<PAGE>
-------------------------------------------
UST
MASTER FUNDS, INC.
-------------------------------------------
INTERNATIONAL 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.................................................. 3
STATEMENTS OF CHANGES IN NET ASSETS....................................... 4
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS.................. 6
PORTFOLIOS OF INVESTMENTS
International Fund....................................................... 8
Pacific/Asia Fund........................................................ 12
Pan European Fund........................................................ 15
Emerging Americas Fund................................................... 18
NOTES TO FINANCIAL STATEMENTS............................................. 21
</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 ex-
penses 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>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost -- see
accompanying portfolios.... $78,713,176 $57,543,141 $42,389,811 $39,873,788
=========== =========== =========== ===========
Investments, at value (Note
1)......................... $83,451,792 $58,540,693 $46,940,390 $35,832,640
Cash........................ 139 610 601 884
Foreign currency (cost
$14,123)................... -- -- -- 14,476
Dividends receivable........ 186,980 84,229 142,066 55,044
Interest receivable......... 38,726 23,680 20,073 11,664
Receivable for investments
sold....................... -- -- 41,724 56,057
Receivable for fund shares
sold....................... 202,624 184,973 15,415 161,351
Withholding tax receivable.. 73,539 1,845 96,766 --
Prepaid expenses............ 404 354 263 280
Unamortized organization
costs (Note 5)............. -- 9,429 9,429 9,429
----------- ----------- ----------- -----------
TOTAL ASSETS............... 83,954,204 58,845,813 47,266,727 36,141,825
LIABILITIES:
Payable for investments
purchased.................. 136,783 -- 47,757 117,958
Payable for fund shares
redeemed................... 118,655 11,427 81,460 36,460
Investment advisory fees
payable (Note 2)........... 63,359 44,816 36,163 28,508
Administration fees and
shareholder servicing fees
payable (Note 2)........... 17,448 12,331 9,383 7,915
Accrued expenses and other
payables................... 36,381 70,559 32,839 30,689
----------- ----------- ----------- -----------
TOTAL LIABILITIES.......... 372,626 139,133 207,602 221,530
----------- ----------- ----------- -----------
NET ASSETS................... $83,581,578 $58,706,680 $47,059,125 $35,920,295
=========== =========== =========== ===========
NET ASSETS consist of:
Undistributed/(distributions
in excess of) net
investment income.......... $ 250,776 $ 45,646 $ 548,250 $ (220,235)
Accumulated net realized
gain/(loss) on investments. 372,458 (111,928) 1,175,412 (4,990,673)
Unrealized
appreciation/(depreciation)
on investments............. 4,739,079 997,776 4,555,847 (4,042,408)
Par value (Note 4).......... 7,882 6,440 5,219 5,050
Paid in capital in excess of
par value.................. 78,211,383 57,768,746 40,774,397 45,168,561
----------- ----------- ----------- -----------
TOTAL NET ASSETS............. $83,581,578 $58,706,680 $47,059,125 $35,920,295
=========== =========== =========== ===========
Shares of Common Stock
Outstanding................. 7,882,375 6,439,989 5,218,785 5,049,933
NET ASSET VALUE PER SHARE.... $10.60 $9.12 $9.02 $7.11
====== ===== ===== =====
</TABLE>
See Notes to Financial Statements
2
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income............. $1,024,353 $ 776,076 $1,001,586 $ 444,365
Interest income............. 189,950 83,636 42,414 36,209
Less: Foreign taxes
withheld................... (118,708) (45,488) (136,422) (35,335)
---------- ---------- ---------- -----------
TOTAL INCOME............... 1,095,595 814,224 907,578 445,239
EXPENSES:
Investment advisory fees
(Note 2)................... 369,440 262,569 219,083 170,391
Administration fees (Note
2)......................... 73,888 52,514 43,817 34,078
Administrative service fees
(Note 2)................... 30,017 18,562 16,360 12,245
Shareholder servicing agent
fees (Note 2).............. 28,414 19,088 14,718 13,770
Custodian fees (Note 2)..... 24,110 30,689 25,901 21,614
Registration and filing
fees....................... 7,485 1,442 5,204 4,511
Legal and audit fees........ 5,145 3,469 3,050 2,270
Directors' fees and expenses
(Note 2)................... 1,095 781 682 500
Shareholder reports......... 11,157 7,850 6,834 4,611
Amortization of organization
costs (Note 5)............. -- 2,105 2,105 2,105
Miscellaneous expenses...... 2,868 1,879 1,770 1,692
---------- ---------- ---------- -----------
TOTAL EXPENSES............. 553,619 400,948 339,524 267,787
Fees waived by investment
adviser and administrators
(Note 2)................... (30,017) (18,562) (16,360) (12,245)
---------- ---------- ---------- -----------
NET EXPENSES............... 523,602 382,386 323,164 255,542
---------- ---------- ---------- -----------
NET INVESTMENT INCOME........ 571,993 431,838 584,414 189,697
---------- ---------- ---------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain/(loss):
Security transactions...... 445,772 (93,067) 1,205,817 (1,184,446)
Foreign currency
translations.............. (62,135) (18,862) (30,408) (44,892)
---------- ---------- ---------- -----------
Total net realized
gain/(loss)................ 383,637 (111,929) 1,175,409 (1,229,338)
Change in unrealized
appreciation/(depreciation)
on investments during the
period..................... 4,387,023 3,633,912 2,665,436 6,917,364
---------- ---------- ---------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS.. 4,770,660 3,521,983 3,840,845 5,688,026
---------- ---------- ---------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS... $5,342,653 $3,953,821 $4,425,259 $ 5,877,723
========== ========== ========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
PERIOD ENDED SEPTEMBER 30,
1995 (UNAUDITED)
Net investment income....... $ 571,993 $ 431,838 $ 584,414 $ 189,697
Net realized gain/(loss) on
investments................ 383,637 (111,929) 1,175,409 (1,229,338)
Change in unrealized
appreciation/(depreciation)
on investments during the
period..................... 4,387,023 3,633,912 2,665,436 6,917,364
----------- ----------- ----------- ------------
Net increase in net assets
resulting from operations.. 5,342,653 3,953,821 4,425,259 5,877,723
Distributions to
shareholders:
From net realized gain on
investments............... -- (59,217) (365,020) --
Increase in net assets from
fund share transactions
(Note 4)................... 14,186,967 7,194,877 3,021,924 2,698,842
----------- ----------- ----------- ------------
Net increase in net assets.. 19,529,620 11,089,481 7,082,163 8,576,565
NET ASSETS:
Beginning of period........ 64,051,958 47,617,199 39,976,962 27,343,730
----------- ----------- ----------- ------------
End of period (1).......... $83,581,578 $58,706,680 $47,059,125 $ 35,920,295
=========== =========== =========== ============
YEAR ENDED MARCH 31, 1995
Net investment income....... $ 432,171 $ 431,881 $ 440,751 $ 23,066
Net realized gain/(loss) on
investments................ 1,361,291 926,373 535,571 (949,310)
Change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations
during the year............ (3,439,838) (4,408,067) 589,836 (12,162,327)
----------- ----------- ----------- ------------
Net increase/(decrease) in
net assets resulting from
operations................. (1,646,376) (3,049,813) 1,566,158 (13,088,571)
Distributions to
shareholders:
From net investment income. -- (190,492) (418,469) (7,102)
In excess of net investment
income.................... (644,640) (1,253,347) -- (779,330)
From net realized gain on
investments............... (1,837,604) (4,336,945) (465,376) (1,896)
In excess of net realized
gain on investments....... -- -- -- (3,391,937)
Increase in net assets from
fund share transactions
(Note 4)................... 12,443,548 3,421,063 2,619,824 5,330,119
----------- ----------- ----------- ------------
Net increase/(decrease) in
net assets................. 8,314,928 (5,409,534) 3,302,137 (11,938,717)
NET ASSETS:
Beginning of year.......... 55,737,030 53,026,733 36,674,825 39,282,447
----------- ----------- ----------- ------------
End of year (2)............ $64,051,958 $47,617,199 $39,976,962 $ 27,343,730
=========== =========== =========== ============
</TABLE>
(1) Including undistributed/(distributions in excess of) net investment income
of $250,776 for International Fund, $45,646 for Pacific/Asia Fund, $548,250
for Pan European Fund and ($220,235) for Emerging Americas Fund.
