<PAGE>
---------------------------------------------
UST
MASTER FUNDS, INC.
---------------------------------------------
DOMESTIC EQUITY PORTFOLIOS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS..................................................... 1
STATEMENTS OF ASSETS AND LIABILITIES....................................... 2
STATEMENTS OF OPERATIONS................................................... 4
STATEMENTS OF CHANGES IN NET ASSETS........................................ 6
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................. 8
PORTFOLIOS OF INVESTMENTS
Equity Fund.............................................................. 10
Income and Growth Fund................................................... 11
Aging of America Fund.................................................... 13
Business and Industrial Restructuring Fund............................... 14
Communication and Entertainment Fund..................................... 16
Early Life Cycle Fund.................................................... 17
Environmentally-Related Products and Services Fund....................... 18
Global Competitors Fund.................................................. 19
Long-Term Supply of Energy Fund.......................................... 20
Productivity Enhancers Fund.............................................. 21
NOTES TO FINANCIAL STATEMENTS.............................................. 22
</TABLE>
For shareholder account information, current price and yield quotations, or to
make an initial purchase or obtain a prospectus, call the appropriate telephone
number listed below:
. SHAREHOLDER SERVICES 1-800-446-1012
. CURRENT PRICE AND YIELD INFORMATION 1-800-233-9180
. INITIAL PURCHASE AND PROSPECTUS INFORMATION 1-800-233-1136
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and
expenses regarding UST Master Funds, Inc. and UST Master Tax-Exempt Funds, Inc.
may be obtained by contacting the Funds at 1-800-233-1136.
Investors should read the current prospectus carefully prior to investing or
sending money.
UST Master Funds, Inc. and UST Master Tax-Exempt Funds, Inc. are sponsored and
distributed by Edgewood Services, Inc.
You may write to UST Master Funds, Inc. and UST Master Tax-Exempt Funds, Inc.
at the following address:
UST MASTER FUNDS, INC.
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UNITED STATES TRUST COMPANY OF NEW YORK, ITS PARENT OR AFFILIATES
AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present UST Master Funds and UST Master Tax-Exempt Funds semi-
annual reports for the six months ended September 30, 1995.
The U.S. stock market continued to make strong gains for the period.
International markets remained difficult overall, though conditions are
looking up. Bond markets both home and abroad were somewhat volatile, yet the
spectacular gains of early 1995 were not eroded. While the general market has
been very favorable and some segments have been spectacular, the market also
continues to be variable and unforgiving to those companies which fail to meet
earnings expectations. In this environment, our outlook is somewhat cautious.
Much of the good news may already be in the markets, and further broad gains
will depend on continued good news about earnings and interest rates.
Investment performance continued to be strong in several of our equity and
fixed income funds. The Early Life Cycle Fund, with a return of 31.16%* ranked
105th among 288 Small Company Growth Funds ranked by Lipper Analytical
Services, Inc.** (Lipper) for the one year period ended September 30, 1995.
The Communication and Entertainment Fund returned 30.98%,* Global Competitors
returned 28.77%,* ranking 121st, and 184th, respectively, among 550 Growth
Funds ranked by Lipper for the same period. Among our fixed-income funds, The
Managed Income returned 16.98%* ranking 8th among 77 Corporate BBB Funds***
tracked by Lipper. The Intermediate-Term Managed Income Funds returned 14.61%*
ranking 13th among 144 Lipper Intermediate-Term Investment Grade Bond Funds.
Three Tax-Exempt funds turned in the best relative performance in our family
of funds during the one year period. Lipper ranked both the Long-Term Tax-
Exempt, 16.03%,* and the N.Y. Intermediate-Term Funds, 10.37%,* number 1 among
213 General Municipal Bond Funds,*** and 22 among N.Y. State Municipal Bond
Funds,*** respectively. The Intermediate-Term Tax Exempt Fund ranked 2nd among
111 Lipper Intermediate-Term Municipal Bond Funds*** with a return of 11.16%.*
With a diversified portfolio of professionally managed funds, we are prepared
to fulfill your investment needs. We appreciate your participation in UST
Master Funds and UST Master Tax-Exempt Funds and look forward to serving you
in the years to come.
Alfred C. Tannachion
Chairman of the Board and President
- --------
* Past performance is not predictive of future performance. Total return
represents the change during the period in a hypothetical account with
dividends reinvested, without taking into account the maximum initial
sales charge of 4.5%. Investment return and principal value will fluctuate
so that an investor's shares when redeemed, may be worth more or less than
their original cost.
The average annual total returns on 9/30/95, including the maximum 4.5%
sales charge for one year and since inception (12/31/92) were 25.25% and
20.50%, respectively, for Early Life Cycle Fund, 25.13% and 23.54%,
respectively, for Communication and Entertainment Fund, 22.96% and 12.77%,
respectively, for Global Competitors Fund and 9.49% and 4.86%, respectively,
for Intermediate-Term Managed Income Fund. The average annual total returns
on 9/30/95, including the maximum 4.5% sales charge for one year, five year
and since inception were 11.66%, 9.14% and 10.68%, respectively, for Managed
Income Fund (1/9/86 inception), 10.78%, 9.35% and 10.69%, respectively, for
Long Term Tax-Exempt Fund (2/5/86 inception), 5.38%, 6.01% and 6.05%,
respectively, for N.Y. Intermediate-Term Tax-Exempt Fund (5/31/90 inception)
and 6.10%, 7.14% and 7.95%, respectively, for Intermediate-Term Tax-Exempt
Fund (12/3/85 inception).
A portion of the tax-exempt funds' income may be subject to the Alternative
Minimum Tax and some investors may be subject to certain state and local
taxes.
Each fund is currently waiving certain fees. Had the funds not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
** Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor whose rankings are based on total return excluding sales charges.
*** For the five year period ended 9/30/95, Lipper ranked Managed Income Fund
19 among 26 Corporate BBB Funds, Long-Term Tax-Exempt Fund 2 among 98
General Municpal Bond Funds, N.Y. Intermediate-Term Tax-Exempt Fund 5
among 5 N.Y. State Municipal Bond Funds and Intermediate-Term Tax-Exempt
Fund 5 among 32 Intermediate-Term Municipal Bond Funds.
1
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
AS OF SEPTEMBER 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND FUND FUND
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investments, at cost--see
accompanying portfolios.............. $120,441,912 $ 92,487,930 $27,988,411
============ ============ ===========
Investments, at value (Note 1)....... $171,384,379 $114,661,768 $34,021,025
Cash................................. 683 931 764
Dividends receivable................. 111,842 99,825 37,190
Interest receivable.................. 38,773 465,812 10,251
Receivable for investments sold...... -- 328,672 1,334,575
Receivable for fund shares sold...... 277,555 269,112 55,921
Receivable from administrator (Note
2)................................... -- -- --
Receivable from investment adviser
(Note 2)............................. -- -- --
Prepaid expenses..................... 794 674 94
Unamortized organization costs (Note
5)................................... -- -- 9,429
Other Assets......................... 3,598 1,184 --
------------ ------------ -----------
TOTAL ASSETS......................... 171,817,624 115,827,978 35,469,249
LIABILITIES:
Payable for investments purchased.... 1,323,075 36,135 1,314,967
Payable for fund shares redeemed..... 588,673 559,814 12,489
Investment advisory fee payable (Note
2)................................... 96,308 66,767 15,641
Administration fees and shareholder
servicing fees payable
(Note 2)............................. 20,476 16,033 4,642
Accrued expenses and other payables.. 91,564 61,777 19,793
------------ ------------ -----------
TOTAL LIABILITIES.................... 2,120,096 740,526 1,367,532
------------ ------------ -----------
NET ASSETS............................ $169,697,528 $115,087,452 $34,101,717
============ ============ ===========
NET ASSETS consist of:
Accumulated net investment
income/(loss)........................ $ 227,703 $ 836,839 $ 42,896
Accumulated net realized gain/(loss)
on investments....................... 3,239,691 63,824 (813,333)
Unrealized appreciation of
investments and foreign currency
translations......................... 50,942,467 22,173,838 6,032,614
Par value (Note 4)................... 7,162 8,467 3,864
Paid-in capital in excess of par
value................................ 115,280,505 92,004,484 28,835,676
------------ ------------ -----------
TOTAL NET ASSETS...................... $169,697,528 $115,087,452 $34,101,717
============ ============ ===========
Shares of Common Stock Outstanding.... 7,162,365 8,466,976 3,864,304
NET ASSET VALUE PER SHARE............. $23.69 $13.59 $8.82
====== ====== =====
</TABLE>
See Notes to Financial Statements
2
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$40,520,108 $34,705,571 $60,335,893 $3,342,351 $36,563,467 $19,848,810 $30,629,111
=========== =========== =========== ========== =========== =========== ===========
$50,300,451 $44,712,452 $74,088,076 $4,304,687 $44,479,957 $21,261,313 $31,758,000
-- 102 945 390 71 221 987
39,415 26,279 8,535 2,536 50,428 52,799 14,430
7,394 64,896 26,145 130 11,810 3,886 4,569
1,044,968 -- 254,475 -- 431,150 -- 1,405,698
145,502 94,020 142,669 6,439 106,770 41,635 69,822
-- -- -- 3,296 -- -- --
-- -- -- 1,097 -- -- --
144 162 230 29 96 69 112
9,429 9,429 9,429 9,429 9,429 9,429 9,429
-- -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ----------- -----------
51,547,303 44,907,340 74,530,504 4,328,033 45,089,711 21,369,352 33,263,047
1,402,050 -- 1,084,885 -- 914,070 -- 4,248,108
1,994 20,967 2,713 2,396 3,000 406 12,432
22,804 20,363 31,084 -- 20,174 9,987 13,580
6,733 6,208 8,435 731 6,334 2,673 3,872
21,527 23,440 29,107 12,766 18,346 14,883 17,656
----------- ----------- ----------- ---------- ----------- ----------- -----------
1,455,108 70,978 1,156,224 15,893 961,924 27,949 4,295,648
----------- ----------- ----------- ---------- ----------- ----------- -----------
