<PAGE>
--------------------------------------------
UST
MASTER FUNDS, INC.
--------------------------------------------
DOMESTIC EQUITY PORTFOLIOS
ANNUAL REPORT
MARCH 31, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS.................................................... 1
ADVISER'S DOMESTIC EQUITY MARKET REVIEW................................... 2
ADVISER'S INVESTMENT REVIEWS
Equity Fund.............................................................. 3
Income and Growth Fund................................................... 4
Aging of America Fund.................................................... 5
Business and Industrial Restructuring Fund............................... 6
Communication and Entertainment Fund..................................... 7
Early Life Cycle Fund.................................................... 8
Environmentally-Related Products and Services Fund....................... 9
Global Competitors Fund.................................................. 10
Long-Term Supply of Energy Fund.......................................... 11
Productivity Enhancers Fund.............................................. 12
STATEMENTS OF ASSETS AND LIABILITIES...................................... 14
STATEMENTS OF OPERATIONS.................................................. 16
STATEMENTS OF CHANGES IN NET ASSETS....................................... 18
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................ 20
PORTFOLIOS OF INVESTMENTS
Equity Fund.............................................................. 22
Income and Growth Fund................................................... 23
Aging of America Fund.................................................... 25
Business and Industrial Restructuring Fund............................... 26
Communication and Entertainment Fund..................................... 28
Early Life Cycle Fund.................................................... 29
Environmentally-Related Products and Services Fund....................... 30
Global Competitors Fund.................................................. 31
Long-Term Supply of Energy Fund.......................................... 32
Productivity Enhancers Fund.............................................. 33
NOTES TO FINANCIAL STATEMENTS............................................. 34
INDEPENDENT AUDITORS' REPORT.............................................. 42
FEDERAL TAX INFORMATION................................................... 43
</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.
/s/ Alfred C. Tannachion
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 DOMESTIC EQUITY MARKET REVIEW
- --------------------------------------------------------------------------------
For investors in the financial markets, the first three quarters of fiscal
1995 proved extraordinarily challenging. Negatively impacted by fears of
inflation, rising interest rates, the declining value of the U.S. dollar, and
other factors, the domestic equity markets endured several jolting corrections
and lackluster recoveries. Signs of improvement -- sparked by the recovery of
health care issues, strength in cyclicals and technology, and continued heavy
takeover and merger activity -- were short lived, and the major market indices
finally closed out the third fiscal quarter basically flat and lacking
discernible trends.
The overall investment environment improved during the fiscal fourth quarter,
as it became apparent that interest-rate hikes were finished, at least for the
near term, and the long-hoped-for "soft landing" was within reach. These
positives on the domestic front, along with continued strong corporate
profitability, shifted market focus away from the ailing U.S. dollar and
allowed for strong gains in the domestic equity markets. Areas of strength
included our aging of america investment theme, with its significant
representation of health care and other large-capitalization, "defensive"
consumer staples/cyclicals; also strong were U.S. Trust's global competitors
and business and industrial restructuring investment themes. Nevertheless, we
note that the apparent bull trend and new highs are not reflective of a strong
market so much as a market of a number of strong stocks. Moreover, for many
companies, particularly small technology concerns, there is no room at all for
any softness in short-term financial results.
Given the valuation of the market and some fundamental uncertainty going
forward, we re-emphasize the importance of our "good business" concepts and
characteristics. In the current environment, it is especially important to find
the best long-term business values to maintain portfolio diversification at
attractive or even reasonable prices.
2
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW EQUITY FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a total return
of 14.65%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock
Price Index. For much of the first half of fiscal 1995, market conditions were
extremely difficult and volatile; interest-rate-sensitive and "concept driven"
early life cycle concerns were particularly weak. During this period, we
remained focused on broad diversification with a concentration on companies
capable of increasing revenues through market-share gains, new products,
and/or pricing flexibility. During the second half of the fiscal year, we
began to restructure the portfolio, maintaining broad diversification across
U.S. Trust's strategies and investment themes, but shifting our focus from
growth to value, decreasing the number of holdings in the Fund from 49 to
roughly 35-40, and eliminating those stocks that we regarded as having gotten
slightly ahead of themselves and that would be vulnerable in a downtrending
market. In their stead, we added names that we believed represent clear
longer-term value -- out-of-favor, "contrarian" ideas which promise a greater
degree of safety in a less-than-robust market environment. Indeed, for the
fiscal fourth quarter, many of these new additions (stocks such as Mellon
Bank) proved among the Fund's strongest performers.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN EQUITY FUND
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Equity Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year 5 years Since Inception (4/25/85)
- --------------------------------------------------------------------------------
<S> <C> <C>
9.48% 11.30% 14.10%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Equity Equity Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Equity
<S> <C> <C> <C>
4/25/85 9550 10000 10000
3/31/86 14969 15674 13760
3/31/87 17604 18434 17360
3/31/88 15626 16362 15910
3/31/89 18519 19392 18810
3/31/90 20739 21716 22440
3/31/91 21799 22826 25670
3/31/92 25477 26677 28510
3/31/93 30383 31815 32850
3/31/94 32370 33895 33340
3/31/95 37098 38860 38520
</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 Equity Fund on
4/25/85 (inception date) to a $10,000 investment made in the Standard & Poor's
500 Composite Stock Price Index on that date. For comparative purposes, the
value of the Index on 3/31/85 is used as the beginning value on 4/25/85. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Standard & Poor's 500
Composite Stock Price 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: 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 may be modified or
terminated at any time.
3
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW INCOME AND GROWTH FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund achieved a total return
of 5.74%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock Price
Index. Through much of the first three quarters of fiscal 1995, the Fund
suffered from the rapid and dramatic increase in short-term interest rates.
Many of the income-producing vehicles -- traditionally additive to total
return -- posted losses. Given the fund's structure and strategy, we made no
major portfolio changes. In order to provide moderate current income and
capital appreciation, the fund is divided into roughly 35% convertible
preferred, convertible bond and corporate bond issues, and 65% common stock.
The fund is also well-diversified among U.S. Trust's strategies and themes.
The fund benefitted from the drop in interest rates during the fiscal fourth
quarter.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN INCOME AND GROWTH
FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Income and Growth Fund+
- --------------------------------------------------------------------------------
Average Annual Total Return Ended on 3/31/95
Reflects Maximum Sales Charge of 4.5%
- --------------------------------------------------------------------------------
1 year 5 years Since Inception (1/6/87)
- --------------------------------------------------------------------------------
<S> <C> <C>
1.01% 9.27% 9.25%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Income & Growth Income & Growth Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Income & Growth
<S> <C> <C> <C>
1/6/87 9550 10000 10000
3/31/87 10680 11188 12130
3/31/88 10100 10580 11120
3/31/89 11954 12522 13140
3/31/90 12688 13291 15680
3/31/91 12524 13119 17940
3/31/92 14080 14749 19920
3/31/93 18367 19239 22960
3/31/94 19595 20525 23300
3/31/95 20720 21705 26920
</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 Income and
Growth Fund on 1/6/87 (inception date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. For
comparative purposes, the value of the Index on 12/31/86 is used as the
beginning value on 1/6/87. All dividends and capital gain distributions are
reinvested. The Fund's performance takes into account fees and expenses. The
Standard & Poor's 500 Composite Stock Price 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: 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 may be modified or
terminated at any time.
4
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW AGING OF AMERICA FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund recorded a total return
of 12.80%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500"). During the fiscal first quarter, the Fund
continued to be negatively impacted by a variety of factors. Widespread
corporate restructuring (and consequent layoffs), not to mention the largest
tax increase in history, played havoc with consumer confidence, and the
spending that traditionally leads economic recovery was notably absent.
(Consumer staples/consumer cyclicals account for roughly 80% of the fund's
value.) Rising interest rates provided little help for financials (12% of the
fund's value), and the specter of health care reform hung over the health care
sector (25% of the fund's value). At this time, we adopted a slightly more
defensive approach, emphasizing larger-capitalization holdings. Toward mid-
summer of calendar 1994, however, we began to monitor a slight shifting away
from cyclicals toward more defensive, steady growth issues (consumer
staples/cyclicals). This nascent trend continued to develop in the third
quarter, and became fully realized during the fourth. The end of interest-rate
increases (at least for the near term), prospects of a "soft" economic
landing, the demise of health care reform, the dissipation of the private-
label/name-brand controversy, and the shifting political winds all worked to
the fund's benefit.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN AGING OF AMERICA FUND
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Aging of America 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>
7.70% 3.49%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Aging of Americas Fund Aging of Americas Fund Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Aging of Americas
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 9563 10014 10440
6/30/93 9509 9957 10490
9/30/93 9650 10105 10760
12/31/93 10165 10644 11010
3/31/94 9576 10027 10590
6/30/94 9329 9769 10640
9/30/94 10014 10486 11150
12/31/94 9865 10330 11150
3/31/95 10802 11311 12240
</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 Aging of
America Fund on 12/31/92 (inception date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. All dividends
and capital gain distributions are reinvested. The Fund's performance takes
into account fees and expenses. The Standard & Poor's 500 Composite Stock
Price 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: 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 may be modified or
terminated at any time.
5
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund realized a total return
of 11.49%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock
Price Index. The Fund's performance was mixed for the first three fiscal
quarters. Throughout, we maintained broad diversification among U.S. Trust's
early life cycle, problem/opportunity, and transaction value strategies. We
became slightly more defensive, adding several larger-capitalization,
consumer-oriented, predictable, "traditional" growth stocks. Areas of emphasis
included health care, banks, trucks/rails, aerospace, and international (a
drag on performance overall). Strong second-quarter results disintegrated in
the third, as our efforts to spread risk and diversify away from interest-rate
sensitive issues proved only partially successful. Indeed, while these new
additions held up relatively well, they were unable to offset the damage
occurring in other areas. The Fund improved sharply during the fiscal fourth
quarter. The benefits of the widespread restructuring that has occurred over
the past several years are now being felt, in our view. In fact, we believe it
is fair to characterize the current environment as a restructuring driven
market. Regarding changes to the portfolio, we focused our activity on
financial, health care, and defense related stocks, as we believe these areas
will continue to show strength in the months ahead.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN BUSINESS AND INDUSTRIAL
RESTRUCTURING FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Business and Industrial Restructuring 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>
6.49% 19.12%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Business & Ind. Rest. Business & Ind. Rest. Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Business & Ind. Rest.
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10518 11014 10440
6/30/93 11010 11529 10490
9/30/93 11808 12365 10760
12/31/93 13365 13995 11010
3/31/94 13296 13922 10590
6/30/94 12947 13558 10640
9/30/94 14293 14967 11150
12/31/94 13713 14359 11150
3/31/95 14823 15522 12240
</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 Business and
Industrial Restructuring Fund on 12/31/92 (inception date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. All dividends and capital gain distributions are reinvested. The
Fund's performance takes into account fees and expenses. The Standard & Poor's
500 Composite Stock Price 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: 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 may be modified or
terminated at any time.
6
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW COMMUNICATION AND ENTERTAINMENT FUND
- --------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a total return of
12.87%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock Price
Index. After a difficult first quarter in which the excessive expectations
regarding the "information superhighway" finally appeared to have been washed
out of the group, the fund recovered along with technology stocks in general
during the second, and remained basically flat in the third -- helped by its
concentration of entertainment software companies. The situation improved
markedly during the fiscal fourth quarter, along with the market in general.
Our investment strategy remained consistent throughout Fiscal 1995. We
continued -- and continue -- to maintain primary emphasis on the providers of
content, in particular software, with secondary emphases on transmission
companies (phone, wireless, cable) and equipment providers.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN COMMUNICATION AND
ENTERTAINMENT FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Communication and Entertainment 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>
7.80% 16.40%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Comm. & Entern Comm. & Entern Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Comm. & Entern
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10382 10871 10440
6/30/93 11091 11614 10490
9/30/93 12557 13149 10760
12/31/93 13193 13815 11010
3/31/94 12466 13054 10590
6/30/94 11944 12507 10640
9/30/94 13650 14293 11150
12/31/94 13312 13939 11150
3/31/95 14071 14734 12240
</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 Communication
and Entertainment Fund on 12/31/92 (inception date) to a $10,000 investment
made in the Standard & Poor's 500 Composite Stock Price Index on that date. All
dividends and capital gain distributions are reinvested. The Fund's performance
takes into account fees and expenses. The Standard & Poor's 500 Composite Stock
Price 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: 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 may be modified or
terminated at any time.
