberger Ltd. 3,018,750
- --------------------------------------------------------------------------------
OIL & GAS - U.S. INTEGRATED (2.06%)
53,800 Amoco Corporation 2,898,475
- --------------------------------------------------------------------------------
43,500 Mobil Corporation 3,303,281
- --------------------------------------------------------------------------------
6,201,756
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE (0.15%)
25,000 TJX Companies, Inc. 445,312
- --------------------------------------------------------------------------------
RETAIL - CONSUMER ELECT (0.41%)
30,000 Best Buy Co., Inc.* 1,245,000
- --------------------------------------------------------------------------------
RETAIL - DRUG STORES (2.92%)
110,000 CVS Corp. 4,819,375
- --------------------------------------------------------------------------------
90,000 Walgreen Co. 3,965,625
- --------------------------------------------------------------------------------
8,785,000
- --------------------------------------------------------------------------------
RETAIL - MAJOR DISCOUNT CHAINS (0.18%)
15,000 Dayton-Hudson Corporation 536,250
- --------------------------------------------------------------------------------
RETAIL - SUPERMARKETS (3.93%)
120,000 Albertson's, Inc. 6,495,000
- --------------------------------------------------------------------------------
115,000 Safeway, Inc.* 5,333,125
- --------------------------------------------------------------------------------
11,828,125
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 55 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (76.89%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS - EQUIPMENT (2.21%)
84,900 Nokia Corp. ADR $ 6,659,343
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (3.47%)
75,000 Bell Atlantic Corp. 3,632,812
- --------------------------------------------------------------------------------
57,000 Global Crossing Ltd.* 1,189,875
- --------------------------------------------------------------------------------
115,000 MCI Worldcom, Inc.* 5,620,625
- --------------------------------------------------------------------------------
10,443,312
- --------------------------------------------------------------------------------
TOBACCO (2.06%)
135,000 Philip Morris Companies, Inc. 6,218,437
- --------------------------------------------------------------------------------
UTILITY - ELECTRIC POWER (9.96%)
160,000 Dominion Resources, Inc. 7,140,000
- --------------------------------------------------------------------------------
115,000 Duke Energy Corporation 7,611,562
- --------------------------------------------------------------------------------
100,000 FPL Group, Inc. 6,968,750
- --------------------------------------------------------------------------------
100,000 New England Electrical System 4,150,000
- --------------------------------------------------------------------------------
100,000 Western Resources, Inc. 4,137,500
- --------------------------------------------------------------------------------
30,007,812
- --------------------------------------------------------------------------------
UTILITY - TELEPHONE (1.51%)
102,500 SBC Communications, Inc. 4,548,437
- --------------------------------------------------------------------------------
Total Common Stocks
(cost $210,236,399) 231,682,674
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
PREFERRED STOCK - CONVERTIBLE (6.04%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
INSURANCE - LIFE (0.98%)
75,000 Conseco Financial Trust 7.00% 2,957,812
- --------------------------------------------------------------------------------
UTILITY - ELECTRIC POWER (5.06%)
89,200 Houston Industries, Inc. 7.00% 6,807,075
- --------------------------------------------------------------------------------
150,000 Texas Utilities Co. 9.25% 8,437,508
- --------------------------------------------------------------------------------
15,244,583
- --------------------------------------------------------------------------------
Total Preferred Stock - Convertible
(cost $17,844,650) 18,202,395
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
CORPORATE DEBT - CONVERTIBLE (5.78%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - INTERNET (1.50%)
2,000,000 America Online, Inc. - 4.00%, 11/15/02 $ 4,512,500
- --------------------------------------------------------------------------------
COMPUTER - MEMORY DEVICES (1.57%)
1,850,000 EMC Corp. - 3.25%, 3/15/02 4,736,000
- --------------------------------------------------------------------------------
POLLUTION CONTROL - SERVICES (1.84%)
3,400,000 U.S.A. Waste Services, Inc. - 4.50%, 6/1/01 5,542,000
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE - BUILDING PRODUCTS (0.87%)
1,500,000 Home Depot Inc. - 3.25%, 10/1/01 2,617,500
- --------------------------------------------------------------------------------
Total Corporate Debt - Convertible
(cost $15,270,606) 17,408,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (2.99%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
$ 9,026,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998 to be repurchased at
$9,029,342 on October 1, 1998, collateralized
by U.S. Treasury Bond, 6.00% - October 28,
1999, with a value of $9,210,220. 9,026,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $9,026,000) 9,026,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (cost $252,377,655) (91.70%) 276,319,069
- --------------------------------------------------------------------------------
Other assets, less liabilities (8.30%) 25,010,538
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 301,329,607
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
ADR - American Depository Receipts.
See notes to financial statements.
THE BERGER FUNDS 56 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30, 1998
- ------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 252,377,655
- ------------------------------------------------------------------------
Investments, at value $ 276,319,069
- ------------------------------------------------------------------------
Cash 582
- ------------------------------------------------------------------------
Receivables
Investment securities sold 37,479,725
- ------------------------------------------------------------------------
Fund shares sold 116,583
- ------------------------------------------------------------------------
Dividends 356,646
- ------------------------------------------------------------------------
Interest 109,241
- ------------------------------------------------------------------------
Total Assets 314,381,846
- ------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 12,330,703
- ------------------------------------------------------------------------
Fund shares redeemed 166,503
- ------------------------------------------------------------------------
Accrued investment advisory fees 182,479
- ------------------------------------------------------------------------
Accrued custodian and accounting fees 16,757
- ------------------------------------------------------------------------
Accrued transfer agent fees 165,421
- ------------------------------------------------------------------------
Accrued 12b-1 fees 60,826
- ------------------------------------------------------------------------
Accrued audit fees 19,300
- ------------------------------------------------------------------------
Accrued administrative service fees 2,433
- ------------------------------------------------------------------------
Accrued shareholder report fees 101,851
- ------------------------------------------------------------------------
Accrued other expenses 5,966
- ------------------------------------------------------------------------
Total Liabilities 13,052,239
- ------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 301,329,607
- ------------------------------------------------------------------------
Capital Shares
- ------------------------------------------------------------------------
Authorized (Par Value $0.01) Unlimited
- ------------------------------------------------------------------------
Shares Outstanding 22,159,998
- ------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE $ 13.60
- ------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30, 1998
- -----------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 3,542,314
- -----------------------------------------------------------------------
Interest 2,127,784
Foreign tax withholding (4,904)
- -----------------------------------------------------------------------
Total Income 5,665,194
- -----------------------------------------------------------------------
Expenses
Investment advisory fees 2,539,379
- -----------------------------------------------------------------------
Administrative services fee 33,858
- -----------------------------------------------------------------------
Accounting fees 40,430
- -----------------------------------------------------------------------
Custodian fees 45,131
- -----------------------------------------------------------------------
Transfer agent fees 836,264
- -----------------------------------------------------------------------
Registration fees 36,870
- -----------------------------------------------------------------------
12b-1 fees 846,460
- -----------------------------------------------------------------------
Audit fees 39,955
- -----------------------------------------------------------------------
Legal fees 20,834
- -----------------------------------------------------------------------
Directors' fees and expenses 35,534
- -----------------------------------------------------------------------
Reports to shareholders 360,455
- -----------------------------------------------------------------------
Other expenses 29,380
- -----------------------------------------------------------------------
Gross Expenses 4,864,550
- -----------------------------------------------------------------------
Less fees paid indirectly (25,025)
- -----------------------------------------------------------------------
Less earnings credits (23,701)
- -----------------------------------------------------------------------
Net Expenses 4,815,824
- -----------------------------------------------------------------------
Net Investment Income (loss) 849,370
- -----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions 55,262,003
- -----------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (60,354,177)
- -----------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions (5,092,174)
- -----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ (4,242,804)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 57 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER GROWTH AND INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, September 30,
1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 849,370 $ 2,831,373
- ------------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions 55,262,003 62,443,462
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (60,354,177) 32,101,646
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations (4,242,804) 97,376,481
- ------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (810,870) (2,752,207)
- ------------------------------------------------------------------------------------
In excess of net investment income (117,492) --
- ------------------------------------------------------------------------------------
Net realized gains on investments (59,593,140) (35,161,405)
- ------------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders (60,521,502) (37,913,612)
- ------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 42,707,097 50,210,039
- ------------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions 57,969,279 36,434,190
- ------------------------------------------------------------------------------------
Payments for shares redeemed (91,605,461) (104,621,754)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 9,070,915 (17,977,525)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets (55,693,391) 41,485,344
- ------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 357,022,998 315,537,654
- ------------------------------------------------------------------------------------
End of period $ 301,329,607 $ 357,022,998
- ------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 226,255,471 $ 217,184,556
- ------------------------------------------------------------------------------------
Undistributed (Distributions in excess of) net
investment income (88,579) (38,500)
- ------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 51,221,301 55,581,351
- ------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions 23,941,414 84,295,591
- ------------------------------------------------------------------------------------
Total $ 301,329,607 $ 357,022,998
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 2,928,438 3,472,770
- ------------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
distributions 4,248,233 2,712,734
- ------------------------------------------------------------------------------------
Shares redeemed (6,365,416) (7,277,941)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 811,255 (1,092,437)
- ------------------------------------------------------------------------------------
Shares outstanding, beginning of period 21,348,743 22,441,180
- ------------------------------------------------------------------------------------
Shares outstanding, end of period 22,159,998 21,348,743
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 58 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER
BALANCED
FUND
CO-PORTFOLIO JOHN B. JARES
MANAGERS' COMMENTARY PATRICK S. ADAMS
[BERGER BALANCED FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BEBAX
- - Fund Number 213
</TABLE>
PERFORMANCE
In its first full year of operation, the Berger Balanced Fund (the "Fund")
posted an outstanding return of 56.77%(1) for the year ended September 30, 1998,
which significantly outpaced the 9.08% return posted by the Standard & Poor's
(S&P) 500(2) for the same time period.
Our Fund benefited from the extreme volatility that has characterized the equity
markets over the past twelve months. A high cash position and a advantageous
launch date (September 30, 1997) helped our Fund post a spectacular return in
our first six months. During the fourth quarter 1997, world markets were roiled
by the beginning of the Asian financial crisis. We took advantage of this market
environment to invest Fund assets in the newly available supply of attractively
priced growth stocks. Many of these stocks appreciated nicely during the first
quarter of 1998 as investors returned to stocks that they had aggressively sold
the previous quarter. Although our Fund's performance was not as spectacular the
second half of the fiscal year, our bottom-up style of balanced fund management
enabled us to consistently outperform the benchmark every quarter.
PERIOD IN REVIEW
As of September 30, our Fund's assets were allocated as follows: 51% equities,
42% fixed income and 7% cash/ cash equivalents. We had a relatively high cash
position in mid-August that gave us the opportunity to take advantage of the
market's correction and buy attractively priced growth stocks. Although we will
always have at least 25% of Fund assets invested in stocks and 25% in fixed
income securities, we will invest more heavily in stocks when we consider the
stock market attractive and when the number of potentially profitable
investments is plentiful.
In a tumultuous year, our Fund benefited from strong performances by several
individual companies, including IBM, Intel and Amoco. In addition, our
fixed-income holdings performed well as interest rates fell all year and
currently are setting multiyear lows. As of September 30, we were invested in
fixed-income securities with shorter maturities, generally between two and three
years, because we believe they offer the best value for fixed-income
investments. In order to minimize our exposure to interest-rate risk, the
nonconvertible portion of our fixed-income portfolio is invested only in
investment-grade corporate bonds and U.S. government securities.
LOOKING AHEAD
We remain cautiously optimistic about prospects for the U.S. equity markets.
Many companies are selling at very reasonable valuations, and the outlook for
inflation and interest rates remains quite favorable. We are hopeful the Federal
Reserve will continue to lower rates, which will help improve investor
confidence. However, the financial crisis that began in Asia last year continues
to spread and now threatens economies worldwide, including Latin America and
Canada. If the economies of our largest trading partners enter severe
recessions, we could feel the impact here at home. We will remain vigilant and
monitor how these conditions may affect the earnings growth of companies in
which we invest. In addition, we will continue to invest in attractively priced,
fundamentally sound stocks that we believe will be strong performers over the
long term.
1. Performance figures are based on historical results and are not intended to
be indicative of future performance. 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 S&P 500 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.
THE BERGER FUNDS 59 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
PERFORMANCE OVERVIEW
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF
BERGER BALANCED FUND VS.
S&P 500 INDEX AND COST OF LIVING INDEX
BERGER COST OF
BALANCED S&P 500 LIVING
FUND INDEX INDEX
<S> <C> <C> <C>
9/30/97 $10,000 $10,000 $10,000
12/31/97 $13,789 $10,287 $10,006
3/31/98 $15,810 $11,722 $10,062
6/30/98 $16,477 $12,108 $10,112
9/30/98 $15,677 $10,906 $10,136
BERGER BALANCED FUND*
TOTAL RETURN
As of September 30, 1998
Life of Fund 56.77%
(9/30/97)
*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.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Berger Investment Portfolio Trust_______________________________________________
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 New Generation Fund, Berger
Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund,
Berger Mid Cap Value Fund and Berger Balanced Fund (constituting Berger
Investment Portfolio Trust, hereafter referred to as the "Trust") at September
30, 1998, the results of each of their operations for each of the periods
indicated, the changes in each of their net assets for each of the periods
indicated and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial statements of
Berger Small Company Growth Fund for the period ended September 30, 1994 were
audited by other independent accountants whose report dated October 28, 1994
expressed an unqualified opinion on those financial statements.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
THE BERGER FUNDS 60 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER BALANCED FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (48.45%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
BANKS - MIDWEST (0.47%)
2,100 Nothern Trust Corporation $ 143,325
- --------------------------------------------------------------------------------
BANKS - NORTHEAST (0.52%)
2,900 State Street Corp. 158,231
- --------------------------------------------------------------------------------
COMPUTER - GRAPHICS (1.11%)
13,300 Cadence Design Systems, Inc.* 339,981
- --------------------------------------------------------------------------------
COMPUTER - LOCAL NETWORKS (2.82%)
14,200 3Com Corporation* 426,887
- --------------------------------------------------------------------------------
9,700 Ascend Communications, Inc.* 441,350
- --------------------------------------------------------------------------------
868,237
- --------------------------------------------------------------------------------
COMPUTER - MAINFRAMES (1.46%)
3,500 International Business Machines Corp. 448,000
- --------------------------------------------------------------------------------
COMPUTER - MINI/MICRO (2.32%)
11,700 Compaq Computer Corporation 370,012
- --------------------------------------------------------------------------------
6,900 Sun Microsystems, Inc.* 343,706
- --------------------------------------------------------------------------------
713,718
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - FINANCE (1.02%)
6,700 Intuit, Inc.* 311,968
- --------------------------------------------------------------------------------
COSMETICS/PERSONAL CARE (1.16%)
17,300 The Dial Corporation 356,812
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS (1.03%)
5,700 Tyco International, Ltd. 314,925
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (0.82%)
10,000 Applied Materials, Inc. 252,500
- --------------------------------------------------------------------------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING (4.64%)
7,100 Intel Corporation 608,825
- --------------------------------------------------------------------------------
9,600 Texas Instruments, Inc. 506,400
- --------------------------------------------------------------------------------
8,900 Xilinx, Inc.* 311,500
- --------------------------------------------------------------------------------
1,426,725
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS (1.30%)
6,100 Associates First Capital Corp. Class A 398,025
- --------------------------------------------------------------------------------
FOOD - MEAT PRODUCTS (1.94%)
30,000 Tyson Foods, Inc. 596,250
- --------------------------------------------------------------------------------
FOOD - MISCELLANEOUS PREPARATION (1.67%)
19,700 Keebler Foods Company* 512,200
- --------------------------------------------------------------------------------
</TABLE>
COMMON STOCKS (48.45%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
LEISURE - SERVICES (3.68%)
16,400 Carnival Corporation $ 521,725
- --------------------------------------------------------------------------------
22,900 Royal Caribbean Cruises Ltd. 608,281
- --------------------------------------------------------------------------------
1,130,006
- --------------------------------------------------------------------------------
MEDIA - CABLE TV (2.00%)
7,000 Time Warner, Inc. 612,937
- --------------------------------------------------------------------------------
MEDIA - RADIO/TV (0.65%)
6,000 Chancellor Media Corporation* 200,250
- --------------------------------------------------------------------------------
MEDICAL - DRUG/DIVERSIFIED (2.21%)
6,800 American Home Products Corp. 356,150
- --------------------------------------------------------------------------------
4,300 Warner-Lambert Company 324,650
- --------------------------------------------------------------------------------
680,800
- --------------------------------------------------------------------------------
MEDICAL - ETHICAL DRUGS (2.36%)
5,200 Lilly (Eli) & Co. 407,225
- --------------------------------------------------------------------------------
5,800 SmithKline Beecham PLC ADR 317,550
- --------------------------------------------------------------------------------
724,775
- --------------------------------------------------------------------------------
MEDICAL - HOSPITALS (1.43%)
15,300 Tenet Healthcare Corporation* 439,875
- --------------------------------------------------------------------------------
OIL & GAS - U.S. INTEGRATED (1.23%)
7,000 Amoco Corporation 377,125
- --------------------------------------------------------------------------------
PAPER & PAPER PRODUCTS (1.77%)
13,500 Kimberly-Clark Corp. 546,750
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (3.28%)
21,700 Saks Incorporated 486,893
- --------------------------------------------------------------------------------
11,800 Sears Roebuck & Co. 521,412
- --------------------------------------------------------------------------------
1,008,305
- --------------------------------------------------------------------------------
RETAIL - MISCELLANEOUS/DIVERSIFIED (1.77%)
78,500 Petsmart, Inc.* 544,593
- --------------------------------------------------------------------------------
RETAIL - RESTAURANTS (0.88%)
17,000 Darden Restaurants, Inc. 272,000
- --------------------------------------------------------------------------------
RETAIL/WHOLESALE - BUILDING PRODUCTS (0.52%)
5,000 Lowes Cos., Inc. 159,062
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - SERVICES (0.90%)
8,800 Qwest Communications International, Inc. 275,550
- --------------------------------------------------------------------------------
TEXTILE - APPAREL MANUFACTURING (1.45%)
19,400 Jones Apparel Group, Inc.* 444,987
- --------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 61 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER BALANCED FUND
SCHEDULE OF INVESTMENTS
COMMON STOCKS (48.45%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES/PAR VALUE VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO (2.04%)
13,600 Philip Morris Companies, Inc. $ 626,450
- --------------------------------------------------------------------------------
Total Common Stocks
(cost $15,163,028) 14,884,362
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. TREASURY NOTES (22.95%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
4,000,000 U.S. Treasury Note - 5.50%, 2/28/99 4,016,252
- --------------------------------------------------------------------------------
3,000,000 U.S. Treasury Note - 5.75%, 9/30/99 3,033,763
- --------------------------------------------------------------------------------
Total U.S. Treasury Notes
(cost $6,992,112) 7,050,015
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
CORPORATE DEBT - NON CONVERTIBLE (11.59%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
ELECTRONIC - EQUIPMENT (1.66%)
500,000 General Electric Capital Corp. - 5.89%, 5/11/01 509,475
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS (4.96%)
500,000 Ford Motor Credit Co. - 6.12%, 4/28/03 515,512
- --------------------------------------------------------------------------------
1,000,000 General Motors Acceptance Corp. - 5.80%, 8/7/00 1,008,356
- --------------------------------------------------------------------------------
1,523,868
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT BROKERS (3.31%)
500,000 Merrill Lynch & Co., Inc. - 6.02%, 5/11/01 508,899
- --------------------------------------------------------------------------------
500,000 Merrill Lynch & Co., Inc. - 6.48%, 3/1/00 507,056
- --------------------------------------------------------------------------------
1,015,955
- --------------------------------------------------------------------------------
RETAIL - DEPARTMENT STORES (1.66%)
495,000 Sears Roebuck - 6.69%, 4/30/01 510,867
- --------------------------------------------------------------------------------
Total Corporate Debt - Non Convertible
(cost $3,506,677) 3,560,165
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.33%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
1,025,000 Federal National Mortgage Association Note -
5.42%, 10/5/98 1,024,382
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations
(cost $1,024,382) 1,024,382
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (3.00%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
$ 920,000 State Street Repurchase Agreement, 5.35% dated
September 30, 1998 to be repurchased at $920,137
on October 1, 1998, collateralized by U.S.