$50,092,195 $44,836,362 $73,374,280 $4,312,140 $44,127,787 $21,341,403 $28,967,399
=========== =========== =========== ========== =========== =========== ===========
$ 80,405 $ 25,966 $ (51,176) $ (1,825) $ 74,432 $ 56,386 $ 10,769
766,525 2,250,376 1,940,778 (643,377) (454,397) (136,122) 3,835,797
9,780,365 10,006,881 13,752,183 962,336 7,916,485 1,412,503 1,128,889
3,914 3,677 6,465 587 4,414 2,490 3,029
39,460,986 32,549,462 57,726,030 3,994,419 36,586,853 20,006,146 23,988,915
----------- ----------- ----------- ---------- ----------- ----------- -----------
$50,092,195 $44,836,362 $73,374,280 $4,312,140 $44,127,787 $21,341,403 $28,967,399
=========== =========== =========== ========== =========== =========== ===========
3,913,475 3,677,009 6,464,774 586,459 4,414,314 2,490,263 3,029,016
$12.80 $12.19 $11.35 $7.35 $10.00 $8.57 $9.56
====== ====== ====== ===== ====== ===== =====
</TABLE>
See Notes to Financial Statements
3
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income....................... $ 219,012 $ 1,152,554 $ 48,432
Dividend income....................... 1,019,867 1,062,745 179,351
Less: Foreign taxes withheld.......... -- (800) --
----------- ----------- ----------
TOTAL INCOME.......................... 1,238,879 2,214,499 227,783
EXPENSES:
Investment advisory fees (Note 2)..... 568,179 404,855 85,256
Administration fees (Note 2).......... 116,759 83,193 25,000
Administrative service fees (Note 2).. 47,583 29,064 6,201
Shareholder servicing agent fees (Note
2)................................... 37,056 30,399 5,475
Custodian fees (Note 2)............... 40,746 30,058 13,422
Registration and filing fees.......... 3,242 3,124 4,949
Legal and audit fees.................. 9,500 6,687 1,744
Directors' fees and expenses (Note
2)................................... 2,272 1,699 365
Shareholder reports................... 12,828 7,803 2,244
Amortization of organization costs
(Note 5)............................. -- -- 2,105
Miscellaneous expenses................ 4,092 3,259 812
----------- ----------- ----------
TOTAL EXPENSES........................ 842,257 600,141 147,573
Fees waived by investment adviser and
administrators (Note 2).............. (47,583) (29,064) (9,577)
----------- ----------- ----------
NET EXPENSES.......................... 794,674 571,077 137,996
----------- ----------- ----------
NET INVESTMENT INCOME/(LOSS)........... 444,205 1,643,422 89,787
----------- ----------- ----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain/(loss):
Security transactions................. 3,242,017 1,700,715 (272,559)
Foreign currency translations......... -- -- --
----------- ----------- ----------
Total net realized gain/(loss)........ 3,242,017 1,700,715 (272,559)
Change in unrealized
appreciation/(depreciation) on in-
vestments and foreign currency trans-
lations during the period............ 19,900,740 13,146,369 3,757,971
----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS.......................... 23,142,757 14,847,084 3,485,412
----------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $23,586,962 $16,490,506 $3,575,199
=========== =========== ==========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 27,748 $ 133,665 $ 91,049 $ 2,960 $ 47,760 $ 21,949 $ 23,007
323,032 115,809 121,412 17,332 284,375 188,107 132,495
(2,818) (951) -- -- (2,838) -- --
---------- ---------- ----------- -------- ---------- ---------- ----------
347,962 248,523 212,461 20,292 329,297 210,056 155,502
118,409 108,279 175,577 13,424 107,840 57,465 71,954
30,419 27,816 45,104 25,000 27,703 25,000 25,000
7,961 7,646 23,729 2,391 7,382 4,592 5,258
10,924 12,107 12,969 4,292 6,965 4,999 5,447
10,522 7,253 11,926 1,736 9,752 4,367 10,149
4,935 4,645 5,165 6,061 4,910 4,850 4,756
2,498 2,272 3,733 353 2,090 1,383 1,536
515 497 799 80 447 263 365
3,083 2,923 4,695 379 2,693 1,600 1,888
2,105 2,105 2,105 2,105 2,105 2,105 2,105
1,131 1,175 1,564 515 807 731 783
---------- ---------- ----------- -------- ---------- ---------- ----------
192,502 176,718 287,366 56,336 172,694 107,355 129,241
(7,961) (7,646) (23,729) (34,219) (7,382) (14,821) (12,429)
---------- ---------- ----------- -------- ---------- ---------- ----------
184,541 169,072 263,637 22,117 165,312 92,534 116,812
---------- ---------- ----------- -------- ---------- ---------- ----------
163,421 79,451 (51,176) (1,825) 163,985 117,522 38,690
---------- ---------- ----------- -------- ---------- ---------- ----------
1,206,939 2,250,537 1,940,874 (127,424) 180,774 125,392 3,889,456
(4,404) (159) -- -- 810 -- --
---------- ---------- ----------- -------- ---------- ---------- ----------
1,202,535 2,250,378 1,940,874 (127,424) 181,584 125,392 3,889,456
6,208,383 6,461,471 9,797,361 875,629 5,128,391 1,291,606 26,400
---------- ---------- ----------- -------- ---------- ---------- ----------
7,410,918 8,711,849 11,738,235 748,205 5,309,975 1,416,998 3,915,856
---------- ---------- ----------- -------- ---------- ---------- ----------
$7,574,339 $8,791,300 $11,687,059 $746,380 $5,473,960 $1,534,520 $3,954,546
========== ========== =========== ======== ========== ========== ==========
</TABLE>
See Notes to Financial Statements
5
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND FUND FUND
------------ ------------ -----------
<S> <C> <C> <C>
PERIOD ENDED SEPTEMBER 30, 1995
(UNAUDITED)
Net investment income/(loss)......... $ 444,205 $ 1,643,422 $ 89,787
Net realized gain/(loss) on
investments......................... 3,242,017 1,700,715 (272,559)
Change in unrealized
appreciation/(depreciation) on
investments and foreign currency
translations during the period...... 19,900,740 13,146,369 3,757,971
------------ ------------ -----------
Net increase in net assets resulting
from operations..................... 23,586,962 16,490,506 3,575,199
Distributions to shareholders:
From net investment income.......... (416,345) (1,086,106) (78,238)
From net realized gain on
investments........................ (7,294,108) (495,121) --
Increase/(decrease) in net assets
from fund share transactions (Note
4).................................. 16,404,120 253,586 8,431,172
------------ ------------ -----------
Net increase/(decrease) in net
assets.............................. 32,280,629 15,162,865 11,928,133
NET ASSETS:
Beginning of period................. 137,416,899 99,924,587 22,173,584
------------ ------------ -----------
End of period (1)................... $169,697,528 $115,087,452 $34,101,717
============ ============ ===========
YEAR ENDED MARCH 31, 1995
Net investment income/(loss)......... $ 434,763 $ 3,316,405 $ 97,235
Net realized gain/(loss) on
investments......................... 8,541,411 (122,305) (407,075)
Change in unrealized
appreciation/(depreciation) on
investments and foreign currency
translations during the year........ 8,328,610 1,813,647 2,415,478
------------ ------------ -----------
Net increase/(decrease) in net assets
resulting from operations........... 17,304,784 5,007,747 2,105,638
Distributions to shareholders:
From net investment income.......... (234,920) (3,030,356) (81,800)
In excess of net investment income.. -- -- --
From net realized gain on
investments........................ (2,880,896) (3,536,012) --
Increase/(decrease) in net assets
from fund share transactions (Note
4).................................. 966,098 4,800,766 9,566,820
------------ ------------ -----------
Net increase/(decrease) in net
assets.............................. 15,155,066 3,242,145 11,590,658
NET ASSETS:
Beginning of year................... 122,261,833 96,682,442 10,582,926
------------ ------------ -----------
End of year (2)..................... $137,416,899 $ 99,924,587 $22,173,584
============ ============ ===========
</TABLE>
(1) Including accumulated net investment income/(loss) of $227,703 for Equity
Fund, $836,839 for Income and Growth Fund, $42,896 for Aging of America
Fund, $80,405 for Business and Industrial Restructuring Fund, $25,966 for
Communication and Entertainment Fund, ($51,176) for Early Life Cycle Fund,
($1,825) for Environmentally-Related Products and Services Fund, $74,432
for Global Competitors Fund, $56,386 for Long-Term Supply of Energy Fund
and $10,769 for Productivity Enhancers Fund.
(2) Including accumulated net investment income of $199,843 for Equity Fund,
$279,523 for Income and Growth Fund, $31,347 for Aging of America Fund,
$64,066 for Business and Industrial Restructuring Fund, $21,964 for
Communication and Entertainment Fund, $50,305 for Global Competitors Fund,
and $22,348 for Long-Term Supply of Energy Fund.
See Notes to Financial Statements
6
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 163,421 $ 79,451 $ (51,176) $ (1,825) $ 163,985 $ 117,522 $ 38,690
1,202,535 2,250,378 1,940,874 (127,424) 181,584 125,392 3,889,456
6,208,383 6,461,471 9,797,361 875,629 5,128,391 1,291,606 26,400
----------- ----------- ----------- ---------- ----------- ----------- -----------
7,574,339 8,791,300 11,687,059 746,380 5,473,960 1,534,520 3,954,546
(147,082) (75,449) -- -- (139,858) (83,484) (27,921)
-- (80,570) (2,216,446) -- -- -- (341,363)
12,482,181 6,286,691 16,121,313 (793,263) 13,299,057 4,077,493 7,116,867
----------- ----------- ----------- ---------- ----------- ----------- -----------
19,909,438 14,921,972 25,591,926 (46,883) 18,633,159 5,528,529 10,702,129
30,182,757 29,914,390 47,782,354 4,359,023 25,494,628 15,812,874 18,265,270
----------- ----------- ----------- ---------- ----------- ----------- -----------
$50,092,195 $44,836,362 $73,374,280 $4,312,140 $44,127,787 $21,341,403 $28,967,399
=========== =========== =========== ========== =========== =========== ===========
$ 192,090 $ 117,720 $ (83,566) $ (4,222) $ 165,153 $ 136,166 $ (17,295)
(288,156) 195,440 2,652,580 (298,761) (604,095) (261,515) 337,213
2,845,780 2,850,750 3,235,122 280,050 2,802,463 463,608 583,278
----------- ----------- ----------- ---------- ----------- ----------- -----------
2,749,714 3,163,910 5,804,136 (22,933) 2,363,521 338,259 903,196
(139,348) (103,532) -- -- (133,461) (133,084) --
-- -- -- (9,193) -- -- --
(258,199) (445,488) (656,959) -- -- (5,138) (207,461)
13,390,609 6,275,130 17,684,135 (141,805) 13,205,903 8,782,842 1,867,860
----------- ----------- ----------- ---------- ----------- ----------- -----------
15,742,776 8,890,020 22,831,312 (173,931) 15,435,963 8,982,879 2,563,595
14,439,981 21,024,370 24,951,042 4,532,954 10,058,665 6,829,995 15,701,675
----------- ----------- ----------- ---------- ----------- ----------- -----------
$30,182,757 $29,914,390 $47,782,354 $4,359,023 $25,494,628 $15,812,874 $18,265,270
=========== =========== =========== ========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
7
<PAGE>
UST MASTER FUNDS, INC.
