<PAGE>
-------------------------------------------
UST
MASTER FUNDS, INC.
-------------------------------------------
INTERNATIONAL EQUITY PORTFOLIOS
ANNUAL REPORT
MARCH 31, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS.................................................... 1
ADVISER'S INTERNATIONAL EQUITY MARKETS REVIEW............................. 2
ADVISER'S INVESTMENT REVIEWS
International Fund....................................................... 3
Pacific/Asia Fund........................................................ 4
Pan European Fund........................................................ 5
Emerging Americas Fund................................................... 6
STATEMENTS OF ASSETS AND LIABILITIES...................................... 7
STATEMENTS OF OPERATIONS.................................................. 8
STATEMENTS OF CHANGES IN NET ASSETS....................................... 9
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................ 10
PORTFOLIOS OF INVESTMENTS
International Fund....................................................... 12
Pacific/Asia Fund........................................................ 16
Pan European Fund........................................................ 19
Emerging Americas Fund................................................... 22
NOTES TO FINANCIAL STATEMENTS............................................. 25
INDEPENDENT AUDITORS' REPORT.............................................. 31
FEDERAL TAX INFORMATION................................................... 32
</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 UST Distributors, Inc. (See Note 2 to financial statements.)
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 MUTUAL FUNDS SERVICE 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 AND 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 the Annual Report for the UST Master Funds, Inc. and
UST Master Tax-Exempt Funds, Inc. for the fiscal year ended March 31, 1995.
During this past year, we welcomed many new investors to the UST Master Funds
family. With $3.7 billion in assets in the twenty-five funds, we approach
fiscal year 1996 with optimism.
The UST Master Funds consist of ten domestic equity, four international
equity, seven fixed-income, and four money market funds. These funds have been
designed to provide a comprehensive range of investment choices and offer
shareholders an opportunity to allocate holdings according to personal
investment objectives.
Investment performance continued to be strong in several of our funds. In the
domestic equity areas, the Early Life Cycle Fund ranked thirty-eighth among 250
Small Company Growth Funds as reported by Lipper Analytical Services, Inc.* for
the one year period ended March 31, 1995. On the international front, the
Emerging Americas Fund rated second among 12 Latin American Funds reported by
Lipper. Leading the way for our fixed-income funds, the Long-Term Tax-Exempt
Fund ranked number one in a universe of 193 Lipper General Municipal Debt
Funds.** In the money market areas, Lipper rated the Money Fund and Short-Term
Tax-Exempt Fund among the top 25% in field of 248 Money Market Instrument Funds
and 121 Tax-Exempt Money Market Funds, respectively, for the same one year
period.***
UST Master Fund shareholders are serviced by a dedicated team of
professionals. We recognize the importance of excellent customer service and
are committed to meeting shareholder needs in a responsible and efficient
manner. We appreciate your participation in the funds and look forward to
serving you in the years to come.
(Sigcut)
Alfred C. Tannachion
Chairman of the Board and President
* Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor whose rankings are based on total return excluding sales charge.
Past performance is not predictive of future performance.
** For the five year period ended March 31, 1995, the Long-Term Tax-Exempt
Fund ranked number two in a universe of 93 Lipper General Municipal Debt
Funds.
*** Fund Shares are not issued or guaranteed by the U.S. Government and there
is no assurance that the money market funds will be able to maintain a
stable net asset value of $1 per share.
1
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INTERNATIONAL EQUITY MARKETS REVIEW
- --------------------------------------------------------------------------------
During the fiscal first quarter, particularly in the latter half, the most
important factor for U.S. investors was the continued weakness of the U.S.
dollar. This is tied in closely with the crash in bond values -- particularly
in European debt instruments -- following the hike in U.S. interest rates and
growing recognition that U.S. economic growth had been underway earlier than
anticipated. These concerns washed over onto stocks in Europe, which in local
terms saw sharp corrections -- the U.K. in particular. Some dollar-linked areas
in Asia also saw sharp price corrections. Nevertheless, given the U.S. dollar's
weakness, returns to U.S. investors invested abroad were relatively better than
U.S.-only investments.
In aggregate, international markets made little headway during the fiscal
second quarter, though returns to U.S. investors were aided by a further
weakening of the dollar against the European currencies. After a strong
performance earlier in the year, Japan fell back on profit taking. In Europe,
markets recovered at first but then fell back as the world's bond markets
weakened. The markets of the Pacific Basin, in contrast, performed well. Most
impressive, however, were the rallies seen in some of the Latin American
markets. In Japan, while the outlook for corporate profits remained
encouraging, concerns persisted regarding interest rates and continued weakness
in the bond markets.
Most of the international markets did little more than move sideways in the
fiscal third quarter. Japan oscillated within a narrow trading range as
economic indicators remained mixed. Foreign investment was also muted. In
Europe, share prices were trendless as well, despite continued good economic
and corporate news and the stabilization of the bond markets after their
earlier setbacks. The apparent turnaround in the bond markets was prompted by
the greater-than-expected rise in the federal funds rate by the Federal Reserve
Board. The rise in short-term interest rates in the U.S. inevitably had a
negative impact on the markets of the Pacific Basin, in particular on Hong
Kong, given the region's links to the U.S. dollar. Latin America was also
affected by the upturn in U.S. rates, but suffered more markedly at the end of
the quarter from the unexpected devaluation of the Mexican peso.
The international markets began the fiscal fourth quarter on a subdued note.
The main influences on market were the weakness of the U.S. dollar and the
corresponding strength of the European currencies, in particular the deutsche
mark and the yen. This led to a series of downward revisions in corporate
earnings forecasts in Europe and a resulting easing in share prices, despite
the better bond market background. The Japanese market fared even worse as the
negative effects of the strong yen were added to the Kobe earthquake. Latin
America was again volatile. In local currency terms, the only meaningful gains
were seen in some of the markets of the Pacific Basin, which recovered after
their earlier setbacks on relief that U.S. interest rates had stopped rising.
2
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
INTERNATIONAL FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a loss of 1.93%*
versus gains of 5.13% for the FT-Actuaries World Indices -- World Excluding
U.S. Index** and 15.57% for the Standard & Poor's 500 Composite Stock Price
Index.*** During the fiscal first quarter, we continued to increase our
weighting in Japan toward our targeted weighting of 30%. We also reduced
positions in Italy after its strong performance. During the fiscal second
quarter, we made few changes to the portfolio. We added at first a little to
Japan, focusing on cyclical stocks; we financed these purchases through
trimming positions in the Pacific Basin, particularly Hong Kong and Singapore.
Weightings in Continental Europe and the United Kingdom remained unchanged.
Through the first half, our exposure to Latin American markets was a plus. We
made few changes for the balance of the year, other than to take advantage of
the weakness in the Japanese market and add to our positions. We financed this
through additional profit taking in the Pacific Basin, Taiwan in particular.
We also cut back on our Latin America weighting, Mexico in particular, given
expectations of continued near-term volatility. The Fund remained unhedged
throughout the reporting period and thus benefitted from the weakness of the
U.S. dollar.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN INTERNATIONAL FUND AND
FT-ACTUARIES WORLD INDICES-WORLD EXCLUDING U.S. INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
International Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year 5 years Since Inception (7/21/87)
- --------------------------------------------------------------------------------
<S> <C> <C>
- -6.31% 1.67% 4.60%
- --------------------------------------------------------------------------------
<CAPTION>
International International Financial Times Actuaries
(reflects maximum sales charge) (exclusive of sales charge) World Indices
<S> <C> <C> <C>
7/21/87 9550 10000 10000
3/31/88 9424 9872 10930
3/31/89 10423 10918 12160
3/31/90 12393 12982 10950
3/31/91 11749 12307 11290
3/31/92 11238 11772 10420
3/31/93 11784 12343 11630
3/31/94 14416 15101 14190
3/31/95 14137 14809 14760
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in International
Fund on 7/21/87 (inception date) to a $10,000 investment made in the FT-
Actuaries World Indices-World Excluding U.S. Index on that date. For
comparative purposes, the value of the Index on 6/30/87 is used as the
beginning value on 7/21/87. All dividends and capital gain distributions are
reinvested. The Fund's performance takes into account fees and expenses. The
FT-Actuaries World Indices-World Excluding U.S. Index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Goldman Sachs -- The FT-Actuaries World Indices-World Excluding
U.S. Index is a widely accepted, unmanaged index of global stock market
performance, including Canada, Mexico, Europe, Australia, New Zealand,
South Africa and the Far East. The Index includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver maybe modified or
terminated at any time.
