<PAGE>
[LOGO OF EXCELSIOR FUNDS INC. APPEARS HERE]
INTERNATIONAL EQUITY PORTFOLIOS
ANNUAL REPORT
MARCH 31, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS.................................................... 1
ADVISER'S INTERNATIONAL EQUITY MARKETS REVIEW............................. 2
ADVISER'S INVESTMENT REVIEWS
International Fund....................................................... 3
Pacific/Asia Fund........................................................ 4
Pan European Fund........................................................ 5
Emerging Americas Fund................................................... 6
STATEMENTS OF ASSETS AND LIABILITIES...................................... 7
STATEMENTS OF OPERATIONS.................................................. 8
STATEMENTS OF CHANGES IN NET ASSETS....................................... 9
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................ 10
PORTFOLIOS OF INVESTMENTS
International Fund....................................................... 12
Pacific/Asia Fund........................................................ 16
Pan European Fund........................................................ 19
Emerging Americas Fund................................................... 22
NOTES TO FINANCIAL STATEMENTS............................................. 25
INDEPENDENT AUDITORS' REPORT.............................................. 31
FEDERAL TAX INFORMATION................................................... 32
</TABLE>
For shareholder account information, current price and yield quotations, or to
make an initial purchase or obtain a prospectus, call the appropriate telephone
number listed below:
. INITIAL PURCHASE AND PROSPECTUS INFORMATION AND SHAREHOLDER SERVICES 1-800-
446-1012
. CURRENT PRICE AND YIELD INFORMATION 1-800-233-9180
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and ex-
penses regarding Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. may
be obtained by contacting the Funds at 1-800-446-1012.
Investors should read the current prospectus carefully prior to investing or
sending money.
Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. are sponsored and
distributed by Edgewood Services, Inc.
You may write to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
the following address:
EXCELSIOR FUNDS, INC.
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UNITED STATES TRUST COMPANY OF NEW YORK, ITS PARENT 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. FUND SHARES ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report for the Excelsior Funds, Inc. and
Excelsior Tax-Exempt Funds, Inc. for the fiscal year ended March 31, 1996.
There were several exciting developments during this tenth anniversary year
for the funds.
On January 1, 1996 the funds changed their name from UST Master Funds to
Excelsior Funds. This was done to more clearly differentiate our funds in the
marketplace and to make the funds more attractive to other financial
institutions through which we seek to distribute them. At the same time, the
funds entered alliances with a new distributor, Edgewood Services, and another
fund company, Excelsior Institutional Trust. These strategic alliances have
expanded our fund family's product offerings to reach new markets and have
enabled the funds to consolidate service providers, thereby reducing certain
operating expenses of the funds. These cost savings are being passed on to
shareholders.
The extended Excelsior Funds Family now consists of thirteen domestic
equity, five international, ten fixed-income, and five money market funds
totalling $4.2 billion in assets. These funds have been designed to provide a
comprehensive range of investment options and offer investors, both individual
and institutional, an opportunity to allocate holdings in accordance with
their specific investment objectives.
Excelsior Fund shareholders are serviced by a dedicated team of
professionals. We recognize the importance of excellent customer service and
are committed to meeting investor needs in a responsible and efficient manner.
We appreciate your participation in the funds during our first decade of
operation and look forward to serving you in the years to come.
(ART)
Alfred C. Tannachion
Chairman of the Board and President
1
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
ADVISER'S INTERNATIONAL EQUITY MARKETS REVIEW
- -------------------------------------------------------------------------------
Overall positive returns from international markets during the fiscal year
were overshadowed by strength in the U.S. equity market.
During most of the first three fiscal quarters, returns from international
markets were mixed though with an overall improved tone in Southeast Asia
(Hong Kong in particular) and Europe (the United Kingdom performing better
than most Continental markets). Bond markets provided a favorable background
as interest rates eased on the back of better inflation numbers and a trimming
in economic growth forecasts. European markets were supported by an improved
interest-rate outlook, but progress was limited given downward earnings
estimate revisions. Central banks in Europe cut official rates again, and the
U.S. dollar firmed a little against the yen. The Pacific Basin and Latin
America were mixed but posted overall positive returns. Japan performed the
best both in local and dollar-adjusted terms.
In the final quarter of the year, Latin America posted overall lackluster
performance. After a strong January, sentiment in most Asian markets shifted
in February, as consensus expectations of a U.S. recession were replaced by
forecasts of an economic pickup. Europe continued to show relative strength as
reporting season went without incident.
Overall, we feel, things are looking up for international investors.
Conditions appear better in Japan, but very careful stock selection is
required. The European markets are generally undervalued relative to the U.S.,
and Japan is about equal to the U.S. on a cash flow multiple basis. The
emerging markets are looking better after their two-year cycle of extremes of
favor and disfavor with U.S. fund managers.
2
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
ADVISER'S INVESTMENT REVIEW
INTERNATIONAL FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1996, the Fund achieved a total return
of 12.77%* versus 12.66% for the FT/S&P- Actuaries World Indices-World
Excluding U.S. Index** and 32.10% for the Standard & Poor's 500 Composite
Price Index.*** For much of the reporting period, major portfolio asset
allocation changes were few. We maintained roughly a 15% weighting in the
U.K., a 30% weighting in Continental Europe, a 28% weighting in Japan (though
we increased this several percentage points in the latter half of the fiscal
year), a 15% weighting in the Pacific Basin, and a 5% weighting in Latin
America. Regarding overall stock selection, we remained biased toward
industrials in anticipation of continuing steady economic growth at the
expense of the financials or more defensive issues. Throughout the period, in
keeping with our long-standing policy, the portfolio was left unhedged. During
most of the first three fiscal quarters, returns from international markets
were mixed though with an overall improved tone in Southeast Asia (Hong Kong
in particular) and Europe (the U.K. performing better than most Continental
markets). European markets were supported by an improved interest-rate
outlook, but progress was limited given downward earnings estimate revisions.
The Pacific Basin and Latin America were mixed but posted overall positive
returns; Japan performed the best both in local and dollar-adjusted terms. In
the final quarter, Latin America continued overall lackluster performance,
though with some notable exceptions. After a strong January, sentiment in most
Asian markets shifted in February, as consensus expectations of a U.S.
recession were replaced by forecasts of an economic pickup. Europe continued
to show relative strength as reporting season went without incident. In
general, we feel things are looking up for international investors. Conditions
appear better in Japan, but careful stock selection is required. The European
markets overall are undervalued relative to the U.S., and the emerging markets
are looking better after their two-year cycle of extremes of favor and
disfavor with U.S. fund managers.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN INTERNATIONAL FUND AND
FT/S&P-ACTUARIES WORLD INDICES-WORLD EXCLUDING U.S. INDEX**
---------------------------------------------------------------
International Fund+
---------------------------------------------------------------
Average Annual Total Return Ended on 3/31/96
Reflects Maximum Sales Charge of 4.5%
---------------------------------------------------------------
1 year 5 years Since Inception (7/21/87)
---------------------------------------------------------------
7.72% 5.32% 5.51%
---------------------------------------------------------------
<TABLE>
<CAPTION>
FT/S&P
International Fund International Fund Actuaries World Indices
(exclusive of sales charge) (reflects maximum sales charge) World excluding U.S. Index**
<S> <C> <C> <C>
7/21/87 9,550 10,000 10,000
3/31/88 9,424 9,872 10,930
3/31/89 10,423 10,918 12,160
3/31/90 12,393 12,982 10,950
3/31/91 11,749 12,307 11,290
3/31/92 11,238 11,772 10,420
3/31/93 11,784 12,343 11,630
3/31/94 14,416 15,101 14,190
3/31/95 14,137 14,809 14,760
3/31/96 15,942 16,700 16,810
</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. INTERNATIONAL INVESTING IS SUBJECT TO
SPECIAL RISKS SUCH AS CURRENCY FLUCTUATIONS AND DIFFERENCES IN ACCOUNTING AND
TAXATION STANDARDS.
The above illustration compares a $10,000 investment made in International
Fund on 7/21/87 (inception date) to a $10,000 investment made in the FT/S&P-
Actuaries World Indices-World Excluding U.S. Index on that date. For
comparative purposes, the value of the Index on 6/30/87 is used as the
beginning value on 7/21/87. All dividends and capital gain distributions are
reinvested. The Fund's performance takes into account fees and expenses. The
FT/S&P-Actuaries World Indices-World Excluding U.S. Index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Goldman Sachs -- The FT/S&P-Actuaries World Indices-World
Excluding U.S. Index is a widely accepted, unmanaged index of global stock
market performance, including Canada, Mexico, Europe, Australia, New
Zealand, South Africa and the Far East. The Index includes dividends
reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
3
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
ADVISER'S INVESTMENT REVIEW
PACIFIC/ASIA FUND
- -------------------------------------------------------------------------------
The Fund reported a total return of 17.22%* for the twelve months ended
March 31, 1996 versus 7.13% for the Morgan Stanley Capital International
Pacific Free Index** and 32.10% for the Standard & Poor's 500 Composite Stock
Price Index.*** The Fund's heavy weightings in Japan (17%) and Australia (15%)
hindered performance during the first fiscal quarter. For the second fiscal
quarter, Japan improved, Hong Kong continued to edge higher (32% weighting),
Singapore (7% weighting) moved sideways, and Malaysia (18% weighting) fell on
concern of an overheating economy and some disappointing earnings reports.
Thailand (7% weighting) was unsettled by political uncertainties, while Taiwan
was hit by its war of words with China. Australia enjoyed a strong quarter
helped by the bond market and positive sentiment toward the resource sector.
Much the same was true for the third fiscal quarter. Attracted by Asia's
superior economics and prospects for lower U.S. interest rates, liquidity
continued to surge during the first few weeks of the final quarter, causing
Asian markets to approach all-time highs. Market sentiment shifted in
February, however, as consensus expectations of a U.S. recession were replaced
by forecasts of an economic pickup. Looking ahead, we feel economic recoveries
in China, Japan and elsewhere will probably lead to higher commodity prices.
Japanese economic recovery could well translate into higher interest rates
there. Performance for Asian markets overall will continue to be closely
linked to developments in the U.S., and stock selection will remain the key to
above-average performance.
------------------------------------------------
Pacific/Asia Fund+
------------------------------------------------
Average Annual Total Return Ended on 3/31/96
Reflects Maximum Sales Charge of 4.5%
------------------------------------------------
1 year Since Inception (12/31/92)
------------------------------------------------
11.93% 14.84%
------------------------------------------------
<TABLE>
<CAPTION>
Pacific Asia (ref Pacific Asia excMorgan Stanley)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 10,286 10,771 11,745
9/30/93 12,207 12,782 14,504
3/31/94 14,207 14,876 14,725
9/30/94 14,715 15,408 15,808
3/31/95 13,370 14,000 15,178
9/30/95 14,447 15,128 15,182
3/31/96 15,673 16,411 16,260
</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. INTERNATIONAL INVESTING IS SUBJECT TO
SPECIAL RISKS SUCH AS CURRENCY FLUCTUATIONS AND DIFFERENCES IN ACCOUNTING AND
TAXATION STANDARDS.