7
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW EARLY LIFE CYCLE FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a total return
of 15.16%*, versus 5.50%** for the Russell 2000 Index and 15.57%*** for the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"). Throughout
the fiscal year, the small- and middle-capitalization areas significantly
underperformed the S&P 500. This was particularly pronounced during the first
and final quarters of Fiscal 1995. Throughout the fiscal year, we maintained
broad diversification with representation in all of U.S. Trust's investment
themes, and an equal weighting of consumer staples and cyclicals. Technology,
the Fund's best-performing area, accounts for the fund's largest sector
weighting, and we increased it throughout the first three fiscal quarters. In
the fiscal fourth quarter, the overall environment grew less favorable as
market favor shifted increasingly away from small-capitalization stocks and
toward more "defensive" larger-capitalization concerns. Once again, areas of
strength included technology, though we scaled back on some of our larger,
best-performing positions. Although growth rates for technology stocks should
remain robust overall, the sector is not nearly as undervalued as it was a
year ago. As a result, individual stock selection will be more important than
ever. Right now, we're looking for the "fallen angels," former favorites that
have been battered down by the stock market but who nevertheless show
significant future.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
EARLY LIFE CYCLE FUND AND THE RUSSELL 2000 INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Early Life Cycle 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>
9.92% 15.21%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Russell
Early Life Cycle Early Life Cycle 2000 Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Early Life Cycle
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10095 10571 10440
6/30/93 11023 11543 10660
9/30/93 11951 12514 11600
12/31/93 12216 12791 11900
3/31/94 11940 12503 11590
6/30/94 11289 11909 11120
9/30/94 12729 13329 11900
12/31/94 12863 13470 11670
3/31/95 13750 14398 12210
</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 Early Life
Cycle Fund on 12/31/92 (inception date) to a $10,000 investment made in the
Russell 2000 Index on that date. All dividends and capital gain distributions
are reinvested. The Fund's performance takes into account fees and expenses.
The Russell 2000 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: The Russell Company--The Russell 2000 Index is an unmanaged index
and is composed of the 2,000 smallest companies in the Russell 3000 Index.
The Russell 3000 Index is composed of 3,000 of the largest U.S. companies
by market capitalization. The index includes dividends reinvested.
*** Source: Standard and 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 may be modified or
terminated at any time.
8
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND
- --------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund realized a loss
(0.27%)*, versus a gain of 15.57%** for the Standard & Poor's 500 Composite
Stock Price Index. The long-awaited windfall for environmental service
companies did not materialize, though the environmental stocks did recover
somewhat during the fiscal fourth quarter. In an industry driven by regulation,
much of the problem has been a startling lack of government initiatives, in our
view. Throughout the year, the strongest-performing sector continued to be
solid waste as volumes improved and Subtitle D and dump closings provided price
relief. The remediation area continued to languish; although the DOD/DOE
cleanup efforts are a definite plus, the actual dollars have as yet been slow
in coming. Toward the end of the fiscal year, we diversified the fund's
holdings into the area of the personal environment -- specifically, personal
security, adding positions in Sensormatic, a provider of fully integrated
electronic security systems, and ITI Technologies, a manufacturer of wireless
security systems for homes and businesses.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND AND
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Environmentally-Related Products and Services 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>
- -4.68% -6.99%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poor's 500
Environ. Rel Pr. & Ser. Environ. Rel Pr. & Ser. Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Environ. Rel Pr. & Ser.
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 9482 9929 10440
6/30/93 8677 9086 10490
9/30/93 8614 9021 10760
12/31/93 8860 9278 11010
3/31/94 8519 8920 10590
6/30/94 8218 8606 10640
9/30/94 8696 9106 11150
12/31/94 8291 8682 11150
3/31/95 8496 8897 12240
</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 Environmentally-
Related Products and Services Fund on 12/31/92 (inception date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. All dividends and capital gain distributions are reinvested. The
Fund's performance takes into account fees and expenses. The Standard & Poor's
500 Composite Stock Price 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: 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 may be modified or
terminated at any time.
9
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW GLOBAL COMPETITORS FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund posted a total return
of 12.73%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock
Price Index. The Fund continued to improve throughout the fiscal year. After a
difficult fiscal first quarter, the Fund benefitted from a resurgent
technology sector in the second, though weakness in cyclicals had a dampening
effect. In the third fiscal quarter, the Fund's technology holdings continued
to drive results, though cyclicals, financials, and (toward quarter's end)
holdings in Mexico continued to be a drag. In the fiscal fourth quarter, the
fund recovered strongly, given turmoil in the emerging markets and a broad-
based shift to more defensive, larger-capitalization, U.S.-based companies.
The weakness of the U.S. dollar provided an additional plus. Our efforts at
this time were directed at consolidating the Fund's number of holdings from 56
to roughly 45. Substantial amounts of new money added to the fund were used to
increase current positions, with a specific emphasis on technology. Looking
ahead, both the near-and long-term outlooks for the fund remain positive; in
1994, over 50% of the S&P 500's net profit was derived from markets
overseas -- and this number should grow. Increasingly, U.S. companies are
finding that they are becoming the primary beneficiaries of the economic
growth, increased consumerism, and infrastructure development taking place in
foreign markets -- particularly the rapidly growing emerging markets.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN GLOBAL COMPETITORS
FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Global Competitors 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>
7.67% 8.04%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Global Competitors Global Competitors Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Global Competitors
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 9932 10400 10440
6/30/93 10055 10529 10490
9/30/93 10786 11295 10760
12/31/93 11119 11643 11010
3/31/94 10556 11054 10590
6/30/94 10272 10757 10640
9/30/94 10805 11315 11150
12/31/94 10944 11460 11150
3/31/95 11900 12461 12240
</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 Global
Competitors Fund on 12/31/92 (inception date) to a $10,000 investment made in
the Standard & Poor's 500 Composite Stock Price Index on that date. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Standard & Poor's 500
Composite Stock Price 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: 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 may be modified or
terminated at any time.
10
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW LONG-TERM SUPPLY OF ENERGY FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund recorded a total return
of 4.28%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock Price
Index. The fund has been and will continue to be dominated by the
price/profitability of petroleum products. Our approach, as always, is long
term, and the long-term outlooks for both oil and gas remain compelling. We
made few changes to the fund during fiscal 1995. In the oil area, we continued
to emphasize the integrated majors, particularly those with international
exposure. They have all benefitted from modestly improving oil prices,
improving refining and marketing operations, and exposure to chemicals, which
are currently enjoying a cyclical upswing. While demand for natural gas is
growing and should continue to do so, the supply side of the equation is still
accommodating itself to deregulation. Greater efficiency in transmission and
distribution and new technologies allowing gas to be produced cheaper have
combined to keep natural gas prices low, and it is difficult to tell when this
situation will change. As a result, our strategy has been and continues to be
to seek out stronger, smaller companies that can prosper in this sort of
environment -- companies such as Anadarko Petroleum.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN LONG-TERM SUPPLY OF
ENERGY FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Long-Term Supply of Energy 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% 4.53%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Long-Term Supply Energy Fund Long-Term Supply Energy Fund Composite Stock
(reflects maximum sales charge) (exclusive of sales charge) Price Index Supply En.
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 10655 11157 10440
6/30/93 11296 11829 10490
9/30/93 11916 12478 10760
12/31/93 10952 11469 11010
3/31/94 10595 11094 10590
6/30/94 10964 11365 10640
9/30/94 11046 11567 11150
12/31/94 10657 11159 11150
3/31/95 11048 11568 12240
</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 Long-Term
Supply of Energy Fund on 12/31/92 (inception date) to a $10,000 investment
made in the Standard & Poor's 500 Composite Stock Price Index on that date.
All dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Standard & Poor's 500
Composite Stock Price 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: 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 may be modified or
terminated at any time.
11
<PAGE>
UST MASTER FUNDS, INC.
ADVISER'S INVESTMENT REVIEW PRODUCTIVITY ENHANCERS FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1995, the Fund realized a total return
of 4.45%*, versus 15.57%** for the Standard & Poor's 500 Composite Stock Price
Index. Through the first three fiscal quarters, we maintained roughly a 60%
concentration in technology and a 40% weighting in capital goods. Technology
stocks in general underperformed in the first fiscal quarter, recovered
somewhat in the second, and then backed off in the third -- and the Fund
behaved in similar manner. The Fund's capital goods holdings restrained
performance during this period, particularly in the fiscal third quarter. The
situation improved noticeably in the fourth quarter, as the Fund's performance
was driven by a recovery in technology stocks -- specifically,
semiconductors -- and smaller, niche manufacturing firms, in particular the
"machine vision," or quality control, companies such as Cognex, Medar,
Perceptron, and Robotic Vision Systems. During the final quarter, we reduced
the Fund's technology weighting to approximately 40% (within this,
semiconductors and equipment manufacturers represent approximately 15% of the
entire fund's value) and increased our global exposure with export-related
U.S.-based companies, given our expectation that economic growth in the years
ahead will be more rapid outside the U.S.. Regarding the outlook, earnings are
strong, inflation is low, and interest-rate hikes seem behind us. Despite some
lingering concerns and given the somewhat heightened valuations of the market,
we remain optimistic.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PRODUCTIVITY
ENHANCERS FUND AND THE STANDARD & POOR'S 500 CONPOSITE STOCK PRICE INDEX**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Productivity Enhancers 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>
- -0.23% 5.40%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The Standard &
Poors 500
Prod.Enhancers Prod. Enhancers Composite Stock Prod.
(reflects maximum sales charge) (exclusive of sales charge) Price Index Enhancers
<S> <C> <C> <C>
12/31/92 9550 10000 10000
3/31/93 9468 9914 10440
6/30/93 9945 10414 10490
9/30/93 10105 10582 10760
12/31/93 10529 11026 11010
3/31/94 10775 11283 10590
6/30/94 9675 10131 10640
9/30/94 10728 11234 11150
12/31/94 10604 11103 11150
3/31/95 11255 11786 12240
</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 Productivity
Enhancers Fund on 12/31/92 (inception date) to a $10,000 investment made in
the Standard & Poor's 500 Composite Stock Price Index on that date. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Standard & Poor's 500
Composite Stock Price 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: 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 may be modified or
terminated at any time.