3
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
PACIFIC/ASIA FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a loss of 5.89%*
versus gains of 3.08% for the Morgan Stanley Capital International Pacific
Free Index** and 15.57% for the Standard & Poor's 500 Composite Stock Price
Index.*** We began the fiscal year with a cautious stance on Southeast Asia,
given weakness in the U.S. dollar. Our goal was to invest primarily in the
emerging growth economies in Asia. We maintained a light position in Japan
(relative to GDP and market capitalization), though we did raise our target
weighting from 15% to 20%. As the year progressed, we remained positive on
South Korea, Taiwan, Australia and Singapore, though we became increasingly
wary of the more interest-rate sensitive Asian markets and tilted emphasis
toward Australia and Singapore. Moving toward the final quarter, we increased
our position in Hong Kong in anticipation of a U.S. bond market rally; this
proved advantageous, as gains were seen in Hong Kong, New Zealand and
Malaysia. However, losses posted by holdings in Thailand, Indonesia, Australia
and Japan effectively offset these advances.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PACIFIC/ASIA FUND AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC FREE INDEX***
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Pacific/Asia Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year Since Inception (12/31/92)
- --------------------------------------------------------------------------------
<S> <C>
- -10.07% 13.78%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Pacific Asia Pacific Asia Morgan Stanley Capital PACIFIC ASIA
(reflects maximum sales charge) (exclusive of sales charge) International Pacific Free Index FUND
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10286 10771 11745
6/30/93 11282 10814 13800
9/30/93 12207 12782 14504
12/31/93 15877 16625 13648
3/31/94 14207 14876 14725
6/30/94 14475 15158 16263
9/30/94 14715 15408 15808
12/31/94 13544 14183 15427
3/31/95 13370 14000 15178
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Pacific/Asia
Fund on 12/31/92 (inception date) to a $10,000 investment made in the Morgan
Stanley Capital International Pacific Free Index on that date. All dividends
and capital gain distributions are reinvested. The Fund's performance takes
into account fees and expenses. The Morgan Stanley Capital International
Pacific Free Index does not take into account charges, fees and other
expenses. Further information relating to Fund performance is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Morgan Stanley & Co., Incorporated -- Morgan Stanley Capital
International Pacific Free Index is a widely-accepted, unmanaged index
composed of a sample of companies representative of the market structure of
six Pacific Basin countries. The Index includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver maybe modified or
terminated at any time.
4
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
PAN EUROPEAN FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund recorded a total return
of 4.33%* versus 10.99% for FT -- Actuaries World Indices -- Europe Index**
and 15.57% for the Standard & Poor's 500 Composite Stock Price Index***.
During the fiscal first quarter, the end of the European recession was clouded
by weakness in the global bond markets and weakness in the U.S. dollar. Most
European equity markets declined, though the Fund did benefit from our
decision to sell our Italian equities and buy Austrian securities as Austria
showed the best U.S. dollar performance during the quarter. We made few other
portfolio changes during the fiscal year. We remained unhedged throughout this
period, and thus benefitted from the weakness of the U.S. dollar.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PAN EUROPEAN FUND
AND THE FT-ACTUARIES WORLD INDICES-EUROPE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Pan European Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year Since Inception (12/31/92)
- --------------------------------------------------------------------------------
<S> <C>
0.38% 6.40%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Pan European Pan European Financial Times Pan
(reflects maximum sales charge) (exclusive of sales charge) Actuaries Index European
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10014 10486 10493
6/30/93 9727 10186 10616
9/30/93 10418 10907 11585
12/31/93 11198 11726 12485
3/31/94 11020 11540 12107
6/30/94 10841 11352 12495
9/30/94 11287 11819 13057
12/31/94 11203 11731 13217
3/31/95 11497 12039 14063
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Pan European
Fund on 12/31/92 (inception date) to a $10,000 investment made in the FT-
Actuaries World Indices-Europe Index on that date. All dividends and capital
gain distributions are reinvested. The Fund's performance takes into account
fees and expenses. The FT-Actuaries World Indices-Europe Index does not take
into account charges, fees and other expenses. Further information relating to
Fund performance is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Goldman Sachs -- FT-Actuaries World Indices-Europe Index is a
widely-accepted, unmanaged index composed of a sample of companies
representative of the market structure of 14 European countries. The Index
includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver maybe modified or
terminated at any time.
5
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
EMERGING AMERICAS FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund recorded a loss of
30.47%* versus a loss of 29.78% for the Morgan Stanley Capital International
EMF Latin America Index** and a gain of 15.57% for the Standard & Poor's 500
Composite Stock Price Index***. Initial efforts were directed toward favored
nations -- Argentina, Brazil, Mexico and Peru. Least favored were Chile and
Venezuela, and we remained neutral on Canada and Colombia. Adjustments to the
portfolio included trimming in Argentina, additions to Mexico and a continued
overweighting in Brazil. We also increased the number of issues in the fund to
enhance overall diversification. These weightings remained relatively constant
through the first half of the fiscal year. Up until early December 1994, the
optimism resulting from the successful elections in Mexico and Brazil set the
tone for much of Latin American investment. Still, we became increasingly
cautious, underweighting the Mexican position, overweighting Brazil and
tilting positions in Canadian securities heavily toward natural resource
stocks; these efforts could not provide much resistance when the Mexican
government devalued the peso, however. As the final quarter unfolded, pressure
on the Mexican market and peso continued, and similar pressures extended into
most of South America. Although volatility was widespread, our Mexican
underweighting and positions in Canada did aid the Fund throughout the fiscal
fourth quarter.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN EMERGING AMERICAS FUND
AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EMF LATIN AMERICA INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Emerging Americas Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year Since Inception (12/31/92)
- --------------------------------------------------------------------------------
<S> <C>
- -33.54% -4.90%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Emerging Americas Emerging Americas Morgan Stanley Capital International Emerging
(reflects maximum sales charge) (exclusive of sales charge) EMF Latin America Index Americas
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 9714 10171 11340
6/30/93 10014 10486 10690
9/30/93 10785 11294 12100
12/31/93 13344 13973 15070
3/31/93 12846 13452 15850
6/30/94 11757 12312 14400
9/30/93 15026 15735 19070
12/31/94 11920 12482 14920
3/31/95 8932 9353 10900
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Emerging
Americas Fund on 12/31/92 (inception date) to a $10,000 investment made in the
Morgan Stanley Capital International EMF Latin America Index on that date. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Morgan Stanley Capital
International EMF Latin America Index does not take into account charges, fees
and other expenses. Further information relating to Fund performance is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Morgan Stanley & Co., Incorporated -- Morgan Stanley Capital
International EMF Latin America Index is a widely-accepted, unmanaged index
composed of a sample of companies representative of the market structure of
seven Latin American countries. The Index includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver maybe modified or
terminated at any time.