The above illustration compares a $10,000 investment made in Pacific/Asia
Fund on 12/31/92 (inception date) to a $10,000 investment made in the Morgan
Stanley Capital International Pacific Free Index on that date. All dividends
and capital gain distributions are reinvested. The Fund's performance takes
into account fees and expenses. The Morgan Stanley Capital International
Pacific Free Index does not take into account charges, fees and other
expenses. Further information relating to Fund performance is contained in the
Financial Highlights section of the prospectus and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Morgan Stanley & Co., Incorporated -- Morgan Stanley Capital
International Pacific Free Index is a widely-accepted, unmanaged index
composed of a sample of companies representative of the market structure
of six Pacific Basin countries. The Index includes dividends reinvested.
*** Source: Standards & 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>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
ADVISER'S INVESTMENT REVIEW
PAN EUROPEAN FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1996, the Fund achieved a total return
of 18.25%* versus 19.75% for the FT/S&P-Actuaries World Indices -- Europe
Index** and 32.10% for the Standard & Poor's 500 Composite Price Index.***
During the first quarter, the Fund was aided by its large U.K. weighting as
well as decent performance from the French and German markets. During the
second and third fiscal quarters, markets were up overall, helped by an
initially firmer dollar, U.S. stock market strength, and improved interest
rate outlook. In the final quarter, after some improvement in January, the
U.K. market became overshadowed by political concerns which have led it to lag
other equity markets. In Continental Europe, the market greeted the strength
of the U.S. dollar positively, and enabled rates to drop further. Reporting
season went without major incident. We could be heading into a sluggish growth
period, but this appears to be fully discounted by the markets already. We
anticipate few changes in the Fund, except perhaps to add quality cyclical
stocks. We remain modestly optimistic on European markets.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PAN EUROPEAN FUND
AND THE FT/S&P-ACTUARIES WORLD INDICES-EUROPE INDEX**
------------------------------------------------
Pan European Fund+
------------------------------------------------
Average Annual Total Return Ended on 3/31/96
Reflects Maximum Sales Charge of 4.5%
------------------------------------------------
1 year Since Inception (12/31/92)
------------------------------------------------
12.88% 9.92%
------------------------------------------------
<TABLE>
<CAPTION>
FT/S&P
Pan European Fund Pan European Fund Actuaries World Indices
(exclusive of sales charge) (reflects maximum sales charge) Europe Index**
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 10,014 10,486 10,493
9/30/93 10,418 10,907 11,585
3/31/94 11,020 11,540 12,107
9/30/94 11,287 11,819 13,057
3/31/95 11,497 12,039 14,063
9/30/95 12,771 13,373 15,625
3/31/96 13,596 14,236 16,841
</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. INTERNATIONAL INVESTING IS SUBJECT TO
SPECIAL RISKS SUCH AS CURRENCY FLUCTUATIONS AND DIFFERENCES IN ACCOUNTING AND
TAXATION STANDARDS.
The above illustration compares a $10,000 investment made in Pan European
Fund on 12/31/92 (inception date) to a $10,000 investment made in the FT/S&P-
Actuaries World Indices-Europe Index on that date. All dividends and capital
gain distributions are reinvested. The Fund's performance takes into account
fees and expenses. The FT/S&P-Actuaries World Indices-Europe Index does not
take into account charges, fees and other expenses. Further information
relating to Fund performance is contained in the Financial Highlights section
of the Prospectus and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Goldman Sachs -- FT/S&P-Actuaries World Indices-Europe Index is a
widely-accepted, unmanaged index composed of a sample of companies
representative of the market structure of 14 European countries. The Index
includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
5
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
ADVISER'S INVESTMENT REVIEW
EMERGING AMERICAS FUND
- -------------------------------------------------------------------------------
The Fund posted a total return of 27.29%* for the twelve months ended March
31, 1996 versus 21.39% for the Morgan Stanley Capital International/EMF Latin
American Index** and 32.10% for the Standard & Poor's 500 Composite Stock
Price Index.*** During the first half, asset allocation--a 15% Canada
weighting, emphasis on Chile, Peru, Colombia, and especially Brazil, and
deemphasis in Mexico--and remaining fully invested were positive factors for
the Fund. During the second half, despite some bright spots, Latin America saw
lackluster performance overall. Argentina made the most progress as the
government appeared to regain direction and the International Monetary Fund
approved its fiscal targets. Brazil fell back, and Mexico was volatile.
Concerns about the lack of economic recovery led to renewed weakness in the
peso and to sharp rises in interest rates. The entire region remains sensitive
to trends in the dollar and U.S. interest rates. Nevertheless, the outlook
remains good as valuations remain low in the region and markets should benefit
from perceptions of lower risk and improved fund flows. We have maintained an
overweight position in Brazil despite the recent setback for social security
reform. Prospects for the approval of the administration and fiscal reforms
this summer remain good while we should continue to see good progress on the
privatization front. We have also been gradually reducing the extent of our
underweight position in Mexico. There are encouraging signs of economic
recovery, and interest rates should begin to trend downward later in the year.
-------------------------------------------------
Emerging Americas Fund+
-------------------------------------------------
Average Annual Total Return Ended on 3/31/96
Reflects Maximum Sales Charge of 4.5%
-------------------------------------------------
1 year Since Inception (12/31/92)
-------------------------------------------------
21.48% 4.03%
-------------------------------------------------
<TABLE>
<CAPTION>
Emerging AmeriEmerging AmeriMorgan Stanley
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 9,714 10,171 11,340
9/30/93 10,785 11,294 12,100
3/31/94 12,846 13,452 15,850
9/30/94 15,026 15,735 19,070
3/31/95 8,932 9,353 10,900
9/30/95 10,837 11,348 13,210
3/31/96 11,370 11,905 13,240
</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. INTERNATIONAL INVESTING IS SUBJECT TO
SPECIAL RISKS SUCH AS CURRENCY FLUCTUATIONS AND DIFFERENCES IN ACCOUNTING AND
TAXATION STANDARDS.
The above illustration compares a $10,000 investment made in Emerging
Americas Fund on 12/31/92 (inception date) to a $10,000 investment made in the
Morgan Stanley Capital International EMF Latin America Index on that date. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The Morgan Stanley Capital
International EMF Latin America Index does not take into account charges, fees
and other expenses. Further information relating to Fund performance is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
- -------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** Source: Morgan Stanley & Co., Incorporated -- Morgan Stanley Capital
International EMF Latin America Index is a widely-accepted, unmanaged
index composed of a sample of companies representative of the market
structure of seven Latin American countries. The Index includes dividends
reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 300 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>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1996
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost -- see
accompanying portfolios.... $90,310,606 $70,894,694 $41,379,777 $44,626,202
=========== =========== =========== ===========
Investments, at value (Note
1)......................... $97,485,725 $75,769,378 $47,728,713 $43,208,652
Cash........................ 2,111 963 194,268 66,059
Foreign currency (cost
$5,710).................... -- -- -- 5,787
Dividends receivable........ 217,330 105,902 84,798 94,030
Interest receivable......... 3,440 16,707 10,821 9,856
Receivable for investments
sold....................... 194,750 291,112 56,640 47,440
Receivable for fund shares
sold....................... 29,259 377,807 10,605 244,212
Withholding tax receivable.. 64,292 1,214 91,811 --
Prepaid expenses............ 2,640 1,738 1,496 980
Unamortized organization
costs (Note 5)............. -- 7,347 7,347 7,347
----------- ----------- ----------- -----------
TOTAL ASSETS............... 97,999,547 76,572,168 48,186,499 43,684,363
LIABILITIES:
Payable for investments
purchased.................. -- -- 194,699 230,200
Payable for fund shares
redeemed................... 18,044 245,934 2,996 227,207
Investment advisory fees
payable (Note 2)........... 74,098 58,046 36,411 32,693
Accrued expenses and other
payables................... 56,909 75,935 36,549 34,545
----------- ----------- ----------- -----------
TOTAL LIABILITIES.......... 149,051 379,915 270,655 524,645
----------- ----------- ----------- -----------
NET ASSETS................... $97,850,496 $76,192,253 $47,915,844 $43,159,718
=========== =========== =========== ===========
NET ASSETS consist of:
Undistributed/(distributions
in excess of) net
investment income.......... $ (324,489) $ (90,699) $ (38,681) $ (238,455)
Accumulated net realized
gain/(loss) on investments
and foreign currency
transactions............... 1,132,693 737,939 873,445 (6,604,007)
Unrealized
appreciation/(depreciation)
on investments and foreign
currency translations...... 7,173,318 4,875,096 6,349,375 (1,417,619)
Par value (Note 4).......... 8,968 7,792 5,215 5,858
Paid in capital in excess of
par value.................. 89,860,006 70,662,125 40,726,490 51,413,941
----------- ----------- ----------- -----------
TOTAL NET ASSETS............. $97,850,496 $76,192,253 $47,915,844 $43,159,718
=========== =========== =========== ===========
Shares of Common Stock Out-
standing.................... 8,968,353 7,792,286 5,214,555 5,858,457
NET ASSET VALUE PER SHARE.... $10.91 $9.78 $9.19 $7.37
====== ===== ===== =====
</TABLE>
See Notes to Financial Statements
7
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income............. $1,639,590 $1,380,011 $1,314,651 $ 883,137
Interest income............. 349,919 196,533 85,718 110,289
Less: Foreign taxes
withheld................... (189,240) (94,806) (178,860) (65,004)
---------- ---------- ---------- ----------
TOTAL INCOME............... 1,800,269 1,481,738 1,221,509 928,422
EXPENSES:
Investment advisory fees
(Note 2)................... 813,016 582,320 445,615 356,064
Administration fees (Note
2)......................... 162,603 116,464 89,123 71,213
Administrative service fees
(Note 2)................... 79,843 46,251 40,127 29,595
