<PAGE>
HEWITT MONEY MARKET FUND
Performance As Of 12/31/99
<TABLE>
<CAPTION>
Thirty-Day Yield
<S> <C>
Administrative Shares 5.53%
Institutional Shares 5.89%
</TABLE>
The thirty-day yield is an annualized yield for the period from December 1,
1999 to December 31,1999. "Annualized yield" refers to the interest you would
earn if you held a share of the Fund for one year, the yield is prorated if
you hold a share for a shorter period of time. The yield reflects fluctuations
in interest rates on the Fund's investments and expenses for the Fund's
administration and management.
A fund's "net asset value," or NAV, is the market value of one share of a
fund. The NAV of Hewitt Money Market Fund's Administrative Shares increased
from $100.02 per share on March 1, 1999 to $100.05 per share on December 31,
1999. The NAV of Institutional Shares increased from $100.30 per share on
March 1, 1999 to $100.52 per share on December 31, 1999. "Net investment
income" includes income from dividends and interest on the Fund's investments
after management and administrative fees and other expenses have been
deducted. Cumulative dividends on net investment income were approximately
$3.83 per share for Administrative Shares and $3.90 per share for
Institutional Shares during this period. Of course, past performance is no
guarantee of future results.
High housing and auto sales, as well as low unemployment figures all pointed
to an economy that was growing at a robust pace. Inflationary concerns ensued.
In response, the Federal Reserve Board raised short-term interest rates three
times during the course of the year in June, August, and November effectively
reversing the interest rate cuts implemented in 1998.
The "Y2K" dynamic unfolded during the summer, when corporations began to
prepare for the uncertainties that the Year 2000 change might bring. In an
effort to build up liquidity, many corporations issued debt, flooding the
market with a large supply of short-term paper. The increased supply drove
prices down and raised yields.
The Master Portfolio (1) benefited from rising rates on the shorter maturities
and floating-rate securities. Due to a relatively large amount of cash on hand
in the second half of the year, the Master Portfolio was able to purchase
short-term debt at unusually high yields.
The Master Portfolio is well positioned going into the new year, and will
continue to pursue its investment objective of seeking a high level of income
consistent with liquidity and the preservation of capital.
(1) Hewitt Money Market Fund is a "feeder" fund in a "master-feeder"
structure. Instead of investing directly in the individual securities in the
portfolio, the feeder fund, which is offered to the public, holds an interest
in the Master Portfolio. It is the Master Portfolio that actually invests in
the individual securities. Barclays Global Fund Advisors (BGFA) is the
investment advisor for the Master Portfolio.
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment:
Interest in Master Portfolio, at market value (Note 1)............ $100,998,729
Receivables:
Fund shares sold................................................ 296,113
Due from Hewitt Associates LLC (Note 2)......................... 50,739
------------
Total Assets...................................................... 101,345,581
------------
LIABILITIES
Payables:
Fund shares redeemed............................................ 3,864,149
Other accrued expenses.......................................... 94,869
------------
Total Liabilities................................................. 3,959,018
------------
TOTAL NET ASSETS.................................................. $ 97,386,563
============
Net assets consist of:
Paid-in capital................................................. 97,386,592
Undistributed net realized loss on investments.................. (29)
------------
TOTAL NET ASSETS.................................................. $ 97,386,563
============
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
Administrative Shares
Net Assets........................................................ $ 54,318,175
Shares outstanding................................................ 542,912
Net asset value and offering price per share...................... $ 100.05
Institutional Shares
Net Assets........................................................ $ 43,068,388
Shares outstanding................................................ 428,448
Net asset value and offering price per share...................... $ 100.52
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Period Ended For the Period Ended
December 31, 1999* February 28, 1999**
-------------------- --------------------
<S> <C> <C>
NET INVESTMENT INCOME
ALLOCATED FROM MASTER PORTFOLIO
Interest........................... $3,322,580 $ 621,576
Expenses (Note 2).................. (65,000) (11,934)
---------- ---------
Net Investment Income Allocated
from Master Portfolio............. 3,257,580 609,642
EXPENSES (NOTE 2)
Administration fees--Administrative
Shares............................ 41,253 9,243
Administration fees--Institutional
Shares............................ 20,539 2,386
Shareholder servicing fees--
Administrative Shares............. 103,133 23,108
Shareholder servicing fees--
Institutional Shares.............. 41,077 4,771
Distribution costs--Administrative
Shares............................ 103,133 23,108
Legal fees......................... 6,333 30,822
Fund accounting and transfer agent
fees.............................. 59,967 28,767
Printing cost...................... 39,854 16,439
Registration fees.................. 53,895 16,336
Audit fees......................... 13,390 13,410
Other expenses..................... 17,814 6,780
---------- ---------
Total Expenses....................... 500,388 175,170
Less:
Fees reimbursed by Hewitt
Associates LLC (Note 2)........... (173,540) (106,174)
---------- ---------
Total Net Expenses................... 326,848 68,996
---------- ---------
NET INVESTMENT INCOME................ 2,930,732 540,646
---------- ---------
REALIZED GAIN ON INVESTMENTS
ALLOCATED FROM MASTER PORTFOLIO
Net realized gain on sale of
investments....................... 161 0
---------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................... $2,930,893 $ 540,646
========== =========
</TABLE>
- --------
* For the ten months ended December 31, 1999. The Fund changed its fiscal
year end from February 28 to December 31.