6
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1995
<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.... $63,939,073 $50,814,461 $38,735,593 $ 38,196,773
=========== =========== =========== ============
Investments, at value (Note
1)......................... $64,287,741 $48,176,377 $40,627,023 $ 27,238,162
Cash........................ 17,702 2,378 22,263 30,195
Foreign currency (cost
$14,123)................... -- -- -- 13,912
Dividends receivable........ 200,477 94,303 144,843 61,413
Interest receivable......... 24,094 3,901 5,332 365
Receivable for investments
sold....................... 3,569,726 -- 5,576,632 626,146
Receivable for fund shares
sold....................... 317,032 40,159 230 1,575
Withholding tax receivable.. 48,029 2,272 72,124 --
Prepaid expenses............ 2,619 2,231 1,621 1,776
Unamortized organization
costs (Note 5)............. -- 11,534 11,534 11,534
----------- ----------- ----------- ------------
TOTAL ASSETS............... 68,467,420 48,333,155 46,461,602 27,985,078
LIABILITIES:
Payable for investments
purchased.................. 3,397,522 -- 6,340,566 545,626
Payable for fund shares
redeemed................... 922,996 587,315 62,744 30,261
Net unrealized depreciation
on open forward foreign
currency contracts......... 7,285 -- -- --
Investment advisory and
custodian fees payable
(Note 2)................... 52,806 44,326 35,922 20,634
Administration fees and
shareholder servicing fees
payable (Note 2)........... 14,464 10,933 9,326 6,915
Accrued expenses and other
payables................... 20,389 73,382 36,082 37,912
----------- ----------- ----------- ------------
TOTAL LIABILITIES.......... 4,415,462 715,956 6,484,640 641,348
----------- ----------- ----------- ------------
NET ASSETS................... $64,051,958 $47,617,199 $39,976,962 $ 27,343,730
=========== =========== =========== ============
NET ASSETS consist of:
Distributions in excess of
net investment income...... $ (321,217) $ (386,192) $ (36,164) $ (409,932)
Accumulated net realized
gain/(loss) on investments. (11,179) 59,218 365,023 (3,761,335)
Unrealized
appreciation/(depreciation)
on investments and foreign
currency translations...... 352,056 (2,636,136) 1,890,411 (10,959,772)
Par value (Note 4).......... 6,525 5,635 4,882 4,668
Paid in capital in excess of
par value.................. 64,025,773 50,574,674 37,752,810 42,470,101
----------- ----------- ----------- ------------
TOTAL NET ASSETS............. $64,051,958 $47,617,199 $39,976,962 $ 27,343,730
=========== =========== =========== ============
Shares of Common Stock Out-
standing.................... 6,525,104 5,635,215 4,882,358 4,668,226
NET ASSET VALUE PER SHARE.... $9.82 $8.45 $8.19 $5.86
===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
7
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income............. $ 1,330,663 $ 1,164,202 $1,154,010 $ 613,301
Interest income............. 161,554 115,183 49,480 30,687
Less: Foreign taxes
withheld................... (160,321) (103,020) (160,582) (32,776)
----------- ----------- ---------- ------------
TOTAL INCOME............... 1,331,896 1,176,365 1,042,908 611,212
EXPENSES:
Investment advisory fees
(Note 2)................... 612,277 507,383 398,346 392,196
Administration fees (Note
2)......................... 122,455 101,477 79,669 78,439
Administrative service fees
(Note 2)................... 37,903 27,198 22,473 24,089
Shareholder servicing agent
fees (Note 2).............. 48,917 32,248 27,922 22,947
Custodian fees (Note 2)..... 41,210 62,516 46,292 48,889
Registration and filing
fees....................... 16,931 9,898 11,743 11,523
Legal and audit fees........ 9,863 7,480 7,640 8,916
Directors' fees and expenses
(Note 2)................... 1,972 1,676 1,311 1,123
Shareholder reports......... 26,732 12,773 17,921 18,299
Amortization of organization
costs (Note 5)............. -- 4,176 4,175 4,176
Miscellaneous expenses...... 19,368 4,857 7,138 5,667
Fees waived by investment
adviser and administrators
(Note 2)................... (37,903) (27,198) (22,473) (28,118)
----------- ----------- ---------- ------------
TOTAL EXPENSES............. 899,725 744,484 602,157 588,146
----------- ----------- ---------- ------------
NET INVESTMENT INCOME........ 432,171 431,881 440,751 23,066
----------- ----------- ---------- ------------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain/(loss):
Security transactions...... 1,412,003 941,148 593,287 (892,336)
Foreign currency
transactions.............. (50,712) (14,775) (57,716) (56,974)
----------- ----------- ---------- ------------
Total net realized
gain/(loss)................ 1,361,291 926,373 535,571 (949,310)
Change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations...... (3,439,838) (4,408,067) 589,836 (12,162,327)
----------- ----------- ---------- ------------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS.. (2,078,547) (3,481,694) 1,125,407 (13,111,637)
----------- ----------- ---------- ------------
NET INCREASE/(DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS.................. $(1,646,376) $(3,049,813) $1,566,158 $(13,088,571)
=========== =========== ========== ============
</TABLE>
See Notes to Financial Statements
8
<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>
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 sharehold-
ers:
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 (1)............ $64,051,958 $47,617,199 $39,976,962 $27,343,730
=========== =========== =========== ===========
YEAR ENDED MARCH 31, 1994
Net investment income....... $ 73,861 $ 169,584 $ 10,350 $ 49,062
Net realized gain on invest-
ments...................... 5,690,997 5,467,494 257,590 1,158,711
Change in unrealized
appreciation on investments
and foreign currency
translations during the
year ...................... 1,549,690 1,236,991 1,143,097 1,064,359
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations.. 7,314,548 6,874,069 1,411,037 2,272,132
Distributions to sharehold-
ers:
From net investment income. (73,861) (169,584) -- (49,062)
In excess of net investment
income.................... (571,533) (200,410) (36,293) (38,952)
From net realized gain on
investments............... (28,861) (1,171,348) -- (145,063)
Increase in net assets from
fund share transactions
(Note 4)................... 18,722,794 38,028,987 31,503,381 33,413,644
----------- ----------- ----------- -----------
Net increase in net assets.. 25,363,087 43,361,714 32,878,125 35,452,699
NET ASSETS:
Beginning of year.......... 30,373,943 9,665,019 3,796,700 3,829,748
----------- ----------- ----------- -----------
End of year (2)............ $55,737,030 $53,026,733 $36,674,825 $39,282,447
=========== =========== =========== ===========
</TABLE>
(1) 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.
(2) Including undistributed/(distributions in excess of) net investment income
of ($749,258) for International Fund, ($241,389) for Pacific/Asia Fund,
$4,842 for Pan European Fund and ($15,964) for Emerging Americas Fund.
See Notes to Financial Statements
9
<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)
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)
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
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)
</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 $.01 per share.
See Notes to Financial Statements
10
<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 $ 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%
$ 0.00 $(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%
$ 0.00 $(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%
<CAPTION>
FEE
WAIVERS
(NOTE 2)
- ----------
<C>
$0.00
0.00
0.00
0.00+++
0.01
$0.00+++
0.04
0.01
$0.02
0.05
0.00+++
$0.02
0.03
0.01
</TABLE>
See Notes to Financial Statements
11
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INTERNATIONAL FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 91.38%
JAPAN -- 30.14%
76,000 Asahi Chemical Industry Co., Ltd. ....................... $ 549,862
16,000 Daifuku.................................................. 213,825
45 DDI Corp. ............................................... 388,825
46 East Japan Railway Co. .................................. 225,230
7,000 Fuji Photo Film Co., Ltd. ............................... 166,129
52,000 Fujitsu Ltd. ............................................ 518,203
38,000 Hitachi Ltd. ............................................ 394,009
130,000 Hitachi Zosen Corp. ..................................... 606,567
90,000 Honshu Paper Co., Ltd. .................................. 601,383
26,000 Industrial Bank of Japan................................. 673,963
21,000 Isetan Co. .............................................. 336,290
37,000 Kajima Corp. ............................................ 358,491
17,000 Katokichi Co., Ltd. ..................................... 374,078
3,000 Keyence Corp. ........................................... 315,553
16,000 Kurita Water Industries Ltd. ............................ 390,783
5,000 Kyocera Corp. ........................................... 372,120
86,000 Marubeni Corp. .......................................... 436,935
22,000 Matsushita Electric Industries Ltd. ..................... 354,839
146,000 +Mazda Motor Corp. ...................................... 689,631
43,000 Mitsubishi Estate Co., Ltd. ............................. 483,998
50,000 Mitsubishi Heavy Industries Ltd. ........................ 358,871
48,000 Mitsubishi Trust and Banking Co. ........................ 702,304
11,000 Murata Manufacturing Co., Ltd. .......................... 427,074
99,000 +Navix Line Ltd. ........................................ 290,841
44,000 +New Japan Securities Co. ............................... 246,360
26,000 NGK Spark Plug Co. ...................................... 311,521
34 Nippon Telegraph & Telephone Corp. ...................... 292,995
66,000 Nippon Yusen............................................. 404,516
156,000 +NKK Corp. .............................................. 415,161
27,000 Nomura Securities Co., Ltd. ............................. 503,917
28,000 Olympus Optical Co., Ltd. ............................... 275,807
26,000 Onward Kashiyama Co., Ltd................................ 368,433
67,000 +Pacific Metals Co., Ltd. ............................... 289,459
34,000 Sanwa Bank Ltd. ......................................... 650,230
67,000 Sekisui Chemical Co., Ltd. .............................. 795,046
8,000 Shimachu Co., Ltd. ...................................... 244,240