Treasury Bond, 5.70% - February 22, 2000, with a
value of $939,231. 920,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement
(cost $920,000) 920,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
PREFERRED STOCK - CONVERTIBLE (2.53%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
TRANSPORTATION - RAIL (0.66%)
4,500 Union Pacific Capital Trust 202,500
- --------------------------------------------------------------------------------
UTILITY - ELECTRIC POWER (1.87%)
10,200 Texas Utilities Co. 573,750
- --------------------------------------------------------------------------------
Total Preferred Stock - Convertible
(cost $713,063) 776,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
CORPORATE DEBT - CONVERTIBLE (0.73%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
ELECTRONIC - SEMICONDUCTOR EQUIPMENT (0.73%)
300,000 Lam Research Corp. - 5.00%, 9/1/02 224,625
- --------------------------------------------------------------------------------
Total Corporate Debt - Convertible
(cost $253,125) 224,625
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments (Cost $28,572,387) (92.58%) 28,439,799
- --------------------------------------------------------------------------------
Other assets, less liabilities (7.42%) 2,280,758
- --------------------------------------------------------------------------------
Net Assets (100.00%) $ 30,720,557
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
ADR - American Depository Receipt.
PLC - Public Limited Company.
See notes to financial statements.
THE BERGER FUNDS 62 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30, 1998
- ------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 28,572,387
- ------------------------------------------------------------------------------------
Investments, at value $ 28,439,799
- ------------------------------------------------------------------------------------
Cash 691
- ------------------------------------------------------------------------------------
Receivables
Investment securities sold 2,296,810
- ------------------------------------------------------------------------------------
Fund shares sold 68,978
- ------------------------------------------------------------------------------------
Dividends 15,741
- ------------------------------------------------------------------------------------
Interest 80,280
- ------------------------------------------------------------------------------------
Due from Management Company 3,486
- ------------------------------------------------------------------------------------
Total Assets 30,905,785
- ------------------------------------------------------------------------------------
LIABILITIES
Payables
Fund shares redeemed 125,031
- ------------------------------------------------------------------------------------
Accrued investment advisory fees 17,376
- ------------------------------------------------------------------------------------
Accrued custodian and accounting fees 3,765
- ------------------------------------------------------------------------------------
Accrued transfer agent fees 7,419
- ------------------------------------------------------------------------------------
Accrued 12b-1 fees 6,206
- ------------------------------------------------------------------------------------
Accrued audit fees 15,300
- ------------------------------------------------------------------------------------
Accrued administrative service fees 249
- ------------------------------------------------------------------------------------
Accrued shareholder report fees 1,861
- ------------------------------------------------------------------------------------
Other accrued expenses 8,021
- ------------------------------------------------------------------------------------
Total Liabilities 185,228
- ------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 30,720,557
- ------------------------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ------------------------------------------------------------------------------------
Shares Outstanding 2,313,209
- ------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 13.28
- ------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 101,889
- --------------------------------------------------------------------------------
Interest 687,919
- --------------------------------------------------------------------------------
Total Income 789,808
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 167,958
- --------------------------------------------------------------------------------
Administrative services fee 2,400
- --------------------------------------------------------------------------------
Accounting fees 8,976
- --------------------------------------------------------------------------------
Custodian fees 15,208
- --------------------------------------------------------------------------------
Transfer agent fees 42,414
- --------------------------------------------------------------------------------
Registration fees 25,919
- --------------------------------------------------------------------------------
12b-1 fees 59,985
- --------------------------------------------------------------------------------
Audit fees 21,311
- --------------------------------------------------------------------------------
Legal fees 6,460
- --------------------------------------------------------------------------------
Directors fees and expenses 2,521
- --------------------------------------------------------------------------------
Reports to shareholders 22,802
- --------------------------------------------------------------------------------
Other expenses 286
- --------------------------------------------------------------------------------
Gross Expenses 376,240
- --------------------------------------------------------------------------------
Less fees waived by the advisor (16,303)
- --------------------------------------------------------------------------------
Less earnings credits (4,308)
- --------------------------------------------------------------------------------
Net Expenses 355,629
- --------------------------------------------------------------------------------
Net Investment Income (Loss) 434,179
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign currency
transactions 6,207,143
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (132,588)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions 6,074,555
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 6,508,734
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 63 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Period Ended
September 30, September
1998 30, 1997(1)
- ----------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 434,179 $ --
- ----------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions 6,207,143 --
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (132,588) --
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations 6,508,734 --
- ----------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (407,800) --
- ----------------------------------------------------------------------------------
Net realized gains on investments (2,535,109) --
- ----------------------------------------------------------------------------------
Net Decrease in Net Assets from Dividends and
Distributions to Shareholders (2,942,909) --
- ----------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 38,583,031 7,461,844
- ----------------------------------------------------------------------------------
Net asset value of shares issued in reinvestment
of dividends and distributions 2,636,258 --
- ----------------------------------------------------------------------------------
Payments for shares redeemed (21,526,401) --
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived from
Fund Share Transactions 19,692,888 7,461,844
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 23,258,713 7,461,844
- ----------------------------------------------------------------------------------
NET ASSETS
Beginning of period 7,461,844 --
- ----------------------------------------------------------------------------------
End of period $ 30,720,557 $ 7,461,844
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 27,154,732 $ 7,461,844
- ----------------------------------------------------------------------------------
Undistributed net investment income (loss) 26,379 --
- ----------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
investments 3,672,034 --
- ----------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions (132,588) --
- ----------------------------------------------------------------------------------
Total $ 30,720,557 $ 7,461,844
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS IN FUND SHARES
<TABLE>
<S> <C> <C>
Shares sold 2,988,884 746,184
- ----------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment of
dividends and distributions 220,731 --
- ----------------------------------------------------------------------------------
Shares redeemed (1,642,590) --
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 1,567,025 746,184
- ----------------------------------------------------------------------------------
Shares outstanding, beginning of period 746,184 --
- ----------------------------------------------------------------------------------
Shares Outstanding, End of Period 2,313,209 746,184
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
1. The Fund commenced investment operations on September 30, 1997.
See notes to financial statements.
THE BERGER FUNDS 64 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
NOTES TO
FINANCIAL
STATEMENTS
------------------------------------
- ------------------------------------------------------------------------
1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION
The Berger New Generation Fund ("BNG"), Berger Select Fund ("BSEL"), Berger
Small Company Growth Fund ("BSCG"), Berger Small Cap Value Fund ("BSCV"), Berger
Mid Cap Growth Fund ("BMCG"), Berger Mid Cap Value Fund ("BMCV"), Berger One
Hundred Fund ("100"), Berger/BIAM International Fund ("BBIF"), Berger Growth and
Income Fund ("BG&I") and Berger Balanced Fund ("BBAL")(individually the "Fund"
and collectively, the "Funds") are diversified open-end management investment
companies registered under the Investment Company Act of 1940 (the "1940 Act").
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 investment objective of each Fund is capital
appreciation, including the BBAL and BG&I, which also pursue current income.
100 and BG&I are corporations registered in the State of Maryland. BNG, BSEL,
BSCG, BMCG, BMCV and BBAL are separate series established under the Berger
Investment Portfolio Trust, a Delaware business trust ("BIP Trust"). BSEL and
BMCG commenced operations on December 31, 1997, and BMCV commenced operations on
August 12, 1998. BSCV is the only series established under the Berger Omni
Investment Trust ("OMNI Trust"), a Massachusetts business trust, and offers two
separate classes of shares; Investor Shares ("BSCV; Inv") and Institutional
Shares ("BSCV; Inst"). Both classes have identical rights to earnings, assets
and voting privileges. The BBIF is one of three series established under the
Berger/BIAM Worldwide Funds Trust ("BBWF Trust"), a Delaware business trust.
Other series or portfolios may be added under each Trust in the future. All
costs in organizing the Trusts were borne by Berger Associates, Inc. ("Berger")
or BBOI Worldwide LLC ("BBOI").
BBIF invests all of its investable assets in the Berger/BIAM International
Portfolio (the "Portfolio"), a series of Berger/ BIAM Worldwide Portfolios Trust
("BBWP Trust"). The value of such investment reflects BBIF's proportionate
interest in the net assets of the Portfolio (9% at September 30, 1998). The
Portfolio is an open-end management investment company and has the same
investment objective and policies as BBIF. The performance of BBIF will be
derived from the investment performance of the Portfolio. The financial
statements of the Portfolio, including the schedule of portfolio investments,
are included elsewhere in this report and should be read in conjunction with
BBIF's financial statements.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their 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, the NASDAQ Stock Market 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. 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
directors/trustees of the Funds.
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 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 directors/trustees.
Since BBIF invests all of its investable assets in the Portfolio, the value of
BBIF's investable assets will be equal to the value of its beneficial interest
in the Portfolio. Valuation of securities by the Portfolio is discussed in Note
1 of the Portfolio's Notes to Financial Statements, which are included elsewhere
in this report.
CALCULATION OF NET ASSET VALUE
Each Fund's per share calculation of net asset value is determined by dividing
the total value of its assets, less liabilities, by the total number of shares
outstanding.
FEDERAL INCOME TAX STATUS
It is the Funds' policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of their
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
THE BERGER FUNDS 65 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
- --------------------------------------------------------------------------------
1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- --------------------------------------------------------------------------------
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.
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, except if the
ex-dividend date has passed, certain dividends from foreign securities are
reported as soon as a Fund is informed of the ex-dividend date. Interest income
is recorded on the accrual basis and includes amortization of discounts and
premiums. Gains and losses are computed on the identified cost basis for both
financial statement and federal income tax purposes for all securities.
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES
Income, expenses (other than those attributable to a specific class) and gains
and losses of the BSCV are allocated daily to each class of shares based upon
the ratio of net assets represented by each class as a percentage of total net
assets of the BSCV. Expenses directly attributable to a specific class are
charged against the operations of such class.
As an investor in the Portfolio, BBIF is allocated its pro rata share of the
aggregate investment income, realized and unrealized gains or losses and annual
operating expenses (including the investment advisory fee, custodian fees,
independent accountants' fees, record keeping and pricing agent fees) of the
Portfolio. Income, realized and unrealized gains or losses and expenses are
allocated on the day incurred in proportion to the prior day's relative net
assets of BBIF and other investors in the Portfolio.
COMMON EXPENSES
Certain expenses that are not directly allocable to a specific Fund are
allocated to the Funds on the basis of relative net assets.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results may differ from those estimates.
- --------------------------------------------------------------------------------
2 AGREEMENTS
- --------------------------------------------------------------------------------
Berger renders investment advisory services to BNG, BSEL, BSCG, BSCV, BMCG,
BMCV, 100, BG&I and BBAL pursuant to agreements that provide for an investment
advisory fee to be paid to Berger at the following annual rates as a percentage
of average daily net assets; BNG, BSCG and BSCV -- .90%; 100, BSEL, BMCG, BMCV
and BG&I -- .75%; and BBAL -- .70%. Berger has delegated the day-to-day
investment management of BSCV and BMCV to Perkins, Wolf & McDonnell and Company
("PWM"). As compensation for services rendered to BSCV, PWM receives a
sub-advisory fee from Berger at an annual rate of .90% of the BSCV's average
daily net assets up to $75 million; .50% of average daily net assets between $75
million and $200 million and .20% of average daily net assets in excess of $200
million. As compensation for services rendered to the BMCV, PWM receives a
sub-advisory fee from Berger at an annual rate of .75% of the BMCV's average
daily net assets up to $50 million; .375% of average daily net assets between
$50 million and $100 million and .20% of average daily net assets in excess of
$100 million. All investment advisory fees are accrued daily and paid monthly.
Berger has also agreed to voluntarily waive its advisory fee for the BNG, BSEL,
BMCG, BMCV and BBAL to the extent that the each Fund's normal operating expenses
in any fiscal year (including the management fee and the 12b-1 fee, but
excluding brokerage commissions, interest, taxes and extraordinary expenses)
exceeds 1.90%, 2.00%, 2.00%, 2.00% and 1.50%, respectively, of each Fund's
average daily net assets for that fiscal year.
Pursuant to an Administrative Services Agreement, whereby BBOI serves as the
administrator to BBIF, the Fund pays BBOI a fee at an annual rate equal to the
lesser of 0.45% of its average daily net assets or BBOI's annual cost to provide
or procure such services plus 0.02% of the Fund's average daily net assets.
Under the Agreement, BBOI is responsible, at its own expense, for providing or
procuring administrative services reasonably necessary for the operation of the
Fund, including recordkeeping and pricing services, custodian services, transfer
agency and dividend disbursing services, tax and audit services, insurance,
printing and mailing to shareholders of prospectuses and other required
communication and certain other administrative services. BBOI has delegated the
administration of the Fund to Berger. For such services, BBOI has agreed to
compensate Berger with a sub-administration fee equal to 0.25% per annum of the
Fund's average daily net assets. Berger has voluntarily waived such fee for the
fiscal year ended September 30, 1998.
The Funds have adopted plans pursuant to Rule 12b-1 under the Investment Company
Act of 1940 (the "Plans"). The BSCV Plan, which became effective February 14,
1997, applies only to the BSCV; Inv. The Plans provide for the payment to Berger
of a 12b-1 fee of .25% per annum of each Fund's average daily net assets (or the
net assets of a particular class of shares, where applicable) to finance
activities primarily
THE BERGER FUNDS 66 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
- --------------------------------------------------------------------------------
2 AGREEMENTS - CONTINUED
- --------------------------------------------------------------------------------
intended to result in the sale of Fund shares. The Plans provide that such
payments will be made to Berger as compensation rather than as reimbursements
for actual expenses incurred to promote the sale of shares of the Funds.
The BNG, BSEL, BSCG, BSCV, BMCG, BMCV, 100, BG&I and BBAL have each entered into
an administrative services agreement with Berger. The administrative services
agreement provides for an annual fee of .01% of the average daily net assets of
each Fund, computed daily and payable monthly. The Funds have also entered into
recordkeeping and pricing agreements with Investors Fiduciary Trust Company
("IFTC"), which also serves as the Funds' custodian and transfer agent. The
record keeping and pricing agreement provides for the monthly payment of a base
fee plus a fee computed as a percentage of average daily net assets on a total
relationship basis with other Berger Funds. IFTC's fees for custody,
recordkeeping and pricing or transfer agency services are subject to reduction
by credits earned by each Fund, based on the cash balances of each 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 Funds as a
sub-transfer agent. DST Securities, Inc., a wholly owned subsidiary of DST, is
designated as an introductory broker on certain portfolio transactions. The
Funds receive an amount equal to the brokerage commissions paid to DST
Securities, Inc. as credits against transfer agent fees and expenses. For the
fiscal year or periods ended September 30, 1998, the following credits were
earned:
<TABLE>
<CAPTION>
Fund Credits
- -------------------------------------------------------------
<S> <C>
BNG $ 1,350
- -------------------------------------------------------------
BSEL 6,615
- -------------------------------------------------------------
BSCG 15,675
- -------------------------------------------------------------
BSCV NA
- -------------------------------------------------------------
BMCG NA
- -------------------------------------------------------------
BMCV NA
- -------------------------------------------------------------
100 310,225
- -------------------------------------------------------------
BBIF NA
- -------------------------------------------------------------
BG&I 25,025
- -------------------------------------------------------------
BBAL NA
- -------------------------------------------------------------
</TABLE>
Certain officers and directors of Berger and BBOI are also officers and/or
directors/trustees of the Funds. Directors/ trustees who are not affiliated with
Berger or BBOI are compensated for their services according to a fee schedule
which includes an annual fee component and a per meeting fee component. Such
directors/trustees fees and expenses totaled $332,322 for the periods ended
September 30, 1998.
The Funds adopted a director/trustee fee deferral plan (the "Plan") which allows
the directors/trustees to defer the receipt of all or a portion of the fees
payable on or after January 16, 1996. The deferred fees remain in the Funds and
are invested in various Berger funds until distribution in accordance with the
Plan.
- --------------------------------------------------------------------------------
3 INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
PURCHASES AND SALES
Purchases and sales of investment securities (excluding short-term securities)
during the fiscal year or periods ended September 30, 1998, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ----------------------------------------------------------
<S> <C> <C>
BNG $ 309,922,020 $ 333,811,004
- ----------------------------------------------------------
BSEL 253,210,677 229,402,823
- ----------------------------------------------------------
BSCG 692,170,461 840,315,633
- ----------------------------------------------------------
BSCV 206,155,276 101,954,394
- ----------------------------------------------------------
BMCG 10,914,667 7,169,476
- ----------------------------------------------------------
BMCV 17,068,628 2,135,517
- ----------------------------------------------------------
100 4,386,713,726 4,595,256,942
- ----------------------------------------------------------
BBIF(1) NA NA
- ----------------------------------------------------------
BG&I 1,293,700,660 1,336,423,905
- ----------------------------------------------------------
BBAL 132,546,914 121,326,646
- ----------------------------------------------------------
</TABLE>
1. See the Portfolio's Notes to Financial Statements for information regarding
purchases and sales of investment securities.
BBAL had purchases of $9,065,430 and sales of $2,020,820 of long-term government
securities during the period ended September 30, 1998. No other Funds purchased
long-term government securities.
UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF
SECURITIES
At September 30, 1998, the federal tax cost of securities and the composition of
unrealized appreciation (the excess of value over tax cost) and unrealized
depreciation (the excess of tax cost over value) for securities was as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Federal Tax Unrealized Unrealized Appreciation
Fund Cost Appreciation (Depreciation) (Depreciation)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BNG $ 103,764,790 $ 17,248,845 $ (7,476,255) $ 9,772,590
- ----------------------------------------------------------------------------
BSEL 35,368,251 604,462 (1,465,505) (861,043)
BSCG 527,609,705 103,743,095 (80,043,748) 23,699,347
- ----------------------------------------------------------------------------
BSCV 222,251,602 13,405,125 (35,484,830) (22,079,705)
- ----------------------------------------------------------------------------
BMCG 4,767,680 275,218 (627,630) (352,412)
- ----------------------------------------------------------------------------
BMCV 21,244,454 259,071 (1,287,283) (1,028,212)
100 1,275,862,224 61,363,482 (129,517,491) (68,154,009)
BBIF(1) NA NA NA NA
- ----------------------------------------------------------------------------
BG&I 262,301,797 17,582,481 (3,565,209) 14,017,272
- ----------------------------------------------------------------------------
BBAL 28,663,705 753,414 (977,320) (223,906)
- ----------------------------------------------------------------------------
</TABLE>
1. See the Portfolio's Notes to Financial Statements for federal tax cost of
securities and the composition of net unrealized appreciation or depreciation of
securities.
THE BERGER FUNDS 67 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
- --------------------------------------------------------------------------------
3 INVESTMENT TRANSACTIONS - CONTINUED
- --------------------------------------------------------------------------------
FUTURES CONTRACTS
Each Fund may enter into futures contracts for hedging purposes. Upon entering
into a contract, a Fund deposits and maintains as collateral such initial margin
as may be required by the exchanges on which the transaction is affected.
Pursuant to the contracts, a Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in the value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by a Fund
as variation margin receivable or payable on futures contracts. During the
period the futures contracts are open, changes in the value of the contracts are
recognized on a daily basis to reflect the market value of the contracts at the
end of each day's trading and are recorded as realized or unrealized gain or
loss, as appropriate. A Fund's use of futures contracts may subject it to
certain risks as a result of unanticipated movements in the market. A lack of
correlation between the value of an instrument underlying a futures contract and
the asset being hedged or unexpected adverse price movements, could render a
Fund's hedging strategy unsuccessful and result in losses. In addition, there
can be no assurance that a liquid secondary market will exist for any contract
purchased or sold. Realized gains or losses on these contracts are a separate
component of Net Realized and Unrealized Gain (Loss) on Investments and Foreign
Currency Transactions in the Statement of Operations.
FORWARD CONTRACTS AND OPTIONS
Each Fund may hold certain types of forward contracts and/or options for the
purpose of hedging each portfolio against exposure to market value fluctuations.
The use of such instruments may involve certain risks as a result of
unanticipated movements in the market. A lack of correlation between the value
of such instruments and the assets being hedged, or unexpected adverse price
movements, could render a Fund's hedging strategy unsuccessful. In addition,
there can be no assurance that a liquid secondary market will exist for the
instrument. Realized gains or losses on these securities are included in Net
Realized Gain (Loss) on Investments and Foreign Currency Transactions in the
Statement of Operations.
REPURCHASE AGREEMENTS
Repurchase agreements held by a Fund are fully collateralized by U.S. Treasury
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 CREDIT RISK
The Funds 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 risks 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 or loss
from investment securities includes fluctuations from currency exchange rates
and fluctuations in market value.
FEDERAL INCOME TAXES
Dividends paid by the Funds from net investment income and distributions of net
realized short-term capital gains are, for federal income tax purposes, taxable
as ordinary income to shareholders. For the fiscal year or period ended
September 30, 1998, 10%, 18% and 1% of the ordinary income distributions
declared by the BSCV, BG&I and BBAL, respectively, qualified for the dividends
received deduction available to corporate shareholders.
For the fiscal year ended September 30, 1998, 67% of the capital gain
distributions of the 100 were long term capital gains.