** For the period from October 1, 1998 (commencement of operations) to
February 28, 1999.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period For the Period
Ended Ended
December 31, 1999* February 28, 1999**
------------------ -------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income................ $ 2,930,732 $ 540,646
Net realized gain on sale of
investments......................... 161 0
------------ ------------
Net increase in net assets resulting
from operations....................... 2,930,893 540,646
------------ ------------
Distributions to shareholders:
From net investment income
Administrative Shares.............. (1,894,788) (423,411)
Institutional Shares............... (1,035,944) (117,235)
From net realized gain on sale of
investments
Administrative Shares.............. (128) 0
Institutional Shares............... (62) 0
Capital share transactions:
Administrative Shares
Proceeds from shares sold............ 94,041,302 59,583,039
Reinvestment of dividends and
distributions....................... 1,894,916 423,168
Cost of shares redeemed.............. (87,533,582) (14,090,428)
------------ ------------
Net increase resulting from capital
share transactions--Administrative
Shares................................ 8,402,636 45,915,779
------------ ------------
Institutional Shares
Proceeds from shares sold............ 103,707,117 19,171,866
Reinvestment of dividends and
distributions....................... 1,036,006 117,140
Cost of shares redeemed.............. (72,624,332) (8,339,620)
------------ ------------
Net increase resulting from capital
share transactions--
Institutional Shares.................. 32,118,791 10,949,386
------------ ------------
Increase in Net Assets................. 40,521,398 56,865,165
NET ASSETS:
Beginning net assets................... 56,865,165 0
------------ ------------
Ending net assets...................... $ 97,386,563 $ 56,865,165
============ ============
SHARES ISSUED AND REDEEMED:
Administrative Shares
Shares sold.......................... 938,431 595,438
Shares issued in reinvestment of
dividends and distributions......... 18,944 4,231
Shares redeemed...................... (873,524) (140,608)
------------ ------------
Net increase in shares outstanding..... 83,851 459,061
============ ============
Institutional Shares
Shares sold.......................... 1,031,069 191,080
Shares issued in reinvestment of
dividends and distributions......... 10,318 1,169
Shares redeemed...................... (722,108) (83,080)
------------ ------------
Net increase in shares outstanding..... 319,279 109,169
============ ============
</TABLE>
- --------
* For the ten months ended December 31, 1999. The Fund changed its fiscal
year end from February 28 to December 31.