Shareholder servicing agent
fees (Note 2).............. 59,023 38,884 32,328 29,466
Custodian fees (Note 2)..... 50,913 62,035 51,859 43,748
Registration and filing
fees....................... 11,693 2,629 8,114 7,096
Legal and audit fees........ 15,177 8,920 7,523 5,827
Directors' fees and expenses
(Note 2)................... 2,829 1,522 1,629 1,137
Shareholder reports......... 15,624 11,337 8,574 6,980
Amortization of organization
costs (Note 5)............. -- 4,187 4,187 4,187
Miscellaneous expenses...... 5,602 3,471 2,993 2,894
---------- ---------- ---------- ----------
TOTAL EXPENSES............. 1,216,323 878,020 692,072 558,207
---------- ---------- ---------- ----------
Fees waived by investment
adviser and administrators
(Note 2)................... (79,843) (46,251) (40,127) (29,595)
---------- ---------- ---------- ----------
NET EXPENSES............... 1,136,480 831,769 651,945 528,612
---------- ---------- ---------- ----------
NET INVESTMENT INCOME........ 663,789 649,969 569,564 399,810
---------- ---------- ---------- ----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain/(loss):
Security transactions...... 1,871,620 1,111,919 2,302,728 (2,581,412)
Foreign currency
transactions.............. (110,551) (31,192) (76,187) (100,239)
---------- ---------- ---------- ----------
Total net realized
gain/(loss)................ 1,761,069 1,080,727 2,226,541 (2,681,651)
Change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations
during the year............ 6,821,262 7,511,232 4,458,964 9,542,153
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS.. 8,582,331 8,591,959 6,685,505 6,860,502
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS... $9,246,120 $9,241,928 $7,255,069 $7,260,312
========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements
8
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
YEAR ENDED MARCH 31, 1996
Net investment income....... $ 663,789 $ 649,969 $ 569,564 $ 399,810
Net realized gain/(loss) on
investments and foreign
currency transactions...... 1,761,069 1,080,727 2,226,541 (2,681,651)
Change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations
during
the year .................. 6,821,262 7,511,232 4,458,964 9,542,153
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations.. 9,246,120 9,241,928 7,255,069 7,260,312
Distributions to sharehold-
ers:
From net investment income. (644,347) (572,461) (503,212) (177,450)
In excess of net investment
income.................... (91,134) (86,949) -- (211,904)
From net realized gain on
investments............... (548,777) (97,072) (1,786,988) --
Increase in net assets from
fund share transactions
(Note 4)................... 25,836,676 20,089,608 2,974,013 8,945,030
----------- ----------- ----------- -----------
Net increase in net assets.. 33,798,538 28,575,054 7,938,882 15,815,988
NET ASSETS:
Beginning of year.......... 64,051,958 47,617,199 39,976,962 27,343,730
----------- ----------- ----------- -----------
End of year (1)............ $97,850,496 $76,192,253 $47,915,844 $43,159,718
=========== =========== =========== ===========
YEAR ENDED MARCH 31, 1995
Net investment income....... $ 432,171 $ 431,881 $ 440,751 $ 23,066
Net realized gain/(loss) on
investments................ 1,361,291 926,373 535,571 (949,310)
Change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations
during the year............ (3,439,838) (4,408,067) 589,836 (12,162,327)
----------- ----------- ----------- -----------
Net increase/(decrease) in
net assets resulting from
operations................. (1,646,376) (3,049,813) 1,566,158 (13,088,571)
Distributions to sharehold-
ers:
From net investment income. -- (190,492) (418,469) (7,102)
In excess of net investment
income.................... (644,640) (1,253,347) -- (779,330)
From net realized gain on
investments............... (1,837,604) (4,336,945) (465,376) (1,896)
In excess of net realized
gain on investments....... -- -- -- (3,391,937)
Increase in net assets from
fund share transactions
(Note 4)................... 12,443,548 3,421,063 2,619,824 5,330,119
----------- ----------- ----------- -----------
Net increase/(decrease) in
net assets................. 8,314,928 (5,409,534) 3,302,137 (11,938,717)
NET ASSETS:
Beginning of year.......... 55,737,030 53,026,733 36,674,825 39,282,447
----------- ----------- ----------- -----------
End of year (2)............ $64,051,958 $47,617,199 $39,976,962 $27,343,730
=========== =========== =========== ===========
</TABLE>
(1) Including distributions in excess of net investment income of $324,489 for
International Fund, $90,699 for Pacific/Asia Fund, $38,681 for Pan European
Fund and $238,455 for Emerging Americas Fund.
(2) Including distributions in excess of net investment income of $321,217 for
International Fund, $386,192 for Pacific/Asia Fund, $36,164 for Pan
European Fund and $409,932 for Emerging Americas Fund.
See Notes to Financial Statements
9
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each year.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED DIVIDENDS DIVIDENDS
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM FROM NET IN EXCESS OF
BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT INVESTMENT NET INVESTMENT
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL FUND -- (7/21/87*)
Year Ended March 31,
1992................... $ 8.75 $ 0.08 $(0.45) $(0.37) $(0.11) $ 0.00
1993................... 8.27 0.15 0.25 0.40 (0.01) 0.00
1994................... 8.66 0.05 1.88 1.93 (0.02) (0.12)
1995................... 10.44 0.10 (0.29) (0.19) 0.00 (0.11)
1996................... 9.82 0.10 1.15 1.25 (0.08) (0.01)
PACIFIC/ASIA FUND -- (12/31/92*)
Year Ended March 31,
1993................... $ 7.00 $ 0.00+++ $ 0.54 $ 0.54 $ 0.00 $ 0.00
1994................... 7.54 0.08 2.81 2.89 (0.05) (0.06)
1995................... 10.04 0.08 (0.58) (0.50) (0.03) (0.23)
1996................... 8.45 0.12 1.33 1.45 (0.09) (0.01)
PAN EUROPEAN FUND -- (12/31/92*)
Year Ended March 31,
1993................... $ 7.00 $(0.00)+++ $ 0.34 $ 0.34 $ 0.00 $ 0.00
1994................... 7.34 0.03 0.70 0.73 0.00 (0.04)
1995................... 8.03 0.09 0.25 0.34 (0.09) 0.00
1996................... 8.19 0.11 1.35 1.46 (0.10) 0.00
EMERGING AMERICAS FUND -- (12/31/92*)
Year Ended March 31,
1993................... $ 7.00 $(0.00)+++ $ 0.12 $ 0.12 $ 0.00 $ 0.00
1994................... 7.12 0.05 2.24 2.29 (0.03) (0.02)
1995................... 9.30 0.01 (2.56) (2.55) 0.00 (0.17)
1996................... 5.86 0.10 1.49 1.59 (0.04) (0.04)
</TABLE>
* Commencement of operations.
** Annualized.
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Total return data does not reflect the sales load payable on purchases of
Fund shares.
+++ Amount represents less than $0.01 per share.
See Notes to Financial Statements
10
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
DISTRIBUTIONS IN EXCESS RATIO OF NET RATIO OF GROSS RATIO OF NET
FROM NET OF NET NET ASSETS, OPERATING OPERATING INVESTMENT
REALIZED REALIZED NET ASSET END OF EXPENSES EXPENSES INCOME/(LOSS)
GAIN ON GAIN ON TOTAL VALUE, END TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE
INVESTMENTS INVESTMENTS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS+ NET ASSETS
- ------------- ------------- ------------- ---------- -------- ----------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $0.00 $(0.11) $8.27 (4.35)% $46,921 1.52% 1.52% 0.94 %
0.00 0.00 (0.01) 8.66 4.85 % 30,374 1.50% 1.50% 1.27 %
(0.01) 0.00 (0.15) 10.44 22.34 % 55,737 1.53% 1.53% 0.18 %
(0.32) 0.00 (0.43) 9.82 (1.93)% 64,052 1.47% 1.53% 0.71 %
(0.07) 0.00 (0.16) 10.91 12.77 % 97,850 1.40% 1.50% 0.82 %
$0.00 $0.00 $0.00 $7.54 7.71 % $ 9,665 1.67%** 2.00%** 0.27 %**
(0.28) 0.00 (0.39) 10.04 38.11 % 53,027 1.53% 1.77% 0.54 %
(0.83) 0.00 (1.09) 8.45 (5.89)% 47,617 1.47% 1.52% 0.85 %
(0.02) 0.00 (0.12) 9.78 17.22 % 76,192 1.43% 1.51% 1.12 %
$0.00 $0.00 $0.00 $7.34 4.86 % $ 3,797 1.67%** 3.13%** (0.33)%**
0.00 0.00 (0.04) 8.03 10.05 % 36,675 1.61% 1.72% 0.06 %
(0.09) 0.00 (0.18) 8.19 4.33 % 39,977 1.51% 1.57% 1.11 %
(0.36) 0.00 (0.46) 9.19 18.25 % 47,916 1.46% 1.55% 1.28 %
$0.00 $0.00 $0.00 $7.12 1.71 % $ 3,830 1.67%** 2.56%** (0.04)%**
(0.06) 0.00 (0.11) 9.30 32.25 % 39,282 1.49% 1.71% 0.29 %
0.00 (0.72) (0.89) 5.86 (30.47)% 27,344 1.50% 1.57% 0.06 %
0.00 0.00 (0.08) 7.37 27.29 % 43,160 1.48% 1.57% 1.12 %
<CAPTION>
PORTFOLIO FEE
TURNOVER WAIVERS
RATE (NOTE 2)
--------- ----------
<S> <C>
32% $0.00
31% 0.00
64% 0.00+++
66% 0.01
39% 0.01
1% $0.00+++
68% 0.04
69% 0.01
29% 0.01
9% $0.02
30% 0.05
47% 0.00+++
42% 0.01
76% $0.02
51% 0.03
69% 0.01
54% 0.01
</TABLE>
See Notes to Financial Statements
11
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
INTERNATIONAL FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 97.65%
JAPAN -- 32.87%
106,000 Asahi Chemical Industry Co., Ltd. ....................... $ 785,112
32,000 Dai-Ichi Kangyo Bank Ltd. ............................... 625,456
109 DDI Corp. ............................................... 830,777
118 East Japan Railway Co. .................................. 606,939
86,000 Fujisawa Pharmaceutical Co. ............................. 828,392
65,000 Hitachi Construction Machinery Co. ...................... 741,607
84,000 Hitachi Ltd. ............................................ 816,983
144,000 Hitachi Zosen Corp. ..................................... 775,685
101,000 Honshu Paper Co., Ltd. .................................. 688,572
29,000 Industrial Bank of Japan................................. 800,056
49,000 Isetan Co. .............................................. 714,860
12,000 Ito-Yokado Co., Ltd. .................................... 712,616
72,000 Kajima Corp. ............................................ 774,338
66,000 Kamigumi Co., Ltd. ...................................... 672,777
20,000 Katokichi Co., Ltd. ..................................... 433,929
4,000 Keyence Corp. ........................................... 478,818
155,000 Kumagai Gumi Co., Ltd. .................................. 640,700
13,000 Kyocera Corp. ........................................... 882,633
144,000 Marubeni Corp. .......................................... 806,659
49,000 Mitsubishi Estate Co., Ltd. ............................. 673,618
97,000 Mitsubishi Heavy Industries Ltd. ........................ 838,193
167,000 Mitsui Mining & Smelting Co., Ltd. ...................... 715,290
27,000 Murata Manufacturing Co., Ltd. .......................... 929,206
221,000 Navix Line Ltd. ......................................... 682,035
116,000 +New Japan Securities Co. ............................... 764,799
50,000 NGK Spark Plug Co. ...................................... 547,087
90 Nippon Telephone & Telegraph Corp. ...................... 658,188
129,000 Nippon Yusen............................................. 734,696
218,000 +NKK Corp. .............................................. 629,964
37,000 Nomura Securities Co., Ltd. ............................. 813,149
38,000 Onward Kashiyama Co., Ltd. .............................. 575,704
60,000 +Pacific Metals Co., Ltd. ............................... 402,319