The Funds distribute net realized capital gains, if any, to their 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 period ended September 30, 1998 the following reclassifications were
made:
<TABLE>
<CAPTION>
BNG BSCG BSCV BMCG 100 BG&I BBIF
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paid in Capital (1,868,101) (5,663,664) (24,162) -- (6,499,150) -- (605,088)
- ----------------------------------------------------------------------------------------------------------------------------------
Undistributed Net Investment Income 1,868,101 7,819,479 2,376,533 22,265 6,499,150 28,913 408,640
- ----------------------------------------------------------------------------------------------------------------------------------
Undistributed Net Realized Gain -- (2,155,815) (2,352,371) (22,265) -- (28,913) 196,448
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 68 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
- --------------------------------------------------------------------------------
3 INVESTMENT TRANSACTIONS - CONTINUED
- --------------------------------------------------------------------------------
During the year ended September 30, 1998, BBIF paid $43,205 of foreign taxes on
$1,131,315 of foreign source income. The Fund will make the foreign tax credit
election to pass through these taxes to shareholders.
Net capital loss carryovers used to offset realized capital gains in 1998 by BNG
amounted to $7,485,327. Additionally, BG&I and BBIF incurred and elected to
defer post-October 31 net capital and/or currency losses of $37,638 and
$604,150, respectively, to the year ended September 30, 1999.
- --------------------------------------------------------------------------------
4 LINE OF CREDIT
- --------------------------------------------------------------------------------
BNG, BSEL, BSCG, BSCV, BMCG, 100, BG&I, BBAL and the Portfolio are party to an
ongoing agreement with certain banks that allows the Funds, collectively, to
borrow up to $150 million for temporary or emergency purposes. Interest on the
borrowings, if any, is charged to the specific Fund or Portfolio executing the
borrowing at the Federal Funds Rate plus 45 basis points. In addition, the line
of credit requires a quarterly payment of a commitment fee based on the average
daily unused portion of the line of credit. At September 30, 1998, the
outstanding line of credit balance was $0.
- --------------------------------------------------------------------------------
5 OTHER MATTERS
- --------------------------------------------------------------------------------
Effective November 17, 1997, BSCG was closed to new investors. During the period
for which the Fund was closed to new investors, Berger reduced the 12b-1 fee
payable by the Fund by the amount of such fee that was not utilized by Berger to
provide or to compensate third party administrators or other companies for
providing shareholder services to Fund shareholders in connection with the
distribution of Fund shares. Effective May 29, 1998, the Fund was reopened to
new investors as a result of an investment policy change with regard to the
allowable market capitalization of the Fund's investments. Effective May 29,
1998, the 12b-1 fee payable by the Fund reverted to .25% per annum of the Fund's
average daily net assets, which was the rate that was in existence prior to the
Fund's closing.
THE BERGER FUNDS 69 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
BERGER/BIAM
INTERNATIONAL
PORTFOLIO
--------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Investors of
Berger/BIAM International Portfolio
- --------------------------------------------------------------------------------
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 supplemental data present fairly, in all material
respects, the financial position of Berger/BIAM International Portfolio (the
sole portfolio comprising Berger/BIAM Worldwide Portfolios Trust, hereafter
referred to as the "Portfolio") at September 30, 1998, the results of its
operations for the year then ended, and the changes in its net assets and the
supplemental data for the year then ended and for the period October 11, 1996
(commencement of investment operations) through September 30, 1997, in
conformity with generally accepted accounting principles. These financial
statements and supplemental data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio'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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
SCHEDULE OF INVESTMENTS
COMMON STOCKS (94.44%) September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY/SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
AUSTRALIA (4.50%)
266,850 National Australia Bank Ltd. Commercial Banks & Other Banks $ 3,233,198
- ------------------------------------------------------------------------------------------------------------------------------
537,645 News Corporation Ltd. Media 3,476,111
- ------------------------------------------------------------------------------------------------------------------------------
457,510 Telstra Corp. Ltd. Utilities 1,285,154
- ------------------------------------------------------------------------------------------------------------------------------
7,994,463
- ------------------------------------------------------------------------------------------------------------------------------
CANADA (0.45%)
19,850 Royal Bank of Canada Commercial Banks & Other Banks 803,002
- ------------------------------------------------------------------------------------------------------------------------------
DENMARK (0.54%)
9,650 Tele Danmark A.S. Utilities 958,845
- ------------------------------------------------------------------------------------------------------------------------------
FRANCE (7.15%)
18,626 Alcatel Alsthom Computer/Commercial/Office Equipment 1,656,945
- ------------------------------------------------------------------------------------------------------------------------------
27,652 AXA-UAP Insurance-Multi/Property/Casualty 2,533,980
- ------------------------------------------------------------------------------------------------------------------------------
33,375 Michelin Class B Auto Components 1,311,605
- ------------------------------------------------------------------------------------------------------------------------------
29,880 Total S.A. - B Oil 3,768,292
- ------------------------------------------------------------------------------------------------------------------------------
17,166 Vivendi Diversified Holding Companies 3,422,099
- ------------------------------------------------------------------------------------------------------------------------------
12,692,921
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 70 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
COMMON STOCKS (94.44%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY/SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
GERMANY (9.74%)
2,808 Bayerische Motoren Werke (BMW) A.G. Automobiles $ 1,808,140
- ------------------------------------------------------------------------------------------------------------------------------
402 Bayerische Motoren Werke (BMW) A.G.(1) Automobiles 252,837
- ------------------------------------------------------------------------------------------------------------------------------
29,300 Bayerische Vereinsbank A.G. Commercial Banks & Other Banks 2,158,734
- ------------------------------------------------------------------------------------------------------------------------------
53,945 Hoechst A.G. Chemicals 2,229,599
- ------------------------------------------------------------------------------------------------------------------------------
76,650 Mannesmann A.G.+ Machinery & Engineering Services 7,024,738
- ------------------------------------------------------------------------------------------------------------------------------
44,851 Veba A.G. Diversified Industrials 2,337,318
- ------------------------------------------------------------------------------------------------------------------------------
2,177 Viag A.G. Utilities 1,497,017
- ------------------------------------------------------------------------------------------------------------------------------
17,308,383
- ------------------------------------------------------------------------------------------------------------------------------
IRELAND (0.04%)
53,200 Smurfit (Jefferson) Group Forestry & Paper Products 79,534
- ------------------------------------------------------------------------------------------------------------------------------
ITALY (2.54%)
155,256 ENI S.p.A. Utilities 952,034
- ------------------------------------------------------------------------------------------------------------------------------
515,711 Telecom Italia S.p.A. Utilities 3,554,526
- ------------------------------------------------------------------------------------------------------------------------------
4,506,560
- ------------------------------------------------------------------------------------------------------------------------------
JAPAN (14.05%)
222,000 Canon, Inc.+ Computer/Commercial/Office Equipment 4,496,819
- ------------------------------------------------------------------------------------------------------------------------------
107,000 Dai Nippon Printing Co. Ltd. Media 1,370,851
- ------------------------------------------------------------------------------------------------------------------------------
30,000 Fuji Photo Film Photo Equipment & Supplies 1,031,078
- ------------------------------------------------------------------------------------------------------------------------------
70,000 Honda Motor Co. Ltd.+ Automobiles 2,124,314
- ------------------------------------------------------------------------------------------------------------------------------
131,000 Kao Corporation Food & Grocery Products 2,088,336
- ------------------------------------------------------------------------------------------------------------------------------
10,900 Keyence Corporation Electronics & Instruments 1,041,776
- ------------------------------------------------------------------------------------------------------------------------------
50,000 Murata Manufacturing Co. Ltd. Electronics & Instruments 1,685,557
- ------------------------------------------------------------------------------------------------------------------------------
17,000 Rohm Company Limited Machinery & Engineering Services 1,616,087
- ------------------------------------------------------------------------------------------------------------------------------
113,000 Shiseido Co. Ltd. Health & Personal Care 995,722
- ------------------------------------------------------------------------------------------------------------------------------
59,400 Sony Corporation+ Household Durables & Appliances 4,122,164
- ------------------------------------------------------------------------------------------------------------------------------
164,000 Takeda Chemical Industries+ Health & Personal Care 4,377,330
- ------------------------------------------------------------------------------------------------------------------------------
24,950,034
- ------------------------------------------------------------------------------------------------------------------------------
MALAYSIA (0.11%)
103,000 Hume Industries Bhd X Construction & Building Materials 51,161
- ------------------------------------------------------------------------------------------------------------------------------
219,400 Sime Darby Bhd X Diversified Holding Companies 146,458
- ------------------------------------------------------------------------------------------------------------------------------
197,619
- ------------------------------------------------------------------------------------------------------------------------------
MEXICO (0.15%)
301,770 Grupo Financiero Banamex Accival* - B Commercial Banks & Other Banks 266,528
- ------------------------------------------------------------------------------------------------------------------------------
NETHERLANDS (8.90%)
76,280 ABN Amro Holdings N.V. Commercial Banks & Other Banks 1,300,952
- ------------------------------------------------------------------------------------------------------------------------------
101,000 Elsevier N.V. Media 1,502,536
- ------------------------------------------------------------------------------------------------------------------------------
128,617 ING Groep N.V. Insurance - Multi/Property/Casualty 5,801,654
- ------------------------------------------------------------------------------------------------------------------------------
60,015 Koninklijke KPN N.V. Utilities 1,855,788
- ------------------------------------------------------------------------------------------------------------------------------
57,925 Koninklijke Ahold N.V. Food & Grocery Products 1,732,687
- ------------------------------------------------------------------------------------------------------------------------------
42,540 Royal Dutch Petroleum Company Oil 2,113,269
- ------------------------------------------------------------------------------------------------------------------------------
58,840 TNT Post Groep N.V. Utilities 1,500,581
- ------------------------------------------------------------------------------------------------------------------------------
15,807,467
- ------------------------------------------------------------------------------------------------------------------------------
PHILIPPINES (0.21%)
286,370 San Miguel Corp. Class B Beverage Industry/Tobacco Manufacturing 369,826
- ------------------------------------------------------------------------------------------------------------------------------
PORTUGAL (0.31%)
23,950 Electricidade de Portugal S.A. Utilities 551,170
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE BERGER FUNDS 71 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
COMMON STOCKS (94.44%) - CONTINUED September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY/SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
SINGAPORE (1.82%)
285,000 City Developments Ltd. Real Estate $ 624,149
- ------------------------------------------------------------------------------------------------------------------------------
303,435 Development Bank of Singapore Ltd. Commercial Banks & Other Banks 1,221,284
- ------------------------------------------------------------------------------------------------------------------------------
61,600 Fraser & Neave Ltd. Beverage Industry/Tobacco Manufacturing 131,986
- ------------------------------------------------------------------------------------------------------------------------------
151,972 Singapore Press Holdings Ltd. Media 1,259,308
- ------------------------------------------------------------------------------------------------------------------------------
3,236,727
- ------------------------------------------------------------------------------------------------------------------------------
SPAIN (1.86%)
145,662 Banco De Santander S.A. Commercial Banks & Other Banks 2,210,413
- ------------------------------------------------------------------------------------------------------------------------------
30,070 Telefonica S.A. Utilities 1,097,963
- ------------------------------------------------------------------------------------------------------------------------------
3,308,376
- ------------------------------------------------------------------------------------------------------------------------------
SWITZERLAND (12.46%)
1,605 Alusuisse Lonza Holdings Group A.G.+ Fabricated Metal Products 1,533,498
- ------------------------------------------------------------------------------------------------------------------------------
2,705 Nestle S.A.+ Food & Grocery Products 5,396,283
- ------------------------------------------------------------------------------------------------------------------------------
3,136 Novartis A.G.+ Health & Personal Care 5,040,770
- ------------------------------------------------------------------------------------------------------------------------------
308 Roche Holding A.G. Health & Personal Care 3,324,302
- ------------------------------------------------------------------------------------------------------------------------------
2,237 Schweizerische Rueckversicherungs Insurance-Multi/Property/Casualty 4,448,073
- ------------------------------------------------------------------------------------------------------------------------------
12,207 Union Bank of Switzerland AG Commercial Banks & Other Banks 2,387,461
- ------------------------------------------------------------------------------------------------------------------------------
22,130,387
- ------------------------------------------------------------------------------------------------------------------------------
THAILAND (0.27%)
503,000 Bangkok Bank PLC Commercial Banks & Other Banks 476,927
- ------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (29.34%)
290,920 Allied Zurich PLC* Insurance - Multi/Property/Casualty 2,975,436
- ------------------------------------------------------------------------------------------------------------------------------
205,350 Barclays Bank PLC Commercial Banks & Other Banks 3,352,730
- ------------------------------------------------------------------------------------------------------------------------------
290,920 British American Tobacco PLC* Tobacco/Financial Services 2,166,088
- ------------------------------------------------------------------------------------------------------------------------------
238,080 Cable & Wireless PLC Utilities 2,269,166
- ------------------------------------------------------------------------------------------------------------------------------
151,900 Cadbury Schweppes PLC Beverage Industry/Tobacco Manufacturing 1,966,497
- ------------------------------------------------------------------------------------------------------------------------------
308,500 Diageo Ordinary PLC* Beverage Industry/Tobacco Manufacturing 2,935,106
- ------------------------------------------------------------------------------------------------------------------------------
170,850 Glaxo Welcome PLC Health & Personal Care 5,041,913
- ------------------------------------------------------------------------------------------------------------------------------
250,750 Granada Group PLC Entertainment/Leisure/Toys 3,152,486
- ------------------------------------------------------------------------------------------------------------------------------
197,978 Kingfisher PLC Retail Trade 1,836,496
- ------------------------------------------------------------------------------------------------------------------------------
353,800 Ladbroke Group PLC Entertainment/Leisure/Toys 1,316,383
- ------------------------------------------------------------------------------------------------------------------------------
351,960 Lloyds TSB Group PLC Commercial Banks & Other Banks 3,940,572
- ------------------------------------------------------------------------------------------------------------------------------
88,420 National Westminster Bank PLC Commercial Banks & Other Banks 1,186,747
- ------------------------------------------------------------------------------------------------------------------------------
321,840 Prudential Corporation PLC Insurance - Life & Agents/Brokers 4,702,394
- ------------------------------------------------------------------------------------------------------------------------------
271,450 Safeway PLC Retail Trade 1,271,703
- ------------------------------------------------------------------------------------------------------------------------------
28,683 Scottish Power PLC Utilities 277,766
- ------------------------------------------------------------------------------------------------------------------------------
517,430 Shell Transport & Trading Company PLC Oil 3,131,749
- ------------------------------------------------------------------------------------------------------------------------------
671,564 Siebe PLC Machinery & Engineering Services 2,167,811
- ------------------------------------------------------------------------------------------------------------------------------
213,300 TI Group PLC Machinery & Engineering Services 1,290,094
- ------------------------------------------------------------------------------------------------------------------------------
346,700 Vodafone Group PLC Utilities 4,023,067
- ------------------------------------------------------------------------------------------------------------------------------
87,850 Zeneca Group PLC Health & Personal Care 3,094,940
- ------------------------------------------------------------------------------------------------------------------------------
52,099,144
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (cost $174,908,990) 167,737,913
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENT (4.71%)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C>
$ 8,368,000 State Street Repurchase Agreement, 5.35%
dated September 30, 1998, to be repurchased
at $8,369,244 On October 1, 1998,
collateralized by U.S. Treasury Bond October
9, 1998, with a value of $8,538,600. 8,368,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Repurchase Agreement (Cost $8,368,000) 8,368,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $183,276,990) (99.15%) 176,105,913
- ------------------------------------------------------------------------------------------------------------------------------
Other assets, less liabilities (.85%) 1,489,887
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.00%) $ 177,595,800
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
+ Security is designated as collateral for forward foreign currency contracts.
1. Shares have reduced dividend rights of ordinary shares.
THE BERGER FUNDS 72 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
/X/ SCHEDULE OF ILLIQUID SECURITIES
<TABLE>
<CAPTION>
Fair Value as a
Security Name Date Acquired Cost Value % of Net Assets
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hume Industries Bhd 4/21/94 $ 559,829 $ 51,161 .03%
- --------------------------------------------------------------------------------------------------
Sime Darby Bhd 12/22/92 $ 556,338 $ 146,458 .08%
- --------------------------------------------------------------------------------------------------
$ 1,116,167 $ 197,619 .11%
- --------------------------------------------------------------------------------------------------
</TABLE>
OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
Unrealized
Contract Maturity Value on September Appreciation
Currency Amount Date 30, 1998 (Depreciation)
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
Buy Japanese Yen 20,000,000 10/2/98 $ 146,252 $ (958)
- ---------------------------------------------------------------------------------------------
Sell Swiss Franc 8,874,000 10/7/98 6,421,798 (581,142)
- ---------------------------------------------------------------------------------------------
Sell Japanese Yen 315,576,000 10/13/98 2,321,595 (46,354)
- ---------------------------------------------------------------------------------------------
Sell German Deutschemark 4,842,000 10/19/98 2,900,662 (195,634)
- ---------------------------------------------------------------------------------------------
Sell Swiss Franc 3,177,000 10/30/98 2,310,310 (150,283)
- ---------------------------------------------------------------------------------------------
Sell Swiss Franc 3,239,000 11/13/98 2,358,991 (173,578)
- ---------------------------------------------------------------------------------------------
Sell Japanese Yen 296,653,000 11/18/98 2,189,481 (122,213)
Sell Japanese Yen 296,547,000 11/30/98 2,192,452 (115,356)
- ---------------------------------------------------------------------------------------------
Sell Japanese Yen 262,626,000 12/9/98 1,944,490 9,573
- ---------------------------------------------------------------------------------------------
Sell Japanese Yen 575,708,000 12/14/98 4,266,005 (242,298)
- ---------------------------------------------------------------------------------------------
Sell Japanese Yen 273,970,000 1/19/99 2,040,737 78,625
- ---------------------------------------------------------------------------------------------
$ 29,092,773 $ (1,539,618)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 73 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
September 30,
1998
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at cost $ 183,276,990
- --------------------------------------------------------------------------------
Investments, at value $ 176,105,913
- --------------------------------------------------------------------------------
Cash 2,643,952
- --------------------------------------------------------------------------------
Foreign cash (cost $954,497) 964,475
- --------------------------------------------------------------------------------
Receivables
Contributions 2,368
- --------------------------------------------------------------------------------
Dividends 650,954
- --------------------------------------------------------------------------------
Interest 1,244
- --------------------------------------------------------------------------------
Due from Management Company 6,143
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Assets 180,375,049
- --------------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,053,108
- --------------------------------------------------------------------------------
Withdrawals 23,235
- --------------------------------------------------------------------------------
Accrued audit fees 26,500
- --------------------------------------------------------------------------------
Accrued investment advisory fees 136,788
- --------------------------------------------------------------------------------
Net unrealized depreciation on forward currency contracts 1,539,618
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Liabilities 2,779,249
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS $ 177,595,800
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
September 30, 1998
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 7,387,853
- --------------------------------------------------------------------------------
Interest 471,919
- --------------------------------------------------------------------------------
Foreign tax withheld (420,767)
- --------------------------------------------------------------------------------
Total Income 7,439,005
- --------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 1,531,256
- --------------------------------------------------------------------------------
Accounting fees 44,391
- --------------------------------------------------------------------------------
Custodian fees 98,663
- --------------------------------------------------------------------------------
Audit fees 51,000
- --------------------------------------------------------------------------------
Legal fees 11,708
- --------------------------------------------------------------------------------
Trustees' fees and expenses 17,799
- --------------------------------------------------------------------------------
Reports to shareholders 4,572
- --------------------------------------------------------------------------------
Other expenses 7,934
- --------------------------------------------------------------------------------
Gross Expenses 1,767,323
- --------------------------------------------------------------------------------
Less fees waived by advisor (61,456)
- --------------------------------------------------------------------------------
Less earnings credits (140,928)
- --------------------------------------------------------------------------------
Net Expenses 1,564,939
- --------------------------------------------------------------------------------
Net investment income (loss) 5,874,066
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions (4,726,150)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (15,953,893)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions (20,680,043)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (14,805,977)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE BERGER FUNDS 74 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period From
October 11,
Year Ended 1996 (1)
September 30, to September
1998 30, 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 5,874,066 $ 1,018,078
- ------------------------------------------------------------------------------------
Net realized gain (loss) on securities and foreign
currency transactions (4,726,150) 1,712,223
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (15,953,893) 6,712,560
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations (14,805,977) 9,442,861
- ------------------------------------------------------------------------------------
FROM TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 103,931,701 127,144,416
- ------------------------------------------------------------------------------------
Withdrawals (33,746,924) (14,370,277)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived From
Investors' Beneficial Interest 70,184,777 112,774,139
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 55,378,800 122,217,000
- ------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 122,217,000 --
- ------------------------------------------------------------------------------------
End of period $177,595,800 $122,217,000
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $182,899,789 $112,774,139
- ------------------------------------------------------------------------------------
Undistributed net investment income (loss) 8,663,777 1,018,078
- ------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
securities and foreign currency transactions (4,726,433) 1,712,223
- ------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
securities and foreign currency transactions (9,241,333) 6,712,560
- ------------------------------------------------------------------------------------
Total $177,595,800 $122,217,000
- ------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (in thousands) $ 177,596 $ 122,217
- ------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.00% 0.89%(2)
- ------------------------------------------------------------------------------------
Ratio of net income (loss) to average net assets 3.45% 1.63%(2)
- ------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.04% 1.10%(2)
- ------------------------------------------------------------------------------------
Portfolio turnover rate 17% 17%
- ------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Annualized.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
See notes to financial statements.