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
For a fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS
NET ASSET NET AND UNREALIZED DIVIDENDS DIVIDENDS FROM NET
VALUE, INVESTMENT GAIN/(LOSS) TOTAL FROM FROM NET IN EXCESS OF REALIZED GAIN
BEGINNING INCOME/ ON INVESTMENTS INVESTMENT INVESTMENT NET INVESTMENT ON INVESTMENTS
OF PERIOD (LOSS) AND OPTIONS OPERATIONS INCOME INCOME AND OPTIONS
--------- ---------- -------------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUND -- (4/25/85*)
Year Ended March 31,
1991.................... $13.87 $0.28 $ 0.39 $ 0.67 $(0.23) $0.00 $(0.18)
1992.................... 14.13 0.13 2.23 2.36 (0.21) 0.00 0.00
1993.................... 16.28 0.08 3.01 3.09 (0.09) 0.00 (0.51)
1994.................... 18.77 0.05 1.16 1.21 (0.08) 0.00 (0.39)
1995.................... 19.17 0.07 2.67 2.74 (0.04) 0.00 (0.47)
Period Ended September
30, 1995 (Unaudited)... 21.40 0.06 3.42 3.48 (0.06) 0.00 (1.13)
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1991.................... $ 8.84 $0.29 $(0.43) $(0.14) $(0.34) $0.00 $ 0.00
1992.................... 8.36 0.30 0.72 1.02 (0.28) 0.00 0.00
1993.................... 9.10 0.27 2.43 2.70 (0.35) 0.00 0.00
1994.................... 11.45 0.31 0.46 0.77 (0.27) 0.00 (0.01)
1995.................... 11.94 0.38 0.26 0.64 (0.35) 0.00 (0.41)
Period Ended September
30, 1995 (Unaudited)... 11.82 0.20 1.76 1.96 (0.13) 0.00 (0.06)
AGING OF AMERICA FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.01 $ 0.00 $ 0.01 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.01 0.03 (0.02) 0.01 (0.03) 0.00 0.00
Year Ended March 31,
1995................... 6.99 0.04 0.85 0.89 (0.04) 0.00 0.00
Period Ended September
30, 1995 (Unaudited)... 7.84 0.02 0.98 1.00 (0.02) 0.00 0.00
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.02 $ 0.69 $ 0.71 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.71 0.06 1.96 2.02 (0.07) 0.00 (0.02)
Year Ended March 31,
1995................... 9.64 0.07 1.02 1.09 (0.06) 0.00 (0.12)
Period Ended September
30, 1995 (Unaudited)... 10.55 0.05 2.25 2.30 (0.05) 0.00 0.00
COMMUNICATION AND ENTERTAINMENT FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.01 $ 0.60 $ 0.61 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.61 0.02 1.52 1.54 (0.03) 0.00 (0.37)
Year Ended March 31,
1995................... 8.75 0.04 1.06 1.10 (0.04) 0.00 (0.17)
Period Ended September
30, 1995 (Unaudited)... 9.64 0.02 2.58 2.60 (0.02) 0.00 (0.03)
EARLY LIFE CYCLE FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.00 $ 0.40 $ 0.40 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.40 (0.01) 1.36 1.35 0.00 0.00 (0.09)
Year Ended March 31,
1995................... 8.66 (0.02) 1.31 1.29 0.00 0.00 (0.18)
Period Ended September
30, 1995 (Unaudited)... 9.77 (0.01) 2.01 2.00 0.00 0.00 (0.42)
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.00 $(0.05) $(0.05) $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 6.95 0.00 (0.71) (0.71) 0.00 0.00 0.00
Year Ended March 31,
1995................... 6.24 (0.01) (0.01) (0.02) 0.00 (0.01) 0.00
Period Ended September
30, 1995 (Unaudited)... 6.21 0.00 1.14 1.14 0.00 0.00 0.00
GLOBAL COMPETITORS FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.01 $ 0.27 $ 0.28 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.28 0.05 0.41 0.46 (0.05) 0.00 0.00
Year Ended March 31,
1995................... 7.69 0.07 0.90 0.97 (0.07) 0.00 0.00
Period Ended September
30, 1995 (Unaudited)... 8.59 0.04 1.41 1.45 (0.04) 0.00 0.00
LONG-TERM SUPPLY OF ENERGY FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.01 $ 0.80 $ 0.81 $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 7.81 0.08 (0.12) (0.04) (0.07) 0.00 0.00
Year Ended March 31,
1995................... 7.70 0.09 0.24 0.33 (0.10) 0.00 (0.01)
Period Ended September
30, 1995 (Unaudited)... 7.92 0.05 0.64 0.69 (0.04) 0.00 0.00
PRODUCTIVITY ENHANCERS FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $0.01 $(0.07) $(0.06) $ 0.00 $0.00 $ 0.00
Year Ended March 31,
1994................... 6.94 0.00 0.96 0.96 0.00 (0.02) 0.00
Year Ended March 31,
1995................... 7.88 (0.01) 0.35 0.34 0.00 0.00 (0.10)
Period Ended September
30, 1995 (Unaudited)... 8.12 0.01 1.58 1.59 (0.01) 0.00 (0.14)
</TABLE>
* Commencement of operations
** Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Total return data does not reflect the sales load payable on purchases of
shares.
See Notes to Financial Statements
8
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS IN RATIO OF NET RATIO OF GROSS RATIO OF NET
EXCESS OF NET NET ASSETS, OPERATING OPERATING INVESTMENT
REALIZED GAIN NET ASSET END EXPENSES EXPENSES INCOME (LOSS) PORTFOLIO FEE
ON INVESTMENTS TOTAL VALUE, END TOTAL OF PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS
AND OPTIONS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS + NET ASSETS RATE (NOTE 2)
---------------- ------------- ---------- -------- ----------- ------------ -------------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(0.41) $14.13 5.11% $ 29,866 1.23% 1.23% 2.21% 41% $0.00
0.00 (0.21) 16.28 16.87% 71,614 1.15% 1.15% 0.87% 20% 0.00
0.00 (0.60) 18.77 19.26% 106,144 1.08% 1.08% 0.51% 24% 0.00
(0.34) (0.81) 19.17 6.54% 122,262 1.14% 1.14% 0.25% 17% 0.00
0.00 (0.51) 21.40 14.65% 137,417 1.05% 1.08% 0.36% 23% 0.00
0.00 (1.19) 23.69 16.98% 169,698 1.05%** 1.11%** 0.59%** 27%** 0.01
$0.00 $(0.34) $ 8.36 (1.30)% $ 19,593 1.28% 1.28% 3.64% 148% $0.00
0.00 (0.28) 9.10 12.42% 23,254 1.23% 1.23% 3.52% 81% 0.00
0.00 (0.35) 11.45 30.45% 51,303 1.15% 1.15% 2.76% 28% 0.00
0.00 (0.28) 11.94 6.69% 96,682 1.17% 1.17% 2.77% 28% 0.00
0.00 (0.76) 11.82 5.74% 99,925 1.06% 1.09% 3.31% 36% 0.00
0.00 (0.19) 13.59 16.75% 115,087 1.06%** 1.11%** 3.04%** 15%** 0.00
$0.00 $ 0.00 $ 7.01 0.14% $ 2,389 0.99%** 3.87%** 0.77%** 14%** $0.03
0.00 (0.03) 6.99 0.13% 10,583 0.99% 1.82% 0.59% 24% 0.04
0.00 (0.04) 7.84 12.80% 22,174 0.99% 1.26% 0.63% 14% 0.02
0.00 (0.02) 8.82 12.84% 34,102 0.97%** 1.04%** 0.63%** 26%** 0.00
$0.00 $ 0.00 $ 7.71 10.14% $ 1,935 0.99%** 5.85%** 2.48%** 9%** $0.04
0.00 (0.09) 9.64 26.40% 14,440 0.99% 1.73% 0.77% 75% 0.06
0.00 (0.18) 10.55 11.49% 30,183 0.98% 1.08% 0.83% 82% 0.01
0.00 (0.05) 12.80 21.83% 50,092 0.94%** 0.98%** 0.83%** 59%** 0.00
$0.00 $ 0.00 $ 7.61 8.71% $ 5,785 0.99%** 2.20%** 1.06%** 25%** $0.01
0.00 (0.40) 8.75 20.07% 21,024 0.98% 1.16% 0.29% 60% 0.01
0.00 (0.21) 9.64 12.87% 29,914 0.98% 1.06% 0.46% 56% 0.01
0.00 (0.05) 12.19 27.06% 44,836 0.94%** 0.98%** 0.44%** 83%** 0.00
$0.00 $ 0.00 $ 7.40 5.71% $ 5,512 0.99%** 2.70%** 0.12%** 4%** $0.01
0.00 (0.09) 8.66 18.27% 24,951 0.95% 1.15% (0.25)% 20% 0.01
0.00 (0.18) 9.77 15.16% 47,782 0.96% 1.04% (0.23)% 42% 0.01
0.00 (0.42) 11.35 21.42% 73,374 0.90%** 0.98%** (0.17)%** 33%** 0.00
$0.00 $ 0.00 $ 6.95 (0.71)% $ 2,452 0.99%** 2.83%** 0.32%** 0%** $0.02
0.00 0.00 6.24 (10.15)% 4,533 0.99% 2.20% (0.07)% 28% 0.05
0.00 (0.01) 6.21 (0.27)% 4,359 0.99% 2.42% (0.10)% 61% 0.09
0.00 0.00 7.35 18.36% 4,312 0.99%** 2.52%** (0.08)%** 40%** 0.06
$0.00 $ 0.00 $ 7.28 4.00% $ 2,037 0.99%** 3.97%** 0.82%** 0%** $0.03
0.00 (0.05) 7.69 6.29% 10,059 0.99% 1.72% 0.81% 19% 0.05
0.00 (0.07) 8.59 12.73% 25,495 0.97% 1.18% 1.04% 29% 0.01
0.00 (0.04) 10.00 16.92% 44,128 0.92%** 0.96%** 0.91%** 12%** 0.00
$0.00 $ 0.00 $ 7.81 11.57% $ 1,457 0.99%** 7.03%** 1.69%** 0%** $0.05
0.00 (0.07) 7.70 (0.57)% 6,830 0.99% 2.03% 1.21% 6% 0.07
0.00 (0.11) 7.92 4.28% 15,813 0.98% 1.35% 1.18% 31% 0.03
0.00 (0.04) 8.57 8.70% 21,341 0.97%** 1.12%** 1.23%** 18%** 0.01
$0.00 $ 0.00 $ 6.94 (0.86)% $ 3,369 0.99%** 4.23%** 1.29%** 183%** $0.03
0.00 (0.02) 7.88 13.81% 15,702 0.99% 1.49% 0.01% 198% 0.10
0.00 (0.10) 8.12 4.45% 18,265 0.99% 1.21% (0.10)% 276% 0.02
0.00 (0.15) 9.56 19.83% 28,967 0.98%** 1.08%** 0.32%** 431%** 0.00
</TABLE>
See Notes to Financial Statements
9
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
EQUITY FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- ------------
<C> <S> <C>
COMMON STOCKS -- 96.34%
CONSUMER CYCLICAL -- 24.48%
76,000 Centex Corp............................................. $ 2,204,000
55,000 Dayton Hudson Corp...................................... 4,173,125
100,000 Ford Motor Co........................................... 3,112,500
150,000 Heilig-Meyers Co........................................ 3,487,500
60,000 Houghton Mifflin Co..................................... 2,790,000
62,000 Lowe's Cos., Inc........................................ 1,860,000
90,000 Luxottica Group S.p.A. ADR.............................. 4,398,750
76,500 Manpower, Inc........................................... 2,218,500
70,000 McDonald's Corp......................................... 2,677,500
75,000 +O'Reilly Automotive, Inc............................... 2,268,750
55,000 Reuters Holdings plc ADR................................ 2,901,250
65,000 +Scholastic Corp........................................ 4,078,750
65,000 Sears, Roebuck & Co..................................... 2,396,875
75,000 Time Warner, Inc........................................ 2,981,250
------------
41,548,750
------------
FINANCIAL -- 16.33%
18,240 General Re Corp......................................... 2,754,240
30,000 MBIA, Inc............................................... 2,115,000
115,000 Mellon Bank Corp........................................ 5,131,875
135,000 Mercantile Bankshares Corp.............................. 3,661,875
44,000 Morgan Stanley Group, Inc............................... 4,229,500
50,000 State Street Boston Corp................................ 2,000,000
70,000 United Asset Management Corp............................ 2,808,750
95,000 UNUM Corp............................................... 5,011,250
------------
27,712,490
------------
CONSUMER STAPLES -- 14.29%
90,000 Abbott Laboratories..................................... 3,836,250
171,500 +FHP International Corp................................. 4,116,000
90,000 +Forest Laboratories, Inc............................... 4,005,000
55,000 +Genzyme Corp........................................... 3,162,500
55,800 Johnson & Johnson....................................... 4,136,175
60,900 Pfizer, Inc............................................. 3,250,538
111,600 +Physician Corp. of America............................. 1,757,700
------------
24,264,163
------------
TECHNOLOGY -- 14.00%
130,000 +Informix Corp.......................................... 4,225,000
145,000 +Intersolv, Inc......................................... 2,881,875
50,510 +Microsoft Corp......................................... 4,571,155
39,000 Motorola, Inc........................................... 2,978,625
70,000 Texas Instruments, Inc.................................. 5,591,250
55,610 Tyco International Ltd.................................. 3,503,430
------------
23,751,335
------------
ENERGY -- 10.39%
115,000 Enron Corp.............................................. 3,852,500
70,000 Louisiana Land & Exploration Co......................... 2,493,750
40,000 Mobil Corp.............................................. 3,985,000
190,500 +United Meridian Corp................................... 3,262,312
141,680 Unocal Corp............................................. 4,037,880
------------
17,631,442
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
CAPITAL GOODS -- 7.35%
70,000 Illinois Tool Works, Inc............................. $ 4,121,250
101,250 +Thermo Electron Corp................................ 4,695,469
128,000 WMX Technologies, Inc................................ 3,648,000
------------
12,464,719
------------
UTILITIES -- 6.45%
82,940 AT&T Corp............................................ 5,453,305
