<PAGE>
-------------------
Hansberger
[LOGO OF HAWSBERGER -------------------
INSTITUTION] Institutional
Series
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SEMI-ANNUAL REPORT
June 30, 1999
International Fund
Emerging Markets Fund
<PAGE>
LETTER TO SHAREHOLDERS
July 30, 1999
Dear Fellow Shareholder:
Adherence to our disciplined, value-oriented investment process resulted in
favorable outperformance during the first six months of 1999. Investor's
fascination with momentum stocks waned as concerns over the Federal Reserve's
interest rate policy caused investors to re-examine valuations and real
earnings prospects. Accordingly, attention has grown toward investments in
Asia and in sectors that have suffered from the deterioration of commodity
prices. Your portfolios have been positioned in these areas on a stock by
stock basis and have benefited accordingly. We continue to see the greatest
investment opportunities among stocks in Asia (including Japan), commodity
sensitive and energy related stocks, shares of world class companies based in
emerging economies, mid-capitalization stocks and other out-of-favor stocks
whose prices we feel have discounted the worst investor expectations.
A significant contributor to the strong performance of your portfolios this
year has been investments in Asia. The initial economic crisis which started
with the devaluation of the Thai baht two years ago and spread around the
world (mainly in the emerging markets) has come almost full circle with
economic growth estimates for many of these countries being upgraded. These
revisions are most notable in the Asian economies where interest rates have
fallen, current account deficits have turned to surpluses and currencies have
strengthened. In many instances, the turnaround in economic forecasts
translates to more favorable expectations for stock performance. This recovery
is also positively affecting many of our non-Asian investments that conduct
business in the region. We continue to find investment opportunities in Asia
in several consumer oriented companies which will benefit as consumer
confidence and consumption recovers in these markets. We have maintained our
earlier investments in financial service stocks, despite their very strong
performance, as their earnings will benefit from the restructuring of these
economies. Essentially we are experiencing the best of both worlds in emerging
Asia as many of the stocks have characteristics that appeal to both the value
and growth investor. From a value investor's standpoint, many of these stocks
are still undervalued relative to their long term normalized earnings and at
the same time the growth investor is attracted to them because of their strong
earnings growth expectations over the next couple of years. A recent Morgan
Stanley study showed that if the return on equity ("ROE"), of stocks in their
emerging markets universe returned to their historical level of 10% from 6%
currently over the next three years, this would equate to annualized earnings
growth of 19% over the same period.
An area of increasing emphasis for Hansberger Global Investors, Inc. ("HGI")
is Japan. Our extensive due diligence on Japanese companies leaves us
encouraged and as a result we have increased our holdings in Japanese stocks
significantly. In meeting with the management of dozens of companies we are
hearing more about increasing profitability (with many companies using ROE as
the financial measurement yardstick) and further restructuring of inefficient
balance sheets. This is a reversal from the more traditional Japanese focus of
increasing market share at any cost. Much of this restructuring is being
driven by the introduction of international accounting standards over the next
three years, as companies will begin reporting fully consolidated accounts and
cash flow statements, and by the entry of foreign competition into its once
closed market. In addition to these company specific measures, the Japanese
Government is now helping by reducing corporate tax rates. The Government has
also made serious strides in banking reform over the past three years and has
pushed for full disclosure of problem loans to the extent that over 55
trillion Yen (USD$450bn at current exchange rates) have been written off. More
recently the Government has introduced new tax legislation to exempt future
sales of cross-holdings from capital gains taxes to further assist the banking
system. The Japanese Government has backed up reform with imprisonment and
public disgrace for those bank managements who do not comply within this grace
period. Several HGI analysts have just returned from a research trip to Japan
where they visited several Japanese banks. During this trip, we confirmed our
belief that the Japanese banking system is on the mend and they identified
many similarities to the Anglo-Saxon banking crisis of the early 1990's.
We recently visited with a number of government agencies in Shanghai and
Beijing to study the current state of the Chinese economy and the potential
influence on our portfolio investments. Our goal was to identify the main
challenges facing the economy over the next several years and to analyze the
potential impact on the companies in which we invest. Chief among these
challenges is reversing the deflationary environment and the restructuring of
the banking system and the economy. China has effectively been in a
deflationary environment for over a year; CPI
<PAGE>
for the first quarter of 1999 was -2.2% with no noticeable improvement in the
second quarter. Part of the problem is declining food prices due to a bumper
harvest, as food accounts for about 50% of China's CPI basket. However, the
main contributor is low consumer spending, as people prefer to save as they
face a slow economy and uncertain job prospects. The only positive about
deflation is that the real exchange rate has declined implying that, on a real
basis, the currency is already being devalued. This has allowed many exporters
to quote prices of their products at levels approximately 10% below last year,
as prices of their inputs have declined as well. So far, the Chinese
Government has been trying to stimulate consumption by keeping a loose
monetary policy and lowering interest rates. We still feel that there is
currently no fundamental reason for a devaluation of the Renminbi as long as
the balance of payments surplus continues. However, from a political
standpoint, we feel the risks of a devaluation next year following China's
likely admission to the World Trade Organization ("WTO") have increased. A
gradual devaluation of 10-15% is the most likely scenario, and we feel a
devaluation of this amount will not set off a round of further devaluation in
Asia.
As a result of our recent trip to China, we sensed that the Chinese
Government is cognizant of these problems and is formulating policies to
address these challenges. Accordingly, we are encouraged by China's likely
entry into WTO this year, and we expect that the initial flow of Foreign
Direct Investment ("FDI") will help alleviate any short-term pain China will
feel in terms of bankruptcies and higher unemployment. Longer term, the
benefits of WTO membership will become evident as Chinese companies become
more efficient and productive. Further supporting our view is the initial
recovery in other Asian economies and the resulting beneficial effect on
China.
Our doubts over "Europhoria" were manifested during the first half of the
year with the Euro falling 13% versus the U.S. Dollar, contributing to the
disappointing relative and absolute performance of European equity markets
during this period when measured in U.S. dollars. Near-term we expect the Euro
to test parity with the U.S. Dollar and perhaps overshoot, but longer-term we
see support for the currency partly attributable to the substantial U.S. trade
deficit and European trade surplus. Despite these macroeconomic uncertainties,
the valuations of many European stocks have been extended and your portfolios'
representation in Europe has been underweight versus our peers. Last year we
lowered our exposure to the large cap "Euro--11" companies and focused on
investments in the Nordic countries, the U.K., European cyclicals, and mid cap
stocks in Europe. Many of these investments have served us well this year as
they have recovered with the rebound in commodity prices and their export
sales have benefited from the lower Euro. According to the International
Monetary Fund ("IMF"), non-Japan Asia is the most intensive consumer of
commodities in the world accounting for 65% of the growth in worldwide
consumption prior to the Asian crisis. Many European cyclicals have heavy
sales exposure to emerging markets and will benefit from their recovery. At
the same time, many global commodity-producing companies have continued to
shutter capacity and rationalize existing operations. We have also started to
see activity in mid capitalization European stocks in the form of mergers and
acquisitions. A recent JP Morgan study showed that in the first four months of
1999 there were $450 billion of mergers & acquisitions ("M&A"), 77% more than
in the same period of 1998; and they expect $1.3 trillion of M&A in 1999, 50%
more than last year. Additionally, the number of venture capital and leveraged
buy-out ("LBO") funds targeting European investments has trebled over the last
three years. The advent of the Euro is a driving force for further
restructuring and consolidation of European industries that we feel has a long
way to go. We continue to remain positive on emerging European companies given
their exciting earnings prospects, overly depressed valuations, and their
potential for future EU membership.
The S&P 500 has continued its upward trend, but a market rotation from
growth to value stocks started in April in response to expectations for
tighter Fed policy. The effect on growth stocks from rising interest rates is
similar to that on a long duration bond; earnings start to matter and earnings
multiples are put in check. As a result of this volatility, we have identified
some new investment opportunities in the U.S. in companies that have
disappointed with short-term earnings but where we feel the long-term story is
still in place. We continue to avoid large-cap growth stocks that are
commanding unprecedented valuations but instead are focusing on leading
companies in out-of-favor industries and quality mid-cap issues where an
attractive combination of earnings growth and valuation exists. We believe
that the firming of interest rates could be a catalyst for further rotation
into more value-oriented companies. We do not feel that near term U.S.
interest rate policy will have a negative effect on Asia as many of these
markets have effectively "delinked" themselves from the U.S. dollar over the
last two years and several of these markets already have high real interest
rates and strong current account surpluses. For example, Hong Kong currently
has -3% inflation and 6% interest rates. Elsewhere in North America, Canada
posted strong first half performance on the back of recovering commodity
prices and a stronger currency.