23,000 Sumitomo Bank............................................ 490,207
51,000 Sumitomo Corp. .......................................... 464,171
45,000 Sumitomo Trust & Banking Co., Ltd. ...................... 606,567
55,000 Tokio Marine & Fire Insurance Co. ....................... 624,136
49,000 Tokyo Broadcasting System................................ 779,032
19,000 Tokyo Steel Manufacturing Co. ........................... 385,253
44,000 Tokyu Corp. ............................................. 284,378
52,000 Tokyu Department Store................................... 300,138
25,000 Toppan Printing Co., Ltd. ............................... 342,742
-----------
19,304,113
-----------
UNITED KINGDOM & POSSESSIONS -- 14.42%
185,000 Allied Colloids Group plc................................ 368,222
40,000 Allied Domecq plc........................................ 342,411
40,000 Bass plc................................................. 355,357
48,301 BAT Industries plc....................................... 343,126
70,600 British Gas plc.......................................... 327,312
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UNITED KINGDOM & POSSESSIONS -- (CONTINUED)
53,000 British Petroleum Co. plc................................ $ 367,931
85,000 British Sky Broadcasting Group plc....................... 350,057
71,600 British Telecommunications plc........................... 453,025
81,264 BTR plc.................................................. 431,325
60,000 Caradon plc.............................................. 254,381
40,000 Dalgety plc.............................................. 281,567
120,000 Delian Lloyds Investment Trust plc....................... 164,086
70,600 General Electric Co. plc................................. 338,165
32,500 Glaxo Holdings plc....................................... 371,296
70,000 Inchcape plc............................................. 344,353
50,000 Kingfisher plc........................................... 373,805
35,000 Land Securities plc...................................... 336,424
35,000 Legal & General Group plc................................ 267,327
42,000 Marks & Spencer plc...................................... 283,412
55,000 National Westminster Bank plc............................ 474,376
100,000 NFC plc.................................................. 268,621
52,000 Sainsbury (J) plc........................................ 359,306
35,000 Shell Transportation & Trading Co. plc................... 401,557
125,000 Syndicate Capital Trust plc.............................. 145,638
13 Thai-Euro Fund IDR....................................... 373,750
13,000 Unilever plc............................................. 257,278
175,000 Wimpey (George) plc...................................... 365,309
17,000 Zeneca Group plc......................................... 239,332
-----------
9,238,749
-----------
GERMANY -- 7.23%
2,700 BASF AG.................................................. 547,826
1,900 Bayer AG................................................. 466,739
1,200 Bayerische Motoren Werke AG.............................. 598,261
740 DBV Holding AG, Class A.................................. 246,667
1,445 Deutsche Bank AG......................................... 682,396
2,843 Mannesmann AG............................................ 734,442
125 Munich (Registered)...................................... 225,996
1,700 Preussag AG.............................................. 479,203
1,800 Veba AG.................................................. 650,869
-----------
4,632,399
-----------
FRANCE--6.81%
7,200 Accor S.A. .............................................. 855,741
8,012 Cie Generale des Eaux.................................... 810,241
7,670 Credit Local de France................................... 640,027
8,800 Lafarge Coppee S.A. ..................................... 663,621
16,460 +Michelin CGDE, Class B (Registered)..................... 705,161
11,550 Total S.A., Class B...................................... 685,897
-----------
4,360,688
-----------
SWITZERLAND -- 5.30%
1,840 Alusuisse-Lonza Holding AG............................... 995,384
743 Nestle AG (Registered)................................... 723,361
166 Roche Holding AG......................................... 956,511
797 Union Bank of Switzerland (Bearer)....................... 721,162
-----------
3,396,418
-----------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INTERNATIONAL FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
HONG KONG -- 4.89%
469,000 Amoy Properties Ltd. .................................... $ 448,908
107,000 Cheung Kong Holdings Ltd. ............................... 466,409
284,000 Dairy Farm International Holdings Ltd. .................. 363,669
119,000 Hong Kong Electric Holdings Ltd. ........................ 380,957
124,000 Hutchison Whampoa........................................ 546,927
704,000 Shun Tak Holdings Ltd. .................................. 416,598
74,000 Swire Pacific Ltd., Class A.............................. 504,902
-----------
3,128,370
-----------
NETHERLANDS -- 4.12%
4,800 Akzo Nobel N.V. ......................................... 523,563
20,800 Philips Electronics N.V. ................................ 705,541
20,086 Royal PTT Nederland N.V. ................................ 709,927
6,500 VNU N.V. ................................................ 697,210
-----------
2,636,241
-----------
AUSTRALIA -- 3.83%
85,000 ANZ Banking Group Ltd. .................................. 299,482
32,500 Brambles Industries Ltd. ................................ 300,911
26,000 Broken Hill Proprietary Co., Ltd. ....................... 340,524
170,000 Gio Australia Holdings Ltd. ............................. 317,538
47,000 Mayne Nickless Ltd. ..................................... 204,499
24,010 Memtec Ltd. ADR.......................................... 318,133
188,000 MIM Holdings Ltd. ....................................... 257,517
94,000 North Ltd. .............................................. 210,696
41,000 Western Mining Corp. Holdings Ltd. ...................... 206,323
-----------
2,455,623
-----------
SINGAPORE -- 2.27%
54,155 Development Bank of Singapore Ltd. (Foreign)............. 567,832
260,000 +Neptune Orient Lines Ltd. .............................. 320,510
17,200 +Singapore Sesdaq Fund................................... 253,700
177,000 United Overseas Land Ltd. ............................... 313,496
-----------
1,455,538
-----------
MALAYSIA -- 2.20%
69,000 Malayan Banking Bhd...................................... 466,364
180,000 Malaysian International Shipping Corp. (Foreign)......... 519,367
61,000 Telekom Malaysia Bhd..................................... 421,937
-----------
1,407,668
-----------
SWEDEN -- 2.15%
28,400 Astra AB, Class A........................................ 733,974
37,300 Volvo AB, Class B........................................ 641,819
-----------
1,375,793
-----------
ITALY -- 1.89%
19,800 Assicurazioni Generali SPA............................... 441,809
168,000 Italgas SPA.............................................. 381,280
166,500 Telecom Italia SPA....................................... 388,141
-----------
1,211,230
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SPAIN -- 1.48%
2,300 Acerinox S.A. .......................................... $ 221,468
8,270 Argentaria S.A. ........................................ 241,181
8,470 Repsol S.A. ............................................ 239,994
19,500 Telefonica de Espana S.A. .............................. 247,021
-----------
949,664
-----------
BELGIUM--1.40%
1,650 Generale de Banque S.A. ................................ 488,052
830 Solvay et Cie S.A. ..................................... 406,489
-----------
894,541
-----------
BRAZIL -- 1.04%
7,350 Cia Siderurgica Nacional ADR............................ 171,769
17,100 Telebras ADR............................................ 495,900
-----------
667,669
-----------
KOREA -- 0.91%
53,100 +Schroder Korea Fund.................................... 584,100
-----------
ARGENTINA -- 0.80%
5,700 Telecom Argentina ADR................................... 250,800
13,900 YPF S.A. ADR............................................ 264,100
-----------
514,900
-----------
CHILE -- 0.34%
3,600 Genesis Chile Fund Ltd. (Participating Certificates).... 106,200
3,600 GT Chile Growth Fund Ltd. .............................. 113,400
-----------
219,600
-----------
MEXICO -- 0.16%
79,560 Cifra S.A., Series B.................................... 99,274
-----------
TOTAL COMMON STOCKS
(Cost $58,218,332)...................................... 58,532,578
-----------
PREFERRED STOCKS -- 1.26%
FRANCE -- 1.26%
865 Legrand ADP (Cost $666,486)............................. 804,193
-----------
<CAPTION>
NO. OF
WARRANTS
--------
<C> <S> <C>
WARRANTS -- 0.03%
UNITED KINGDOM & POSSESSIONS -- 0.02%
2,000 +BTR plc, expiring 6/11/95.............................. 3,528
2,666 +BTR plc, expiring 5/15/96.............................. 3,322
2,666 +BTR plc, expiring 12/26/97............................. 3,408
1,401 +BTR plc, expiring 11/26/98............................. 793
6,000 +Syndicate Capital Trust plc, expiring 10/31/99......... 2,282
-----------
13,333
-----------
</TABLE>
See Notes to Financial Statements
13
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INTERNATIONAL FUND -- (CONTINUED)
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (NOTE 1)
-------- -----------
<C> <S> <C>
WARRANTS -- (CONTINUED)
JAPAN -- 0.01%
82 +Credit Saison Co., expiring
4/18/96................................................. $ 5,637
-----------
TOTAL WARRANTS
(Cost $122,255)......................................... 18,970
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 7.70%
UNITED STATES -- 7.70%
$1,992,000 Associates Corp. of North America Master Notes.......... 1,992,000
2,940,000 General Electric Co. Promissory Notes................... 2,940,000
---------
TOTAL DEMAND NOTES
(Cost $4,932,000)....................................... 4,932,000
---------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $63,939,073*)........................................ 100.37% $64,287,741
OTHER ASSETS &
LIABILITIES (NET).......................................... (0.37) (235,783)
------ -----------
NET ASSETS................................................. 100.00% $64,051,958
====== ===========
</TABLE>
- --------
*-- For Federal tax purposes, the tax basis of investments aggregates
$64,183,608.
