<PAGE>
[LOGO OF EXCELSIOR APPEARS HERE]
INTERNATIONAL EQUITY PORTFOLIOS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STATEMENTS OF ASSETS AND LIABILITIES...................................... 1
STATEMENTS OF OPERATIONS.................................................. 2
STATEMENTS OF CHANGES IN NET ASSETS....................................... 3
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................ 4
PORTFOLIOS OF INVESTMENTS
International Fund....................................................... 6
Pacific/Asia Fund........................................................ 9
Pan European Fund........................................................ 12
Latin America Fund (formerly Emerging Americas Fund)..................... 15
NOTES TO FINANCIAL STATEMENTS............................................. 17
</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>
EXCELSIOR FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
LATIN
AMERICA
FUND
(FORMERLY
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND)
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost --
see accompanying
portfolios............ $153,166,354 $99,766,478 $147,258,322 $ 89,993,951
============ =========== ============ ============
Investments, at value
(Note 1).............. $180,446,684 $87,658,825 $180,424,768 $119,169,264
Cash................... 266,606 -- 406,404 32,169
Foreign currency (cost
$110,076)............. -- -- -- 109,158
Dividends receivable... 338,376 369,741 285,597 222,743
Interest receivable.... 41,421 40,818 70,658 10,559
Receivable for
investments sold...... 2,457,943 291,521 2,273,607 --
Receivable for fund
shares sold........... 96,898 209,841 323,749 306,369
Withholding tax
receivable............ 90,513 3,956 146,522 --
Prepaid expenses....... 1,796 1,418 1,729 1,073
Unamortized
organization costs
(Note 5).............. -- 1,078 1,078 1,078
------------ ----------- ------------ ------------
TOTAL ASSETS.......... 183,740,237 88,577,198 183,934,112 119,852,413
LIABILITIES:
Payable for investments
purchased............. 316,742 -- 942,398 --
Payable for fund shares
redeemed.............. 13,689 220,461 4,867 49,414
Investment advisory
fees payable (Note
2).................... 141,138 72,466 135,780 88,373
Administration fees
payable (Note 2)...... 28,995 14,884 28,340 18,423
Administrative service
fees payable (Note
2).................... 10,762 7,385 9,782 7,619
Directors' fees payable
(Note 2).............. 1,541 1,167 1,241 962
Foreign taxes payable.. -- -- -- 52,589
Due to custodian bank.. -- 125,759 -- --
Accrued expenses and
other payables........ 45,451 51,368 46,613 33,224
------------ ----------- ------------ ------------
TOTAL LIABILITIES..... 558,318 493,490 1,169,021 250,604
------------ ----------- ------------ ------------
NET ASSETS.............. $183,181,919 $88,083,708 $182,765,091 $119,601,809
============ =========== ============ ============
NET ASSETS consist of:
Undistributed net
investment income..... $ 513,849 $ 166,487 $ 332,173 $ 390,472
Accumulated net
realized gain on
investments and
foreign currency
translations.......... 4,993,476 1,512,100 10,281,619 1,410,084
Unrealized appreciation
(depreciation) of
investments and
foreign currency
translations.......... 27,274,756 (12,140,956) 33,156,845 29,167,984
Par value (Note 4)..... 14,136 10,668 14,500 9,581
Paid-in capital in
excess of par value... 150,385,702 98,535,409 138,979,954 88,623,688
------------ ----------- ------------ ------------
TOTAL NET ASSETS...... $183,181,919 $88,083,708 $182,765,091 $119,601,809
============ =========== ============ ============
Shares of Common Stock
Outstanding........... 14,136,448 10,668,344 14,499,716 9,581,539
NET ASSET VALUE PER
SHARE.................. $12.96 $8.26 $12.60 $12.48
</TABLE>
See Notes to Financial Statements
1
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
LATIN
AMERICA
FUND
(FORMERLY
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND)
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income........... $ 1,662,741 $ 857,250 $ 1,576,298 $ 1,065,173
Interest income........... 293,451 175,024 108,231 73,486
Less: Foreign taxes
withheld................. (209,175) (95,709) (240,911) (9,187)
----------- ------------ ----------- -----------
TOTAL INCOME............. 1,747,017 936,565 1,443,618 1,129,472
EXPENSES:
Investment advisory fees
(Note 2)................. 816,430 493,934 763,743 497,290
Administration fees (Note
2)....................... 163,286 98,787 152,755 99,458
Administrative servicing
fees (Note 2)............ 56,365 33,634 44,181 32,917
Shareholder servicing
agent fees............... 25,891 19,938 14,539 15,445
Custodian fees............ 129,374 76,480 118,269 77,143
Registration and filing
fees..................... 6,389 5,074 6,406 6,505
Legal and audit fees...... 9,445 6,012 8,567 5,470
Directors' fees and
expenses (Note 2)........ 3,376 2,326 3,061 1,931
Shareholder reports....... 7,870 4,727 7,278 4,494
Foreign taxes expense..... -- -- -- 755
Amortization of
organization costs (Note
5)....................... -- 2,093 2,093 2,093
Miscellaneous expenses.... 5,845 5,042 7,659 2,874
----------- ------------ ----------- -----------
TOTAL EXPENSES........... 1,224,271 748,047 1,128,551 746,375
Fees waived by investment
adviser and
administrators (Note 2).. (56,365) (33,634) (44,181) (32,917)
----------- ------------ ----------- -----------
NET EXPENSES............. 1,167,906 714,413 1,084,370 713,458
----------- ------------ ----------- -----------
NET INVESTMENT INCOME...... 579,111 222,152 359,248 416,014
----------- ------------ ----------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain (loss):
Security transactions.... 2,939,609 1,571,142 2,666,005 6,031,211
Foreign currency
transactions............ (58,178) (55,725) (75,464) (94,600)
----------- ------------ ----------- -----------
Total net realized gain... 2,881,431 1,515,417 2,590,541 5,936,611
Change in unrealized
appreciation/depreciation
of investments and
foreign currency
translations during the