52,650 Telephone & Data Systems, Inc........................ 2,211,300
80,000 Vodafone Group plc ADR............................... 3,280,000
------------
10,944,605
------------
RAW/INTERMEDIATE MATERIALS -- 3.05%
20,590 Georgia-Pacific Corp................................. 1,801,625
145,000 Pall Corp............................................ 3,371,250
------------
5,172,875
------------
TOTAL COMMON STOCKS
(Cost $112,547,912).................................. 163,490,379
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 4.65%
$1,147,000 Associates Corp. of North America Master Notes....... 1,147,000
6,747,000 General Electric Co. Promissory Notes................ 6,747,000
------------
TOTAL DEMAND NOTES
(Cost $7,894,000).................................... 7,894,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $120,441,912*)...................................... 100.99% $171,384,379
OTHER ASSETS & LIABILITIES (NET).......................... (0.99) (1,686,851)
------ ------------
NET ASSETS................................................ 100.00% $169,697,528
====== ============
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
10
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INCOME AND GROWTH FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- ------------
<C> <S> <C>
COMMON STOCKS -- 61.19%
CONSUMER CYCLICAL -- 14.49%
50,000 Clayton Homes, Inc...................................... $ 1,187,500
58,000 Cooper Tire & Rubber Co................................. 1,406,500
65,000 Heilig-Meyers Co........................................ 1,511,250
48,000 Luxottica Group S.p.A. ADR.............................. 2,346,000
56,000 McDonald's Corp......................................... 2,142,000
55,000 Herman Miller, Inc...................................... 1,471,250
71,000 ServiceMaster Ltd. Partnership.......................... 1,988,000
87,000 Smart & Final, Inc...................................... 1,685,625
50,000 Wiley (John) & Sons, Inc., Class A...................... 2,937,500
------------
16,675,625
------------
TECHNOLOGY -- 10.86%
50,000 Adobe Systems, Inc...................................... 2,587,500
80,000 +Analog Devices, Inc.................................... 2,770,000
100,000 ECI Telecommunications.................................. 2,225,000
200,000 +Interleaf, Inc......................................... 2,000,000
100,000 +Unitrode Corp.......................................... 2,912,500
------------
12,495,000
------------
FINANCIAL -- 8.23%
21,750 American International Group, Inc....................... 1,848,750
21,000 Morgan Stanley Group, Inc............................... 2,018,625
48,000 Mutual Risk Management Ltd.............................. 1,896,000
87,000 Pennsylvania Real Estate Investment Trust............... 1,892,250
85,000 Wellsford Residential Properties........................ 1,816,875
------------
9,472,500
------------
CONSUMER STAPLES -- 7.46%
40,000 Gillette Co............................................. 1,905,000
27,000 Johnson & Johnson....................................... 2,001,375
22,000 Kellogg Co.............................................. 1,592,250
56,000 Novo-Nordisk A.S., ADR.................................. 1,708,000
50,000 +Sunrise Medical, Inc................................... 1,375,000
------------
8,581,625
------------
CAPITAL GOODS -- 7.04%
35,500 Baldor Electric Co...................................... 891,938
56,000 Dover Corp.............................................. 2,142,000
41,300 Lincoln Electric Co..................................... 1,094,450
37,000 Raychem Corp............................................ 1,665,000
42,000 Trinity Industries, Inc................................. 1,302,000
15,041 Woodward Governor Co.................................... 1,003,987
------------
8,099,375
------------
ENERGY -- 5.19%
41,000 Norsk Hydro A.S., ADR................................... 1,768,125
165,000 San Juan Basin Royalty Trust............................ 1,134,375
60,000 +SEACOR Holdings, Inc................................... 1,425,000
96,250 +United Meridian Corp................................... 1,648,281
------------
5,975,781
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
RAW/INTERMEDIATE
MATERIALS -- 5.19%
36,000 Nucor Corp.......................................... $ 1,611,000
62,000 Pall Corp........................................... 1,441,500
30,000 Pioneer Hi-Bred International, Inc.................. 1,380,000
84,000 Worthington Industries, Inc......................... 1,543,500
------------
5,976,000
------------
UTILITIES -- 2.03%
65,000 +NEXTEL Communications, Inc., Class A............... 1,096,875
60,000 UGI Corp............................................ 1,237,500
------------
2,334,375
------------
TRANSPORTATION -- 0.70%
189,892 +Greyhound Lines, Inc............................... 807,041
------------
TOTAL COMMON STOCKS (Cost $50,493,660).............. 70,417,322
------------
CONVERTIBLE PREFERRED STOCKS -- 12.28%
FINANCIAL -- 6.79%
325,000 Capstead Mortgage Corp., Series B, Preferred
Exchange $1.26...................................... 4,225,000
75,000 Catellus Development Corp., Series A, Preferred
Exchange $3.75...................................... 3,590,625
------------
7,815,625
------------
TRANSPORTATION -- 3.70%
75,000 Delta Air Lines, Inc., Series C, Preferred Exchange
$3.50............................................... 4,256,250
------------
TECHNOLOGY -- 1.49%
30,000 Storage Technology Corp., Preferred Exchange $3.50.. 1,717,500
------------
ENERGY -- 0.30%
8,715 Maxus Energy Corp., Preferred Exchange $4.00........ 346,421
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $14,287,082).................................. 14,135,796
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS -- 5.08%
RAW/INTERMEDIATE MATERIALS -- 2.67%
$3,100,000 Fort Howard Sr. Notes, 9.25%, 03/15/2001............ 3,076,750
------------
TRANSPORTATION -- 2.41%
2,975,000 Greyhound Lines, Inc., Debenture,
10.00%, 07/31/2001.................................. 2,766,750
------------
TOTAL CORPORATE BONDS (Cost $5,836,920)............. 5,843,500
------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INCOME AND GROWTH FUND (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- ------------
<C> <S> <C>
CONVERTIBLE BONDS -- 17.29%
TECHNOLOGY -- 9.69%
$3,452,000 Kollmorgen Corp., Sub-Debenture, 8.75%, 05/01/2009... $ 3,365,700
4,000,000 Network Equipment Technologies, Inc., Sub-Debenture,
7.25%, 05/15/2014.................................... 5,285,000
2,540,000 Storage Technology Corp. 8.00%, 05/31/2015........... 2,505,075
------------
11,155,775
------------
ENERGY -- 3.88%
4,600,000 AES Corp., Sub-Debenture, 6.50%, 03/15/2002.......... 4,462,000
------------
CONSUMER STAPLES -- 3.72%
4,900,000 Novacare, Inc., Sub-Debenture, 5.50%, 01/15/2000..... 4,281,375
------------
TOTAL CONVERTIBLE BONDS (Cost $17,504,268)........... 19,899,150
------------
DEMAND NOTES -- 3.79%
1,003,000 Associates Corp. of North America Master Notes....... 1,003,000
3,363,000 General Electric Co. Promissory Notes................ 3,363,000
------------
TOTAL DEMAND NOTES
(Cost $4,366,000).................................... 4,366,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $92,487,930*)..........................99.63%.$114,661,768
OTHER ASSETS & LIABILITIES (NET)........... 0.37 425,684
------ ------------
NET ASSETS................................. 100.00% $115,087,452
====== ============
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
12
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
AGING OF AMERICA FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- 93.90%
CONSUMER STAPLES -- 42.49%
19,000 American Greetings Corp., Class A......................... $ 579,500
13,000 Bausch & Lomb, Inc........................................ 537,875
13,000 Campbell Soup Co.......................................... 653,250
25,000 Carnival Corp., Class A................................... 600,000
13,500 Columbia/HCA Healthcare Corp.............................. 656,438
11,500 Eastman Kodak Co.......................................... 681,375
12,000 +Forest Laboratories, Inc................................. 534,000
21,500 Gaylord Entertainment..................................... 583,188
11,000 General Mills, Inc........................................ 613,250
15,500 +Genzyme Corp............................................. 891,250
16,000 Gillette Co............................................... 762,000
13,500 International Flavors & Fragrances, Inc................... 651,375
11,500 Johnson & Johnson......................................... 852,437
27,000 Mattel, Inc............................................... 793,125
21,600 Medtronic, Inc............................................ 1,161,000
15,000 PepsiCo, Inc.............................................. 765,000
15,500 Pfizer, Inc............................................... 827,312
20,000 +Sunrise Medical, Inc..................................... 550,000
14,500 United Healthcare Corp.................................... 708,688
14,000 +Value Health, Inc........................................ 371,000
12,500 Walt Disney Co............................................ 717,188
-----------
14,489,251
-----------
CONSUMER CYCLICAL -- 27.85%
21,500 +American Medical Response................................ 610,063
20,000 Black & Decker Corp....................................... 682,500
6,400 Capital Cities/ABC, Inc................................... 752,800
17,000 +Coleman Co., Inc......................................... 637,500
10,500 Gannett Co., Inc.......................................... 573,562
20,500 +General Nutrition Cos., Inc.............................. 922,500
21,500 Lowe's Cos., Inc.......................................... 645,000
19,000 Marriott International, Inc............................... 710,125
18,000 Masco Corp................................................ 495,000
14,200 Pittway Corp., Class A.................................... 883,950
11,000 Premark International, Inc................................ 559,625
23,000 Rite Aid Corp............................................. 644,000
22,500 Stewart Enterprises, Inc., Class A........................ 804,375
14,500 Time Warner, Inc.......................................... 576,375
-----------
9,497,375
-----------
FINANCIAL -- 12.55%
17,000 American Express Co....................................... 754,375
12,000 Barnett Banks of Florida, Inc............................. 679,500
9,500 BayBanks, Inc............................................. 717,250
8,000 Dean Witter Discover & Co................................. 450,000
13,500 Standard Federal Bancorporation........................... 526,500
26,000 Summit Bancorp. (New Jersey).............................. 718,250
8,200 UNUM Corp................................................. 432,550
-----------
4,278,425
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
TECHNOLOGY -- 5.02%
9,000 +Intuit, Inc.......................................... $ 423,000
11,300 Motorola, Inc......................................... 863,037
18,500 Sensormatics Electronics Corp......................... 425,500
-----------
1,711,537
-----------
UTILITIES -- 3.34%
10,500 AT&T Corp............................................. 690,375
14,000 +Worldcom, Inc........................................ 449,750
-----------
1,140,125
-----------
CAPITAL GOODS -- 2.65%
19,500 +Thermo Electron Corp................................. 904,312
-----------
TOTAL COMMON STOCKS (Cost $25,988,411)................ 32,021,025
