GIT Equity Trust
Worldwide Growth Portfolio
GIT Investment Services, Inc.
1655 Fort Myer Drive
Arlington, Virginia 22209
Phone: 703-528-6500
Toll Free: 800-336-3063
Annual Report
March 31, 1995/Audited
Management's Discussion of Fund Performance
May 17, 1995
Dear Fellow Shareholder:
Although prospects for the international emerging markets have
improved considerably in recent weeks, the Worldwide Growth
portfolio showed a loss of 22% for the fiscal year ended March
31, 1995. Following the fund's gain of 25.11% for the previous
year, this performance reflects what has been an extremely
turbulent year for emerging markets around the globe.
Sharply rising interest rates in the U.S. during most of 1994
were a major factor in causing investors to reassess their
commitments to developing markets. Although the downward trend
in the emerging markets was interrupted briefly by a summer
rally, most markets registered sharp overall declines during
1994. For the year, Hong Kong's main stock market index, for
example, was down 35%; Malaysia was down 27%, and Indonesia down
31%.
In Latin America, bearish sentiment and shifting international
investment flows culminated in a major financial crisis that
threatened the economic stability of Mexico and, to a lesser
extent, several neighboring countries. On December 20, 1994,
facing rapidly declining foreign reserves, the Mexican government
was forced to devalue its currency by 15%. As a result of the
heavy selling of Mexican financial assets which followed, Mexico
was forced to abandon its pegged exchange rate on December 22.
Subsequent depreciation of the peso and heavy selling in the
stock market resulted in a 75% decline in the Mexican Bolsa in
U.S. dollar terms from its summer high. Meanwhile, local
interest rates quickly shot upward from relatively moderate
levels to short-term rates exceeding 50% annually, imposing a
sudden, devastating burden on Mexican business and banks.
The crisis in Mexico was felt throughout Latin America. The
Brazilian market declined by over 50% during the sell-off, as did
markets in Argentina and Peru.
While the crisis in Mexico and throughout Latin America
illustrates the sensitivity of emerging markets to transitory
international investment shifts, we believe that Latin American
countries, including Mexico, have made enormous economic progress
in recent years and continue to have great long-term potential.
Current difficulties notwithstanding, the region offers
significant opportunities for appreciation over the coming years,
and for this reason we remain committed to investing there.
Meanwhile, Asia was adversely affected by concerns over U.S.
interest rates, a weak dollar, U.S. trade problems, and losses
from derivatives incurred by Orange County, California. With the
Hong Kong dollar pegged to the U.S. dollar, the Hang Seng index
tumbled as the Federal Reserve Board continued its interest rate
hikes. After reaching a high of over 10,000 in September 1994,
the index had fallen 30% by the middle of January. Conditions
were exacerbated by rumors concerning Deng Xiao Peng's health,
the transfer of control to China in 1997, and weakness in the
real estate market.
After the devaluation in Mexico, Indonesian and Thai markets came
under pressure due to speculation that they would follow the same
path. After a September 1994 rally, the Jakarta Stock Market
Composite Index had declined about 21% by March 1995. Indonesia
continues to suffer from the combination of a strong yen and a
weak dollar, since 40% of its loans are yen denominated while 90%
of its foreign exchange earnings are in U.S. dollars.
The Thai Stock Exchange fell almost 24% from its high in
September to its low in mid-March. Trading volume continues to
be light in Bangkok as of this writing. In Malaysia, the Kuala
Lumpur Composite Index, which was at the 1200 level in September,
saw a downward correction of 26% by January and the Malaysian
government is likely to be forced to raise interest rates to
combat rising inflation.
<PAGE>
Management's Discussion of Fund Performance (continued)
Even Singapore was not spared. The Straits Times Index fell
almost 25% from October to January, but as the favored "safe
haven" in the region, Singapore's market began to recover
relatively quickly. In the last 12 months, the Singapore dollar
has appreciated almost 15% against the U.S. dollar. If the
currency continues to appreciate, it will make Singapore's
exports less competitive and cut into corporate profits,
particularly in the manufacturing and electronics sectors.