period................... 17,406,589 (10,994,838) 19,752,223 19,892,726
----------- ------------ ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS............... 20,288,020 (9,479,421) 22,342,764 25,829,337
----------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS................ $20,867,131 $ (9,257,269) $22,702,012 $26,245,351
=========== ============ =========== ===========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LATIN
AMERICA
FUND
(FORMERLY
PAN EMERGING
INTERNATIONAL PACIFIC/ASIA EUROPEAN AMERICAS
FUND FUND FUND FUND)
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
Net investment income.......................... $ 579,111 $ 222,152 $ 359,248 $ 416,014
Net realized gain on investments and foreign
currency transactions......................... 2,881,431 1,515,417 2,590,541 5,936,611
Change in unrealized appreciation/depreciation
of investments and foreign currency
translations during the period................ 17,406,589 (10,994,838) 19,752,223 19,892,726
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations............................... 20,867,131 (9,257,269) 22,702,012 26,245,351
Distributions to shareholders:
From net investment income.................... (69,446) -- (12,080) (5,486)
In excess of net investment income............ -- -- -- --
From net realized gain on investments......... -- -- -- --
In excess of net realized gain on
investments.................................. -- -- -- --
Increase in net assets from fund share
transactions (Note 4)......................... 35,569,096 7,395,980 38,083,660 22,462,085
------------ ----------- ------------ ------------
Net increase in net assets..................... 56,366,781 (1,861,289) 60,773,592 48,701,950
NET ASSETS:
Beginning of period........................... 126,815,138 89,944,997 121,991,499 70,899,859
------------ ----------- ------------ ------------
End of period (1)............................. $183,181,919 $88,083,708 $182,765,091 $119,601,809
============ =========== ============ ============
--------
(1) Including undistributed net investment
income.................................... $ 513,849 $ 166,487 $ 332,173 $ 390,472
============ =========== ============ ============
YEAR ENDED MARCH 31, 1997
Net investment income.......................... $ 757,068 $ 594,891 $ 847,849 $ 268,775
Net realized gain on investments and foreign
currency transactions......................... 3,264,752 726,826 8,430,147 2,335,031
Change in unrealized appreciation/depreciation
of investments and foreign currency
translations during the year.................. 2,694,849 (6,021,214) 7,055,247 10,692,877
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations............................... 6,716,669 (4,699,497) 16,333,243 13,296,683
Distributions to shareholders:
From net investment income.................... (979,932) (609,545) (742,102) (287,871)
In excess of net investment income............ -- (55,665) (14,995) (20,056)
From net realized gain on investments......... (1,733,863) (1,359,412) (1,679,580) --
In excess of net realized gain on
investments.................................. -- (3,317) -- --
Increase in net assets from fund share
transactions (Note 4)......................... 24,961,768 20,480,180 60,179,089 14,751,385
------------ ----------- ------------ ------------
Net increase in net assets..................... 28,964,642 13,752,744 74,075,655 27,740,141
NET ASSETS:
Beginning of year............................. 97,850,496 76,192,253 47,915,844 43,159,718
------------ ----------- ------------ ------------
End of year (2)............................... $126,815,138 $89,944,997 $121,991,499 $ 70,899,859
============ =========== ============ ============
--------
(2) Including undistributed (distributions in
excess of) net investment income.......... $ 4,184 $ (55,665) $ (14,995) $ (20,056)
============ =========== ============ ============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
EXCELSIOR FUNDS, INC.
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each period.
<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,
1993................... $ 8.27 $ 0.15 $ 0.25 $ 0.40 $ (0.01) --
1994................... 8.66 0.05 1.88 1.93 (0.02) $(0.12)
1995................... 10.44 0.10 (0.29) (0.19) -- (0.11)
1996................... 9.82 0.10 1.15 1.25 (0.08) (0.01)
1997................... 10.91 0.09 0.63 0.72 (0.10) --
Six Months Ended
September 30, 1997
(Unaudited) 11.34 0.04 1.59 1.63 (0.01) --
PACIFIC/ASIA FUND -- (12/31/92*)
Year Ended March 31,
1993................... $ 7.00 -- $ 0.54 $ 0.54 -- --
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)
1997................... 9.78 0.07 (0.53) (0.46) (0.07) -- +++
Six Months Ended
September 30, 1997
(Unaudited) 9.09 0.02 (0.85) (0.83) -- --
PAN EUROPEAN FUND -- (12/31/92*)
Year Ended March 31,
1993................... $ 7.00 -- $ 0.34 $ 0.34 -- --
1994................... 7.34 $ 0.03 0.70 0.73 -- $(0.04)
1995................... 8.03 0.09 0.25 0.34 $ (0.09) --
1996................... 8.19 0.11 1.35 1.46 (0.10) --
1997................... 9.19 0.11 2.01 2.12 (0.10) -- +++
Six Months Ended
September 30, 1997
(Unaudited) 10.94 0.03 1.63 1.66 -- +++ --
LATIN AMERICA FUND -- (12/31/92*)
(formerly Emerging
Americas Fund)
Year Ended March 31,
1993................... $ 7.00 -- $ 0.12 $ 0.12 -- --
1994................... 7.12 $ 0.05 2.24 2.29 $ (0.03) $(0.02)
1995................... 9.30 0.01 (2.56) (2.55) -- (0.17)
1996................... 5.86 0.10 1.49 1.59 (0.04) (0.04)
1997................... 7.37 0.05 2.09 2.14 (0.05) -- +++
Six Months Ended
September 30, 1997
(Unaudited) 9.46 0.04 2.98 3.02 -- +++ --
</TABLE>
* Commencement of operations.
** Annualized.
*** Not Annualized.
+ Expense ratios before waiver of fees and reimbursement of expenses (if
any) by adviser and administrators.
++ Total return data, for periods prior to March 31, 1997, does not reflect
the sales load payable on purchases of shares. The sales load was
eliminated effective February 14, 1997.
+++ Amount represents less than $0.01 per share.