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 5.86%
$ 665,000 Associates Corp. of North America Master Notes........ 665,000
1,335,000 General Electric Co. Promissory Notes................. 1,335,000
-----------
TOTAL DEMAND NOTES
(Cost $2,000,000)..................................... 2,000,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $27,988,411*)........................................ 99.76% $34,021,025
OTHER ASSETS & LIABILITIES (NET)........................... 0.24 80,692
------ -----------
NET ASSETS................................................. 100.00% $34,101,717
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
See Notes to Financial Statements
13
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 95.60%
CONSUMER STAPLES -- 27.29%
20,000 AHI Healthcare Systems, Inc............................. $ 310,000
50,000 Allied Healthcare Products, Inc......................... 900,000
30,000 +Amerisource Health Corp., Class A...................... 810,000
35,000 +Apria Healthcare Group, Inc............................ 848,750
10,000 Avon Products, Inc...................................... 717,500
53,000 +Beverly Enterprises.................................... 728,750
10,000 Bristol-Myers Squibb Co................................. 728,750
12,000 CPC International, Inc.................................. 792,000
28,000 Dial Corp............................................... 693,000
13,000 Eastman Kodak Co........................................ 770,250
30,000 +FHP International Corp................................. 720,000
115,000 Food Lion, Inc.......................................... 690,000
13,000 General Mills, Inc...................................... 724,750
25,000 IVAX Corp............................................... 753,125
30,000 +MediSense, Inc......................................... 720,000
53,000 +Pepsi-Cola Puerto Rico Bottling Co., Class B........... 689,000
40,000 Sunbeam Corp............................................ 595,000
30,000 United Wisconsin Services, Inc.......................... 716,250
8,000 Warner Lambert Co....................................... 762,000
-----------
13,669,125
-----------
TECHNOLOGY -- 20.73%
30,000 Bell & Howell Holdings Co............................... 765,000
40,000 +Black Box Corp......................................... 720,000
25,000 +Elsag Bailey Process Automation ADR.................... 815,625
60,000 +General DataComm Industries., Inc...................... 885,000
11,000 International Business Machines Corp.................... 1,038,125
25,000 +International Rectifier Corp........................... 1,006,250
35,000 +Intersolv, Inc......................................... 695,625
55,000 +Phoenix Technologies Ltd............................... 694,375
17,000 +Plantronics, Inc....................................... 618,375
115,000 +Plasma-Therm, Inc...................................... 488,750
25,000 +Storage Technology Corp................................ 612,500
16,000 Texas Instruments, Inc.................................. 1,278,000
14,000 Watkins Johnson Co...................................... 766,500
-----------
10,384,125
-----------
FINANCIAL -- 19.07%
14,800 American Eagle Group.................................... 153,550
10,000 Bankers Trust New York Corp............................. 702,500
30,500 CRA Managed Care, Inc................................... 648,125
10,500 First Chicago Corp...................................... 720,562
13,000 First Union Corp. (N.C.)................................ 663,000
31,000 Health and Retirement Properties Trust.................. 484,375
25,000 Invesco PLC-Sponsored ADR............................... 862,500
50,000 ISB Financial Corp...................................... 775,000
17,000 Mellon Bank Corp........................................ 758,625
18,000 Midlantic Corp.......................................... 976,500
43,000 MS Financial, Inc....................................... 483,750
55,000 +Riggs National Corp.................................... 694,375
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
FINANCIAL -- (CONTINUED)
12,500 Student Loan Marketing Association........................ $ 675,000
18,000 Travelers, Inc............................................ 956,250
-----------
9,554,112
-----------
RAW/INTERMEDIATE
MATERIALS -- 8.91%
16,000 Cambrex Corp.............................................. 644,000
10,000 Dow Chemical Co........................................... 745,000
50,000 Fort Howard Corp.......................................... 762,500
11,700 OM Group, Inc............................................. 351,000
11,500 St. Joe Paper Co.......................................... 731,688
23,000 Wellman, Inc.............................................. 563,500
10,000 W. R. Grace Co............................................ 667,500
-----------
4,465,188
-----------
ENERGY -- 5.26%
51,700 Flores & Rucks, Inc....................................... 594,550
6,500 Mobil Corp................................................ 647,562
75,000 +Nabors Industries, Inc................................... 707,813
38,000 YPF S.A. ADR.............................................. 684,000
-----------
2,633,925
-----------
UTILITIES -- 4.55%
52,570 +Century Communications Corp.,
Class A................................................... 529,234
35,000 Mobilemedia Corp.......................................... 945,000
25,000 +Worldcom, Inc............................................ 803,125
-----------
2,277,359
-----------
CAPITAL GOODS -- 4.12%
15,000 Allied Signal, Inc........................................ 661,875
8,400 McDonnell Douglas Corp.................................... 695,100
8,000 United Technologies Corp.................................. 707,000
-----------
2,063,975
-----------
CONSUMER CYCLICAL -- 3.46%
20,500 Congoleum Corp., Class A.................................. 215,250
25,000 +Lear Seating Corp........................................ 734,375
18,000 +Multimedia, Inc.......................................... 783,000
-----------
1,732,625
-----------
HOLDING COMPANY DIVERSIFIED -- 1.12%
8,000 Internatio-Muller N.V..................................... 563,211
-----------
TRANSPORTATION -- 1.09%
22,425 +Southern Pacific Rail Corp............................... 543,806
-----------
TOTAL COMMON STOCKS
(Cost $38,155,180)........................................ 47,887,451
-----------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS--1.35%
CONSUMER STAPLES -- 1.35%
100,000 RJR Nabisco Holdings, Series C (Cost $641,928)......... $ 675,000
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
CONVERTIBLE BONDS -- 1.02%
ENERGY -- 1.02%
$ 20,000 Atlantic Richfield 9.00, 9/15/97 (Cost $495,000)....... 510,000
-----------
DEMAND NOTES -- 2.45%
492,000 Associates Corp. of North America Master Notes......... 492,000
736,000 General Electric Co. Promissory Notes.................. 736,000
-----------
TOTAL DEMAND NOTES
(Cost $1,228,000)...................................... 1,228,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $40,520,108*)........................................ 100.42% $50,300,451
OTHER ASSETS & LIABILITIES (NET)........................... (0.42) (208,256)
------ -----------
NET ASSETS................................................. 100.00% $50,092,195
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR--American Depositary Receipt.
See Notes to Financial Statements
15
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
COMMUNICATION AND ENTERTAINMENT FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 88.53%
TECHNOLOGY -- 38.70%
20,600 Adobe Systems, Inc....................................... $ 1,066,050
36,300 +AirTouch Communications, Inc............................ 1,111,688
50,000 Computer Learning Centers, Inc........................... 537,500
65,900 ECI Telecommunications Limited Designs................... 1,466,275
38,200 +Electronic Arts, Inc. .................................. 1,399,075
92,400 +General DataComm Industries, Inc........................ 1,362,900
32,600 +Informix Corp........................................... 1,059,500
57,000 Metricom, Inc............................................ 1,239,750
17,100 Motorola, Inc............................................ 1,306,013
17,500 Nokia Corp., Class A ADR................................. 1,220,625
108,900 +Phoenix Technologies Ltd................................ 1,374,863
40,000 +Recoton Corp............................................ 1,070,000
30,000 +SDL, Inc................................................ 832,500
13,000 Texas Instruments, Inc................................... 1,038,375
43,500 +Unitrode Corp........................................... 1,266,938
-----------
17,352,052
-----------
CONSUMER CYCLICAL -- 32.42%
50,000 +Activision, Inc......................................... 787,500
42,500 +Franklin Electronic Publishers, Inc..................... 1,673,437
16,300 Gannett Co., Inc......................................... 890,387
30,000 Gaylord Entertainment.................................... 813,750
21,900 Houghton Mifflin Co...................................... 1,018,350
24,800 +King World Productions, Inc............................. 908,300
24,250 +Paging Network, Inc..................................... 1,164,000
17,700 +Scholastic Corp......................................... 1,110,675
30,000 +Silicon Graphics, Inc................................... 1,031,250
40,000 Tele-Communications, Inc., Class A....................... 1,060,000
178,000 Television Broadcasts Ltd. ADR........................... 716,033
23,884 +Viacom, Inc., Class B................................... 1,188,229
18,550 Walt Disney Co........................................... 1,064,306
18,900 Wiley (John) & Sons, Inc., Class A....................... 1,110,375
-----------
14,536,592
-----------
UTILITIES -- 14.33%
24,000 Ameritech Corp........................................... 1,251,000
20,800 AT&T Corp................................................ 1,367,600
20,600 +DSC Communications Corp................................. 1,220,550
46,600 MCI Communications Corp.................................. 1,211,600
31,400 +MFS Communications Co., Inc............................. 1,373,750
-----------
6,424,500
-----------
CONSUMER STAPLES -- 3.08%
43,800 +Sylvan Learning Systems, Inc............................ 1,379,700
-----------
TOTAL COMMON STOCKS
(Cost $29,775,856)....................................... 39,692,844
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
CONVERTIBLE BONDS -- 4.41%
CONSUMER CYCLICAL -- 2.36%
$1,018,400 Time Warner, Inc., Series C, Debenture, 8.75%,
01/10/2015........................................... $ 1,060,409
-----------
TECHNOLOGY -- 2.05%
931,000 Storage Technology Corp.
8.00%, 05/31/2015.................................... 918,199
-----------
TOTAL CONVERTIBLE BONDS (Cost $1,888,715)............ 1,978,608
-----------
DEMAND NOTES -- 6.78%
1,157,000 Associates Corp. of North America Master Notes....... 1,157,000
1,884,000 General Electric Co. Promissory Notes................ 1,884,000
-----------
TOTAL DEMAND NOTES
(Cost $3,041,000).................................... 3,041,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $34,705,571*)........................................ 99.72% $44,712,452
OTHER ASSETS & LIABILITIES (NET)........................... 0.28 123,910
------ -----------
NET ASSETS................................................. 100.00% $44,836,362
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR--American Depositary Receipt.