12
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
13
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1995
<TABLE>
<CAPTION>
AGING OF
EQUITY INCOME AND AMERICA
FUND GROWTH FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS:
Investments, at cost--see
accompanying portfolios............ $106,447,410 $90,435,401 $20,111,407
============ =========== ===========
Investments, at value (Note 1)...... $137,489,137 $99,462,870 $22,386,050
Cash................................ 721 723 384
Dividends receivable................ 148,546 100,203 27,872
Interest receivable................. 32,998 484,099 8,166
Receivable for investments sold..... -- 352,074 --
Receivable for fund shares sold..... 97,135 60,533 19,992
Receivable from administrator (Note
2)................................. -- -- --
Receivable from investment adviser
(Note 2)........................... -- -- --
Prepaid expenses.................... 4,886 3,932 541
Unamortized organization costs (Note
5)................................. -- -- 11,534
Other Assets........................ 36,454 19,992 --
------------ ----------- -----------
TOTAL ASSETS........................ 137,809,877 100,484,426 22,454,539
LIABILITIES:
Payable for investments purchased... 194,303 407,325 240,985
Payable for fund shares redeemed.... 10,974 16,199 --
Investment advisory and custodian
fees payable (Note 2).............. 88,407 63,953 10,273
Administration fees and shareholder
servicing fees payable
(Note 2)........................... 22,517 17,963 3,435
Accrued expenses and other payables. 76,777 54,399 26,262
------------ ----------- -----------
TOTAL LIABILITIES................... 392,978 559,839 280,955
------------ ----------- -----------
NET ASSETS........................... $137,416,899 $99,924,587 $22,173,584
============ =========== ===========
NET ASSETS consist of:
Accumulated net investment income... $ 199,843 $ 279,523 $ 31,347
Accumulated net realized gain/(loss)
on investments..................... 7,291,782 (1,141,770) (540,774)
Unrealized appreciation of
investments and foreign currency
translations....................... 31,041,727 9,027,469 2,274,643
Par value (Note 4).................. 6,421 8,455 2,827
Paid-in capital in excess of par
value.............................. 98,877,126 91,750,910 20,405,541
------------ ----------- -----------
TOTAL NET ASSETS..................... $137,416,899 $99,924,587 $22,173,584
============ =========== ===========
Shares of Common Stock Outstanding... 6,420,813 8,455,564 2,826,981
NET ASSET VALUE PER SHARE............ $21.40 $11.82 $7.84
====== ====== =====
</TABLE>
See Notes to Financial Statements
14
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCT GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$26,564,051 $27,046,731 $42,895,065 $4,268,293 $22,553,864 $16,088,110 $17,166,874
=========== =========== =========== ========== =========== =========== ===========
$30,136,033 $30,592,141 $46,849,887 $4,355,000 $25,342,152 $16,209,007 $18,269,363
352 688 880 968 798 963 510
20,657 16,083 17,121 3,065 32,714 17,000 12,500
2,868 42,402 12,847 747 13,872 3,411 1,973
820,922 -- 1,700,967 -- 1,210,033 -- --
118 141 7,312 -- 14,998 4,998 4,994
-- -- -- 10,409 -- -- --
-- -- -- 1,098 -- -- --
799 836 1,291 168 528 384 676
11,534 11,534 11,534 11,534 11,534 11,534 11,534
-- -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ----------- -----------
30,993,283 30,663,825 48,601,839 4,382,989 26,626,629 16,247,297 18,301,550
768,125 697,500 760,400 -- 1,091,735 403,694 --
-- 4,993 -- -- -- -- --
9,953 11,003 18,297 -- 8,789 3,014 5,508
5,052 5,265 7,826 748 3,784 2,609 3,060
27,396 30,674 32,962 23,218 27,693 25,106 27,712
----------- ----------- ----------- ---------- ----------- ----------- -----------
810,526 749,435 819,485 23,966 1,132,001 434,423 36,280
----------- ----------- ----------- ---------- ----------- ----------- -----------
$30,182,757 $29,914,390 $47,782,354 $4,359,023 $25,494,628 $15,812,874 $18,265,270
=========== =========== =========== ========== =========== =========== ===========
$ 64,066 $ 21,964 $ -- $ -- $ 50,305 $ 22,348 $ --
(436,010) 80,568 2,216,350 (515,953) (635,981) (261,514) 287,704
3,571,982 3,545,410 3,954,822 86,707 2,788,094 120,897 1,102,489
2,861 3,102 4,892 702 2,968 1,997 2,251
26,979,858 26,263,346 41,606,290 4,787,567 23,289,242 15,929,146 16,872,826
----------- ----------- ----------- ---------- ----------- ----------- -----------
$30,182,757 $29,914,390 $47,782,354 $4,359,023 $25,494,628 $15,812,874 $18,265,270
=========== =========== =========== ========== =========== =========== ===========
2,861,323 3,101,632 4,892,316 701,832 2,968,007 1,996,785 2,250,747
$10.55 $9.64 $9.77 $6.21 $8.59 $7.92 $8.12
====== ===== ===== ===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
15
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
AGING OF
EQUITY INCOME AND AMERICA
FUND GROWTH FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income....................... $ 182,196 $1,871,554 $ 46,701
Dividend income....................... 1,528,126 2,507,172 203,032
Less: Foreign taxes withheld.......... -- -- --
----------- ---------- ----------
TOTAL INCOME.......................... 1,710,322 4,378,726 249,733
EXPENSES:
Investment advisory fees (Note 2)..... 907,625 750,915 92,625
Administration fees (Note 2).......... 186,366 154,582 41,750
Administrative service fees (Note 2).. 26,987 24,620 4,051
Shareholder servicing agent fees (Note
2)................................... 58,701 44,939 8,342
Custodian fees (Note 2)............... 66,290 55,190 21,210
Registration and filing fees.......... 6,370 7,995 11,091
Legal and audit fees.................. 16,148 12,996 2,810
Directors' fees and expenses (Note 2). 4,004 3,196 526
Shareholder reports................... 22,814 22,061 4,903
Amortization of organization costs
(Note 5)............................. -- -- 4,176
Miscellaneous expenses................ 7,241 10,447 3,264
Fees waived by investment adviser and
administrators (Note 2).............. (26,987) (24,620) (42,250)
----------- ---------- ----------
TOTAL EXPENSES........................ 1,275,559 1,062,321 152,498
----------- ---------- ----------
NET INVESTMENT INCOME/(LOSS)........... 434,763 3,316,405 97,235
----------- ---------- ----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain/(loss):
Security transactions................. 8,541,411 (122,305) (407,075)
Foreign currency translations......... -- -- --
----------- ---------- ----------
Total net realized gain/(loss)........ 8,541,411 (122,305) (407,075)
Change in unrealized
appreciation/(depreciation) on
investments and foreign currency
translations during the year......... 8,328,610 1,813,647 2,415,478
----------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS........... 16,870,021 1,691,342 2,008,403
----------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $17,304,784 $5,007,747 $2,105,638
=========== ========== ==========
</TABLE>
See Notes to Financial Statements
16
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ---------- ---------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 34,811 $ 155,908 $ 87,808 $ 8,020 $ 62,475 $ 25,847 $ 32,498
385,325 212,570 183,657 31,130 257,806 223,785 119,339
(1,242) -- -- -- -- -- --
---------- ---------- ---------- --------- ---------- --------- --------
418,894 368,478 271,465 39,150 320,281 249,632 151,837
139,163 153,458 221,126 26,277 95,561 69,075 102,553
41,750 41,750 56,809 41,750 41,750 41,750 41,750
5,189 7,168 17,091 1,660 3,243 3,576 4,525
15,499 17,951 19,827 6,487 9,266 8,104 8,573
19,624 16,365 26,637 5,073 11,904 8,682 21,574
11,111 11,100 11,585 11,096 11,186 11,176 11,143
3,984 4,443 6,342 769 2,804 1,867 3,257
766 828 1,129 142 476 343 540
6,191 8,879 10,521 1,996 4,962 3,467 6,169
4,176 4,176 4,176 4,176 4,176 4,176 4,176
3,716 4,117 6,413 6,523 2,371 3,533 3,248
(24,365) (19,477) (26,625) (62,577) (32,571) (42,283) (38,376)
---------- ---------- ---------- --------- ---------- --------- --------
226,804 250,758 355,031 43,372 155,128 113,466 169,132
---------- ---------- ---------- --------- ---------- --------- --------
192,090 117,720 (83,566) (4,222) 165,153 136,166 (17,295)
---------- ---------- ---------- --------- ---------- --------- --------
(286,314) 195,596 2,652,580 (298,761) (604,910) (261,515) 337,213
(1,842) (156) -- -- 815 -- --
---------- ---------- ---------- --------- ---------- --------- --------
(288,156) 195,440 2,652,580 (298,761) (604,095) (261,515) 337,213
2,845,780 2,850,750 3,235,122 280,050 2,802,463 463,608 583,278
---------- ---------- ---------- --------- ---------- --------- --------
2,557,624 3,046,190 5,887,702 (18,711) 2,198,368 202,093 920,491
---------- ---------- ---------- --------- ---------- --------- --------
$2,749,714 $3,163,910 $5,804,136 $ (22,933) $2,363,521 $ 338,259 $903,196
========== ========== ========== ========= ========== ========= ========
</TABLE>
See Notes to Financial Statements
17
<PAGE>
UST MASTER FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
YEAR ENDED MARCH 31, 1995
Net investment income/(loss)......... $ 434,763 $ 3,316,405 $ 97,235
Net realized gain/(loss) on
investments......................... 8,541,411 (122,305) (407,075)
Change in unrealized
appreciation/(depreciation) on
investments and foreign currency
translations during the year........ 8,328,610 1,813,647 2,415,478
------------ ----------- -----------
Net increase/(decrease) in net assets
resulting from operations........... 17,304,784 5,007,747 2,105,638
Distributions to shareholders:
From net investment income.......... (234,920) (3,030,356) (81,800)
In excess of net investment income.. -- -- --
From net realized gain on
investments........................ (2,880,896) (3,536,012) --
Increase/(decrease) in net assets
from fund share transactions (Note
4).................................. 966,098 4,800,766 9,566,820
------------ ----------- -----------
Net increase/(decrease) in net
assets.............................. 15,155,066 3,242,145 11,590,658
NET ASSETS:
Beginning of year................... 122,261,833 96,682,442 10,582,926
------------ ----------- -----------
End of year (1)..................... $137,416,899 $99,924,587 $22,173,584
============ =========== ===========
YEAR ENDED MARCH 31, 1994
Net investment income/(loss)......... $ 286,226 $ 2,056,103 $ 34,043
Net realized gain/(loss) on
investments and options............. 2,357,182 3,531,389 (127,458)
Change in unrealized
appreciation/(depreciation) on
investments and options during the
year................................ 4,124,417 (1,912,252) (149,802)
------------ ----------- -----------
Net increase/(decrease) in net assets
resulting from operations........... 6,767,825 3,675,240 (243,217)
Distributions to shareholders:
From net investment income.......... (286,226) (1,666,882) (21,194)
In excess of net investment income.. -- -- --
From net realized gain on
investments and options............ (2,357,182) (53,609) --
In excess of net realized gain on
investments and options............ (2,087,106) -- --
Increase in net assets from fund
share transactions (Note 4)......... 14,080,962 43,424,806 8,458,375
------------ ----------- -----------
Net increase in net assets........... 16,118,273 45,379,555 8,193,964
NET ASSETS:
Beginning of year................... 106,143,560 51,302,887 2,388,962
------------ ----------- -----------
End of year (2)..................... $122,261,833 $96,682,442 $10,582,926
============ =========== ===========
</TABLE>
(1) Including accumulated net investment income of $199,843 for Equity Fund,
$279,523 for Income and Growth Fund, $31,347 for Aging of America Fund,
$64,066 for Business and Industrial Restructuring Fund, $21,964 for
Communication and Entertainment Fund, $50,305 for Global Competitors Fund,
and $22,348 for Long-Term Supply of Energy Fund.
(2) Including undistributed net investment income of $459,009 for Income and
Growth Fund, $15,912 for Aging of America Fund, $14,632 for Business and
Industrial Restructuring Fund, $7,932 for Communication and Entertainment
Fund, $17,798 for Global Competitors Fund and $19,266 for Long-Term Supply
of Energy Fund.
See Notes to Financial Statements
18
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 192,090 $ 117,720 $ (83,566) $ (4,222) $ 165,153 $ 136,166 $ (17,295)
(288,156) 195,440 2,652,580 (298,761) (604,095) (261,515) 337,213
2,845,780 2,850,750 3,235,122 280,050 2,802,463 463,608 583,278
----------- ----------- ----------- ---------- ------------ ------------ -----------
2,749,714 3,163,910 5,804,136 (22,933) 2,363,521 338,259 903,196
(139,348) (103,532) -- -- (133,461) (133,084) --
-- -- -- (9,193) -- -- --
(258,199) (445,488) (656,959) -- -- (5,138) (207,461)
13,390,609 6,275,130 17,684,135 (141,805) 13,205,903 8,782,842 1,867,860
----------- ----------- ----------- ---------- ------------ ------------ -----------
15,742,776 8,890,020 22,831,312 (173,931) 15,435,963 8,982,879 2,563,595
14,439,981 21,024,370 24,951,042 4,532,954 10,058,665 6,829,995 15,701,675
----------- ----------- ----------- ---------- ------------ ------------ -----------
$30,182,757 $29,914,390 $47,782,354 $4,359,023 $ 25,494,628 $ 15,812,874 $18,265,270
=========== =========== =========== ========== ============ ============ ===========
$ 43,586 $ 39,296 $ (31,628) $ (2,238) $ 43,756 $ 45,848 $ 955
123,310 979,696 491,630 (217,190) (31,086) 5,139 262,692
642,443 465,198 575,451 (157,451) (72,337) (428,461) 415,283
----------- ----------- ----------- ---------- ------------ ------------ -----------
809,339 1,484,190 1,035,453 (376,879) (59,667) (377,474) 678,930
(34,180) (39,296) -- -- (28,357) (29,119) (955)
-- (665) -- (1,677) -- -- (8,851)
(13,573) (646,759) (154,849) -- -- -- --
-- -- -- -- -- -- --
11,743,298 14,441,888 18,558,215 2,459,485 8,109,395 5,779,543 11,663,958
----------- ----------- ----------- ---------- ------------ ------------ -----------
12,504,884 15,239,358 19,438,819 2,080,929 8,021,371 5,372,950 12,333,082
1,935,097 5,785,012 5,512,223 2,452,025 2,037,294 1,457,045 3,368,593
----------- ----------- ----------- ---------- ------------ ------------ -----------
$14,439,981 $21,024,370 $24,951,042 $4,532,954 $ 10,058,665 $ 6,829,995 $15,701,675
=========== =========== =========== ========== ============ ============ ===========
</TABLE>
See Notes to Financial Statements
19
<PAGE>
UST MASTER FUNDS, INC.