37,000 Pioneer Electronic Corp. ................................ 761,246
62,000 Ricoh Co., Ltd........................................... 666,791
43,000 Sanwa Bank Ltd. ......................................... 864,584
73,000 Sekisui Chemical Co., Ltd. .............................. 955,765
81,000 Sumitomo Corp. .......................................... 855,980
60,000 Sumitomo Trust & Banking Co., Ltd. ...................... 824,839
61,000 Tokio Marine & Fire Insurance Co. ....................... 792,949
53,000 Tokyo Broadcasting System, Inc. ......................... 822,781
8,000 Tokyo Steel Manufacturing Co. ........................... 145,142
90,000 Tokyu Corp. ............................................. 685,963
110,000 Tokyu Department Store................................... 737,585
80,000 Toshiba Corp. ........................................... 607,500
92,000 Toyo Trust & Banking Ltd. ............................... 859,515
-----------
32,161,797
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UNITED KINGDOM & POSSESSIONS -- 16.97%
100,000 Allied Domecq plc........................................ $ 749,115
80,000 Angerstein Underwriting Trust plc........................ 124,497
71,000 BAT Industries plc....................................... 523,747
200,000 British Gas plc.......................................... 697,242
75,000 British Petroleum Co. plc................................ 656,239
130,000 British Telecommunications plc........................... 732,866
159,000 BTR plc.................................................. 765,356
96,000 Carlton Communications plc............................... 663,493
240,000 Caradon plc.............................................. 748,810
94,000 Dalgety plc.............................................. 589,436
47,000 General Accident plc..................................... 440,284
103,000 General Electric Co. plc................................. 575,941
47,000 Glaxo Holdings plc....................................... 588,719
58,000 Granada Group plc........................................ 663,676
195,000 Inchcape plc............................................. 850,879
54,000 Johnson Matthey plc...................................... 463,841
79,000 Kingfisher plc........................................... 685,815
83,000 Land Securities plc...................................... 792,719
75,000 National Westminster Bank plc............................ 727,755
257,000 NFC plc.................................................. 635,207
75,000 Peninsular & Oriental Steam plc.......................... 614,474
158,000 Sainsbury (J) plc........................................ 877,456
34,000 Shell Transportation & Trading Co. plc................... 448,706
33,000 Thai Euro Fund IDR....................................... 1,130,250
400,000 Wimpey (George) plc...................................... 854,388
-----------
16,600,911
-----------
GERMANY -- 6.35%
3,565 Bayer AG................................................. 1,208,536
3,143 Mannesmann AG............................................ 1,148,502
2,050 Preussag AG.............................................. 569,290
2,295 Siemens AG............................................... 1,258,799
20,300 Veba AG.................................................. 986,951
2,970 Volkswagen AG............................................ 1,038,011
-----------
6,210,089
-----------
FRANCE--5.84%
5,900 Accor S.A. .............................................. 889,659
7,000 Compagnie de Saint Gobain................................ 909,506
12,340 Credit Local de France................................... 966,901
15,680 Lafarge Coppee S.A. ..................................... 1,038,585
20,060 Michelin CGDE, Class B (Registered)...................... 956,472
14,050 Total S.A., Class B...................................... 949,041
-----------
5,710,164
-----------
HONG KONG -- 5.10%
469,000 Amoy Properties Ltd. .................................... 548,804
140,000 Bank of East Asia Ltd.................................... 479,700
</TABLE>
See Notes to Financial Statements
12
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
INTERNATIONAL FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
HONG KONG -- (CONTINUED)
107,000 Cheung Kong Holdings Ltd................................ $ 754,008
210,500 Hong Kong Electric Holdings Ltd......................... 684,520
124,000 Hutchison Whampoa....................................... 782,415
98,000 Swire Pacific Ltd., Class A............................. 861,650
233,000 Wharf (Holdings) Ltd. .................................. 879,700
-----------
4,990,797
-----------
SWITZERLAND -- 4.91%
1,233 Nestle AG (Registered).................................. 1,390,259
166 Roche Holding AG........................................ 1,377,987
780 Sandoz AG (Registered).................................. 914,216
1,700 Winterthur Schweizerische Versicherungs................. 1,121,240
-----------
4,803,702
-----------
NETHERLANDS -- 4.63%
21,300 ABN Amro Holdings N.V. ................................. 1,059,971
5,800 Akzo Nobel N.V. ........................................ 645,030
20,000 Koninklijke Ahold N.V. ................................. 965,008
22,000 Koninklijke KNP N.V. ................................... 551,398
10,800 Philips Electronics N.V. ............................... 392,953
55,000 Verenigde Nederlandse Uitgeversbedrijven Verenigd Bezit
N.V. ................................................... 915,668
-----------
4,530,028
-----------
SWEDEN -- 3.32%
23,600 Astra AB, Class A....................................... 1,085,126
43,230 Ericsson S.A., Class B.................................. 950,224
52,300 Volvo AB, Class B....................................... 1,216,061
-----------
3,251,411
-----------
ITALY -- 2.20%
215,000 Fiat SPA................................................ 675,518
288,000 Italgas SPA............................................. 835,981
401,500 Telecom Italia SPA...................................... 636,509
-----------
2,148,008
-----------
AUSTRALIA -- 2.15%
85,000 ANZ Banking Group Ltd. ................................. 406,486
35,600 Broken Hill Proprietary Co., Ltd. ...................... 506,843
152,000 Mayne Nickless Ltd. .................................... 807,658
268,000 MIM Holdings Ltd. ...................................... 387,419
-----------
2,108,406
-----------
BRAZIL -- 2.14%
10,250 Cia Vale do Rio Doce ADR................................ 402,312
67,100 Eletrobras ADR.......................................... 897,128
16,000 Telebras ADR............................................ 796,000
-----------
2,095,440
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
MALAYSIA -- 2.02%
69,000 Malayan Banking Bhd...................................... $ 643,764
70,000 Malaysian International Shipping Bhd (Foreign)........... 197,865
56,000 Telekom Malaysia Bhd..................................... 515,833
147,000 Tenaga Nasional Bhd...................................... 621,822
-----------
1,979,284
-----------
SINGAPORE -- 1.73%
54,155 Development Bank of Singapore Ltd. (Foreign)............. 665,777
260,000 Neptune Orient Lines Ltd. ............................... 295,623
17,200 +Singapore Sesdaq Fund................................... 361,200
177,000 United Overseas Land Ltd. ............................... 373,571
-----------
1,696,171
-----------
MEXICO -- 1.45%
300,000 +Cifra S.A. ADR.......................................... 388,500
79,560 +Cifra S.A., Series B.................................... 105,446
29,000 Empresas ICA Sociedad Controladora S.A. ADR.............. 380,480
35,600 +/++Grupo Carso S.A. ADR................................. 547,172
-----------
1,421,598
-----------
TAIWAN -- 1.31%
39 Formosa Fund IDR......................................... 284,700
900,000 GP Taiwan Index Fund..................................... 702,000
4 Taipei Fund IDR.......................................... 292,000
-----------
1,278,700
-----------
SPAIN -- 1.22%
16,770 Repsol S.A. ............................................. 632,320
35,500 Telefonica de Espana S.A. ............................... 563,447
-----------
1,195,767
-----------
BELGIUM -- 0.82%
2,250 Generale de Banque S.A. ................................. 799,332
-----------
CHILE -- 0.78%
5,500 Enersis S.A. ADR......................................... 155,375
9,000 Genesis Chile Fund Ltd. (Participating Certificates)..... 346,500
5,000 Sociedad Quimica y Minera de Chile ADR................... 261,250
-----------
763,125
-----------
ARGENTINA -- 0.63%
5,700 Telecom Argentina ADR 239,400
18,900 YPF S.A. ADR............................................. 380,363
-----------
619,763
-----------
</TABLE>
See Notes to Financial Statements
13
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
INTERNATIONAL FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
KOREA -- 1.21%
11 Korea International Trust............................... $ 561,000
53,100 +Schroder Korea Fund.................................... 623,925
-----------
1,184,925
-----------
TOTAL COMMON STOCKS
(Cost $88,691,227)...................................... 95,549,418
-----------
PREFERRED STOCKS -- 1.09%
FRANCE -- 1.09%
8,650 Legrand S.A. (Cost $666,486)............................ 1,065,461
-----------
<CAPTION>
NO. OF
WARRANTS
--------
<C> <S> <C>
WARRANTS -- 0.05%
JAPAN -- 0.03%
82 +Credit Saison Co., expiring
4/18/96................................................. 26,138
-----------
UNITED KINGDOM & POSSESSIONS -- 0.02%
24,000 +Angerstein Underwriting Trust plc, expiring 8/31/00.... 9,520
2,666 +BTR plc, expiring 5/15/96.............................. 2,378
2,666 +BTR plc, expiring 12/26/97............................. 2,400
1,401 +BTR plc, expiring 11/26/98............................. 321
6,000 +Syndicate Capital Trust plc, expiring
10/31/99................................................ 2,289
2,600 +Thai Euro Fund IDR (Bonus), expiring 3/31/98........... 7,800
-----------
24,708
-----------
TOTAL WARRANTS
(Cost $132,893)......................................... 50,846
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<C> <S> <C>
DEMAND NOTES -- 0.84%
UNITED STATES -- 0.84%
$ 9,000 Associates Corp. of North America Master Notes......... $ 9,000
811,000 General Electric Co. Promissory Notes.................. 811,000
-----------
TOTAL DEMAND NOTES
(Cost $820,000)........................................ 820,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $90,310,606*)......................................... 99.63% $97,485,725
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.37 364,771
------ -----------
NET ASSETS.................................................. 100.00% $97,850,496
====== ===========
</TABLE>
- --------
* -- For Federal income tax purposes, the tax basis of investments aggregates
$90,718,991.
+ -- Non-income producing.
++ -- Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1996 these securities amounted to $547,172, or 0.6% of net assets.
ADR -- American Depositary Receipt.
IDR -- International Depositary Share.