+-- Non-income producing
ADR-- American Depositary Receipt
IDR-- International Depositary Receipt
FORWARD FOREIGN CURRENCY CONTRACTS
Under the terms of forward foreign
currency contracts open at 3/31/95,
the International Fund is obligated
to deliver or receive currency in
exchange for U.S. dollars as
indicated below:
<TABLE>
<CAPTION>
CURRENCY IN NET
TO EXCHANGE SETTLEMENT UNREALIZED
DELIVER FOR DATE VALUE (DEPRECIATION)
--------------- --------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Purchases.. $ 592,835 (Pounds)372,200 4/6/95 $ 602,295 $ 9,460
=============== ========== ========
Sales...... (Pounds)705,020 $ 1,124,120 4/6/95 $1,140,865 $(16,745)
=============== ========== ========
$ (7,285)
========
</TABLE>
- --------
(Pounds) -- Pound Sterling
See Notes to Financial Statements
14
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INTERNATIONAL FUND -- (CONTINUED)
At March 31, 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................................................ 22.20% $14,221,110
Consumer Cyclical........................................ 14.64 9,374,226
Raw/Intermediate Materials............................... 11.40 7,304,664
Utilities................................................ 11.29 7,233,639
Consumer Staples......................................... 8.08 5,173,644
Demand Notes............................................. 7.70 4,932,000
Technology............................................... 6.70 4,290,436
Transportation........................................... 6.33 4,053,870
Capital Goods............................................ 6.12 3,922,740
Energy & Natural Resources............................... 3.67 2,350,262
Investment Companies..................................... 2.24 1,431,150
------ -----------
Total Investments........................................ 100.37% $64,287,741
Other Assets and Liabilities (Net)....................... (0.37) (235,783)
------ -----------
Net Assets............................................... 100.00% $64,051,958
====== ===========
</TABLE>
See Notes to Financial Statements
15
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PACIFIC/ASIA FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
COMMON STOCKS -- 96.29%
HONG KONG -- 29.21%
840,000 Amoy Properties Ltd. .................................. $ 804,015
490,000 Cathay Pacific Airways Ltd. ........................... 757,386
335,000 Cheung Kong Holdings Ltd. ............................. 1,460,252
175,000 China Light & Power Co., Ltd. ......................... 848,833
600,000 Dickson Concepts International Ltd..................... 322,072
490,000 Guangdong Investments Ltd. ............................ 237,673
3,538,000 Harbour Ring International Holdings.................... 416,440
721,500 Hong Kong Electric Holdings Ltd........................ 2,309,748
458,200 Hong Kong Telecom...................................... 891,959
286,000 Hutchison Whampoa...................................... 1,261,460
191,000 Jardine Strategic Holdings............................. 725,800
1,395,000 Leefung-Asco Printers Holdings Ltd. ................... 220,134
367,000 Mandarin Oriental International Ltd. .................. 488,941
1,332,000 Shun Tak Holdings Ltd. ................................ 788,222
220,500 Sun Hung Kai Properties Ltd. .......................... 1,504,472
128,000 Swire Pacific Ltd., Class A............................ 873,344
-----------
13,910,751
-----------
AUSTRALIA -- 18.44%
395,000 ANZ Banking Group Ltd. ................................ 1,391,711
100,000 Australian Gas Light Company Ltd. ..................... 309,115
1,598,666 Australian Medical Enterprises Ltd. ................... 819,715
298,000 Australian National Industries Ltd. ................... 272,856
470,000 Azon Ltd. ............................................. 616,251
87,000 Brambles Industries Ltd. .............................. 805,514
70,000 Broken Hill Proprietary Co., Ltd. ..................... 916,795
242,000 Mayne Nickless Ltd. ................................... 1,052,952
74,500 Memtec Ltd. ADR........................................ 987,125
157,000 MIM Holdings Ltd. ..................................... 215,054
117,000 North Ltd. ............................................ 262,249
235,000 +Orbital Engine Corp., Ltd. ........................... 228,943
100,000 Pioneer International Ltd. ............................ 232,202
54,000 Western Mining Corp. Holdings Ltd. .................... 271,742
99,990 Woodside Petroleum Ltd. ............................... 396,975
-----------
8,779,199
-----------
JAPAN -- 18.34%
30,000 Asahi Chemical Industry Co., Ltd. ..................... 217,051
13,000 Daifuku................................................ 173,733
27 DDI Corp. ............................................. 233,295
47 East Japan Railway Co. ................................ 230,127
18,000 Fujitsu Ltd. .......................................... 179,378
32,000 Honshu Paper Co., Ltd. ................................ 213,825
15,000 Isetan Co. ............................................ 240,207
5,000 Ito-Yokado Co., Ltd. .................................. 247,696
23,000 Kajima Corp. .......................................... 222,846
7,000 Katokichi Co., Ltd. ................................... 154,032
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
7,000 Kurita Water Industries Ltd. .......................... $ 170,968
42,000 Marubeni Corp. ........................................ 213,387
24,000 Matsushita Electric Industries Ltd..................... 387,097
80,000 +Mazda Motor Corp. .................................... 377,880
18,000 Mitsubishi Estate Co., Ltd. ........................... 202,604
50,000 +New Japan Securities Co. ............................. 279,954
44,000 NGK Spark Plug Co. .................................... 527,189
41 Nippon Telegraph & Telephone Corp. .................... 353,318
180,000 +NKK Corp. ............................................ 479,032
41,000 Nippon Yusen........................................... 251,290
26,000 Nomura Securities Co., Ltd. ........................... 485,253
36,000 Onward Kashiyama Co., Ltd. ............................ 510,138
80,000 +Pacific Metals Co., Ltd. ............................. 345,622
21,000 Sumitomo Bank.......................................... 447,581
36,000 Sumitomo Corp. ........................................ 327,650
16,000 Sumitomo Trust & Banking Co., Ltd. .................... 215,668
27,000 Tokio Marine & Fire Insurance Co....................... 306,394
21,000 Tokyo Steel Manufacturing Co. ......................... 425,806
49,000 Tokyu Corp. ........................................... 316,693
-----------
8,735,714
-----------
MALAYSIA -- 8.95%
214,000 Malayan Banking Bhd.................................... 1,446,403
133,333 Malaysian International Shipping Bhd (Foreign)......... 384,716
579,000 Nylex Malaysia Bhd..................................... 1,373,122
202,400 Oriental Holdings Bhd.................................. 1,056,000
-----------
4,260,241
-----------
SINGAPORE -- 7.49%
720,000 ABR Holdings Ltd. ..................................... 244,846
57,500 Development Bank of Singapore Ltd. (Foreign)........... 602,905
90,000 Keppel Corp., Ltd. .................................... 726,886
634,000 Pacific Carriers Ltd. ................................. 673,751
50,000 Singapore Airlines Ltd. (Foreign)...................... 499,469
305,000 Times Publishing Ltd. ................................. 816,790
-----------
3,564,647
-----------
KOREA -- 5.53%
61,000 Korea Electric Power Corp. ADR......................... 1,258,125
125,000 +Schroder Korea Fund................................... 1,375,000
-----------
2,633,125
-----------
THAILAND -- 2.49%
8,000 Bangkok Insurance Co., Ltd. (Foreign).................. 137,152
296,230 Dusit Thani Corp., Ltd. (Foreign)...................... 266,264
285,000 +Robinson Department Store Co. (Foreign)............... 535,497
30,000 Samitivej Co., Ltd. (Foreign).......................... 25,290
125,700 Surapon Seafoods Co., Ltd. (Foreign)................... 220,862
-----------
1,185,065
-----------
</TABLE>
See Notes to Financial Statements
16
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PACIFIC/ASIA FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UNITED KINGDOM & POSSESSIONS -- 1.35%
300,000 Rowe Evans Investments plc............................. $ 640,808
-----------
NEW ZEALAND -- 1.33%
219,329 Carter Holt Harvey Ltd. ............................... 489,937
432,000 Huttons Kiwi Ltd. ..................................... 141,912
-----------
631,849
-----------
INDIA -- 1.19%
54,000 Morgan Stanley India Investment Fund, Inc. ............ 567,000
-----------
NETHERLANDS -- 1.12%
40,000 IS Himalayan Fund N.V. ................................ 536,000
-----------
INDONESIA -- 0.72%
193,500 Panin Bank (Foreign)................................... 194,625
50,000 Tancho Indonesia (Foreign)............................. 149,754
-----------
344,379
-----------
TAIWAN -- 0.13%
2,899 Asia Cement Corp. GDS.................................. 63,053
-----------
PHILIPPINES -- 0.00%
124 Philippine National Bank, Class B...................... 1,057
-----------
TOTAL COMMON STOCKS
(Cost $48,198,351)..................................... 45,852,888
-----------
PREFERRED STOCKS -- 1.36%
AUSTRALIA -- 1.36%
223,000 +Publishing and Broadcasting Ltd. (Cost $941,110)...... 648,489
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
DEMAND NOTES -- 3.52%
UNITED STATES -- 3.52%
$ 258,000 Associates Corp. of North America Master Notes........ $ 258,000
1,417,000 General Electric Co. Promissory Notes................. 1,417,000
-----------
TOTAL DEMAND NOTES
(Cost $1,675,000)..................................... 1,675,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $50,814,461*)........................................ 101.17% $48,176,377
OTHER ASSETS &
LIABILITIES (NET).......................................... (1.17) (559,178)
------ -----------
NET ASSETS................................................. 100.00% $47,617,199
====== ===========
</TABLE>
- --------
* -- For Federal tax purposes, the tax basis of investments aggregates
$50,832,273.