(2) Including distributions in excess of net investment income of $321,217 for
International Fund, $386,192 for Pacific/Asia Fund, $36,164 for Pan
European Fund and $409,932 for Emerging Americas Fund.
See Notes to Financial Statements
4
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
5
<PAGE>
UST MASTER FUNDS, INC.
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS
For a fund share outstanding throughout each year.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED DIVIDENDS DIVIDENDS
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM FROM NET IN EXCESS OF
BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT INVESTMENT NET INVESTMENT
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL FUND --
(7/21/87*)
Year Ended March 31,
1991................... $9.84 $0.13 $(0.64) $(0.51) $(0.11) $ 0.00
1992................... 8.75 0.08 (0.45) (0.37) (0.11) 0.00
1993................... 8.27 0.15 0.25 0.40 (0.01) 0.00
1994................... 8.66 0.05 1.88 1.93 (0.02) (0.12)
1995................... 10.44 0.10 (0.29) (0.19) 0.00 (0.11)
Period Ended September
30, 1995 (Unaudited).. 9.82 0.08 0.70 0.78 0.00 0.00
PACIFIC/ASIA FUND --
(12/31/92*)
Year Ended March 31,
1993................... $7.00 $0.00+++ $ 0.54 $ 0.54 $ 0.00 $ 0.00
1994................... 7.54 0.08 2.81 2.89 (0.05) (0.06)
1995................... 10.04 0.08 (0.58) (0.50) (0.03) (0.23)
Period Ended September
30, 1995 (Unaudited).. 8.45 0.08 0.60 0.68 0.00 0.00
PAN EUROPEAN FUND --
(12/31/92*)
Year Ended March 31,
1993................... $7.00 $0.00+++ $ 0.34 $ 0.34 $ 0.00 $ 0.00
1994................... 7.34 0.03 0.70 0.73 0.00 (0.04)
1995................... 8.03 0.09 0.25 0.34 (0.09) 0.00
Period Ended September
30, 1995 (Unaudited).. 8.19 0.11 0.79 0.90 0.00 0.00
EMERGING AMERICAS
FUND -- (12/31/92*)
Year Ended March 31,
1993................... $7.00 $0.00+++ $ 0.12 $ 0.12 $ 0.00 $ 0.00
1994................... 7.12 0.05 2.24 2.29 (0.03) (0.02)
1995................... 9.30 0.01 (2.56) (2.55) 0.00 (0.17)
Period Ended September
30, 1995 (Unaudited).. 5.86 0.04 1.21 1.25 0.00 0.00
</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
fund shares.
+++ Amount represents less than $0.01 per share.
See Notes to Financial Statements
6
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
IN EXCESS RATIO OF NET RATIO OF GROSS RATIO OF NET
DISTRIBUTIONS OF NET NET ASSETS, OPERATING OPERATING INVESTMENT
FROM NET REALIZED NET ASSET END OF EXPENSES EXPENSES INCOME/(LOSS) PORTFOLIO
REALIZED GAIN GAIN ON TOTAL VALUE, END TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
ON INVESTMENTS INVESTMENTS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS+ NET ASSETS RATE
- -------------- ------------- ------------- ---------- -------- ----------- ------------ -------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.47) $0.00 $(0.58) $ 8.75 (5.20)% $31,873 1.61% 1.61% 1.57 % 47%
0.00 0.00 (0.11) 8.27 (4.35)% 46,921 1.52% 1.52% 0.94 % 32%
0.00 0.00 (0.01) 8.66 4.85 % 30,374 1.50% 1.50% 1.27 % 31%
(0.01) 0.00 (0.15) 10.44 22.34 % 55,737 1.53% 1.53% 0.18 % 64%
(0.32) 0.00 (0.43) 9.82 (1.93)% 64,052 1.47% 1.53% 0.71 % 66%
0.00 0.00 0.00 10.60 7.94 % 83,582 1.42%** 1.50%** 1.55 %** 34%**
$0.00 $0.00 $ 0.00 $ 7.54 7.71 % $ 9,665 1.67%** 2.00%** 0.27 %** 1%
(0.28) 0.00 (0.39) 10.04 38.11 % 53,027 1.53% 1.77% 0.54 % 68%
(0.83) 0.00 (1.09) 8.45 (5.89)% 47,617 1.47% 1.52% 0.85 % 69%
(0.01) 0.00 (0.01) 9.12 8.05 % 58,707 1.46%** 1.53%** 1.64 %** 30%**
$0.00 $0.00 $ 0.00 $ 7.34 4.86 % $ 3,797 1.67%** 3.13%** (0.33)%** 9%
0.00 0.00 (0.04) 8.03 10.05 % 36,675 1.61% 1.72% 0.06 % 30%
(0.09) 0.00 (0.18) 8.19 4.33 % 39,977 1.51% 1.57% 1.11 % 47%
(0.07) 0.00 (0.07) 9.02 11.08 % 47,059 1.47%** 1.55%** 2.67 %** 31%**
$0.00 $0.00 $ 0.00 $ 7.12 1.71 % $ 3,830 1.67%** 2.56%** (0.04)%** 76%
(0.06) 0.00 (0.11) 9.30 32.25 % 39,282 1.49% 1.71% 0.29 % 51%
(0.00) (0.72) (0.89) 5.86 (30.47)% 27,344 1.50% 1.57% 0.06 % 69%
0.00 0.00 0.00 7.11 21.33 % 35,920 1.50%** 1.57%** 1.11 %** 54%**
<CAPTION>
FEE
WAIVERS
(NOTE 2)
----------
<C>
$0.00
0.00
0.00
0.00+++
0.01
0.00+++
$0.00+++
0.04
0.01
0.00+++
$0.02
0.05
0.00+++
0.00+++
$0.02
0.03
0.01
0.00+++
</TABLE>
See Notes to Financial Statements
7
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INTERNATIONAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 93.88%
JAPAN -- 26.59%
76,000 Asahi Chemical Industry Co., Ltd...................... $ 525,699
16,000 Daifuku............................................... 195,496
45 DDI Corp.............................................. 371,706
46 East Japan Railway Co................................. 227,608
34,000 Fujisawa Pharmaceutical Co............................ 336,464
52,000 Fujitsu Ltd........................................... 656,367
35,000 Hitachi Construction Machinery Co..................... 392,305
38,000 Hitachi Ltd........................................... 414,420
130,000 Hitachi Zosen Corp.................................... 635,363
90,000 Honshu Paper Co., Ltd................................. 546,198
26,000 Industrial Bank of Japan.............................. 758,760
35,000 Isetan Co............................................. 491,265
7,000 Ito-Yokado Co., Ltd. ................................. 387,357
37,000 Kajima Corp........................................... 364,657
44,000 Kamigumi Co., Ltd..................................... 412,764
17,000 Katokichi Co., Ltd. .................................. 324,447
3,000 Keyence Corp. ........................................ 372,614
5,000 Kyocera Corp.......................................... 410,987
86,000 Marubeni Corp......................................... 429,870
22,000 Matsushita Electric Industries Ltd.................... 337,676
43,000 Mitsubishi Estate Co., Ltd............................ 481,975
50,000 Mitsubishi Heavy Industries Ltd....................... 383,722
68,000 Mitsubishi Oil Co., Ltd............................... 582,288
48,000 Mitsubishi Trust and Banking Co....................... 751,288
150,000 +Mitsui Mining & Smelting Co., Ltd.................... 542,260
11,000 Murata Manufacturing Co., Ltd. ....................... 413,208
149,000 +Navix Line Ltd....................................... 395,708
84,000 +New Japan Securities Co.............................. 432,596
26,000 NGK Spark Plug Co..................................... 351,813
47 Nippon Telegraph & Telephone Corp..................... 404,148
66,000 Nippon Yusen.......................................... 391,215
156,000 +NKK Corp............................................. 417,449
27,000 Nomura Securities Co., Ltd............................ 528,931
28,000 Olympus Optical Co., Ltd.............................. 259,840
26,000 Onward Kashiyama Co., Ltd. ........................... 349,187
67,000 +Pacific Metals Co., Ltd.............................. 436,383
42,000 Ricoh Corp............................................ 420,721
38,000 Sakura Bank Ltd. ..................................... 414,420
34,000 Sanwa Bank Ltd. ...................................... 638,594
67,000 Sekisui Chemical Co., Ltd. ........................... 852,469
51,000 Sumitomo Corp. ....................................... 487,701
45,000 Sumitomo Trust & Banking Co., Ltd..................... 617,995
55,000 Tokio Marine & Fire Insurance Co...................... 594,264
49,000 Tokyo Broadcasting System, Inc........................ 707,563
19,000 Tokyo Steel Manufacturing Co.......................... 366,455
80,000 Tokyu Corp. .......................................... 539,634
77,000 Tokyu Department Store................................ 466,525
55,000 Toshiba Corp.......................................... 402,656
-----------
22,223,031
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UNITED KINGDOM & POSSESSIONS -- 16.41%
273,000 Allied Colloids Group plc............................. $ 539,074