** For the period from October 1, 1998 (commencement of operations) to
February 28, 1999.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HEWITT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Period Ended For the Period Ended
December 31, 1999* February 28, 1999**
------------------------------ ----------------------------
Administrative Institutional Administrative Institutional
Shares Shares Shares Shares
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Assets Value,
beginning of period.... $100.02 $100.30 $100.00 $100.00
Income from investment
operations:
Net investment
income............... 3.83 3.90 1.83 1.97
Net realized gain on
investments.......... 0.03 0.22 0.00 0.00
------- ------- ------- -------
Total from investment
operations............. 3.86 4.12 1.83 1.97
Less distributions:
From net investment
income............... (3.83) (3.90) (1.81) (1.67)
From net realized
gains................ (0.00)**** (0.00)**** 0.00 0.00
------- ------- ------- -------
Total distributions..... (3.83) (3.90) (1.81) (1.67)
------- ------- ------- -------
Net Asset Value, end of
period................. $100.05 $100.52 $100.02 $100.30
======= ======= ======= =======
Total Return (not
annualized)............ 3.92% 4.18% 1.84% 1.98%
Ratios/Supplemental
data:
Net assets, end of
period (000)......... $54,318 $43,068 $45,916 $10,949
Ratios to average net
assets***:
Ratio of expenses to
average net assets
(1).................. 0.74% 0.44% 0.75% 0.45%
Ratio of net
investment income to
average net assets
(2).................. 4.61% 5.03% 4.52% 4.86%
- ---------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets
prior to
reimbursement of
fees and
expenses***......... 1.02% 0.72% 1.32% 1.62%
(2) Ratio of net
investment income to
average net assets
prior to
reimbursement of
fees and
expenses***......... 4.33% 4.75% 3.95% 3.69%
- ---------------------------------------------------------------------------------------
</TABLE>
* For the ten months ended December 31, 1999. The Fund changed its fiscal
year end from February 28 to December 31.
** For the period from October 1, 1998 (commencement of operations) to
February 28, 1999.
*** Annualized
**** Rounds to less than $0.01.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
HEWITT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
1 Summary of Significant Accounting Policies
Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust
(the "Trust"), a diversified open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Trust was
established as a Delaware business trust organized pursuant to a Declaration
of Trust on July 7, 1998. The investment objective of the Fund is to provide a
high level of income while preserving capital and liquidity by investing in
high quality, short-term investments. The Fund pursues its investment
objective by investing all of its assets in the Money Market Master Portfolio
(the "Master Portfolio"), a series of Master Investment Portfolio ("MIP"). The
Master Portfolio has the same investment objective and substantially the same
investment policies as the Fund. The performance of the Fund is directly
affected by the performance of the Master Portfolio. The financial statements
of the Master Portfolio, including the Portfolio of Investments, are included
elsewhere in this report and should be read in conjunction with the Fund's
financial statements. The Fund presently offers two classes of shares,
Administrative Shares and Institutional Shares. Shares of each class have
identical interests in the Master Portfolio and have the same rights, however,
differ principally in their respective distribution fees and shareholder
servicing fees.
The following significant accounting policies are consistently followed by
the Fund in the preparation of its financial statements, and such policies are
in conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Effective August 19, 1999, the Board of Trustees approved a change in fiscal
year-end of the Fund from February 28 to December 31. Accordingly, the Fund's
financial statements are presented for the ten-month period ended December 31,
1999.
Investment Policy and Security Valuation
The value of the Fund's investment in the Master Portfolio reflects the
Fund's interest in the net assets of the Master Portfolio. As of December 31,
1999, the value of the Fund's investment in the Master Portfolio was 41.14% of
the outstanding interests of the Master Portfolio. The Master Portfolio uses
the amortized cost method of valuation to determine the value of its portfolio
securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost
method, which involves valuing a security at its cost and accreting or
amortizing any discount or premium, respectively, over the period until
maturity, approximates market value.
Security Transactions and Income Recognition
Security transactions are accounted for by the Master Portfolio on the date
the securities are purchased or sold (trade date). Revenue is recognized by
the Master Portfolio as follows: Interest income is recognized by the Master
Portfolio on a daily accrual basis. Realized gains and losses are reported on
the basis of identified cost of securities delivered. All net investment
income and realized capital gains and losses of the Master Portfolio are
allocated to its interestholders as required by the Internal Revenue Code of
1986, as amended (the "Code").
6
<PAGE>
HEWITT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--Continued
Federal Income Taxes
The Fund is treated as a separate entity for federal income tax purposes. It
is the policy of the Trust that the Fund continue to qualify as a regulated
investment company by complying with the provisions of the Code applicable to
regulated investment companies, as defined by the Code, and to make
distributions of substantially all of its investment company taxable income
and any net realized capital gains (after reduction for capital loss
carryforwards) sufficient to relieve it from all, or substantially all,
federal income and excise taxes. Accordingly, no provision for federal taxes
was required at December 31, 1999.