THE BERGER FUNDS 75 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
NOTES TO
FINANCIAL
STATEMENTS
--------------------------
- ------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION
The Berger/BIAM International Portfolio (the "Portfolio") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Portfolio is a series of the Berger/BIAM Worldwide
Portfolios Trust (the "Trust"), which was organized as a Delaware business trust
on May 31, 1996. All costs in organizing the Trust were borne by BBOI Worldwide
LLC ("BBOI"), the investment advisor of the Portfolio. The Portfolio commenced
investment operations on October 11, 1996, ("Commencement of Investment
Operations") with the sale of 448,161 shares of beneficial interest to the
International Equity Fund, formerly known as the Berger/BIAM International
Institutional Fund, in exchange for portfolio assets with an aggregate value of
$4,481,609, which were transferred from the Pooled Trust of Citizens Bank of New
Hampshire ("Citizens NH") to the International Equity Fund and, in turn,
transferred to the Portfolio. Such transaction was a tax-free exchange. Citizens
NH was an affiliate of Bank of Ireland Asset Management (U.S.) Limited ("BIAM"),
which was the investment sub-advisor to the Pooled Trust and is the investment
sub-advisor to the Portfolio. Citizens NH sold their 23.5% interest on September
4, 1998. Currently there are three investors in the Portfolio, the Berger/BIAM
International Fund, the International Equity Fund and the Berger/BIAM
International CORE Fund.
The investment objective of the Portfolio is long-term capital appreciation. The
Portfolio invests primarily in common stocks of well-established companies
located outside the United States.
The Portfolio is advised by BBOI, which has delegated daily investment
management of the Portfolio to BIAM. Berger Associates, Inc. ("Berger") and BIAM
each own 50% of BBOI.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
The Portfolio's securities and other assets are valued at the close of the
regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m. Eastern Standard Time) each day the Exchange is open. The
Portfolio's securities and other assets are valued as follows: securities listed
or traded primarily on foreign exchanges, national exchanges and the NASDAQ
Stock market are valued at the last sale price on such markets, or, if such a
price is lacking for the trading period immediately preceding the time of
determination, such securities are valued at the mean of their current bid and
asked prices. Securities that are traded in the over-the-counter market are
valued at the mean between their current bid and asked prices. Short-term
obligations maturing within 60 days are valued at amortized cost, which
approximates market value. Securities and assets for which quotations are not
readily available are valued at fair values determined in good faith pursuant to
consistently applied procedures established by the trustees of the Portfolio.
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 Portfolio
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.
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.
FEDERAL INCOME TAXES
The Portfolio is considered a partnership for federal income tax purposes. As
such, each investor in the Portfolio will be taxed 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 satisfy the requirements of Sub-Chapter M of the
Internal Revenue Code.
THE BERGER FUNDS 76 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- --------------------------------------------------------------------------------
Income tax regulations may differ from generally accepted accounting principles
primarily due to the differing treatment of net operating losses and foreign
currency transactions. Accordingly, these permanent differences in the character
of income between financial statements and tax basis have been reclassified to
paid-in-capital. During the year ended September 30, 1998, the following
classifications were made:
<TABLE>
<CAPTION>
- -------------------------------------------------
<S> <C>
Paid in Capital $ (59,127)
- -------------------------------------------------
Undistributed Net Investment Income 1,771,633
- -------------------------------------------------
- -------------------------------------------------
Undistributed Net Realized Gain (1,712,506)
- -------------------------------------------------
- -------------------------------------------------
</TABLE>
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Gains and losses are
computed on the identified cost basis for both financial statement and federal
income tax purposes for all securities. Dividend income is recorded on the
ex-dividend date, except if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Portfolio is informed of the
ex-dividend date. Dividend income is recorded net of foreign taxes withheld.
Interest income is recorded on the accrual basis and includes amortization of
discounts and premiums.
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.
FORWARD CURRENCY CONTRACTS
The Portfolio may enter into forward foreign currency exchange contracts for the
purpose of hedging the Portfolio against exposure to market value fluctuations
in foreign currencies. The use of such instruments may involve risks such as the
possibility of illiquid markets or imperfect correlation between the value of
the contracts and the underlying securities, or that the counterparty will fail
to perform its obligations. Forward currency contracts and foreign denominated
assets may involve more risks than domestic transactions, including currency
risk, political and economic risk, regulatory risk and market risk. Risks may
arise from the potential inability of a counterparty to meet the terms of a
contract and from unanticipated movements in the value of foreign currencies
relative to the U.S. dollar. The forward foreign currency exchange contracts are
adjusted to the daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized gains or
losses until the contract settlement date. Realized gains or losses on these
securities are included in Net Realized Gain (Loss) on Investments and Foreign
Currency Transactions in the Statement of Operations.
- --------------------------------------------------------------------------------
2. AGREEMENTS
- --------------------------------------------------------------------------------
BBOI renders investment advisory services to the Portfolio pursuant to an
agreement that provides for an investment advisory fee to be paid to BBOI at the
annual rate of .90% of the Portfolio's average daily net assets. BBOI has agreed
to waive its advisory fee to the extent that the Portfolio's normal operating
expenses in any fiscal year (including the investment advisory fee and custodian
fees, but excluding brokerage commissions, interest, taxes and extraordinary
expenses) exceed 1.00% of the Portfolio's average daily net assets for that
fiscal year. BBOI is also responsible for providing for or arranging for all
managerial and administrative services necessary for the operations of the
Portfolio. BBOI has delegated the daily investment management of the Portfolio
to BIAM. For such services, BBOI pays BIAM a sub-advisory fee equal to .45% of
the average daily net assets of the Portfolio. Such sub-advisory fee has been
voluntarily waived by BIAM from the Commencement of Investment Operations
through September 30, 1998, except for an amount payable on the Citizens NH
converted assets (see note 1).
Investors Fiduciary Trust Company ("IFTC") has been appointed to provide record
keeping and pricing services to the Portfolio, including calculating the net
asset value of the Portfolio, and to perform certain accounting and record
keeping functions required by the Portfolio. In addition, IFTC has been
appointed to serve as the Portfolio's custodian and transfer agent. For
custodian, record keeping and pricing services, the Portfolio pays a fee
directly to IFTC based on a percentage of its net assets, subject to certain
minimums, and reimburses IFTC for certain out-of-pocket expenses. IFTC's fees
for custody, record keeping and pricing, or transfer agency services are subject
to reduction by credits earned by the Portfolio, based on the cash balances of
the Portfolio held by IFTC as custodian or by credits received from directed
brokerage transactions.
Certain officers and trustees of the Trust are officers and directors of Berger,
BBOI or BIAM. Trustees who are not affiliated with Berger, BBOI or BIAM are
compensated for their services according to a fee schedule, allocated among the
Berger Funds (which consists of the New Generation Fund, Select Fund, Small
Company Growth Fund, Small Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value
Fund, One Hundred Fund, Growth & Income Fund and Balanced Fund) and the
Portfolio, which includes an annual fee component and a per
THE BERGER FUNDS 77 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
2. AGREEMENTS - CONTINUED
- --------------------------------------------------------------------------------
meeting component. The Portfolio's portion of the trustees' fees and expenses
for the fiscal year ended September 30, 1998, totaled $17,799.
The Portfolio 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 on
or after January 16, 1996. The deferred fees remain in the Funds and are
invested in various Berger funds until distribution in accordance with the Plan.
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
PURCHASES AND SALES
Purchases and sales of investment securities (excluding short-term securities)
during the year ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
Purchase of Sales of
Investment Investment
Securities Securities
- ----------------------------------
<S> <C>
$100,225,074 $ 27,100,941
- ----------------------------------
</TABLE>
There were no purchases or sales of long-term U.S. Government securities during
the year ended September 30, 1998.
UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF
SECURITIES
At September 30, 1998, the federal tax cost of securities and the composition of
unrealized appreciation (the excess of value over tax cost) and unrealized
depreciation (the excess of tax cost over value) for securities held was as
follows:
<TABLE>
<CAPTION>
Gross Gross
Federal Tax Unrealized Unrealized
Cost Appreciation Depreciation Net
---------------------------------------------------------------
<S> <C> <C> <C>
$183,323,116 $20,191,763 $(27,408,966) $(7,217,203)
---------------------------------------------------------------
</TABLE>
REPURCHASE AGREEMENTS
Repurchase agreements held by the Fund are fully collateralized by U.S. Treasury
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.
- --------------------------------------------------------------------------------
4. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Portfolio, along with the Berger New Generation Fund, Berger Select Fund,
Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger Mid Cap
Growth Fund, Berger One Hundred Fund, Berger Growth and Income Fund, and Berger
Balanced Fund (the "Funds"), are party to an ongoing agreement with certain
banks that allows the Funds and the Portfolio, collectively, to borrow up to
$150 million, subject to certain conditions, for temporary or emergency
purposes. Interest on any borrowings, if any, is charged to the specific Fund or
Portfolio executing the borrowing at the Federal Funds Rate plus 45 basis
points. In addition, the unsecured line of credit requires a quarterly payment
of a commitment fee based on the average daily unused portion of the line of
credit. At September 30, 1998, the outstanding balance on the line of credit was
$0.
THE BERGER FUNDS 78 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
..............................
FINANCIAL
HIGHLIGHTS
------------------------------------
BERGER NEW GENERATION FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
-----------------------------------------------
1998 1997 1996(1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.72 $ 11.82 $ 10.00
- -----------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.13) 0.56
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.06) 3.64 1.26
- -----------------------------------------------------------------------------------------------------
Total from investment operations (2.06) 3.51 1.82
- -----------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- (0.61) --
- -----------------------------------------------------------------------------------------------------
Distributions (from capital gains) -- 0.00 --
- -----------------------------------------------------------------------------------------------------
Total dividends and distributions -- (0.61) --
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.66 $ 14.72 $ 11.82
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Return(2) (13.99)% 31.53% 18.20%
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 113,693 $ 190,164 $ 116,912
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.72% 1.89% 1.90%(4)
- -----------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.37)% (1.51)% 12.35%(4)
- -----------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.72% 1.89% 2.09%(4)
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 243% 184% 474%(5)
- -----------------------------------------------------------------------------------------------------
</TABLE>
1. Period from March 29, 1996 (commencement of investment operations) to
September 30, 1996.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Annualized.
5. Portfolio turnover was greater than anticipated turnover during this period
as a result of portfolio transactions undertaken in response to volatile markets
and the short tax year for its initial period of operations.
BERGER SELECT FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Period from December 31,
1997(1)
to September 30, 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.00
- -----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.07
- -----------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 3.19
- -----------------------------------------------------------------------------------
Total from investment operations 3.26
- -----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- -----------------------------------------------------------------------------------
Distributions (from capital gains) --
- -----------------------------------------------------------------------------------
Total dividends and distributions --
- -----------------------------------------------------------------------------------
Net asset value, end of period $ 13.26
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Return(2) 32.60%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $41,571
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 1.13%(3)
- -----------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.48%(3)
- -----------------------------------------------------------------------------------
Portfolio turnover rate 1486%(4)
- -----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
4. Portfolio turnover was greater than expected during this period due to active
trading undertaken in response to market conditions at a time when the Fund's
assets were still relatively small and before the Fund was fully invested.
See notes to financial statements.
THE BERGER FUNDS 79 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS
BERGER SMALL COMPANY GROWTH FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.33 $ 4.74 $ 3.61 $ 2.74 $ 2.50
- -------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.05) (0.03) (0.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (1.24) 0.84 1.16 0.89 0.24
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.24) 0.79 1.13 0.87 0.24
- -------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- --(2) --
- -------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (0.48) (0.20) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.48) (0.20) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 3.61 $ 5.33 $ 4.74 $ 3.61 $ 2.74
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Total Return(3) (24.70)% 17.68% 31.30% 31.90% 9.60%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 561,741 $ 902,685 $ 871,467 $ 522,667 $ 211,852
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(4) 1.48% 1.67% 1.68% 1.89% 2.10%
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.01)% (1.09)% (0.97)% (0.74)% 0.32%(5)
- -------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.59% 1.67% 1.68% 1.89% 2.10%(5)
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 111% 91% 109% 108%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Period from December 30, 1993 (commencement of investment operations) to
September 30, 1994.
2. Dividends from net investment income were less than $0.01 per share.
3. Total return not annualized for periods of less than one full year.
4. Net expenses represent gross expenses reduced by fees waived by the Advisor.
5. Annualized.
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Year Ended Period from February 14,
September 30, 1997(1)
1998 to September 30, 1997
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 22.28 $ 17.24
- -------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.42 0.03
- -------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses) on
investments and foreign currency
transactions (2.58) 5.01
- -------------------------------------------------------------------------------------------------------------
Total from investment operations (2.16) 5.04
- -------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.17) --
- -------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (2.37) --
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Total dividends and distributions (2.54) --
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.58 $ 22.28
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Total Return(2) (10.98)% 29.23%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $108,465 $55,211
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 0.87% 0.60%(3)
- -------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.56% 1.66%(3)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 81%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations for Investor Share class.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
See notes to financial statements.
THE BERGER FUNDS 80 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS
BERGER SMALL CAP VALUE FUND - INSTITUTIONAL SHARES
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Year Ended Years Ended December 31,
September 30, Nine Months Ended ------------------------------
1998 September 30, 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 22.33 $ 16.48 $ 14.57 $ 12.75 $ 13.99
- ----------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.45 0.07 0.12 0.09 (0.01)
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gains (losses) on investments
and foreign currency income (2.55) 5.78 3.62 3.23 0.91
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.10) 5.85 3.74 3.32 0.90
- ----------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment
income) (0.23) -- (0.11) (0.09) --
- ----------------------------------------------------------------------------------------------------------------------
Distributions (from capital
gains) (2.37) -- (1.72) (1.41) (2.14)
- ----------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (2.60) -- (1.83) (1.50) (2.14)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.63 $ 22.33 $ 16.48 $ 14.57 $ 12.75
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total Return(1) (10.65)% 33.50% 25.58% 26.07% 6.74%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in
thousands) $92,787 $58,450 $ 36,041 $ 31,833 $ 18,270
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to
average net assets 1.26% 0.63%(2) 0.69% 0.64% (0.04)%
- ----------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average
net assets 1.19% 1.34%(2) 1.48% 1.64% 1.43%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 81% 69% 90% 125%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Total return not annualized for periods of less than one full year.
2. Annualized.
BERGER MID CAP GROWTH FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Period from December 31,
1997(1)
to September 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) --
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions 0.93
- ----------------------------------------------------------------------------------
Total from investment operations 0.93
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $ 10.93
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) 9.30%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 4,283
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Net expense ratio to average net
assets(3) 2.00%(4)
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average
net assets (0.82)%(4)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net
assets 2.46(4)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 262%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Annualized.
See notes to financial statements.
THE BERGER FUNDS 81 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS
BERGER MID CAP VALUE FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
For the period from August 12,
1998(1)
to September 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.03
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions (0.70)
- ----------------------------------------------------------------------------------
Total from investment operations (0.67)
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $ 9.33
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) (6.70)%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 19,710
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average
net assets 2.30%(3)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net
assets 1.68%(3)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 25%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
BERGER 100 FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
----------------------------------------------------------------------
1998 1997(1) 1996(1) 1995(1) 1994(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.51 $ 19.64 $ 18.89 $ 15.96 $ 16.54
- -------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.09) (0.08) (0.04) (0.12)
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.57) 4.73 1.76 2.97 (0.46)
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.57) 4.64 1.68 2.93 (0.58)
- -------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (6.95) (2.77) (0.93) -- --
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (6.95) (2.77) (0.93) -- --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.99 $ 21.51 $ 19.64 $ 18.89 $ 15.96
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Total Return (16.08)% 26.50% 9.36% 18.36% (3.51)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,286,828 $1,889,048 $2,012,706 $2,205,678 $2,228,743
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(2) 1.38% 1.41% 1.42% 1.49% 1.70%
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (0.38)% (0.40)% (0.43)% (0.28)% (0.74)%
- -------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.38% 1.41% 1.42% 1.49% 1.95%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 280% 200% 122% 114% 64%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Per share calculations for the period were based on average shares
outstanding.
2. Net expenses represent gross expenses reduced by fees waived by the Advisor.
THE BERGER FUNDS 82 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS
BERGER/BIAM INTERNATIONAL FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Year Ended Period From November 7, 1996
September 30, (1)
1998 to September 30, 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 11.46 $ 10.00
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.74 0.05
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (1.70) 1.41
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (0.96) 1.46
- ---------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.06) --
- ---------------------------------------------------------------------------------------------------------
Distributions (in excess of capital gains) (0.38) --
- ---------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.44) --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.06 $ 11.46
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Total Return(2) (8.46)% 14.60%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $16,515 $18,673
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Net expense ratio to average net
assets(3)(4) 1.80% 1.90%(5)
- ---------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 2.20% 0.61%(5)
- ---------------------------------------------------------------------------------------------------------
Gross expense ratio to average net
assets(4) 1.83% 1.99%(5)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Reflects the Fund's expenses plus the Fund's pro rata share of the
Portfolio's expenses.
5. Annualized.
See notes to financial statements.
BERGER GROWTH AND INCOME FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.72 $ 14.06 $ 12.89 $ 11.48 $ 11.27
- ------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.04 0.14 0.20 0.16 0.12
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (0.30) 4.28 1.17 1.43 0.21
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.26) 4.42 1.37 1.59 0.33
- ------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.03) (0.13) (0.20) (0.18) (0.12)
- ------------------------------------------------------------------------------------------------------------------
Dividends (in excess of net investment
income) (0.01) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (2.82) (1.63) -- -- --
- ------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (2.86) (1.76) (0.20) (0.18) (0.12)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.60 $ 16.72 $ 14.06 $ 12.89 $ 11.48
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return (1.60)% 34.56% 10.66% 14.05% 2.91%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 301,330 $ 357,023 $ 315,538 $ 354,396 $ 391,570
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(1) 1.44% 1.51% 1.56% 1.64% 1.81%
- ------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 0.25% 0.87% 1.39% 1.33% 1.19%
- ------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.44% 1.51% 1.56% 1.64% 2.06%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 417%(2) 173% 112% 85% 23%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Net expenses represent gross expenses reduced by fees waived by the Advisor.
2. Portfolio turnover was greater than expected during this period due to higher
than normal trading activity undertaken in response to market conditions that
existed at that time.
See notes to financial statements.
THE BERGER FUNDS 83 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS
BERGER BALANCED FUND
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Year Ended
September 30,
1998(1)
- ----------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.00
- ----------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.22
- ----------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 5.17
- ----------------------------------------------------------------------
Total from investment operations 5.39
- ----------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.21)
- ----------------------------------------------------------------------
Distributions (from capital gains) (1.90)
- ----------------------------------------------------------------------
Total dividends and distributions (2.11)
- ----------------------------------------------------------------------
Net asset value, end of period $ 13.28
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Total Return 56.77%
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $30,721
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Net expense ratio to average net assets(2) 1.50%
- ----------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 1.81%
- ----------------------------------------------------------------------
Gross expense ratio to average net assets 1.57%
- ----------------------------------------------------------------------
Portfolio turnover rate 658%(3)
- ----------------------------------------------------------------------
</TABLE>
1. The Fund had no financial highlights for the one day of operations during the
period ended September 30, 1997.
2. Net expenses represent gross expenses reduced by fees waived by the Advisor.
3. Portfolio turnover was greater than expected during this period due to higher
than normal trading activity undertaken in response to market conditions at a
time when the Fund's assets were still relatively small and before the Fund was
fully invested.
See notes to financial statements.
THE BERGER FUNDS 84 SEPTEMBER 30, 1998 ANNUAL REPORT
<PAGE>
This page intentionally left blank.
<PAGE>
LIPPER RANKING #1 OUT OF 395 BALANCED FUNDS. (9/30/97-9/30/98)
ON BALANCE:
IT'S BERGER.
BERGER BALANCED FUND IS THE #1 balanced fund, according to Lipper Analytical
Services for the 1-year period ending 9/30/98. The Berger Balanced Fund team,
led by Portfolio Managers Patrick Adams and John Jares, uses proprietary
research to uncover companies they believe represent growth potential, with a
minimum of 25% of portfolio assets in fixed-income securities to provide
portfolio income as they explore further opportunities in stocks.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<S> <C>
Year to Date
(Through 9/30/98) 13.69%
1 Year
(9/30/97-9/30/98) 56.77%
Since Inception
(9/30/97-9/30/98) 56.77%
</TABLE>
800-551-5849
WWW.BERGERFUNDS.COM
Performance is historical and does not represent future results.
Investment return and principal value will vary, and you may have a gain or
loss when you sell shares. Returns were primarily generated during a period of
higher-than-normal trading activity undertaken in response to market conditions
during the Fund's initial period of operations before it became fully invested.