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
For a fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS
NET ASSET NET AND UNREALIZED DIVIDENDS DIVIDENDS FROM NET
VALUE, INVESTMENT GAIN/(LOSS) TOTAL FROM FROM NET IN EXCESS OF REALIZED GAIN
BEGINNING INCOME/ ON INVESTMENTS INVESTMENT INVESTMENT NET INVESTMENT ON INVESTMENTS
OF PERIOD (LOSS) AND OPTIONS OPERATIONS INCOME INCOME AND OPTIONS
--------- ---------- -------------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUND -- (4/25/85*)
Year Ended March 31,
1991.................... $13.87 $ 0.28 $ 0.39 $ 0.67 $(0.23) $ 0.00 $(0.18)
1992.................... 14.13 0.13 2.23 2.36 (0.21) 0.00 0.00
1993.................... 16.28 0.08 3.01 3.09 (0.09) 0.00 (0.51)
1994.................... 18.77 0.05 1.16 1.21 (0.08) 0.00 (0.39)
1995.................... 19.17 0.07 2.67 2.74 (0.04) 0.00 (0.47)
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1991.................... $ 8.84 $ 0.29 $(0.43) $(0.14) $(0.34) $ 0.00 $ 0.00
1992.................... 8.36 0.30 0.72 1.02 (0.28) 0.00 0.00
1993.................... 9.10 0.27 2.43 2.70 (0.35) 0.00 0.00
1994.................... 11.45 0.31 0.46 0.77 (0.27) 0.00 (0.01)
1995.................... 11.94 0.38 0.26 0.64 (0.35) 0.00 (0.41)
AGING OF AMERICA FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $ 0.00 $ 0.01 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.01 0.03 (0.02) 0.01 (0.03) 0.00 0.00
Year Ended March 31,
1995................... 6.99 0.04 0.85 0.89 (0.04) 0.00 0.00
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.02 $ 0.69 $ 0.71 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.71 0.06 1.96 2.02 (0.07) 0.00 (0.02)
Year Ended March 31,
1995................... 9.64 0.07 1.02 1.09 (0.06) 0.00 (0.12)
COMMUNICATION AND ENTERTAINMENT FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $ 0.60 $ 0.61 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.61 0.02 1.52 1.54 (0.03) 0.00 (0.37)
Year Ended March 31,
1995................... 8.75 0.04 1.06 1.10 (0.04) 0.00 (0.17)
EARLY LIFE CYCLE FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.00 $ 0.40 $ 0.40 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.40 (0.01) 1.36 1.35 0.00 0.00 (0.09)
Year Ended March 31,
1995................... 8.66 (0.02) 1.31 1.29 0.00 0.00 (0.18)
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.00 $(0.05) $(0.05) $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 6.95 0.00 (0.71) (0.71) 0.00 0.00 0.00
Year Ended March 31,
1995................... 6.24 (0.01) (0.01) (0.02) 0.00 (0.01) 0.00
GLOBAL COMPETITORS FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $ 0.27 $ 0.28 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.28 0.05 0.41 0.46 (0.05) 0.00 0.00
Year Ended March 31,
1995................... 7.69 0.07 0.90 0.97 (0.07) 0.00 0.00
LONG-TERM SUPPLY OF ENERGY FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $ 0.80 $ 0.81 $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 7.81 0.08 (0.12) (0.04) (0.07) 0.00 0.00
Year Ended March 31,
1995................... 7.70 0.09 0.24 0.33 (0.10) 0.00 (0.01)
PRODUCTIVITY ENHANCERS FUND -- (12/31/92*)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $(0.07) $(0.06) $ 0.00 $ 0.00 $ 0.00
Year Ended March 31,
1994................... 6.94 0.00 0.96 0.96 0.00 (0.02) 0.00
Year Ended March 31,
1995................... 7.88 (0.01) 0.35 0.34 0.00 0.00 (0.10)
</TABLE>
* Commencement of operations
** Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Total return data does not reflect the sales load payable on purchases of
shares.
See Notes to Financial Statements
20
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS RATIO OF NET RATIO OF GROSS RATIO OF NET
IN EXCESS OF NET ASSET NET ASSETS, OPERATING OPERATING INVESTMENT
NET REALIZED GAIN VALUE, END EXPENSES EXPENSES INCOME (LOSS) PORTFOLIO FEE
ON INVESTMENTS TOTAL END TOTAL OF PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS
AND OPTIONS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS+ NET ASSETS RATE (NOTE 2)
----------------- ------------- --------- -------- ----------- ------------ -------------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $(0.41) $14.13 5.11% $ 29,866 1.23% 1.23% 2.21% 41% $0.00
0.00 (0.21) 16.28 16.87% 71,614 1.15% 1.15% 0.87% 20% 0.00
0.00 (0.60) 18.77 19.26% 106,144 1.08% 1.08% 0.51% 24% 0.00
(0.34) (0.81) 19.17 6.54% 122,262 1.14% 1.14% 0.25% 17% 0.00
0.00 (0.51) 21.40 14.65% 137,417 1.05% 1.08% 0.36% 23% 0.00
$ 0.00 $(0.34) $ 8.36 (1.30)% $ 19,593 1.28% 1.28% 3.64% 148% $0.00
0.00 (0.28) 9.10 12.42% 23,254 1.23% 1.23% 3.52% 81% 0.00
0.00 (0.35) 11.45 30.45% 51,303 1.15% 1.15% 2.76% 28% 0.00
0.00 (0.28) 11.94 6.69% 96,682 1.17% 1.17% 2.77% 28% 0.00
0.00 (0.76) 11.82 5.74% 99,925 1.06% 1.09% 3.31% 36% 0.00
$ 0.00 $ 0.00 $ 7.01 0.14% $ 2,389 0.99%** 3.87%** 0.77%** 14%** $0.03
0.00 (0.03) 6.99 0.13% 10,583 0.99% 1.82% 0.59% 24% 0.04
0.00 (0.04) 7.84 12.80% 22,174 0.99% 1.26% 0.63% 14% 0.02
$ 0.00 $ 0.00 $ 7.71 10.14% $ 1,935 0.99%** 5.85%** 2.48%** 9%** $0.04
0.00 (0.09) 9.64 26.40% 14,440 0.99% 1.73% 0.77% 75% 0.06
0.00 (0.18) 10.55 11.49% 30,183 0.98% 1.08% 0.83% 82% 0.01
$ 0.00 $ 0.00 $ 7.61 8.71% $ 5,785 0.99%** 2.20%** 1.06%** 25%** $0.01
0.00 (0.40) 8.75 20.07% 21,024 0.98% 1.16% 0.29% 60% 0.01
0.00 (0.21) 9.64 12.87% 29,914 0.98% 1.06% 0.46% 56% 0.01
$ 0.00 $ 0.00 $ 7.40 5.71% $ 5,512 0.99%** 2.70%** 0.12%** 4%** $0.01
0.00 (0.09) 8.66 18.27% 24,951 0.95% 1.15% (0.25)% 20% 0.01
0.00 (0.18) 9.77 15.16% 47,782 0.96% 1.04% (0.23)% 42% 0.01
$ 0.00 $ 0.00 $ 6.95 (0.71)% $ 2,452 0.99%** 2.83%** 0.32%** 0%** $0.02
0.00 0.00 6.24 (10.15)% 4,533 0.99% 2.20% (0.07)% 28% 0.05
0.00 (0.01) 6.21 (0.27)% 4,359 0.99% 2.42% (0.10)% 61% 0.09
$ 0.00 $ 0.00 $ 7.28 4.00% $ 2,037 0.99%** 3.97%** 0.82%** 0%** $0.03
0.00 (0.05) 7.69 6.29% 10,059 0.99% 1.72% 0.81% 19% 0.05
0.00 (0.07) 8.59 12.73% 25,495 0.97% 1.18% 1.04% 29% 0.01
$ 0.00 $ 0.00 $ 7.81 11.57% $ 1,457 0.99%** 7.03%** 1.69%** 0%** $0.05
0.00 (0.07) 7.70 (0.57)% 6,830 0.99% 2.03% 1.21% 6% 0.07
0.00 (0.11) 7.92 4.28% 15,813 0.98% 1.35% 1.18% 31% 0.03
$ 0.00 $ 0.00 $ 6.94 (0.86)% $ 3,369 0.99%** 4.23%** 1.29%** 183%** $0.03
0.00 (0.02) 7.88 13.81% 15,702 0.99% 1.49% 0.01% 198% 0.10
0.00 (0.10) 8.12 4.45% 18,265 0.99% 1.21% (0.10)% 276% 0.02
</TABLE>
See Notes to Financial Statements
21
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
EQUITY FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ------------
<C> <S> <C>
COMMON STOCKS -- 95.08%
CONSUMER CYCLICAL -- 27.10%
76,000 Centex Corp............................................. $ 1,833,500
165,000 Comcast Corp., Class A Special.......................... 2,557,500
45,000 Dayton-Hudson Corp...................................... 3,217,500
100,000 Ford Motor Co........................................... 2,700,000
60,000 Houghton Mifflin Co..................................... 2,790,000
62,000 Lowe's Cos., Inc........................................ 2,139,000
90,000 Luxottica Group SpA ADR................................. 3,240,000
76,500 Manpower, Inc........................................... 2,457,563
60,000 McDonald's Corp......................................... 2,047,500
75,000 +O'Reilly Automotive, Inc............................... 1,912,500
55,000 Reuters Holdings plc ADR................................ 2,516,250
65,000 +Scholastic Corp........................................ 3,526,250
65,000 Sears, Roebuck & Co..................................... 3,469,375
75,000 Time Warner, Inc........................................ 2,831,250
------------
37,238,188
------------
FINANCIAL -- 15.13%
18,240 General Re Corp......................................... 2,407,680
30,000 MBIA, Inc............................................... 1,886,250
115,000 Mellon Bank Corp........................................ 4,686,250
135,000 Mercantile Bankshares Corp.............................. 2,953,125
44,000 Morgan Stanley Group, Inc............................... 2,964,500
50,000 State Street Boston Corp................................ 1,593,750
95,000 UNUM Corp............................................... 4,298,750
------------
20,790,305
------------
CONSUMER STAPLES -- 13.77%
70,000 Abbott Laboratories..................................... 2,493,750
81,500 +FHP International Corp................................. 2,404,250
75,000 +Genzyme Corp........................................... 2,906,250
50,800 Johnson & Johnson....................................... 3,022,600
30,450 Pfizer, Inc............................................. 2,611,087
111,600 +Physician Corp. of America............................. 2,455,200
85,000 +Sunrise Medical, Inc................................... 3,038,750
------------
18,931,887
------------
TECHNOLOGY -- 13.63%
65,000 +Informix Corp.......................................... 2,218,125
145,000 +Intersolv, Inc......................................... 2,301,875
50,510 +Microsoft Corp......................................... 3,586,210
39,000 Motorola, Inc........................................... 2,130,375
154,400 +Spectrum Holobyte, Inc................................. 2,451,100
35,000 Texas Instruments, Inc.................................. 3,097,500
55,610 Tyco International Ltd.................................. 2,940,379
------------
18,725,564
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ------------
<C> <S> <C>
ENERGY -- 10.07%
45,000 Burlington Resources, Inc........ $ 1,833,750
102,000 +HS Resources, Inc............... 1,504,500
180,000 Hugoton Energy Corp.............. 1,350,000
70,000 Louisiana Land & Exploration Co.. 2,616,250
62,190 Phillips Petroleum Co............ 2,277,709
115,500 +United Meridian Corp............ 1,617,000
91,680 Unocal Corp...................... 2,635,800
------------
13,835,009
------------
UTILITIES -- 7.36%
82,940 American Telephone & Telegraph
Co............................... 4,292,145
80,000 +NEXTEL Communications, Inc.,
Class A.......................... 1,090,000
52,650 Telephone & Data Systems, Inc.... 2,079,675
80,000 Vodafone Group plc ADR........... 2,650,000
------------
10,111,820
------------
CAPITAL GOODS -- 4.99%
70,000 Illinois Tool Works, Inc......... 3,421,250
67,500 +Thermo Electron Corp............ 3,434,062
------------
6,855,312
------------
RAW/INTERMEDIATE
MATERIALS -- 3.03%
20,590 Georgia Pacific Corp............. 1,642,052
120,000 Pall Corp........................ 2,520,000
------------
4,162,052
------------
TOTAL COMMON STOCKS
(Cost $99,608,410)................. 130,650,137
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 4.97%
$ 799,000 Associates Corp. of North America
Master Notes..................... 799,000
6,040,000 General Electric Co. Promissory
Notes............................ 6,040,000
------------
TOTAL DEMAND NOTES
(Cost $6,839,000).................. 6,839,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $106,447,410*)................... 100.05% $137,489,137
OTHER ASSETS & LIABILITIES (NET)....... (0.05) (72,238)
------ ------------
NET ASSETS............................. 100.00% $137,416,899
====== ============
</TABLE>
- --------
* For Federal income tax purposes, the tax basis of investments aggregates
$106,449,351.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
22
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INCOME AND GROWTH FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 61.52%
CONSUMER CYCLICAL -- 14.67%
80,000 Comcast Corp., Class A Special........................... $ 1,240,000
58,000 Cooper Tire & Rubber Co.................................. 1,645,750
63,000 Heilig Meyers Co......................................... 1,378,125
48,000 Luxottica Group SpA ADR.................................. 1,728,000
56,000 McDonald's Corp.......................................... 1,911,000
55,000 Miller (Herman), Inc..................................... 1,203,125
71,000 ServiceMaster Ltd. Partnership........................... 1,686,250
84,000 Smart & Final, Inc....................................... 1,302,000
50,000 Wiley (John) & Sons, Inc., Class A....................... 2,562,500
-----------
14,656,750
-----------
TECHNOLOGY -- 10.04%
50,000 Adobe Systems, Inc....................................... 2,475,000
90,000 +Analog Devices, Inc..................................... 2,295,000
100,000 ECI Telecommunications................................... 1,487,500
29,000 +Lotus Development Corp.................................. 1,094,750
35,000 Premier Industrial Corp.................................. 826,875
100,000 +Unitrode Corp........................................... 1,850,000
-----------
10,029,125
-----------
CAPITAL GOODS -- 8.51%
28,000 Dover Corp............................................... 1,813,000
41,300 Lincoln Electric Co...................................... 1,899,800
37,000 Raychem Corp. ........................................... 1,503,125
74,000 Spartan Motors, Inc...................................... 777,000
42,000 Trinity Industries, Inc.................................. 1,569,750
15,041 Woodward Governor Co. ................................... 940,063
-----------
8,502,738
-----------
FINANCIAL -- 8.05%
14,500 American International Group, Inc........................ 1,511,625
90,000 First Financial Caribbean Corp........................... 1,080,000
21,000 Morgan Stanley Group, Inc................................ 1,414,875
48,000 Mutual Risk Management Ltd............................... 1,338,000
67,000 Pennsylvania Real Estate Investment Trust................ 1,348,375
65,000 Wellsford Residential Properties......................... 1,356,875
-----------
8,049,750
-----------
CONSUMER STAPLES -- 7.68%
20,000 Gillette Co.............................................. 1,632,500
27,000 Johnson & Johnson........................................ 1,606,500
22,000 Kellogg Co. ............................................. 1,284,250
56,000 Novo-Nordisk A.S., ADR................................... 1,365,000
50,000 +Sunrise Medical, Inc.................................... 1,787,500
-----------
7,675,750
-----------
ENERGY -- 5.15%
41,000 Norsk Hydro A.S., ADR.................................... 1,527,250
60,000 +SEACOR Holdings, Inc.................................... 1,245,000
150,000 San Juan Basin Royalty Trust............................. 1,031,250
96,250 +United Meridian Corp. .................................. 1,347,500
-----------
5,151,000
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
RAW/INTERMEDIATE
MATERIALS -- 4.99%
36,000 Nucor Corp................ $ 2,025,000
62,000 Pall Corp. ............... 1,302,000
84,000 Worthington Industries,
Inc....................... 1,659,000
-----------
4,986,000
-----------
UTILITIES -- 1.98%
65,000 +NEXTEL Communications,
Inc., Class A............. 885,625
57,000 UGI Corp.................. 1,090,125
-----------
1,975,750
-----------
TRANSPORTATION -- 0.45%
189,892 +Greyhound Lines, Inc..... 450,994
-----------
TOTAL COMMON STOCKS
(Cost $50,976,919)........ 61,477,857
-----------
CONVERTIBLE PREFERRED STOCKS -- 12.04%
FINANCIAL -- 6.27%
250,000 Capstead Mortgage Corp.,
Series B, Preferred
Exchange $1.26............ 3,156,250
65,000 Catellus Development
Corp., Series A, Preferred
Exchange $3.75............ 3,111,875
-----------
6,268,125
-----------
TRANSPORTATION -- 3.57%
67,000 Delta Air Lines, Inc.,
Series C, Preferred
Exchange $3.50............ 3,567,750
-----------
TECHNOLOGY -- 1.46%
30,000 Storage Technology Corp.,
Preferred Exchange $3.50.. 1,455,000
-----------
ENERGY -- 0.74%
22,700 Maxus Energy Corp.,
Preferred Exchange $4.00.. 734,913
-----------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $12,963,106)........ 12,025,788
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS -- 7.30%
RAW/INTERMEDIATE
MATERIALS -- 3.00%
$3,100,000 Fort Howard Sr. Notes,
9.25%, 03/15/2001......... 2,999,250
-----------
TECHNOLOGY -- 2.30%
2,700,000 Storage Technology Corp.