Dividends and Distributions to Shareholders
Dividends to shareholders from net investment income of the Fund are
declared and distributed monthly. Distributions to shareholders from capital
gains, if any, are declared and distributed annually, generally in December.
2 Agreements and Other Transactions with Affiliates
Hewitt Associates LLC (the "Administrator") provides administrative services
to the Fund. Services provided by the Administrator include, but are not
limited to: managing the daily operations and business affairs of the Fund,
subject to the supervision of the Board of Trustees; overseeing the
preparation and maintenance of all documents and records required to be
maintained by the Fund; preparing or assisting in the preparation of
regulatory filings, prospectuses and shareholder reports; providing, at its
own expense, the services of its personnel to serve as officers of the Trust;
and preparing and disseminating material for meetings of the Board of Trustees
and shareholders. The Fund pays the Administrator a monthly fee calculated at
an annual rate of 0.10% of the Fund's average daily net assets. The
Administrator has agreed to waive its fees or absorb expenses of the Fund to
the extent necessary to assure that total ordinary operating expenses on an
annual basis does not exceed 0.45% and 0.75% of the average daily net assets
of the Fund attributable to Institutional and Administrative Shares,
respectively. The Administrator may not modify or terminate this waiver
agreement without approval of the Board of Trustees of the Trust. For the
period ended December 31, 1999, the Administrator reimbursed the Fund $119,485
and $54,055 for expenses related to Administrative Shares and Institutional
Shares, respectively.
Barclays Global Fund Advisors, Inc. ("BGFA") serves as the Master
Portfolio's investment advisor. For its services, BGFA is paid by the Master
Portfolio a fee calculated at an annual rate of 0.10% of the Master
Portfolio's average daily net assets. BGFA is an indirect subsidiary of
Barclays Bank PLC.
Hewitt Services LLC (the "Distributor") serves as the Distributor of the
Fund's shares. The Trust has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act which allows the Fund to Pay expenses relating to the
distribution of Administrative Shares. Under the plan, the Fund pays a fee to
the Distributor, calculated at an annual rate of 0.25% of the average daily
net assets of the Fund attributable to Administrative Shares, as compensation
for services rendered in connection with the sale and distribution of
Administrative Shares. This fee is an expense of Administrative Shares only
and is not borne by Institutional Shares.
7
<PAGE>
HEWITT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--Continued
Hewitt Associates LLC also serves as the shareholder servicing agent (the
"Shareholder Servicing Agent") for Institutional Shares. The Shareholder
Servicing Agent is responsible for receiving on behalf of the Fund's Transfer
Agent orders by employee benefit plans to purchase and redeem Institutional
Shares. The Shareholder Servicing Agent is also responsible for maintaining
records showing the number of Institutional Shares allocable to individual
participant accounts in those plans. In addition, the Shareholder Servicing
Agent sends all shareholder communications relating to the Fund to
shareholders and to plan participants or arranges for these materials to be
sent. For these services, the Fund pays Hewitt Associates LLC a monthly fee
calculated at an annual rate of 0.20% of the average daily net assets of the
Fund attributable to Institutional Shares. This fee is an expense of
Institutional Shares only and is not borne by Administrative Shares.
The Trust has retained the Distributor to serve as Shareholder Servicing
Agent for Administrative Shares. As Shareholder Servicing Agent, the
Distributor is responsible for maintaining records showing the number of
Administrative Shares owned by IRAs established through the Distributor and by
other investors who have purchased Administrative Shares through the
Distributor. In addition, the Distributor sends all shareholder communications
relating to the Fund to holders of Administrative Shares or arranges for these
materials to be sent. For these services, the Fund pays the Distributor a
monthly fee calculated at an annual rate of 0.25% of average daily net assets
of the Fund attributable only to Administrative Shares. This fee is an expense
of Administrative Shares only and is not borne by Institutional Shares. The
Fund also reimburses each Shareholder Servicing Agent for certain out-of-
pocket expenses.