Lipper Analytical Services, Inc. rankings and fund performance figures are
based on total return, including reinvestment of dividends and capital gains
for the stated period. Lipper ranks Berger Balanced Fund #1 out of 395 balanced
funds for the one-year period ended 9/30/98.
To learn more about the no-load Berger Balanced Fund, call for a
prospectus containing more complete information, including risks, fees and
expenses. Read it carefully before you invest.
- -C- 1998 Berger Distributors,
Inc. Member NASD.
BF007
[LOGO] Shareholders with questions should write Bulk Rate
to The Berger Funds, c/o Berger Associates, U.S. Postage
Inc., P.O. Box 5005, Denver, CO 80217, or PAID
call (800) 551-5849. Visit our Web site at Berger Funds
www.bergerfunds.com
COMAR
<PAGE>
----------------------------------
INTERNATIONAL
----------------------------------
EQUITY
----------------------------------
FUND
----------------------------------
SEPTEMBER 30, 1998
A N N U A L R E P O R T
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL
TABLE OF CONTENTS
EQUITY FUND
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
<S> <C>
PORTFOLIO MANAGER'S LETTER......................... 2
REPORT OF INDEPENDENT ACCOUNTANTS.................. 5
STATEMENT OF ASSETS AND LIABILITIES................ 6
STATEMENT OF OPERATIONS............................ 6
STATEMENT OF CHANGES IN NET ASSETS................. 7
NOTES TO FINANCIAL STATEMENTS...................... 8
FINANCIAL HIGHLIGHTS............................... 11
BERGER/BIAM INTERNATIONAL PORTFOLIO
REPORT OF INDEPENDENT ACCOUNTANTS.................. 13
SCHEDULE OF INVESTMENTS............................ 14
STATEMENT OF ASSETS AND LIABILITIES................ 19
STATEMENT OF OPERATIONS............................ 20
STATEMENT OF CHANGES IN NET ASSETS................. 21
NOTES TO FINANCIAL STATEMENTS...................... 22
</TABLE>
1
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL
PORTFOLIO MANAGER'S COMMENTARY
EQUITY FUND
PERFORMANCE
The International Equity Fund (the "Fund") had a total return of -7.77%(1)
for the year ended September 30, 1998. The MSCI EAFE Index(2) returned -8.08%
for the same period.
Global equity markets had a rocky end to the fourth quarter 1997, as the
troubles in Asia began to reverberate around the world. In early 1998, European
markets saw gains that were supported by low bond yields, a positive Wall Street
environment and surging liquidity, but the pace of economic recovery in parts of
continental Europe was reduced mid-year. In Japan, on the back of more evidence
of economic weakness, the government proposed measures aimed at restoring
confidence and boosting economic activity. By the end of February, however,
sentiment had turned negative again, following yet another uninspiring Japanese
government package. The Japanese market fell back during March as the yen
continued to weaken against the dollar throughout the month.
By mid-1998, the main concerns in the market were the emerging crisis in
Russia, plus the possibility of a global slowdown and the impact of this on
corporate profits. This, along with weak Wall Street support, led to a flight
out of equities and into bonds. Financial, industrial and cyclical stocks were
particularly hard hit by the downturn. The Japanese market continued its fall,
and the economic environment in the rest of Asia worsened. Core European markets
underperformed the more peripheral markets, which was attributed to
profit-taking in some of the large European stocks following announcements of a
mixed bag of corporate earnings results.
PERIOD IN REVIEW
Stocks in the Leading Consumer Franchises theme performed well in the first
half of 1998. Nestle, the world's largest foodmaker, announced that sales in the
first four months of 1998 rose by 6.2%. Cadbury Schweppes sales were up, as
sales of their Dr. Pepper and 7-Up beverages helped offset a slowdown in
chocolate sales growth.
However, several consumer stocks, including Sony and BMW, declined in the
third quarter of '98 mainly on fears of a slowdown in global consumer spending.
Stocks in the Healthcare Needs theme had a good first half of the year, led by
Zeneca, which announced a significant increase in profit and sales. Glaxo
Wellcome had a tremendous start to the year, but fell back after its merger with
SmithKline Beecham was aborted. The commercial logic for further consolidation
in the pharmaceutical sector remains sound, however, and should continue to
support share prices.
2
<PAGE>
INTERNATIONAL EQUITY FUND
Performance bright spots were few and far between during the third quarter
1998. Swiss pharmaceutical company Roche was one of the few positive performers.
The company reiterated its intentions to become one of the world's top three
drug companies, which led to expectations that it will move back into an
acquisition mode.
Stocks in our Growth in Telecommunications theme, which led our portfolio up
for the first half of the year, gave up some of their gains during the third
quarter. Alcatel Alsthom's share price fell when it announced that 1998
operating profits would be below expectations. Ironically, this plunge came
after Alcatel reported the largest half-year profit in French corporate history!
Mannesmann, the German-quoted telecommunications company, also fell, even though
its first-half pretax profits were 75% higher than the previous year.
Most of the portfolio's negative performers in the first half of the year were
stocks that had significant earnings exposure to Asia. Topping the list of
disappointments were stocks quoted in the Expanding Financial Services in
Developing Markets theme. The Positive Banking Environment theme had a tough
third quarter 1998, as banking stocks across the world sold off on fears of
their exposure to Russia and Latin America. Among the stocks hardest hit was
Barclays Bank, which saw its share price fall significantly in August and
September. The share price of Union Bank of Switzerland dropped after the bank
announced it was writing off a $550-million equity stake in the collapsed hedge
fund, Long-Term Capital Management.
LOOKING AHEAD
Despite the retreat of many markets in the third quarter 1998, we believe
there are many positive signs on the horizon for international equity markets.
In Europe, plans for the single currency on January 1, 1999, remain intact,
which should have a positive impact on European equity markets. Japan appears to
be inching closer to a solution to its banking crisis. We continue to find
compelling investment opportunities on a company-by-company basis in Japan, but,
given the current environment, it may be some time before their value
materializes.
We see continued short-term volatility in global equity markets, but we
believe that there is long-term potential in carefully selected international
equities.
(1) PERFORMANCE FIGURES ARE BASED ON HISTORICAL RESULTS AND ARE NOT INTENDED
TO BE INDICATIVE OF FUTURE PERFORMANCE. 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 MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX REPRESENTS MAJOR
OVERSEAS STOCK MARKETS. IT IS AN UNMANAGED INDEX. ONE CANNOT INVEST
DIRECTLY IN AN INDEX.
3
<PAGE>
INTERNATIONAL EQUITY FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $1,000,000 INVESTMENT
IN NTERNATIONAL EQUITY FUND VS.
EAFE INDEX AND COST OF LIVING INDEX
INITIAL INVESTMENT $1,000,000
VALUE OF SHARES
INTERNATIONAL EAFE COST OF
EQUITY FUND INDEX LIVING INDEX
7/31/89 $1,000,000 $1,000,000 $1,000,000
9/30/89 $1,004,000 $998,899 $1,004,823
<S> <C> <C> <C>
9/30/90 $1,081,000 $725,314 $1,066,720
9/30/91 $1,266,000 $887,101 $1,102,894
9/30/92 $1,505,000 $826,922 $1,135,852
9/30/93 $1,758,000 $1,048,156 $1,166,399
9/30/94 $1,940,000 $1,154,172 $1,200,965
9/30/95 $2,211,000 $1,224,672 $1,231,511
9/30/96 $2,481,000 $1,334,131 $1,268,489
9/30/97 $2,884,322 $1,500,821 $1,295,820
9/30/98 $2,660,168 $1,379,510 $1,313,505
INTERNATIONAL EQUITY FUND*
AVERAGE ANNUAL TOTAL RETURN
AS OF SEPTEMBER 30, 1998
1 YEAR -7.77%
5 YEARS 8.64%
LIFE OF FUND (7/31/89) 11/26%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
</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. PERFORMANCE FIGURES ARE HISTORICAL AND, IN PART, REFLECT THE
PERFORMANCE OF A POOL OF ASSETS ADVISED BY BIAM (BANK OF IRELAND ASSET
MANAGEMENT) FOR PERIODS BEFORE THE FUND COMMENCED INVESTMENT OPERATIONS ON
OCTOBER 11, 1996, ADJUSTED TO REFLECT ANY INCREASED EXPENSES ASSOCIATED WITH
OPERATING THE FUND. THE ASSET POOL WAS NOT REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND THEREFORE WAS NOT SUBJECT TO THE INVESTMENT
RESTRICTIONS IMPOSED BY LAW ON REGISTERED MUTUAL FUNDS. IF THE POOL HAD BEEN
REGISTERED, ITS PERFORMANCE MIGHT HAVE BEEN ADVERSELY AFFECTED.
4
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL
REPORT OF INDEPENDENT ACCOUNTANTS
EQUITY FUND
To the Board of Trustees and Shareholders of
International Equity Fund
In our opinion, the accompanying statement of assets and liabilities 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
International Equity Fund (one of the funds constituting Berger/BIAM Worldwide
Funds Trust, hereafter referred to as the "Fund") at September 30, 1998, the
results of its operations for the year then ended, and the changes in its net
assets and the financial highlights for the year then ended and for the period
October 11, 1996 (commencement of investment operations) through September 30,
1997, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 generally accepted auditing standards 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 provide a reasonable basis for the opinion expressed
above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
5
<PAGE>
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
1998
<S> <C>
- ---------------------------------------------------------------------
ASSETS
Investment in Berger/BIAM International Portfolio
("Portfolio"), at value $ 7,148,721
Receivable from fund shares sold 813
- ---------------------------------------------------------------------
Total Assets 7,149,534
- ---------------------------------------------------------------------
LIABILITIES
Payables
Accrued administrative fees 614
- ---------------------------------------------------------------------
Total Liabilities 614
- ---------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 7,148,920
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Shares Outstanding
713,483
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE
$ 10.02
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIO
Interest and dividends (net of $17,713 of foreign
withholding taxes) $ 289,991
Portfolio expenses (net of earnings credits and
fee waivers totaling $8,187) (60,473)
- --------------------------------------------------------------------------
Net Investment Income (Loss) allocated from
Portfolio 229,518
- --------------------------------------------------------------------------
FUND EXPENSES
Administrative services fee 6,755
- --------------------------------------------------------------------------
Net Expenses 6,755
- --------------------------------------------------------------------------
Net Investment Income (Loss) 222,763
- --------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
ALLOCATED FROM PORTFOLIO
Net realized gain (loss) on securities and foreign
currency transactions (184,550)
Net change in unrealized appreciation
(depreciation) on securities and foreign currency
transactions (910,289)
- --------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions
Allocated from Portfolio (1,094,839)
- --------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ (872,076)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM
SEPTEMBER 30, OCTOBER 11, 1996(1)
1998 TO SEPTEMBER 30, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 222,763 $ 53,613
Net realized gain (loss) on securities
and foreign currency transactions
allocated from Portfolio (184,550) 121,191
Net change in unrealized appreciation
(depreciation) on securities and
foreign currency transactions allocated
from Portfolio (910,289) 632,348
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (872,076) 807,152
- ---------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net investment income (73,365) --
In excess of net realized gains on
investments and foreign currency
transactions (312,233) --
- ---------------------------------------------------------------------------------------
Net Decrease in Net Assets from
Dividends and Distributions to
Shareholders (385,598) --
- ---------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 3,274,818 7,084,903
Net asset value of shares issued in
reinvestment of dividends and
distributions 376,087 --
Payments for shares redeemed (1,587,277) (1,549,089)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Derived from Fund Share Transactions 2,063,628 5,535,814
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 805,954 6,342,966
- ---------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 6,342,966 --
- ---------------------------------------------------------------------------------------
End of period $ 7,148,920 $ 6,342,966
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 7,395,747 $ 5,535,814
Undistributed net investment income
(loss) 250,609 53,613
Undistributed (Distributions in excess
of) net realized gain (loss) from
investments and foreign currency
transactions allocated from Portfolio (219,495) 121,191
Net unrealized appreciation
(depreciation) of securities and
foreign currency transactions (277,941) 632,348
- ---------------------------------------------------------------------------------------
Total $ 7,148,920 $ 6,342,966
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
TRANSACTIONS IN FUND SHARES
Shares sold 277,815 690,065
Shares issued to shareholders in
reinvestment of dividends and
distributions 36,630 --
Shares redeemed (145,764) (145,263)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 168,681 544,802
Shares outstanding, beginning of period 544,802 --
- ---------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
INTERNATIONAL EQUITY FUND
<TABLE>
<S> <C> <C>
Shares outstanding, end of period 713,483 544,802
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The International Equity Fund (the "Fund"), formerly known as the Berger/BIAM
International Institutional Fund prior to June 20, 1997, is a series of the
Berger/BIAM Worldwide Funds Trust (the "Trust"), a Delaware business trust,
organized on May 31, 1996. The Trust is registered under the Investment Company
Act of 1940, as amended, as an 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/BIAM
International Fund and Berger/BIAM International CORE Fund, are the only series
established under the Trust, although others may be added in the future. The
Trust is also authorized to establish multiple classes of shares representing
differing interests in an existing or new series. The Fund commenced investment
operations on October 11, 1996 ("Commencement of Investment Operations").
The investment objective of the Fund is long-term capital appreciation. The
Fund will invest all of its investable assets in the Berger/BIAM International
Portfolio (the "Portfolio"), a series of Berger/BIAM Worldwide Portfolios Trust.
The value of such investment reflects the Fund's proportionate interest in the
net assets of the Portfolio (4% at September 30, 1998). The Portfolio is an
open-end management investment company and has the same investment objective and
policies as the Fund. The performance of the Fund will be derived from the
investment performance of the Portfolio. The financial statements of the
Portfolio, including the schedule of investments, are included elsewhere in this
report and should be read in conjunction with the Fund's financial statements.
All costs in organizing the Trust were borne by BBOI Worldwide LLC, the
investment advisor of the Portfolio (the "Advisor"). The Advisor has delegated
the daily investment management of the Portfolio to Bank of Ireland Asset
Management (U.S.) Limited ("BIAM" or the "Sub-Advisor"), which owns 50% of the
Advisor. Berger Associates, Inc. ("Berger") also owns 50% of the Advisor.
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
Since the Fund will invest all of its investable assets in the Portfolio, the
value of the Fund's invested assets will be equal to the value of its beneficial
interest in the Portfolio. Valuation of securities by the Portfolio is discussed
in Note 1 of the Portfolio's Notes to Financial Statements which accompany these
Financial Statements for the Fund.
8
<PAGE>
INTERNATIONAL EQUITY FUND
CALCULATION OF NET ASSET VALUE
The per share calculation of net asset value is determined by dividing the
total value of the Fund's assets, less liabilities, by the total number of
shares outstanding.
INCOME AND EXPENSES
As an investor in the Portfolio, the Fund is allocated its pro rata share of
the aggregate investment income, realized and unrealized gains or losses and
annual operating expenses (including the investment advisory fee, custodian
fees, independent accountants' fees, record keeping and pricing agent fees) of
the Portfolio. Income, realized and unrealized gains or losses and expenses are
allocated on the day incurred in proportion to the prior day's relative net
assets of the Fund compared to the other investors in the Portfolio. Expenses
directly attributable to the Fund are charged to the Fund.
FEDERAL INCOME TAXES
Each series of the Trust is treated as a separate entity for federal income
tax purposes. The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no income tax
provision is required.
FEDERAL INCOME TAX STATUS
Dividends paid by the Fund from net investment income and distributions of
net realized short-term capital gains are, for federal income tax purposes,
taxable as ordinary income to shareholders.
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 treatments 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 will be reclassified to paid-in-capital.
During the year ended September 30, 1998 the following reclassifications were
made:
<TABLE>
<S> <C>
Paid in Capital $(203,695)
Undistributed Net Investment
Income 47,598
Undistributed Net Realized Gain 156,097
</TABLE>
During the year ended September 30, 1998, the Fund paid $17,713 of foreign
taxes on $395,909 of foreign source income. The Fund will make the foreign tax
credit election to pass through these taxes to shareholders.
The Fund incurred and elected to defer post-October 31 net capital and
currency losses totaling $278,709.
9
<PAGE>
INTERNATIONAL EQUITY FUND
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 could differ from those estimates.
2. AGREEMENTS
Under an Administrative Services Agreement with the Fund, the Advisor serves
as the administrator of the Fund. Pursuant to such Agreement, the Fund is
obligated to pay the Advisor a fee at an annual rate equal to the lesser of
0.10% of its average daily net assets or the Advisor's annual cost to provide or
procure such services plus 0.01% of the Fund's average daily net assets. Under
the Agreement, the Advisor is responsible, at its own expense, for providing or
procuring all administrative services reasonably necessary for the operation of
the Fund, including record keeping and pricing services, custodian services,
transfer agency and dividend disbursing services, tax and audit services,
insurance, legal services, printing and mailing to shareholders of prospectuses
and other required communications and certain other administrative services. The
Advisor has delegated the administration of the Fund to Berger. For such
services, the Advisor pays Berger a sub-administration fee equal to 0.25% of the
Fund's average daily net assets. Berger has voluntarily waived such
sub-administration fee from the Commencement of Investment Operations through
September 30, 1998.
Investors Fiduciary Trust Company ("IFTC") has been appointed to provide
record keeping and pricing services to the Fund, including calculating the net
asset value of the Fund, and to perform certain accounting and record keeping
functions that it requires. In addition, IFTC has been appointed to serve as the
Fund's custodian, transfer agent and dividend disbursing agent.
Certain officers and trustees of the Trust are officers and directors of
Berger, the Advisor or BIAM. Trustees who are not affiliated with Berger, the
Advisor or BIAM are compensated for their services according to a fee schedule,
allocated among the Berger Funds, which consists of the Berger New Generation
Fund, Berger Select Fund, Berger Small Company Growth Fund, Berger Small Cap
Value Fund, Berger Mid Cap Growth Fund, Berger Mid Cap Value Fund, Berger One
Hundred Fund, Berger Growth and Income Fund and Berger Balanced Fund, and the
Portfolio, which includes an annual fee component and a per meeting component.
Such fees are allocated directly to the Portfolio and, therefore, indirectly to
the Fund.
10
<PAGE>
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS PRESENTED
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED OCTOBER 11, 1996(1)
SEPTEMBER 30, 1998 TO SEPTEMBER 30, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.64 $ 10.00
- --------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.63 0.10
Net realized and unrealized gains
(losses) from investments and foreign
currency transactions (1.52) 1.54
- --------------------------------------------------------------------------------------------
Total from investment operations (0.89) 1.64
- --------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.14) --
Distributions (in excess of capital
gains) (0.59) --
- --------------------------------------------------------------------------------------------
Total dividends and distributions (0.73) --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.02 $ 11.64
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Total Return(2) (7.77)% 16.40%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 7,149 $ 6,343
Net expense ratio to average net
assets(3,4) 1.08% 1.25%(5)
Ratio of net income (loss) to average
net assets 3.30% 1.03%(5)
Gross expense ratio to average net
assets(4) 1.12% 1.34%(5)
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
2. TOTAL RETURN NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE FULL YEAR.
3. NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED BY THE
PORTFOLIO'S ADVISOR.
4. REFLECTS THE FUND'S EXPENSES PLUS THE FUND'S PRO RATA SHARE OF THE
PORTFOLIO'S EXPENSES.
5. ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
BERGER/BIAM
INTERNATIONAL PORTFOLIO
ANNUAL REPORT
The following pages should be read in conjunction
with the International Equity Fund
Annual Report.