68,000 Allied Domecq plc..................................... 578,993
120,000 Angerstein Underwriting Trust plc..................... 163,025
49,000 Bass plc.............................................. 495,395
63,000 BAT Industries plc.................................... 526,468
132,000 British Gas plc....................................... 553,623
66,000 British Petroleum Co. plc............................. 495,237
85,000 British Sky Broadcasting Group plc.................... 512,930
104,000 British Telecommunications plc........................ 650,585
132,000 BTR plc............................................... 680,821
126,000 Caradon plc........................................... 430,927
56,000 Dalgety plc........................................... 391,893
103,000 General Electric Co. plc.............................. 516,603
47,000 Glaxo Holdings plc.................................... 569,468
101,000 Inchcape plc.......................................... 513,751
71,000 Kingfisher plc........................................ 565,281
53,000 Land Securities plc................................... 514,905
41,000 Legal & General Group plc............................. 386,664
60,000 Marks & Spencer plc................................... 410,881
67,000 National Westminster Bank plc......................... 668,910
177,000 NFC plc............................................... 415,217
76,000 Sainsbury (J) plc..................................... 524,051
57,000 Shell Transport & Trading Co. plc..................... 669,921
125,000 Syndicate Capital Trust plc........................... 175,742
12,000 Thai-Euro Fund Global Share Certificate............... 405,000
20,000 Unilever plc.......................................... 399,349
345,000 Wimpey (George) plc................................... 588,598
21,000 Zeneca Group plc...................................... 379,840
-----------
13,723,152
-----------
FRANCE -- 5.74%
5,900 Accor S.A. ........................................... 731,058
8,862 Cie Generale des Eaux................................. 851,458
8,070 Credit Local de France................................ 649,305
12,680 Lafarge Coppee S.A.................................... 834,000
20,060 Michelin CGDE, Class B (Registered)................... 879,739
14,050 Total S.A., Class B................................... 850,477
-----------
4,796,037
-----------
GERMANY -- 5.69%
2,700 BASF AG............................................... 590,655
2,500 Bayer AG.............................................. 638,607
14,450 Deutsche Bank AG...................................... 688,664
5,000 +Fag Kugelfischer Georg Schaefer AG................... 689,534
2,843 Mannesmann AG......................................... 930,020
1,700 Preussag AG........................................... 503,990
18,000 Veba AG............................................... 713,826
-----------
4,755,296
-----------
</TABLE>
See Notes to Financial Statements
8
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INTERNATIONAL FUND (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
NETHERLANDS -- 4.68%
10,000 ABN Amro Holdings N.V. ............................... $ 413,905
4,000 Akzo Nobel N.V........................................ 480,430
20,000 Koninklijke Ahold N.V................................. 751,532
22,000 Koninklijke KNP N.V. ................................. 653,370
10,800 Philips Electronics N.V............................... 526,697
8,200 VNU N.V............................................... 1,086,908
-----------
3,912,842
-----------
SWEDEN -- 4.19%
35,400 Astra AB, Class A..................................... 1,246,713
39,300 Ericsson S.A., Class B................................ 969,978
52,300 Volvo AB, Class B..................................... 1,283,287
-----------
3,499,978
-----------
SWITZERLAND -- 4.18%
1,840 Alusuisse-Lonza Holding AG (Registered)............... 1,364,437
933 Nestle AG (Registered)................................ 955,039
166 Roche Holding AG...................................... 1,172,069
-----------
3,491,545
-----------
HONG KONG -- 4.17%
469,000 Amoy Properties Ltd................................... 442,842
107,000 Cheung Kong Holdings Ltd.............................. 582,665
284,000 Dairy Farm International Holdings Ltd................. 247,080
119,000 Hong Kong Electric Holdings Ltd....................... 397,888
124,000 Hutchison Whampoa..................................... 672,030
704,000 Shun Tak Holdings Ltd................................. 555,463
74,000 Swire Pacific Ltd., Class A........................... 586,261
-----------
3,484,229
-----------
ITALY -- 3.90%
33,800 Assicurazioni Generali SPA............................ 781,952
215,000 Fiat SPA.............................................. 805,433
288,000 Italgas SPA........................................... 860,981
86,500 Telecom Italia Mobile SPA............................. 144,319
401,500 Telecom Italia SPA.................................... 663,646
-----------
3,256,331
-----------
AUSTRALIA -- 2.93%
85,000 ANZ Banking Group Ltd................................. 364,112
35,600 Broken Hill Proprietary Co., Ltd...................... 490,578
152,000 Mayne Nickless Ltd.................................... 720,020
188,000 MIM Holdings Ltd...................................... 269,864
94,000 North Ltd. ........................................... 269,864
128,000 Pioneer International Ltd............................. 338,463
-----------
2,452,901
-----------
SPAIN -- 1.89%
4,970 Acerinox S.A.......................................... 566,874
16,770 Repsol S.A............................................ 527,030
35,500 Telefonica de Espana S.A. ............................ 488,190
-----------
1,582,094
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SINGAPORE -- 1.83%
54,155 Development Bank of Singapore Ltd. (Foreign)......... $ 616,652
260,000 Neptune Orient Lines Ltd............................. 277,782
17,200 +Singapore Sesdaq Fund............................... 318,200
177,000 United Overseas Land Ltd............................. 317,249
-----------
1,529,883
-----------
BRAZIL -- 1.82%
6,750 Cia Vale do Rio Doce ADR............................. 280,125
36,100 Eletrobras ADR....................................... 543,847
15,000 Telebras ADR......................................... 697,500
-----------
1,521,472
-----------
BELGIUM -- 1.78%
2,250 Generale de Banque S.A............................... 704,561
1,470 Solvay S.A. ......................................... 781,782
-----------
1,486,343
-----------
MALAYSIA -- 1.77%
69,000 Malayan Banking Bhd.................................. 557,715
70,000 Malaysian International Shipping Bhd (Foreign)....... 210,432
31,000 Telekom Malaysia Bhd................................. 233,287
125,000 Tenaga Nasional Bhd.................................. 477,802
-----------
1,479,236
-----------
KOREA -- 1.64%
11 Korea International Trust............................ 676,500
53,100 +Schroder Korea Fund................................. 690,300
-----------
1,366,800
-----------
TAIWAN -- 1.60%
39 Formosa Fund IDR..................................... 302,250
900,000 GP Taiwan Index Fund................................. 729,000
4 Taipei Fund IDR...................................... 310,000
-----------
1,341,250
-----------
MEXICO -- 1.39%
185,000 Cifra S.A. ADR....................................... 216,450
79,560 Cifra S.A., Series B................................. 95,098
9,700 Coca-Cola FEMSA S.A. ADR............................. 191,575
24,000 Empresas ICA Sociedad Controladora S.A. ADR.......... 274,560
33,600 +/++Grupo Carso S.A. ADR............................. 382,200
-----------
1,159,883
-----------
CHILE -- 1.14%
15,500 Genesis Chile Fund Ltd. (Participating Certificates). 550,250
10,200 GT Chile Growth Fund Ltd............................. 400,350