+ -- Non-income producing
ADR-- American Depositary Receipt
GDS-- Global Depositary Share
See Notes to Financial Statements
17
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PACIFIC/ASIA FUND -- (CONTINUED)
At March 31, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Transportation........................................... 15.46% $ 7,360,351
Consumer Cyclical........................................ 13.82 6,580,865
Financial................................................ 13.34 6,353,707
Real Estate.............................................. 13.15 6,261,038
Raw/Intermediate Materials............................... 9.95 4,739,031
Utilities................................................ 8.79 4,184,348
Capital Goods............................................ 8.72 4,152,026
Investment Companies..................................... 5.20 2,478,000
Technology............................................... 5.05 2,406,273
Demand Notes............................................. 3.52 1,675,000
Consumer Staples......................................... 2.33 1,108,681
Energy & Natural Resources............................... 1.84 877,057
------ -----------
Total Investments........................................ 101.17% $48,176,377
Other Assets and Liabilities (Net)....................... (1.17) (559,178)
------ -----------
Net Assets............................................... 100.00% $47,617,199
====== ===========
</TABLE>
See Notes to Financial Statements
18
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PAN EUROPEAN FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 98.63%
UNITED KINGDOM & POSSESSIONS -- 36.45%
285,000 Allied Colloids Group plc................................ $ 567,261
65,076 Allied Domecq plc........................................ 557,069
72,000 BAT Industries plc....................................... 511,481
107,000 Bass plc................................................. 950,580
105,000 British Gas plc.......................................... 486,796
78,000 British Petroleum Co. plc................................ 541,483
130,000 British Sky Broadcasting Group plc....................... 535,382
97,000 British Telecommunications plc........................... 613,735
123,296 BTR plc.................................................. 654,418
95,000 Caradon plc.............................................. 402,770
58,000 Dalgety plc.............................................. 408,272
145,000 Delian Lloyds Investment Trust plc....................... 198,270
110,000 General Electric Co. plc................................. 526,886
49,500 Glaxo Holdings plc....................................... 565,513
131,000 Inchcape plc............................................. 644,433
72,000 Kingfisher plc........................................... 538,279
97,000 Land Securities plc...................................... 932,375
54,000 Legal & General Group plc................................ 412,447
57,000 Marks & Spencer plc...................................... 384,630
82,000 National Westminster Bank plc............................ 707,251
145,000 NFC plc.................................................. 389,501
50,000 Redland plc.............................................. 352,768
79,000 Sainsbury (J) plc........................................ 545,868
56,000 Shell Transportation & Trading Co. plc................... 642,491
170,000 Syndicate Capital Trust plc.............................. 198,068
19,000 Unilever plc............................................. 376,022
255,000 Wimpey (George) plc...................................... 532,307
28,000 Zeneca Group plc......................................... 394,194
-----------
14,570,550
-----------
GERMANY -- 13.65%
1,600 BASF AG.................................................. 324,638
2,560 Bayer AG................................................. 628,870
730 Bayerische Motoren Werke AG.............................. 363,942
540 DBV Holding AG, Class A.................................. 180,000
1,800 Deutsche Bank AG......................................... 850,043
540 Duerr Beteiligungs AG.................................... 169,826
554 Karstadt AG.............................................. 225,414
2,198 Mannesmann AG............................................ 567,817
65 Munich (Registered)...................................... 117,518
1,600 Preussag AG.............................................. 451,014
1,000 +Thyssen AG.............................................. 183,623
2,080 Veba AG.................................................. 752,116
600 Viag AG.................................................. 214,348
750 Volkswagen AG............................................ 189,946
400 Weru AG.................................................. 239,130
-----------
5,458,245
-----------
FRANCE -- 11.47%
2,400 Accor S.A. .............................................. 285,247
3,980 Cie Generale des Eaux.................................... 402,491
3,830 Credit Local de France................................... 319,596
2,500 Essilor International ADP................................ 300,238
3,770 IMETAL................................................... 365,330
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FRANCE -- (CONTINUED)
6,865 Lafarge Coppee S.A. ..................................... $ 517,700
12,910 +Michelin CGDE, Class B (Registered)..................... 553,076
1,975 Primagaz S.A. ........................................... 372,140
1,400 Promodes................................................. 320,033
4,500 SEITA.................................................... 124,019
4,230 Societe Centrale des Assurances Generales de France...... 141,890
3,975 Television Francaise 1................................... 355,565
5,240 Total S.A., Class B...................................... 311,178
4,000 Valeo S.A. .............................................. 214,929
-----------
4,583,432
-----------
NETHERLANDS -- 9.11%
5,730 Aegon N.V. .............................................. 407,272
8,000 Ahold N.V. .............................................. 275,505
3,495 Akzo Nobel N.V. ......................................... 381,219
36,700 Elsevier N.V. ........................................... 384,865
1,500 GTI Holding N.V. ........................................ 142,737
17,495 MacIntosh N.V. .......................................... 537,942
10,000 Philips Electronics N.V. ................................ 339,203
16,921 Royal PTT Nederland N.V. ................................ 598,062
7,100 Sphinx N.V. ............................................. 234,399
3,170 VNU N.V. ................................................ 340,024
-----------
3,641,228
-----------
SWITZERLAND -- 8.46%
1,070 +Alusuisse-Lonza Holding AG.............................. 578,837
591 Nestle AG (Registered)................................... 575,379
162 Roche Holding AG......................................... 933,463
980 Sandoz AG (Registered)................................... 630,308
736 Union Bank of Switzerland (Bearer)....................... 665,966
-----------
3,383,953
-----------
ITALY -- 5.51%
20,670 Assicurazioni Generali SPA............................... 461,221
440,000 Credito Italiano SPA..................................... 415,713
49,000 +Gilardini SPA........................................... 109,337
3,900 Industrie Natuzzi SPA ADR................................ 143,813
178,000 Italgas SPA.............................................. 403,975
286,000 Telecom Italia SPA....................................... 666,718
-----------
2,200,777
-----------
SWEDEN -- 3.38%
17,800 Astra AB, Class A........................................ 470,836
6,250 Electrolux AB, Class B................................... 282,143
5,800 Ericsson S.A., Class B................................... 358,890
14,000 Volvo AB, Class B........................................ 240,897
-----------
1,352,766
-----------
BELGIUM -- 2.81%
1,045 Generale de Banque S.A. ................................. 309,100
2,000 Glaverbel S.A. .......................................... 275,317
520 Solvay S.A. ............................................. 254,668
2,400 Ter Beke S.A. ........................................... 282,517
-----------
1,121,602
-----------
</TABLE>
See Notes to Financial Statements
19
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PAN EUROPEAN FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SPAIN -- 2.78%
1,300 Acerinox S.A. ........................................... $ 125,178
5,000 Argentaria S.A. ......................................... 145,817
2,600 +Cristaleria Espanola S.A. .............................. 106,709
5,500 Hidroelectrica del Cantabrico S.A., Class C.............. 141,949
10,000 Repsol S.A. ............................................. 283,346
24,400 Telefonica de Espana S.A. ............................... 309,092
-----------
1,112,091
-----------
FINLAND -- 1.55%
1,700 Kone Corp., Class B...................................... 202,610
6,400 Metra Oy, Class B........................................ 230,604
11,100 Repola Oy................................................ 184,338
-----------
617,552
-----------
AUSTRIA -- 1.45%
2,200 #Boehler-Uddeholm AG..................................... 124,713
3,750 Mayr-Melnhof Karton AG................................... 228,425
650 Wienerberger Baustoffindustrie AG........................ 227,781
-----------
580,919
-----------
GREECE -- 0.85%
13,875 Hellenic Bottling Co. S.A. .............................. 340,098
-----------
DENMARK -- 0.49%
3,700 Tele Danmark AS, Class B................................. 195,147
-----------
NORWAY -- 0.36%
1,500 Kvaerner AS, Class B..................................... 62,854
2,200 Norsk Hydro AS........................................... 82,042
-----------
144,896
-----------
PORTUGAL -- 0.31%
2,760 Jeronimo Martins......................................... 125,263
-----------
TOTAL COMMON STOCKS
(Cost $37,630,329)....................................... 39,428,519
-----------
PREFERRED STOCKS -- 2.16%
GERMANY -- 1.16%
650 Friedrich Grohe AG....................................... 209,131
300 Henkel KGAA.............................................. 112,065
300 Krones AG................................................ 143,478
-----------
464,674
-----------
FRANCE -- 1.00%
430 Legrand ADP.............................................. 399,772
-----------
TOTAL PREFERRED STOCKS
(Cost $773,264).......................................... 864,446
-----------
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (NOTE 1)
-------- -----------
<C> <S> <C>
WARRANTS -- 0.01%
UNITED KINGDOM &
POSSESSIONS -- 0.01%
948 +BTR plc, expiring
11/26/98................................................ $ 537
4,000 +Syndicate Capital Trust
plc, expiring 10/31/99.................................. 1,521
-----------
TOTAL WARRANTS
(Cost $0)............................................... 2,058
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 0.83%
UNITED STATES -- 0.83%
$145,000 Associates Corp. of North America Master Notes.......... 145,000
187,000 General Electric Co. Promissory Notes................... 187,000
----------
TOTAL DEMAND NOTES
(Cost $332,000)......................................... 332,000
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $38,735,593*)........................................ 101.63% $40,627,023
OTHER ASSETS &
LIABILITIES (NET).......................................... (1.63) (650,061)
------ -----------
NET ASSETS................................................. 100.00% $39,976,962
====== ===========
</TABLE>
- --------
* -- For Federal tax purposes, the tax basis of investments aggregates
$38,735,594.