8.00%, 05/31/2015......... 2,291,625
-----------
TRANSPORTATION -- 2.00%
2,750,000 Greyhound Lines, Inc.,
Debenture,
10.00%, 07/31/2001........ 2,000,625
-----------
TOTAL CORPORATE BONDS
(Cost $7,954,813)........... 7,291,500
-----------
</TABLE>
See Notes to Financial Statements
23
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
INCOME AND GROWTH FUND--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
CONVERTIBLE BONDS -- 16.17%
TECHNOLOGY -- 7.92%
$3,455,000 Kollmorgen Corp., Sub-Debenture,
8.75%, 05/01/2009..................................... $ 3,178,600
5,000,000 Network Equipment Technologies, Inc., Sub-Debenture,
7.25%, 05/15/2014..................................... 4,737,500
-----------
7,916,100
-----------
ENERGY -- 4.29%
4,600,000 AES Corp., Sub-Debenture, 6.50%, 03/15/2002........... 4,283,750
-----------
CONSUMER STAPLES -- 3.96%
4,900,000 Novacare, Inc., Sub-Debenture, 5.50%, 01/15/2000...... 3,962,875
-----------
TOTAL CONVERTIBLE BONDS
(Cost $16,035,563).................................... 16,162,725
-----------
DEMAND NOTES -- 2.51%
417,000 Associates Corp. of North America Master Notes........ 417,000
2,088,000 General Electric Co. Promissory Notes................. 2,088,000
-----------
TOTAL DEMAND NOTES
(Cost $2,505,000)..................................... 2,505,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $90,435,401*)........................................ 99.54% $99,462,870
OTHER ASSETS & LIABILITIES (NET)........................... 0.46 461,717
------ -----------
NET ASSETS................................................. 100.00% $99,924,587
====== ===========
</TABLE>
- --------
* For Federal income tax purposes, the tax basis of investments aggregates
$90,440,728.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
24
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
AGING OF AMERICA FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- 94.06%
CONSUMER STAPLES -- 44.26%
13,900 American Greetings Corp., Class A......................... $ 413,525
8,000 Bausch & Lomb, Inc. ...................................... 286,000
9,400 Campbell Soup Co.......................................... 454,725
18,600 Carnival Cruise Lines, Inc., Class A...................... 434,775
12,600 +Coleman Co., Inc......................................... 483,525
10,000 Columbia/HCA Healthcare Corp.............................. 430,000
10,000 Dentsply International, Inc. ............................. 347,500
8,500 Eastman Kodak Co.......................................... 451,562
12,700 +Genzyme Corp............................................. 492,125
6,000 Gillette Co............................................... 489,750
10,300 International Flavors & Fragrances, Inc................... 531,737
8,800 Johnson & Johnson......................................... 523,600
21,200 Mattel, Inc............................................... 522,050
9,500 Medtronic, Inc. .......................................... 659,063
10,800 PepsiCo, Inc. ............................................ 421,200
6,000 Pfizer, Inc............................................... 514,500
18,300 +Sun Healthcare Group, Inc................................ 466,650
15,300 +Sunrise Medical, Inc..................................... 546,975
10,500 United Healthcare Corp.................................... 490,875
9,500 +Value Health, Inc........................................ 363,375
9,200 Walt Disney Co............................................ 491,050
-----------
9,814,562
-----------
CONSUMER CYCLICAL -- 29.33%
16,000 +American Medical Response................................ 402,000
13,800 Black & Decker Corp....................................... 398,475
4,800 Capital Cities/ABC, Inc. ................................. 423,600
7,600 Gannett Co., Inc.......................................... 405,650
16,200 +General Nutrition Cos., Inc.............................. 441,450
9,800 H & R Block, Inc. ........................................ 425,075
16,400 Lowe's Cos., Inc.......................................... 565,800
14,700 Marriott International, Inc............................... 510,825
13,300 Masco Corp................................................ 367,413
11,400 Pittway Corp., Class A.................................... 528,675
9,000 Premark International, Inc................................ 397,125
17,300 Stewart Enterprises, Inc., Class A........................ 462,775
14,000 Sysco Corp. .............................................. 367,500
10,700 Time Warner, Inc.......................................... 403,925
15,800 Wal-Mart Stores, Inc...................................... 402,900
-----------
6,503,188
-----------
FINANCIAL -- 10.86%
13,100 American Express Co. ..................................... 456,862
9,200 Barnett Banks of Florida, Inc............................. 418,600
7,000 BayBanks, Inc............................................. 448,000
10,500 State Street Boston Corp.................................. 334,688
20,700 Summit Bancorp. (New Jersey).............................. 388,125
8,000 UNUM Corp................................................. 362,000
-----------
2,408,275
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
TECHNOLOGY -- 5.61%
12,400 Corning, Inc. ........................................ $ 446,400
8,800 Motorola, Inc......................................... 480,700
11,300 Sensormatic Electronics Corp.......................... 316,400
-----------
1,243,500
-----------
CAPITAL GOODS -- 2.30%
10,000 +Thermo Electron Corp................................. 508,750
-----------
UTILITIES -- 1.70%
7,300 American Telephone & Telegraph Co..................... 377,775
-----------
TOTAL COMMON STOCKS
(Cost $18,581,407).................................... 20,856,050
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 6.90%
$ 352,000 Associates Corp. of North America Master Notes........ 352,000
1,178,000 General Electric Co. Promissory Notes................. 1,178,000
-----------
TOTAL DEMAND NOTES (Cost $1,530,000).................. 1,530,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $20,111,407*)........................................ 100.96% $22,386,050
OTHER ASSETS & LIABILITIES (NET)........................... (0.96) (212,466)
------ -----------
NET ASSETS................................................. 100.00% $22,173,584
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
See Notes to Financial Statements
25
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 95.11%
CONSUMER STAPLES -- 25.58%
17,000 +Abbey Healthcare Group, Inc............................. $ 618,375
9,000 Avon Products, Inc....................................... 544,500
10,000 Bristol-Myers Squibb Co.................................. 630,000
12,000 CPC International, Inc................................... 649,500
60,000 +Continental Medical Systems, Inc........................ 465,000
45,000 Cott Corp................................................ 382,500
25,000 Dial Corp................................................ 634,375
100,000 Food Lion, Inc........................................... 562,500
20,000 IVAX Corp................................................ 500,000
25,000 MediSense, Inc........................................... 493,750
21,000 +Physician Corp. of America.............................. 462,000
8,000 Warner Lambert Co........................................ 626,000
16,000 +Wellpoint Health Networks, Inc.......................... 560,000
15,000 United Wisconsin Services, Inc........................... 590,625
-----------
7,719,125
-----------
TECHNOLOGY -- 14.92%
20,000 ACT Manufacturing, Inc................................... 280,000
8,500 International Business Machines Corp..................... 695,938
25,000 +International Rectifier Corp............................ 600,000
32,000 +Intersolv, Inc.......................................... 508,000
50,000 +Phoenix Technologies Ltd................................ 356,250
15,000 +Plantronics, Inc........................................ 414,375
62,000 +Plasma-Therm, Inc....................................... 255,750
9,700 Texas Instruments, Inc................................... 858,450
14,000 Watkins Johnson Co....................................... 535,500
-----------
4,504,263
-----------
FINANCIAL -- 13.33%
50,000 American Eagle Group..................................... 493,750
10,000 First Chicago Corp....................................... 501,250
31,000 Health and Retirement Properties Trust................... 461,125
15,000 Mellon Bank Corp......................................... 611,250
13,000 Midlantic Corp........................................... 442,000
40,000 +Riggs National Corp..................................... 365,000
13,000 Student Loan Marketing Association....................... 453,375
18,000 Travelers, Inc........................................... 695,250
-----------
4,023,000
-----------
RAW/INTERMEDIATE
MATERIALS -- 11.30%
16,000 Cambrex Corp............................................. 488,000
8,500 Dow Chemical Co.......................................... 620,500
40,000 Fort Howard Corp......................................... 505,000
7,000 Great Lakes Chemical Corp................................ 436,625
16,000 OM Group, Inc............................................ 396,000
7,000 St. Joe Paper Co......................................... 433,125
10,000 W. R. Grace Co........................................... 532,500
-----------
3,411,750
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
CONSUMER CYCLICAL -- 9.81%
25,000 American Standard Cos., Inc.............................. $ 618,750
28,000 Baker (J.), Inc.......................................... 416,500
23,050 Comcast Corp., Class A Special........................... 357,275
35,000 Congoleum Corp., Class A................................. 525,000
20,000 +Federated Department Stores, Inc........................ 442,500
23,500 +OfficeMax, Inc.......................................... 602,187
-----------
2,962,212
-----------
CAPITAL GOODS -- 6.27%
13,000 Allied Signal, Inc....................................... 510,250
50,000 Grupo Carso S.A., Class A1............................... 216,077
10,000 +MagneTek, Inc........................................... 143,750
8,400 McDonnell Douglas Corp................................... 468,300
8,000 United Technologies Corp................................. 553,000
-----------
1,891,377
-----------
ENERGY -- 5.56%
41,700 Flores & Rucks, Inc...................................... 484,762
27,000 Hugoton Energy Corp...................................... 202,500
5,500 Mobil Corp............................................... 509,437
64,000 +Nabors Industries, Inc.................................. 480,000
-----------
1,676,699
-----------
TRANSPORTATION -- 3.87%
17,000 IHC Caland N.V........................................... 421,479
25,000 +Southern Pacific Rail Corp.............................. 437,500
34,000 U.S. Xpress Enterprises, Inc.,
Class A.................................................. 310,250
-----------
1,169,229
-----------
UTILITIES -- 2.78%
37,270 +Century Communications, Corp., Class A.................. 368,041
10,000 Tenneco, Inc............................................. 471,250
-----------
839,291
-----------
HOLDING COMPANY
DIVERSIFIED -- 1.69%
8,000 Internatio-Muller N.V.................................... 509,063
-----------
TOTAL COMMON STOCKS (Cost $25,122,305)................... 28,706,009
-----------
PREFERRED STOCKS -- 1.34%
CONSUMER CYCLICAL -- 1.34%
400 Hornbach Holding AG
(Cost $409,131).......................................... 402,899
-----------
CONVERTIBLE PREFERRED STOCKS -- 1.58%
CONSUMER STAPLES -- 1.58%
75,000 RJR Nabisco Holdings, Series C (Cost $488,615)........... 478,125
-----------
</TABLE>
See Notes to Financial Statements
26
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<C> <S> <C>
CONVERTIBLE BONDS -- 1.66%
ENERGY -- 1.66%
$20,000 Atlantic Richfield 9.00%, 09/15/1997 (Cost $495,000)... $ 500,000
-----------
DEMAND NOTES -- 0.16%
49,000 General Electric Co.