See Notes to Financial Statements
14
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
INTERNATIONAL FUND -- (CONTINUED)
At March 31, 1996, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Financial................................................. 21.20% $20,743,815
Consumer Cyclical......................................... 17.94 17,562,618
Raw/Intermediate Materials................................ 11.26 11,017,621
Capital Goods............................................. 11.12 10,877,577
Utilities................................................. 9.74 9,532,376
Transportation............................................ 7.33 7,168,456
Consumer Staples.......................................... 7.09 6,938,224
Technology................................................ 5.43 5,314,978
Investment Companies...................................... 4.54 4,443,392
Energy & Natural Resources................................ 3.14 3,066,668
Demand Notes.............................................. 0.84 820,000
------ -----------
Total Investments......................................... 99.63% $97,485,725
Other Assets and Liabilities (Net)........................ 0.37 364,771
------ -----------
Net Assets................................................ 100.00% $97,850,496
====== ===========
</TABLE>
See Notes to Financial Statements
15
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PACIFIC/ASIA FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 93.94%
HONG KONG -- 29.94%
1,210,000 Amoy Properties Ltd. ................................. $ 1,415,891
379,200 Bank of East Asia Ltd. ............................... 1,299,302
490,000 Cathay Pacific Airways Ltd. .......................... 861,650
535,000 Cheung Kong Holdings Ltd. ............................ 3,770,041
175,000 China Light & Power Co., Ltd. ........................ 789,695
1,050,000 Dickson Concepts International Ltd. .................. 1,153,995
1,610,000 Guangdong Investments Ltd. ........................... 1,020,041
140,000 Hang Seng Bank........................................ 1,430,049
3,538,000 Harbour Ring International Holdings................... 388,842
74,500 +Henderson China Holding Ltd. ........................ 214,811
416,500 Hong Kong Electric Holdings Ltd. ..................... 1,354,407
558,200 Hong Kong Telecom..................................... 1,115,101
286,000 Hutchison Whampoa..................................... 1,804,603
191,000 Jardine Strategic Holdings............................ 603,560
1,395,000 Leefung-Asco Printers Holdings Ltd. .................. 187,587
179,000 Mandarin Oriental International Ltd. ................. 225,540
220,500 Sun Hung Kai Properties Ltd. ......................... 1,974,350
162,000 Swire Pacific Ltd., Class A........................... 1,424,360
470,000 Wharf (Holdings) Ltd. ................................ 1,774,502
-----------
22,808,327
-----------
MALAYSIA -- 16.31%
288,000 DCB Holdings Bhd...................................... 990,551
214,000 Malayan Banking Bhd................................... 1,996,600
700,000 Malaysian Industrial Development Finance Bhd.......... 1,007,314
341,333 Malaysian International Shipping Bhd (Foreign)........ 964,827
283,000 Nylex Malaysia Bhd.................................... 1,040,482
202,400 Oriental Holdings Bhd................................. 1,112,220
240,000 Perusahaan Otomobil Nasional Bhd. .................... 1,072,149
265,000 Petronas Gas Bhd. .................................... 1,194,307
170,000 Resorts World Bhd..................................... 967,780
370,000 Sime Darby Bhd. ...................................... 1,023,919
250,000 Tenaga Nasional Bhd................................... 1,057,521
-----------
12,427,670
-----------
JAPAN -- 13.38%
30,000 Asahi Chemical Industry Co., Ltd...................... 222,201
20,000 Dai-Ichi Kangyo Bank Ltd.............................. 390,910
27 DDI Corp.............................................. 205,789
47 East Japan Railway Co................................. 241,747
18,000 Fujitsu Ltd........................................... 166,146
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
32,000 Honshu Paper Co., Ltd................................. $ 218,161
7,000 Industrial Bank of Japan.............................. 193,117
15,000 Isetan Co............................................. 218,835
5,000 Ito-Yokado Co., Ltd................................... 296,923
23,000 Kajima Corp........................................... 247,358
22,000 Kamigumi Co., Ltd..................................... 224,259
7,000 Katokichi Co., Ltd.................................... 151,875
77,000 Kumagai Gumi Co., Ltd................................. 318,283
42,000 Marubeni Corp......................................... 235,275
18,000 Mitsubishi Estate Co., Ltd............................ 247,452
25,000 Mitsubishi Heavy Industries Ltd....................... 216,029
37,000 Mitsubishi Oil Co., Ltd............................... 311,765
54,000 Mitsui Mining & Smelting Co., Ltd..................... 231,291
50,000 +New Japan Securities Co.............................. 329,655
44,000 NGK Spark Plug Co..................................... 481,436
41 Nippon Telephone & Telegraph Corp..................... 299,841
41,000 Nippon Yusen.......................................... 233,508
180,000 NKK Corp.............................................. 520,153
26,000 Nomura Securities Co., Ltd............................ 571,402
36,000 Onward Kashiyama Co., Ltd............................. 545,404
56,000 +Pacific Metals Co., Ltd.............................. 375,498
19,000 Pioneer Electronic Corp............................... 390,910
18,000 Ricoh Co., Ltd........................................ 193,585
16,000 Sekisui Chemical Co., Ltd............................. 209,483
36,000 Sumitomo Corp......................................... 380,436
16,000 Sumitomo Trust & Banking Co., Ltd..................... 219,957
27,000 Tokio Marine & Fire Insurance Co...................... 350,977
21,000 Tokyo Steel Manufacturing Co.......................... 380,997
49,000 Tokyu Corp............................................ 373,469
-----------
10,194,127
-----------
AUSTRALIA -- 11.67%
220,000 ANZ Banking Group Ltd................................. 1,052,080
85,000 Australian Gas Light Co., Ltd......................... 358,664
470,000 Azon Ltd.............................................. 653,721
68,000 Broken Hill Proprietary Co., Ltd...................... 968,127
417,000 Mayne Nickless Ltd.................................... 2,215,745
38,500 Memtec Ltd. ADR....................................... 1,025,063
402,000 MIM Holdings Ltd...................................... 581,129
220,000 News Corp., Ltd....................................... 1,287,595
205,000 +Orbital Engine Corp., Ltd............................ 128,150
94,000 Western Mining Corp. Holdings Ltd..................... 621,403
-----------
8,891,677
-----------
</TABLE>
See Notes to Financial Statements
16
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PACIFIC/ASIA FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SINGAPORE -- 6.58%
67,000 City Developments Ltd................................. $ 595,153
93,500 Development Bank of Singapore Ltd. (Foreign).......... 1,149,481
220,000 Inchcape Berhad....................................... 781,694
36,000 Jurong Shipyard Ltd................................... 213,616
80,000 Keppel Corp., Ltd..................................... 727,687
32,000 Oversea-Chinese Banking Corp. (Foreign)............... 429,790
70,000 Singaport Airlines Ltd. (Foreign)..................... 726,265
185,000 United Overseas Land Ltd. ............................ 390,456
-----------
5,014,142
-----------
THAILAND -- 6.50%
60,000 Bangkok Bank Co., Ltd. (Foreign)...................... 808,145
11,000 Bangkok Insurance Co., Ltd............................ 164,719
8,000 Bangkok Insurance Co., Ltd. (Foreign)................. 145,149
148,115 Dusit Thani Co., Ltd. (Foreign)....................... 234,703
275,000 National Petrochemical Co. (Foreign).................. 708,117
40,000 Phatra Thanakit Co., Ltd.............................. 367,628
285,000 Robinson Department Store Co. (Foreign)............... 632,254
34,000 Siam City Cement Public Co., Ltd...................... 468,723
62,850 Surapon Seafoods Co., Ltd. (Foreign).................. 198,561
14 Thailand International Fund........................... 479,500
263,000 +TelecomAsia Corp. (Foreign).......................... 744,939
-----------
4,952,438
-----------
KOREA -- 2.75%
3,100 Hyundai Motor Co., Ltd. GDR........................... 48,050
32,800 Korea Electric Power Corp. ADR........................ 754,400
11,200 Korea Fund, Inc....................................... 236,600
90,000 +Schroder Korea Fund.................................. 1,057,500
-----------
2,096,550
-----------
TAIWAN -- 2.75%
162 Formosa Fund IDR...................................... 1,182,600
6 Taipei Fund IDR....................................... 438,000
50,000 Taiwan American Fund.................................. 475,000
-----------
2,095,600
-----------
NEW ZEALAND -- 0.91%
313,329 Carter Holt Harvey Ltd................................ 691,035
-----------
PHILIPPINES -- 0.82%
112,000 Ayaia Land, Inc., Class B............................. 182,096
258,000 Petron Corp........................................... 111,037
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
PHILIPPINES -- (CONTINUED)
14,000 Philippine Commercial International Bank.............. $ 160,673
124 Philippine National Bank, Class B..................... 1,625
125,000 Pilipino Telephone Corp............................... 169,759
-----------
625,190
-----------
INDONESIA -- 0.80%
72,000 PT Indosat............................................ 247,240
241,875 Panin Bank (Foreign).................................. 253,570
89,500 Tancho Indonesia (Foreign)............................ 111,062
-----------
611,872
-----------
INDIA -- 0.78%
54,000 Morgan Stanley India Investment Fund, Inc............. 600,750
-----------
NETHERLANDS -- 0.75%
40,000 IS Himalayan Fund N.V................................. 568,000
-----------
TOTAL COMMON STOCKS
(Cost $66,702,694).................................... 71,577,378
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 5.50%
UNITED STATES -- 5.50%
$1,103,000 Associates Corp. of North America Master Notes........ 1,103,000
3,089,000 General Electric Co. Promissory Notes................. 3,089,000
-----------
TOTAL DEMAND NOTES
(Cost $4,192,000)..................................... 4,192,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $70,894,694*)......................................... 99.44% $75,769,378
OTHER ASSETS &
LIABILITIES (NET)........................................... 0.56 422,875
------ -----------
NET ASSETS.................................................. 100.00% $76,192,253
====== ===========
</TABLE>
- --------
* -- For Federal income tax purposes, the basis of investments aggregates
$71,240,401.
+ -- Non-income producing.
ADR -- American Depositary Receipt.
GDR -- Global Depositary Receipt.
IDR -- International Depositary Receipt.