See Notes to Financial Statements
16
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
EARLY LIFE CYCLE FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 92.54%
TECHNOLOGY -- 25.32%
24,100 Adobe Systems, Inc....................................... $ 1,247,175
32,000 +Asyst Technologies, Inc................................. 1,448,000
60,000 +Informix Corp........................................... 1,950,000
70,900 +Intersolv, Inc.......................................... 1,409,138
81,900 Metricom, Inc............................................ 1,781,325
70,000 +Perceptron, Inc......................................... 1,680,000
134,000 +Phoenix Technologies Ltd................................ 1,691,750
50,000 SDL, Inc................................................. 1,387,500
23,000 +StrataCom, Inc.......................................... 1,262,125
61,000 +System Software Associates, Inc......................... 2,447,625
81,000 +Thermedics, Inc......................................... 1,609,875
38,700 +Wall Data, Inc.......................................... 667,575
-----------
18,582,088
-----------
CONSUMER STAPLES -- 22.60%
175,000 +Alliance Pharmaceutical Corp............................ 2,100,000
46,700 Allied Healthcare Products, Inc.......................... 840,600
111,600 +Benson Eyecare Corp..................................... 1,102,050
31,900 +Coastal Physician Group, Inc............................ 558,250
24,700 +Genzyme Corp............................................ 1,420,250
91,000 Goodmark Foods........................................... 1,638,000
37,000 I-Stat Corp.............................................. 1,378,250
98,686 +Ligand Pharmaceuticals, Class B......................... 962,189
56,500 Pepsi-Cola Puerto Rico Bottling Co., Class B............. 734,500
58,000 Physician Reliance Network, Inc.......................... 2,102,500
63,500 +Quantum Health Resources, Inc........................... 666,750
48,000 +Sunrise Medical, Inc.................................... 1,320,000
105,000 Veterinary Centers of America, Inc....................... 1,758,750
-----------
16,582,089
-----------
CONSUMER CYCLICAL -- 16.40%
110,000 +Activision, Inc......................................... 1,732,500
48,300 Allen Group, Inc......................................... 1,750,875
36,600 +Bell Sports Corp........................................ 393,450
57,250 Comcast Corp., Class A Special........................... 1,145,000
30,000 Exide Corp............................................... 1,500,000
48,300 +Franklin Electronic Publishers, Inc..................... 1,901,812
76,000 Recovery Engineering, Inc................................ 1,197,000
105,000 +Stimsonite Corp......................................... 1,233,750
80,000 +Westcott Communications, Inc............................ 1,180,000
-----------
12,034,387
-----------
FINANCIAL -- 12.42%
20,000 Alex Brown, Inc.......................................... 1,167,500
135,000 +Americredit Corp........................................ 2,008,125
88,500 +Capsure Holdings Corp................................... 1,216,875
31,300 First American Corp. (Tennessee)......................... 1,345,900
61,000 Homestate Holdings, Inc.................................. 518,500
57,000 Integon Corp............................................. 1,004,625
96,000 +National Auto Credit, Inc............................... 1,848,000
-----------
9,109,525
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
CAPITAL GOODS -- 9.14%
106,700 +BE Aerospace, Inc.................................... $ 893,612
75,000 Harmon Industries, Inc................................ 1,050,000
76,500 Juno Lighting, Inc.................................... 1,128,375
36,000 +Lindsay Manufacturing Co............................. 1,170,000
28,000 Teleflex, Inc......................................... 1,134,000
64,000 TriMas Corp........................................... 1,328,000
-----------
6,703,987
-----------
TRANSPORTATION -- 4.03%
63,000 Air Express International Corp........................ 1,559,250
75,000 SkyWest, Inc.......................................... 1,396,875
-----------
2,956,125
-----------
ENERGY -- 1.17%
71,000 Snyder Oil Corp....................................... 860,875
-----------
RAW/INTERMEDIATE MATERIALS -- 1.13%
94,400 +Steel of West Virginia, Inc.......................... 826,000
-----------
UTILITIES -- 0.33%
72,000 +New World Power Corp................................. 243,000
-----------
TOTAL COMMON STOCKS
(Cost $54,145,893).................................... 67,898,076
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 8.43%
$1,295,000 Associates Corp. of North America Master Notes........ 1,295,000
4,895,000 General Electric Co. Promissory Notes................. 4,895,000
-----------
TOTAL DEMAND NOTES
(Cost $6,190,000)..................................... 6,190,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $60,335,893*)........................................ 100.97% $74,088,076
OTHER ASSETS & LIABILITIES (NET)........................... (0.97) (713,796)
------ -----------
NET ASSETS................................................. 100.00% $73,374,280
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
See Notes to Financial Statements
17
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ----------
<C> <S> <C>
COMMON STOCKS -- 96.35%
TECHNOLOGY -- 25.29%
3,000 +Active Voice Corp......................................... $ 84,750
3,500 +Asyst Technologies, Inc................................... 158,375
3,500 Honeywell Corp............................................. 150,062
4,000 +ITI Technologies, Inc..................................... 108,000
9,000 Memtec Ltd. ADR............................................ 157,500
6,000 +Molten Metal Technology, Inc.............................. 192,000
5,000 Sensormatic Electronics Corp............................... 115,000
4,500 +Thermo Instrument Systems, Inc............................ 124,875
----------
1,090,562
----------
CAPITAL GOODS -- 24.78%
10,000 BHA Group, Inc............................................. 135,000
3,000 Browning-Ferris Industries, Inc............................ 91,125
10,000 Continental Waste Industries, Inc.......................... 165,000
3,000 Harsco Corp................................................ 166,875
5,000 Recovery Engineering, Inc.................................. 78,750
3,000 Stewart & Stevenson Services, Inc.......................... 96,750
4,500 +Thermo Electron Corp...................................... 208,688
3,000 York International Corp.................................... 126,375
----------
1,068,563
----------
RAW/INTERMEDIATE
MATERIALS -- 24.55%
7,000 Caraustar Industries, Inc.................................. 136,500
6,000 Engelhard Corp............................................. 152,250
7,000 +Fort Howard Corp.......................................... 106,750
5,000 +Ionics, Inc............................................... 208,125
3,500 Minerals Technologies, Inc................................. 131,687
5,000 Pall Corp.................................................. 116,250
5,000 Pioneer Hi-Bred International, Inc......................... 92,000
5,000 +Tetra Tech, Inc........................................... 115,000
----------
1,058,562
----------
ENERGY -- 9.00%
2,500 Fluor Corp................................................. 140,000
10,000 +Thermo Power Corp......................................... 158,750
6,000 Wheelabrator Technologies, Inc............................. 89,250
----------
388,000
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ----------
<C> <S> <C>
CONSUMER CYCLICAL -- 5.08%
5,000 Ultralife Batteries, Inc................................ $ 121,250
4,000 Wellman, Inc............................................ 98,000
----------
219,250
----------
CONSUMER STAPLES -- 4.80%
5,000 +Safety 1st, Inc........................................ 103,750
2,000 Schering-Plough Corp.................................... 103,000
----------
206,750
----------
UTILITIES -- 2.85%
6,000 +California Energy Co., Inc............................. 123,000
----------
TOTAL COMMON STOCKS
(Cost $3,192,351)....................................... 4,154,687
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 3.48%
$150,000 General Electric Co. Promissory Notes (Cost $150,000)... 150,000
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $3,342,351*).......................................... 99.83% $4,304,687
OTHER ASSETS AND LIABILITIES (NET).......................... 0.17 7,453
------ ----------
NET ASSETS.................................................. 100.00% $4,312,140
====== ==========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
18
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
GLOBAL COMPETITORS FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ----------
<C> <S> <C>
COMMON STOCKS -- 93.05%
CONSUMER STAPLES -- 19.12%
16,000 CPC International, Inc..................................... $1,056,000
23,000 Gillette Co................................................ 1,095,375
3,000 L'Oreal.................................................... 765,387
23,000 Libbey, Inc. .............................................. 549,125
22,000 Pfizer, Inc. .............................................. 1,174,250
15,000 Procter & Gamble Co........................................ 1,155,000
23,000 Schering-Plough Corp....................................... 1,184,500
40,000 Sunbeam-Oster Co., Inc..................................... 595,000
15,000 Walt Disney Co. ........................................... 860,625
----------
8,435,262
----------
TECHNOLOGY -- 17.88%
17,000 Adobe Systems, Inc......................................... 879,750
27,000 Astra AB, Class A Free..................................... 950,882
32,000 +Informix Corp............................................. 1,040,000
30,000 +Intersolv, Inc. .......................................... 596,250
14,000 Motorola, Inc. ............................................ 1,069,250
30,000 +Silicon Graphics, Inc. ................................... 1,031,250
14,000 Texas Instruments, Inc. ................................... 1,118,250
25,500 +Thermolase Corp. ......................................... 519,563
41,000 ThermoSpectra Corp......................................... 686,750
----------
7,891,945
----------
CONSUMER CYCLICAL -- 15.44%
26,000 Duracell International, Inc................................ 1,166,750
24,000 Goodyear Tire and Rubber Co. .............................. 945,000
10,000 Hilton Hotels Corp......................................... 638,750
31,000 Luxottica Group S.p.A ADR.................................. 1,515,125
26,000 McDonald's Corp. .......................................... 994,500
20,000 +Nu-Kote Holdings, Inc., Class A........................... 435,000
22,500 +Viacom, Inc., Class B..................................... 1,119,375
----------
6,814,500
----------
CAPITAL GOODS -- 9.82%
18,000 General Electric Co. ...................................... 1,147,500
17,000 Illinois Tool Works, Inc................................... 1,000,875
35,000 +Thermo Electron Corp. .................................... 1,623,125
21,750 Thermo Remediation, Inc. .................................. 323,531
15,000 +Thermo Voltek Corp. ...................................... 238,125
----------
4,333,156
----------
FINANCIAL -- 9.53%
17,000 American International Group, Inc. ........................ 1,445,000
20,000 Citicorp................................................... 1,415,000
14,000 Morgan Stanley Group, Inc. ................................ 1,345,750
----------
4,205,750
----------
UTILITIES -- 8.91%
10,000 +AirTouch Communications, Inc. ............................ 306,250
15,000 AT&T Corp.................................................. 986,250
30,000 +LCI International, Inc. .................................. 1,177,500
20,000 MCI Communications Corp.................................... 520,000
23,000 Vodafone Group plc ADR..................................... 943,000
----------
3,933,000
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ----------
<C> <S> <C>
ENERGY -- 8.15%
10,000 Anadarko Petroleum Corp. .............................. $ 473,750
21,000 Chevron Corp........................................... 1,021,125
10,000 Mobil Corp. ........................................... 996,250
9,000 Royal Dutch Petroleum Co............................... 1,104,750
----------
3,595,875
----------
RAW/INTERMEDIATE MATERIALS -- 3.45%
20,000 +Crown Cork & Seal Co., Inc............................ 775,000
10,000 Dow Chemical Co. ...................................... 745,000
----------
1,520,000
----------
TRANSPORTATION -- 0.75%
5,000 Union Pacific Corp..................................... 331,250
----------
TOTAL COMMON STOCKS
(Cost $33,277,473)..................................... 41,060,738
----------
CONVERTIBLE PREFERRED STOCKS -- 2.44%
TRANSPORTATION -- 2.44%
19,000 Delta Air Lines, Inc., Series C, Preferred Exchange
$3.50 (Cost $981,885).................................. 1,078,250
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
CONVERTIBLE BONDS -- 1.34%
CONSUMER CYCLICAL -- 1.34%
$435,000 General Instruments Corp., Jr. Subordinated, 5.00%,
06/15/2000 (Cost $553,109)............................. 589,969
----------
DEMAND NOTES -- 3.97%
984,000 Associates Corp. of North America Master Notes......... 984,000
767,000 General Electric Co. Promissory Notes.................. 767,000
----------
TOTAL DEMAND NOTES
(Cost $1,751,000)...................................... 1,751,000
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $36,563,467*)........................................ 100.80% $44,479,957
OTHER ASSETS & LIABILITIES (NET)........................... (0.80) (352,170)
------ -----------
NET ASSETS................................................. 100.00% $44,127,787
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
19
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
LONG-TERM SUPPLY OF ENERGY FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 95.05%
ENERGY -- 71.22%
12,000 Amoco Corp............................................... $ 769,500
18,000 Anadarko Petroleum Corp.................................. 852,750
19,000 Burlington Resources, Inc................................ 736,250
14,000 Chevron Corp............................................. 680,750
34,000 +Crown Central Petroleum, Class B........................ 531,250
15,000 Exxon Corp............................................... 1,083,750
70,000 Hugoton Energy Corp...................................... 647,500
20,000 Imperial Oil Ltd......................................... 745,000
149,400 +McFarland Energy, Inc................................... 1,008,450
9,500 Mobil Corp............................................... 946,438
21,000 Norsk Hydro A.S., ADR.................................... 905,625
9,000 Royal Dutch Petroleum Co................................. 1,104,750
26,400 +SEACOR Holdings, Inc.................................... 627,000
12,000 Schlumberger Ltd......................................... 783,000
19,800 +Tejas Gas Corp.......................................... 1,009,800
87,000 +Tejas Power Corp., Class A.............................. 826,500
52,000 +United Meridian Corp.................................... 890,500
50,000 Vintage Petroleum, Inc................................... 1,050,000
-----------
15,198,813
-----------
UTILITIES -- 9.71%
59,000 +AES Corp................................................ 1,121,000
50,000 +New World Power Corp.................................... 168,750
38,000 UGI Corp................................................. 783,750
-----------
2,073,500
-----------
CONSUMER CYCLICAL -- 8.24%
20,000 Duracell International, Inc.............................. 897,500
17,200 Exide Corp............................................... 860,000
-----------
1,757,500
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
TECHNOLOGY -- 3.20%
70,000 Energy Research Corp................................... $ 682,500
-----------
CAPITAL GOODS -- 2.68%
24,000 Dresser Industries, Inc................................ 573,000
-----------
TOTAL COMMON STOCKS
(Cost $18,872,810)..................................... 20,285,313
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 4.57%
$487,000 Associates Corp. of North America Master Notes......... 487,000
489,000 General Electric Co. Promissory Notes.................. 489,000
-----------
TOTAL DEMAND NOTES
(Cost $976,000)........................................ 976,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $19,848,810*)........................................ 99.62% $21,261,313
OTHER ASSETS & LIABILITIES (NET)........................... 0.38 80,090
------ -----------
NET ASSETS................................................. 100.00% $21,341,403
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR--American Depositary Receipt.