Promissory Notes
(Cost $49,000)......................................... 49,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $26,564,051*)........................................ 99.85% $30,136,033
OTHER ASSETS & LIABILITIES (NET)........................... 0.15 46,724
------ -----------
NET ASSETS................................................. 100.00% $30,182,757
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
See Notes to Financial Statements
27
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
COMMUNICATION AND ENTERTAINMENT FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- 93.17%
CONSUMER CYCLICAL -- 37.28%
9,800 Capital Cities/ABC, Inc.................................. $ 864,850
57,400 Comcast Corp., Class A Special........................... 889,700
14,900 Gannett Co., Inc......................................... 795,288
20,000 Houghton Mifflin Co...................................... 930,000
22,700 +King World Productions, Inc............................. 893,813
27,450 +Paging Network, Inc..................................... 905,850
80,000 +Phoenix Technologies Ltd................................ 570,000
30,000 +Recoton Corp............................................ 495,000
16,100 +Scholastic Corp......................................... 873,425
38,685 +Tele-Communications, Inc.,
Class A.................................................. 807,549
160,000 Television Broadcasts Ltd. ADR........................... 546,358
21,184 +Viacom, Inc., Class B................................... 947,984
50,000 +Westcott Communications, Inc............................ 687,500
18,400 Wiley (John) & Sons, Inc.,
Class A.................................................. 943,000
-----------
11,150,317
-----------
TECHNOLOGY -- 33.37%
23,100 Adobe Systems, Inc....................................... 1,143,450
29,200 +AirTouch Communications, Inc............................ 795,700
55,000 ECI Telecommunications Limited Designs................... 818,125
30,000 +Electronic Arts, Inc.................................... 675,000
40,000 +Franklin Electronic Publishers, Inc..................... 1,125,000
20,000 +Informix Corp........................................... 682,500
22,000 +Lotus Development Corp.................................. 830,500
12,300 +Microsoft Corp.......................................... 873,300
15,700 Motorola, Inc............................................ 857,612
28,000 +Qualcomm, Inc........................................... 917,000
56,600 +Spectrum Holobyte, Inc.................................. 898,525
8,000 +Wall Data, Inc.......................................... 366,000
-----------
9,982,712
-----------
UTILITIES -- 17.86%
15,000 American Telephone & Telegraph Co........................ 776,250
13,700 Bell Atlantic Corp....................................... 722,675
42,600 MCI Communications Corp.................................. 873,300
23,700 +MFS Communications Co., Inc............................. 829,500
35,600 +NEXTEL Communications, Inc., Class A.................... 485,050
18,000 Southwestern Bell Corp................................... 758,250
29,700 Sprint Corp.............................................. 898,425
-----------
5,343,450
-----------
CONSUMER STAPLES -- 4.66%
20,300 Harcourt General, Inc.................................... 791,700
35,000 +Sylvan Learning Systems, Inc............................ 603,750
-----------
1,395,450
-----------
TOTAL COMMON STOCKS
(Cost $24,279,116)....................................... 27,871,929
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<C> <S> <C>
CONVERTIBLE BONDS -- 4.61%
CONSUMER CYCLICAL -- 2.91%
$ 870,050 Time Warner, Inc., Series C, Debenture,
8.75%, 01/10/2015.......................... $ 868,962
-----------
TECHNOLOGY -- 1.70%
600,000 Storage Technology Corp. 8.00%, 05/31/2015. 509,250
-----------
TOTAL CONVERTIBLE BONDS (Cost $1,425,615)... 1,378,212
-----------
DEMAND NOTES -- 4.49%
12,000 Associates Corp. of North America Master
Notes...................................... 12,000
1,330,000 General Electric Co. Promissory Notes...... 1,330,000
-----------
TOTAL DEMAND NOTES (Cost $1,342,000)........ 1,342,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $27,046,731*)............................. 102.27% $30,592,141
OTHER ASSETS & LIABILITIES (NET)................ (2.27) (677,751)
------ -----------
NET ASSETS...................................... 100.00% $29,914,390
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
28
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
EARLY LIFE CYCLE FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- 93.81%
TECHNOLOGY -- 27.92%
24,100 Adobe Systems, Inc............................. $ 1,192,950
32,000 +Asyst Technologies, Inc. ..................... 1,160,000
34,000 +Informix Corp. ............................... 1,160,250
70,900 +Intersolv, Inc. .............................. 1,125,538
20,000 +Lotus Development Corp. ...................... 755,000
69,900 +Metricom, Inc. ............................... 996,075
70,000 +Perceptron, Inc. ............................. 1,137,500
73,000 +Spectrum Holobyte, Inc. ...................... 1,158,875
23,000 +StrataCom, Inc. .............................. 989,000
43,000 System Software Associates, Inc................ 1,075,000
81,000 +Thermedics, Inc. ............................. 1,265,625
29,000 +Wall Data, Inc. .............................. 1,326,750
-----------
13,342,563
-----------
CONSUMER STAPLES -- 18.87%
131,600 +Benson Eyecare Corp........................... 1,102,150
36,000 +Coastal Healthcare Group, Inc................. 981,000
28,700 +Genzyme Corp.................................. 1,112,125
54,000 +I-Stat Corp. ................................. 1,350,000
98,686 +Ligand Pharmaceuticals, Class B............... 666,130
55,000 Physician Reliance Network, Inc................ 1,388,750
38,500 +Quantum Health Resources, Inc................. 798,875
30,000 +Sunrise Medical, Inc.......................... 1,072,500
50,000 +Veterinary Centers of America, Inc............ 543,750
-----------
9,015,280
-----------
CONSUMER CYCLICAL -- 14.20%
48,300 Allen Group, Inc. ............................. 1,195,425
60,000 +Bell Sports Corp. ............................ 810,000
57,250 Comcast Corp., Class A Special................. 887,375
24,400 +King World Productions, Inc. ................. 960,750
61,000 +Recovery Engineering, Inc..................... 991,250
43,200 Standard Products Co........................... 847,800
90,000 +Stimsonite Corp............................... 1,091,250
-----------
6,783,850
-----------
FINANCIAL -- 13.35%
23,000 Alex Brown, Inc................................ 888,375
10,000 Capital Guaranty Corp.......................... 171,250
64,500 +Capsure Holdings Corp......................... 806,250
31,300 First American Corp. (Tennessee)............... 1,048,550
61,000 Homestate Holdings, Inc........................ 823,500
42,000 Integon Corp. ................................. 546,000
96,000 +National Auto Credit, Inc. ................... 1,080,000
37,300 West One Bancorp............................... 1,016,425
-----------
6,380,350
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
CAPITAL GOODS -- 12.05%
106,700 +BE Aerospace, Inc.................................... $ 666,875
59,000 Harmon Industries, Inc................................ 826,000
54,000 Juno Lighting, Inc. .................................. 1,053,000
33,000 +Lindsay Manufacturing Co............................. 973,500
28,000 Teleflex, Inc. ....................................... 1,127,000
50,000 TriMas Corp........................................... 1,112,500
-----------
5,758,875
-----------
TRANSPORTATION -- 2.32%
75,000 SkyWest, Inc.......................................... 1,106,250
-----------
RAW/INTERMEDIATE MATERIALS -- 1.99%
84,400 +Steel of West Virginia, Inc.......................... 949,500
-----------
ENERGY -- 1.87%
61,000 Snyder Oil Corp....................................... 892,125
-----------
UTILITIES -- 1.24%
19,750 +NEXTEL Communications, Inc., Class A................. 269,094
72,000 +New World Power Corp................................. 324,000
-----------
593,094
-----------
TOTAL COMMON STOCKS (Cost $40,867,065)................ 44,821,887
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 4.24%
$ 116,000 Associates Corp. of North America Master Notes........ 116,000
1,912,000 General Electric Co. Promissory Notes................. 1,912,000
-----------
TOTAL DEMAND NOTES (Cost $2,028,000).................. 2,028,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $42,895,065*)......................................... 98.05% $46,849,887
OTHER ASSETS & LIABILITIES (NET)............................ 1.95 932,467
------ -----------
NET ASSETS.................................................. 100.00% $47,782,354
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
See Notes to Financial Statements
29
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ----------
<C> <S> <C>
COMMON STOCKS -- 98.95%
CAPITAL GOODS -- 38.99%
12,000 +Acmat Corp................................................ $ 138,000
10,000 +Allied Waste Industries, Inc.............................. 47,500
20,000 +Allwaste, Inc. ........................................... 120,000
10,000 BHA Group, Inc............................................. 115,000
4,000 Browning-Ferris Industries, Inc............................ 136,000
10,000 +Continental Waste Industries, Inc. ....................... 106,250
2,500 Fluor Corp................................................. 120,625
35,000 International Technology Corp.............................. 78,750
6,000 +Jacobs Engineering Group, Inc............................. 117,750
6,000 +Molten Metal Technology, Inc. ............................ 97,500
3,000 Stewart & Stevenson Services, Inc. ........................ 105,750
3,000 +Thermo Electron Corp...................................... 152,625
4,000 WMX Technologies, Inc...................................... 110,000
10,000 Wheelabrator Technologies, Inc............................. 136,250
3,000 York International Corp.................................... 117,750
----------
1,699,750
----------
RAW/INTERMEDIATE
MATERIALS -- 26.58%
5,000 Caraustar Industries, Inc.................................. 83,750
4,500 Engelhard Corp. ........................................... 133,312
2,000 Exide Corp................................................. 73,500
7,000 Fort Howard Corp........................................... 88,375
5,000 +Ionics, Inc............................................... 150,000
3,000 Minerals Technologies, Inc. ............................... 96,750
10,000 +Mycogen Corp. ............................................ 92,500
3,500 Nalco Chemical Co.......................................... 117,688
5,000 Pall Corp. ................................................ 105,000
6,000 Rock-Tenn Co., Class A..................................... 99,000
6,000 +Tetra Tech, Inc........................................... 118,500
----------
1,158,375
----------
TECHNOLOGY -- 22.06%
3,500 +Asyst Technologies, Inc................................... 126,875
3,500 Corning, Inc. ............................................. 126,000
3,500 Honeywell, Inc. ........................................... 130,813
4,000 +ITI Technologies, Inc..................................... 100,000
10,000 Memtec Ltd. ADR............................................ 131,250
4,500 Sensormatic Electronics Corp............................... 126,000
3,000 +Thermo Instrument Systems, Inc............................ 100,500
12,000 +Thermo Power Corp......................................... 120,000
----------
961,438
----------
CONSUMER CYCLICAL -- 5.37%
4,500 Miller (Herman), Inc....................................... 98,437
5,000 Ultralife Batteries, Inc................................... 86,250
6,000 +Waste Management International plc ADR.................... 49,500
----------
234,187
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ----------
<C> <S> <C>
TRANSPORTATION -- 3.01%
15,000 Laidlaw, Inc., Class B.................................. $ 131,250
----------
UTILITIES -- 2.94%
8,000 +California Energy Co., Inc............................. 128,000
----------
TOTAL COMMON STOCKS
(Cost $4,226,293)....................................... 4,313,000
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 0.96%
$42,000 General Electric Co. Promissory Notes (Cost $42,000).... 42,000
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $4,268,293*).......................................... 99.91% $4,355,000
OTHER ASSETS & LIABILITIES (NET)............................ 0.09 4,023
------ ----------
NET ASSETS.................................................. 100.00% $4,359,023
====== ==========
</TABLE>
- --------
* For Federal income tax purposes, the tax basis of investments aggregates
$4,284,793.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
30
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
GLOBAL COMPETITORS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- 88.54%
CONSUMER STAPLES -- 21.20%
13,000 CPC International, Inc.................................. $ 703,625
9,000 Gillette Co............................................. 734,625
2,400 L'Oreal................................................. 634,103
18,000 Libbey, Inc............................................. 335,250
8,000 Pfizer, Inc............................................. 686,000
11,000 Procter & Gamble Co..................................... 728,750
9,500 Schering-Plough Corp.................................... 706,562
15,000 Sunbeam-Oster Co., Inc.................................. 343,125
10,000 Walt Disney Co.......................................... 533,750
-----------
5,405,790
-----------
TECHNOLOGY -- 15.54%
14,500 Adobe Systems, Inc...................................... 717,750
20,000 Astra AB, Class B Free.................................. 516,883
11,000 +Compuware Corp......................................... 401,500
14,000 +Informix Corp.......................................... 477,750
7,000 +Intersolv, Inc......................................... 111,125
12,000 Motorola, Inc........................................... 655,500
13,000 +Silicon Graphics, Inc.................................. 461,500
7,000 Texas Instruments, Inc.................................. 619,500
-----------
3,961,508
-----------
CONSUMER CYCLICAL -- 12.40%
16,000 Duracell International, Inc............................. 716,000
6,000 Hilton Hotels Corp...................................... 444,750
23,000 Luxottica Group SpA ADR................................. 828,000
21,000 McDonald's Corp......................................... 716,625
10,000 +Nu-kote Holdings, Inc., Class A........................ 230,000
6,000 Time Warner, Inc........................................ 226,500
-----------
3,161,875
-----------
CAPITAL GOODS -- 9.75%
13,000 General Electric Co..................................... 703,625
14,000 Illinois Tool Works, Inc................................ 684,250
16,000 +Thermo Electron Corp................................... 814,000
14,500 Thermo Remediation, Inc................................. 284,563
-----------
2,486,438
-----------
UTILITIES -- 9.22%
10,000 +AirTouch Communications, Inc........................... 272,500
12,000 American Telephone & Telegraph Co....................... 621,000
22,000 +LCI International, Inc................................. 547,250
18,500 MCI Communications Corp................................. 379,250
16,000 Vodafone Group plc ADR.................................. 530,000
-----------
2,350,000
-----------
ENERGY -- 8.67%
10,000 Anadarko Petroleum Corp................................. 437,500
15,000 Chevron Corp............................................ 720,000
7,000 Royal Dutch Petroleum Co................................ 840,000
7,132 Total S.A. ADR.......................................... 213,960
-----------
2,211,460
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
FINANCIAL -- 5.46%
6,500 American International
Group, Inc................ $ 677,625
4,000 Morgan (J.P.) & Co., Inc.. 244,000
7,000 Morgan Stanley Group,
Inc....................... 471,625
-----------
1,393,250
-----------
RAW/INTERMEDIATE
MATERIALS -- 5.22%
17,000 +Crown Cork & Seal Co.,
Inc....................... 745,875
8,000 Dow Chemical Co........... 584,000
-----------
1,329,875
-----------
TRANSPORTATION -- 1.08%
5,000 Union Pacific Corp........ 275,000
-----------
TOTAL COMMON STOCKS (Cost
$19,953,375).............. 22,575,196
-----------
CONVERTIBLE PREFERRED STOCKS -- 2.51%
TRANSPORTATION -- 2.51%
12,000 Delta Air Lines, Inc.,
Series C, Preferred
Exchange $3.50
(Cost $571,380)............. 639,000
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
CONVERTIBLE BONDS -- 2.56%
CONSUMER CYCLICAL -- 2.56%
$435,000 General Instruments Corp.,
Jr. Subordinated,
5.00%, 06/15/2000
(Cost $553,109)............. 651,956
-----------
DEMAND NOTES -- 5.79%
592,000 Associates Corp. of North
America Master Notes...... 592,000
884,000 General Electric Co.
