<PAGE>
Contents
Semi-Annual Report
June 30, 1999
International Currency Fund
<TABLE>
<CAPTION>
Page
<S> <C>
Portfolios of Investments .............. 15
Financial Statements ................... 17
Financial Highlights ................... 21
Notes to Financial Statements .......... 23
</TABLE>
<PAGE>
International Currency Fund
UNITED STATES DOLLAR PORTFOLIO
Portfolio of Investments (unaudited)
June 30, 1999
<TABLE>
<CAPTION>
Principal Maturity Amortised
Description Amount Rate Date Cost
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial Paper - 41.5%
Federal National Mortgage Association .................. 2,732,000 4.88% 07/28/99 $ 2,722,124
Lehman Bros Holdings ................................... 1,500,000 5.06% 07/09/99 1,498,337
Thunder Bay Funding Inc. ............................... 516,000 4.89% 07/08/99 515,515
-----------
Total Commercial Papers ............................................................... 4,735,976
-----------
Certificate of Deposit - 9.9%
Banc One Corp. ......................................... 600,000 7.00% 05/08/00 607,670
Merrill Lynch .......................................... 525,000 5.08% 04/12/00 524,722
-----------
Total Certificates of Deposit ......................................................... 1,132,392
-----------
Time Deposits - 5.9%
General Electric Capital Corp. ......................... 675,000 4.95% 07/16/99 675,000
-----------
Repurchase Agreements - 41.7%
Warburg Dillon Reed LLC, dated 06/30/99, with a maturity
value of $2,553,337. (Collateralised by $2,600,000
6.125% U.S. Treasury Notes due 11/15/27 with a market
value of $2,578,420) .................................. 2,553,000 4.75% 07/01/99 2,553,000
Goldman Sachs, dated 06/30/99, with a maturity value of
$2,200,287. (Collateralised by $2,215,000 6.25%
U.S. Treasury Notes due 08/15/23 with a market value
of $2,219,109) ........................................ 2,200,000 4.70% 07/01/99 2,200,000
-----------
Total Repurchase Agreements ........................................................... 4,753,000
-----------
Total Investments at Amortised Cost - 99.0% ........................................... 11,296,368
Other assets in excess of liabilities - 1.0% .......................................... 106,821
-----------
Net assets - 100.0% ................................................................... $11,403,189
===========
</TABLE>
Percentages indicated are based on net assets of $11,403,189
See notes to financial statements.
Semi-Annual Report 15
<PAGE>
International Currency Fund
POUND STERLING PORTFOLIO
Portfolio of Investments (unaudited)
June 30, 1999
<TABLE>
<CAPTION>
Amortized
Principal Maturity Cost
Description Amount Rate Date (Pounds)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Time Deposits - 15.1%
Den Danske Bank .......................................... 4,500,000 5.19% 07/08/99 4,500,000
RBC ...................................................... 4,500,000 5.19% 07/08/99 4,500,000
Chase Manhattan .......................................... 2,367,000 5.56% 07/01/99 2,367,000
----------
11,367,000
----------
Commercial Paper - 34.3%
Scottish Power ........................................... 4,000,000 5.23% 07/07/99 3,996,600
General Electric Capital Corp. ........................... 5,000,000 5.31% 08/09/99 4,971,603
Xerox .................................................... 4,000,000 5.17% 07/14/99 3,992,638
Associates Capital Corp. ................................. 4,500,000 5.12% 10/28/99 4,424,951
Barclays ................................................. 4,000,000 5.20% 07/19/99 3,989,734
Unilever Capital Corp. ................................... 4,500,000 5.28% 07/06/99 4,496,748
----------
25,872,274
----------
Certificates of Deposit - 34.0%
Royal Bank of Scotland ................................... 4,000,000 5.19% 09/30/99 3,999,360
Federal National Mortgage Association .................... 4,410,000 5.17% 08/10/99 4,418,820
Abbey National Treasury .................................. 1,512,000 6.00% 08/10/99 1,512,683
Bank of Nova Scotia ...................................... 4,000,000 4.91% 07/15/99 4,000,000
Hypoveinsbank ............................................ 4,000,000 4.96% 07/15/99 4,000,000
Abbey National Treasury .................................. 2,660,000 6.00% 08/10/99 2,661,330
Nestle Holdings U.K. ..................................... 1,072,000 6.75% 02/25/00 1,080,661
Halifax Building Society ................................. 4,000,000 5.14% 07/16/99 4,000,000