12
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL
REPORT OF INDEPENDENT ACCOUNTANTS
EQUITY FUND
To the Board of Trustees and Investors of
Berger/BIAM International Portfolio
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 supplemental data present fairly, in all
material respects, the financial position of Berger/BIAM International Portfolio
(the sole portfolio comprising Berger/ BIAM Worldwide Portfolios Trust,
hereafter referred to as the "Portfolio") at September 30, 1998, the results of
its operations for the year then ended, and the changes in its net assets and
the supplemental data for the year then ended and for the period October 11,
1996 (commencement of investment operations) through September 30, 1997, in
conformity with generally accepted accounting principles. These financial
statements and supplemental data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio'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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
13
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - 94.44%
AUSTRALIA (4.50%)
266,850 National Australia Bank Ltd. Commercial Banks & Other Banks $ 3,233,198
537,645 News Corporation Ltd. Media 3,476,111
457,510 Telstra Corp. Ltd. Utilities 1,285,154
-------------
7,994,463
-------------
CANADA (0.45%)
19,850 Royal Bank of Canada Commercial Banks & Other Banks 803,002
-------------
DENMARK (0.54%)
9,650 Tele Danmark A.S. Utilities 958,845
-------------
FRANCE (7.15%)
18,626 Alcatel Alsthom Computer/Commercial/Office Equipment 1,656,945
27,652 AXA-UAP Insurance - Multi/Property/ Casualty 2,533,980
33,375 Michelin Class B Auto Components 1,311,605
29,880 Total S.A. - B Oil 3,768,292
17,166 Vivendi Diversified Holding Companies 3,422,099
-------------
12,692,921
-------------
GERMANY (9.74%)
2,808 Bayerische Motoren Werke (BMW) A.G. Automobiles 1,808,140
402 Bayerische Motoren Werke (BMW) A.G.(1) Automobiles 252,837
29,300 Bayerische Vereinsbank A.G. Commercial Banks & Other Banks 2,158,734
53,945 Hoechst A.G. Chemicals 2,229,599
76,650 Mannesmann A.G.+ Machinery & Engineering Services 7,024,738
44,851 Veba A.G. Diversified Industrials 2,337,318
2,177 Viag A.G. Utilities 1,497,017
-------------
17,308,383
-------------
IRELAND (0.04%)
53,200 Smurfit (Jefferson) Group Forestry & Paper Products 79,534
-------------
ITALY (2.54%)
155,256 ENI S.p.A. Utilities $ 952,034
</TABLE>
14
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
515,711 Telecom Italia S.p.A. Utilities 3,554,526
-------------
4,506,560
-------------
JAPAN (14.05%)
222,000 Canon, Inc.+ Computer/Commercial/Office Equipment 4,496,819
107,000 Dai Nippon Printing Co. Ltd. Media 1,370,851
30,000 Fuji Photo Film Photo Equipment & Supplies 1,031,078
70,000 Honda Motor Co. Ltd.+ Automobiles 2,124,314
131,000 Kao Corporation Food & Grocery Products 2,088,336
10,900 Keyence Corporation Electronics & Instruments 1,041,776
50,000 Murata Manufacturing Co. Ltd. Electronics & Instruments 1,685,557
17,000 Rohm Company Limited Machinery & Engineering Services 1,616,087
113,000 Shiseido Co. Ltd. Health & Personal Care 995,722
59,400 Sony Corporation+ Household Durables & Appliances 4,122,164
164,000 Takeda Chemical Industries+ Health & Personal Care 4,377,330
-------------
24,950,034
-------------
MALAYSIA (0.11%)
103,000 Hume Industries Bhd X Construction & Building Materials 51,161
219,400 Sime Darby Bhd X Diversified Holding Companies 146,458
-------------
197,619
-------------
MEXICO (0.15%)
301,770 Grupo Financiero Banamex Accival* - B Commercial Banks & Other Banks 266,528
-------------
NETHERLANDS (8.90%)
76,280 ABN Amro Holdings N.V. Commercial Banks & Other Banks 1,300,952
101,000 Elsevier N.V. Media 1,502,536
128,617 ING Groep N.V. Insurance - Multi/Property/ Casualty 5,801,654
60,015 Koninklijke KPN N.V. Utilities 1,855,788
57,925 Koninklijke Ahold N.V. Food & Grocery Products 1,732,687
42,540 Royal Dutch Petroleum Company Oil 2,113,269
58,840 TNT Post Groep N.V. Utilities $ 1,500,581
-------------
15,807,467
-------------
</TABLE>
15
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
PHILIPPINES (0.21%)
286,370 San Miguel Corp. Class B Beverage Industry/Tobacco Manufacturing 369,826
-------------
PORTUGAL (0.31%)
23,950 Electricidade de Portugal S.A. Utilities 551,170
-------------
SINGAPORE (1.82%)
285,000 City Developments Ltd. Real Estate 624,149
303,435 Development Bank of Singapore Ltd. Commercial Banks & Other Banks 1,221,284
61,600 Fraser & Neave Ltd. Beverage Industry/Tobacco Manufacturing 131,986
151,972 Singapore Press Holdings Ltd. Media 1,259,308
-------------
3,236,727
-------------
SPAIN (1.86%)
145,662 Banco De Santander S.A. Commercial Banks & Other Banks 2,210,413
30,070 Telefonica S.A. Utilities 1,097,963
-------------
3,308,376
-------------
SWITZERLAND (12.46%)
1,605 Alusuisse Lonza Holdings Group A.G.+ Fabricated Metal Products 1,533,498
2,705 Nestle S.A.+ Food & Grocery Products 5,396,283
3,136 Novartis A.G.+ Health & Personal Care 5,040,770
308 Roche Holding A.G. Health & Personal Care 3,324,302
2,237 Schweizerische Rueckversicherungs Insurance - Multi/Property/ Casualty 4,448,073
12,207 Union Bank of Switzerland AG Commercial Banks & Other Banks 2,387,461
-------------
22,130,387
-------------
THAILAND (0.27%)
503,000 Bangkok Bank PLC Commercial Banks & Other Banks 476,927
-------------
UNITED KINGDOM (29.34%)
290,920 Allied Zurich PLC* Insurance - Multi/Property/ Casualty 2,975,436
205,350 Barclays Bank PLC Commercial Banks & Other Banks $ 3,352,730
290,920 British American Tobacco PLC* Tobacco/Financial Services 2,166,088
</TABLE>
16
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
238,080 Cable & Wireless PLC Utilities 2,269,166
151,900 Cadbury Schweppes PLC Beverage Industry/Tobacco Manufacturing 1,966,497
308,500 Diageo Ordinary PLC* Beverage Industry/Tobacco Manufacturing 2,935,106
170,850 Glaxo Welcome PLC Health & Personal Care 5,041,913
250,750 Granada Group PLC Entertainment/Leisure/Toys 3,152,486
197,978 Kingfisher PLC Retail Trade 1,836,496
353,800 Ladbroke Group PLC Entertainment/Leisure/Toys 1,316,383
351,960 Lloyds TSB Group PLC Commercial Banks & Other Banks 3,940,572
88,420 National Westminster Bank PLC Commercial Banks & Other Banks 1,186,747
321,840 Prudential Corporation PLC Insurance - Life & Agents/ Brokers 4,702,394
271,450 Safeway PLC Retail Trade 1,271,703
28,683 Scottish Power PLC Utilities 277,766
517,430 Shell Transport & Trading Company PLC Oil 3,131,749
671,564 Siebe PLC Machinery & Engineering Services 2,167,811
213,300 TI Group PLC Machinery & Engineering Services 1,290,094
346,700 Vodafone Group PLC Utilities 4,023,067
87,850 Zeneca Group PLC Health & Personal Care 3,094,940
-------------
52,099,144
-------------
TOTAL COMMON STOCKS (cost $174,908,990) 167,737,913
-------------
REPURCHASE AGREEMENT - 4.71%
$ 8,368,000 State Street Repurchase Agreement, 5.35% dated September 30, 1998, to be repurchased at
$8,369,244 on October 1, 1998, collateralized by U.S. Treasury Bond October 9, 1998, with a
value of $8,538,600.
8,368,000
-------------
TOTAL REPURCHASE AGREEMENT (Cost $8,368,000) 8,368,000
-------------
</TABLE>
17
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
MARKET
VALUE
-------------
<C> <S> <C> <C>
Total Investments (Cost $183,276,990) (99.15%) $176,105,913
Other assets, less liabilities (.85%) 1,489,887
-------------
Net Assets (100.00%) $177,595,800
-------------
-------------
</TABLE>
* NON-INCOME PRODUCING SECURITY.
+ SECURITY IS DESIGNATED AS COLLATERAL FOR FORWARD FOREIGN CURRENCY
CONTRACTS.
1. SHARES HAVE REDUCED DIVIDEND RIGHTS OF ORDINARY SHARES.
X SCHEDULE OF ILLIQUID SECURITIES
<TABLE>
<CAPTION>
FAIR VALUE AS A
SECURITY NAME DATE ACQUIRED COST VALUE % OF NET ASSETS
- ------------------------------ ------------- ------------ ---------- ---------------
<S> <C> <C> <C> <C>
Hume Industries Bhd 4/21/94 $ 559,829 $ 51,161 .03%
Sime Darby Bhd 12/22/92 $ 556,338 $ 146,458 .08%
------------ ---------- ----
$ 1,116,167 $ 197,619 .11%
------------ ---------- ----
------------ ---------- ----
</TABLE>
OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT MATURITY VALUE ON APPRECIATION
CURRENCY AMOUNT DATE SEPTEMBER 30, 1998 (DEPRECIATION)
------------------------- ------------ -------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Buy Japanese Yen 20,000,000 10/2/98 $ 146,252 $ (958)
Sell Swiss Franc 8,874,000 10/7/98 6,421,798 (581,142)
Sell Japanese Yen 315,576,000 10/13/98 2,321,595 (46,354)
Sell German Deutschemark 4,842,000 10/19/98 2,900,662 (195,634)
Sell Swiss Franc 3,177,000 10/30/98 2,310,310 (150,283)
Sell Swiss Franc 3,239,000 11/13/98 2,358,991 (173,578)
Sell Japanese Yen 296,653,000 11/18/98 2,189,481 (122,213)
Sell Japanese Yen 296,547,000 11/30/98 2,192,452 (115,356)
Sell Japanese Yen 262,626,000 12/9/98 1,944,490 9,573
Sell Japanese Yen 575,708,000 12/14/98 4,266,005 (242,298)
Sell Japanese Yen 273,970,000 1/19/99 2,040,737 78,625
------------------- ---------------
$29,092,773 $(1,539,618)
------------------- ---------------
------------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
ASSETS
Investments, at cost $ 183,276,990
- --------------------------------------------------------------------------
Investments, at value $ 176,105,913
Cash 2,643,952
Foreign cash (cost $954,497) 964,475
Receivables
Contributions 2,368
Dividends 650,954
Interest 1,244
Due from Management Company 6,143
- --------------------------------------------------------------------------
Total Assets 180,375,049
- --------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,053,108
Withdrawals 23,235
Accrued audit fees 26,500
Accrued investment advisory fees 136,788
Net unrealized depreciation on forward currency
contracts 1,539,618
- --------------------------------------------------------------------------
Total Liabilities 2,779,249
- --------------------------------------------------------------------------
NET ASSETS $ 177,595,800
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends $ 7,387,853
Interest 471,919
Foreign tax withheld (420,767)
- --------------------------------------------------------------------------
Total Income 7,439,005
- --------------------------------------------------------------------------
Expenses
Investment advisory fees 1,531,256
Accounting fees 44,391
Custodian fees 98,663
Audit fees 51,000
Legal fees 11,708
Trustees' fees and expenses 17,799
Reports to shareholders 4,572
Other expenses 7,934
- --------------------------------------------------------------------------
Gross Expenses 1,767,323
Less fees waived by advisor (61,456)
Less earnings credits (140,928)
- --------------------------------------------------------------------------
Net Expenses 1,564,939
- --------------------------------------------------------------------------
Net investment income (loss) 5,874,066
- --------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on securities and
foreign currency transactions (4,726,150)
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (15,953,893)
- --------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions (20,680,043)
- --------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ (14,805,977)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED OCTOBER 11, 1996(1)
SEPTEMBER 30, TO
1998 SEPTEMBER 30, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 5,874,066 $ 1,018,078
Net realized gain (loss) on securities and foreign currency
transactions (4,726,150) 1,712,223
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (15,953,893) 6,712,560
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations (14,805,977) 9,442,861
- -------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 103,931,701 127,144,416
Withdrawals (33,746,924) (14,370,277)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived From
Investors' Beneficial Interest 70,184,777 112,774,139
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 55,378,800 122,217,000
- -------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 122,217,000 --
- -------------------------------------------------------------------------------------------------------
End of period $ 177,595,800 $ 122,217,000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 182,899,789 $ 112,774,139
Undistributed net investment income (loss) 8,663,777 1,018,078
Undistributed net realized gain (loss) from securities and
foreign currency transactions (4,726,433) 1,712,223
Net unrealized appreciation (depreciation) of securities and
foreign currency transactions (9,241,333) 6,712,560
- -------------------------------------------------------------------------------------------------------
Total $ 177,595,800 $ 122,217,000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (in thousands) $ 177,596 $ 122,217
Net expense ratio to average net assets(3) 1.00% 1.00%(2)
Ratio of net income (loss) to average net assets 3.45% 1.63%(2)
Gross expense ratio to average net assets 1.04% 1.10%(2)
Portfolio turnover rate 17% 17%
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
2. ANNUALIZED.
3. NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED BY THE
ADVISOR.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Berger/BIAM International Portfolio (the "Portfolio") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Portfolio is a series of the Berger/BIAM Worldwide
Portfolios Trust (the "Trust"), which was organized as a Delaware business trust
on May 31, 1996. All costs in organizing the Trust were borne by BBOI Worldwide
LLC ("BBOI"), the investment advisor of the Portfolio. The Portfolio commenced
investment operations on October 11, 1996, ("Commencement of Investment
Operations") with the sale of 448,161 shares of beneficial interest to the
International Equity Fund, formerly known as the Berger/BIAM International
Institutional Fund, in exchange for portfolio assets with an aggregate value of
$4,481,609, which were transferred from the Pooled Trust of Citizens Bank of New
Hampshire ("Citizens NH") to the International Equity Fund and, in turn,
transferred to the Portfolio. Such transaction was a tax-free exchange. Citizens
NH was an affiliate of Bank of Ireland Asset Management (U.S.) Limited ("BIAM"),
which was the investment sub-advisor to the Pooled Trust and is the investment
sub-advisor to the Portfolio. Citizens NH sold their 23.5% interest on September
4, 1998. Currently there are three investors in the Portfolio, the Berger/ BIAM
International Fund, the International Equity Fund and the Berger/BIAM
International CORE Fund.
The investment objective of the Portfolio is long-term capital appreciation.
The Portfolio invests primarily in common stocks of well-established companies
located outside the United States.
The Portfolio is advised by BBOI, which has delegated daily investment
management of the Portfolio to BIAM. Berger Associates, Inc. ("Berger") and BIAM
each own 50% of BBOI.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
The Portfolio's securities and other assets are valued at the close of the
regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m. Eastern Standard Time) each day the Exchange is open. The
Portfolio's securities and other assets are valued as follows: securities listed
or traded primarily on foreign exchanges, national exchanges and the NASDAQ
Stock market are valued at the last sale price on such markets, or, if such a
price is lacking for the trading period immediately preceding the time of
determination, such securities are valued at the
22
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
mean of their current bid and asked prices. Securities that are traded in the
over-the-counter market are valued at the mean between their current bid and
asked prices. Short-term obligations maturing within 60 days are valued at
amortized cost, which approximates market value. Securities and assets for which
quotations are not readily available are valued at fair values determined in
good faith pursuant to consistently applied procedures established by the
trustees of the Portfolio.
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
Portfolio 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.
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.
FEDERAL INCOME TAXES
The Portfolio is considered a partnership for federal income tax purposes. As
such, each investor in the Portfolio will be taxed 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 satisfy the requirements of Sub-Chapter M of the
Internal Revenue Code.
Income tax regulations may differ from generally accepted accounting
principles primarily due to the differing treatment of net operating losses and
foreign currency transactions. Accordingly, these permanent differences in the
character of income between financial statements and tax basis have been
reclassified to paid-in-capital. During the year ended September 30, 1998, the
following classifications were made:
<TABLE>
<S> <C>
Paid in Capital $ (59,127)
Undistributed Net Investment
Income 1,771,633
Undistributed Net Realized Gain (1,712,506)
</TABLE>
23
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Gains and losses are
computed on the identified cost basis for both financial statement and federal
income tax purposes for all securities. Dividend income is recorded on the
ex-dividend date, except if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Portfolio is informed of the
ex-dividend date. Dividend income is recorded net of foreign taxes withheld.
Interest income is recorded on the accrual basis and includes amortization of
discounts and premiums.
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.
FORWARD CURRENCY CONTRACTS
The Portfolio may enter into forward foreign currency exchange contracts for
the purpose of hedging the Portfolio against exposure to market value
fluctuations in foreign currencies. The use of such instruments may involve
risks such as the possibility of illiquid markets or imperfect correlation
between the value of the contracts and the underlying securities, or that the
counterparty will fail to perform its obligations. Forward currency contracts
and foreign denominated assets may involve more risks than domestic
transactions, including currency risk, political and economic risk, regulatory
risk and market risk. Risks may arise from the potential inability of a
counterparty to meet the terms of a contract and from unanticipated movements in
the value of foreign currencies relative to the U.S. dollar. The forward foreign
currency exchange contracts are adjusted to the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial statement
purposes as unrealized gains or losses until the contract settlement date.
Realized gains or losses on these securities are included in Net Realized Gain
(Loss) on Investments and Foreign Currency Transactions in the Statement of
Operations.
2. AGREEMENTS
BBOI renders investment advisory services to the Portfolio pursuant to an
agreement that provides for an investment advisory fee to be paid to BBOI at the
annual rate of .90% of the Portfolio's average daily net assets. BBOI has agreed
to waive its advisory fee to the extent that the Portfolio's normal operating
expenses in any fiscal year (including the investment advisory fee and custodian
fees, but excluding brokerage commissions, interest, taxes and extraordinary
expenses) exceed 1.00% of the Portfolio's average daily net assets for that
fiscal year. BBOI is also responsible for providing for or arranging for all
managerial and administrative services necessary for
24
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
the operations of the Portfolio. BBOI has delegated the daily investment
management of the Portfolio to BIAM. For such services, BBOI pays BIAM a
sub-advisory fee equal to .45% of the average daily net assets of the Portfolio.
Such sub-advisory fee has been voluntarily waived by BIAM from the Commencement
of Investment Operations through September 30, 1998, except for an amount
payable on the Citizens NH converted assets (see note 1).
Investors Fiduciary Trust Company ("IFTC") has been appointed to provide
record keeping and pricing services to the Portfolio, including calculating the
net asset value of the Portfolio, and to perform certain accounting and record
keeping functions required by the Portfolio. In addition, IFTC has been
appointed to serve as the Portfolio's custodian and transfer agent. For
custodian, record keeping and pricing services, the Portfolio pays a fee
directly to IFTC based on a percentage of its net assets, subject to certain
minimums, and reimburses IFTC for certain out-of-pocket expenses. IFTC's fees
for custody, record keeping and pricing, or transfer agency services are subject
to reduction by credits earned by the Portfolio, based on the cash balances of
the Portfolio held by IFTC as custodian or by credits received from directed
brokerage transactions.
Certain officers and trustees of the Trust are officers and directors of
Berger, BBOI or BIAM. Trustees who are not affiliated with Berger, BBOI or BIAM
are compensated for their services according to a fee schedule, allocated among
the Berger Funds (which consists of the New Generation Fund, Select Fund, Small
Company Growth Fund, Small Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value
Fund, One Hundred Fund, Growth & Income Fund and Balanced Fund) and the
Portfolio, which includes an annual fee component and a per meeting component.
The Portfolio's portion of the trustees' fees and expenses for the fiscal year
ended September 30, 1998, totaled $17,799.
The Portfolio 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 on or after January 16, 1996. The deferred fees remain in the Funds and
are invested in various Berger funds until distribution in accordance with the
Plan.
3. INVESTMENT TRANSACTIONS
PURCHASES AND SALES
Purchases and sales of investment securities (excluding short-term
securities) during the year ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
Purchase of Sales of
Investment Investment
Securities Securities
- ------------------ ------------------
<S> <C>
$100,225,074 $ 27,100,941
</TABLE>
There were no purchases or sales of long-term U.S. Government securities
during the year ended September 30, 1998.
25
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF
SECURITIES
At September 30, 1998, the federal tax cost of securities and the composition
of unrealized appreciation (the excess of value over tax cost) and unrealized
depreciation (the excess of tax cost over value) for securities held was as
follows:
<TABLE>
<CAPTION>
Gross Gross
Federal Tax Unrealized Unrealized
Cost Appreciation Depreciation Net
- -------------- ----------- ----------- ----------
<S> <C> <C> <C>
$183,323,116 $20,191,763 $(27,408,966) $(7,217,203)
</TABLE>
REPURCHASE AGREEMENTS
Repurchase agreements held by the Fund are fully collateralized by U.S.
Treasury 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.
4. LINE OF CREDIT
The Portfolio, along with the Berger New Generation Fund, Berger Select Fund,
Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger Mid Cap
Growth Fund, Berger One Hundred Fund, Berger Growth and Income Fund, and Berger
Balanced Fund (the "Funds"), are party to an ongoing agreement with certain
banks that allows the Funds and the Portfolio, collectively, to borrow up to
$150 million, subject to certain conditions, for temporary or emergency
purposes. Interest on any borrowings, if any, is charged to the specific Fund or
Portfolio executing the borrowing at the Federal Funds Rate plus 45 basis
points. In addition, the unsecured line of credit requires a quarterly payment
of a commitment fee based on the average daily unused portion of the line of
credit. At September 30, 1998, the outstanding balance on the line of credit was
$0.
26
<PAGE>
This page intentionally left blank.