-----------
950,600
-----------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INTERNATIONAL FUND (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ARGENTINA -- 0.54%
5,700 Telecom Argentina ADR................................ $ 239,742
11,900 YPF S.A. ADR......................................... 214,200
-----------
453,942
-----------
TOTAL COMMON STOCKS
(Cost $73,867,797)................................... 78,466,845
-----------
PREFERRED STOCKS -- 1.01%
FRANCE -- 1.01%
8,650 Legrand S.A. (Cost $666,486)......................... 846,902
-----------
RIGHTS -- 0.05%
SWEDEN -- 0.05%
39,300 +/xEricsson S.A., Class B,
expiring 10/27/95 (Cost $0).......................... 45,946
-----------
<CAPTION>
NO. OF
WARRANTS
--------
<C> <S> <C>
WARRANTS -- 0.06%
UNITED KINGDOM & POSSESSIONS -- 0.04%
24,000 +Angerstein Underwriting Trust plc, expiring 8/31/00. 9,478
2,000 +BTR plc, expiring 10/23/95.......................... 3,349
2,666 +BTR plc, expiring 5/15/96........................... 2,927
2,666 +BTR plc, expiring 12/26/97.......................... 2,948
1,401 +BTR plc, expiring 11/26/98.......................... 543
6,000 +Syndicate Capital Trust plc, expiring 10/31/99...... 2,654
2,600 +Thai Euro Fund (Bonus),
expiring TBA......................................... 7,800
-----------
29,699
-----------
JAPAN -- 0.02%
82 +Credit Saison Co.,
expiring 4/18/96..................................... 16,400
-----------
TOTAL WARRANTS
(Cost $132,893)...................................... 46,099
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
DEMAND NOTES -- 4.84%
UNITED STATES -- 4.84%
$1,115,000 Associates Corp. of North America Master Notes........ $ 1,115,000
2,931,000 General Electric Co. Promissory Notes................. 2,931,000
-----------
TOTAL DEMAND NOTES
(Cost $4,046,000)..................................... 4,046,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $78,713,176*)......................................... 99.84% $83,451,792
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.16 129,786
------ -----------
NET ASSETS.................................................. 100.00% $83,581,578
====== ===========
</TABLE>
- --------
*-- Aggregate cost for Federal tax and book purposes.
+-- Non-income producing.
++-- Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September
30, 1995 these securities amounted to $382,200, or 0.5% of net assets.
x-- Security is valued at fair value. See Note 1(a).
ADR -- American Depositary Receipt
IDR-- International Depositary Share
See Notes to Financial Statements
10
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
INTERNATIONAL FUND (UNAUDITED) -- (CONTINUED)
At September 30, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Financial................................................ 18.11% $15,140,208
Consumer Cyclical........................................ 14.96 12,506,293
Utilities................................................ 14.72 12,305,252
Raw/Intermediate Materials............................... 12.58 10,517,889
Consumer Staples......................................... 7.56 6,319,020
Capital Goods............................................ 7.22 6,031,434
Transportation........................................... 6.04 5,049,353
Technology............................................... 5.18 4,328,814
Demand Notes............................................. 4.84 4,046,000
Investment Companies..................................... 4.63 3,868,375
Energy & Natural Resources............................... 4.00 3,339,154
------ -----------
Total Investments........................................ 99.84% $83,451,792
Other Assets and Liabilities (Net)....................... 0.16 129,786
------ -----------
Net Assets............................................... 100.00% $83,581,578
====== ===========
</TABLE>
See Notes to Financial Statements
11
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PACIFIC/ASIA FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- 89.56%
HONG KONG -- 25.58%
1,110,000 Amoy Properties Ltd................................... $ 1,048,091
490,000 Cathay Pacific Airways Ltd............................ 744,710
335,000 Cheung Kong Holdings Ltd.............................. 1,824,232
175,000 China Light & Power Co., Ltd.......................... 905,422
1,050,000 Dickson Concepts International Ltd.................... 760,555
1,240,000 Guangdong Investments Ltd............................. 741,799
3,538,000 Harbour Ring International Holdings................... 375,254
416,500 Hong Kong Electric Holdings Ltd....................... 1,392,607
458,200 Hong Kong Telecom..................................... 832,692
286,000 Hutchison Whampoa..................................... 1,550,005
191,000 Jardine Strategic Holdings............................ 557,720
1,395,000 Leefung-Asco Printers Holdings Ltd.................... 243,591
179,000 Mandarin Oriental International Ltd................... 186,160
1,332,000 Shun Tak Holdings Ltd................................. 1,050,962
220,500 Sun Hung Kai Properties Ltd........................... 1,789,680
128,000 Swire Pacific Ltd., Class A........................... 1,014,073
-----------
15,017,553
-----------
AUSTRALIA -- 15.65%
395,000 ANZ Banking Group Ltd................................. 1,692,051
85,000 Australian Gas Light Co., Ltd......................... 295,400
1,598,666 +Australian Medical Enterprises Ltd................... 1,038,699
298,000 Australian National Industries Ltd.................... 281,423
470,000 Azon Ltd.............................................. 678,211
54,000 Broken Hill Proprietary Co., Ltd...................... 744,135
417,000 Mayne Nickless Ltd.................................... 1,975,318
74,500 Memtec Ltd. ADR....................................... 1,303,750
157,000 MIM Holdings Ltd...................................... 225,365
117,000 North Ltd............................................. 335,895
235,000 +Orbital Engine Corp., Ltd............................ 266,313
54,000 Western Mining Corp. Holdings Ltd..................... 353,301
-----------
9,189,861
-----------
JAPAN -- 14.96%
30,000 Asahi Chemical Industry Co., Ltd...................... 207,513
13,000 Daifuku............................................... 158,841
27 DDI Corp.............................................. 223,023
47 East Japan Railway Co................................. 232,556
18,000 Fujitsu Ltd........................................... 227,204
32,000 Honshu Paper Co., Ltd................................. 194,204
15,000 Isetan Co............................................. 210,542
5,000 Ito-Yokado Co., Ltd................................... 276,684
23,000 Kajima Corp........................................... 226,679
7,000 Katokichi Co., Ltd.................................... 133,596
42,000 Marubeni Corp......................................... 209,936
24,000 Matsushita Electric Industries Ltd.................... 368,373
18,000 Mitsubishi Estate Co., Ltd............................ 201,757
37,000 Mitsubishi Oil Co., Ltd............................... 316,833
50,000 +New Japan Securities Co.............................. 257,498
44,000 NGK Spark Plug Co..................................... 595,375
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
42 Nippon Telegraph & Telephone Corp..................... $ 360,219
41,000 Nippon Yusen.......................................... 243,027
180,000 +NKK Corp............................................. 481,672
26,000 Nomura Securities Co., Ltd............................ 509,341
36,000 Onward Kashiyama Co., Ltd............................. 483,490
80,000 +Pacific Metals Co., Ltd.............................. 521,054
18,000 Ricoh Corp............................................ 180,309
34,000 Sakura Bank Ltd....................................... 370,797