----------
25,672,854
----------
Repurchase Agreements - 15.9%
Warburg Dillon Read, dated 06/30/99, with a maturity value
of (Pounds) 12,001,644. (Collateralised by (Pounds) 11,950,000
UK Treasury Notes due 08/10/99 with a market value
of (Pounds) 12,240,000) ................................. 12,000,000 5.00% 07/01/99 12,000,000
----------
Total Investments at Amortised Cost - 99.3% .............................................. 4,912,128
Other assets in excess of liabilities - 0.7% ............................................. 521,438
----------
Net assets - 100.0% ...................................................................... 75,433,566
==========
</TABLE>
Percentages indicated are based on net assets of (Pounds) 75,433,566
See notes to financial statements.
16 Semi-Annual Report
<PAGE>
International Currency Fund
Statements of Assets and Liabilities (unaudited)
(local currencies) as at June 30, 1999
<TABLE>
<CAPTION>
United States Pound Canadian
Dollar Sterling Dollar Euro
Portfolio Portfolio Portfolio* Portfolio
$ (Pounds) C$ E
-------------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Assets:
Investments in securities, at amortised cost
(cost $11,282,700 and (Pounds) 74,649,126, respectively) .. 11,296,368 74,912,128 -- --
Deferred organisational costs .............................. 37,500 22,500 -- --
Cash ....................................................... 907 743 10 10
Interest receivable ........................................ 61,904 469,622 -- --
Other receivables .......................................... 89,618 124,018 -- --
---------- ---------- ------ ------
Total Assets ............................................. 11,486,297 75,529,011 10 10
---------- ---------- ------ ------
Liabilities:
Amounts payable to Investment Manager ...................... 60,030 45,000 -- --
Custody fees payable ....................................... 7,179 1,376 -- --
Advisory fees payable ...................................... -- 41,077 -- --
Audit fees payable ......................................... 828 6,218 -- --
Other accrued expenses ..................................... 15,071 1,774 -- --
---------- ---------- ------ ------
Total Liabilities ........................................ 83,108 95,445 -- --
---------- ---------- ------ ------
Net Assets, June 30, 1999 .................................. 11,403,189 75,433,566 10 10
========== ========== ====== ======
</TABLE>
* not yet commenced operations.
See notes to financial statements.
Semi-Annual Report 17
<PAGE>
International Currency Fund
Statements of Operations (unaudited)
(local currencies) For the six months ended June 30, 1999
<TABLE>
<CAPTION>
United States Pound Canadian
Dollar Sterling Dollar Euro
Portfolio Portfolio Portfolio* Portfolio
$ (Pounds) C$ E
-------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income ............................................. 332,724 2,888,104 -- --
------- --------- ------ ------
Total Income ............................................... 332,724 2,888,104 -- --
------- --------- ------ ------
Expenses:
Advisory fees ............................................... 13,679 101,882 -- --
Administration fees ......................................... 3,421 25,471 -- --
Directors fees .............................................. 29,760 20,478 -- --
Legal fees .................................................. 15,743 10,419 -- --
Amortisation of organisation costs .......................... 7,500 4,500 -- --
Audit fees .................................................. 7,312 3,878 -- --
Fund accounting fees and expenses ........................... 1,344 10,190 -- --
Custodian fees and expenses ................................. 744 5,611 -- --
Miscellaneous expenses ...................................... 21,896 17,686 -- --
------- --------- ------ ------
Total Expenses .............................................. 101,399 200,115 -- --
Fee waivers ................................................. (13,679) (66,222) -- --
------- --------- ------ ------
Total Net Expenses .......................................... 87,720 133,893 -- --
------- --------- ------ ------
Net Investment Income ........................................ 245,004 2,754,211 -- --
------- --------- ------ ------
Net Increase in Net Assets Resulting from Operations ......... 245,004 2,754,211 -- --
======= ========= ====== ======
</TABLE>
* not yet commenced operations.