See Notes to Financial Statements
20
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PRODUCTIVITY ENHANCERS FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 91.71%
CAPITAL GOODS -- 41.23%
20,000 Allied Signal, Inc....................................... $ 882,500
12,000 AMP, Inc................................................. 462,000
45,000 Bridgeport Machines, Inc................................. 787,500
12,000 +Cognex Corp............................................. 570,000
25,000 Crane, Co................................................ 862,500
25,000 Donaldson Co., Inc....................................... 615,625
22,000 Dover Corp............................................... 841,500
7,000 Emerson Electric, Co. ................................... 500,500
20,000 Honeywell Corp........................................... 857,500
20,000 IDEX Corp................................................ 715,000
16,000 Illinois Tool Works, Inc................................. 942,000
12,000 Parker-Hannifin Corp..................................... 456,000
10,000 Rockwell International Corp. ............................ 472,500
15,000 +Thermo Electron Corp.................................... 695,625
22,000 Veeco Instruments, Inc................................... 566,500
21,000 +Vishay Intertechnology, Inc. ........................... 882,000
22,000 +Wolverine Tube, Inc..................................... 833,250
-----------
11,942,500
-----------
TECHNOLOGY -- 28.90%
10,000 Adobe Systems, Inc....................................... 517,500
5,000 +Cabletron Systems, Inc.................................. 329,375
7,000 +Cisco Systems, Inc...................................... 483,000
10,000 +Compaq Computer......................................... 483,750
15,000 +Digital Equipment Corp.................................. 684,375
25,000 +Elsag Bailey Process Automation ADR..................... 815,625
5,000 Hewlett-Packard Co. ..................................... 416,875
10,000 International Business Machines Corp..................... 943,750
17,000 Littlefuse, Inc.......................................... 539,750
10,000 +LSI Logic Corp.......................................... 577,500
8,000 Micron Technology........................................ 636,000
5,000 Motorola, Inc............................................ 381,875
10,000 +Oracle System Corp...................................... 382,500
20,000 +Perceptron, Inc......................................... 480,000
165,000 +Plasma-Therm, Inc....................................... 701,250
-----------
8,373,125
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
CONSUMER CYCLICAL -- 13.41%
14,000 Chrysler Corp........................................ $ 742,000
20,000 General Motors, Class E.............................. 910,000
30,000 Kaydon Corp.......................................... 885,000
20,000 +Lear Seating Corp................................... 587,500
9,000 Lowe's Cos., Inc..................................... 270,000
22,000 Mark IV Industries, Inc.............................. 489,500
-----------
3,884,000
-----------
FINANCIAL -- 6.32%
20,000 Citicorp............................................. 1,415,000
15,000 Summit Bancorporation (New Jersey)................... 414,375
-----------
1,829,375
-----------
RAW/INTERMEDIATE MATERIALS -- 1.85%
12,000 Nucor Corp........................................... 537,000
-----------
TOTAL COMMON STOCKS
(Cost $25,437,111)................................... 26,566,000
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 17.92%
$5,192,000 General Electric Co. Promissory Notes (Cost
$5,192,000).......................................... 5,192,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $30,629,111*)........................................ 109.63% $31,758,000
OTHER ASSETS & LIABILITIES (NET)........................... (9.63) (2,790,601)
------ -----------
NET ASSETS................................................. 100.00% $28,967,399
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
21
<PAGE>
UST MASTER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
UST Master Funds, Inc. ("Master Fund") was incorporated under the laws of
the State of Maryland on August 2, 1984 and is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Master Fund currently offers shares in twenty managed investment portfolios,
each having its own investment objectives and policies.
The following is a summary of significant accounting policies for Equity
Fund, Income and Growth Fund, Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund (the
"Portfolios"). The financial statements for the remaining portfolios of Master
Fund and UST Master Tax-Exempt Fund, Inc. ("Master Tax-Exempt Fund") are
presented separately.
(A) PORTFOLIO VALUATION:
Investments in securities that are traded on a recognized stock exchange
are valued at the last sale price on the exchange on which such securities
are primarily traded or at the last sale price on the national securities
market. Securities traded over-the-counter are valued each business day on
the basis of the closing over-the-counter bid prices. Securities for which
there were no transactions are valued at the average of the most recent bid
prices (as calculated by an independent pricing service (the "Service")
based upon its evaluation of the market for such securities) when, in the
judgement of the Service, quoted bid prices for securities are readily
available and are representative of the bid side of the market. Portfolio
securities that are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such securities on
their respective exchanges, except that when an occurrence subsequent to
the time a value was so established is likely to have changed such value,
then a fair value of those securities will be determined by consideration
of other factors under the direction of the Board of Directors. A security
which is traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market on which the security is
traded. Securities for which market quotations are not readily available
are valued at fair value, pursuant to guidelines adopted by Master Fund's
Board of Directors. Short-term debt instruments with remaining maturities
of 60 days or less are valued at amortized cost, which approximates market
value.
All other foreign securities are valued at the last current bid quotation
if market quotations are available, or at fair value as determined in
accordance with policies established by the Board of Directors. Investment
valuations, other assets, and liabilities initially expressed in foreign
currencies are converted each business day into U.S. dollars based upon
current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses
on investments. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
22
<PAGE>
Forward foreign currency exchange contracts: The Portfolios'
participation in forward currency exchange contracts will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging involves the purchase or sale of foreign currency with
respect to specific receivables or payables of a Portfolio generally
arising in connection with the purchase or sale of its portfolio
securities. Risk may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and is generally limited to the amount of unrealized gain on the contracts,
if any, at the date of default. Risk may also arise from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Contracts are marked-to-market daily and the change in market value is
recorded as unrealized appreciation or depreciation. Realized gains or
losses arising from such transactions are included in net realized gains or
losses from foreign currency transactions.
(B) SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Security transactions are recorded on a trade date basis. Realized gains
and losses on investments sold are recorded on the basis of identified
cost. Interest income, including where applicable, amortization of discount
on investments, is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date, except for certain dividends from foreign
securities, which are recorded as soon as the Portfolios are informed of
the dividend.
(C) REPURCHASE AGREEMENTS:
Master Fund may purchase portfolio securities from financial institutions
deemed to be creditworthy by the investment adviser subject to the seller's
agreement to repurchase and Master Fund's agreement to resell such
securities at mutually agreed upon prices. Securities purchased subject to
such repurchase agreements are deposited with Master Fund's custodian or
sub-custodian or are maintained in the Federal Reserve/Treasury book-entry
system and must have, at all times, an aggregate market value greater than
101% of the repurchase price (including accrued interest).
If the value of the underlying security, including accrued interest,
falls below the value of 101% of the repurchase price plus accrued
interest, Master Fund will require the seller to deposit additional
collateral by the next business day. Default or bankruptcy of the seller
may, however, expose the applicable Portfolio of Master Fund to possible
delay in connection with the disposition of the underlying securities or
loss to the extent that proceeds from a sale of the underlying securities
were less than the repurchase price under the agreement.
(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid quarterly. Net
realized capital gains, unless offset by any available capital loss
carryforward, are distributed to shareholders at least annually.
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
net operating losses, partnership income, deferral of losses on wash sales
and post-October losses.
In order to avoid a Federal excise tax, each Portfolio is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
(E) FEDERAL TAXES:
It is the policy of Master Fund that each Portfolio continue to qualify
as a regulated investment company, if such qualification is in the best
interest of the shareholders, by complying with the requirements of the
Internal Revenue Code applicable to regulated investment companies, and by
distributing substantially all of its taxable earnings to its shareholders.
23
<PAGE>
At March 31, 1995, the following Portfolios had approximate capital loss
carryforwards for Federal tax purposes available to offset future net
capital gains through the indicated expiration dates:
<TABLE>
<CAPTION>
EXPIRATION DATE
MARCH 31,
-------------------------
2001 2002 2003 TOTAL
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Equity.................................. $206,000 $ -- $ -- $206,000
Aging of America Fund................... -- 54,000 279,000 333,000
Environmentally-Related Products and
Services Fund.......................... -- 154,000 52,000 206,000
Global Competitors Fund................. -- 31,000 197,000 228,000
Long-Term Supply of Energy Fund......... -- -- 48,000 48,000
</TABLE>
To the extent that such carryforward is utilized, no capital gain
distribution will be made.
Net capital losses incurred after October 31 and within the taxable year
are deemed to arise on the first business day of a Portfolio's next taxable
year. Income and Growth Fund, Aging of America Fund, Business and
Industrial Restructuring Fund, Environmentally-Related Products and
Services Fund and Long-Term Supply of Energy Fund incurred, and elected to
defer, net capital losses of approximately $1,632,000, $208,000, $438,000,
$293,000, and $213,000, respectively, for the year ended March 31, 1995.
At September 30, 1995, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities for which there
was an excess of tax cost over value is as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
------------ -------------- ------------
<S> <C> <C> <C>
Equity Fund....................... $51,899,162 $ (956,695) $50,942,467
Income and Growth Fund............ 24,582,358 (2,408,520) 22,173,838
Aging of America Fund............. 6,428,852 (396,238) 6,032,614
Business and Industrial Restruc-
turing Fund...................... 10,327,503 (547,160) 9,780,343
Communication and Entertainment
Fund............................. 10,251,188 (244,307) 10,006,881
Early Life Cycle Fund............. 18,703,681 (4,951,498) 13,752,183
Environmentally-Related Products
and Services Fund................ 1,027,871 (65,535) 962,336
Global Competitors Fund........... 8,406,703 (490,213) 7,916,490
Long-Term Supply of Energy Fund... 1,970,866 (558,363) 1,412,503
Productivity Enhancers Fund....... 1,410,228 (281,339) 1,128,889
</TABLE>
(F) EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to that
Portfolio. Other expenses are allocated to the respective Portfolios based
on average net assets.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS
United States Trust Company of New York ("U.S. Trust") serves as the
investment adviser to Master Fund. For the services provided pursuant to the
Investment Advisory Agreement, U.S. Trust is entitled to receive a fee,
computed daily and paid monthly, at the annual rates of .75% of the average
daily net assets of the Equity Fund and Income and Growth Fund, and .60% of the
average daily net assets of the Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund.
24
<PAGE>
Effective September 1, 1995, Chase Global Funds Services Company ("CGFSC"),
formerly, Mutual Funds Service Company ("MFSC"), and Federated Administrative
Services ("Administrators") provide administrative services to Master Fund.
For the services provided to the Portfolios, the Administrators are entitled
jointly to annual fees, computed daily and paid monthly, based on the combined
aggregate average daily net assets of Master Fund (excluding Master Fund's
international equity portfolios) and Master Tax-Exempt Fund, an affiliated
investment company, as follows: .200% of the first $200 million, .175% of the
next $200 million, and .150% over $400 million. Administration fees payable by
each Portfolio of the two investment companies are determined in proportion to
the relative daily net assets of the respective Portfolios for the period
paid. After such allocation has been made, the Administrators are entitled
jointly to an annual minimum fee of $18,000 and $39,000 for the first and
second full years, respectively, after they commenced operations, and $50,000
for each full year thereafter, from Aging of America Fund, Business and
Industrial Restructuring Fund, Communication and Entertainment Fund, Early
Life Cycle Fund, Environmentally-Related Products and Services Fund, Global
Competitors Fund, Long-Term Supply of Energy Fund and Productivity Enhancers
Fund. Effective August 1, 1995 through August 31, 1995, MFSC, and Federated
Administrative Services served as administrators to Master Fund and prior to
August 1, 1995, MFSC and Concord Holding Corporation served as administrators
to Master Fund all under the same terms, conditions and fees as stated above.
For the period ended September 30, 1995, administration fees charged by MFSC
were as follows:
<TABLE>
<S> <C>
Equity Fund............................................................. $88,449
Income and Growth Fund.................................................. 63,693
Aging of America Fund................................................... 16,412
Business and Industrial Restructuring Fund.............................. 22,540
Communication and Entertainment Fund.................................... 20,677
Early Life Cycle Fund................................................... 33,507
Environmentally-Related Products and Services Fund...................... 3,776
Global Competitors Fund................................................. 20,649
Long-Term Supply of Energy Fund......................................... 11,182
Productivity Enhancers Fund............................................. 13,771
</TABLE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses.
Until further notice to Master Fund, U.S. Trust and/or Administrators intend
to voluntarily waive fees, to the extent necessary for each of Aging of
America Fund, Business and Industrial Restructuring Fund, Communication and
Entertainment Fund, Early Life Cycle Fund, Environmentally-Related Products
and Services Fund, Global Competitors Fund, Long-Term Supply of Energy Fund
and Productivity Enhancers Fund to maintain an annual expense ratio of not
more than .99%. In addition, the Administrators intend to maintain their
annual joint minimum fee at $18,000 until further notice for Aging of America
Fund, Business and Industrial Restructuring Fund, Communication and
Entertainment Fund, Early Life Cycle Fund, Environmentally-Related Products
and Services Fund, Global Competitors Fund, Long-Term Supply of Energy Fund
and Productivity Enhancers Fund. For the period ended September 30, 1995, U.S.