<PAGE>
We appreciate the confidence that you have placed in our firm and your
ongoing support. Please call us should you have any questions or comments or
desire elaboration on any of the above topics.
For the Hansberger Institutional Series
James E. Chaney
Chief Investment Officer
Hansberger Global Investors, Inc.
Charles F. Gulden, CFA
Senior Vice President of Research
Hansberger Global Investors, Inc.
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
INTERNATIONAL FUND
Market conditions during the six months ended June 30, 1999
During the first half of 1999, the economic recovery in Asia helped boost
local markets with a spillover effect into other developing markets worldwide.
After roughly 18 months of negative stock market performance, markets
throughout Asia began rising during the fourth quarter of 1998. The solid
performance lost a little ground during the first quarter of this year but
rallied throughout the second quarter. The most notable market gains in Asia
occurred in economies where interest rates fell significantly, currencies
appreciated off their lows, and current account deficits turned to surplus.
For example, index performance (MSCI country index) for the first half of 1999
in Korea, Singapore and Thailand was 77.9%, 33.5% and 58.3%, respectively.
The Japanese index (MSCI country index) returned a respectable 20.7% during
the first half of 1999. The positive changes due to economic reform and
fundamental improvements at the company level are becoming more visible to
investors. After a period of negative growth, GDP in Japan rose 1.9% in the
first quarter. A corporate tax-rate reduction and enhanced corporate
disclosure requirements should help improve the global competitive position of
Japanese companies. In addition, if the recent banking reform, which appears
to contain the appropriate remedy to cure the banking crisis, is successful,
the Japanese market may continue its ascent.
European markets were not as generous, on the whole, as Asian markets. The
newly introduced Euro lost 13% versus the dollar during the first half of the
year. Fortunately, as valuations for many European companies expanded at rates
that we thought were unsustainable, we began to pare back our European
exposure. The positive contributors in index performance came mostly from the
commodity-driven economies in the Nordic region. First half index performance
(MSCI country index) in Finland, Norway and Sweden was 28.5%, 10.4% and 19.5%,
respectively.
Fund performance during the six months ended June 30, 1999
The Fund's total return for the half year ending June 30, 1999, was 20.4%
versus the MSCI EAFE Index return of 4.1% for the same period. The primary
factors affecting performance were the Fund's exposure to developing markets
and its overweight position in Asia. Your Fund began the year with a 35.5%
exposure to the Far East. With market appreciation and additional purchases,
that exposure grew to 44.2% by the end of June. The additional boost to
performance came from the reduction in exposure to European stocks from 52.0%
to 44.1% over the same period.
Market Outlook
After a prolonged rally in high multiple growth stocks, we believe that
company fundamentals and valuations have reemerged as the determinant factors
in stock performance. Our commitment to investing in quality companies in
downtrodden markets and industries paid off in the first half of 1999 and we
expect movement in the same direction to continue throughout the rest of the
year. We maintain our favorable outlook on events in Asia but we will continue
to search for the ever-increasing value ideas throughout the rest of the
world.
Thank you for your interest and investment in the International Fund. The
analysts and portfolio managers at Hansberger Global Investors look forward to
serving you with our proven approach to international investing.
For the International Fund Team
James E. Chaney
Chief Investment Officer
Hansberger Global Investors, Inc.
1
<PAGE>
[GRAPH]
International Fund MSCI EAFE Index
12/31/96 10,000 10,000
1/31/97 10,178 9,652
2/28/97 10,366 9,813
3/31/97 10,247 9,851
4/30/97 10,326 9,905
5/31/97 10,642 10,552
6/30/97 11,087 11,136
7/31/97 11,413 11,319
8/31/97 10,894 10,476
9/30/97 11,354 11,065
10/31/97 10,376 10,217
11/30/97 9,881 10,115
12/31/97 9,854 10,206
1/31/98 9,924 10,675
2/28/98 10,578 11,362
3/31/98 11,112 11,715
4/30/98 11,132 11,810
5/31/98 10,669 11,756
6/30/98 10,065 11,847
7/31/98 10,113 11,970
8/31/98 8,315 10,490
9/30/98 8,002 10,171
10/31/98 8,871 11,234
11/30/98 9,214 11,812
12/31/98 9,165 12,281
1/31/99 9,145 12,247
2/28/99 8,828 11,958
3/31/99 9,431 12,460
4/30/99 10,657 12,968
5/31/99 10,351 12,303
6/30/99 11,035 12,786
This graph compares the Fund's performance with the MSCI Europe Australia Far
East ("EAFE") Index, a broad-based unmanaged index that represents the general
performance of international equity markets. Total returns for the Fund and the
index include reinvestment of all dividends and capital gains. The index does
not include commissions or fees that an investor purchasing the securities in
the index would pay. Past performance is no guarantee of future results, and
the investment return and principal value of an investment in the Fund will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Although the investment characteristics of the
index are similar to those of the Fund, the securities owned by the Fund and
those composing the index are likely to be different, and any securities that
the Fund and the index have in common are likely to have different weightings
in the respective portfolios. Investors cannot invest directly in the index.
2
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
EMERGING MARKETS FUND
Market conditions during the six months ended June 30, 1999
The first half of the current year 1999 saw the acceleration of the progress
made in most emerging markets from 4Q 1998. Most countries continued to
reflate their economies, lower interest rates, increase their export
surpluses, and yet maintain foreign exchange stability. In many countries, the
foreign exchange rates actually strengthened substantially (e.g., Indonesia
Rupiah +56% from its low) as positive moves on the political front accentuated
economic gains.
A lot of the nervousness effected by the devaluation of the Brazilian Real
in early January, 1999 disappeared within days and stock markets in the Latin
American region rebounded sharply from the January lows. The reason for this
"buy on a devaluation" mentality may be that money managers have learned from
the experiences of Thailand and Korea that a financial crisis may actually be
a time to buy into the stock markets of troubled countries. As an asset class,
the emerging market countries have many long term solid positive factors such
as the low cost of labor, relatively high educational levels, a wealth of
minerals and natural resources, and the basic desire to grow out of relative
poverty. Positive fund flows from banking and multinational sources bolster
the case for long term equity investors to seek investment opportunities in
these markets.
Fund performance for the six months ended June 30, 1999
The Fund's total return was 45.7% for the six months ended June 30, 1999
ahead of the 39.9% returned by the MSCI Emerging Market Free Index. The Fund's
investments benefited from positive news flow and money flows towards emerging
markets in general, an orientation towards larger cap stocks, and the
relatively high Asian exposure in the portfolio.
Market outlook
With Japan looking like it may be in a recovery phase, the Asian economies
should receive a fairly powerful boost. If the U.S. economy, still strong by
all indications, falters then a strong Japan could buy up Asian exports to the
benefit of Asian companies. We believe that Indonesia, Malaysia, and Thailand
will perform better within an Asian context as their economies show stronger
signs of recovery and attract more capital. Latin American economies have
slowed during the past two months as investors review the recent tax and
budget reforms that have been proposed in Argentina and Brazil. Mexico
continues to be powered by its link with a strong U.S. economy. Russia has
again received a vote of confidence although much needs to be done. Within
Eastern Europe, macro economic policies are being driven by a desire to be
closer to the Euro-zone nations rather than to part of the Russia-CIS bloc.
Increased multinational investments in Slovakia and the resolution of the
Kosovo conflict have given comfort to long-term investors. As Japan was a
driver for Asia's economic performance, growth in Germany and the Euro-zone
will be the engine for long-term sustainable growth for much of Eastern
Europe.
We recognize the strong performance that these markets have had in the past
few quarters, but note the low levels from which they are rebounding. With
capital flows being driven by relatively shorter time horizons, the volatility
of the recent past may indeed be the norm for the future. There could still be
crises in many of these regions in the future, but our long-term objective to
find value in these unique areas of the world continues. Our team will
continue to strive to balance the risks with the opportunities and the rewards
of investing in the emerging markets.