36,000 Sumitomo Corp......................................... 344,259
16,000 Sumitomo Trust & Banking Co., Ltd..................... 219,731
27,000 Tokio Marine & Fire Insurance Co...................... 291,730
21,000 Tokyo Steel Manufacturing Co.......................... 405,029
49,000 Tokyu Corp............................................ 330,526
-----------
8,781,798
-----------
MALAYSIA -- 10.71%
214,000 Malayan Banking Bhd................................... 1,729,723
350,000 Malaysian Industrial Development Finance Bhd.......... 696,795
33,333 Malaysian International Shipping Bhd (Foreign)........ 100,205
579,000 Nylex Malaysia Bhd.................................... 1,694,465
202,400 Oriental Holdings Bhd................................. 1,015,425
115,000 Resorts World Bhd..................................... 572,367
125,000 Tenaga Nasional Bhd................................... 477,802
-----------
6,286,782
-----------
SINGAPORE -- 7.13%
57,500 Development Bank of Singapore Ltd. (Foreign).......... 654,741
220,000 Inchcape Berhad....................................... 702,045
90,000 Keppel Corp., Ltd..................................... 721,164
634,000 Pacific Carriers Ltd.................................. 606,059
50,000 Singapore Airlines Ltd. (Foreign)..................... 463,907
305,000 Times Publishing Ltd.................................. 707,457
185,000 United Overseas Land Ltd.............................. 331,588
-----------
4,186,961
-----------
THAILAND -- 5.28%
60,000 Bangkok Bank Co., Ltd. (Foreign)...................... 674,641
8,000 Bangkok Insurance Co., Ltd. (Foreign)................. 137,161
148,115 +Dusit Thani Corp., Ltd. (Foreign).................... 259,851
35,000 National Petrochemical Co............................. 73,266
240,000 National Petrochemical Co. (Foreign).................. 622,010
285,000 Robinson Department Store Co. (Foreign)............... 553,977
125,700 Surapon Seafoods Co., Ltd. (Foreign).................. 190,455
30,000 TelecomAsia Corp...................................... 90,311
165,000 TelecomAsia Corp. (Foreign)........................... 496,710
-----------
3,098,382
-----------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PACIFIC/ASIA FUND (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
KOREA -- 3.96%
3,100 Hyundai Motor Co., Ltd. GDR........................... $ 60,450
43,000 Korea Electric Power Corp. ADR........................ 1,091,125
90,000 +Schroder Korea Fund.................................. 1,170,000
-----------
2,321,575
-----------
TAIWAN -- 2.78%
3,188 Asia Cement Corp. GDS................................. 65,354
162 Formosa Fund IDR...................................... 1,255,500
4 Taipei Fund IDR....................................... 310,000
-----------
1,630,854
-----------
INDIA -- 0.96%
54,000 Morgan Stanley India Investment Fund, Inc............. 560,250
-----------
NETHERLANDS -- 0.93%
40,000 IS Himalayan Fund N.V................................. 548,000
-----------
NEW ZEALAND -- 0.87%
219,329 Carter Holt Harvey Ltd................................ 510,809
-----------
INDONESIA -- 0.75%
241,875 Panin Bank (Foreign).................................. 293,667
50,000 Tancho Indonesia (Foreign)............................ 147,903
-----------
441,570
-----------
PHILIPPINES -- 0.00%
124 +Philippine National Bank, Class B.................... 1,298
-----------
TOTAL COMMON STOCKS
(Cost $51,578,141).................................... 52,575,693
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
DEMAND NOTES -- 10.16%
UNITED STATES -- 10.16%
$2,866,000 Associates Corp. of North America Master Notes........ $ 2,866,000
3,099,000 General Electric Co. Promissory Notes................. 3,099,000
-----------
TOTAL DEMAND NOTES
(Cost $5,965,000)..................................... 5,965,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $57,543,141*)...................... 99.72% $58,540,693
OTHER ASSETS & LIABILITIES (NET)........................... 0.28 165,987
------ -----------
NET ASSETS................................................. 100.00% $58,706,680
====== ===========
</TABLE>
- --------
*-- Aggregate cost for Federal tax and book purposes.
+-- Non-income producing.
ADR -- American Depositary Receipt
GDR-- Global Depositary Receipt
GDS-- Global Depositary Share
IDR-- International Depositary Share
See Notes to Financial Statements
13
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PACIFIC/ASIA FUND (UNAUDITED) -- (CONTINUED)
At September 30, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Consumer Cyclical........................................ 13.38% $ 7,854,253
Financial................................................ 12.83 7,529,175
Raw/Intermediate Materials............................... 12.70 7,456,010
Demand Notes............................................. 10.16 5,965,000
Transportation........................................... 9.38 5,507,188
Real Estate.............................................. 9.10 5,343,250
Utilities................................................ 7.79 4,570,706
Capital Goods............................................ 6.78 3,978,892
Investment Companies..................................... 6.55 3,843,750
Consumer Staples......................................... 5.36 3,148,419
Technology............................................... 4.65 2,731,817
Energy & Natural Resources............................... 1.04 612,233
------ -----------
Total Investments........................................ 99.72% $58,540,693
Other Assets and Liabilities (Net)....................... 0.28 165,987
------ -----------
Net Assets............................................... 100.00% $58,706,680
====== ===========
</TABLE>
See Notes to Financial Statements
14
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PAN EUROPEAN FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 89.83%
UNITED KINGDOM & POSSESSIONS -- 31.03%
270,000 Allied Colloids Group plc............................. $ 533,150
58,000 Allied Domecq plc..................................... 493,847
145,000 Angerstein Underwriting Trust plc..................... 196,989
104,000 Bass plc.............................................. 1,051,451
65,000 BAT Industries plc.................................... 543,181
99,000 British Gas plc....................................... 415,217
74,000 British Petroleum Co. plc............................. 555,266
100,000 British Sky Broadcasting Group plc.................... 603,447
97,000 British Telecommunications plc........................ 606,796
118,000 BTR plc............................................... 608,612
88,000 Caradon plc........................................... 300,965
53,000 Dalgety plc........................................... 370,899
100,000 General Electric Co. plc.............................. 501,556
49,500 Glaxo Holdings plc.................................... 599,758
131,000 Inchcape plc.......................................... 666,351
68,000 Kingfisher plc........................................ 541,396
94,000 Land Securities plc................................... 913,227
49,000 Legal & General Group plc............................. 462,111
57,000 Marks & Spencer plc................................... 390,337
79,000 National Westminster Bank plc......................... 788,715
200,000 NFC plc............................................... 469,172
50,000 Redland plc........................................... 299,354
75,000 Sainsbury (J) plc..................................... 517,156
52,000 Shell Transport & Trading Co. plc..................... 611,156
170,000 Syndicate Capital Trust plc........................... 239,009
19,000 Unilever plc.......................................... 379,382
255,000 Wimpey (George) plc................................... 435,050
28,000 Zeneca Group plc...................................... 506,453