# For fiscal years beginning on or after September 1, 1995 a fund is
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
IN EXCESS
DISTRIBUTIONS OF NET NET ASSETS,
FROM NET REALIZED NET ASSET END OF
REALIZED GAIN GAIN ON TOTAL VALUE, END TOTAL PERIOD
ON INVESTMENTS INVESTMENTS DISTRIBUTIONS OF PERIOD RETURN++ (000)
-------------- ------------- ------------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL FUND -- (7/21/87*)
Year Ended March 31,
1993................... -- -- $(0.01) $ 8.66 4.85 % $ 30,374
1994................... $(0.01) -- (0.15) 10.44 22.34 % 55,737
1995................... (0.32) -- (0.43) 9.82 (1.93)% 64,052
1996................... (0.07) -- (0.16) 10.91 12.77 % 97,850
1997................... (0.19) -- (0.29) 11.34 6.78 % 126,815
Six Months Ended
September 30, 1997
(Unaudited) -- -- (0.01) 12.96 14.33 %*** 183,182
PACIFIC/ASIA FUND -- (12/31/92*)
Year Ended March 31,
1993................... -- -- -- $ 7.54 7.71 %*** $ 9,665
1994................... $(0.28) -- $(0.39) 10.04 38.11 % 53,027
1995................... (0.83) -- (1.09) 8.45 (5.89)% 47,617
1996................... (0.02) -- (0.12) 9.78 17.22 % 76,192
1997................... (0.16) -- +++ (0.23) 9.09 (4.80)% 89,945
Six Months Ended
September 30, 1997
(Unaudited) -- -- -- 8.26 (9.13)%*** 88,084
PAN EUROPEAN FUND -- (12/31/92*)
Year Ended March 31,
1993................... -- -- -- $ 7.34 4.86 %*** $ 3,797
1994................... -- -- $(0.04) 8.03 10.05 % 36,675
1995................... $(0.09) -- (0.18) 8.19 4.33 % 39,977
1996................... (0.36) -- (0.46) 9.19 18.25 % 47,916
1997................... (0.27) -- (0.37) 10.94 23.76 % 121,991
Six Months Ended
September 30, 1997
(Unaudited) -- -- -- +++ 12.60 15.27 %*** 182,765
LATIN AMERICA FUND -- (12/31/92*)
(formerly Emerging
Americas Fund)
Year Ended March 31,
1993................... -- -- -- $ 7.12 1.71 %*** $ 3,830
1994................... $(0.06) -- $(0.11) 9.30 32.25 % 39,282
1995................... -- $(0.72) (0.89) 5.86 (30.47)% 27,344
1996................... -- -- (0.08) 7.37 27.29 % 43,160
1997................... -- -- (0.05) 9.46 29.09 % 70,900
Six Months Ended
September 30, 1997
(Unaudited) -- -- -- +++ 12.48 31.93 %*** 119,602
<CAPTION>
RATIO OF NET RATIO OF GROSS RATIO OF NET
OPERATING OPERATING INVESTMENT AVERAGE
EXPENSES EXPENSES INCOME (LOSS) PORTFOLIO FEE BROKER
TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS COMMISSION
NET ASSETS NET ASSETS+ NET ASSETS RATE (NOTE 2) RATE#
------------ -------------- ------------- ------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL FUND -- (7/21/87*)
Year Ended March 31,
1993................... 1.50% 1.50% 1.27 % 31% -- N/A
1994................... 1.53% 1.53% 0.18 % 64% -- N/A
1995................... 1.47% 1.53% 0.71 % 66% $0.01 N/A
1996................... 1.40% 1.50% 0.82 % 39% 0.01 N/A
1997................... 1.43% 1.51% 0.70 % 116% 0.01 $0.0123
Six Months Ended
September 30, 1997
(Unaudited) 1.43%** 1.50%** 0.71 %** 25%** -- +++ 0.0324
PACIFIC/ASIA FUND -- (12/31/92*)
Year Ended March 31,
1993................... 1.67%** 2.00%** 0.27 %** 1%** -- N/A
1994................... 1.53% 1.77% 0.54 % 68% $0.04 N/A
1995................... 1.47% 1.52% 0.85 % 69% 0.01 N/A
1996................... 1.43% 1.51% 1.12 % 29% 0.01 N/A
1997................... 1.45% 1.52% 0.69 % 126% 0.01 $0.0094
Six Months Ended
September 30, 1997
(Unaudited) 1.45%** 1.52%** 0.45 %** 32%** -- +++ 0.0180
PAN EUROPEAN FUND -- (12/31/92*)
Year Ended March 31,
1993................... 1.67%** 3.13%** (0.33)%** 9%** $0.02 N/A
1994................... 1.61% 1.72% 0.06 % 30% 0.05 N/A
1995................... 1.51% 1.57% 1.11 % 47% -- N/A
1996................... 1.46% 1.55% 1.28 % 42% 0.01 N/A
1997................... 1.45% 1.52% 1.23 % 82% 0.01 $0.0012
Six Months Ended
September 30, 1997
(Unaudited) 1.42%** 1.48%** 0.47 %** 26%** -- +++ 0.0025
LATIN AMERICA FUND -- (12/31/92*)
(formerly Emerging
Americas Fund)
Year Ended March 31,
1993................... 1.67%** 2.56%** (0.04)%** 76%** $0.02 N/A
1994................... 1.49% 1.71% 0.29 % 51% 0.03 N/A
1995................... 1.50% 1.57% 0.06 % 69% 0.01 N/A
1996................... 1.48% 1.57% 1.12 % 54% 0.01 N/A
1997................... 1.48% 1.56% 0.50 % 73% 0.01 $0.0005
Six Months Ended
September 30, 1997
(Unaudited) 1.43%** 1.50%** 0.84 %** 72%** -- +++ 0.0004
</TABLE>
* Commencement of operations.
** Annualized.
*** Not Annualized.
+ Expense ratios before waiver of fees and reimbursement of expenses (if
any) by adviser and administrators.
++ Total return data, for periods prior to March 31, 1997, does not reflect
the sales load payable on purchases of shares. The sales load was
eliminated effective February 14, 1997.
+++ Amount represents less than $0.01 per share.