For the Emerging Markets Fund Team
Thomas L. Hansberger, CFA
Chairman & CEO
Hansberger Global Investors, Inc.
3
<PAGE>
[GRAPH]
Emerging Markets Fund MSCI EAFE Index
12/30/96 10,000 10,000
1/31/97 10,375 10,682
2/28/97 10,623 11,140
3/31/97 10,356 10,847
4/30/97 10,375 10,866
5/31/97 10,603 11,177
6/30/97 11,215 11,775
7/31/97 11,947 11,951
8/31/97 11,334 10,430
9/30/97 11,483 10,719
10/31/97 9,753 8,960
11/30/97 8,647 8,633
12/31/97 8,489 8,841
1/31/98 7,720 8,148
2/28/98 8,579 8,999
3/31/98 8,759 9,389
4/30/98 8,679 9,287
5/31/98 7,570 8,014
6/30/98 6,671 7,173
7/31/98 6,701 7,401
8/31/98 4,754 5,261
9/30/98 4,934 5,595
10/31/98 5,553 6,184
11/30/98 6,152 6,698
12/31/98 5,924 6,601
1/31/99 6,004 6,495
2/28/99 5,793 6,558
3/31/99 6,405 7,422
4/30/99 7,668 8,340
5/31/99 7,627 8,292
6/30/99 8,630 9,233
This graph compares the Fund's performance with the MSCI Emerging Markets Free
Index, a broad-based unmanaged index that represents the general performance of
equity markets in developing markets. Total returns for the Fund and the index
include reinvestment of all dividends and capitalizations. The index does not
include commissions or fees that an investor purchasing the securities in the
index would pay. Past performance is no guarantee of future results, and the
investment return and principal value of an investment in the Fund will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Although the investment characteristics of the
index are similar to those of the Fund, the securities owned by the Fund and
those composing the index are likely to be different, and any securities that
the Fund and the index have in common are likely to have different weightings
in the respective portfolios. Investors cannot invest directly in the index.
4
<PAGE>
International Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Common and Preferred Stocks - 97.1%
Australia - 2.2%
300,491 Broken Hill Proprietary Co. ......................... $ 3,467,516
244,090 National Australia Bank Ltd. ........................ 4,023,824
------------
7,491,340
------------
Austria - 3.0%
43,816 Bank Austria AG...................................... 2,307,343
43,000 Boehler-Uddeholm AG.................................. 2,130,731
12,500 EVN AG............................................... 1,830,187
43,450 VA Technologie AG.................................... 3,941,313
------------
10,209,574
------------
Brazil - 1.4%
55,000 Companhia Vale do Rio Doce S.A. ADR.................. 1,091,965
17,000 Telebras HOLDRs...................................... 1,533,188
95,000 Unibanco - Uniao de Bancos Brasileiros S.A. GDR...... 2,285,937
------------
4,911,090
------------
Canada - 3.4%
75,000 Alcan Aluminium Ltd. ................................ 2,395,313
888,000 Methanex Corp.(a).................................... 3,373,448
269,300 Moore Corp. Ltd. .................................... 2,255,388
470,000 Nexfor, Inc. ........................................ 2,901,431
95,100 Primex Forest Products Ltd. ......................... 754,813
------------
11,680,393
------------
Chile - 0.5%
30,000 Cia. de Telecomunicaciones de Chile S.A. ADR......... 742,500
32,500 Genesis Chile Fund PTD Shares........................ 1,023,750
------------
1,766,250
------------
China - 0.5%
302,000 Shandong Huaneng Power Co., Ltd. ADR................. 1,566,625
------------
Croatia - 0.7%
161,000 Pliva d.d. GDR(c).................................... 2,394,730
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Czech Republic - 2.5%
573,100 Komercni Banka A.S., GDR(a).......................... $ 3,596,203
77,000 Skoda Plzen A.S.(a).................................. 325,386
1,263,500 The Czech Power Co. (Caske Energeticke Zavedy)(a).... 2,584,472
116,135 Zivnobanka-Investicni Fond(a)........................ 2,033,440
------------
8,539,501
------------
Denmark - 0.6%
31,100 Unidanmark A/S, Class A - Registered................. 2,072,988
------------
Finland - 1.2%
242,000 Fortum Oyj(a)........................................ 1,171,919
249,800 Kemira Oyj........................................... 1,511,469
185,000 Metsa Serla Oyj, Class B............................. 1,574,013
------------
4,257,401
------------
France - 3.7%
31,209 Banque Nationale de Paris............................ 2,603,758
25,000 Elf Aquitaine S.A. .................................. 3,673,282
80,000 Rhone-Poulenc S.A., Class A.......................... 3,660,168
55,500 Scor................................................. 2,756,433
------------
12,693,641
------------
Germany - 3.2%
81,000 BASF AG.............................................. 3,562,903
100,500 Bulfinger & Berger Bau AG............................ 2,480,124
45,000 Veba AG.............................................. 2,657,773
4,525 Viag AG.............................................. 2,102,521
------------
10,803,321
------------
Hong Kong - 6.9%
410,000 Dao Heng Bank Group Ltd. ............................ 1,839,063
5,200,000 Giordano Holdings Ltd. .............................. 3,686,375
67,000 HSBC Holdings plc.................................... 2,443,963
446,000 Hutchison Whampoa Ltd. .............................. 4,038,449
1,003,248 Jardine Matheson Holdings Ltd. ...................... 5,016,240
15,974,000 Pacific Ports Co., Ltd. ............................. 2,491,337
5,135,000 Swire Pacific Ltd., Class B.......................... 3,838,856
------------
23,354,283
------------
</TABLE>
5
<PAGE>
International Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Common and Preferred Stocks (continued)
India - 0.6%
283,100 Jardine Fleming India Fund(a)........................ $ 1,981,700
------------
Indonesia - 0.9%
1,544,000 PT Indostat.......................................... 2,943,076
------------
Italy - 1.8%
295,000 Burgo (Cartiere) S.p.A. ............................. 1,894,618
441,000 Societa Assicuratrice Industriale - SAI S.p.A. RNC... 2,322,299
378,625 Telecom Italia S.p.A. RNC............................ 2,056,385
------------
6,273,302
------------
Japan - 13.8%
135,000 Aoyama Trading Co., Ltd. ............................ 4,266,567
411,000 Ataka Construction & Engineering..................... 1,805,584
334,400 Daito Trust Construction Co. ........................ 3,734,922
140,000 Daiwa House Industry Co., Ltd. ...................... 1,474,477
778,000 Daiwa Securities Co., Ltd. .......................... 5,149,334
860,000 Dowa Fire & Marine Insurance Co. .................... 2,860,263
396,000 Hitachi Ltd. ........................................ 3,718,540
545,000 Kyudenko Corp. ...................................... 3,120,212
1,980,000 Marubeni Corp. ...................................... 4,144,453
1,055,000 Nippon Fire & Marine Insurance Co. .................. 3,578,638
144,000 Nishimatsu Construction Co., Ltd. ................... 826,806
70 NTT Mobile Communications Network, Inc. ............. 949,781
280 NTT Mobile Communications Network, Inc.(a)........... 3,752,792
129,000 Sankyo Co., Ltd. .................................... 3,255,150
108,000 Yamanouchi Pharmaceutical Co., Ltd. ................. 4,137,007
------------
46,774,526
------------
Korea - 3.3%
320,000 Korea Fund, Inc.(a).................................. 4,760,000
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Korea (continued)
37,500 Pohang Iron & Steel Co., Ltd.(b)..................... $ 4,505,022
460 Sindo Ricoh Ltd. .................................... 24,639
1,325 SK Telecom Co., Ltd.(b).............................. 1,800,913
------------
11,090,574
------------
Malaysia - 3.2%
1,645,000 Malakoff Bhd. ....................................... 4,153,625
2,030,000 Malayan Banking Bhd. ................................ 5,785,500
331,000 O.Y.L. Industries Bhd. .............................. 844,050
------------
10,783,175
------------
Mexico - 1.4%
65,000 Panamerican Beverages, Inc., Class A................. 1,547,813
42,000 Telefonos de Mexico S.A., Class L, ADR............... 3,394,125