Promissory Notes.......... 884,000
-----------
TOTAL DEMAND NOTES
(Cost $1,476,000)......... 1,476,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $22,553,864*)............ 99.40% $25,342,152
OTHER ASSETS & LIABILITIES
(NET).......................... 0.60 152,476
------ -----------
NET ASSETS..................... 100.00% $25,494,628
====== ===========
</TABLE>
- --------
*Aggregate cost for Federal tax and book purposes.
+Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
31
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
LONG-TERM SUPPLY OF ENERGY FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 98.41%
ENERGY -- 76.54%
10,000 Amoco Corp. ............................................. $ 636,250
14,000 Anadarko Petroleum Corp. ................................ 612,500
14,500 Burlington Resources, Inc. .............................. 590,875
12,000 Chevron Corp. ........................................... 576,000
34,000 +Crown Central Petroleum,
Class B.................................................. 459,000
9,500 Exxon Corp. ............................................. 634,125
50,000 Flores & Rucks, Inc. .................................... 581,250
62,000 Hugoton Energy Corp. .................................... 465,000
15,000 Imperial Oil Ltd. ....................................... 534,375
60,000 Maxus Energy Corp. ...................................... 330,000
98,000 +McFarland Energy, Inc. ................................. 710,500
7,000 Mobil Corp. ............................................. 648,375
19,000 Norsk Hydro A.S., Class A ADR............................ 707,750
25,000 Plains Petroleum Co. .................................... 584,375
5,000 Royal Dutch Petroleum Co. ............................... 600,000
24,000 +SEACOR Holdings, Inc. .................................. 498,000
9,000 Schlumberger Ltd. ....................................... 536,625
13,500 +Tejas Gas Corp. ........................................ 592,312
64,000 +Tejas Power Corp., Class A.............................. 616,000
41,030 +United Meridian Corp. .................................. 574,420
31,000 Vintage Petroleum, Inc. ................................. 616,125
-----------
12,103,857
-----------
UTILITIES -- 7.91%
34,000 +AES Corp. .............................................. 586,500
50,000 +New World Power Corp. .................................. 225,000
23,000 UGI Corp. ............................................... 439,875
-----------
1,251,375
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
CONSUMER CYCLICAL -- 7.57%
15,000 Duracell International, Inc. .......................... $ 671,250
14,300 Exide Corp. ........................................... 525,525
-----------
1,196,775
-----------
CAPITAL GOODS -- 3.23%
24,000 Dresser Industries, Inc. .............................. 510,000
-----------
TECHNOLOGY -- 3.16%
50,000 +Energy Research Corp. ................................ 500,000
-----------
TOTAL COMMON STOCKS (Cost $15,441,110)................. 15,562,007
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 4.09%
$ 37,000 Associates Corp. of North America Master Notes......... 37,000
610,000 General Electric Co. Promissory Notes.................. 610,000
-----------
TOTAL DEMAND NOTES
(Cost $647,000)........................................ 647,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $16,088,110*)........................................ 102.50% $16,209,007
OTHER ASSETS & LIABILITIES (NET)........................... (2.50) (396,133)
------ -----------
NET ASSETS................................................. 100.00% $15,812,874
====== ===========
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
+ Non-income producing security.
ADR--American Depositary Receipt.
See Notes to Financial Statements
32
<PAGE>
UST MASTER FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
PRODUCTIVITY ENHANCERS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 99.62%
TECHNOLOGY -- 45.20%
5,000 +ASM Lithography Holding N.V............................. $ 139,375
10,000 Adobe Systems, Inc....................................... 495,000
7,000 +Applied Materials, Inc.................................. 385,000
10,000 +Asyst Technologies, Inc................................. 362,500
20,000 +Geotek Communications, Inc.............................. 165,000
25,000 Integrated Silicon Solution, Inc......................... 856,250
10,000 L.M. Ericsson Telephone Co. ADR.......................... 617,500
15,000 Littlefuse, Inc.......................................... 423,750
15,000 +Lotus Development Corp.................................. 566,250
80,000 +Medar, Inc.............................................. 790,000
77,000 +Megatest Corp........................................... 847,000
6,000 Motorola, Inc. .......................................... 327,750
60,000 +Perceptron, Inc......................................... 975,000
100,000 +Plasma-Therm, Inc. ..................................... 412,500
10,000 Premier Industrial Corp.................................. 236,250
60,000 +Robotic Vision Systems, Inc. ........................... 420,000
6,000 Telephone & Data Systems, Inc............................ 237,000
-----------
8,256,125
-----------
CAPITAL GOODS -- 24.78%
6,000 AMP, Inc................................................. 216,000
15,000 +Cognex Corp. ........................................... 423,750
14,000 Donaldson Co., Inc....................................... 350,000
12,000 Dover Corp............................................... 777,000
14,000 Duriron Co., Inc......................................... 287,000
55,500 +Encon Systems, Inc...................................... 228,938
18,000 IDEX Corp. .............................................. 537,750
6,000 Illinois Tool Works, Inc................................. 293,250
8,000 Nordson Corp............................................. 442,000
12,000 Stewart & Stevenson Services, Inc........................ 423,000
14,000 Watts Industries, Inc., Class A.......................... 297,500
10,000 +Wolverine Tube, Inc..................................... 250,000
-----------
4,526,188
-----------
FINANCIAL -- 12.15%
20,000 Citicorp................................................. 850,000
4,000 First Chicago Corp. ..................................... 200,500
10,000 Mellon Bank Corp......................................... 407,500
30,000 Norwest Corp............................................. 761,250
-----------
2,219,250
-----------
CONSUMER CYCLICAL -- 7.56%
20,000 Mark IV Industries, Inc.................................. 410,000
15,000 McDonald's Corp.......................................... 511,875
15,000 Trinova Corp. ........................................... 459,375
-----------
1,381,250
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
UTILITIES -- 3.95%
10,000 American Telephone & Telegraph Co....................... $ 517,500
15,000 +NEXTEL Communications, Inc., Class A................... 204,375
-----------
721,875
-----------
CONSUMER STAPLES -- 2.91%
10,000 Eastman Kodak Co........................................ 531,250
-----------
TRANSPORTATION -- 1.63%
5,000 Burlington Northern, Inc................................ 296,875
-----------
RAW/INTERMEDIATE
MATERIALS -- 1.44%
11,800 TriMas Corp............................................. 262,550
-----------
TOTAL COMMON STOCKS (Cost $17,092,874).................. 18,195,363
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 0.40%
$74,000 General Electric Co. Promissory Notes (Cost $74,000)...... 74,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $17,166,874*)........................................ 100.02% $18,269,363
OTHER ASSETS & LIABILITIES (NET)........................... (0.02) (4,093)
------ -----------
NET ASSETS................................................. 100.00% $18,265,270
====== ===========
</TABLE>
- --------
* For Federal income tax purposes, the tax basis of investments aggregates
$17,220,353.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
33
<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 Equity
Fund, Income and Growth Fund, Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund (the
"Portfolios"). The financial statements for the remaining portfolios of Master
Fund and UST Master Tax-Exempt Fund, Inc. ("Master Tax-Exempt Fund") are
presented separately.
(a) PORTFOLIO VALUATION:
Investments in securities that are traded on a recognized stock exchange
are valued at the last sale price on the exchange on which such securities
are primarily traded or at the last sale price on the national securities
market. Securities traded over-the-counter are valued each business day on
the basis of the closing over-the-counter bid prices. Securities for which
there were no transactions are valued at the average of the most recent bid
prices (as calculated by an independent pricing service (the "Service")
based upon its evaluation of the market for such securities) when, in the
judgement of the Service, quoted bid prices for securities are readily
available and are representative of the bid side of the market. Securities
for which market quotations are not readily available are valued at fair
value, pursuant to guidelines adopted by Master Fund's Board of Directors.
Short-term debt instruments with remaining maturities of 60 days or less
are valued at amortized cost, which approximates market value.
(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 discounts
on investments, is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date.
(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).
34
<PAGE>
If the value of the underlying security, including accrued interest,
falls below the value of 101% of the repurchase price plus accrued
interest, Master Fund will require the seller to deposit additional
collateral by the next business day. Default or bankruptcy of the seller
may, however, expose the applicable Portfolio of Master Fund to possible
delay in connection with the disposition of the underlying securities or
loss to the extent that proceeds from a sale of the underlying securities
were less than the repurchase price under the agreement.
(d) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid quarterly. Net
realized capital gains, unless offset by any available capital loss
carryforward, are distributed to shareholders at least annually.
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
net operating losses, partnership income, deferral of losses on wash sales
and post-October losses. During the year ended March 31, 1995, amounts have
been reclassified between undistributed net investment income and
accumulated net realized gain/(loss) on investments and paid-in capital in
excess of par value.
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.
At March 31, 1995, the following Portfolios had approximate capital loss
carryforwards for Federal tax purposes available to offset future net
capital gains through the indicated expiration dates:
<TABLE>
<CAPTION>
EXPIRATION DATE
MARCH 31,
-------------------------
2001 2002 2003 TOTAL
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Equity................................... $206,000 $ -- $ -- $206,000
Aging of America Fund.................... -- 54,000 279,000 333,000
Environmentally-Related Products and
Services Fund........................... -- 154,000 52,000 206,000
Global Competitors Fund.................. -- 31,000 197,000 228,000
Long-Term Supply of Energy Fund.......... -- -- 48,000 48,000
</TABLE>
To the extent that such carryforward is utilized, no capital gain
distribution will be made.
During the year ended March 31, 1995, Equity Fund utilized capital loss
carryforwards for Federal tax purposes totaling approximately $23,000.
Net capital losses incurred after October 31 and within the taxable year
are deemed to arise on the first business day of a Portfolio's next taxable
year. Income and Growth Fund, Aging of
35
<PAGE>
America Fund, Business and Industrial Restructuring Fund, Environmentally-
Related Products and Services Fund and Long-Term Supply of Energy Fund
incurred, and expect to defer, net capital losses of approximately
$1,632,000, $208,000, $438,00, $293,000, and $213,000, 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>
TAX BASIS TAX BASIS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
------------ -------------- ------------
<S> <C> <C> <C>
Equity Fund........................ $32,497,955 $(1,458,169) $31,039,786
Income and Growth Fund............. 14,297,685 (5,275,543) 9,022,142
Aging of America Fund.............. 2,639,837 (365,194) 2,274,643
Business and Industrial Restructur-
ing Fund........................... 4,154,745 (582,763) 3,571,982
Communication and Entertainment
Fund............................... 4,764,679 (1,219,269) 3,545,410
Early Life Cycle Fund.............. 7,552,386 (3,597,564) 3,954,822
Environmentally-Related Products
and Services Fund................. 445,016 (374,809) 70,207
Global Competitors Fund............ 2,931,160 (142,872) 2,788,288
Long-Term Supply of Energy Fund.... 910,522 (789,625) 120,897
Productivity Enhancers Fund........ 1,752,231 (703,221) 1,049,010
</TABLE>
(f) EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to that
Portfolio. Other expenses are allocated to the respective Portfolios based
on average net assets.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS
United States Trust Company of New York ("U.S. Trust") serves as the
investment adviser to Master Fund. For the services provided pursuant to the
Investment Advisory Agreement, U.S. Trust is entitled to receive a fee,
computed daily and paid monthly, at the annual rates of .75% of the average
daily net assets of the Equity Fund and Income and Growth Fund, and .60% of the
average daily net assets of the Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund.