# For fiscal years beginning on or after September 1, 1995 a fund is
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements
5
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
INTERNATIONAL FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ----------
<C> <S> <C>
COMMON STOCKS -- 94.06%
FRANCE -- 13.52%
67,942 AXA-UAP................................................. $4,557,714
5,259 Carrefour S.A. ......................................... 3,277,014
19,272 Compagnie Generale des Eaux............................. 2,267,294
12,740 Dassault Systemes S.A. ................................. 815,978
27,242 Elf Aquitaine S.A. ..................................... 3,636,552
45,644 +SGS-Thomson Microelectronics N.V. ..................... 4,300,522
28,280 Technip S.A. ........................................... 3,593,986
20,258 Total S.A., Class B..................................... 2,318,419
----------
24,767,479
----------
JAPAN -- 11.25%
83,000 Canon, Inc. ............................................ 2,427,423
180,080 Credit Saison Co. Ltd. ................................. 4,893,640
209 DDI Corp. .............................................. 1,049,329
94,000 Denso Corp. ............................................ 2,281,856
27,000 Rohm Co. ............................................... 3,176,471
51,800 Sony Corp. ............................................. 4,892,461
196,000 Suzuki Motor Co. Ltd. .................................. 1,883,679
----------
20,604,859
----------
UNITED KINGDOM & POSSESSIONS -- 8.63%
242,218 Airtours plc............................................ 4,117,972
223,806 Granada Group plc....................................... 3,162,366
202,000 Serco Group plc......................................... 2,720,659
288,509 Siebe plc............................................... 5,803,128
----------
15,804,125
----------
GERMANY -- 8.06%
8,513 GEA AG.................................................. 3,035,195
12,929 SAP AG.................................................. 3,321,882
25,405 SGL Carbon AG........................................... 3,709,389
69,625 Siemens AG.............................................. 4,694,861
----------
14,761,327
----------
AUSTRALIA -- 5.54%
182,726 Brambles Industries Ltd. ............................... 3,809,746
1,300,000 Burns, Philp & Co. Ltd. ................................ 961,615
314,402 F.H. Faulding & Co. Ltd. ............................... 1,881,036
147,066 Lend Lease Corp. Ltd. .................................. 3,497,234
----------
10,149,631
----------
SWITZERLAND -- 5.16%
141 Lindt & Spruengli AG.................................... 2,773,452
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SWITZERLAND -- (CONTINUED)
3,264 Novartis AG (Registered)................................ $5,005,997
189 Roche Holding AG........................................ 1,676,823
----------
9,456,272
----------
SWEDEN -- 4.30%
260,330 ABB AB, Class A......................................... 3,689,581
98,366 Autoliv AB.............................................. 4,180,555
----------
7,870,136
----------
FINLAND -- 3.99%
45,810 Oy Nokia AB, Class A.................................... 4,358,154
180,783 Valmet Corp. ........................................... 2,957,658
----------
7,315,812
----------
NETHERLANDS -- 3.98%
90,780 ING Groep N.V. ......................................... 4,169,074
23,187 Wolters Kluwer N.V. .................................... 3,127,018
----------
7,296,092
----------
BRAZIL -- 3.75%
81,477 Eletrobras ADR.......................................... 2,134,380
4,480,000 Petrobras............................................... 1,276,027
26,829 Telebras ADR............................................ 3,454,234
----------
6,864,641
----------
HONG KONG -- 3.63%
92,700 HSBC Holdings plc....................................... 3,102,979
264,000 Swire Pacific Ltd., Class A............................. 2,021,583
431,000 Television Broadcasts Ltd. ............................. 1,526,255
----------
6,650,817
----------
CANADA -- 3.37%
154,700 Bombardier, Inc., Class B............................... 3,134,752
14,300 Northern Telecom Ltd. .................................. 1,492,817
64,000 Thomson Corp. .......................................... 1,553,915
----------
6,181,484
----------
ITALY -- 3.05%
432,125 Edison S.p.A. .......................................... 2,326,943
1,558,432 Telecom Italia S.p.A. .................................. 3,252,003
----------
5,578,946
----------
SPAIN -- 3.03%
180,365 Banco Bilbao Vizcaya, S.A. (Registered)................. 5,554,062
----------
</TABLE>
See Notes to Financial Statements
6
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
INTERNATIONAL FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
AUSTRIA -- 2.80%
23,910 VA Technologie AG......................... $ 5,128,243
------------
SOUTH AFRICA -- 2.10%
278,600 Sasol Ltd. ............................... 3,842,037
------------
ARGENTINA -- 1.87%
486,375 Siderca S.A., Class A..................... 1,454,567
53,228 YPF S.A. ADR.............................. 1,962,783
------------
3,417,350
------------
INDONESIA -- 1.69%
960,905 PT Tambang Timah (Foreign)................ 1,413,526
1,519,491 PT Telekomunikasi (Foreign)............... 1,679,316
------------
3,092,842
------------
PORTUGAL -- 1.50%
129,800 Banco Comercial Portugues, S.A............ 2,741,898
------------
PHILIPPINES -- 0.66%
4,414,400 Metro Pacific Corp........................ 537,236
75,012 Metropolitan Bank & Trust Co. ............ 676,428
------------
1,213,664
------------
MEXICO -- 0.65%
136,400 Sanluis Corporacion S.A. de C.V........... 1,194,642
------------
TAIWAN -- 0.44%
88,700 +Yang Ming Marine Transport GDR........... 798,300
------------
SINGAPORE -- 0.43%
107,000 Singapore Airlines Ltd. (Foreign)......... 790,778
------------
THAILAND -- 0.41%
73,400 Banpu Public Co. Ltd. (Registered)........ 754,276
------------
KOREA -- 0.25%
21,000 Korea Electric Power Corp................. 466,922
------------
TOTAL COMMON STOCKS (Cost $145,297,753)... 172,296,635
------------
PREFERRED STOCK -- 0.37%
GERMANY -- 0.37%
2,500 SAP AG-VORZUG
(Cost $402,442)........................... 669,921
------------
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (NOTE 1)
-------- ------------
<C> <S> <C>
WARRANTS -- 0.01%
FRANCE -- 0.01%
22,022 +Compagnie Generale des Eaux, expiring 05/02/01
(Cost $0)........................................ $ 11,878
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
BONDS -- 0.38%
INDIA -- 0.38%
$650,000 Mahindra & Mahindra Ltd.
5.00%, 07/09/01
(Cost $703,159).................................. 705,250
------------
DEMAND NOTES -- 3.69%
UNITED STATES -- 3.69%
3,351,000 Associates Corp. of North America Master Notes... 3,351,000
3,412,000 General Electric Co. Promissory Notes ........... 3,412,000
------------
TOTAL DEMAND NOTES
(Cost $6,763,000) ............................... $ 6,763,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $153,166,354*).................... 98.51% $180,446,684
OTHER ASSETS & LIABILITIES (NET).......................... 1.49 2,735,235
------ ------------
NET ASSETS................................................ 100.00% $183,181,919
====== ============
</TABLE>
- --------
* -- Aggregate cost for Federal tax and book purposes.