8
<PAGE>
Independent Auditors' Report
To the Shareholders and Board of Trustees of
Hewitt Series Trust:
We have audited the accompanying statement of assets and liabilities of Hewitt
Money Market Fund (one series of Hewitt Series Trust) as of December 31, 1999
and the related statements of operations, changes in net assets and financial
highlights for the ten-month period then ended and the period from October 1,
1998 (commencement of operations) to February 28, 1999. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Hewitt Money Market Fund as of December 31, 1999, the results of its
operations, changes in its net assets, and its financial highlights for the
ten-month period then ended and the period from October 1, 1998 to February
28, 1999 in conformity with generally accepted accounting principles.
/s/ KPMG LLP
San Francisco, California
February 11, 2000
9
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
DECEMBER 31, 1999
Portfolio of Investments
<TABLE>
<CAPTION>
Yield to Maturity
Principal Security Name Maturity Date Value
----------- --------------------------------- -------- -------- ------------
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--13.85%
$ 5,000,000 Abbey National Treasury Service 5.04% 02/08/00 $ 4,999,997
5,000,000 ABN Amro Bank NV 5.14% 02/22/00 4,999,725
3,000,000 American Express Centurion 5.97% 02/03/00 3,000,000
10,000,000 Bank of Montreal 5.09% 04/14/00 9,998,902
3,000,000 Bayerische Hypo-Und Vereinsbank
AG 5.23% 03/01/00 3,000,048
5,000,000 Chase Manhattan Bank 5.18% 03/15/00 4,999,414
3,000,000 Credit Suisse First Boston 5.60% 06/04/00 3,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT $ 33,998,086
COMMERCIAL PAPER--52.39%
3,000,000 Accor BNP 6.12% 02/04/00 2,982,660
1,195,000 Atlantis One Funding Corp 5.93% 03/23/00 1,178,859
8,096,000 BMW US Capital Corp 5.00% 01/03/00 8,093,751
3,528,000 Countrywide Home Loans Inc 6.12% 02/15/00 3,501,011
6,000,000 Countrywide Home Loans Inc 6.55% 02/03/00 5,963,975
9,000,000 Dorada Finance Inc 5.82% 03/08/00 8,902,515
5,000,000 Edison Asset Securization 5.86% 02/11/00 4,966,659
4,270,000 Enterprises Funding Corp 6.50% 01/14/00 4,259,977
2,977,000 Falcon Asset Securization 5.85% 02/18/00 2,953,779
5,000,000 Falcon Asset Securization 5.86% 02/08/00 4,969,072
2,184,000 Forrestal Funding 6.17% 01/18/00 2,177,637
4,166,000 Forrestal Funding 6.22% 01/18/00 4,153,763
3,000,000 General Electric Capital Corp 5.95% 03/16/00 2,962,812
2,100,000 General Electric Capital Corp 6.00% 02/07/00 2,087,050
3,000,000 General Electric Financial
Assurance Holding 5.93% 04/10/00 2,950,584
8,000,000 Greenwich Funding Corp 5.85% 02/10/00 7,948,000
3,000,000 International Securitization Corp 6.20% 01/27/00 2,986,567
2,000,000 International Securitization Corp 6.85% 01/18/00 1,993,531
5,000,000 Intrepid Funding 5.88% 04/12/00 4,916,700
1,500,000 Kitty Hawk Funding Corp 5.86% 02/15/00 1,489,013
2,000,000 Lexington Parker Capital Corp 6.10% 01/28/00 1,990,850
8,000,000 Lexington Parker Capital Corp 6.59% 02/07/00 8,000,000
2,296,000 Liberty Street Funding Corp 5.93% 03/15/00 2,268,013
2,000,000 Liberty Street Funding Corp 5.95% 02/07/00 1,987,770
2,000,000 Liberty Street Funding Corp 6.09% 02/17/00 1,984,098
8,000,000 Merrill Lynch & Co Inc 6.15% 02/02/00 7,956,267
4,300,000 Monte Rosa Capital Corp 5.87% 02/04/00 4,276,161
2,000,000 Monte Rosa Capital Corp 5.95% 03/21/00 1,973,556
2,204,000 Monte Rosa Capital Corp 6.00% 03/20/00 2,174,980
2,000,000 Moriarty LLC 6.17% 01/26/00 1,991,431
</TABLE>
10
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
DECEMBER 31, 1999
Portfolio of Investments
<TABLE>
<CAPTION>
Yield to Maturity
Principal Security Name Maturity Date Value
----------- -------------------------------- -------- -------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER--(Continued)
$ 1,258,000 Silver Tower US Funding LLC 5.90% 02/07/00 $ 1,250,371
2,000,000 Special Purpose Accounts
Receivable Corp 5.86% 02/10/00 1,986,978
2,000,000 Thames Asset Global
Securitization No. 1 Inc 6.00% 01/18/00 1,994,333
3,000,000 Thames Asset Global