<PAGE>
THE BERGER FUNDS ANNUAL REPORT
September 30, 1998
BERGER/BIAM INTERNATIONAL CORE FUND
<PAGE>
- --------------------------------------------------------------------------------
BERGER/BIAM
TABLE OF CONTENTS
INTERNATIONAL CORE FUND
<TABLE>
<CAPTION>
BERGER/BIAM INTERNATIONAL CORE FUND
<S> <C>
PORTFOLIO MANAGER'S LETTER......................... 2
REPORT OF INDEPENDENT ACCOUNTANTS.................. 5
STATEMENT OF ASSETS AND LIABILITIES................ 6
STATEMENT OF OPERATIONS............................ 6
STATEMENT OF CHANGES IN NET ASSETS................. 7
NOTES TO FINANCIAL STATEMENTS...................... 8
FINANCIAL HIGHLIGHTS............................... 11
BERGER/BIAM INTERNATIONAL PORTFOLIO
REPORT OF INDEPENDENT ACCOUNTANTS.................. 13
SCHEDULE OF INVESTMENTS............................ 14
STATEMENT OF ASSETS AND LIABILITIES................ 19
STATEMENT OF OPERATIONS............................ 20
STATEMENT OF CHANGES IN NET ASSETS................. 21
NOTES TO FINANCIAL STATEMENTS...................... 22
</TABLE>
1
<PAGE>
- --------------------------------------------------------------------------------
BERGER/BIAM
PORTFOLIO MANAGER'S COMMENTARY
INTERNATIONAL CORE FUND
PERFORMANCE
The Berger/BIAM International CORE Fund (the "Fund") had a total return of
- -7.79%(1) for the year ended September 30, 1998. The MSCI EAFE Index(2) returned
- -8.08% for the same period.
Global equity markets had a rocky end to the fourth quarter 1997, as the
troubles in Asia began to reverberate around the world. In early 1998, European
markets saw gains that were supported by low bond yields, a positive Wall Street
environment and surging liquidity, but the pace of economic recovery in parts of
continental Europe was reduced mid-year. In Japan, on the back of more evidence
of economic weakness, the government proposed measures aimed at restoring
confidence and boosting economic activity. By the end of February, however,
sentiment had turned negative again, following yet another uninspiring Japanese
government package. The Japanese market fell back during March as the yen
continued to weaken against the dollar throughout the month.
By mid-1998, the main concerns in the market were the emerging crisis in
Russia, plus the possibility of a global slowdown and the impact of this on
corporate profits. This, along with weak Wall Street support, led to a flight
out of equities and into bonds. Financial, industrial and cyclical stocks were
particularly hard hit by the downturn. The Japanese market continued its fall,
and the economic environment in the rest of Asia worsened. Core European markets
underperformed the more peripheral markets, which was attributed to
profit-taking in some of the large European stocks following announcements of a
mixed bag of corporate earnings results.
PERIOD IN REVIEW
Stocks in the Leading Consumer Franchises theme performed well in the first
half of 1998. Nestle, the world's largest foodmaker, announced that sales in the
first four months of 1998 rose by 6.2%. Cadbury Schweppes sales were up, as
sales of their Dr. Pepper and 7-Up beverages helped offset a slowdown in
chocolate sales growth.
However, several consumer stocks, including Sony and BMW, declined in the
third quarter of `98 mainly on fears of a slowdown in global consumer spending.
Stocks in the Healthcare Needs theme had a good first half of the year, led by
Zeneca, which announced a significant increase in profit and sales. Glaxo
Wellcome had a tremendous start to the year, but fell back after its merger with
SmithKline Beecham was aborted. The commercial logic for further consolidation
in the pharmaceutical sector remains sound, however, and should continue to
support share prices.
2
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
Performance bright spots were few and far between during the third quarter
1998. Swiss pharmaceutical company Roche was one of the few positive performers.
The company reiterated its intentions to become one of the world's top three
drug companies, which led to expectations that it will move back into an
acquisition mode.
Stocks in our Growth in Telecommunications theme, which led our portfolio up
for the first half of the year, gave up some of their gains during the third
quarter. Alcatel Alsthom's share price fell when it announced that 1998
operating profits would be below expectations. Ironically, this plunge came
after Alcatel reported the largest half-year profit in French corporate history!
Mannesmann, the German-quoted telecommunications company, also fell, even though
its first-half pretax profits were 75% higher than the previous year.
Most of the portfolio's negative performers in the first half of the year were
stocks that had significant earnings exposure to Asia. Topping the list of
disappointments were stocks quoted in the Expanding Financial Services in
Developing Markets theme. The Positive Banking Environment theme had a tough
third quarter 1998, as banking stocks across the world sold off on fears of
their exposure to Russia and Latin America. Among the stocks hardest hit was
Barclays Bank, which saw its share price fall significantly in August and
September. The share price of Union Bank of Switzerland dropped after the bank
announced it was writing off a $550-million equity stake in the collapsed hedge
fund, Long-Term Capital Management.
LOOKING AHEAD
Despite the retreat of many markets in the third quarter 1998, we believe
there are many positive signs on the horizon for international equity markets.
In Europe, plans for the single currency on January 1, 1999, remain intact,
which should have a positive impact on European equity markets. Japan appears to
be inching closer to a solution to its banking crisis. We continue to find
compelling investment opportunities on a company-by-company basis in Japan, but,
given the current environment, it may be some time before their value
materializes.
We see continued short-term volatility in global equity markets, but we
believe that there is long-term potential in carefully selected international
equities.
(1) PERFORMANCE FIGURES ARE BASED ON HISTORICAL RESULTS AND ARE NOT INTENDED
TO BE INDICATIVE OF FUTURE PERFORMANCE. 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 MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX REPRESENTS MAJOR
OVERSEAS STOCK MARKETS. IT IS AN UNMANAGED INDEX. ONE CANNOT INVEST
DIRECTLY IN AN INDEX.
3
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $1,000,000 INVESTMENT
IN BERGER/BIAM INTERNATIONAL CORE FUND VS.
EAFE INDEX AND COST OF LIVING INDEX
INITIAL INVESTMENT $1,000,000
VALUE OF SHARES
BERGER/BIAM
INTERNATIONAL COST OF
CORE FUND EAFE INDEX LIVING INDEX
7/31/89 $1,000,000 $1,000,000 $1,000,000
<S> <C> <C> <C>
9/30/89 $1,005,000 $998,899 $1,004,823
9/30/90 $1,082,000 $725,314 $1,066,720
9/30/91 $1,267,000 $887,101 $1,102,894
9/30/92 $1,509,000 $826,922 $1,135,852
9/30/93 $1,767,000 $1,048,156 $1,166,399
9/30/94 $1,950,000 $1,154,172 $1,200,965
9/30/95 $2,223,000 $1,224,672 $1,231,511
9/30/96 $2,494,001 $1,334,131 $1,268,489
9/30/97 $2,907,498 $1,500,821 $1,295,820
9/30/98 $2,680,985 $1,379,510 $1,313,505
BERGER/BIAM INTERNATIONAL CORE FUND*
AVERAGE ANNUAL TOTAL RETURN
AS OF SEPTEMBER 30, 1998
1 YEAR -7.79%
5 YEARS 8.70%
LIFE OF FUND (7/31/89) 11.35%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
</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. PERFORMANCE FIGURES ARE HISTORICAL AND, IN PART, REFLECT THE
PERFORMANCE OF A POOL OF ASSETS ADVISED BY BIAM (BANK OF IRELAND ASSET
MANAGEMENT) FOR PERIODS BEFORE THE FUND COMMENCED INVESTMENT OPERATIONS ON
OCTOBER 11, 1996, ADJUSTED TO REFLECT ANY INCREASED EXPENSES ASSOCIATED WITH
OPERATING THE FUND. THE ASSET POOL WAS NOT REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND THEREFORE WAS NOT SUBJECT TO THE INVESTMENT
RESTRICTIONS IMPOSED BY LAW ON REGISTERED MUTUAL FUNDS. IF THE POOL HAD BEEN
REGISTERED, ITS PERFORMANCE MIGHT HAVE BEEN ADVERSELY AFFECTED.
4
<PAGE>
- --------------------------------------------------------------------------------
BERGER/BIAM
REPORT OF INDEPENDENT ACCOUNTANTS
INTERNATIONAL CORE FUND
To the Board of Trustees and Shareholders of
Berger/BIAM International CORE Fund
In our opinion, the accompanying statement of assets and liabilities 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/BIAM International CORE Fund (one of the funds constituting Berger/BIAM
Worldwide Funds Trust, hereafter referred to as the "Fund") at September 30,
1998, the results of its operations for the year then ended, and the changes in
its net assets and the financial highlights for the year then ended and for the
period October 11, 1996 (commencement of investment operations) through
September 30, 1997, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 generally accepted auditing standards 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 provide a reasonable basis for the opinion expressed
above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
5
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER
30,
1998
<S> <C>
- ----------------------------------------------------------------
ASSETS
Investment in the Berger/BIAM International
Portfolio ("Portfolio"), at value $153,927,194
- ----------------------------------------------------------------
Total Assets 153,927,194
- ----------------------------------------------------------------
LIABILITIES
Payables
Fund shares redeemed 29
Accrued administrative fees 9,220
- ----------------------------------------------------------------
Total Liabilities 9,249
- ----------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $153,917,945
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Capital Shares
Authorized (Par Value $0.01) Unlimited
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Shares Outstanding
14,516,925
- ----------------------------------------------------------------
- ----------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE
$ 10.60
- ----------------------------------------------------------------
- ----------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIO
Interest and Dividends (net of $364,529 of foreign
withholding taxes) $ 6,415,306
Portfolio expenses (net of earnings credits and
fee waivers totaling $172,115) (1,331,653)
- --------------------------------------------------------------------------
Net Investment Income (Loss) allocated from
Portfolio 5,083,653
- --------------------------------------------------------------------------
FUND EXPENSES
Administrative services fee 113,922
- --------------------------------------------------------------------------
Net Expenses 113,922
- --------------------------------------------------------------------------
Net Investment Income (Loss) 4,969,731
- --------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
ALLOCATED FROM PORTFOLIO
Net realized gain (loss) on securities and foreign
currency transactions (3,975,554)
Net change in unrealized appreciation
(depreciation) on securities and foreign currency
transactions (13,623,073)
- --------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions
Allocated from Portfolio (17,598,627)
- --------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ (12,628,896)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD FROM
SEPTEMBER 30, OCTOBER 11, 1996(1)
1998 TO SEPTEMBER 30, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 4,969,731 $ 699,024
Net realized gain (loss) on securities
and foreign currency transactions
allocated from Portfolio (3,975,554) 1,211,171
Net change in unrealized appreciation
(depreciation) on securities and
foreign currency transactions allocated
from Portfolio (13,623,073) 4,591,326
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (12,628,896) 6,501,521
- ---------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income (733,103) --
In excess of net realized gains on
investments and foreign currency
transactions (796,911) --
- ---------------------------------------------------------------------------------------
Net Decrease in Net Assets from
Dividends and Distributions to
Shareholders (1,530,014) --
- ---------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS
Proceeds from shares sold 84,064,151 94,285,102
Net asset value of shares issued in
reinvestment of dividends and
distributions 1,271,755 --
Payments for shares redeemed (14,435,770) (3,609,904)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Derived from Fund Share Transactions 70,900,136 90,675,198
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 56,741,226 97,176,719
- ---------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 97,176,719 --
- ---------------------------------------------------------------------------------------
End of period $ 153,917,945 $ 97,176,719
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 162,324,990 $ 90,675,198
Undistributed net investment income
(loss) 6,251,047 699,024
Undistributed (Distributions in excess
of) net realized gain from investments
and foreign currency transactions (5,626,345) 1,211,171
Net unrealized appreciation
(depreciation) of securities and
foreign currency transactions (9,031,747) 4,591,326
- ---------------------------------------------------------------------------------------
Total $ 153,917,945 $ 97,176,719
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
TRANSACTIONS IN FUND SHARES
Shares sold 7,326,169 8,647,739
Shares issued to shareholders in
reinvestment of dividends and
distributions 118,050 --
Shares redeemed (1,252,878) (322,155)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares 6,191,341 8,325,584
Shares outstanding, beginning of period 8,325,584 --
- ---------------------------------------------------------------------------------------
Shares outstanding, end of period 14,516,925 8,325,584
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
7
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
<TABLE>
<S> <S>
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
8
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Berger/BIAM International CORE Fund (the "Fund") is a series of the
Berger/ BIAM Worldwide Funds Trust (the "Trust"), a Delaware business trust,
organized on May 31, 1996. The Trust is registered under the Investment Company
Act of 1940, as amended, as an 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/BIAM
International Fund and International Equity Fund, are the only series
established under the Trust, although others may be added in the future. The
Trust is also authorized to establish multiple classes of shares representing
differing interests in an existing or new series. The Fund commenced investment
operations on October 11, 1996 ("Commencement of Investment Operations").
The investment objective of the Fund is long-term capital appreciation. The
Fund will invest all of its investable assets in the Berger/BIAM International
Portfolio (the "Portfolio"), a series of Berger/BIAM Worldwide Portfolios Trust.
The value of such investment reflects the Fund's proportionate interest in the
net assets of the Portfolio (87% at September 30, 1998). The Portfolio is an
open-end management investment company and has the same investment objective and
policies as the Fund. The performance of the Fund will be derived from the
investment performance of the Portfolio. The financial statements of the
Portfolio, including the schedule of investments, are included elsewhere in this
report and should be read in conjunction with the Fund's financial statements.
All costs in organizing the Trust were borne by BBOI Worldwide LLC, the advisor
of the Portfolio (the "Advisor"). The Advisor has delegated the daily investment
management of the Portfolio to Bank of Ireland Asset Management (U.S.) Limited
("BIAM" or the "Sub-Advisor"), which owns 50% of the Advisor. Berger Associates,
Inc. ("Berger") also owns 50% of the Advisor.
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
Since the Fund will invest all of its investable assets in the Portfolio, the
value of the Fund's invested assets will be equal to the value of its beneficial
interest in the Portfolio. Valuation of securities by the Portfolio is discussed
in Note 1 of the Portfolio's Notes to Financial Statements which accompany these
Financial Statements for the Fund.
8
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
CALCULATION OF NET ASSET VALUE
The per share calculation of net asset value is determined by dividing the
total value of the Fund's assets, less liabilities, by the total number of
shares outstanding.
INCOME AND EXPENSES
As an investor in the Portfolio, the Fund is allocated its pro rata share of
the aggregate investment income, realized and unrealized gains or losses and
annual operating expenses (including the investment advisory fee, custodian
fees, independent accountants' fees, record keeping and pricing agent fees) of
the Portfolio. Income, realized and unrealized gains or losses and expenses are
allocated on the day incurred in proportion to the prior day's relative net
assets of the Fund compared to the other investors in the Portfolio. Expenses
directly attributable to the Fund are charged to the Fund.
FEDERAL INCOME TAXES
Each series of the Trust is treated as a separate entity for federal income
tax purposes. The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no income tax
provision is required.
FEDERAL INCOME TAX STATUS
Dividends paid by the Fund from net investment income and distributions of
net realized short-term capital gains are, for federal income tax purposes,
taxable as ordinary income to shareholders.
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 treatments 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 will be reclassified to paid-in-capital.
During the year ended September 30, 1998 the following reclassifications were
made:
<TABLE>
<S> <C>
Paid in Capital $ 749,656
Undistributed Net Investment
Income 1,315,395
Undistributed Net Realized Gain (2,065,051)
</TABLE>
At September 30, 1998, the Fund had a capital loss carryover in the amount of
$38,956, expiring on September 30, 2006, which may be used to offset future
realized capital gains for federal income tax purposes.
9
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
During the year ended September 30, 1998, the Fund paid $364,529 of foreign
taxes on $8,729,489 of foreign source income. The Fund will make the foreign tax
credit election to pass through these taxes to shareholders.
The Fund incurred and elected to defer post-October 31 net capital and
currency losses totaling $5,625,304.
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 could differ from those estimates.
2. AGREEMENTS
Under an Administrative Services Agreement with the Fund, the Advisor serves
as the administrator of the Fund. Pursuant to such Agreement, the Fund pays the
Advisor a fee at an annual rate equal to the lesser of 0.10% of its average
daily net assets or the Advisor's annual cost to provide or procure such
services plus 0.01% of the Fund's average daily net assets. Under the Agreement,
the Advisor is responsible, at its own expense, for providing or procuring all
administrative services reasonably necessary for the operation of the Fund,
including record keeping and pricing services, custodian services, transfer
agency and dividend disbursing services, tax and audit services, insurance,
legal services, printing and mailing to shareholders of prospectuses and other
required communications and certain other administrative services. The Advisor
has delegated the administration of the Fund to Berger. For such services, the
Advisor pays Berger a sub-administration fee equal to 0.25% of the Fund's
average daily net assets. Berger has voluntarily waived such sub-administration
fee from the Commencement of Investment Operations through September 30, 1998.
Investors Fiduciary Trust Company ("IFTC") has been appointed to provide
record keeping and pricing services to the Fund, including calculating the net
asset value of the Fund, and to perform certain accounting and record keeping
functions that it requires. In addition, IFTC has been appointed to serve as the
Fund's custodian, transfer agent and dividend disbursing agent.
Certain officers and trustees of the Trust are officers and directors of
Berger, the Advisor or BIAM. Trustees who are not affiliated with the
Portfolio's Advisor or Sub-Advisor are compensated for their services according
to a fee schedule, allocated among the Berger Funds which consists of the Berger
New Generation Fund, Berger Select Fund, Berger Small Company Growth Fund,
Berger Small Cap Value Fund, Berger Mid Cap Growth Fund, Berger Mid Cap Value
Fund, Berger One Hundred Fund, Berger Growth and Income Fund and Berger Balanced
Fund and the Portfolio, which includes an annual fee component and a per meeting
component. Such fees are allocated directly to the Portfolio and, therefore,
indirectly to the Fund.
10
<PAGE>
BERGER/BIAM INTERNATIONAL CORE FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS PRESENTED
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED OCTOBER 11, 1996(1)
SEPTEMBER 30, 1998 TO SEPTEMBER 30, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.67 $ 10.00
- --------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.68 0.08
Net realized and unrealized gains
(losses) from investments and foreign
currency transactions (1.59) 1.59
- --------------------------------------------------------------------------------------------
Total from investment operations (0.91) 1.67
- --------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.08) --
Distributions (in excess of capital
gains) (0.08) --
- --------------------------------------------------------------------------------------------
Total dividends and distributions (0.16) --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.60 $ 11.67
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Total Return(2) (7.79)% 16.70%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 153,918 $ 97,177
Net expense ratio to average net
assets(3),(4) 1.08% 1.10%(5)
Ratio of net income (loss) to average
net assets 3.44% 1.62%(5)
Gross expense ratio to average net
assets(4) 1.12% 1.20%(5)
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
2. TOTAL RETURN NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE FULL YEAR.
3. NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED BY THE
PORTFOLIO'S ADVISOR.
4. REFLECTS THE FUND'S EXPENSES PLUS THE FUND'S PRO RATA SHARE OF THE
PORTFOLIO'S EXPENSES.
5. ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
BERGER/BIAM
INTERNATIONAL PORTFOLIO
ANNUAL REPORT
The following pages should be read in conjunction
with the Berger/BIAM International CORE Fund
Annual Report.