+ -- Non-income producing.
ADR-- American Depositary Receipt.
GDR-- Global Depositary Receipt.
See Notes to Financial Statements
7
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
INTERNATIONAL FUND -- (CONTINUED)
At September 30, 1997, 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....................................... 21.13% $ 38,701,690
Technology.............................................. 14.92 27,329,537
Capital Goods........................................... 14.77 27,062,099
Financial............................................... 13.56 24,836,626
Consumer Staples........................................ 8.05 14,738,738
Raw/Intermediate Materials.............................. 7.01 12,850,618
Energy.................................................. 6.29 11,520,724
Utilities............................................... 5.47 10,014,023
Demand Notes............................................ 3.69 6,763,000
Transportation.......................................... 3.62 6,629,629
------ ------------
Total Investments....................................... 98.51% $180,446,684
Other Assets and Liabilities (Net)...................... 1.49 2,735,235
------ ------------
Net Assets.............................................. 100.00% $183,181,919
====== ============
</TABLE>
See Notes to Financial Statements
8
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PACIFIC/ASIA FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
COMMON STOCKS -- 92.81%
JAPAN -- 26.66%
64,000 Canon, Inc. ........................................... $ 1,871,748
143,650 Credit Saison Co. Ltd. ................................ 3,903,662
333 DDI Corp. ............................................. 1,671,897
90,000 Denso Corp. ........................................... 2,184,756
26,000 Rohm Co. .............................................. 3,058,824
34,000 Secom Co., Ltd. ....................................... 2,295,775
45,700 Sony Corp. ............................................ 4,316,321
212,000 Suzuki Motor Co. Ltd. ................................. 2,037,448
81,000 Taisho Pharmaceutical Co., Ltd. ....................... 2,140,762
-----------
23,481,193
-----------
HONG KONG -- 13.49%
2,538,000 Giordano International Ltd. ........................... 1,640,065
101,300 HSBC Holdings plc...................................... 3,390,850
307,000 Swire Pacific Ltd., Class A............................ 2,350,856
757,000 Television Broadcasts Ltd. ............................ 2,680,685
954,000 Varitronix International Ltd. ......................... 1,824,776
-----------
11,887,232
-----------
AUSTRALIA -- 13.03%
2,624,288 AAPC Ltd. ............................................. 1,084,786
192,392 Brambles Industries Ltd. .............................. 4,011,277
995,000 Burns, Philp & Co. Ltd. ............................... 736,005
462,006 F.H. Faulding & Co. Ltd. .............................. 2,764,135
121,143 Lend Lease Corp. Ltd. ................................. 2,880,785
-----------
11,476,988
-----------
NEW ZEALAND -- 9.73%
1,118,512 Carter Holt Harvey Ltd. ............................... 2,428,247
940,000 +Restaurant Brands New Zealand Ltd. ................... 1,426,687
546,131 Telecom Corporation of New Zealand Ltd. ............... 2,769,966
352,500 Tranz Rail Holdings Ltd. .............................. 1,941,378
-----------
8,566,278
-----------
INDONESIA -- 7.20%
688,500 PT Hanjaya Mandala Sampoerna (Foreign)................. 1,416,882
1,554,187 PT Tambang Timah (Foreign)............................. 2,286,266
2,386,060 PT Telekomunikasi (Foreign)............................ 2,637,033
-----------
6,340,181
-----------
SINGAPORE -- 6.58%
552,000 GP Batteries International Ltd. ....................... 1,711,236
270,000 Keppel Fels Ltd. ...................................... 794,637
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SINGAPORE -- (CONTINUED)
291,100 Singapore Airlines Ltd. (Foreign).................... $ 2,151,360
448,000 +Want Want Holdings.................................. 1,137,920
-----------
5,795,153
-----------
PHILIPPINES -- 4.79%
4,775,158 C&P Homes, Inc. ..................................... 462,112
11,250,700 Metro Pacific Corp. ................................. 1,369,220
138,958 Metropolitan Bank & Trust Co. ....................... 1,253,067
700,150 San Miguel Corp., Class B............................ 1,139,540
-----------
4,223,939
-----------
KOREA -- 4.15%
125,200 Korea Electric Power Corp. .......................... 2,783,746
10,160 Medison Co. ......................................... 873,559
-----------
3,657,305
-----------
TAIWAN -- 2.81%
275,300 +Yang Ming Marine Transport GDR...................... 2,477,700
-----------
MALAYSIA -- 2.11%
315,000 New Straits Times Press Bhd. ........................ 952,631
283,000 United Engineers Bhd. ............................... 908,255
-----------
1,860,886
-----------
INDIA -- 1.16%
11,290 +Housing Development Finance Corp. Ltd. ............. 1,019,443
-----------
THAILAND -- 1.10%
94,000 Banpu Public Co. Ltd. (Registered)................... 965,967
-----------
TOTAL COMMON STOCKS (Cost $93,870,233)............... 81,752,265
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
CONVERTIBLE BONDS -- 3.37%
INDIA -- 3.37%
$ 2,736,000 Mahindra & Mahindra Ltd.
5.00%, 07/09/01
(Cost $2,958,245).................................... 2,968,560
-----------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PACIFIC/ASIA FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
DEMAND NOTES -- 3.34%
UNITED STATES -- 3.34%
$1,392,000 Associates Corp. of North America Master Notes.... $ 1,392,000
1,546,000 General Electric Co. Promissory Notes............. 1,546,000
-----------
TOTAL DEMAND NOTES (Cost $2,938,000).............. 2,938,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $99,766,478*)...................... 99.52% $87,658,825
OTHER ASSETS & LIABILITIES (NET)........................... 0.48 424,883
------ -----------
NET ASSETS................................................. 100.00% $88,083,708
====== ===========
</TABLE>
- --------
* -- Aggregate cost for Federal tax and book purposes.
+ -- Non-income producing.
GDR -- Global Depositary Receipt.