------------
4,941,938
------------
Netherlands - 3.2%
88,353 Ahrend N.V. ......................................... 1,537,200
51,800 Ballast Nedam Preferred N.V. ........................ 1,374,587
10,100 Eriks Holdings N.V. ................................. 537,079
320,000 European Vinyl Corp. International N.V. ............. 2,709,400
62,000 KPN N.V. ............................................ 2,912,812
71,475 Koninklijke Pakhoed N.V. ............................ 1,697,428
------------
10,768,506
------------
New Zealand - 4.6%
2,237,000 Air New Zealand Ltd., Class B........................ 4,624,743
3,225,000 Carter Holt Harvey Ltd. ............................. 3,863,627
952,100 Fisher & Paykel Industries Ltd. ..................... 3,028,243
1,564,900 Fletcher Challenge Energy............................ 4,247,306
------------
15,763,919
------------
Norway - 1.9%
129,700 Bergesen d.y. ASA, Class B........................... 1,839,073
172,100 Odfjell ASA.......................................... 2,451,224
</TABLE>
6
<PAGE>
International Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Common and Preferred Stocks (continued)
Norway (continued)
110,000 Sparebanken NOR...................................... $ 2,056,336
------------
6,346,633
------------
Peru - 0.7%
317,000 Banco Wiese ADR...................................... 376,438
140,000 Southern Peru Copper Corp. .......................... 2,021,250
------------
2,397,688
------------
Philippines - 1.7%
115,000 Philippine Long Distance Telephone Company........... 3,512,837
808,000 Philippine National Bank(a).......................... 2,191,547
------------
5,704,384
------------
Poland - 1.2%
95,080 Bank Rozwoju Eksportu S.A. .......................... 2,987,883
140,000 Telekomunikacja Polska S.A. GDR(a,c)................. 987,000
------------
3,974,883
------------
Portugal - 0.4%
40,500 Electricidade de Portugal, S.A. ADR.................. 1,452,938
------------
Russia - 1.5%
60,000 Lukoil Oil Co. ADR................................... 2,376,000
2,237,300 Novorossiysk Sea Shipping(b)......................... 11,186
19,000 Oskolcement(a,b)..................................... 5,700
285,500 Rostelecom ADR(a).................................... 2,801,469
------------
5,194,355
------------
Singapore - 2.4%
613,000 City Developments Ltd. .............................. 3,924,986
587,000 United Overseas Bank Ltd. ........................... 4,103,328
------------
8,028,314
------------
Slovakia - 0.6%
31,500 Nafta Gbely A.S. .................................... 369,295
236,500 Slovakofarma A.S. GDR(c)............................. 833,662
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- -------------------------------------------------------------------------------
<C> <S> <C>
Slovakia (continued)
202,010 Vychodoslovenske Zeleziarne (VSZ) A.S.(a)........... $ 829,364
------------
2,032,321
------------
Slovenia - 0.7%
195,000 SKB Banka GDR(c).................................... 2,383,875
------------
South Africa - 1.4%
48,752 AngloGold Ltd. ..................................... 2,100,509
796,000 Standard Bank Investment Corp., Ltd. ............... 2,631,568
------------
4,732,077
------------
Spain - 3.7%
75,000 Catalina Occidente S.A. ............................ 1,610,771
235,000 Iberdrola S.A. ..................................... 3,583,915
188,000 Repsol S.A. ........................................ 3,843,549
72,327 Telefonica S.A.(a).................................. 3,488,347
------------
12,526,582
------------
Sweden - 3.6%
320,000 ABB AB, B Shares.................................... 4,250,797
214,500 Assidoman AB........................................ 3,241,941
79,603 AstraZeneca Group plc............................... 3,111,181
104,500 Getinge Industrier AB, B Shares..................... 1,548,560
------------
12,152,479
------------
Switzerland - 1.9%
3,400 Forbo Holdings AG -- Registered..................... 1,354,128
3,800 Schweizerische Lebensversicherungs und
Rentenanstalt...................................... 2,304,440
9,100 UBS AG.............................................. 2,721,145
------------
6,379,713
------------
Thailand - 3.2%
1,778,100 Bankok Bank Public Co. Ltd.(a)...................... 6,652,509
361 Thai International Fund IDR(a)...................... 4,187,600
------------
10,840,109
------------
United Kingdom - 9.6%
2,199,860 BICC plc............................................ 3,175,227
246,274 Cable & Wireless plc................................ 3,140,923
525,000 Enterprise Oil plc.................................. 3,420,330
</TABLE>
7
<PAGE>
International Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- -------------------------------------------------------------------------------
<C> <S> <C>
Common and Preferred Stocks (continued)
United Kingdom (continued)
532,769 J Sainsbury plc.................................... $ 3,361,690
137,825 National Westminster Bank plc...................... 2,924,213
500,000 Nycomed Amersham plc............................... 3,478,302
304,000 Powergen plc....................................... 3,280,110
728,559 Rolls-Royce plc.................................... 3,085,800
380,718 Royal & Sun Alliance Insurance Group plc(a)........ 3,417,231
1,586,203 Storehouse plc..................................... 3,377,934
------------
32,661,760
------------
Total -- Common and Preferred Stocks
(Cost $308,453,370)............................... 329,869,964
------------
Rights - 0.0%
Korea - 0.0%
304 SK Telecom Co. Ltd. Rt.(a,b)....................... 147,863
------------
Total -- Rights (Cost $0).......................... 147,863
------------
<CAPTION>
Face Value
Amount (Note A1)
- -------------------------------------------------------------------------------
<C> <S> <C>
Convertible Bonds - 1.0%
Singapore - 1.0%
$18,000,000 Asia Pulp & Paper Finance VI
Zero Coupon, 11/18/12............................. $3,348,000
------------
Total -- Convertible Bonds (Cost $2,997,754)....... $3,348,000
------------
</TABLE>
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Discount Rate (Note A1)
- --------------------------------------------------------------------------------
<C> <C> <S> <C>
U.S. Government Obligations - 1.8%
U.S. Treasury Bills - 1.8%
$ 296,000 07/22/99, 4.23%...................................... $ 295,282
249,000 07/29/99, 4.18%...................................... 248,204
403,000 08/05/99, 4.39%...................................... 401,288
888,000 08/12/99, 4.44%...................................... 883,493
2,649,000 08/26/99, 4.44%...................................... 2,631,527
1,410,000 09/09/99, 4.63%...................................... 1,397,689
181,000 09/23/99, 4.51%...................................... 179,083
------------
Total -- U.S. Government Obligations
(Cost $6,035,651).................................... 6,036,566
------------
TOTAL INVESTMENTS -- 99.9% (Cost $317,486,775)........ 339,402,393
Other Assets and Liabilities (Net) -- 0.1%............ 189,027
------------
NET ASSETS -- 100%.................................... $339,591,420
============
</TABLE>
(a) Non-income producing securities.
(b) Fair valued securities - See Note A1. Total market value of fair valued
securities owned at June 30, 1999 was $6,470,684 or 1.9% of net assets.
(c) 144A Security - Certain conditions for public sale may exist.
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
IDR International Depositary Receipt.
8
<PAGE>
Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- ------------------------------------------------------------------------------
<C> <S> <C>
<CAPTION>
Common and Preferred Stocks -90.1%
<C> <S> <C>
Argentina - 0.8%
71,000 Telefonica de Argentina S.A. ADR.................... $ 2,227,625
------------
Brazil - 6.8%
110,000 Aracruz Celulose S.A. ADR........................... 2,420,000
90,000 Companhia Energetica de Minas Gerais CEMIG S.A.