+ -- Non-income producing
# -- Security acquired through an initial public offering of shares and fair
valued at cost pending listing--see Note 1A to financial statements.
ADR-- American Depositary Receipt
See Notes to Financial Statements
20
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PAN EUROPEAN FUND -- (CONTINUED)
At March 31, 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........................................ 24.42% $ 9,764,398
Consumer Staples......................................... 19.43 7,767,952
Financial................................................ 15.14 6,051,624
Raw/Intermediate Materials............................... 11.82 4,723,760
Utilities................................................ 10.23 4,090,371
Capital Goods............................................ 8.57 3,425,966
Energy & Natural Resources............................... 5.72 2,285,086
Technology............................................... 4.02 1,607,029
Diversified.............................................. 1.45 578,837
Demand Notes............................................. 0.83 332,000
------ -----------
Total Investments........................................ 101.63% $40,627,023
Other Assets and Liabilities (Net)....................... (1.63) (650,061)
------ -----------
Net Assets............................................... 100.00% $39,976,962
====== ===========
</TABLE>
See Notes to Financial Statements
21
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
EMERGING AMERICAS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- 78.65%
BRAZIL -- 17.54%
58,483,000 Banco Bradesco...................................... $ 364,705
12,400 Cia Energetica de Minas Gerais ADR.................. 258,788
14,200 Cia Siderurgica Nacional ADR........................ 331,854
4,820,000 Cia Vale do Rio Doce................................ 1,068,129
6,113,000 Eletrobras.......................................... 1,204,901
26,500,000 Souza Cruz S.A. .................................... 137,222
14,000,000 Telebras............................................ 325,835
22,100 Telebras ADR........................................ 640,900
3,960,000 Telesp.............................................. 463,029
-----------
4,795,363
-----------
CHILE -- 17.24%
10,240 Banco O'Higgins ADR................................. 181,760
8,656 Banco Osorno y La Union ADR......................... 110,364
2,265 Chilectra S.A. ADR.................................. 108,154
7,500 Chilgener S.A. ADR.................................. 187,500
4,336 Compania Cervecerias Unidas S.A. ADR................ 99,728
5,954 Compania de Telefonos de Chile ADR.................. 397,429
9,683 Embotelladora Andina S.A. ADR....................... 254,179
29,624 Empresa Nacional de Electridad S.A. ADR............. 651,728
21,288 Enersis S.A. ADR.................................... 526,878
217,330 Five Arrows Chile Investment Trust.................. 517,245
29,006 Genesis Chile Fund Ltd. (Participating
Certificates)....................................... 855,677
2,300 GT Chile Growth Fund Ltd. .......................... 72,450
6,850 Laboratorio Chile S.A. ADR.......................... 123,300
5,528 Madeco S.A. ADR..................................... 129,908
11,585 Maderas y Sinteticos S.A. ADR....................... 196,945
5,476 Sociedad Quimica y Minera de Chile ADR.............. 164,280
7,820 Vina Concha y Toro S.A. ADR......................... 136,850
-----------
4,714,375
-----------
CANADA -- 15.97%
22,000 +Abitibi Price, Inc. ............................... 308,834
28,000 +Anderson Exploration Ltd. ......................... 287,911
17,000 +Avenor, Inc. ...................................... 348,087
20,500 Bombardier, Inc., Class B........................... 395,923
15,000 Cambior, Inc. ...................................... 173,015
26,900 Camco, Inc. ........................................ 101,019
1,000 +Ford Motor Co. of Canada Ltd. ..................... 89,771
2,500 Franco Nevada Mining Ltd. .......................... 124,285
24,000 Midland Walwyn, Inc. ............................... 124,464
12,800 Potash Corp. of Saskatchewan, Inc. ................. 567,668
17,200 Rio Algom Ltd. ..................................... 309,120
5,900 Seagram Co. Ltd. ................................... 187,276
12,300 +Talisman Energy, Inc. ............................. 222,157
23,000 Telus Corp. ........................................ 275,572
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CANADA -- (CONTINUED)
17,700 Toronto Dominion Bank................................ $ 254,802
18,000 Transcanada Pipelines Ltd. .......................... 230,150
43,100 Wascana Energy, Inc. ................................ 366,103
-----------
4,366,157
-----------
MEXICO -- 13.20%
37,000 Apasco S.A. ......................................... 100,413
9,380 Bufete Industrial S.A. ADR........................... 94,973
53,274 Cemex S.A., Class A.................................. 112,205
52,497 Cemex S.A., Class B.................................. 115,524
162,307 Cifra S.A., Series B................................. 203,482
146,500 Cifra S.A., Series C................................. 178,479
4,050 Coca-Cola FEMSA S.A. ADR............................. 74,419
40,500 Desaroios Sociedad Fomento Industries, Class B....... 81,836
98,000 Embotelladores del Valle Anahuac S.A., Class B....... 59,263
5,400 Empresas La Moderna S.A. ADR......................... 56,025
45,000 FEMSA, Class B....................................... 74,336
116,000 Grupo Carso S.A., Class A1........................... 507,286
5,160 Grupo Casa Autrey S.A. ADR........................... 73,530
52,000 Grupo Financiero Banamex Accival S.A., Class B....... 61,357
38,000 Grupo Financiero Banamex Accival S.A., Class C....... 43,717
18,000 Grupo Industrial Alfa S.A.,
Class A.............................................. 129,558
63,900 Grupo Industrial Bimbo S.A., Class A................. 209,701
19,000 Grupo Televisa S.A. CPO.............................. 160,855
14,170 Hylsamex GDR......................................... 131,073
24,240 Kimberly-Clark de Mexico S.A., Class A............... 199,855
10,544 Kimberly-Clark de Mexico S.A., Class B............... 85,534
4,700 Panamerican Beverages, Inc., Class A................. 122,788
518,000 Telefonos de Mexico S.A.,
Class L.............................................. 733,451
-----------
3,609,660
-----------
ARGENTINA -- 6.99%
1 Acindar Industrial S.A., Class B..................... 1
41,800 Astra Cia Argentina de Petro, Class B................ 55,176
23,245 Banco de Galicia y Buenos Aires S.A., Class B........ 89,493
9,840 Banco Frances del Rio de la Plata S.A., Class B...... 59,335
5,487 Buenos Aires Embotelladora S.A. ADR.................. 142,662
8,415 Carulla S.A. ADR..................................... 158,875
5,800 CIADEA S.A. ......................................... 29,580
73,585 Cia Naviera Perez Compania S.A., Class B............. 273,736
</TABLE>
See Notes to Financial Statements
22
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
EMERGING AMERICAS FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ARGENTINA -- (CONTINUED)
30,200 Comercial del Plata S.A. ............................ $ 66,138
1,818 +Corporacion Cementera Argentina S.A., Class B....... 8,545
23,000 +Inversiones Y Representacion S.A. .................. 44,160
16,088 +Molinos Rio de la Plata S.A., Class B............... 81,244
3,410 Quilmes Industrial S.A. ............................. 56,265
80,000 Siderca S.A. ........................................ 48,000
43,707 Telecom Argentina S.A.,
Class B.............................................. 190,125
100,928 Telefonica de Argentina S.A., Class B................ 247,274
48,000 Transportadora de Gas del Sur S.A., Class B.......... 90,240
14,250 YPF S.A. ADR......................................... 270,750
-----------
1,911,599
-----------
</TABLE>
<TABLE>
PERU -- 5.71%
<S> <C>
146,099 +Banco de Credito del Peru........................... 238,423
46,393 Banco Wiese, Class C................................. 81,265
10,000 Cementos Lima, Class C............................... 175,166
125,254 Cerveceria Backus y Johnson, Class C................. 230,512
12,092 Cia de Minas Buenaventura, Class C................... 48,260
26,908 Cia de Minas Buenaventura, Class T................... 110,138
29,838 +Southern Peru Copper,
Class T.............................................. 107,708
464,761 +Telefonica del Peru S.A.,
Class B.............................................. 570,904
-----------
1,562,376
-----------
</TABLE>
<TABLE>
COLOMBIA -- 2.00%
<S> <C>
3,700 ++Banco de Colombia GDR.............................. 25,874
19,000 Banco de Colombia GDS................................ 132,865
14,850 ++Cementos Diamante ADR.............................. 310,068
5,132 Corporacion Financiera del Valle GDS................. 79,546
-----------
548,353
-----------
TOTAL COMMON STOCKS
(Cost $30,423,106)................................... 21,507,883
-----------
PREFERRED STOCKS -- 16.28%
BRAZIL -- 16.28%
27,120,000 Acesita.............................................. 200,833
44,394,442 Banco Bradesco....................................... 299,094
1,190,000 Brahma............................................... 284,924
420,000 Brasmotor............................................ 95,880
520,000 Cia Cimento Portland Itau............................ 153,452
2,900,000 Cia Vale do Rio Doce................................. 392,372
360,000 Copene Petroquimica.................................. 254,165
2,438,000 Eletrobras, Class B.................................. 466,967
720,000 Itaubanco............................................ 171,589
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
PREFERRED STOCKS -- (CONTINUED)
BRAZIL -- (CONTINUED)
150,000 Klabin.............................................. $ 167,038
1,325,064 Light............................................... 391,027
14,500,000 Lojas Americanas.................................... 274,499
6,309,999 Petrobras........................................... 439,170
175,000 Sadia Concordia..................................... 155,902
3,702,718 Telesp.............................................. 383,466
280,000,000 Usiminas............................................ 321,158
-----------
TOTAL PREFERRED STOCKS
(Cost $6,510,667)................................... 4,451,536
-----------
RIGHTS -- 0.00%
PERU -- 0.00%
2,248 +Minera Southern Peru Copper, expiring 4/18/95 (Cost
$0)................................................. 0
-----------
<CAPTION>
NO. OF
WARRANTS
-----------
<C> <S> <C>
WARRANTS -- 0.06%
CHILE -- 0.06%
39,575 +Five Arrows Chile Investment Trust, expiring
5/31/99............................................. 15,632
-----------
MEXICO -- 0.00%
2,190 +Nacional Financiera/Grupo Televisa, expiring
2/17/96............................................. 111
-----------
TOTAL WARRANTS
(Cost $0)........................................... 15,743
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
DEMAND NOTES -- 4.62%
UNITED STATES -- 4.62%
$1,263,000 General Electric Co. Promissory Notes
(Cost $1,263,000)................................... 1,263,000
-----------
TOTAL INVESTMENTS
(Cost $38,196,773*)......................................... 99.61% $27,238,162
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.39 105,568
------ -----------
NET ASSETS.................................................. 100.00% $27,343,730
====== ===========
</TABLE>
- --------
* -- For Federal tax purposes, the tax basis of investments aggregates
$38,355,893.