See Notes to Financial Statements
10
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PACIFIC/ASIA FUND -- (CONTINUED)
At September 30, 1997, 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........................................ 15.53% $13,678,737
Financial................................................ 14.53 12,797,583
Technology............................................... 14.10 12,416,228
Capital Goods............................................ 12.71 11,193,791
Consumer Staples......................................... 12.01 10,577,871
Utilities................................................ 11.20 9,862,642
Transportation........................................... 9.66 8,513,493
Raw/Intermediate Materials............................... 6.45 5,680,480
Demand Notes............................................. 3.33 2,938,000
------ -----------
Total Investments........................................ 99.52% $87,658,825
Other Assets and Liabilities (Net)....................... 0.48 424,883
------ -----------
Net Assets............................................... 100.00% $88,083,708
====== ===========
</TABLE>
See Notes to Financial Statements
11
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PAN EUROPEAN FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ------------
<C> <S> <C>
COMMON STOCKS -- 91.00%
FRANCE -- 18.14%
93,489 AXA-UAP........................................... $ 6,271,468
7,443 Carrefour S.A. ................................... 4,637,919
26,450 Compagnie Generale des Eaux....................... 3,111,765
18,840 Dassault Systemes S.A. ........................... 1,206,674
32,942 Elf Aquitaine S.A. ............................... 4,397,449
56,050 +SGS-Thomson Microelectronics N.V. ............... 5,280,962
37,350 Technip S.A. ..................................... 4,746,654
30,623 Total S.A., Class B............................... 3,504,638
------------
33,157,529
------------
UNITED KINGDOM & POSSESSIONS -- 15.04%
272,200 Airtours plc...................................... 4,627,698
707,800 Capita Group plc.................................. 3,253,807
1,666,500 Cordiant plc...................................... 3,225,692
325,499 Granada Group plc................................. 4,599,283
290,600 Serco Group plc................................... 3,913,978
321,088 Siebe plc......................................... 6,458,429
915,500 TC Group plc...................................... 1,402,873
------------
27,481,760
------------
GERMANY -- 10.32%
11,832 GEA AG............................................ 4,218,540
14,820 SAP AG............................................ 3,807,742
33,650 SGL Carbon AG..................................... 4,913,243
87,980 Siemens AG........................................ 5,932,551
------------
18,872,076
------------
NETHERLANDS -- 6.71%
116,900 ING Groep N.V. ................................... 5,368,636
103,472 Koninklijke Ahrend Groep NV ...................... 3,561,367
24,679 Wolters Kluwer N.V. .............................. 3,328,230
------------
12,258,233
------------
SWITZERLAND -- 6.65%
167 Lindt & Spruengli AG.............................. 3,284,869
4,141 Novartis AG (Registered).......................... 6,351,052
283 Roche Holding AG.................................. 2,510,798
------------
12,146,719
------------
FINLAND -- 5.40%
62,100 Oy Nokia AB, Class A.............................. 5,907,910
242,200 Valmet Corp. ..................................... 3,962,455
------------
9,870,365
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SWEDEN -- 5.10%
283,000 ABB AB, Class A................................. $ 4,010,877
124,900 Autoliv AB...................................... 5,308,250
------------
9,319,127
------------
AUSTRIA -- 4.52%
27,739 Austria Mikro Systeme International AG.......... 1,957,128
29,430 VA Technologie AG............................... 6,312,179
------------
8,269,307
------------
ITALY -- 3.86%
545,200 Edison S.p.A. .................................. 2,935,838
1,975,140 Telecom Italia S.p.A. .......................... 4,121,553
------------
7,057,391
------------
SPAIN -- 3.84%
228,200 Banco Bilbao Vizcaya, S.A. (Registered)......... 7,027,068
------------
IRELAND -- 3.43%
382,522 Irish Continental Group plc..................... 4,498,887
379,300 IWP International plc........................... 1,762,367
------------
6,261,254
------------
TURKEY -- 2.59%
108,200,000 +Global Menkul Degerler A.S. ................... 2,485,214
126,800,013 +Medya Holding.................................. 1,092,162
16,800,000 +Turk Sise ve Cam Fabrikalari A.S. ............. 1,157,623
------------
4,734,999
------------
DENMARK -- 2.21%
37,100 Den Danske Bank................................. 4,043,161
------------
PORTUGAL -- 2.11%
182,200 Banco Comercial Portugues, S.A. ................ 3,848,796
------------
CROATIA -- 1.08%
38,850 Pliva d.d. GDR.................................. 763,437
61,900 Pliva d.d. GDR (Registered)..................... 1,210,145
------------
1,973,582
------------
TOTAL COMMON STOCKS
(Cost $136,159,073)............................. 166,321,367
------------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PAN EUROPEAN FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
PREFERRED STOCK -- 0.88%
GERMANY -- 0.88%
6,000 SAP AG-VORZUG
(Cost $965,860)................................. $ 1,607,810
------------
<CAPTION>
NO. OF
WARRANTS
----------
<C> <S> <C>
WARRANTS -- 0.01%
FRANCE -- 0.01%
28,350 +Compagnie Generale des Eaux, expiring 05/02/01
(Cost $0)....................................... 15,291
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CONVERTIBLE BONDS -- 2.75%
SWITZERLAND -- 2.75%
$3,184,780 Schweiz Lebens 2.00%, 11/10/98 (Cost $2,673,389)
................................................ 5,020,300
------------
DEMAND NOTES -- 4.08%
UNITED STATES -- 4.08%
5,123,000 Associates Corp. of North America Master Notes.. 5,123,000
2,337,000 General Electric Co. Promissory Notes........... 2,337,000
------------
TOTAL DEMAND NOTES (Cost $7,460,000)............ 7,460,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $147,258,322*).................... 98.72% $180,424,768
OTHER ASSETS & LIABILITIES (NET).......................... 1.28 2,340,323
------ ------------
NET ASSETS................................................ 100.00% $182,765,091
====== ============
</TABLE>
- --------
* --Aggregate cost for Federal tax and book purposes.
+ --Non-income producing.
GDR--Global Depositary Receipt.