During the sell-off in the emerging markets in the latter part of
the fiscal year, the Worldwide Growth Portfolio took no
extraordinary actions to increase or decrease its positions
significantly. Many of the fund's stocks were under extreme
selling pressure which militated against any "fire sales" of
portfolio securities during this period. At the same time, we
were cautious about committing additional capital to these
markets under such conditions. As a result, our relative cash
position as a percentage of net assets increased from 10% at the
end of the last fiscal year to 15% on March 31, 1995.
After so much bad news, it is encouraging that market conditions
have reversed course significantly in the last few weeks. We see
a strong rebound in Latin American markets, where ravaged stocks
have doubled and in some cases tripled in value in a matter of
weeks. The Worldwide Growth Portfolio, after hitting a low of
$7.58 per share on March 9, 1995 gained 13.4% over the subsequent
three weeks to end the fiscal year at $8.50. The upward trend in
these markets has persisted into the current quarter, and as of
this writing the share price stands at $9.455.
We remain optimistic with regard to the long term potential of
emerging markets, and are mindful that opportunities are often
presented during periods of high volatility and panic selling.
The depressed stock prices of February and March, for example,
created the potential for substantial short-term percentage gains
in the subsequent months.
We appreciate your confidence in GIT Investment Funds, and
encourage you to become familiar with all 13 of our no-load
mutual fund portfolios.
Sincerely,
(signature)
A. Bruce Cleveland
President
Comparison of Changes in Value of $10,000 Investment in the GIT
Equity Trust Worldwide Growth Portfolio and the Morgan Stanley
European Australian Far East Index
Depicted herein is a graphic presentation comparing the values of
a $10,000 investment made in the Worldwide Growth Portfolio
against the Morgan Stanley European Australian Far East Index.
Through the use of a line graph, the following information is
presented:
Value (as of March 31, 1995) of a $10,000 investment made on
March 31, 1993 in the Worldwide Growth Portfolio: $9,735.
Corresponding value of the Morgan Stanley European Australian Far
East Index: $11,546. Average Annual Total Return Since Inception
(April 16, 1993 - March 31, 1995): (1.37%); One-year Total
Return: (22.20%)
Past performance is not predictive of future performance.
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees and Shareholders, Worldwide Growth
Portfolio, GIT Equity Trust:
We have audited the accompanying statement of assets and
liabilities of Worldwide Growth Portfolio (one of the portfolios
comprising GIT Equity Trust), including the portfolio of
investments, as of March 31, 1995, and the related statement of
operations for the year then ended, and the statement of changes
in net assets and the financial highlights for the year then
ended and for the period from inception (April 16, 1993) to March
31, 1994. These financial statements and financial highlights are
the responsibility of the Portfolio'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. Our procedures included confirmation of
securities owned as of March 31, 1995, 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 and financial highlights
referred to above present fairly, in all material respects, the
financial position of Worldwide Growth Portfolio at March 31,
1995, the results of its operations for the year then ended, and
the changes in its net assets and the financial highlights for
the year then ended and for the period from inception (April 16,
1993) to March 31, 1994, in conformity with generally accepted
accounting principles.