ADR................................................ 1,878,228
160,600 Companhia Vale do Rio Doce S.A. ADR................. 3,188,536
190,600 Petroleo Brasileiro S.A. ADR........................ 2,934,878
65,000 Tele Sudeste Celular Participacoes S.A. ADR......... 1,885,000
24,050 Telebras HOLDRs ADR................................. 2,169,009
100,000 Unibanco--Uniao de Bancos Brasileiros S.A. GDR...... 2,406,250
850,000 Usinas Siderurgicas de Minas Gerais S.A. --Usiminas
Pfd. A Share....................................... 2,862,956
------------
19,744,857
------------
Chile - 1.7%
127,000 Administradura de Fundos de Pensiones Provida ADR... 2,794,000
84,948 Cia. de Telecomunicaciones de Chile S.A. ADR........ 2,102,463
------------
4,896,463
------------
China - 3.4%
200,000 Huaneng Power International, Inc. ADR............... 3,425,000
27,634,000 Shanghai Petrochemical Co. Ltd., Class H............ 6,518,209
------------
9,943,209
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Croatia - 1.3%
253,000 Pliva d.d. GDR(c)..................................... $ 3,763,147
------------
Czech Republic - 0.8%
4,273 Deza Valasske Mezirici A.S. .......................... 43,387
345,500 Komercni Banka A.S., GDR(a)........................... 2,168,013
------------
2,211,400
------------
Greece - 1.4%
146,666 Hellenic Telecommunication Organization S.A. ......... 3,147,739
42,000 Panafon Hellenic Telecom S.A.(a)...................... 1,014,245
------------
4,161,984
------------
Hong Kong - 7.6%
851,000 Citic Pacific Ltd. ................................... 2,714,802
108,800 HSBC Holdings plc..................................... 3,968,704
378,000 Hutchison Whampoa Ltd. ............................... 3,422,721
992,949 Jardine Matheson Holdings Ltd. ....................... 4,964,745
901,000 SmarTone Telecommunications Holdings Ltd. ............ 3,205,290
329,500 Swire Pacific Ltd., Class A........................... 1,630,873
700,000 Wing Hang Bank Ltd. .................................. 2,251,138
------------
22,158,273
------------
Hungary - 3.5%
140,000 BorsodChem Rt. ....................................... 3,388,428
127,800 EGIS Rt. ............................................. 3,061,426
80,000 Matav Rt. ADR ........................................ 2,200,000
61,016 Pick Szeged Rt. ...................................... 1,714,067
------------
10,363,921
------------
India - 2.6%
110,000 Bajaj Auto Ltd. GDR(c)................................ 1,804,000
225,000 BSES Ltd. GDR(c)...................................... 2,255,625
240,000 Gujarat Ambuja Cements Ltd(c)......................... 1,968,000
150,000 Mahanagar Telephone Nigam Ltd. GDR(c)................. 1,485,000
------------
7,512,625
------------
</TABLE>
9
<PAGE>
Emerging Markets Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
<CAPTION>
Common and Preferred Stocks (continued)
<C> <S> <C>
Indonesia - 2.9%
1,900,000 PT Indofood Sukses Makmur Tbk(a)...................... $ 2,579,061
191,600 PT Indosat ADR........................................ 3,736,200
1,000,000 PT Semen Gresik (Persero) Tbk. ....................... 2,166,065
------------
8,481,326
------------
Israel - 1.9%
60,000 ECI Telecom Ltd. ..................................... 1,980,000
150,000 Koor Industries Ltd. ADR.............................. 3,506,250
------------
5,486,250
------------
Korea - 9.4%
98,000 Korea Electric Power Corp. ........................... 4,072,398
46,000 Korea Telecom Corp.(b)................................ 3,052,095
54,940 Pohang Iron & Steel Co., Ltd.(b)...................... 6,600,157
41,242 Samsung Electronics Co. .............................. 4,525,040
5,000 Samsung Fire & Marine Insurance....................... 3,520,518
1,020 Sindo Ricoh........................................... 54,635
2,130 SK Telecom Co., Ltd.(b)............................... 2,895,052
161,710 SK Telecom Co., Ltd. ADR.............................. 2,749,070
------------
27,468,965
------------
Malaysia - 6.7%
575,000 Malakoff Bhd. ........................................ 1,451,875
1,070,000 Malayan Banking Bhd. ................................. 3,049,500
1,600,000 Perusahaan Otomobil Nasional Bhd. .................... 3,520,000
1,530,000 Road Builder (M) Holdings Bhd. ....................... 2,792,250
7,500,000 Technology Resources Industries Bhd. ................. 5,812,500
800,000 Telekom Malaysia Bhd. ................................ 2,840,000
------------
19,466,125
------------
Mexico - 7.2%
725,651 Cemex S.A. de C.V. CPO................................ 3,588,596
192,000 Cifra SA de CV. ADR V shares(a)....................... 3,682,425
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- ------------------------------------------------------------------------------
<C> <S> <C>
Mexico (continued)
1,400,000 Grupo Casa Autrey S.A. de C.V.(a)................... $ 527,433
560,000 Grupo Mexico S.A., Series B......................... 2,383,105
95,500 Panamerican Beverages, Inc. ........................ 2,274,094
33,700 Telefonos de Mexico S.A., Class L ADR............... 2,723,381
300,000 Transpotacion Martima Mexicana S.A. de C.V., Class
A, ADR(a).......................................... 1,312,500
259,000 Tubos de Acero de Mexico S.A. ADR................... 2,816,625
1,000,000 Vitro S.A., Series A................................ 1,697,973
------------
21,006,132
------------
Peru - 1.7%
373,000 Banco Wiese ADR..................................... 442,937
160,000 Credicorp Ltd. ..................................... 1,760,000
190,000 Southern Peru Copper Corp. ......................... 2,743,125
------------
4,946,062
------------
Philippines - 3.4%
52,000,000 Digital Telecommunications Phils., Inc.
(Digitel)(a)....................................... 3,204,213
408,600 Metropolitan Bank & Trust Co. ...................... 4,088,690
90,000 Philippine Long Distance Telephone Co. ............. 2,749,177
------------
10,042,080
------------
Poland - 3.3%
88,200 Bank Rozwoju Eksportu S.A. ......................... 2,771,679
270,250 Budimex S.A.(a)..................................... 1,581,616
357,000 Telekomunikacja Polska S.A. GDR(a,c)................ 2,516,850
269,984 Zaclady Metali Lekkich Kety(a)...................... 2,837,237
------------
9,707,382
------------
Romania - 0.3%
140,000 Alro Slatina S.A. .................................. 830,022
------------
</TABLE>
10
<PAGE>
Emerging Markets Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
<CAPTION>
Common and Preferred Stocks (continued)
<C> <S> <C>
Russia - 6.0%
18,000,000 Baskirenergo.......................................... $ 1,314,000
60,000 Chelyabink Suyazin- form.............................. 1,245,000
13,700,000 Irkutskenergo(a)...................................... 1,394,660
103,300 Lukoil Oil Co. ADR.................................... 4,090,680
575,970 Rostelecom ADR(a)..................................... 5,651,673
500,000 Surgutneftegaz ADR.................................... 3,887,500
------------
17,583,513
------------
Singapore - 4.3%
185,000 Asia Pulp & Paper Co. Ltd. ADR(a)..................... 1,780,625
410,000 City Developments Ltd. ............................... 2,625,195
380,000 Cycle & Carriage Ltd. ................................ 2,187,564
260,000 Development Bank of Singapore Ltd. ................... 3,176,785
405,000 United Overseas Bank Ltd. ............................ 2,831,086
------------
12,601,255
------------
Slovakia - 2.2%
24,280 Drotovna A.S.(a,b).................................... 55,379
9,500 Nafta Gbely A.S. ..................................... 111,375
13,000 SES A.S.(a,b)......................................... 32,913
980,000 Slovakofarma A.S. GDR(c).............................. 3,454,500
153,940 Slovnaft A.S.(a)...................................... 2,036,475
169,496 Vychodoslovenske Zeleziarne (VSZ) A.S.(a)............. 695,876
------------
6,386,518
------------
Slovenia - 0.7%
171,500 SKB Banka GDR(c)...................................... 2,096,588
------------
South Africa - 1.3%
44,000 AngloGold Ltd. ....................................... 1,895,766
550,300 Standard Bank Investment Corp., Ltd. ................. 1,819,287
------------
3,715,053
------------
Thailand - 8.0%
390,000 Advanced Info. Service Public Co., Ltd. .............. 5,286,702
3,900,000 Bank of Ayudhya Public Co., Ltd. ..................... 2,669,784
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note A1)
- --------------------------------------------------------------------------------
<C> <S> <C>
Thailand (continued)
1,418,300 Bankok Bank Public Co., Ltd. (Foreign)(a)............ $ 5,306,368
1,600,000 Land & House Public Co., Ltd......................... 2,906,331
1,900,000 Thai Airways International Public Co., Ltd.(a)....... 3,580,046
1,200,000 Thai Farmer's Bank Public Co., Ltd.(a)............... 3,708,825
------------
23,458,056
------------
Turkey - 0.2%
34,186,800 Yapi ve Kredi Bankasi A.S. .......................... 494,568
------------
Venezuela - 0.7%
420,500 Mavesa, S.A. ADR..................................... 1,366,625
247,833 Siderurgica Venezolana Sivensa ADR................... 743,425
------------
2,110,050
------------
Total -- Common Stocks (Cost $193,660,806)........... 262,863,449
------------
Rights - 0.1%
Korea - 0.1%
70 Samsung Electronics Co.(a)........................... 3,508
489 SK Telecom Co., Ltd.(a).............................. 237,846
------------
241,354
------------
Total -- Rights (Cost $0)............................ 241,354
------------
Warrants - 0.0%
Singapore - 0.0%
37,000 Asia Pulp & Paper Co. Ltd.(a) (Cost $0).............. 97,125
------------
</TABLE>
11
<PAGE>
Emerging Markets Fund (continued)
Portfolio of Investments
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Discount Rate (Note A1)
- --------------------------------------------------------------------------------
<C> <C> <S> <C>
U.S. Government Obligations - 1.0%
U.S. Treasury Bills - 1.0%
$ 123,000 07/22/99, 4.23%...................................... $ 122,686
40,000 07/29/99, 4.18%...................................... 39,872
511,000 08/05/99, 4.44%...................................... 508,849
101,000 09/09/99, 4.63%...................................... 100,118
2,181,000 09/23/99, 4.51%...................................... 2,157,897
------------
Total -- U.S. Government Obligations
(Cost $2,928,998).................................... 2,929,422
------------
TOTAL INVESTMENTS -- 91.2%
(Cost $196,589,804).................................. 266,131,350
Other Assets and Liabilities (Net) -- 8.8%............ 25,657,660
------------
NET ASSETS -- 100%.................................... $291,789,010
============
</TABLE>
(a) Non-income producing securities.