See Notes to Financial Statements
17
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PACIFIC/ASIA FUND -- (CONTINUED)
At March 31, 1996, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Financial................................................ 33.62% $25,615,987
Consumer Cyclical........................................ 13.54 10,314,706
Raw/Intermediate Materials............................... 9.68 7,373,264
Transportation........................................... 7.86 5,991,386
Investment Companies..................................... 6.61 5,037,950
Capital Goods............................................ 5.97 4,546,644
Utilities................................................ 5.60 4,269,184
Demand Notes............................................. 5.50 4,192,000
Consumer Staples......................................... 5.03 3,830,885
Technology............................................... 3.44 2,621,600
Energy & Natural Resources............................... 2.59 1,975,772
------ -----------
Total Investments........................................ 99.44% $75,769,378
Other Assets and Liabilities (Net)....................... 0.56 422,875
------ -----------
Net Assets............................................... 100.00% $76,192,253
====== ===========
</TABLE>
See Notes to Financial Statements
18
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PAN EUROPEAN FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 94.79%
UNITED KINGDOM & POSSESSIONS -- 31.53%
95,000 Allied Domecq plc..................................... $ 711,659
75,000 BAT Industries plc.................................... 553,254
210,000 British Gas plc....................................... 732,104
70,000 British Petroleum Co. plc............................. 612,489
130,000 British Telecommunications plc........................ 732,866
161,000 BTR plc............................................... 774,983
92,000 Carlton Communications plc............................ 635,848
235,000 Caradon plc........................................... 733,210
100,000 Dalgety plc........................................... 627,060
130,000 General Electric Co. plc.............................. 726,916
49,500 Glaxo Holdings plc.................................... 620,034
52,000 Granada Group plc..................................... 595,020
165,000 Inchcape plc.......................................... 719,974
55,000 Johnson Matthey plc................................... 472,431
86,000 Kingfisher plc........................................ 746,582
85,000 Land Securities plc................................... 811,821
79,000 National Westminster Bank plc......................... 766,569
260,000 NFC plc............................................... 642,622
80,000 Peninsular & Oriental Steam........................... 655,438
150,000 Sainsbury (J) plc..................................... 833,028
42,000 Shell Transport & Trading Co. plc..................... 554,284
398,000 Wimpey (George) plc................................... 850,116
-----------
15,108,308
-----------
FRANCE -- 12.24%
3,500 Accor S.A. ........................................... 527,764
4,000 Compagnie de Saint Gobain............................. 519,718
6,830 Credit Local de France................................ 535,165
2,500 Essilor International ADP............................. 437,072
3,770 IMETAL................................................ 560,238
9,551 Lafarge Coppee S.A. .................................. 632,622
10,610 Michelin CGDE, Class B (Registered)................... 505,891
6,517 Primagaz S.A.......................................... 657,720
1,950 Promodes.............................................. 509,437
6,000 Television Francaise 1................................ 613,887
5,440 Total S.A., Class B................................... 367,458
-----------
5,866,972
-----------
GERMANY -- 12.20%
1,600 BASF AG............................................... 431,319
3,500 Bayer AG.............................................. 1,186,501
540 Duerr Beteiligungs AG................................. 170,076
1,798 Mannesmann AG......................................... 657,018
1,600 Preussag AG........................................... 444,324
7,000 SGL Carbon AG......................................... 674,208
1,820 Siemens AG............................................ 998,263
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
GERMANY -- (CONTINUED)
10,800 Veba AG.............................................. $ 525,077
2,170 Volkswagen AG........................................ 758,412
-----------
5,845,198
-----------
SWITZERLAND -- 10.14%
941 Nestle AG (Registered)............................... 1,061,017
197 Roche Holding AG..................................... 1,635,322
1,340 Sandoz AG (Registered)............................... 1,570,576
900 Winterthur Schweizerische Versicherungs (Registered). 593,598
-----------
4,860,513
-----------
NETHERLANDS -- 8.72%
16,400 ABN Amro Holdings N.V. .............................. 816,128
1,795 Akzo Nobel N.V....................................... 199,626
36,700 Elsevier N.V. ....................................... 562,120
4,000 Groisch N.V. ........................................ 176,535
19,600 Koninklijke Ahold N.V. .............................. 945,707
18,000 Koninklijke KNP N.V. ................................ 451,144
7,995 MacIntosh N.V. ...................................... 197,963
4,800 Philips Electronics N.V. ............................ 174,646
7,254 Sphinx N.V........................................... 127,355
31,700 Verenigde Nederlandse Vitgeversbedrijven Verenigd
Bezit N.V............................................ 527,758
-----------
4,178,982
-----------
SWEDEN -- 5.91%
21,800 Astra AB, Class A.................................... 1,008,882
31,770 Ericsson S.A., Class B............................... 698,325
29,000 Sparbanken Sverige AB, Class A....................... 325,224
36,500 Stora Kopparbergs Bergslags AB, Class A.............. 469,369
14,000 Volvo AB, Class B.................................... 325,523
-----------
2,827,323
-----------
ITALY -- 3.80%
440,000 Credito Italiano S.p.A............................... 471,579
68,400 Finanziaria Autogrill S.p.A. ........................ 74,182
10,200 Industrie Natuzzi S.p.A. ADR......................... 554,625
78,000 Italgas S.p.A. ...................................... 226,411
29,500 Magneti Marelli S.p.A................................ 39,898
286,000 Telecom Italia S.p.A................................. 453,404
-----------
1,820,099
-----------
SPAIN -- 3.57%
11,800 Argentaria S.A. ..................................... 499,114
2,600 Cristaleria Espanola S.A............................. 171,769
5,500 Hidroelectrica del Cantabrico S.A., Class C.......... 177,913
</TABLE>
See Notes to Financial Statements
19
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PAN EUROPEAN FUND--(CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SPAIN -- (CONTINUED)
10,000 Repsol S.A............................................ $ 377,054
30,400 Telefonica de Espana S.A.............................. 482,501
-----------
1,708,351
-----------
FINLAND -- 2.15%
5,450 Cultor Oy 1........................................... 244,678
6,400 Metra Oy, Class B..................................... 252,224
9,000 Nokia AB.............................................. 312,711
11,100 Repola Oy............................................. 220,523
-----------
1,030,136
-----------
BELGIUM -- 1.92%
1,045 Generale de Banque S.A................................ 371,245
520 Solvay S.A. .......................................... 297,890
2,400 Ter Beke S.A.......................................... 252,424
-----------
921,559
-----------
PORTUGAL -- 0.85%
5,460 Jeronimo Martins...................................... 405,223
-----------
NORWAY 0.77%
8,500 Norsk Hydro AS........................................ 370,586
-----------
GREECE -- 0.65%
8,375 Hellenic Bottling Co. S.A............................. 312,761
-----------
AUSTRIA -- 0.34%
3,750 Mayr-Meinhof Karton AG................................ 164,334
-----------
TOTAL COMMON STOCKS
(Cost $39,260,612).................................... 45,420,345
-----------
PREFERRED STOCKS -- 0.85%
FRANCE -- 0.85%
3,300 Legrand S.A. (Cost $226,919).......................... 406,477
-----------
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (NOTE 1)
---------- -----------
<C> <S> <C>
WARRANTS -- 0.05%
UNITED KINGDOM & POSSESSIONS -- 0.03%
29,000 +Angerstein Underwriting Trust plc, expiring 8/31/00. $ 11,504
948 +BTR plc, expiring 11/26/98.......................... 217
4,000 +Syndicate Capital Trust plc, expiring 10/31/99...... 1,526
-----------
13,247
-----------
FRANCE -- 0.02%
592 +Primagaz S.A., expiring 6/30/98..................... 9,644
-----------
TOTAL WARRANTS
(Cost $13,246)....................................... 22,891
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 3.92%
UNITED STATES -- 3.92%
$ 671,000 Associates Corp. of North America Master Notes....... 671,000
1,208,000 General Electric Co. Promissory Notes................ 1,208,000
-----------
TOTAL DEMAND NOTES
(Cost $1,879,000).................................... 1,879,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $41,379,777*)........................................ 99.61% $47,728,713
OTHER ASSETS & LIABILITIES (NET)........................... 0.39 187,131
------ -----------
NET ASSETS................................................. 100.00% $47,915,844
====== ===========
</TABLE>
- --------
* -- For Federal income tax purposes, the basis of investments aggregates
$41,385,196.
+ -- Non-income producing.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
20
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
PAN EUROPEAN FUND -- (CONTINUED)
At March 31, 1996, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Consumer Cyclical........................................ 24.04% $11,521,257
Consumer Staples......................................... 17.12 8,203,869
Raw/Intermediate Materials............................... 14.87 7,124,600
Financial................................................ 10.86 5,203,472
Capital Goods............................................ 7.96 3,812,694
Energy & Natural Resources............................... 6.91 3,310,754
Technology............................................... 5.61 2,686,248
Utilities................................................ 5.42 2,598,171
Demand Notes............................................. 3.92 1,879,000
Diversified.............................................. 1.53 733,210
Transportation........................................... 1.37 655,438
------ -----------
Total Investments........................................ 99.61% $47,728,713
Other Assets and Liabilities (Net)....................... 0.39 187,131
------ -----------
Net Assets............................................... 100.00% $47,915,844
====== ===========
</TABLE>
See Notes to Financial Statements
21
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
EMERGING AMERICAS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- 79.59%
MEXICO -- 23.53%
88,400 Cemex, S.A., CPO.................................... $ 316,972
53,274 Cemex S.A., Class A................................. 189,254
116,497 Cemex S.A., Class B................................. 446,340
461,307 +Cifra S.A., Class B................................ 611,400
598,000 +Controladora Comercial Mexicana S.A. de CV, Class
B................................................... 498,730
141,046 +Corporacion GEO S.A., Class B...................... 487,011
109,000 +Desaroios Sociedad Fomento Industries S.A., Series
B................................................... 495,784
61,100 Empresas ICA Sociedad Controladora S.A. ADR......... 801,632
206,697 FEMSA, Class B...................................... 584,681
169,000 +Gruma S.A., Class B................................ 599,243
159,000 Grupo Carso S.A., Class A1.......................... 1,241,594
175,000 Grupo Financiero Banamex Accival S.A., Class B...... 372,776
72,200 +Grupo Financiero Bancomer S.A. ADR................. 577,600
35,540 Kimberly-Clark de Mexico S.A., Class A.............. 679,649
52,000 Telefonos de Mexico S.A., Class A................... 86,598
942,000 Telefonos de Mexico S.A., Class L................... 1,561,243
76,000 +Tubos de Acero de Mexico S.A. ..................... 603,559
-----------
10,154,066
-----------
BRAZIL -- 19.35%
53,431,229 Banco Bradesco...................................... 454,458
25,567 Cia Energetica de Minas Gerais ADR.................. 706,928
2,120,000 Cia Vale do Rio Doce................................ 493,722
8,470,800 Electrobras......................................... 2,212,906
1,175,064 x/+Light Participacoes S.A. ........................ 40,454
1,175,064 Light Servicos de Electridade
S.A................................................. 396,208
56,500 Souza Cruz S.A. .................................... 425,066
28,600,000 Telebras............................................ 1,132,301
35,700 Telebras ADR........................................ 1,776,075
4,680,000 Telesp.............................................. 710,813
-----------
8,348,931
-----------
CANADA -- 11.70%
17,000 Avenor, Inc. ....................................... 241,708
41,000 Bombardier, Inc., Class B........................... 605,508
18,000 Canadian Pacific Ltd. .............................. 358,296
2,500 Franco Nevada Mining Ltd. .......................... 152,730