(signature)
Ernst & Young LLP
Washington, DC
May 5, 1995
<PAGE>
Worldwide Growth Portfolio
Portfolio of Investments - March 31, 1995
Number
Company Description of Shares Value
COMMON STOCKS:
75.1% of Net Assets
ARGENTINA: 7.9%
Banco Frances
del Rio de la Banking and
Plata S.A. financial services 5,176 $31,196
Inversiones y
Representacion,
S.A. <F1> Real estate development 20,000 38,381
Telecom Argentina
Stet-France
Telecom S.A.,
B Shares, ADR <F4> Telecommunications 1,500 64,875
Telefonica de
Argentina S.A.,
Class B Telecommunications 35,600 87,176
YPF Sociedad
Anonmia, D Shares,
ADR <F4> Oil and gas 2,200 41,800
CHILE: 6.3%
The Chile Fund,
Inc. Multi-industry 1,600 64,000
Compania de
Telefonos de Chile
S.A., ADR <F4> Telecommunications 1,400 93,450
Maderas y
Sinteticos S.A.,
ADR <F4> Forest products 3,000 51,000
HONG KONG/CHINA: 13.2%
Citic Pacific
Ltd. <F1> Diversified 32,000 79,048
Espirit Asia
Holdings Ltd. Apparel 206,000 81,260
First Pacific
Company Ltd. Diversified 84,000 61,381
Guangdong
Investment Ltd. Diversified 116,000 56,260
Hutchison Whampoa
Ltd. Diversified 17,000 74,974
Sinocan Holdings Packaging and
Ltd. containers 210,000 45,357
Wo Kee Hong Electronics and
Holdings Ltd. appliances 120,000 25,297
Yizheng Chemical
Fibre Company,
Ltd., H Shares Chemicals 40,000 14,227
INDIA: 2.4%
The India Fund,
Inc. Multi-industry 3,000 30,750
The Morgan Stanley
India Investment
Fund, Inc. Multi-industry 1,500 15,750
Sanghi Polyesters
Ltd., GDR
(144A) <F1> <F4> Textiles 6,000 34,500
INDONESIA: 6.8%
P.T. Indorama
Synthetics Textiles 30,000 90,551
P.T. Indonesian
Satellite
Corporation,
ADR <F1> <F4> Telecommunications 2,500 88,125
P.T. Pabrik Kertas Forest and
Tjiwi Kimia <F1> paper products 24,000 42,928
P.T. Sinar Mas
Agro Resources
and Technology Agriculture 200 217
P.T. Sumalindo
Lestari Jaya <F1> Forest products 3,000 5,198
MALAYSIA: 4.8%
Ekran Berhad Engineering and
construction 6,000 21,581
Ekran Berhad, Engineering and
A Shares construction 6,000 21,581
Kian Joo Can
Factory Berhad, Packaging and
A Shares containers 11,500 42,045
Public Finance
Berhad Financial services 38,000 72,696
See Notes to Portfolio of Investments
<PAGE>
Worldwide Growth Portfolio
Portfolio of Investments - March 31, 1995 (continued)
Number
Company Description of Shares Value
MEXICO: 7.2%
Desc, S.A. de C.V.,
Series C,
ADR <F1> <F4> Diversified 2,500 $20,625
Empaques Ponderosa,
S.A., Series B Packaging 20,000 32,236
Grupo Financiero
Banamex Accival
S.A. de C.V., Banking and
Series B financial services 4,100 4,841
Grupo Financiero
Banamex Accival
S.A. de C.V., Banking and
Series L financial services 10,205 11,237
Grupo Financiero
Bancomer S.A.