Trust and the Administrators waived fees as follows:
<TABLE>
<CAPTION>
U.S.
TRUST ADMINISTRATORS
------- --------------
<S> <C> <C>
Aging of America Fund................................... $ 279 $ 3,097
Environmentally-Related Products and Services Fund...... 11,033 20,795
Long-Term Supply of Energy Fund......................... -- 10,229
Productivity Enhancers Fund............................. 658 6,513
</TABLE>
25
<PAGE>
Master Fund has also entered into shareholder servicing agreements with
various service organizations requiring them to provide administrative support
services to their customers owning shares of the Portfolios. As a
consideration for the administrative services provided by each service
organization to its customers, each Portfolio will pay the service
organization an administrative service fee at the annual rate of up to .40% of
the average daily net asset value of its shares held by the service
organizations' customers. Such services may include assisting in processing
purchase, exchange and redemption requests; transmitting and receiving funds
in connection with customer orders to purchase, exchange or redeem shares; and
providing periodic statements. Until further notice to Master Fund, U.S. Trust
and the Administrators have voluntarily agreed to waive investment advisory
and administration fees payable by each Portfolio in an amount equal to
administrative service fees payable by that Portfolio. For the period ended
September 30, 1995, U.S. Trust and the Administrators waived investment
advisory and administration fees in amounts equal to the administrative
service fees for the Portfolios as follows:
<TABLE>
<CAPTION>
U.S
TRUST ADMINISTRATORS
------- --------------
<S> <C> <C>
Equity Fund............................................. $44,736 $2,847
Income and Growth Fund.................................. 28,076 988
Aging of America Fund................................... 6,187 14
Business and Industrial Restructuring Fund.............. 7,924 37
Communication and Entertainment Fund.................... 7,606 40
Early Life Cycle Fund................................... 23,648 81
Environmentally-Related Products and Services Fund...... 2,391 --
Global Competitors Fund................................. 7,365 17
Long-Term Supply of Energy Fund......................... 4,583 9
Productivity Enhancers Fund............................. 5,247 11
</TABLE>
Effective August 1, 1995, Edgewood Services, Inc. (the "Distributor"), a
wholly-owned subsidiary of Federated Investors, replaced UST Distributors,
Inc. as the sponsor and distributor of Master Fund. Certain sales of Master
Fund's shares are subject to a maximum sales charge of 4 1/2% of the offering
price. Shares of each Portfolio are sold on a continual basis by the
Distributor.
Each Director of Master Fund receives an annual fee of $9,000, plus a
meeting fee of $1,500 for each meeting attended, and is reimbursed for
expenses incurred for attending meetings. The Chairman receives an additional
annual fee of $5,000. No person who is an officer, director, or employee of
U.S. Trust or the Administrators, or of any parent or subsidiary thereof, who
serves as an officer, director or employee of the Master Fund receives any
compensation from the Master Fund.
U.S. Trust serves as shareholder servicing and dividend disbursing agent to
Master Fund and effective September 1, 1995, CGFSC serves as sub-shareholder
servicing agent. Prior to September 1, 1995, MFSC served as sub-shareholder
servicing agent.
For the period ended September 30, 1995, shareholder servicing fees charged
by U.S. Trust and MFSC were as follows:
<TABLE>
<S> <C>
Equity Fund............................................................. $27,309
Income and Growth Fund.................................................. 23,044
Business and Industrial Restructuring Fund.............................. 7,854
Communication and Entertainment Fund.................................... 8,059
Early Life Cycle Fund................................................... 9,059
Long-Term Supply of Energy Fund......................................... 3,973
</TABLE>
26
<PAGE>
Effective September 1, 1995, The Chase Manhattan Bank, N.A. ("Chase") serves
as custodian of Master Fund's assets. Prior to September 1, 1995, U.S. Trust
served as the custodian of Master Fund's assets. For the period ended
September 30, 1995, custody fees charged by U.S. Trust were as follows:
<TABLE>
<S> <C>
Equity Fund............................................................ $33,312
Income and Growth Fund................................................. 24,706
Aging of America Fund.................................................. 10,721
Business and Industrial Restructuring Fund............................. 8,793
Communication and Entertainment Fund................................... 6,001
Early Life Cycle Fund.................................................. 9,841
Environmentally-Related Products and Services Fund..................... 466
Global Competitors Fund................................................ 7,703
Long-Term Supply of Energy Fund........................................ 3,469
Productivity Enhancers Fund............................................ 8,032
</TABLE>
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities, excluding short-term investments, for the
Portfolios aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Equity Fund............................................ $29,179,192 $19,481,707
Income and Growth Fund................................. 7,959,803 9,454,205
Aging of America Fund.................................. 11,122,653 3,443,090
Business and Industrial Restructuring Fund............. 23,078,076 11,315,287
Communication and Entertainment Fund................... 17,819,015 14,109,713
Early Life Cycle Fund.................................. 20,542,336 9,203,049
Environmentally-Related Products and Services Fund..... 871,028 1,777,545
Global Competitors Fund................................ 15,657,120 2,103,291
Long-Term Supply of Energy Fund........................ 4,933,057 1,626,751
Productivity Enhancers Fund............................ 53,871,258 49,416,477
</TABLE>
4. COMMON STOCK:
Master Fund currently offers twenty classes of shares, each representing
interests in one of twenty separate Portfolios. Authorized capital for each
Portfolio is as follows: 375 million shares each of Equity Fund and Income and
Growth Fund and 500 million shares each of Aging of America Fund, Business and
Industrial Restructuring Fund, Communication and Entertainment Fund, Early
Life Cycle Fund, Environmentally-Related Products and Services Fund, Global
Competitors Fund, Long-Term Supply of Energy Fund and Productivity Enhancers
Fund.
Each share has a par value of $.001, and represents an equal proportionate
interest in the particular Portfolio with other shares of the same Portfolio,
and is entitled to such dividends and distributions of taxable earnings on the
assets belonging to such Portfolio as are declared at the discretion of Master
Fund's Board of Directors.
27
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUND
--------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,353,441 $ 30,124,039 1,514,081 $ 29,964,878
Issued in connection with
USAffinity Acquisition
(Note 6)................. -- -- 289,274 5,668,178
Issued as reinvestment of
dividends................ 161,591 3,413,816 57,340 1,088,850
Redeemed.................. (773,480) (17,133,735) (1,818,997) (35,755,808)
---------- ------------ ---------- ------------
Net Increase.............. 741,552 $ 16,404,120 41,698 $ 966,098
========== ============ ========== ============
<CAPTION>
INCOME AND GROWTH FUND
--------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,024,267 $ 13,157,434 2,399,422 $ 27,811,019
Issued in connection with
USAffinity Acquisition
(Note 6)................. -- -- 264,712 3,053,313
Issued as reinvestment of
dividends................ 36,447 445,715 135,164 1,535,569
Redeemed.................. (1,049,302) (13,349,563) (2,439,219) (27,599,135)
---------- ------------ ---------- ------------
Net Increase.............. 11,412 $ 253,586 360,079 $ 4,800,766
========== ============ ========== ============
<CAPTION>
AGING OF AMERICA FUND
--------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,229,061 $ 10,020,083 1,707,584 $ 12,399,386
Issued as reinvestment of
dividends................ 396 3,187 540 3,818
Redeemed.................. (192,134) (1,592,098) (395,623) (2,836,384)
---------- ------------ ---------- ------------
Net Increase.............. 1,037,323 $ 8,431,172 1,312,501 $ 9,566,820
========== ============ ========== ============
<CAPTION>
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
--------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,298,675 $ 15,304,000 1,826,131 $ 17,995,664
Issued as reinvestment of
dividends................ 1,050 11,935 2,798 26,882
Redeemed.................. (247,573) (2,833,754) (465,836) (4,631,937)
---------- ------------ ---------- ------------
Net Increase.............. 1,052,152 $ 12,482,181 1,363,093 $ 13,390,609
========== ============ ========== ============
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATION AND ENTERTAINMENT FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold......................... 873,221 $ 9,378,364 1,530,541 $13,804,283
Issued as reinvestment of
dividends................... 2,106 21,318 8,157 71,305
Redeemed..................... (299,950) (3,112,991) (840,212) (7,600,458)
--------- ----------- ---------- -----------
Net Increase................. 575,377 $ 6,286,691 698,486 $ 6,275,130
========= =========== ========== ===========
<CAPTION>
EARLY LIFE CYCLE FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold......................... 2,073,206 $21,160,563 3,639,278 $32,443,615
Issued as reinvestment of
dividends................... 25,291 235,465 8,625 73,252
Redeemed..................... (526,039) (5,274,715) (1,636,553) (14,832,732)
--------- ----------- ---------- -----------
Net Increase................. 1,572,458 $16,121,313 2,011,350 $17,684,135
========= =========== ========== ===========
<CAPTION>
ENVIRONMENTALLY-RELATED PRODUCTS
AND SERVICES FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold......................... 116,913 $ 800,171 301,109 $ 1,866,198
Issued as reinvestment of
dividends................... -- -- 45 271
Redeemed..................... (232,286) (1,593,434) (326,035) (2,008,274)
--------- ----------- ---------- -----------
Net Decrease................. (115,373) $ (793,263) (24,881) $ (141,805)
========= =========== ========== ===========
<CAPTION>
GLOBAL COMPETITORS FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold......................... 1,768,360 $16,337,850 1,876,723 $14,926,152
Issued as reinvestment of
dividends................... 449 4,113 526 4,062
Redeemed..................... (322,502) (3,042,906) (218,038) (1,724,311)
--------- ----------- ---------- -----------
Net Increase................. 1,446,307 $13,299,057 1,659,211 $13,205,903
========= =========== ========== ===========
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM SUPPLY OF ENERGY FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
--------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold......................... 749,800 $ 6,213,894 1,467,892 $ 11,543,268
Issued as reinvestment of
dividends................... 421 3,450 858 6,714
Redeemed..................... (256,743) (2,139,851) (358,847) (2,767,140)
-------- ----------- ---------- ------------
Net Increase................. 493,478 $ 4,077,493 1,109,903 $ 8,782,842
======== =========== ========== ============
<CAPTION>
PRODUCTIVITY ENHANCERS FUND
-----------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
--------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold......................... 983,040 $ 9,002,998 1,751,841 $ 13,239,078
Issued as reinvestment of
dividends................... 1,365 11,620 759 5,671
Redeemed..................... (206,136) (1,897,751) (1,493,416) (11,376,889)
-------- ----------- ---------- ------------
Net Increase................. 778,269 $ 7,116,867 259,184 $ 1,867,860
======== =========== ========== ============
</TABLE>
5. ORGANIZATION COSTS
Master Fund has borne all costs in connection with the initial organization
of new portfolios, including the fees for registering and qualifying its
shares for distribution under Federal and state securities regulations. All
such costs are being amortized on the straight-line basis over periods of five
years from the dates on which each Portfolio commenced operations.
6. ASSET ACQUISITION
On March 10, 1995, Income and Growth Fund acquired certain assets of
$3,053,313 (excluding unamortized organization costs) from USAffinity Growth
and Income Fund in a tax-free exchange of 264,712 shares of Income and Growth
Fund. Equity Fund acquired certain assets of $5,668,178 (excluding unamortized
organization costs) from USAffinity Growth Fund in a tax-free exchange of
289,274 shares of Equity Fund and Equity Fund also acquired certain assets of
$1,857,648 (excluding unamortized organization costs) from USAffinity Green
Fund in a taxable exchange for the shareholders of USAffinity Green Fund of
89,915 shares of Equity Fund.
USTDEQS995
30