+ -- 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 March 31,
1995 these securities amounted to $335,942, or 1.2% of net assets.
ADR-- American Depositary Receipt
GDR-- Global Depositary Receipt
GDS-- Global Depositary Share
See Notes to Financial Statements
23
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
EMERGING AMERICAS FUND -- (CONTINUED)
At March 31, 1995, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Raw/Intermediate Materials............................... 20.56% $ 5,622,809
Utilities................................................ 19.33 5,287,007
Financial................................................ 10.77 2,944,433
Consumer Staples......................................... 8.95 2,447,835
Consumer Cyclical........................................ 8.11 2,216,428
Capital Goods............................................ 7.90 2,160,353
Energy & Natural Resources............................... 7.54 2,061,350
Technology............................................... 6.49 1,773,942
Investment Companies..................................... 5.34 1,461,005
Demand Notes............................................. 4.62 1,263,000
------ -----------
Total Investments........................................ 99.61% $27,238,162
Other Assets and Liabilities (Net)....................... 0.39 105,568
------ -----------
Net Assets............................................... 100.00% $27,343,730
====== ===========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
UST MASTER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
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
25
<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
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 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. During the year
ended March 31, 1995, certain amounts were reclassified between paid in
capital in excess of par value, distributions in excess of net investment
income and accumulated net realized gain (loss) on investments.
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.
26
<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 expect 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 March 31, 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................ $4,004,559 $ (3,900,426) $ 104,133
Pacific/Asia Fund................. 2,340,386 (4,996,282) (2,655,896)
Pan European Fund................. 3,252,842 (1,361,413) 1,891,429
Emerging Americas Fund............ 824,178 (11,941,909) (11,117,731)
</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.
Mutual Funds Service Company ("MFSC"), an affiliate of U.S. Trust, and
Concord Holding Corporation (the "Administrators") serve as administrators 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 commencement
of operations and $50,000 for each full year thereafter from Pacific/Asia
Fund, Pan European Fund and Emerging Americas Fund.
On April 26, 1995, Master Fund's Board of Directors voted not to renew the
Fund's administration agreement with Concord Holding Corporation, and the
Fund's distribution agreement with UST Distributors, a wholly-owned subsidiary
of Concord Holding Corporation after their July 31, 1995 expiration, and
authorized the Fund to enter into negotiations for a new co-administrator to
serve with MFSC, and a new distributor.
27
<PAGE>
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%. For the year
ended March 31, 1995, U.S. Trust voluntarily waived fees totalling $4,029 for
Emerging Americas Fund.
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 year ended March 31, 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.................................... $37,822 $81
Pacific/Asia Fund..................................... 27,189 9
Pan European Fund..................................... 22,473 --
Emerging Americas Fund................................ 24,068 21
</TABLE>
Certain sales of Master Fund's shares are subject to a maximum sales charge
of 4 1/2% of the offering price. Shares in the Fund are sold on a continuous
basis by Master Fund's sponsor and distributor, UST Distributors, Inc.
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.
U.S. Trust serves as custodian of Master Fund's assets and as shareholder
servicing and dividend disbursing agent. MFSC serves as sub-shareholder
servicing agent.
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...................................... $45,924,918 $37,893,672
Pacific/Asia Fund....................................... 34,632,417 33,514,313
Pan European Fund....................................... 22,273,385 18,183,134
Emerging Americas Fund.................................. 27,534,485 26,726,533
</TABLE>
28
<PAGE>
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
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 2,727,691 $ 27,892,498 2,969,675 $ 30,468,039
Issued as reinvestment
of dividends........... 26,731 272,171 5,460 57,035
Redeemed................ (1,565,883) (15,721,121) (1,144,164) (11,802,280)
---------- ------------ ---------- ------------
Net Increase............ 1,188,539 $ 12,443,548 1,830,971 $ 18,722,794
========== ============ ========== ============
<CAPTION>
PACIFIC/ASIA FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 2,982,448 $ 27,044,986 4,540,274 $ 43,773,003
Issued as reinvestment
of dividends........... 51,459 486,339 4,380 47,831
Redeemed................ (2,682,285) (24,110,262) (542,637) (5,791,847)
---------- ------------ ---------- ------------
Net Increase............ 351,622 $ 3,421,063 4,002,017 $ 38,028,987
========== ============ ========== ============
<CAPTION>
PAN EUROPEAN FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 1,932,822 $ 15,659,703 4,350,092 $ 33,900,676
Issued as reinvestment
of dividends........... 5,039 39,779 83 589
Redeemed................ (1,623,481) (13,079,658) (299,677) (2,397,884)
---------- ------------ ---------- ------------
Net Increase............ 314,380 $ 2,619,824 4,050,498 $ 31,503,381
========== ============ ========== ============
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
EMERGING AMERICAS FUND
------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 3,068,106 $ 26,793,574 4,196,502 $38,192,251
Issued as reinvestment
of dividends........... 25,995 230,998 500 4,765
Redeemed................ (2,649,711) (21,694,453) (511,382) (4,783,372)
---------- ------------ --------- -----------
Net Increase............ 444,390 $ 5,330,119 3,685,620 $33,413,644
========== ============ ========= ===========
</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.
30
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders
and Board of Directors
UST Master Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the International, Pacific/Asia,
Pan European and Emerging Americas Portfolios (four of the portfolios
constituting the UST Master Funds, Inc.) as of March 31, 1995, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification by examination of securities
owned as of March 31, 1995, confirmation by correspondence with the custodian
and brokers, or other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned Portfolios of UST Master Funds, Inc. at March 31, 1995,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
May 19, 1995
31
<PAGE>
FEDERAL TAX INFORMATION: (UNAUDITED)
For the year ended March 31, 1995, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders, the
designation of long-term capital gain and the amounts expected to be passed
through to shareholders as foreign tax credits are approximated as follows:
<TABLE>
<CAPTION>
DIVIDEND
RECEIVED LONG-TERM FOREIGN TAX
FUND DEDUCTION CAPITAL GAIN CREDIT
---- --------- ------------ -----------
<S> <C> <C> <C>
International Fund..................... -- $714,000 $160,000
Pacific/Asia Fund...................... -- 59,000 103,000
Pan European Fund...................... -- 584,000 161,000
Emerging Americas Fund................. 3.34% 866,000 33,000
</TABLE>
32
<PAGE>
USTINLA395