5,000 Goldcorp, Inc. ..................................... 97,234
13,000 Investors Group, Inc. .............................. 168,140
6,300 Northern Telecom Ltd. .............................. 299,928
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CANADA -- (CONTINUED)
6,800 Potash Corp. of Saskatchewan, Inc. ................. $ 428,525
19,000 Quebecor Printing, Inc. ............................ 341,601
17,200 Rio Algom Ltd. ..................................... 320,284
12,300 +Talisman Energy, Inc. ............................. 280,940
23,000 Telus Corp. ........................................ 276,381
26,000 Thomson Corp. ...................................... 379,210
17,700 Toronto Dominion Bank............................... 306,863
28,000 TransCanada Pipelines Ltd. ......................... 390,401
43,100 Wascana Energy, Inc. ............................... 403,262
-----------
5,051,011
-----------
ARGENTINA -- 10.08%
97,000 Astra S.A., Class B................................. 205,661
36,243 Banco de Galicia y Buenos Aires S.A., Class B....... 217,117
29,171 Banco Frances del Rio de la Plata S.A., Class B..... 264,024
15,787 Buenos Aires Embotelladora S.A., ADR................ 262,459
130,169 Cia Naviera Perez Compania S.A., Class B............ 736,830
79,200 +Comercial del Plata S.A. .......................... 213,861
27,988 Molinos Rio de la Plata S.A.,
Class B............................................. 263,114
11,860 Quilmes Industrial S.A. ............................ 142,320
166,928 Telefonica de Argentina S.A.,
Class B............................................. 429,048
24,500 Telefonica de Argentina S.A. ADR.................... 621,810
49,450 YPF S.A. ADR........................................ 995,181
-----------
4,351,425
-----------
CHILE -- 9.59%
5,565 Chilectra S.A. ADR.................................. 277,252
5,620 Chilgener S.A. ADR.................................. 130,665
5,954 Compania de Telefonos de Chile ADR.................. 504,601
3,276 Embotelladora Andina S.A. ADR....................... 113,022
11,873 Empresa Nacional de Electridad S.A. ADR............. 228,555
21,288 Enersis S.A. ADR.................................... 601,386
173,830 Five Arrows Chile Investment Fund................... 504,107
25,466 Genesis Chile Fund Ltd. (Participating
Certificates)....................................... 980,441
3,148 Madeco S.A. ADR..................................... 78,700
</TABLE>
See Notes to Financial Statements
22
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
EMERGING AMERICAS FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CHILE -- (CONTINUED)
10,995 Maderas y Sinteticos S.A. ADR........................ $ 195,162
10,066 Sociedad Quimica y Minera de Chile ADR............... 525,949
-----------
4,139,840
-----------
PERU -- 2.93%
39,158 Cia de Minas Buenaventura,
Class T.............................................. 294,936
17,850 Credicorp Ltd. ...................................... 321,300
314,773 Telefonica del Peru S.A., Class B.................... 649,638
-----------
1,265,874
-----------
COLOMBIA -- 2.41%
18,100 ++Banco de Colombia GDR.............................. 131,225
19,000 Banco de Colombia GDS................................ 137,750
13,900 Banco Ganadero S.A. ADR.............................. 205,025
14,400 ++Cadenalco S.A. ADS................................. 199,872
12,018 Carulla S.A. ADR..................................... 72,108
14,850 ++Cementos Diamante ADR.............................. 226,463
4,520 Cementos Diamante GDR................................ 68,930
-----------
1,041,373
-----------
TOTAL COMMON STOCKS
(Cost $35,914,944)................................... 34,352,520
-----------
PREFERRED STOCKS -- 17.09%
ARGENTINA -- 0.17%
5,930 Quilmes Industrial S.A. ............................. 71,160
-----------
BRAZIL -- 16.92%
46,093,210 Banco Bradesco....................................... 483,055
1,750,000 Brasmotor............................................ 451,853
16,000,000 Cia Energetica de Sao Paulo.......................... 542,730
5,700,000 Cia Vale do Rio Doce................................. 894,593
295,000 +Cosipe.............................................. 403,250
23,031,300 Lojas Americanas..................................... 555,027
1,050,000 Itausa............................................... 712,333
9,209,999 Petroleo Brasileiro S.A. ............................ 1,100,425
1,211,870 Sacervesacia Brahma.................................. 585,320
6,654,025 Telecomunicacoes de Sao Paulo S.A.................... 1,131,912
400,000,000 Usinas Sider Minas Gerais............................ 441,474
-----------
7,301,972
-----------
TOTAL PREFERRED STOCKS
(Cost $7,228,258).................................... 7,373,132
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- -----------
<C> <S> <C>
DEMAND NOTES -- 3.43%
UNITED STATES -- 3.43%
$ 434,000 Associates Corp. of North America Master Notes....... $ 434,000
1,049,000 General Electric Co. Promissory Notes................ 1,049,000
-----------
TOTAL DEMAND NOTES
(Cost $1,483,000).................................... 1,483,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $44,626,202*)........................................ 100.11% $43,208,652
OTHER ASSETS &
LIABILITIES (NET).......................................... (0.11) (48,934)
------ -----------
NET ASSETS................................................. 100.00% $43,159,718
====== ===========
</TABLE>
- --------
* -- For Federal income tax purposes, the basis of investments aggregates
$45,053,638.
+ -- Non-income producing.
++ -- Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1996 these securities amounted to $557,560, or 1.3% of net assets.
x -- Security is valued at fair value. See Note 1 to financial statements.
ADR -- American Depositary Receipt
ADS -- American Depositary Share
GDR -- Global Depositary Receipt
GDS -- Global Depositary Share
See Notes to Financial Statements
23
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
PORTFOLIO OF INVESTMENTS MARCH 31, 1996
EMERGING AMERICAS FUND -- (CONTINUED)
At March 31, 1996, sector diversification of the Fund's investment
portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION ASSETS VALUE
---------------------- ------ -----------
<S> <C> <C>
Utilities................................................ 22.74% $ 9,818,291
Financial................................................ 14.11 6,089,043
Consumer Cyclical........................................ 13.13 5,667,257
Raw/Intermediate Materials............................... 11.94 5,154,560
Capital Goods............................................ 9.40 4,056,709
Consumer Staples......................................... 7.23 3,118,492
Energy & Natural Resources............................... 7.01 3,020,477
Technology............................................... 6.85 2,957,979
Investment Companies..................................... 3.44 1,484,548
Demand Notes............................................. 3.43 1,483,000
Transportation........................................... 0.83 358,296
------ -----------
Total Investments........................................ 100.11% $43,208,652
Other Assets and Liabilities (Net)....................... (0.11) (48,934)
------ -----------
Net Assets............................................... 100.00% $43,159,718
====== ===========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
EXCELSIOR FUNDS, INC.
(FORMERLY UST MASTER FUNDS, INC.)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Excelsior Funds, Inc. ("Excelsior Fund") (formerly UST Master Funds, Inc.)
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.
Excelsior Fund currently offers shares in twenty managed investment
portfolios, each having its own investment objectives and policies.
The following is a summary of significant accounting policies for
International Fund, Pacific/Asia Fund, Pan European Fund and Emerging Americas
Fund (the "Portfolios"). Such policies are in conformity with generally
accepted accounting principles for investment companies and are consistently
followed by Excelsior Fund in the preparation of the financial statements.
Generally accepted accounting principles require management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates. The
financial statements for the remaining portfolios of Excelsior Fund and
Excelsior Tax-Exempt Funds, Inc. are presented separately.
(A) PORTFOLIO VALUATION:
Portfolio securities that are primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on their respective exchanges, except that when an occurrence
subsequent to the time a value was so established is likely to have changed
such value, then a fair value of those securities will be determined by
consideration of other factors under the direction of the Board of
Directors. A security which is traded on more than one exchange is valued
at the quotation on the exchange determined to be the primary market on
which the security is traded. Securities for which market quotations are
not readily available are valued at fair value, pursuant to guidelines
adopted by Excelsior Fund's Board of Directors. Investments in securities
which are primarily traded on a domestic exchange are valued at the last
sale price on that exchange or, if there was no recent sale, at the last
current bid quotation.
Investments in foreign debt securities having maturities of 60 days or
less are valued at amortized cost, which approximates market value. All
other foreign securities are valued at the last current bid quotation if
market quotations are available, or at fair value as determined in
accordance with policies established by the Board of Directors. Investment
valuations, other assets, and liabilities initially expressed in foreign
currencies are converted each business day into U.S. dollars based upon
current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses
on investments. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Forward foreign currency exchange contracts: The Portfolios'
participation in forward currency exchange contracts will be limited to
hedging involving either specific transactions or portfolio
25
<PAGE>
positions. Transaction hedging involves the purchase or sale of foreign
currency with respect to specific receivables or payables of a Portfolio
generally arising in connection with the purchase or sale of its portfolio
securities. Risk may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and is generally limited to the amount of unrealized gain on the contracts,
if any, at the date of default. Risk may also arise from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Contracts are marked-to-market daily and the change in market value is
recorded as unrealized appreciation or depreciation. Realized gains or
losses arising from such transactions are included in net realized gains or
losses from foreign currency transactions.
(B) SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Security transactions are recorded on a trade date basis. Realized gains
and losses on investments sold are recorded on the basis of identified
cost. Interest income, including, where applicable, amortization of
discount on investments, is recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date, except for certain dividends from
foreign securities, which are recorded as soon as the Portfolios are
informed of the dividend.
(C) REPURCHASE AGREEMENTS:
Excelsior 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 Excelsior Fund's agreement to
resell such securities at mutually agreed upon prices. Securities purchased
subject to such repurchase agreements are deposited with Excelsior 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 102% of the repurchase price (including
accrued interest).
If the value of the underlying security, including accrued interest,
falls below the value of 102% of the repurchase price plus accrued
interest, Excelsior 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 Excelsior Fund to possible
delay in connection with the disposition of the underlying securities or
loss to the extent that proceeds from a sale of the underlying securities
were less than the repurchase price under the agreement.
(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid semi-annually.
Net realized capital gains, unless offset by any available capital loss
carryforward, are distributed to shareholders at least annually. Dividends
and distributions are recorded on the ex-dividend date.
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, passive foreign investment companies and
deferral of losses on wash sales and post-October losses.
In order to avoid a Federal excise tax, each Portfolio is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
26
<PAGE>
(E) FEDERAL TAXES:
It is the policy of Excelsior 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, 1996, the Emerging Americas Fund had a capital loss
carryforward for Federal tax purposes available to offset net capital gains
of approximately $5,516,000 which will expire on March 31, 2004.
Net capital losses and net currency losses incurred after October 31 and
within the taxable year are deemed to arise on the first business day of a
Portfolio's next taxable year. International Fund, Pacific/Asia Fund, Pan
European Fund and Emerging Americas Fund incurred, and expect to defer, net
capital and currency losses of approximately $0 and $43,000; $0 and $8,000;
$0 and $38,000; and $886,000 and $38,000, respectively, for the year ended
March 31, 1996.