(b) Fair valued securities--See Note A1. Total market value of fair valued
securities owned at June 30, 1999 was $12,635,596 or 4.3% of net assets.
(c) 144A Security - Certain conditions for public sale may exist.
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
12
<PAGE>
Statements of Assets and Liabilities
June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Emerging
International Markets
Fund Fund
------------- ------------
<S> <C> <C>
ASSETS:
Investments, at Cost -- see accompanying
portfolios...................................... $317,486,775 $196,589,804
============ ============
Investments, at Value (Note A1).................. $339,402,393 $266,131,350
Cash............................................. 581,664 3,116,602
Foreign Currency (Cost $87, $12,990)............. 92 12,990
Receivable for Shares Sold....................... 2,000 25,870,000
Net Unrealized Gain on Foreign Currency Contracts
(Note A3)....................................... 2,558 --
Receivable for Investments Sold.................. 8,897 2,192,523
Dividends Receivable............................. 1,323,489 626,985
Deferred Organization Costs (Note A5)............ 25,258 25,255
Other Assets..................................... 5,222 1,017
------------ ------------
Total Assets.................................... 341,351,573 297,976,722
------------ ------------
LIABILITIES:
Payable for Investments Purchased................ 1,461,161 5,760,599
Management Fees Payable (Note B)................. 210,145 174,333
Administration Fees Payable...................... 38,793 29,892
Custodian Fees Payable........................... 28,265 33,853
Professional Fees Payable........................ 11,000 12,085
Net Unrealized Loss on Foreign Currency Contracts
(Note A3)....................................... -- 155,139
Accrued Expenses and Other Liabilities........... 10,789 21,811
------------ ------------
Total Liabilities............................... 1,760,153 6,187,712
------------ ------------
Net Assets....................................... $339,591,420 $291,789,010
============ ============
NET ASSETS CONSIST OF:
Paid-in Capital.................................. $322,306,098 $244,380,195
Undistributed Net Investment Income.............. 4,226,072 1,001,910
Accumulated Net Realized Loss.................... (8,855,757) (23,053,095)
Unrealized Appreciation of Investments and
Foreign Currency Translations................... 21,915,007 69,460,000
------------ ------------
Net Assets....................................... $339,591,420 $291,789,010
============ ============
Shares of Beneficial Interest Outstanding
(unlimited authorization, no par value)......... 31,455,020 33,908,727
============ ============
Net Asset Value Per Share........................ $ 10.80 $ 8.61
============ ============
</TABLE>
13
<PAGE>
Statements of Operations
Six Months Ended June 30, 1999 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Emerging
International Markets
Fund Fund
------------- -----------
<S> <C> <C>
Investment Income:
Dividends.......................................... $ 5,051,884 $ 2,167,700
Interest........................................... 190,217 208,672
----------- -----------
Total Income...................................... 5,242,101 2,376,372
----------- -----------
Expenses:
Investment Advisory Fees (Note B):
Basic Fees........................................ 1,111,343 1,012,088
Less: Fees Waived................................. (47,998) (153,391)
----------- -----------
Investment Advisory Fees -- Net.................... 1,063,345 858,697
Administration Fees................................ 190,469 133,900
Custodian Fees..................................... 172,822 200,721
Professional Fees.................................. 32,802 34,025
Trustees' Fees and Expenses (Note E)............... 4,740 3,776
Amortization of Organization Costs (Note A5)....... 4,929 4,957
Miscellaneous Expenses............................. 31,086 29,318
----------- -----------
Net Expenses....................................... 1,500,193 1,265,394
----------- -----------
Net Investment Income.............................. 3,741,908 1,110,978
----------- -----------
Net Realized Gain (Loss):
Security Transactions.............................. 8,503,062 4,265,409
Foreign Currency Transactions...................... (792,135) (1,039,550)
----------- -----------
Net Realized Gain................................. 7,710,927 3,225,859
----------- -----------
Net Change in Unrealized Appreciation
(Depreciation) on:
Investments........................................ 45,754,533 76,225,615
Foreign Currency Translations on Receivables and
Payables.......................................... (606) (82,974)
----------- -----------
Net Unrealized Appreciation....................... 45,753,927 76,142,641
----------- -----------
Net Realized Gain and Unrealized Appreciation...... 53,464,854 79,368,500
----------- -----------
Net Increase in Net Assets Resulting from
Operations........................................ $57,206,762 $80,479,478
=========== ===========
</TABLE>
14
<PAGE>
Statements of Changes in Net Assets
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
International Fund
----------------------------------
Six Months Ended
June 30, 1999 Year Ended
(Unaudited) December 31, 1998
---------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income...................... $ 3,741,908 $ 4,317,254
Net Realized Gain (Loss)................... 7,710,927 (16,984,953)
Net Unrealized Appreciation
(Depreciation)............................ 45,753,927 (2,947,731)
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................. 57,206,762 (15,615,430)
------------ ------------
Distributions:
Net Investment Income...................... -- (3,409,988)
Capital Gains.............................. -- (870,351)
------------ ------------
Total Distributions....................... -- (4,280,339)
------------ ------------
Capital Share Transactions (Note G):
Proceeds from Shares Sold.................. 11,472,036 122,323,434
Net Asset Value on Reinvestment of
Distributions............................. -- 3,944,493
Cost of Shares Redeemed.................... (9,673,789) (12,751,236)
Transaction Fees........................... 93,733 312,901
------------ ------------
Increase in Net Assets from Capital Share
Transactions.............................. 1,891,980 113,829,592
------------ ------------
Net Increase in Net Assets................. 59,098,742 93,933,823
Net Assets:
Beginning of Period....................... 280,492,678 186,558,855
------------ ------------
End of Period............................. $339,591,420 $280,492,678
============ ============
Undistributed Net Investment Income
Included in End of Period Net Assets...... $ 4,226,072 $ 484,164
============ ============
</TABLE>
15
<PAGE>
Statements of Changes in Net Assets
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Emerging Market Fund
----------------------------------
Six Months Ended
June 30, 1999 Year Ended
(Unaudited) December 31, 1998
---------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income...................... $ 1,110,978 $ 892,127
Net Realized Gain (Loss)................... 3,225,859 (26,273,246)
Net Unrealized Appreciation................ 76,142,641 2,773,758
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................. 80,479,478 (22,607,361)
------------ ------------
Distributions:
Net Investment Income...................... -- (428,686)
In Excess of Net Investment Income......... -- (109,068)
------------ ------------
Total Distributions....................... -- (537,754)
------------ ------------
Capital Share Transactions (Note G):
Proceeds from Shares Sold.................. 71,145,729 134,663,958
Net Asset Value on Reinvestment of
Distributions............................. -- 493,293
Cost of Shares Redeemed.................... (3,030,264) (7,386,982)
Transaction Fees........................... 523,334 1,325,368
------------ ------------
Increase in Net Assets from Capital Share
Transactions.............................. 68,638,799 129,095,637
------------ ------------
Net Increase in Net Assets................. 149,118,277 105,950,522
Net Assets:
Beginning of Period....................... 142,670,733 36,720,211
------------ ------------
End of Period............................. $291,789,010 $142,670,733
============ ============
Undistributed (Distributions in Excess of)
Net Investment Income Included in End of