de C.V., Banking and
Series C <F1> and financial services 21,500 3,903
Grupo Sidek,
S.A. de C.V.,
Series B <F1> Diversified 26,000 15,965
Grupo Sidek,
S.A. de C.V.,
Series L <F1> Diversified 646 582
Grupo Televisa
S.A. de C.V.,
D Shares Telecommunications 2,300 18,773
Grupo Tribasa
S.A.de C.V., Engineering and
ADR <F1> <F4> construction 2,400 13,800
Telefonos de Mexico
S.A. de C.V.,
L Shares, ADR <F4> Telecommunications 2,100 59,850
Transportacion
Maritima
Mexicana,
S.A. de C.V.,
L Shares,
ADR <F4> Marine transportation 9,800 56,350
PAKISTAN: 1.2%
Pakistan State Oil
Limited Oil 4,000 40,972
PERU: 4.8%
Compania Goodyear
Del Peru Tires and rubber 20,000 55,310
Compania Peruana
De Telefono,
B shares <F1> Telecommunications 86,111 105,543
POLAND: 0.8%
Vistula S.A. <F1> Apparel 6,000 28,085
PORTUGAL: 2.2%
Espirito Santo
Financial Holding Banking and
S.A., ADR <F4> financial services 7,000 72,625
SINGAPORE: 6.0%
Clipsal Industries
Ltd. Electronics 26,000 57,720
Clipsal Industries
Ltd., Warrants
12/8/98 <F1> Electronics 2,000 1,520
First Capital
Corporation Ltd. Diversified 25,000 69,735
Jurong Cement Ltd Building materials 24,000 71,703
SOUTH KOREA: 3.4%
Korea Equity
Fund <F1> Multi-industry 8,000 64,000
Samsung Electronics
Company Electronics 37 5,546
Samsung Electronics
Company (New)
<F1> <F2> Electronics 7 1,049
Samsung
Engineering &
Construction,
Non-voting, Engineering and
GDR (144A)
<F1> <F4> construction 1,154 17,194
Samsung
Engineering &
Construction (New),
Non-voting, GDR Engineering and
<F1> <F2> <F4> construction 1,598 23,809
See Notes to Portfolio of Investments
<PAGE>
Worldwide Growth Portfolio
Portfolio of Investments - March 31, 1995 (continued)
Number
Company Description of Shares Value
TAIWAN: 1.9%
ROC Taiwan
Fund <F1> Multi-industry 6,000 $63,750
THAILAND: 4.8%
Bangkok Bank
Public Company
Ltd. Banking 11,800 85,688
Matichon Public
Company Ltd. Publishing 8,000 35,700
Saha Pathana
Inter Holding,
Ltd. Diversified 12,000 23,367
Singer Thailand
Ltd. Home appliances 1,800 13,728
VENEZUELA: 1.3%
Electricidad de
Caracas Electric utility 39,845 42,189
TOTAL COMMON STOCKS
(Cost $3,496,140) <F3> 2,492,999
PREFERRED STOCKS:
7.7% of Net Assets
BRAZIL: 5.3%
Companhia Acos
Especiais
Itabira, ADR <F4> Steel 2,825 38,138
Iochpe-Maxion Tractor and
S.A., ADR <F4> automobile parts 5,000 58,125
Petroleo
Brasileiro S.A. Oil and gas 600,000 42,755
Telecomunicacoes
Brasileiras,
S.A., ADR <F4> Telecommunications 1,500 37,688
SOUTH KOREA: 2.4%
Samsung Electronics
Company Electronics 604 44,956
Samsung Electronics
Company (New)
<F1> <F2> Electronics 119 8,932
Samsung
Engineering &
Construction, GDR Engineering and
(144A) <F4> construction 3,000 24,750
TOTAL PREFERRED STOCKS
(Cost $384,790) <F3> 255,344
Principal
Amount
CONVERTIBLE CORPORATE BONDS:
2.4% of Net Assets
PHILIPPINES
Bacnotan
Consolidated
Industries, 5.5%,
6/21/04 (144A)
(Cost $100,000)
<F3> <F4> Building materials $100,000 78,750
REPURCHASE AGREEMENT:
14.9% of Net Assets
With Donaldson, Lufkin & Jenrette
Securities Corporation issued 3/31/95
at 6.15%, due 4/3/95 collateralized
by $505,981 in United States Treasury
Bills due 4/15/95. Total proceeds
at maturity are $496,254.