-----------
14,600,003
-----------
FRANCE -- 12.15%
3,500 Accor S.A............................................. 433,679
3,980 Cie Generale des Eaux................................. 382,397
6,830 Credit Local de France................................ 549,535
2,500 Essilor International ADP............................. 299,614
3,770 IMETAL................................................ 447,989
7,551 Lafarge Coppee S.A.................................... 496,651
10,610 Michelin CGDE, Class B (Registered)................... 465,306
6,517 Primagaz S.A.......................................... 448,764
1,950 Promodes.............................................. 472,547
9,000 SEITA................................................. 327,239
6,000 Television Francaise 1................................ 592,322
7,440 Total S.A., Class B................................... 450,360
7,500 Valeo S.A............................................. 353,138
-----------
5,719,541
-----------
GERMANY -- 9.43%
1,600 BASF AG............................................... 350,017
2,560 Bayer AG.............................................. 653,933
365 Bayerische Motoren Werke AG........................... 200,578
17,000 Deutsche Bank AG...................................... 810,192
540 Duerr Beteiligungs AG................................. 177,858
2,300 +Fag Kugelfischer Georg
Schaefer AG........................................... 317,186
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
GERMANY -- (CONTINUED)
1,798 Mannesmann AG......................................... $ 588,173
1,600 Preussag AG........................................... 474,344
1,000 +Thyssen AG........................................... 193,210
10,800 Veba AG............................................... 428,295
750 Volkswagen AG......................................... 243,087
-----------
4,436,873
-----------
NETHERLANDS -- 8.32%
16,400 ABN Amro Holdings N.V................................. 678,804
1,795 Akzo Nobel N.V........................................ 215,593
36,700 Elsevier N.V.......................................... 470,395
4,000 Grolsch N.V........................................... 142,303
1,500 GTI Holding N.V....................................... 132,237
21,600 Koninklijke Ahold N.V................................. 811,654
12,000 Koninklijke KNP N.V................................... 356,384
7,995 MacIntosh N.V......................................... 234,941
4,800 Philips Electronics N.V............................... 234,088
7,254 Sphinx N.V............................................ 216,795
3,170 VNU N.V............................................... 420,183
-----------
3,913,377
-----------
SWITZERLAND -- 8.28%
1,070 Alusuisse-Lonza Holding AG (Registered)............... 793,450
941 Nestle AG (Registered)................................ 963,229
197 Roche Holding AG...................................... 1,390,949
980 Sandoz AG (Registered)................................ 746,214
-----------
3,893,842
-----------
ITALY -- 5.48%
20,670 Assicurazioni Generali SPA............................ 478,193
440,000 Credito Italiano SPA.................................. 522,062
49,000 Gilardini SPA......................................... 103,635
7,900 Industrie Natuzzi SPA ADR............................. 281,437
78,000 Italgas SPA........................................... 233,182
120,000 +SME Meridionale SPA.................................. 251,566
141,000 Telecom Italia Mobile SPA............................. 235,248
286,000 Telecom Italia SPA.................................... 472,735
-----------
2,578,058
-----------
SWEDEN -- 5.30%
21,800 Astra AB, Class A..................................... 781,909
6,250 Electrolux AB, Class B Free........................... 299,045
23,200 Ericsson S.A., Class B................................ 572,608
36,500 Stora Kopparbergs Bergslags AB, Class A............... 497,849
14,000 Volvo AB, Class B..................................... 343,519
-----------
2,494,930
-----------
SPAIN -- 3.49%
1,430 Acerinox S.A.......................................... 163,105
11,800 Argentaria S.A........................................ 419,997
2,600 +Cristaleria Espanol S.A.............................. 161,948
5,500 Hidroelectrica del Cantabrico S.A., Class C........... 166,842
</TABLE>
See Notes to Financial Statements
15
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PAN EUROPEAN FUND (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SPAIN -- (CONTINUED)
10,000 Repsol S.A........................................... $ 314,269
30,400 Telefonica de Espana S.A............................. 418,055
-----------
1,644,216
-----------
BELGIUM -- 2.09%
1,045 Generale de Banque S.A............................... 327,229
1,000 Glaverbel S.A........................................ 128,659
520 Solvay S.A........................................... 276,549
2,400 Ter Beke S.A......................................... 251,600
-----------
984,037
-----------
FINLAND -- 1.60%
5,450 Cultor Oy 1.......................................... 206,633
6,400 Metra Oy, Class B.................................... 296,574
11,100 Repola Oy............................................ 249,391
-----------
752,598
-----------
NORWAY -- 0.90%
1,500 Kvaerner AS, Class B................................. 60,688
8,500 Norsk Hydro AS....................................... 364,885
-----------
425,573
-----------
GREECE -- 0.60%
8,375 Hellenic Bottling Co. S.A............................ 282,223
-----------
AUSTRIA -- 0.58%
3,750 Mayr-Melnhof Karton AG............................... 238,551
162 Wienerberger Baustoffindustrie AG.................... 35,158
-----------
273,709
-----------
PORTUGAL -- 0.58%
5,460 Jeronimo Martins..................................... 273,510
-----------
TOTAL COMMON STOCKS (Cost $37,845,997)............... 42,272,490
-----------
PREFERRED STOCKS -- 1.74%
FRANCE -- 0.89%
4,300 Legrand S.A.......................................... 421,003
-----------
GERMANY -- 0.85%
650 Friedrich Grohe AG................................... 171,089
300 Henkel KGAA.......................................... 114,036
300 Krones AG............................................ 115,506
-----------
400,631
-----------
TOTAL PREFERRED STOCKS (Cost $728,568)............... 821,634
-----------
RIGHTS -- 0.06%
SWEDEN -- 0.06%
23,200 +/xEricsson S.A., Class B, expiring 10/27/95 (Cost
$0).................................................. 27,124
-----------
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (NOTE 1)
---------- -----------
<C> <S> <C>
WARRANTS -- 0.04%
UNITED KINGDOM -- 0.03%
29,000 +Angerstein Underwriting Trust plc, expiring 8/31/00. $ 11,453
948 +BTR plc, expiring 11/26/98.......................... 367
4,000 +Syndicate Capital Trust plc,
expiring 10/31/99.................................... 1,769
-----------
13,589
-----------
FRANCE -- 0.01%
592 +Primagaz S.A., expiring 6/30/98..................... 3,553
-----------
TOTAL WARRANTS
(Cost $13,246)....................................... 17,142
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 8.08%
UNITED STATES -- 8.08%
$1,619,000 Associates Corp. of North America Master Notes....... 1,619,000
2,183,000 General Electric Co. Promissory Notes................ 2,183,000
-----------
TOTAL DEMAND NOTES
(Cost $3,802,000).................................... 3,802,000
===========
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $42,389,811*)......................................... 99.75% $46,940,390
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.25 118,735
------ -----------
NET ASSETS.................................................. 100.00% $47,059,125
====== ===========
</TABLE>
- --------
*-- Aggregate cost for Federal tax and book purposes.
+-- Non-income producing.
x-- Security is valued at fair value. See Note 1(a).