See Notes to Financial Statements
13
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
PAN EUROPEAN FUND -- (CONTINUED)
At September 30, 1997, 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....................................... 23.16% $ 42,322,699
Financial............................................... 18.64 34,064,643
Capital Goods........................................... 13.80 25,220,800
Technology.............................................. 10.67 19,497,052
Consumer Staples........................................ 9.89 18,083,514
Holding Company Diversified............................. 7.50 13,712,121
Energy.................................................. 4.32 7,902,087
Demand Notes............................................ 4.08 7,460,000
Utilities............................................... 3.97 7,248,609
Raw/Intermediate Materials.............................. 2.69 4,913,243
------ ------------
Total Investments....................................... 98.72% $180,424,768
Other Assets and Liabilities (Net)...................... 1.28 2,340,323
------ ------------
Net Assets.............................................. 100.00% $182,765,091
====== ============
</TABLE>
See Notes to Financial Statements
14
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
LATIN AMERICA FUND (FORMERLY EMERGING AMERICAS FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- ------------
<C> <S> <C>
COMMON STOCKS -- 73.73%
MEXICO -- 29.11%
484,300 ALFA, S.A. de C.V. ................................ $ 4,553,568
2,772,500 +Biper, S.A. de C.V., Series B..................... 1,224,842
684,774 Cemex, S.A., CPO................................... 3,589,683
447,793 +Corporacion GEO S.A., Class B..................... 2,803,032
869,000 +Corporacion Moctezuma,
S.A. de C.V., Series B2............................ 1,132,700
261,600 Grupo Elektra, S.A. de C.V. CPO.................... 4,194,900
398,500 +Industrias CH, S.A., Series B..................... 2,222,443
455,500 Industrias Penoles S.A............................. 2,200,058
471,800 Kimberly-Clark de Mexico
S.A. de C.V., Class A.............................. 2,467,166
709,600 Organizacion Soriana
S.A. de C.V., Series B............................. 2,769,304
362,200 Sanluis Corporacion
S.A. de C.V. ...................................... 3,172,282
83,500 +Tubos de Acero de Mexico S.A. .................... 1,944,462
112,900 +TV Azteca, S.A. de C.V. ADR....................... 2,540,250
------------
34,814,690
------------
BRAZIL -- 20.53%
85,900 Cia Brasileira de Distribuicao Grupo Pao de Acucar
GDR................................................ 1,932,750
40,667 Cia Energetica de Minas Gerais ADR................. 2,234,574
70,078,000 Cia Siderurgica Nacional........................... 2,686,302
110,000 +Copel ADR......................................... 1,897,500
6,750,400 Eletrobras......................................... 3,574,249
4,539,000 Light Servicos de
Eletricidade S.A. ................................. 1,943,391
79,355,000 Telebras........................................... 9,164,148
8,700 Telebras ADR....................................... 1,120,125
------------
24,553,039
------------
ARGENTINA -- 12.18%
575,500 +Acindar Industria Argentina de Aceros S.A. ....... 1,810,328
366,392 Banco de Galicia y Buenos Aires S.A., Class B...... 2,693,547
300,000 Siderar S.A.I.C., Class A.......................... 1,680,353
811,198 Siderca S.A., Class A.............................. 2,425,991
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ARGENTINA -- (CONTINUED)
608,300 Telefonica de Argentina S.A., Class B............... $ 2,239,014
100,900 YPF S.A. ADR........................................ 3,720,688
------------
14,569,921
------------
VENEZUELA -- 9.09%
2,099,020 C.A. La Electricidad de Caracas..................... 3,384,427
77,300 CANTV ADR........................................... 3,536,475
670,200 Siderurgica Venezolana Sivensa ADR.................. 3,947,076
------------
10,867,978
------------
PERU -- 2.06%
77,912 Credicorp Ltd....................................... 1,480,328
418,452 Telefonica del Peru S.A., Class B................... 980,599
------------
2,460,927
------------
CHILE -- 0.76%
24,552 Enersis S.A. ADR.................................... 909,959
------------
TOTAL COMMON STOCKS (Cost $63,943,038).............. 88,176,514
------------
PREFERRED STOCKS -- 23.53%
BRAZIL -- 23.53%
220,655,290 Banco Bradesco...................................... 2,326,610
1,524,000 CELESC.............................................. 2,142,560
2,494,870 Cia Cervejaria Brahma............................... 1,913,174
2,183,000 +Cia Riograndense de Telecomunicacoes............... 2,835,867
66,014 Cia Vale do Rio Doce................................ 1,614,492
568,770,000 +Coelce............................................. 2,777,907
162,900,000 Gerdau S.A. ........................................ 3,717,820
1,390,000 Itausa.............................................. 1,319,701
21,125,399 Petrobras........................................... 6,017,094
10,077,000 Telemig B........................................... 1,485,700
672,000 Telepar............................................. 496,914
137,100 Usinas Sider Minas Gerais........................... 1,496,911
------------
TOTAL PREFERRED STOCKS (Cost $23,202,913)........... 28,144,750
------------
</TABLE>
See Notes to Financial Statements
15
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
LATIN AMERICA FUND (FORMERLY EMERGING AMERICAS FUND) -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
DEMAND NOTES -- 2.38%
UNITED STATES -- 2.38%
$ 470,000 Associates Corp. of North America Master Notes...... $ 470,000
2,378,000 General Electric Co. Promissory Notes............... 2,378,000
------------
TOTAL DEMAND NOTES (Cost $2,848,000)................ 2,848,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $89,993,951*)..................... 99.64% $119,169,264
OTHER ASSETS & LIABILITIES (NET).......................... 0.36 432,545
------ ------------
NET ASSETS................................................ 100.00% $119,601,809
====== ============
</TABLE>
- --------
* -- Aggregate cost for Federal tax and book purposes.
+ -- Non-income producing.
ADR -- American Depositary Receipt.
GDR -- Global Depositary Receipt.
At September 30, 1997, 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....................................... 24.00% $ 28,700,895
Raw/Intermediate Materials.............................. 19.31 23,099,057
Utilities............................................... 16.68 19,945,253
Technology.............................................. 16.49 19,724,545
Capital Goods........................................... 7.91 9,464,716
Financial............................................... 5.44 6,500,485
Consumer Staples........................................ 3.22 3,845,924
Energy.................................................. 3.11 3,720,688
Demand Notes............................................ 2.38 2,848,000
Holding Company Diversified ............................ 1.10 1,319,701
------ ------------
Total Investments....................................... 99.64% $119,169,264
Other Assets and Liabilities (Net)...................... 0.36 432,545
------ ------------
Net Assets.............................................. 100.00% $119,601,809
====== ============
</TABLE>
See Notes to Financial Statements
16
<PAGE>
EXCELSIOR FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Excelsior Funds, Inc. ("Excelsior Fund") was incorporated under the laws of
the State of Maryland on August 2, 1984 and is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Excelsior Fund currently offers shares in seventeen 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 Latin America Fund (formerly
known as Emerging Americas Fund) (the "Portfolios"). Such policies are in
conformity with generally accepted accounting principles 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 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
17
<PAGE>
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 not less than the repurchase price.