Securitization No. 1 Inc 6.02% 02/15/00 2,977,425
3,000,000 Transportadora de Gas del Sur SA 6.00% 03/31/00 2,955,000
1,411,000 Variable Funding Capital Corp 7.00% 01/18/00 1,406,336
------------
TOTAL COMMERCIAL PAPER $128,611,484
MEDIUM TERM NOTES--4.89%
7,000,000 Morgan Guaranty Trust Co 5.36% 04/05/00 7,000,000
5,000,000 SNB Key Bank Bank Notes 5.60% 06/16/00 4,998,464
------------
TOTAL MEDIUM TERM NOTES $ 11,998,464
TIME DEPOSITS--5.30%
8,000,000 Bayerische Hypo-Und Vereinsbank
AG 5.50% 01/03/00 $ 8,000,000
5,000,000 Canadian Imperial Bank of
Commerce 5.00% 01/03/00 5,000,000
------------
TOTAL TIME DEPOSITS $ 13,000,000
U.S. GOVERNMENT AGENCY
SECURITIES--2.04%
5,000,000 Federal Home Loan Bank 4.95% 02/17/00 4,999,693
------------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES $ 4,999,693
VARIABLE & FLOATING RATE NOTES--
20.69%
4,818,056 Associates Manufactured Housing
Certificates 6.69% 10/16/00 4,818,056
7,000,000 Ford Motor Credit Co 5.74% 08/18/00 6,995,629
10,000,000 GMAC Mortgage Corp 6.48% 01/04/00 9,994,603
8,000,000 National City Bank 6.46% 10/04/00 7,992,734
5,000,000 Norwest Financial Inc 6.49% 09/07/00 4,997,984
5,000,000 Sigma Finance Inc 5.90% 09/14/00 5,000,000
4,000,000 Sigma Finance Inc 5.99% 03/29/00 3,999,807
7,000,000 Special Purpose Accounts
Receivable Corp 6.57% 02/07/00 7,000,000
------------
TOTAL VARIABLE & FLOATING RATE
NOTES $ 50,798,813
</TABLE>
11
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
DECEMBER 31, 1999
Portfolio of Investments
<TABLE>
<CAPTION>
Yield to Maturity
Principal Security Name Maturity Date Value
------------ -------------------------------- -------- -------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENTS--0.00%
$ 643 Morgan Stanley Tri-party $ 643
Repurchase Agreement dated
12/31/99, due 1/3/00 with a
maturity value of $643 and an
effective yield of 2.40%,
collateralized by a U.S.
Treasury Note with a rate of
6.25%, a maturity of 4/30/01 and
market value of $10,129.
------------
TOTAL REPURCHASE AGREEMENTS $ 643
TOTAL INVESTMENTS IN SECURITIES 99.16% $243,407,183
(Cost $243,407,183) * (Notes 1
and 3)
Other Assets and Liabilities 0.84% 2,066,079
------- ------------
TOTAL NET ASSETS 100.00% $245,473,262
======= ============
</TABLE>
- --------
* Cost for income tax purposes is the same as for financial statement
purposes.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments:
In securities, at market value (see cost below) (Note 1)........... $243,407,183
Receivables:
Interest......................................................... 2,140,308
------------
Total Assets....................................................... 245,547,491
------------
LIABILITIES
Payables:
Due to BGI (Note 2).............................................. 74,229
------------
Total Liabilities.................................................. 74,229
------------
TOTAL NET ASSETS................................................... $245,473,262
============
INVESTMENTS AT COST................................................ $243,407,183
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Period Ended For the Period Ended
December 31, 1999* February 28, 1999**
-------------------- --------------------
<S> <C> <C>
NET INVESTMENT INCOME
Interest.......................... $9,956,770 $5,516,159
---------- ----------
Total Investment Income........... 9,956,770 5,516,159
EXPENSES (NOTE 2)
Advisory Fees..................... 189,564 104,611
---------- ----------
Total Expenses...................... 189,564 104,611
---------- ----------
NET INVESTMENT INCOME............... 9,767,206 5,411,548
---------- ----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on sale of
investments...................... 4,552 0
---------- ----------
Net Gain on Investments............. 4,552 0
---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.................... $9,771,758 $5,411,548
========== ==========
</TABLE>
- --------
* For the ten months ended December 31, 1999. The Master Portfolio changed its
fiscal year end from February 28 to December 31.