See notes to financial statements.
18 Semi-Annual Report
<PAGE>
International Currency Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the six months
ended June 30,
1999 For the year ended
(unaudited) December 31, 1998
$ $
UNITED STATES DOLLAR ------------------- -------------------
<S> <C> <C>
Increase in Net Assets From Operations:
Net investment income ................................... 245,004 2,160,148
----------- ------------
Change in net assets resulting from operations ......... 245,004 2,160,148
----------- ------------
Capital Transactions:
Contributions ........................................... 15,280,976 195,915,883
Withdrawals ............................................. (18,627,095) (237,599,168)
----------- ------------
Change in net assets from capital transactions ......... (3,346,119) (41,683,285)
----------- ------------
Change in Net Assets ..................................... (3,101,115) (39,523,137)
----------- ------------
Net Assets:
Beginning of period ..................................... 14,504,304 54,027,441
----------- ------------
End of period ........................................... 11,403,189 14,504,304
=========== ============
</TABLE>
See notes to financial statements.
Semi-Annual Report 19
<PAGE>
International Currency Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the six months
ended June 30,
1999 For the year ended
(unaudited) December 31, 1998
(Pounds) (Pounds)
POUND STERLING ------------------- -------------------
<S> <C> <C>
Increase in Net Assets From Operations:
Net investment income ................................... 2,754,211 9,060,244
----------- ------------
Change in net assets resulting from operations ......... 2,754,211 9,060,244
----------- ------------
Capital Transactions:
Contributions ........................................... 38,975,203 139,679,400
Withdrawals ............................................. (91,770,390) (151,303,004)
----------- ------------
Change in net assets from capital transactions ......... (52,795,187) (11,623,604)
----------- ------------
Change in Net Assets ..................................... (50,040,976) (2,563,360)
----------- ------------
Net Assets:
Beginning of period ..................................... 125,474,542 128,037,902
----------- ------------
End of period ........................................... 75,433,566 125,474,542
=========== ============
</TABLE>
See notes to financial statements.
20 Semi-Annual Report
<PAGE>
International Currency Fund
Financial Highlights
UNITED STATES DOLLAR
<TABLE>
<CAPTION>
For the period
For the six months from March 26, 1997
ended June 30, For the year ended (commencement
1999 December 31, of operations)
(unaudited) 1998 to December 31, 1997
$ $ $
-------------------- -------------------- ---------------------
<S> <C> <C> <C>
Ratios/Supplemental Data:
Net assets, end of period ('000) ....................... $11,403 $ 14,504 $54,027
Ratio of expenses to average net assets
after waivers and reimbursements ..................... 1.28%(b) 0.45% 0.65%(b)
Ratio of net investment income to average net assets
after waivers and reimbursements ..................... 3.58%(b) 5.03% 4.93%(b)
Ratio of expenses to average net assets (a) ............ 1.48%(b) 0.56% 0.85%(b)
Ratio of net investment income to average net assets (a) 3.38%(b) 5.42% 4.73%(b)
</TABLE>
(a) During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(b) Annualised
See notes to financial statements.