ADR -- American Depositary Receipt
See Notes to Financial Statements
16
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
PAN EUROPEAN FUND (UNAUDITED) -- (CONTINUED)
At September 30, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Consumer Cyclical........................................ 20.00% $ 9,410,479
Consumer Staples......................................... 19.73 9,282,100
Financial................................................ 12.62 5,940,728
Raw/Intermediate Materials............................... 12.51 5,888,514
Demand Notes............................................. 8.08 3,802,000
Utilities................................................ 7.54 3,548,291
Capital Goods............................................ 7.09 3,337,186
Energy & Natural Resources............................... 5.94 2,795,032
Technology............................................... 4.55 2,142,610
Diversified.............................................. 1.69 793,450
------ -----------
Total Investments........................................ 99.75% $46,940,390
Other Assets and Liabilities (Net)....................... 0.25 118,735
------ -----------
Net Assets............................................... 100.00% $47,059,125
====== ===========
</TABLE>
See Notes to Financial Statements
17
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
EMERGING AMERICAS FUND (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 77.89%
MEXICO -- 19.78%
4,500 Banacci, Class L..................................... $ 7,991
22,280 +Bufete Industrial S.A. ADR.......................... 359,265
53,274 Cemex S.A., Class A.................................. 203,904
52,497 Cemex S.A., Class B.................................. 209,988
328,307 Cifra S.A., Class B.................................. 391,393
164,500 Cifra S.A., Class C.................................. 190,949
5,650 Coca-Cola FEMSA S.A. ADR............................. 111,587
87,046 +Corporacion GEO S.A., Class B....................... 286,740
2,100 +Desaroios Sociedad Fomento Industries S.A., Series
B.................................................... 7,906
22,000 Empresas ICA Sociedad Controladora S.A. ADR.......... 251,680
13,400 +Empresas La Moderna S.A. ADR........................ 226,125
82,700 FEMSA, Class B....................................... 209,896
174,000 Grupo Carso S.A., Class A1........................... 1,031,718
7,360 Grupo Casa Autrey S.A. ADR........................... 115,920
139,000 Grupo Financiero Banamex Accival S.A., Class B....... 262,519
24,000 ++Grupo Financiero Bancomer S.A. ADR................. 141,000
235,000 Grupo Financiero Serfin S.A.......................... 173,255
28,000 Grupo Industrial Alfa S.A., Class A 364,549
71,200 Grupo Industrial Bimbo S.A., Class A................. 317,189
13,000 Grupo Televisa S.A. CPO.............................. 129,490
8,570 Hylsamex GDR......................................... 154,260
18,540 Kimberly-Clark de Mexico S.A., Class A............... 258,833
4,700 Panamerican Beverages, Inc., Class A................. 126,312
52,000 Telefonos de Mexico S.A., Class A 83,363
725,000 Telefonos de Mexico S.A., Class L 1,162,274
65,000 Tolmex S.A., Class B2................................ 328,314
-----------
7,106,420
-----------
BRAZIL -- 18.57%
59,539,086 Banco Bradesco....................................... 490,432
19,567 Cia Energetica de Minas Gerais ADR................... 435,366
2,120,000 Cia Vale do Rio Doce................................. 522,770
4,590,800 Eletrobras........................................... 1,416,260
1,525,064 Light................................................ 568,098
56,500 Souza Cruz S.A....................................... 415,005
17,600,000 Telebras............................................. 711,018
28,200 Telebras ADR......................................... 1,311,300
4,780,000 Telesp............................................... 800,010
-----------
6,670,259
-----------
CANADA -- 13.79%
22,000 Abitibi Price, Inc................................... 382,740
28,000 +Anderson Exploration Ltd............................ 263,099
17,000 Avenor, Inc.......................................... 362,180
41,000 Bombardier, Inc., Class B............................ 480,612
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CANADA -- (CONTINUED)
26,900 Camco, Inc........................................... $ 80,083
1,000 +Ford Motor Co. of Canada Ltd........................ 135,829
2,500 Franco Nevada Mining Ltd............................. 149,784
24,000 Midland Walwyn, Inc.................................. 149,598
6,300 Northern Telecom Ltd................................. 223,895
12,800 Potash Corp. of Saskatchewan, Inc.................... 797,856
17,200 Rio Algom Ltd........................................ 347,239
12,300 +Talisman Energy, Inc................................ 239,162
23,000 Telus Corp........................................... 280,310
17,700 Toronto Dominion Bank................................ 302,992
28,000 TransCanada Pipelines Ltd............................ 369,902
43,100 Wascana Energy, Inc.................................. 388,946
-----------
4,954,227
-----------
CHILE -- 13.57%
8,656 Banco Osorno y La Union ADR.......................... 134,168
2,265 Chilectra S.A. ADR................................... 103,907
7,500 Chilgener S.A. ADR................................... 158,438
5,954 Compania de Telefonos de Chile ADR................... 411,570
3,276 Embotelladora Andina S.A. ADR........................ 108,927
23,824 Empresa Nacional de Electridad S.A. ADR.............. 479,458
21,288 Enersis S.A. ADR..................................... 537,522
217,330 Five Arrows Chile Investment Trust................... 623,737
29,006 Genesis Chile Fund Ltd. (Participating Certificates). 1,029,713
2,300 GT Chile Growth Fund Ltd............................. 90,275
12,328 Madeco S.A. ADR...................................... 289,708
19,585 Maderas y Sinteticos S.A. ADR........................ 377,011
13,400 Santa Isabel S.A. ADR................................ 289,775
5,476 Sociedad Quimica y Minera de Chile ADR............... 239,575
-----------
4,873,784
-----------
ARGENTINA -- 6.20%
20,545 Banco de Galicia y Buenos Aires S.A., Class B........ 93,078
9,840 Banco Frances del Rio de la Plata S.A., Class B...... 70,363
8,387 Buenos Aires Embotelladora S.A. ADR.................. 194,998
81,884 Cia Naviera Perez Compania S.A., Class B............. 357,869
7,733 +CIADEA S.A.......................................... 30,162
57,200 +Comercial del Plata S.A............................. 134,433
16,088 Molinos Rio de la Plata S.A., Class B................ 98,147
1,960 Quilmes Industrial S.A............................... 36,260
43,707 Telecom Argentina S.A., Class B...................... 183,588
166,928 Telefonica de Argentina S.A., Class B................ 400,667
48,000 Transportadora de Gas del Sur S.A., Class B.......... 100,810
</TABLE>
See Notes to Financial Statements
18
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
EMERGING AMERICAS FUND (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ARGENTINA -- (CONTINUED)
29,250 YPF S.A. ADR.......................................... $ 526,500
-----------
2,226,875
-----------
COLOMBIA -- 3.45%
3,700 ++Banco de Colombia GDR............................... 24,050
33,400 Banco de Colombia GDS................................. 217,100
13,900 Banco Ganadero S.A. ADR............................... 194,600
14,400 ++Cadenalco S.A. ADS.................................. 190,800
12,018 Carulla S.A. ADR...................................... 109,604
14,850 ++Cementos Diamante ADR............................... 274,725
4,520 Cementos Diamante GDR................................. 83,620
11,700 Cementos Paz del Rio ADR.............................. 146,250
-----------
1,240,749
-----------
PERU -- 2.53%
113,928 Banco de Credito del Peru............................. 213,615
3,793 Cementos Lima, Class C................................ 52,205
50,987 Cerveceria Backus y Johnson, Class C.................. 98,332
708 Cia de Minas Buenaventura,
Class C............................................... 3,919
21,391 +Cia de Minas Buenaventura,
Class T............................................... 121,757
10,838 +Southern Peru Copper, Class T........................ 42,481
195,193 Telefonica del Peru S.A., Class B..................... 374,701
-----------
907,010
-----------
TOTAL COMMON STOCKS (Cost $32,008,935)................ 27,979,324
-----------
PREFERRED STOCKS -- 16.00%
BRAZIL -- 16.00%
100,000 Aracruz Celulose...................................... 205,666
25,200,017 Banco Bradesco........................................ 241,952
1,211,870 Brahma................................................ 494,031
1,380,000 Brasmotor............................................. 353,326
30,000,000 Cia Acos Especiais Itabira-Acesita.................... 253,096
10,000,000 Cia Energetica de Sao Paulo........................... 346,170
6,300,000 Cia Vale do Rio Doce.................................. 1,057,712
145,000 +Cosipa............................................... 257,135
1,395,000 Itaubanco............................................. 439,140
670,000 Itausa................................................ 421,826
183,000 Klabin................................................ 247,713
14,131,300 Lojas Americanas...................................... 335,118
4,609,999 Petrobras............................................. 486,154
3,702,718 Telesp................................................ 607,277
-----------
TOTAL PREFERRED STOCKS (Cost $5,757,853).............. 5,746,316
-----------
RIGHTS -- 0.00%
BRAZIL -- 0.00%
82 +/xTelesp ON, expiring 10/18/95 0
69 +/xTelesp PN, expiring 10/18/95 0
-----------
TOTAL RIGHTS (Cost $0)................................ 0
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
DEMAND NOTES -- 5.87%
UNITED STATES--5.87%
$ 959,000 Associates Corp. of North America Master Notes........ $ 959,000
1,148,000 General Electric Co. Promissory Notes................. 1,148,000
-----------
TOTAL DEMAND NOTES
(Cost $2,107,000)..................................... 2,107,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $39,873,788*)......................................... 99.76% $35,832,640
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.24 87,655
------ -----------
NET ASSETS.................................................. 100.00% $35,920,295
====== ===========
</TABLE>
- --------
*-- Aggregate cost for Federal tax and book purposes.
+-- Non-income producing.