** Period from September 1, 1998 (commencement of operations) to February 28,
1999.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
MASTER INVESTMENT PORTFOLIO--MONEY MARKET MASTER PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period Ended For the Period Ended
December 31, 1999* February 28, 1999**
-------------------- --------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income.............. $ 9,767,206 $ 5,411,548
Net realized gain on sales of
investments....................... 4,552 0
------------ ------------
Net increase in net assets resulting
from operations..................... 9,771,758 5,411,548
------------ ------------
Net increase (decrease) in net assets
resulting from beneficial interest
transactions........................ (26,944,817) 257,234,773
------------ ------------
Increase (decrease) in Net Assets.... (17,173,059) 262,646,321
NET ASSETS:
Beginning net assets................. 262,646,321 0
Ending net assets.................... $245,473,262 $262,646,321
============ ============
</TABLE>
- --------
* For the ten months ended December 31, 1999. The Master Portfolio changed its
fiscal year end from February 28 to December 31.
** Period from September 1, 1998 (commencement of operations) to February 28,
1999.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
1. Significant Accounting Policies
Master Investment Portfolio ("MIP") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. MIP was organized on October 20, 1993 as a Delaware
business trust pursuant to an Agreement and Declaration of Trust dated May 14,
1993, and had no operations prior to March 1, 1994. MIP currently issues the
following separate portfolios (the "Master Portfolios"), the Asset Allocation,
Bond Index, LifePath Income (formerly "LifePath 2000"), LifePath 2010,
LifePath 2020, LifePath 2030, LifePath 2040, Money Market, S&P 500 Index,
Extended Index, International Index and U.S. Equity Index Master Portfolios.
The Money Market Portfolio commenced operations on September 1, 1998. These
financial statements relate only to the Money Market Master Portfolio (the
"Master Portfolio").
The following significant accounting policies are consistently followed by
MIP in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Effective February 10, 1999, the Board of Trustees of MIP approved a change
in fiscal year-end of the Master Portfolio from February 28 to December 31.
Accordingly, the Money Market Master Portfolio financial statements are
presented for the ten-month period ended December 31, 1999.
Security Valuation
The Master Portfolio uses the amortized cost method of valuation to
determine the value of its portfolio securities in accordance with rule 2a-7
under the 1940 Act. The amortized cost method, which involves valuing a
security at its cost and amortizing any discount or premium over the period
until maturity, approximates market value.
Security Transactions and Income Recognition
Interest income is recognized on a daily accrual basis. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Federal Income Taxes
The Master Portfolio intends to qualify as a partnership for federal income
tax purposes. The Master Portfolio, therefore, believes that it will not be
subject to any federal income tax on its income and net realized capital gains
(if any). However, an investor in the Master Portfolio will be taxed on its
allocable share of the partnership's income and capital gains for purposes of
determining its federal income tax liability. The determination of such share
will be made in accordance with the applicable sections of the Internal
Revenue Code of 1986, as amended (the "Code").
It is intended that the Master Portfolio's assets, income and allocations
will be managed in such a way that a regulated investment company investing in
a Master Portfolio will be able to satisfy the requirements of Subchapter M of
the Code, assuming that the investment company invested all of its assets in
the Master Portfolio.
16
<PAGE>
MASTER INVESTMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--Continued
Repurchase Agreements
Transactions involving purchases of securities under agreements to resell
such securities at a specified price and time ("repurchase agreements") are
treated as collateralized financing transactions and are recorded at their
contracted resale amounts. These repurchase agreements, if any, are detailed
in the Master's Portfolio of Investments. The advisor to the Master Portfolio
may pool the Master Portfolio's cash and invest in repurchase agreements
entered into by the other Master Portfolios. The Master Portfolio's prospectus
requires that the cash investments be fully collateralized based on values
that are marked to market daily. The collateral is generally held by an agent
bank under a tri-party agreement. It is the advisor's responsibility to value
collateral daily and to obtain additional collateral as necessary to maintain
the value at equal to or greater than 102% of market value. The repurchase
agreements entered into on December 31, 1999, by the Master Portfolio are
collateralized by U.S. Government securities.