Period Net Assets......................... $ 1,001,910 $ (109,068)
============ ============
</TABLE>
16
<PAGE>
Financial Highlights
For a Share Outstanding Throughout Each Period
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
International Fund
------------------------------------------------------------------------
Six Months Ended
June 30, 1999 Year Ended Year Ended Period Ended
(Unaudited) December 31, 1998 December 31, 1997 December 31, 1996*+
---------------- ----------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 8.97 $ 9.79 $ 10.12 $10.12
-------- -------- -------- ------
Income from Investment
Operations:
Net Investment Income... 0.12 0.14 0.10 --
Net Realized and
Unrealized Gain
(Loss)................. 1.71 (0.81) (0.25) --
-------- -------- -------- ------
Total from Investment
Operations............ 1.83 (0.67) (0.15) --
-------- -------- -------- ------
Less Distributions from:
Net Investment Income... -- (0.11) (0.08) --
In Excess of Net
Investment Income...... -- -- -- ++ --
Capital Gains........... -- (0.04) (0.10) --
-------- -------- -------- ------
Total Distributions.... -- (0.15) (0.18) --
-------- -------- -------- ------
Net Asset Value, End of
Period................. $ 10.80 $ 8.97 $ 9.79 $10.12
======== ======== ======== ======
Total Return............ 20.40% 6.96 % (1.46)% 0.00 %
Ratios and Supplemental
Data:+
Net Assets, End of
Period (in Thousands).. $339,591 $280,493 $186,559 $4,296
Ratio of Expenses to
Average Net Assets(1).. 1.00%** 1.00 % 1.00 % 1.00 %**
Ratio of Net Investment
Income to Average Net
Assets(1).............. 2.52%** 1.82 % 1.84 % 3.50 %**
Portfolio Turnover
Rate................... 23% 32 % 14 % 0 %
- --------------------------------------------
(1) Effect of voluntary expense limitation
during the period:
Ratio of Expenses to
Average Net Assets.... 1.04%** 1.10 % 1.29 % 77.13 %**
Ratio of Net Investment
Income (Loss) to
Average Net Assets.... 2.49%** 1.72 % 1.55 % (72.63)%**
</TABLE>
* The Fund commenced operations on December 30, 1996.
** Annualized.
+ The per share amounts for the two day period ended December 31, 1996 are
based on average outstanding shares.
++ Amount represents less than $0.01 per share.
17
<PAGE>
Financial Highlights
For a Share Outstanding Throughout Each Period
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Emerging Markets Fund
------------------------------------------------------------------------
Six Months Ended
June 30, 1999 Year Ended Year Ended Period Ended
(Unaudted) December 31, 1998 December 31, 1997 December 31, 1996*+
---------------- ----------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 5.91 $ 8.50 $ 10.12 $10.12
-------- -------- ------- ------
Income from Investment
Operations:
Net Investment Income... 0.03 0.04 0.05 --
Net Realized and
Unrealized Gain
(Loss)................. 2.67 (2.61) (1.58) --
-------- -------- ------- ------
Total from Investment
Operations............ 2.70 (2.57) (1.53) --
-------- -------- ------- ------
Less Distributions from:
Net Investment Income... -- (0.02) (0.07) --
In Excess of Net
Investment Income...... -- -- ++ -- --
Capital Gains........... -- -- (0.02) --
-------- -------- ------- ------
Total Distributions.... -- (0.02) (0.09) --
-------- -------- ------- ------
Net Asset Value, End of
Period................. $ 8.61 $ 5.91 $ 8.50 $10.12
======== ======== ======= ======
Total Return............ 45.69% (30.20)% (15.11)% 0.00 %
Ratios and Supplemental
Data:+
Net Assets, End of
Period (in Thousands).. $291,789 $142,671 $36,720 $5,233
Ratio of Expenses to
Average Net Assets(1).. 1.25%** 1.25 % 1.50 % 1.50 %**
Ratio of Net Investment
Income to Average Net
Assets(1).............. 1.10%** 1.08 % 1.12 % 2.87 %**
Portfolio Turnover
Rate................... 23% 44 % 15 % 0 %
- --------------------------------------------
(1) Effect of voluntary expense limitation
during the period:
Ratio of Expenses to
Average Net Assets.... 1.40%** 1.68 % 2.18 % 65.28 %**
Ratio of Net Investment
Income (Loss) to
Average Net Assets.... 0.94%** 0.65 % 0.44 % (60.91)%**
</TABLE>
* The Fund commenced operations on December 30, 1996.
** Annualized.
+ The per share amounts for the two day period ended December 31, 1996 are
based on average outstanding shares.
++ Amount represents less than $0.01 per share.
18
<PAGE>
Notes to Financial Statements
June 30, 1999 (Unaudited)
Hansberger Institutional Series (the "Trust"), a Massachusetts business trust,
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. As of June 30, 1999, the Trust was
comprised of 2 separate active, diversified portfolios (individually referred
to as a "Fund", collectively as the "Funds"). The International Fund and the
Emerging Markets Fund, each a Fund of the Trust, commenced operations on De-
cember 30, 1996.
The International Fund seeks to achieve long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States including developing countries. The
Emerging Markets Fund seeks to achieve long-term capital growth through a pol-
icy of investing primarily in publicly traded equity securities of companies
located in emerging markets.
A. Accounting Policies: The following significant accounting policies are in
conformity with generally accepted accounting principles for investment compa-
nies. Such policies are consistently followed by the Trust in the preparation
of the financial statements. Generally accepted accounting principles may re-
quire management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could dif-
fer from those estimates.
1. Security Valuation: Equity securities listed on a U.S. exchange are val-
ued at the latest quoted sales price on the valuation date. Securities
listed on a foreign exchange are valued at their closing price. Unlisted se-
curities and listed securities not traded on the valuation date for which
market quotations are readily available are valued at a price within a range
not exceeding the current asked price nor less than the current bid price.
Bonds and other fixed income securities may be valued according to the
broadest and most representative market. In addition, bonds and other fixed
income securities may be valued on the basis of prices provided by a pricing
service which are based primarily on institutional size trading in similar
groups of securities. Securities not priced in this manner are valued at the
most recently quoted bid price, or, when securities exchange valuations are
used, at the latest quoted sale price on the day of valuation. If there is
no such reported sale, the latest quoted bid price will be used. Debt secu-
rities purchased with remaining maturities of 60 days or less are valued at
amortized cost, if it approximates market value. All other securities and
assets for which market values are not readily available, including re-
stricted securities and unlisted foreign securities, are valued at fair
value as determined in good faith by the Board of Trustees, although the ac-
tual calculations may be done by others.
The Funds' investments in emerging markets or developing markets may subject
the Funds to a greater degree of risk than in a developed market. Risks as-
sociated with these developing markets, attributable to political, social or
economic factors, may affect the price of the Funds' investments and income
generated by these investments, as well as the Funds' ability to repatriate
such amounts.
2. Foreign Currency Translation: The accounting records of the Funds are
maintained in U.S. dollars. Investment securities and other assets and lia-
bilities denominated in a foreign currency are translated into U.S. dollars
at the foreign currency exchange rates applicable on that day. Purchases and
sales of securities, income receipts and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates of
the transactions. Net realized gains and losses on foreign currency transac-
tions represent net gains and losses from sales and maturities of forward
currency contracts, disposition of foreign currencies, currency gains and
losses realized between the trade and settlement dates on securities trans-
actions and the difference between the amount of net investment income ac-
crued and the U.S. dollar amount actually received. The effect of changes in
foreign currency exchange rates on investments in securities are not segre-
gated in the Statement of Operations from the effects of changes in market
prices of those securities, but are included with the net realized and
unrealized gain or loss on investment in securities.