(Cost $496,000) <F3> 496,000
TOTAL INVESTMENTS
(Cost $4,476,930) <F3> $3,323,093
See Notes to Portfolio of Investments
<PAGE>
Worldwide Growth Portfolio
Portfolio of Investments - March 31, 1995 (continued)
Notes to the Portfolio of Investments:
[FN]
<F1>
Non-income producing
<F2>
Securities acquired through a rights or bonus stock issue that
are restricted as to resale:
Date Value
Acquired Cost (Note 1)
SECURITY (1.0% of Net Assets)
Samsung Engineering &
Construction (New),
Common, Non-voting, GDR 3/22/95 $18,297 $23,809
Samsung Electronics Company
(New), Common 3/11/95 -- 1,049
Samsung Electronics Company
(New), Preferred 3/11/95 -- 8,932
Total $33,790
[FN]
<F3>
Aggregate cost for federal income tax purposes is $4,476,930 at
March 31, 1995, and the net unrealized depreciation is $1,153,837
comprised of gross unrealized appreciation of $126,738 and gross
unrealized depreciation of $1,280,575.
[/FN]
[FN]
<F4>
ADR American Depository Receipt
GDR Global Depository Receipt
144A Securities are exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be
resold in transactions exempt from registration, normally
to qualified institutional buyers. At March 31, 1995 these
securities amounted to $155,194 or 4.7% of net assets.
[/FN]
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Worldwide Growth Portfolio
Statement of Assets and Liabilities
March 31, 1995
ASSETS
Investments, at value (Notes 1 and 2) (Cost $4,476,930)
Investment securities $2,827,093
Repurchase agreement 496,000
Total investments 3,323,093
Cash 769
Dividends and interest receivable 15,694
Total assets 3,339,556
LIABILITIES
Payables
Capital shares redeemed 20,142
Dividends 418
Other liabilities 12
Total liabilities 20,572
NET ASSETS (Note 5) $3,318,984
CAPITAL SHARES OUTSTANDING 390,427
NET ASSET VALUE PER SHARE $8.501
Worldwide Growth Portfolio
Statement of Operations
For the Year Ended March 31, 1995
INVESTMENT INCOME (Note 1)
Interest income $26,058
Dividend income (Net of foreign tax of $4,888) 59,530
Total income 85,588
EXPENSES (Notes 3 and 4)
Investment advisory fee 40,036
Custodian fees 25,868
Professional fees 2,175
Salaries and related expenses 13,559
Securities registration and blue sky expense 13,318
Telephone expense 995
Data processing and office equipment expense 16,167
Office and miscellaneous expenses 4,616
Depreciation and amortization 380
Investment advisory fee waived (40,036)
Total expenses 77,078
NET INVESTMENT INCOME 8,510
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 12,222
Net realized loss on foreign currency
transactions (4,875)
Net unrealized depreciation of investments (1,056,140)
NET LOSS FROM INVESTMENTS AND FOREIGN CURRENCY (1,048,793)
TOTAL DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(1,040,283)
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Worldwide Growth Portfolio
Statements of Change in Net Assets
April 16,1993
Year Ended (inception) to
March 31, 1995 March 31, 1994
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
Net investment income (loss) $8,510 $(9,769)
Net realized gain on
investments 12,222 402,217
Net realized loss on foreign
currency transactions (4,875) (2,507)
Net unrealized depreciation
of investments (1,056,140) (97,696)
Total increase (decrease) in
net assets resulting from
operations (1,040,283) 292,245
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (9,688) --
From net capital gains (431,663) --
CAPITAL SHARE TRANSACTIONS
(Note 7) 1,274,473 3,233,900
TOTAL INCREASE (DECREASE)
IN NET ASSETS (207,161) 3,526,145
NET ASSETS
Beginning of period 3,526,145 --
End of period $3,318,984 $3,526,145
Worldwide Growth Portfolio
Financial Highlights
Selected data for a share outstanding throughout each period:
Year Year
ended ended
March 31 March 31
1995 1994 <F5>
Net asset value beginning of period $12.511 10.000
Net investment income (loss) $0.022 (0.035)
Net realized & unrealized gains
(losses) on securities $(2.491) 2.546
Total from investment operations $(2.469) 2.511
Distributions from net investment
income $(0.025) --
Distributions from capital gains $(1.516) --
Total distributions $(1.541) --
Net asset value end of period $8.501 12.511
Total return (22.20)% 26.19 <F6>
Net assets end of period (thousands) $3,319 3,526
Ratio of expenses to average net
assets <F7> 2.05% 1.81 <F6>
Ratio of net income to average net
assets <F7> 0.21% (0.48) <F6>
Portfolio turnover 65% 83
[FN]
<F5>
For the period from April 16, 1993 (inception) to March 31, 1994
<F6>
Annualized
<F7>
Had BFIMC not waived the advisory fee, the Portfolio's annualized ratios of
expenses and net investment loss to average net assets would have been 3.05%
and (0.79%), respectively. Had BFIMC not waived the advisory fee and
deferred a portion of the operating expenses in the prior year, the
Portfolio's annualized rations of expenses and net investment loss to
average net assets would have been 4.24% and (2.92)%, respectively.