++-- Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September
30, 1995 these securities amounted to $630,575, or 1.8% of net assets.
x-- Security is valued at fair value--See Note 1(a).
ADR-- American Depositary Receipt
GDR-- Global Depositary Receipt
GDS-- Global Depositary Share
See Notes to Financial Statements
19
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
EMERGING AMERICAS FUND (UNAUDITED) -- (CONTINUED)
At September 30, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Utilities................................................ 18.44% $ 6,623,691
Raw/Intermediate Materials............................... 14.93 5,361,664
Financial................................................ 12.85 4,617,302
Consumer Cyclical........................................ 12.37 4,442,439
Capital Goods............................................ 8.89 3,191,834
Consumer Staples......................................... 7.66 2,752,079
Technology............................................... 7.27 2,612,185
Energy & Natural Resources............................... 6.63 2,380,721
Demand Notes............................................. 5.87 2,107,000
Investment Companies..................................... 4.85 1,743,725
------ -----------
Total Investments........................................ 99.76% $35,832,640
Other Assets and Liabilities (Net)....................... 0.24 87,655
------ -----------
Net Assets............................................... 100.00% $35,920,295
====== ===========
</TABLE>
See Notes to Financial Statements
20
<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
International Fund, Pacific/Asia Fund, Pan European Fund and Emerging Americas
Fund (the "Portfolios"). The financial statements for the remaining portfolios
of Master Fund and UST Master Tax-Exempt Funds, Inc. are presented separately.
(A) PORTFOLIO VALUATION:
Investments in securities which are primarily traded on a domestic
exchange are valued at the last sale price on that exchange or, if there
was no recent sale, at the last current bid quotation. 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.
Investment in foreign debt securities having 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.
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
21
<PAGE>
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
translations.
(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 semi-annually.
Net realized capital gains, unless offset by any available capital loss
carryforward, are distributed to shareholders at least annually. Dividends
and distributions are recorded on the ex-dividend date.
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
foreign currency transactions, passive foreign investment companies and
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.
22
<PAGE>
Net capital losses and net currency 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. International Fund, Pacific/Asia Fund, Pan
European Fund and Emerging Americas Fund incurred, and elected to defer,
net capital and currency losses of approximately $0 and $95,000; $0 and
$368,000; $0 and $36,000; and $3,751,000 and $262,000, 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 were as follows:
<TABLE>
<CAPTION>
NET
TAX BASIS TAX BASIS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ -------------- --------------
<S> <C> <C> <C>
International Fund................ $8,042,767 $(3,304,151) $ 4,738,616
Pacific/Asia Fund................. 4,194,693 (3,197,141) 997,552
Pan European Fund................. 5,676,436 (1,125,857) 4,550,579
Emerging Americas Fund............ 2,532,919 (6,574,067) (4,041,148)
</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. Foreign and Colonial Asset Management
("FACAM") serves as the sub-adviser to International Fund and Pan European
Fund. Foreign and Colonial Emerging Markets Limited ("FCEML") serves as the
sub-advisor to Pacific/Asia Fund and Emerging Americas Fund. For the services
provided pursuant to the Investment Advisory Agreements, U.S. Trust is
entitled to receive a fee, computed daily and paid quarterly, at the annual
rate of 1% of the average daily net assets of each Portfolio. FACAM is
entitled to receive from U.S. Trust an annual fee, computed and paid
quarterly, at the annual rate of .70% of the average daily net assets of each
of the International Fund and Pan European Fund. FCEML is entitled to receive
from U.S. Trust an annual fee, computed and paid quarterly, at an annual rate
of .70% of the average daily net assets of the Pacific/Asia Fund and .50% of
the average daily net assets of the Emerging Americas Fund.
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, at the rate of .20%
of the average daily net assets of each Portfolio. 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 Pacific/Asia Fund, Pan European
Fund and Emerging Americas 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 Company
served as administrators to Master Fund all under the same terms, conditions
and
23
<PAGE>
fees as stated above. For the period ended September 30, 1995, administration
fees charged by MFSC were as follows:
<TABLE>
<S> <C>
International Fund................................................... $56,034
Pacific/Asia Fund.................................................... 39,952
Pan European Fund.................................................... 33,463
Emerging Americas Fund............................................... 25,976
</TABLE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust, the sub-advisers
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 the
Administrators intend to voluntarily waive fees and reimburse expenses to the
extent necessary for Pacific/Asia Fund, Pan European Fund and Emerging
Americas Fund to maintain an annual expense ratio of not more than 1.67%.
Master Fund has also entered into shareholder servicing agreements with
various service organizations (which may include affiliates of U.S. Trust)
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 organizations 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 the administrative service
fees payable by such 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
set forth below:
<TABLE>
<CAPTION>
U.S. TRUST ADMINISTRATORS
---------- --------------
<S> <C> <C>
International Fund.................................... $29,790 $227
Pacific/Asia Fund..................................... 18,289 273
Pan European Fund..................................... 16,266 94
Emerging Americas Fund................................ 12,177 68
</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 the 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 continuous 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 Master Fund receives any
compensation from Master Fund.
24
<PAGE>
U.S. Trust serves as the shareholder servicing and dividend disbursing agent
to Master Fund and effective September 1, 1995, CGFSC serves as the sub-
shareholder servicing agent. Prior to September 1, 1995, MFSC served as the
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>
International Fund................................................... $22,257
Pacific/Asia Fund.................................................... 14,316
Pan European Fund.................................................... 11,868
Emerging Americas Fund............................................... 10,393
</TABLE>
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>
International Fund................................................... $19,737
Pacific/Asia Fund.................................................... 25,518
Pan European Fund.................................................... 21,199
Emerging Americas Fund............................................... 17,813
</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>
International Fund...................................... $26,637,514 $11,423,183
Pacific/Asia Fund....................................... 9,889,730 7,357,983
Pan European Fund....................................... 6,558,125 7,579,725
Emerging Americas Fund.................................. 10,621,947 8,604,486
</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 of International Fund and 500
million shares each of Pacific/Asia Fund, Pan European Fund, and Emerging
Americas 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.
<TABLE>
<CAPTION>
INTERNATIONAL FUND
-------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold........................ 2,405,858 $ 25,068,813 2,727,691 $27,892,498
Issued as reinvestment of
dividends.................. -- -- 26,731 272,171
Redeemed.................... (1,048,587) (10,881,846) (1,565,883) (15,721,121)
---------- ------------ ---------- -----------
Net Increase................ 1,357,271 $ 14,186,967 1,188,539 $12,443,548
========== ============ ========== ===========
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
PACIFIC/ASIA FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold......................... 1,673,924 $14,844,934 2,982,448 $ 27,044,986
Issued as reinvestment of
dividends................... 630 5,553 51,459 486,339
Redeemed..................... (869,780) (7,655,610) (2,682,285) (24,110,262)
--------- ----------- ---------- ------------
Net Increase................. 804,774 $ 7,194,877 351,622 $ 3,421,063
========= =========== ========== ============
<CAPTION>
PAN EUROPEAN FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold......................... 1,087,153 $ 9,565,764 1,932,822 $ 15,659,703
Issued as reinvestment of
dividends................... 2,573 21,870 5,039 39,779
Redeemed..................... (753,299) (6,565,710) (1,623,481) (13,079,658)
--------- ----------- ---------- ------------
Net Increase................. 336,427 $ 3,021,924 314,380 $ 2,619,824
========= =========== ========== ============
<CAPTION>
EMERGING AMERICAS FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED
09/30/95 03/31/95
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold......................... 1,338,982 $ 9,454,526 3,068,106 $ 26,793,574
Issued as reinvestment of
dividends................... -- -- 25,995 230,998
Redeemed..................... (957,275) (6,755,684) (2,649,711) (21,694,453)
--------- ----------- ---------- ------------
Net Increase................. 381,707 $ 2,698,842 444,390 $ 5,330,119
========= =========== ========== ============
</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.
USTINLS995
26