12
<PAGE>
- --------------------------------------------------------------------------------
BERGER/BIAM
REPORT OF INDEPENDENT ACCOUNTANTS
INTERNATIONAL PORTFOLIO
To the Board of Trustees and Investors of
Berger/BIAM International Portfolio
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 supplemental data present fairly, in all
material respects, the financial position of Berger/BIAM International Portfolio
(the sole portfolio comprising Berger/ BIAM Worldwide Portfolios Trust,
hereafter referred to as the "Portfolio") at September 30, 1998, the results of
its operations for the year then ended, and the changes in its net assets and
the supplemental data for the year then ended and for the period October 11,
1996 (commencement of investment operations) through September 30, 1997, in
conformity with generally accepted accounting principles. These financial
statements and supplemental data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio'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 generally accepted auditing standards 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
September 30, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
[PRICEWATERHOUSECOOPERS LLP SIGNATURE]
PricewaterhouseCoopers LLP
Denver, Colorado
October 30, 1998
13
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - 94.44%
AUSTRALIA (4.50%)
266,850 National Australia Bank Ltd. Commercial Banks & Other Banks $ 3,233,198
537,645 News Corporation Ltd. Media 3,476,111
457,510 Telstra Corp. Ltd. Utilities 1,285,154
-------------
7,994,463
-------------
CANADA (0.45%)
19,850 Royal Bank of Canada Commercial Banks & Other Banks 803,002
-------------
DENMARK (0.54%)
9,650 Tele Danmark A.S. Utilities 958,845
-------------
FRANCE (7.15%)
18,626 Alcatel Alsthom Computer/Commercial/Office Equipment 1,656,945
27,652 AXA-UAP Insurance-Multi/Property/ Casualty 2,533,980
33,375 Michelin Class B Auto Components 1,311,605
29,880 Total S.A. - B Oil 3,768,292
17,166 Vivendi Diversified Holding Companies 3,422,099
-------------
12,692,921
-------------
GERMANY (9.74%)
2,808 Bayerische Motoren Werke (BMW) A.G. Automobiles 1,808,140
402 Bayerische Motoren Werke (BMW) A.G.(1) Automobiles 252,837
29,300 Bayerische Vereinsbank A.G. Commercial Banks & Other Banks 2,158,734
53,945 Hoechst A.G. Chemicals 2,229,599
76,650 Mannesmann A.G.+ Machinery & Engineering Services 7,024,738
44,851 Veba A.G. Diversified Industrials 2,337,318
2,177 Viag A.G. Utilities 1,497,017
-------------
17,308,383
-------------
IRELAND (0.04%)
53,200 Smurfit (Jefferson) Group Forestry & Paper Products 79,534
-------------
ITALY (2.54%)
155,256 ENI S.p.A. Utilities $ 952,034
</TABLE>
14
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
515,711 Telecom Italia S.p.A. Utilities 3,554,526
-------------
4,506,560
-------------
JAPAN (14.05%)
222,000 Canon, Inc.+ Computer/Commercial/Office Equipment 4,496,819
107,000 Dai Nippon Printing Co. Ltd. Media 1,370,851
30,000 Fuji Photo Film Photo Equipment & Supplies 1,031,078
70,000 Honda Motor Co. Ltd.+ Automobiles 2,124,314
131,000 Kao Corporation Food & Grocery Products 2,088,336
10,900 Keyence Corporation Electronics & Instruments 1,041,776
50,000 Murata Manufacturing Co. Ltd. Electronics & Instruments 1,685,557
17,000 Rohm Company Limited Machinery & Engineering Services 1,616,087
113,000 Shiseido Co. Ltd. Health & Personal Care 995,722
59,400 Sony Corporation+ Household Durables & Appliances 4,122,164
164,000 Takeda Chemical Industries+ Health & Personal Care 4,377,330
-------------
24,950,034
-------------
MALAYSIA (0.11%)
103,000 Hume Industries Bhd X Construction & Building Materials 51,161
219,400 Sime Darby Bhd X Diversified Holding Companies 146,458
-------------
197,619
-------------
MEXICO (0.15%)
301,770 Grupo Financiero Banamex Accival* - B Commercial Banks & Other Banks 266,528
-------------
NETHERLANDS (8.90%)
76,280 ABN Amro Holdings N.V. Commercial Banks & Other Banks 1,300,952
101,000 Elsevier N.V. Media 1,502,536
128,617 ING Groep N.V. Insurance - Multi/Property/ Casualty 5,801,654
60,015 Koninklijke KPN N.V. Utilities 1,855,788
57,925 Koninklijke Ahold N.V. Food & Grocery Products 1,732,687
42,540 Royal Dutch Petroleum Company Oil 2,113,269
58,840 TNT Post Groep N.V. Utilities $ 1,500,581
-------------
15,807,467
-------------
</TABLE>
15
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
PHILIPPINES (0.21%)
286,370 San Miguel Corp. Class B Beverage Industry/Tobacco Manufacturing 369,826
-------------
PORTUGAL (0.31%)
23,950 Electricidade de Portugal S.A. Utilities 551,170
-------------
SINGAPORE (1.82%)
285,000 City Developments Ltd. Real Estate 624,149
303,435 Development Bank of Singapore Ltd. Commercial Banks & Other Banks 1,221,284
61,600 Fraser & Neave Ltd. Beverage Industry/Tobacco Manufacturing 131,986
151,972 Singapore Press Holdings Ltd. Media 1,259,308
-------------
3,236,727
-------------
SPAIN (1.86%)
145,662 Banco De Santander S.A. Commercial Banks & Other Banks 2,210,413
30,070 Telefonica S.A. Utilities 1,097,963
-------------
3,308,376
-------------
SWITZERLAND (12.46%)
1,605 Alusuisse Lonza Holdings Group A.G.+ Fabricated Metal Products 1,533,498
2,705 Nestle S.A.+ Food & Grocery Products 5,396,283
3,136 Novartis A.G.+ Health & Personal Care 5,040,770
308 Roche Holding A.G. Health & Personal Care 3,324,302
2,237 Schweizerische Rueckversicherungs Insurance-Multi/Property/ Casualty 4,448,073
12,207 Union Bank of Switzerland AG Commercial Banks & Other Banks 2,387,461
-------------
22,130,387
-------------
THAILAND (0.27%)
503,000 Bangkok Bank PLC Commercial Banks & Other Banks 476,927
-------------
UNITED KINGDOM (29.34%)
290,920 Allied Zurich PLC* Insurance - Multi/Property/ Casualty 2,975,436
205,350 Barclays Bank PLC Commercial Banks & Other Banks $ 3,352,730
290,920 British American Tobacco PLC* Tobacco/Financial Services 2,166,088
</TABLE>
16
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
COUNTRY/
SHARES/ MARKET
PAR VALUE COMPANY INDUSTRY VALUE
- ----------- --------------------------------------------- --------------------------------------------- -------------
<C> <S> <C> <C>
COMMON STOCKS - CONTINUED
238,080 Cable & Wireless PLC Utilities 2,269,166
151,900 Cadbury Schweppes PLC Beverage Industry/Tobacco Manufacturing 1,966,497
308,500 Diageo Ordinary PLC* Beverage Industry/Tobacco Manufacturing 2,935,106
170,850 Glaxo Welcome PLC Health & Personal Care 5,041,913
250,750 Granada Group PLC Entertainment/Leisure/Toys 3,152,486
197,978 Kingfisher PLC Retail Trade 1,836,496
353,800 Ladbroke Group PLC Entertainment/Leisure/Toys 1,316,383
351,960 Lloyds TSB Group PLC Commercial Banks & Other Banks 3,940,572
88,420 National Westminster Bank PLC Commercial Banks & Other Banks 1,186,747
321,840 Prudential Corporation PLC Insurance - Life & Agents/ Brokers 4,702,394
271,450 Safeway PLC Retail Trade 1,271,703
28,683 Scottish Power PLC Utilities 277,766
517,430 Shell Transport & Trading Company PLC Oil 3,131,749
671,564 Siebe PLC Machinery & Engineering Services 2,167,811
213,300 TI Group PLC Machinery & Engineering Services 1,290,094
346,700 Vodafone Group PLC Utilities 4,023,067
87,850 Zeneca Group PLC Health & Personal Care 3,094,940
-------------
52,099,144
-------------
TOTAL COMMON STOCKS (cost $174,908,990) 167,737,913
-------------
REPURCHASE AGREEMENT -4.71%
$ 8,368,000 State Street Repurchase Agreement, 5.35% dated September 30, 1998, to be repurchased at
$8,369,244 On October 1, 1998, collateralized by U.S. Treasury Bond October 9, 1998, with a
value of $8,538,600.
8,368,000
-------------
TOTAL REPURCHASE AGREEMENT (Cost $8,368,000) 8,368,000
-------------
</TABLE>
17
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
MARKET
VALUE
-------------
<C> <S> <C> <C>
Total Investments (Cost $183,276,990) (99.15%) $176,105,913
Other assets, less liabilities (.85%) 1,489,887
-------------
Net Assets (100.00%) $177,595,800
-------------
-------------
</TABLE>
* NON-INCOME PRODUCING SECURITY.
+ SECURITY IS DESIGNATED AS COLLATERAL FOR FORWARD FOREIGN CURRENCY
CONTRACTS.
1. SHARES HAVE REDUCED DIVIDEND RIGHTS OF ORDINARY SHARES.
X SCHEDULE OF ILLIQUID SECURITIES
<TABLE>
<CAPTION>
FAIR VALUE AS A
SECURITY NAME DATE ACQUIRED COST VALUE % OF NET ASSETS
- ------------------------------ ------------- ------------ ---------- ---------------
<S> <C> <C> <C> <C>
Hume Industries Bhd 4/21/94 $ 559,829 $ 51,161 .03%
Sime Darby Bhd 12/22/92 $ 556,338 $ 146,458 .08%
------------ ---------- ----
$ 1,116,167 $ 197,619 .11%
------------ ---------- ----
------------ ---------- ----
</TABLE>
OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT MATURITY VALUE ON APPRECIATION
CURRENCY AMOUNT DATE SEPTEMBER 30, 1998 (DEPRECIATION)
------------------------- ------------ -------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Buy Japanese Yen 20,000,000 10/2/98 $ 146,252 $ (958)
Sell Swiss Franc 8,874,000 10/7/98 6,421,798 (581,142)
Sell Japanese Yen 315,576,000 10/13/98 2,321,595 (46,354)
Sell German Deutschemark 4,842,000 10/19/98 2,900,662 (195,634)
Sell Swiss Franc 3,177,000 10/30/98 2,310,310 (150,283)
Sell Swiss Franc 3,239,000 11/13/98 2,358,991 (173,578)
Sell Japanese Yen 296,653,000 11/18/98 2,189,481 (122,213)
Sell Japanese Yen 296,547,000 11/30/98 2,192,452 (115,356)
Sell Japanese Yen 262,626,000 12/9/98 1,944,490 9,573
Sell Japanese Yen 575,708,000 12/14/98 4,266,005 (242,298)
Sell Japanese Yen 273,970,000 1/19/99 2,040,737 78,625
------------------- ---------------
$29,092,773 $(1,539,618)
------------------- ---------------
------------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
ASSETS
Investments, at cost $ 183,276,990
- --------------------------------------------------------------------------
Investments, at value $ 176,105,913
Cash 2,643,952
Foreign cash (cost $954,497) 964,475
Receivables
Contributions 2,368
Dividends 650,954
Interest 1,244
Due from Management Company 6,143
- --------------------------------------------------------------------------
Total Assets 180,375,049
- --------------------------------------------------------------------------
LIABILITIES
Payables
Investment securities purchased 1,053,108
Withdrawals 23,235
Accrued audit fees 26,500
Accrued investment advisory fees 136,788
Net unrealized depreciation on forward currency
contracts 1,539,618
- --------------------------------------------------------------------------
Total Liabilities 2,779,249
- --------------------------------------------------------------------------
NET ASSETS $ 177,595,800
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1998
<S> <C>
- --------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends $ 7,387,853
Interest 471,919
Foreign tax withheld (420,767)
- --------------------------------------------------------------------------
Total Income 7,439,005
- --------------------------------------------------------------------------
Expenses
Investment advisory fees 1,531,256
Accounting fees 44,391
Custodian fees 98,663
Audit fees 51,000
Legal fees 11,708
Trustees' fees and expenses 17,799
Reports to shareholders 4,572
Other expenses 7,934
- --------------------------------------------------------------------------
Gross Expenses 1,767,323
Less fees waived by advisor (61,456)
Less earnings credits (140,928)
- --------------------------------------------------------------------------
Net Expenses 1,564,939
- --------------------------------------------------------------------------
Net investment income (loss) 5,874,066
- --------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on securities and
foreign currency transactions (4,726,150)
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions (15,953,893)
- --------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions (20,680,043)
- --------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ (14,805,977)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED OCTOBER 11, 1996(1)
SEPTEMBER 30, TO
1998 SEPTEMBER 30, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 5,874,066 $ 1,018,078
Net realized gain (loss) on securities and foreign currency
transactions (4,726,150) 1,712,223
Net change in unrealized appreciation (depreciation) on
securities and foreign currency transactions (15,953,893) 6,712,560
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations (14,805,977) 9,442,861
- -------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 103,931,701 127,144,416
Withdrawals (33,746,924) (14,370,277)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived From
Investors' Beneficial Interest 70,184,777 112,774,139
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 55,378,800 122,217,000
- -------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 122,217,000 --
- -------------------------------------------------------------------------------------------------------
End of period $ 177,595,800 $ 122,217,000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS
Capital (par value and paid in surplus) $ 182,899,789 $ 112,774,139
Undistributed net investment income (loss) 8,663,777 1,018,078
Undistributed net realized gain (loss) from securities and
foreign currency transactions (4,726,433) 1,712,223
Net unrealized appreciation (depreciation) of securities and
foreign currency transactions (9,241,333) 6,712,560
- -------------------------------------------------------------------------------------------------------
Total $ 177,595,800 $ 122,217,000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (in thousands) $ 177,596 $ 122,217
Net expense ratio to average net assets(3) 1.00% 1.00%(2)
Ratio of net income (loss) to average net assets 3.45% 1.63%(2)
Gross expense ratio to average net assets 1.04% 1.10%(2)
Portfolio turnover rate 17% 17%
</TABLE>
1. COMMENCEMENT OF INVESTMENT OPERATIONS.
2. ANNUALIZED.
3. NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED BY THE
ADVISOR.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Berger/BIAM International Portfolio (the "Portfolio") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Portfolio is a series of the Berger/BIAM Worldwide
Portfolios Trust (the "Trust"), which was organized as a Delaware business trust
on May 31, 1996. All costs in organizing the Trust were borne by BBOI Worldwide
LLC ("BBOI"), the investment advisor of the Portfolio. The Portfolio commenced
investment operations on October 11, 1996, ("Commencement of Investment
Operations") with the sale of 448,161 shares of beneficial interest to the
International Equity Fund, formerly known as the Berger/BIAM International
Institutional Fund, in exchange for portfolio assets with an aggregate value of
$4,481,609, which were transferred from the Pooled Trust of Citizens Bank of New
Hampshire ("Citizens NH") to the International Equity Fund and, in turn,
transferred to the Portfolio. Such transaction was a tax-free exchange. Citizens
NH was an affiliate of Bank of Ireland Asset Management (U.S.) Limited ("BIAM"),
which was the investment sub-advisor to the Pooled Trust and is the investment
sub-advisor to the Portfolio. Citizens NH sold their 23.5% interest on September
4, 1998. Currently there are three investors in the Portfolio, the Berger/ BIAM
International Fund, the International Equity Fund and the Berger/BIAM
International CORE Fund.
The investment objective of the Portfolio is long-term capital appreciation.
The Portfolio invests primarily in common stocks of well-established companies
located outside the United States.
The Portfolio is advised by BBOI, which has delegated daily investment
management of the Portfolio to BIAM. Berger Associates, Inc. ("Berger") and BIAM
each own 50% of BBOI.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
The Portfolio's securities and other assets are valued at the close of the
regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m. Eastern Standard Time) each day the Exchange is open. The
Portfolio's securities and other assets are valued as follows: securities listed
or traded primarily on foreign exchanges, national exchanges and the NASDAQ
Stock market are valued at the last sale price on such markets, or, if such a
price is lacking for the trading period immediately preceding the time of
determination, such securities are valued at the
22
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
mean of their current bid and asked prices. Securities that are traded in the
over-the-counter market are valued at the mean between their current bid and
asked prices. Short-term obligations maturing within 60 days are valued at
amortized cost, which approximates market value. Securities and assets for which
quotations are not readily available are valued at fair values determined in
good faith pursuant to consistently applied procedures established by the
trustees of the Portfolio.
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
Portfolio 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.
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.
FEDERAL INCOME TAXES
The Portfolio is considered a partnership for federal income tax purposes. As
such, each investor in the Portfolio will be taxed 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 satisfy the requirements of Sub-Chapter M of the
Internal Revenue Code.
Income tax regulations may differ from generally accepted accounting
principles primarily due to the differing treatment of net operating losses and
foreign currency transactions. Accordingly, these permanent differences in the
character of income between financial statements and tax basis have been
reclassified to paid-in-capital. During the year ended September 30, 1998, the
following classifications were made:
<TABLE>
<S> <C>
Paid in Capital $ (59,127)
Undistributed Net Investment
Income 1,771,633
Undistributed Net Realized Gain (1,712,506)
</TABLE>
23
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Gains and losses are
computed on the identified cost basis for both financial statement and federal
income tax purposes for all securities. Dividend income is recorded on the
ex-dividend date, except if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Portfolio is informed of the
ex-dividend date. Dividend income is recorded net of foreign taxes withheld.
Interest income is recorded on the accrual basis and includes amortization of
discounts and premiums.
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.
FORWARD CURRENCY CONTRACTS
The Portfolio may enter into forward foreign currency exchange contracts for
the purpose of hedging the Portfolio against exposure to market value
fluctuations in foreign currencies. The use of such instruments may involve
risks such as the possibility of illiquid markets or imperfect correlation
between the value of the contracts and the underlying securities, or that the
counterparty will fail to perform its obligations. Forward currency contracts
and foreign denominated assets may involve more risks than domestic
transactions, including currency risk, political and economic risk, regulatory
risk and market risk. Risks may arise from the potential inability of a
counterparty to meet the terms of a contract and from unanticipated movements in
the value of foreign currencies relative to the U.S. dollar. The forward foreign
currency exchange contracts are adjusted to the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial statement
purposes as unrealized gains or losses until the contract settlement date.
Realized gains or losses on these securities are included in Net Realized Gain
(Loss) on Investments and Foreign Currency Transactions in the Statement of
Operations.
2. AGREEMENTS
BBOI renders investment advisory services to the Portfolio pursuant to an
agreement that provides for an investment advisory fee to be paid to BBOI at the
annual rate of .90% of the Portfolio's average daily net assets. BBOI has agreed
to waive its advisory fee to the extent that the Portfolio's normal operating
expenses in any fiscal year (including the investment advisory fee and custodian
fees, but excluding brokerage commissions, interest, taxes and extraordinary
expenses) exceed 1.00% of the Portfolio's average daily net assets for that
fiscal year. BBOI is also responsible for providing for or arranging for all
managerial and administrative services necessary for
24
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
the operations of the Portfolio. BBOI has delegated the daily investment
management of the Portfolio to BIAM. For such services, BBOI pays BIAM a
sub-advisory fee equal to .45% of the average daily net assets of the Portfolio.
Such sub-advisory fee has been voluntarily waived by BIAM from the Commencement
of Investment Operations through September 30, 1998, except for an amount
payable on the Citizens NH converted assets (see note 1).
Investors Fiduciary Trust Company ("IFTC") has been appointed to provide
record keeping and pricing services to the Portfolio, including calculating the
net asset value of the Portfolio, and to perform certain accounting and record
keeping functions required by the Portfolio. In addition, IFTC has been
appointed to serve as the Portfolio's custodian and transfer agent. For
custodian, record keeping and pricing services, the Portfolio pays a fee
directly to IFTC based on a percentage of its net assets, subject to certain
minimums, and reimburses IFTC for certain out-of-pocket expenses. IFTC's fees
for custody, record keeping and pricing, or transfer agency services are subject
to reduction by credits earned by the Portfolio, based on the cash balances of
the Portfolio held by IFTC as custodian or by credits received from directed
brokerage transactions.
Certain officers and trustees of the Trust are officers and directors of
Berger, BBOI or BIAM. Trustees who are not affiliated with Berger, BBOI or BIAM
are compensated for their services according to a fee schedule, allocated among
the Berger Funds (which consists of the New Generation Fund, Select Fund, Small
Company Growth Fund, Small Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value
Fund, One Hundred Fund, Growth & Income Fund and Balanced Fund) and the
Portfolio, which includes an annual fee component and a per meeting component.
The Portfolio's portion of the trustees' fees and expenses for the fiscal year
ended September 30, 1998, totaled $17,799.
The Portfolio 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 on or after January 16, 1996. The deferred fees remain in the Funds and
are invested in various Berger funds until distribution in accordance with the
Plan.
3. INVESTMENT TRANSACTIONS
PURCHASES AND SALES
Purchases and sales of investment securities (excluding short-term
securities) during the year ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
Purchase of Sales of
Investment Investment
Securities Securities
- ------------------ ------------------
<S> <C>
$100,225,074 $ 27,100,941
</TABLE>
There were no purchases or sales of long-term U.S. Government securities
during the year ended September 30, 1998.
25
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF
SECURITIES
At September 30, 1998, the federal tax cost of securities and the composition
of unrealized appreciation (the excess of value over tax cost) and unrealized
depreciation (the excess of tax cost over value) for securities held was as
follows:
<TABLE>
<CAPTION>
Gross Gross
Federal Tax Unrealized Unrealized
Cost Appreciation Depreciation Net
- -------------- ----------- ----------- ----------
<S> <C> <C> <C>
$183,323,116 $20,191,763 $(27,408,966) $(7,217,203)
</TABLE>
REPURCHASE AGREEMENTS
Repurchase agreements held by the Fund are fully collateralized by U.S.
Treasury 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.
4. LINE OF CREDIT
The Portfolio, along with the Berger New Generation Fund, Berger Select Fund,
Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger Mid Cap
Growth Fund, Berger One Hundred Fund, Berger Growth and Income Fund, and Berger
Balanced Fund (the "Funds"), are party to an ongoing agreement with certain
banks that allows the Funds and the Portfolio, collectively, to borrow up to
$150 million, subject to certain conditions, for temporary or emergency
purposes. Interest on any borrowings, if any, is charged to the specific Fund or
Portfolio executing the borrowing at the Federal Funds Rate plus 45 basis
points. In addition, the unsecured line of credit requires a quarterly payment
of a commitment fee based on the average daily unused portion of the line of
credit. At September 30, 1998, the outstanding balance on the line of credit was
$0.
26
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