[/FN]
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Worldwide Growth Portfolio
Notes to Financial Statements
March 31, 1995
1. Summary of Significant Accounting Policies. GIT Equity Trust
(the "Trust") is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 as an open-
end, diversified investment management company. The Trust offers
shares in four separate portfolios which invest in differing
securities (under policies described in their respective
prospectuses). The Worldwide Growth Portfolio (the "Portfolio")
invests primarily in foreign equity securities, emphasizing
companies that are likely to benefit from the growth of the
world's smaller and emerging capital markets. The Special
Growth, Select Growth and Equity Income Portfolios are managed
independently from the Worldwide Growth Portfolio and issue
separate semi-annual and annual financial reports to
shareholders.
Securities Valuation: Securities traded on a securities exchange
are valued at their closing sale price, if available, and if not
available, such securities are valued at the mean between their
bid and asked prices. Other securities, for which current market
quotations are readily available, are valued at the mean between
their bid and asked prices. Securities for which current market
quotations are not readily available are valued at their fair
value as determined in good faith by the Trustees. Securities
whose prices are quoted in foreign currency are normally
translated into U.S. dollars based on exchange rates at 1 p.m.,
Washington, D.C. time. The portfolio does not isolate that
portion of the results of operations resulting from changes in
foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with net realized and unrealized gain
or loss on investments. Investment transactions are recorded on
the trade date. The cost of investments sold is determined on
the identified cost basis for financial statement and federal income tax
purposes. Repurchase agreements are valued at amortized cost, which
approximates market value.
Forward Foreign Currency Contracts: The Portfolio may enter into
forward foreign currency contracts in order to hedge against
foreign currency risk. Such contracts have been used solely to
establish a rate of exchange for settlement of transactions.
Forward foreign currency contracts are valued at the forward rate
and are marked-to-market daily. The change in market value is
recorded by the Portfolio as an unrealized gain or loss.
Realized gains or losses are recognized when contracts settle.
Although forward foreign currency contracts limit the risk of
loss due to a decline in the value of the hedged currency, they
also limit any potential gain that might result should the value
of the currency increase. In addition, the Portfolio could be
exposed to risks if the counter parties to the contracts are
unable to meet the terms of their contracts.
Investment Income: Interest and other income (if any) is accrued
as earned. Dividend income is recorded on the ex-dividend date,
except that if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Portfolio is
informed of the ex-dividend date.
Dividends and Income Tax: Substantially all of the Trust's
accumulated net investment income, determined as gross investment
income less accrued expenses, is declared as a regular dividend
and distributed to shareholders at least twice annually at
calendar and fiscal year end. Capital gains distributions
reflecting net realized gains of the portfolio, if any, are
declared and paid twice annually at calendar and fiscal year end.
In accordance with the provisions of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies, all of
the taxable income of each portfolio is distributed to its
shareholders, and therefore no federal income tax provision is
required.
Share Subscriptions: Shares purchased by check or otherwise not
paid for in immediately available funds are accounted for as
share subscriptions receivable and shares reserved for
subscriptions.