At March 31, 1996, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities for which there
was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
NET
TAX BASIS TAX BASIS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ -------------- --------------
<S> <C> <C> <C>
International Fund................ $9,660,958 $(2,894,224) $6,766,734
Pacific/Asia Fund................. 7,919,479 (3,390,502) 4,528,977
Pan European Fund................. 7,901,493 (1,557,976) 6,343,517
Emerging Americas Fund............ 2,808,013 (4,652,999) (1,844,986)
</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 Excelsior Fund. Foreign and Colonial Asset Management
("FACAM") serves as the sub-adviser to International Fund and Pan European
Fund. Foreign and Colonial Emerging Markets Limited ("FCEML") serves as the
sub-adviser to Pacific/Asia Fund and Emerging Americas Fund. For the services
provided pursuant to the Investment Advisory Agreements, U.S. Trust is
entitled to receive a fee, computed daily and paid quarterly, at the annual
rate of 1% of the average daily net assets of each Portfolio. FACAM is
entitled to receive from U.S. Trust an annual fee, computed and paid
quarterly, at the annual rate of .70% of the average daily net assets of each
of the International Fund and Pan European Fund. FCEML is entitled to receive
from U.S. Trust an annual fee, computed and paid quarterly, at an annual rate
of .70% of the average daily net assets of the Pacific/Asia Fund and .50% of
the average daily net assets of the Emerging Americas Fund.
Effective January 1, 1996, U.S. Trust, Chase Global Funds Services Company
("CGFSC"), a subsidiary of The Chase Manhattan Bank, N.A. (formerly, Mutual
Funds Service Company ("MFSC") which was a subsidiary of U.S. Trust), and
Federated Administrative Services (collectively, the
27
<PAGE>
"Administrators") provide administrative services to Excelsior Fund. For the
services provided to the Portfolios, the Administrators are entitled jointly
to annual fees, computed daily and paid monthly, at the rate of .20% of the
average daily net assets of each Portfolio. The Administrators are entitled
jointly to an annual minimum fee of $50,000 from Pacific/Asia Fund, Pan
European Fund and Emerging Americas Fund. From September 1, 1995 through
December 31, 1995, CGFSC and Federated Administrative Services served as
administrators to Excelsior Fund; from August 1, 1995 through August 31, 1995,
MFSC and Federated Administrative Services served as administrators to
Excelsior Fund; and prior to August 1, 1995, MFSC and Concord Holding Company
served as administrators to Excelsior Fund all under the same terms,
conditions and fees as stated above. For the period from April 1, 1995 through
August 31, 1995, administration fees charged by MFSC were as follows:
<TABLE>
<S> <C>
International Fund................................................... $56,034
Pacific/Asia Fund.................................................... 39,952
Pan European Fund.................................................... 33,463
Emerging Americas Fund............................................... 25,976
</TABLE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust, the sub-advisers
and the Administrators may undertake to waive a portion or all of the fees
payable to them and also may reimburse the Portfolios for a portion of other
expenses. Until further notice to Excelsior Fund, U.S. Trust and/or the
Administrators intend to voluntarily waive fees and reimburse expenses to the
extent necessary for Pacific/Asia Fund, Pan European Fund and Emerging
Americas Fund to maintain an annual expense ratio of not more than 1.67%. For
the year ended March 31, 1996, no such waivers or reimbursements were
necessary.
Excelsior Fund has also entered into shareholder servicing agreements with
various service organizations (which may include affiliates of U.S. Trust)
requiring them to provide administrative support services to their customers
owning shares of the Portfolios. As a consideration for the administrative
services provided by each service organization to its customers, each
Portfolio will pay the service organizations an administrative service fee at
the annual rate of up to .40% of the average daily net asset value of its
shares held by the service organizations' customers. Such services may include
assisting in processing purchase, exchange and redemption requests;
transmitting and receiving funds in connection with customer orders to
purchase, exchange or redeem shares; and providing periodic statements. Until
further notice to Excelsior Fund, U.S. Trust and the Administrators have
voluntarily agreed to waive investment advisory and administration fees
payable by each Portfolio in an amount equal to the administrative service
fees payable by such Portfolio. For the year ended March 31, 1996, U.S. Trust
and the Administrators waived investment advisory and administration fees in
amounts equal to the administrative service fees for the Portfolios as set
forth below:
<TABLE>
<CAPTION>
U.S. TRUST ADMINISTRATORS
---------- --------------
<S> <C> <C>
International Fund................................. $79,560 $283
Pacific/Asia Fund.................................. 45,970 281
Pan European Fund.................................. 40,033 94
Emerging Americas Fund............................. 29,512 83
</TABLE>
Effective August 1, 1995, Edgewood Services, Inc. (the "Distributor"), a
wholly-owned subsidiary of Federated Investors, replaced UST Distributors,
Inc. as the sponsor and distributor of Excelsior
28
<PAGE>
Fund. Certain sales of Excelsior Fund's shares are subject to a maximum sales
charge of 4 1/2% of the offering price. Shares of each Portfolio are sold on a
continuous basis by the Distributor.
Each Director of Excelsior 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 Excelsior Fund receives any
compensation from Excelsior Fund.
U.S. Trust serves as the shareholder servicing and dividend disbursing agent
to Excelsior Fund and effective September 1, 1995, CGFSC serves as the sub-
shareholder servicing agent. Prior to September 1, 1995, MFSC served as the
sub-shareholder servicing agent. For the period from April 1, 1995 through
August 31, 1995 shareholder servicing fees charged by U.S. Trust and MFSC were
as follows:
<TABLE>
<S> <C>
International Fund................................................... $22,257
Pacific/Asia Fund.................................................... 14,316
Pan European Fund.................................................... 11,868
Emerging Americas Fund............................................... 10,393
</TABLE>
Effective September 1, 1995, The Chase Manhattan Bank, N.A. ("Chase") serves
as custodian of Excelsior Fund's assets. Prior to September 1, 1995, U.S.
Trust served as the custodian of Excelsior Fund's assets. For the period from
April 1, 1995 through August 31, 1995, custody fees charged by U.S. Trust were
as follows:
<TABLE>
<S> <C>
International Fund................................................... $19,737
Pacific/Asia Fund ................................................... 25,518
Pan European Fund.................................................... 21,199
Emerging Americas Fund............................................... 17,813
</TABLE>
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities, excluding short-term investments, for the
Portfolios aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
International Fund................................... $58,017,413 $29,405,500
Pacific/Asia Fund ................................... 32,716,764 16,265,449
Pan European Fund.................................... 18,078,405 19,283,949
Emerging Americas Fund............................... 26,607,642 17,816,804
</TABLE>
4. COMMON STOCK:
Excelsior Fund currently has authorized capital classified into forty
classes of shares, each representing interests in one of twenty separate
portfolios. Authorized capital for each Portfolio is as follows: with respect
to the International Fund, 375 million shares of Common Stock and 500 million
shares of Common Stock--Special Series 1; and with respect to each of the
Emerging Americas, Pacific/Asia and Pan European Funds, 500 million shares of
Common Stock and 500 million shares of Common Stock--Special Series 1. At
March 31, 1996, no shares of Common Stock--Special Series 1 (Trust Shares) of
any Fund were outstanding.
Each share (irrespective of series designation) 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
29
<PAGE>
to such dividends and distributions of taxable earnings on the assets belonging
to such Portfolio as are declared at the discretion of Excelsior Fund's Board
of Directors.
<TABLE>
<CAPTION>
INTERNATIONAL FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/96 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold....................... 4,594,884 $ 48,428,812 2,727,691 $ 27,892,498
Issued as reinvestment of
dividends................. 11,746 124,300 26,731 272,171
Redeemed................... (2,163,381) (22,716,436) (1,565,883) (15,721,121)
---------- ------------ ---------- ------------
Net Increase............... 2,443,249 $ 25,836,676 1,188,539 $ 12,443,548
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
PACIFIC/ASIA FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/96 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold....................... 3,596,013 $ 33,056,971 2,982,448 $ 27,044,986
Issued as reinvestment of
dividends................. 7,394 67,403 51,459 486,339
Redeemed................... (1,446,336) (13,034,766) (2,682,285) (24,110,262)
---------- ------------ ---------- ------------
Net Increase............... 2,157,071 $ 20,089,608 351,622 $ 3,421,063
========== ============ ========== ============
<CAPTION>
PAN EUROPEAN FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/96 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold....................... 1,870,905 $ 16,533,893 1,932,822 $ 15,659,703
Issued as reinvestment of
dividends................. 12,177 104,293 5,039 39,779
Redeemed................... (1,550,885) (13,664,173) (1,623,481) (13,079,658)
---------- ------------ ---------- ------------
Net Increase............... 332,197 $ 2,974,013 314,380 $ 2,619,824
========== ============ ========== ============
<CAPTION>
EMERGING AMERICAS FUND
--------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/96 03/31/95
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold....................... 3,643,045 $ 25,964,699 3,068,106 $ 26,793,574
Issued as reinvestment of
dividends................. 4,539 31,637 25,995 230,998
Redeemed................... (2,457,353) (17,051,306) (2,649,711) (21,694,453)
---------- ------------ ---------- ------------
Net Increase............... 1,190,231 $ 8,945,030 444,390 $ 5,330,119
========== ============ ========== ============
</TABLE>
5. ORGANIZATION COSTS:
Excelsior Fund has borne all costs in connection with the initial
organization of new portfolios, including the fees for registering and
qualifying its shares for distribution under Federal and state securities
regulations. All such costs are being amortized on the straight-line basis over
periods of five years from the dates on which each Portfolio commenced
operations.
30
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders
and Board of Directors
Excelsior Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the International, Pacific/Asia,
Pan European and Emerging Americas Portfolios (four of the portfolios
constituting the Excelsior Funds, Inc.(formerly UST Master Funds, Inc.))as of
March 31, 1996, 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 confirmation of securities owned as of
March 31, 1996, 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 Excelsior Funds, Inc. at March 31, 1996,
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.
Ernst & Young LLP
Boston, Massachusetts
May 13, 1996
31
<PAGE>
FEDERAL TAX INFORMATION: (UNAUDITED)
For the year ended March 31, 1996, the percentage of dividends paid that
qualify for the 70% dividends received deduction for corporate shareholders,
the designation of long-term capital gain and the amounts expected to be passed
through to shareholders as foreign tax credits are approximated as follows:
<TABLE>
<CAPTION>
DIVIDENDS
RECEIVED LONG-TERM FOREIGN TAX
FUND DEDUCTION CAPITAL GAIN CREDIT
---- --------- ------------ -----------
<S> <C> <C> <C>
International Fund..................... -- $ 240,000 $189,000
Pacific/Asia Fund...................... -- 419,000 95,000
Pan European Fund...................... -- 1,267,000 179,000
Emerging Americas Fund................. -- -- 65,000
</TABLE>
32
<PAGE>
USTINLA396