2. Agreements and Other Transactions with Affiliates
Pursuant to an Investment Advisory Contract with the Master Portfolio,
Barclays Global Fund Advisors ("BGFA") provide investment guidance and policy
direction in connection with the management of the Master Portfolio's assets.
BGFA is entitled to receive 0.10% of the average daily net assets of the
Master Portfolio as compensation for its services. BGFA is an indirect
subsidiary of Barclays Bank PLC.
Investors Bank & Trust Company ("IBT") serves as the custodian to the Master
Portfolio. IBT will not be entitled to receive fees for its custodial services
so long as it is entitled to receive a separate fee from Barclays Global
Investors, N.A. ("BGI") for its services as Sub-Administrator of the Master
Portfolio.
Stephens Inc. ("Stephens"), is the co-administrator, sponsor and placement
agent for the Master Portfolio. Certain officers and trustees of MIP are also
officers of Stephens. The MIP has entered into administration services
arrangements with BGI and Stephens, as co-administrators, who have agreed
jointly to provide general administration services to the Master Portfolio,
such as managing and coordinating third-party service relationships. Stephens
and BGI are not entitled to compensation for providing administration services
to the Master Portfolio. This fee is an "all-in" or "semi-unified" fee and BGI
and Stephens, in consideration thereof, have agreed to bear all of the Fund's
ordinary operating expenses, excluding, generally, advisory fees and costs
related to securities transactions. BGI and Stephens may delegate certain of
their administration duties as co-administrators to sub-administrators. As of
December 31, 1999, these officers of Stephens collectively owned less than 1%
of the Master Portfolios' outstanding beneficial interest.
3. Financial Highlights
The expense ratios and net investment income ratios for the Master
Portfolio are as follows:
<TABLE>
<CAPTION>
Money For the For the
Market Period Ended Period Ended
Master December 31, February 28,
Portfolio 1999* 1999**
--------------------------------------
<S> <C> <C>
Ratio of
expenses
to average
net assets
+ 0.10% 0.10%
Ratio of
net
investment
income to
average
net assets
+ 5.23% 5.17%
</TABLE>
* For the ten months ended December 31, 1999. The Master Portfolio changed
its fiscal year end from February 28 to December 31.
** For the period from September 1, 1998 (commencement of operations) to
February 28, 1999.
+ Annualized for period of less than one year.
17
<PAGE>
Independent Auditors' Report
To the Interestholders and Board of Trustees of
Master Investment Portfolio:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Money Market Master Portfolio (one
portfolio of Master Investment Portfolio) as of December 31, 1999, and the
related statements of operations, and changes in net assets, for the ten-month
period then ended and the period from September 1, 1999 (commencement of
operations) to February 28, 1999. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999
by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Money Market Master
Portfolio as of December 31, 1999 the results of its operations and the
changes in its net assets for the periods indicated above in conformity with
generally accepted accounting principles.
/s/ KPMG LLP
San Francisco, California
February 11, 2000
18
<PAGE>
TABLE OF CONTENTS
Page
----
HEWITT MONEY MARKET FUND
Manager's Discussion and Analysis ..................................... 1
Statement of Assets and Liabilities ................................... 2
Statements of Operations .............................................. 3
Statements of Changes in Net Assets ................................... 4
Financial Highlights .................................................. 5
Notes to Financial Statements ......................................... 6
Independent Auditors' Report .......................................... 9
MASTER INVESTMENT PORTFOLIO
Portfolio of Investments .............................................. 10
Statement of Assets and Liabilities ................................... 13
Statements of Operations .............................................. 14
Statements of Changes in Net Assets ................................... 15
Notes to the Financial Statements ..................................... 16
Independent Auditors' Report .......................................... 18
[GRAPHIC]
Hewitt Money Market Fund
Annual Report
December 31, 1999