3. Forward Currency Exchange Contracts: The Funds may enter into forward
currency exchange contracts in connection with planned purchases or sales of
securities or to hedge the value of some or all of a Fund's portfolio secu-
rities. A forward currency contract is an agreement between two parties to
purchase and sell currency at a set price on a future date. The market value
of a forward currency contract fluctuates with changes in currency exchange
rates applicable on that day. Forward currency contracts are marked-to-mar-
ket
19
<PAGE>
Notes to Financial Statements (continued)
daily using the forward foreign currency exchange rates applicable on that
day or at such other rates as deemed appropriate. The change in value is re-
corded by the Funds as an unrealized gain or loss. When a forward currency
contract is extinguished, either by delivering the currency or by entering
into another forward currency contract, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value of the contract at settlement date. The Funds
could be exposed to risk if the counterparties are unable to meet the terms
of the contracts or if the value of the currency changes unfavorably rela-
tive to the U.S. dollar.
4. Taxes: It is each Fund's intention to qualify as a regulated investment
company and distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements. The Funds
may be subject to taxes imposed by countries in which they invest. Such
taxes are generally based on income and/or capital gains earned or repatri-
ated. Taxes are accrued and applied to net investment income, net realized
capital gains and net unrealized appreciation as the income and/or capital
gains are earned.
5. Organizational Costs: The organizational costs of the Funds are being am-
ortized on a straight-line basis over a period of five years beginning with
each Fund's commencement of operations. Hansberger Global Investors, Inc.
has agreed that in the event any of its initial shares in a Fund are re-
deemed, the proceeds on redemption will be reduced by the pro-rata portion
of any unamortized organizational costs in the same proportion as the number
of shares redeemed bears to the initial shares held at time of redemption.
6. Other: Security transactions are accounted for on the date the securities
are purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the specific identified cost basis. Dividend
income is recorded on the ex-date (except that certain dividends from for-
eign securities where the ex-dividend date may have passed are recorded as
soon as the Fund is informed of the ex-dividend date in the exercise of rea-
sonable diligence) net of applicable withholding taxes where recovery of
such taxes is not reasonably assured. Interest income is recognized on the
accrual basis except where collection is in doubt. Discounts and premiums on
securities purchased are amortized according to the effective yield method
over their respective lives. Most expenses of the Trust can be directly at-
tributed to a particular Fund. Expenses which cannot be directly attributed
are apportioned among the Funds based upon relative net assets. Distribu-
tions for the Funds are recorded on the ex-date. Income and capital gain
distributions are determined in accordance with U.S. Federal income tax reg-
ulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing book and tax treatment for
organizational expenses.
Permanent book and tax basis differences relating to shareholder distribu-
tions may result in reclassifications to paid-in capital, undistributed net
investment income (loss) and accumulated net realized gain (loss) on invest-
ments and foreign currency transactions. Undistributed net investment income
(loss) and accumulated net realized gain (loss) may include temporary book
and tax differences which should reverse in a subsequent period.
Distributions in excess of tax basis earnings and profits will be reported
in the Fund's financial statements as a return of capital. Furthermore, dif-
ferences in the recognition or classification of income between the finan-
cial statements and tax earnings and profits which result in temporary over-
distributions for financial statement purposes are classified as distribu-
tions in excess of net investment income or in excess of accumulated net re-
alized gains.
Permanent book and tax basis differences, if any, are not included in ending
undistributed net investment income for the purpose of calculating net in-
vestment income per share in the Financial Highlights.
B. Adviser: Hansberger Global Investors, Inc. (the "Adviser") provides each
Fund with investment advisory services pursuant to an investment advisory
agreement at a monthly fee calculated at the annual rate of 0.75% and 1.00% of
average daily net assets of the International Fund and the Emerging Markets
Fund, respectively. The Adviser has voluntarily agreed to reduce advisory fees
payable to it and to reimburse the Funds, if necessary, if the annual operat-
ing expenses, as defined, expressed as a percentage of average daily net as-
sets, exceed the maximum ratios of 1.00% for the International Fund and 1.25%
for the Emerging Markets Fund. The Adviser, at its discretion, may revise or
discontinue the voluntary fee waivers and reimbursements at any time.
20
<PAGE>
Notes to Financial Statements (continued)
C. Administrator: Chase Global Funds Services Company (the "Administrator" or
"CGFSC"), a subsidiary of The Chase Manhattan Bank, provides the Trust with ad-
ministrative, dividend disbursing and transfer agent services pursuant to an
Administrative Agreement (the "Agreement"). Under the Agreement the Trust pays
the Administrator a monthly fee in proportion to the Funds' combined average
daily net assets at the following annual rate: 0.12% of the first $500 million
of average daily net assets, 0.08% for the next $500 million of average daily
net assets, and 0.06% for average daily net assets over $1 billion. Certain em-
ployees of CGFSC are officers of the Fund.
D. Custodian: The Chase Manhattan Bank serves as the Trust's custodian in ac-
cordance with a custodian agreement. Custodian fees are computed and payable
monthly based on assets held, investment purchases and sales activity, an ac-
count maintenance fee, plus reimbursement for certain out-of-pocket expenses.
E. Trustee Fees: The Trust pays each Trustee, who is not also an officer or af-
filiated person, an annual fee plus travel and other expenses incurred in at-
tending Board meetings. Trustees who are also officers or affiliated persons
receive no remuneration for their service as Trustees.
Expenses for the six months ended June 30, 1999, include legal fees paid to
Morgan, Lewis & Bockius LLP. A partner of that firm is a Trustee to the Trust.
F. Purchases and Sales: For the six months ended June 30, 1999, purchases and
sales of investment securities other than long-term U.S. Government securities
and short-term investments were:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ---- ----------- -----------
<S> <C> <C>
International Fund...................................... $70,532,635 $67,633,459
Emerging Markets Fund................................... 91,685,227 44,048,365
</TABLE>
There were no purchases or sales of long-term U.S. Government securities during
the six months ended June 30, 1999.
During the six months ended June 30, 1999, the Funds paid brokerage commissions
to J.M. Sassoon and Salomon Smith Barney, affiliated broker/dealers, as fol-
lows:
<TABLE>
<CAPTION>
Fund J.M. Sassoon Salomon Smith Barney
- ---- ------------ --------------------
<S> <C> <C>
International................................. -- 4,550
Emerging Markets.............................. 3,226 27,327
</TABLE>
G. Capital Share Transactions: Transactions in fund shares for the periods in-
dicated below:
<TABLE>
<CAPTION>
International Emerging
Fund Markets Fund
--------------------- ---------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
06/30/99 12/31/98 06/30/99 12/31/98
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares sold....................... 1,240,452 13,156,398 10,257,441 20,995,902
Shares issued on reinvestment of
distributions.................... -- 427,557 -- 84,036
Shares repurchased................ 1,047,885 1,372,479 483,944 1,264,492
---------- ---------- ---------- ----------
Increase.......................... 192,567 12,211,476 9,773,497 19,815,446
Fund shares:
Beginning of period............... 31,262,453 19,050,977 24,135,230 4,319,784
---------- ---------- ---------- ----------
End of period..................... 31,455,020 31,262,453 33,908,727 24,135,230
</TABLE>
New shareholders are charged a transaction fee in connection with each purchase
and redemption of shares of each Fund. The transaction fee is 0.50% for the In-
ternational Fund and 1.00% for the Emerging Markets Fund. The transaction fee
is not a sales charge and is retained by the Funds. The fee does not apply to
and is not charged in connection with exchanges from one Fund to another, cer-
tain insignificant transactions, including the reinvestment of dividends or
capital gain distributions, or transactions involving shareholders who previ-
ously purchased shares that were not subject to the transaction fee.
H. Other: At June 30, 1999, cost, unrealized appreciation, unrealized (depreci-
ation), and net unrealized appreciation (depreciation) for U.S. Federal income
tax purposes of the investments of the Portfolio were:
<TABLE>
<CAPTION>
Net
Unrealized Unrealized Unrealized
Fund Cost Appreciation (Depreciation) Appreciation
- ---- ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
International Fund........ $317,486,775 $56,608,045 $(34,692,427) $21,915,618
Emerging Markets Fund..... 196,589,804 81,622,624 (12,081,078) 69,541,546
</TABLE>
From time to time, certain Funds of the Trust have shareholders that hold a
significant portion of a Fund's outstanding shares. Investment activities of
these shareholders could have a material impact on those Funds.
21