2. Investments in Repurchase Agreements. When the Trust
purchases securities under agreements to resell, the securities
are held for safekeeping by the Trust's custodian bank as
collateral. Should the market value of the securities purchased
under such an agreement decrease below the principal amount to be
received at the termination of the agreement plus accrued
interest, the counterparty is required to place an equivalent
amount of additional securities in safekeeping with the Trust's
custodian bank. Repurchase agreements may be terminated within
seven days. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Trust, along with other registered
investment companies having Advisory and Services
Agreements with Bankers Finance Investment Management Corp.
("BFIMC"), transfers uninvested cash balances into a joint
trading account. The aggregate balance in this joint trading
account is invested in one or more consolidated repurchase
agreements whose underlying securities are U.S. Treasury or
federal agency obligations.
3. Investment Advisory Fees and Other Transactions with
Affiliates. The Investment Adviser to the Trust, BFIMC, earns an
advisory fee equal to 1.00% per annum of the average net assets
of the Portfolio; the
<PAGE>
Notes to Financial Statements (continued)
fee accrues daily and is payable monthly. For the year ended
March 31, 1995, BFIMC waived $40,036 of such fee from the
Portfolio. In order to meet the securities registration
requirements of certain states, BFIMC has undertaken
to reimburse the Portfolio by the amount, if any, by which the
total expenses of the Portfolio (less certain excepted expenses)
exceed the applicable expense limitation in any state or other
jurisdiction in which the Trust is subject to regulation during
the fiscal year. The Trust believes the current applicable
expense limitation is 2.50% per annum of the average net assets
of each portfolio up to $30 million, 2.00% of any amount of such
net assets exceeding $30 million but not exceeding $100 million,
and 1.50% per annum of such amount in excess of $100 million.
BFIMC is responsible for the fees and expenses of trustees who
are affiliated with BFIMC, the rent expense of the Trust's
principal executive office premises and certain promotional
expenses. For the year ended March 31, 1995, no outside trustee
fees were paid. Certain officers, trustees, companies and
individuals affiliated with the Trust have investments in the
Trust aggregating 7.4% of net assets.
4. Other Expenses. With the exception of certain expenses of the
Trust payable by it directly, all support services are provided
to the Trust under a services agreement between the Trust and
BFIMC, pursuant to which such services are to be provided for
amounts not exceeding the cost to BFIMC of the support provided.
For the year ended March 31, 1995, expenses of $77,078 have been
reimbursed to BFIMC under the services agreement. As of March
31, 1995, expenses of $16,857 have been incurred by BFIMC on
behalf of the Portfolio, the billing of which has been deferred.
5. Net Assets. At March 31, 1995, net assets include the
following:
Net paid in capital on shares
of beneficial interest $4,497,426
Accumulated net realized loss (24,605)
Net unrealized depreciation of
investments (1,153,837)
Total net assets $3,318,984
In accordance with a recently approved accounting pronouncement
(Statement of Position 93-2), the Portfolio reclassified
$(10,947) from accumulated net investment losses to paid in
capital as a result of permanent book and tax basis differences.
This reclassification had no impact on net asset value.
6. Investment Transactions. Purchases and sales of securities
other than short-term securities for the year ended March 31,1995
were $3,035,085 and $2,262,240, respectively.
7. Capital Share Transactions. An unlimited number of capital
shares, without par value, are authorized. Transactions in
capital shares for the year ended March 31, 1995 and for the
period from April 16, 1993 (inception) to March 31, 1994, were as
follows:
1995 1994
In Dollars
Shares sold $3,109,192 $4,854,347
Shares issued in reinvestment
of dividends 399,120 --
Total shares issued 3,508,312 4,854,347
Shares redeemed (2,233,839) (1,620,447)
Net increase (decrease) $1,274,473 $3,233,900
In Shares
Shares sold 275,640 400,467
Shares issued in reinvestment
of dividends 37,227 --
Total shares issued 312,867 400,467
Shares redeemed (204,278) (118,629)
Net increase (decrease) 108,589 281,838