Semi-Annual Report 21
<PAGE>
International Currency Fund
Financial Highlights
POUND STERLING
<TABLE>
<CAPTION>
For the period
For the six months from March 26, 1997
ended June 30, For the year ended (commencement
1999 December 31, of operations)
(unaudited) 1998 to December 31, 1997
(Pounds) (Pounds) (Pounds)
-------------------- -------------------- ---------------------
<S> <C> <C> <C>
Ratios/Supplemental Data:
Net assets, end of period ('000) ....................... 75,434 125,475 128,038
Ratio of expenses to average net assets
after waivers and reimbursements ..................... 0.26%(b) 0.22% 0.24%(b)
Ratio of net investment income to average net assets
after waivers and reimbursements ..................... 5.28%(b) 6.97% 6.56%(b)
Ratio of expenses to average net assets (a) ............ 0.38%(b) 0.35% 0.41%(b)
Ratio of net investment income to average net assets (a) 5.16%(b) 6.75% 6.38%(b)
</TABLE>
(a) During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(b) Annualised
See notes to financial statements.
22 Semi-Annual Report
<PAGE>
International Currency Fund
Notes to Financial Statements
June 30, 1999
1. Organisation
International Currency Fund (the "Portfolio Trust"), a Delaware business trust,
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company. At June 30, 1999 the
Portfolio Trust consisted of four portfolios; the U.S. Dollar Portfolio (the
"U.S. Dollar Portfolio"), the Pound Sterling Portfolio (the "Pound Sterling
Portfolio"), the Canadian Dollar Portfolio (the "Canadian Dollar Portfolio" and
the Euro Portfolio (the "Euro Portfolio"), (collectively the "Portfolios").
The investment objectives of each Portfolio are to seek to maintain a high
level of liquidity, preserve capital and stability of principal expressed in
the Portfolio's designated currency and, consistent with those objectives, to
earn current income. A Portfolio's investment objectives are fundamental and
may not be changed without the approval of its shareholders.
State Street Bank and Trust Company (the "Investment Adviser"), serves as the
Portfolio Trusts's Investment Adviser. BISYS Fund Services, Ireland Limited
("BISYS") acts as Administrator to the Portfolios.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Portfolios in the preparation of it's financial statements. The policies are in
conformity with U.S. generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
Portfolio Valuations: The securities of the Portfolios are valued at amortised
cost, which approximates market value. The amortised cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming
a constant amortisation to maturity of the difference between the principal
amount due at maturity and cost. In accordance with policies adopted by the
Portfolio Trust in this regard, the Portfolios may not (a) purchase any
instrument with an effective remaining maturity greater than thirteen months,
or (b) maintain a weighted average maturity which exceeds 90 days.
Securities Transactions and Related Income: Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognised on the accrual basis and includes, where
applicable, the amortisation of premium or accretion of discount. Gains or
losses realised on sales of securities are determined by comparing the
amortised cost of the security sold with the net sale proceeds.
Expenses: Expenses directly attributable to a Portfolio are charged to that
Portfolio, while general Portfolio Trust expenses are allocated among the
respective Portfolios of the Trust.
Repurchase Agreements: The Portfolios will enter into repurchase agreements
only with financial institutions rated by a U.S. nationally recognised
statistical rating organisation (NRSRO) in the highest rating category for
short term obligations and deemed to be creditworthy by the Investment Adviser,
pursuant to guidelines established by the Portfolio Trust's Board of Trustees.
During the term of any repurchase agreement, the Investment Adviser will
monitor the creditworthiness of the seller, and the seller must maintain the
value of the securities subject to the agreement in an amount that is greater
than the repurchase price. Default or bankruptcy of the seller would, however
expose the Portfolios to possible loss because of adverse market action or
delays in connection with the disposition of the underlying obligations.
Because of the seller's repurchase obligations, the securities subject to
repurchase agreements do not have maturity limitations.
Organisational Expenses: The deferred organisation costs were incurred by the
United States Dollar and Pound Sterling Portfolios in connection with their
organisation. The Portfolios are expected to reimburse the Investment
Semi-Annual Report 23
<PAGE>
International Currency Fund
Notes to Financial Statements, continued
June 30, 1999
Adviser for the payment of these costs made in advance by the Manager. The
costs have been deferred and will be amortised on a straight line basis over a
five year period from the commencement of operations by the Portfolios.