Mutual Funds Service Company ("MFSC"), an affiliate of U.S. Trust, and
Concord Holding Corporation ("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, based on
the combined aggregate average daily net assets of Master Fund (excluding
Master Fund's international equity portfolios) and Master Tax-Exempt Fund, an
affiliated investment company, as follows: .200% of the first $200 million,
.175% of the next $200 million, and .150% over $400 million. Administration
fees payable by each Portfolio of the two investment companies are determined
in proportion to the relative average daily net assets of the respective
Portfolios for the period paid. After
36
<PAGE>
such allocation has been made, the Administrators are entitled jointly to an
annual minimum fee of $18,000 and $39,000 for the first and second full years,
respectively, after they commenced operations, and $50,000 for each full year
thereafter, from Aging of America Fund, Business and Industrial Restructuring
Fund, Communication and Entertainment Fund, Early Life Cycle Fund,
Environmentally-Related Products and Services Fund, Global Competitors Fund,
Long-Term Supply of Energy Fund and Productivity Enhancers Fund.
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.
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses.
Until further notice to Master Fund, U.S. Trust and/or Administrators intend
to voluntarily waive fees, to the extent necessary for each of Aging of
America Fund, Business and Industrial Restructuring Fund, Communication and
Entertainment Fund, Early Life Cycle Fund, Environmentally-Related Products
and Services Fund, Global Competitors Fund, Long-Term Supply of Energy Fund
and Productivity Enhancers Fund to maintain an annual expense ratio of not
more than .99%. In addition, the Administrators intend to maintain their
annual joint minimum fee at $18,000 until further notice for Aging of America
Fund, Business and Industrial Restructuring Fund, Communication and
Entertainment Fund, Early Life Cycle Fund, Environmentally-Related Products
and Services Fund, Global Competitors Fund, Long-Term Supply of Energy Fund
and Productivity Enhancers Fund. For the year ended March 31, 1995, U.S. Trust
and the Administrators waived fees totaling:
<TABLE>
<CAPTION>
U.S.
TRUST ADMINISTRATORS
------- --------------
<S> <C> <C>
Aging of America Fund.................................... $20,452 $17,747
Business and Industrial Restructuring Fund............... 13,191 5,985
Communication and Entertainment Fund..................... 9,962 2,347
Early Life Cycle Fund ................................... 9,534 --
Environmentally-Related Products and Services Fund....... 24,618 36,299
Global Competitors Fund.................................. 12,394 16,934
Long-Term Supply of Energy Fund.......................... 16,617 22,090
Productivity Enhancers Fund.............................. 18,458 15,393
</TABLE>
Master Fund has also entered into shareholder servicing agreements with
various service organizations requiring them to provide administrative support
services to their customers owning shares of the Portfolios. As a
consideration for the administrative services provided by each service
organization to its customers, each Portfolio will pay the service
organization an administrative service fee at the annual rate of up to .40% of
the average daily net asset value of its shares held by the service
organizations' customers. Such services may include assisting in processing
purchase, exchange and redemption requests; transmitting and receiving funds
in connection with customer orders to purchase, exchange or redeem shares; and
providing periodic statements. Until further notice to Master Fund, U.S. Trust
and the Administrators have voluntarily agreed to waive investment advisory
and administration fees payable by each Portfolio in an amount equal to
administrative service fees payable by that Portfolio. For the year ended
March 31, 1995, U.S. Trust waived investment advisory fees in amounts equal to
the administrative service fees for the Portfolios as set forth on the
following page:
37
<PAGE>
<TABLE>
<S> <C>
Equity Fund............................................................. $26,987
Income and Growth Fund.................................................. 24,620
Aging of America Fund................................................... 4,051
Business and Industrial Restructuring Fund.............................. 5,189
Communication and Entertainment Fund.................................... 7,168
Early Life Cycle Fund................................................... 17,091
Environmentally-Related Products and Services Fund...................... 1,660
Global Competitors Fund................................................. 3,243
Long-Term Supply of Energy Fund......................................... 3,576
Productivity Enhancers Fund............................................. 4,525
</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 continual
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 the Master Fund receives any compensation from
the 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>
Equity Fund............................................. $26,989,524 $39,059,893
Income and Growth Fund.................................. 34,443,029 36,181,791
Aging of America Fund................................... 10,854,393 2,102,721
Business and Industrial Restructuring Fund.............. 32,106,197 18,393,504
Communication and Entertainment Fund.................... 19,686,353 13,564,963
Early Life Cycle Fund................................... 29,555,320 14,803,849
Environmentally-Related Products and Services Fund...... 2,592,692 2,756,406
Global Competitors Fund................................. 16,382,251 4,425,390
Long-Term Supply of Energy Fund......................... 12,200,724 3,501,885
Productivity Enhancers Fund............................. 48,063,404 46,060,771
</TABLE>
4. COMMON STOCK:
Master Fund currently offers twenty classes of shares, each representing
interests in one of twenty separate Portfolios. Authorized capital for each
Portfolio is as follows: 375 million shares each of Equity Fund and Income and
Growth Fund and 500 million shares each of Aging of America Fund, Business and
Industrial Restructuring Fund, Communication and Entertainment Fund, Early Life
Cycle Fund, Environmentally-Related Products and Services Fund, Global
Competitors Fund, Long- Term Supply of Energy Fund and Productivity Enhancers
Fund.
38
<PAGE>
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>
EQUITY FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 1,514,081 $ 29,964,878 2,268,467 $ 44,401,563
Issued in connection
with USAffinity
Acquisition (Note 6)... 289,274 5,668,178 -- --
Issued as reinvestment
of dividends........... 57,340 1,088,850 65,540 1,246,726
Redeemed................ (1,818,997) (35,755,808) (1,609,134) (31,567,327)
---------- ------------ ---------- ------------
Net Increase............ 41,698 $ 966,098 724,873 $ 14,080,962
========== ============ ========== ============
<CAPTION>
INCOME AND GROWTH FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 2,399,422 $ 27,811,019 4,294,905 $ 51,671,213
Issued in connection
with USAffinity
Acquisition (Note 6)... 264,712 3,053,313 -- --
Issued as reinvestment
of dividends........... 135,164 1,535,569 26,014 314,048
Redeemed................ (2,439,219) (27,599,135) (707,183) (8,560,455)
---------- ------------ ---------- ------------
Net Increase............ 360,079 $ 4,800,766 3,613,736 $ 43,424,806
========== ============ ========== ============
<CAPTION>
AGING OF AMERICA FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 1,707,584 $ 12,399,386 1,368,704 $ 9,874,471
Issued as reinvestment
of dividends........... 540 3,818 192 1,367
Redeemed................ (395,623) (2,836,384) (195,188) (1,417,463)
---------- ------------ ---------- ------------
Net Increase............ 1,312,501 $ 9,566,820 1,173,708 $ 8,458,375
========== ============ ========== ============
<CAPTION>
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.................... 1,826,131 $ 17,995,664 1,332,090 $ 12,531,037
Issued as reinvestment
of dividends........... 2,798 26,882 270 2,409
Redeemed................ (465,836) (4,631,937) (85,239) (790,148)
---------- ------------ ---------- ------------
Net Increase............ 1,363,093 $ 13,390,609 1,247,121 $ 11,743,298
========== ============ ========== ============
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATION AND ENTERTAINMENT FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 1,530,541 $13,804,283 1,808,543 $15,955,474
Issued as reinvestment
of dividends........... 8,157 71,305 4,324 39,665
Redeemed................ (840,212) (7,600,458) (169,876) (1,553,251)
---------- ----------- --------- -----------
Net Increase............ 698,486 $ 6,275,130 1,642,991 $14,441,888
========== =========== ========= ===========
<CAPTION>
EARLY LIFE CYCLE FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 3,639,278 $32,443,615 2,564,622 $22,348,184
Issued as reinvestment
of dividends........... 8,625 73,252 1,278 11,223
Redeemed................ (1,636,553) (14,832,732) (429,545) (3,801,192)
---------- ----------- --------- -----------
Net Increase............ 2,011,350 $17,684,135 2,136,355 $18,558,215
========== =========== ========= ===========
<CAPTION>
ENVIRONMENTALLY-RELATED PRODUCTS
AND SERVICES FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 301,109 $ 1,866,198 620,983 $ 4,077,936
Issued as reinvestment
of dividends........... 45 271 10 54
Redeemed................ (326,035) (2,008,274) (247,135) (1,618,505)
---------- ----------- --------- -----------
Net Increase/(Decrease). (24,881) $ (141,805) 373,858 $ 2,459,485
========== =========== ========= ===========
<CAPTION>
GLOBAL COMPETITORS FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 1,876,723 $14,926,152 1,082,008 $ 8,533,163
Issued as reinvestment
of dividends........... 526 4,062 98 768
Redeemed................ (218,038) (1,724,311) (53,170) (424,536)
---------- ----------- --------- -----------
Net Increase............ 1,659,211 $13,205,903 1,028,936 $ 8,109,395
========== =========== ========= ===========
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM SUPPLY OF ENERGY FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 1,467,892 $11,543,268 842,000 $ 6,920,456
Issued as reinvestment
of dividends........... 858 6,714 122 991
Redeemed................ (358,847) (2,767,140) (141,707) (1,141,904)
---------- ----------- --------- -----------
Net Increase............ 1,109,903 $ 8,782,842 700,415 $ 5,779,543
========== =========== ========= ===========
<CAPTION>
PRODUCTIVITY ENHANCERS FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
03/31/95 03/31/94
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold.................... 1,751,841 $13,239,078 1,893,431 $14,521,783
Issued as reinvestment
of dividends........... 759 5,671 24 176
Redeemed................ (1,493,416) (11,376,889) (387,351) (2,858,001)
---------- ----------- --------- -----------
Net Increase............ 259,184 $ 1,867,860 1,506,104 $11,663,958
========== =========== ========= ===========
</TABLE>
5. ORGANIZATION COSTS
Master Fund has borne all costs in connection with the initial organization
of new portfolios, including the fees for registering and qualifying its shares
for distribution under Federal and state securities regulations. All such costs
are being amortized on the straight-line basis over periods of five years from
the dates on which each Portfolio commenced operations.
6. ASSET ACQUISITION
On March 10, 1995, the Income and Growth Fund acquired all of the assets and
liabilities, other than unamortized organization costs, of the USAffinity
Growth and Income Fund and the Equity Fund acquired all of the assets and
liabilities, other than unamortized organization costs, of the USAffinity
Growth Fund and the USAffinity Green Fund. The acquisitions were effected
pursuant to a plan of reorganization approved by the Master Fund's Board of
Directors on November 18, 1994, the USAffinity Fund's Board of Directors on
December 28, 1994 and the USAffinity Fund's shareholders on March 9, 1995. The
transactions were accounted for as tax-free exchanges of shares, with the
exception of the acquisition of the USAffinity Green Fund, which was a taxable
exchange for the shareholders of the USAffinity Green Fund. On March 10, 1995,
net assets of $3,053,313 were transferred from USAffinity Growth and Income
Fund into the Income and Growth Fund in exchange for 264,712 shares of the
Income and Growth Fund, net assets of $5,668,178 were transferred from
USAffinity Growth Fund into the Equity Fund in exchange for 289,274 shares of
the Equity Fund and net assets of $1,857,648 were transferred from USAffinity
Green Fund into the Equity Fund in exchange for 89,915 shares of the Equity
Fund.
41
<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 Equity, Income and Growth,
Aging of America, Business and Industrial Restructuring, Communication and
Entertainment, Early Life Cycle, Environmentally-Related Products and Services,
Global Competitors, Long-Term Supply of Energy and Productivity Enhancers
Portfolios (ten 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
42
<PAGE>
FEDERAL TAX INFORMATION: (UNAUDITED)
For the year ended March 31, 1995, the percentage of dividends paid that
qualify for the 70.0% dividend received deduction for corporate shareholders
and the designation of long-term capital gain for the Portfolios are
approximated as follows:
<TABLE>
<CAPTION>
LONG-TERM
DIVIDEND RECEIVED CAPITAL
FUND DEDUCTION GAIN
---- ----------------- ----------
<S> <C> <C>
Equity Fund..................................... 100.0% $8,517,900
Income and Growth Fund.......................... 54.2% 495,100
Aging of America Fund........................... 100.0% --
Business and Industrial Restructuring Fund...... 89.4% 104,200
Communication and Entertainment Fund............ 39.8% 195,600
Early Life Cycle Fund........................... 18.7% 2,122,000
Global Competitors Fund......................... 100.0% --
Long-Term Supply of Energy Fund................. 100.0% --
Productivity Enhancers Fund..................... 31.2% 341,200
</TABLE>
43
<PAGE>
USTDEQA395