If the value of the underlying security falls below the value of the
repurchase price, 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.
(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
18
<PAGE>
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, 1997, the Latin America Fund had a capital loss carryforward
for Federal tax purposes available to offset net capital gains of
approximately $4,261,000 which will expire on March 31, 2004.
At September 30, 1997, 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................ $34,436,822 $ (7,156,492) $ 27,280,330
Pacific/Asia Fund................. 7,964,267 (20,071,920) (12,107,653)
Pan European Fund................. 34,642,637 (1,476,191) 33,166,446
Latin America Fund................ 30,230,619 (1,055,306) 29,175,313
</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 NY") and U.S. Trust
Company of Connecticut ("U.S. Trust CT" and collectively with U.S. Trust NY,
"U.S. Trust") serve as the investment advisers to the Portfolios. For the
services provided pursuant to the Investment Advisory Agreements, U.S. Trust
is entitled to receive a fee, computed daily and paid monthly, at the annual
rate of 1% of the average daily net assets of each Portfolio. Prior to May 15,
1997, U.S. Trust NY served as the Portfolios' investment adviser pursuant to
investment advisory agreements substantially similar to those currently in
effect for the Portfolios. U.S. Trust NY and U.S. Trust CT are wholly-owned
subsidiaries of U.S. Trust Corporation, a registered bank holding company.
U.S. Trust CT, Chase Global Funds Services Company ("CGFSC"), a subsidiary
of The Chase Manhattan Bank, and Federated Administrative Services ("FAS")
(collectively, the "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 annual rate of .20% of the average daily net assets of each
Portfolio. Prior to May 15, 1997, U.S. Trust NY, CGFSC and FAS served as the
Portfolios' administrators pursuant to administration agreements substantially
similar to those currently in effect for the Portfolios. For the six months
ended September 30, 1997, Administration fees charged by U.S. Trust CT were as
follows:
<TABLE>
<S> <C>
International Fund................................................... $59,479
Pacific/Asia Fund.................................................... 35,854
Pan European Fund.................................................... 55,677
Latin America Fund................................................... 36,271
</TABLE>
19
<PAGE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses.
Until further notice to Excelsior Fund, U.S. Trust intends to voluntarily
waive fees and reimburse expenses to the extent necessary for Pacific/Asia
Fund, Pan European Fund and Latin America Fund to maintain an annual expense
ratio of not more than 1.67%. For the six months ended September 30, 1997, no
fees were waived or expenses reimbursed pursuant to this voluntary limitation.
Excelsior Fund has also entered into administrative 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 organization an administrative
service fee at the annual rate of up to .40% of the average daily net asset
value of its shares held by the service organization's 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 six months ended September 30, 1997,
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................................. $56,075 $290
Pacific/Asia Fund.................................. 33,632 2
Pan European Fund.................................. 44,174 7
Latin America Fund................................. 32,818 99
</TABLE>
Edgewood Services, Inc. (the "Distributor"), a wholly-owned subsidiary of
Federated Investors, serves as the sponsor and distributor of Excelsior Fund.
Shares of each Portfolio are sold without a sales charge 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.
3. PURCHASES AND SALES OF SECURITIES:
For the six months ended September 30, 1997, purchases and sales of
securities, excluding short-term investments, for the Portfolios aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
International Fund................................... $49,902,906 $18,827,086
Pacific/Asia Fund.................................... 21,522,614 14,596,928
Pan European Fund.................................... 54,115,206 18,600,215
Latin America Fund................................... 57,771,598 34,247,900
</TABLE>
20
<PAGE>
4. COMMON STOCK:
Excelsior Fund currently has authorized capital of 35 billion shares of
Common Stock representing interests in one of seventeen separate investment
portfolios. Authorized capital currently offered for each Portfolio is as
follows: 375 million shares of the International Fund, and 500 million shares
each of the Pacific/Asia Fund, Pan European Fund, and Latin America Fund.
Each share has a par value of $.001 and represents an equal proportionate
interest in the particular Portfolio with other shares of the same Portfolio,
and is entitled to such dividends and distributions of taxable earnings on the
assets belonging to such Portfolio as are declared at the discretion of
Excelsior Fund's Board of Directors.
<TABLE>
<CAPTION>
INTERNATIONAL FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 4,389,705 $ 53,388,930 3,509,954 $ 39,006,438
Contribution in-kind...... -- -- 1,925,638 21,239,784
Issued as reinvestment of
dividends................ 605 7,938 29,055 314,909
Redeemed.................. (1,436,601) (17,827,772) (3,250,261) (35,599,363)
---------- ------------ ---------- ------------
Net Increase.............. 2,953,709 $ 35,569,096 2,214,386 $ 24,961,768
========== ============ ========== ============
<CAPTION>
PACIFIC/ASIA FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 2,755,332 $ 25,420,729 5,035,278 $ 48,378,451
Issued as reinvestment of
dividends................ -- -- 15,992 153,860
Redeemed.................. (1,986,298) (18,024,749) (2,944,246) (28,052,131)
---------- ------------ ---------- ------------
Net Increase.............. 769,034 $ 7,395,980 2,107,024 $ 20,480,180
========== ============ ========== ============
<CAPTION>
PAN EUROPEAN FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 4,427,563 $ 50,461,297 7,066,575 $ 71,704,422
Issued as reinvestment of
dividends................ 28 339 8,104 77,487
Redeemed.................. (1,075,759) (12,377,976) (1,141,350) (11,602,820)
---------- ------------ ---------- ------------
Net Increase.............. 3,351,832 $ 38,083,660 5,933,329 $ 60,179,089
========== ============ ========== ============
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
LATIN AMERICA FUND
(FORMERLY EMERGING AMERICAS FUND)
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 3,842,985 $ 43,199,637 3,809,798 $ 32,650,511
Issued as reinvestment of
dividends................ 32 394 2,196 18,453
Redeemed.................. (1,757,559) (20,737,946) (2,174,370) (17,917,579)
---------- ------------ ---------- ------------
Net Increase.............. 2,085,458 $ 22,462,085 1,637,624 $ 14,751,385
========== ============ ========== ============
</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.
22