Federal Income Taxes: Each Portfolio will be treated as a partnership for U.S.
federal income tax purposes. As such, each U.S. investor in a Portfolio will be
taxed on its share of the Portfolio's ordinary income and capital gains. It is
intended that the Portfolios will be managed in such a way that an investor
will be able to satisfy the requirements of U.S. Internal Revenue Code
applicable to regulated investment companies .
3. Agreements and Other Transactions with Affiliates
The Portfolio Trust acting on behalf of each of the Portfolios has an
investment advisory agreement with the Investment Adviser and an Administration
agreement with BISYS.
The Investment Adviser is responsible for managing the investment of the assets
of the Portfolios in conformity with the stated objectives and policies of the
Portfolios. Pursuant to the terms of the Investment Advisory Agreement, the
Investment Adviser is entitled to a fee, which is accrued daily and payable
monthly, at an annual rate of 0.20% of the average daily net assets of each
Portfolio of the Trust. For the period ended June 30, 1999 the Investment
Adviser waived its entire fee for the United States Dollar Portfolio and waived
its fee for the Pound Sterling Portfolio in the following amounts.
<TABLE>
<S> <C>
United States Dollar $13,679
Pound Sterling (Pounds) 66,222
Canadian Dollar Nil
Euro Nil
</TABLE>
As Administrator, BISYS assists in supervising the operations of the
Portfolios. Pursuant to the terms of the Administration Agreement, BISYS is
entitled to a fee from each Portfolio which is accrued daily and payable
monthly, equal to an annual rate of 0.05% of each of the Portfolio's average
daily net assets. For the period ended June 30, 1999 BISYS earned the following
fees as Administrator for each Portfolio.
<TABLE>
<S> <C>
United States Dollar $3,421
Pound Sterling (Pounds) 25,471
Canadian Dollar Nil
Euro Mark Nil
</TABLE>
In addition BISYS earned the following amounts for the period ended June 30,
1999 for providing fund accounting services on a daily basis to each Portfolio.
<TABLE>
<S> <C>
United States Dollar $1,344
Pound Sterling (Pounds )10,190
Canadian Dollar Nil
Euro Mark Nil
</TABLE>
4. Trustees and Officers Compensation
For the period ended June 30, 1999 the Portfolio Trust paid US$34,194 and
\P21,724, respectively, in total to the Trustees of each Portfolio Trust. The
Portfolio will not pay compensation to the Trustees of the Portfolio Trust
affiliated with the Investment Adviser or the Administrator nor will it pay any
compensation to the Trustees who
24 Semi-Annual Report
<PAGE>
International Currency Fund
Notes to Financial Statements, continued
June 30, 1999
p
are officers of the Trust.
5. Securities Transactions
During the period ended June 30, 1999, each Portfolio purchased and matured
portfolio securities transactions, in the following amounts:
<TABLE>
<CAPTION>
Purchases Maturities
<S> <C> <C>
United States Dollar $694,100,558 $697,428,293
Pound Sterling (Pounds) 4,667,029,966 (Pounds) 4,715,074,051
Canadian Dollar nil nil
Euro nil nil
</TABLE>
6. Conversion of the Deutsche Mark Portfolio to the Euro Portfolio
During the period ended June 30, 1999, the Deutsche Mark Fund was redesignated
as The Euro Fund and the Shares of the Deutsche Mark Fund were redenominated in
Euro. Each Share in The Deutsche Mark Fund was redeemed to be denominated in
such amount of Euro as was equivalent to to its denomination in Deutsche Marks
at the rate for the conversion of Deutsche Marks into Euro established by the
council of the EU (1 Euro = 1.95583 Dem), subject to such provisions (if any)
as to rounding down (and payments in respect of fractions consequent on
rounding) as the Company decided, with the approval of the Custodian, and as
was specified in the notice. Hereafter, all payments in respect of dividends or
redemptions will be made solely in Euro.
Semi-Annual Report 25
