<PAGE> 1
BT INVESTMENT FUNDS
PACIFIC
BASIN
EQUITY FUND
SEMI-ANNUAL REPORT
MARCH 31, 1995
<PAGE> 2
PACIFIC BASIN EQUITY FUND 1
---------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- --------------------------------------------------------------------
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . 3
PACIFIC BASIN EQUITY FUND
Statement of Assets and Liabilities . . . . . . . . . . . 6
Statement of Operations . . . . . . . . . . . . . . . . . 7
Statement of Changes in Net Assets . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . . . 9
PACIFIC BASIN EQUITY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . 10
Statement of Operations . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . 13
Schedule of Portfolio Investments . . . . . . . . . . . . 14
PACIFIC BASIN EQUITY FUND
Notes to Financial Statements . . . . . . . . . . . . . . 17
PACIFIC BASIN EQUITY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Pacific Basin
Equity Fund may be obtained by calling or writing to Investors Fiduciary Trust
Company or Signature Broker-Dealer Services, Inc., the primary Servicing Agent
and Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Pacific Basin Equity Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 3
PACIFIC BASIN EQUITY FUND 2
---------------------------------------------------
INTRODUCTION FROM PRESIDENT
- --------------------------------------------------------------------------------
May, 1995
Dear Shareholders:
We are pleased to present your Semi-Annual Report for the BT Investment Funds
Pacific Basin Equity Fund. This Report provides you with an investment overview
as well as a financial summary of the Fund's operations for the six months
ended March 31, 1995. We have also included a Letter from the Investment
Adviser, detailing the factors that affected the Fund's performance and a
performance chart which illustrates your Fund's return versus a relevant
financial index. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Pacific Basin Equity Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 4
PACIFIC BASIN EQUITY FUND 3
---------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The Fund's total return was down 12.99% for the period October 1, 1994 through
March 31, 1995, as compared to the MSCI Combined Far East Free ex Japan Index,
whose return was down 12.00% for the same six month period. Although the Fund
lags its benchmark slightly, it has outperformed the majority of its
competitors. The Lipper Pacific Basin Average return for this six month period
was down 13.19%. Since its inception on November 1, 1993, the Pacific Basin
Equity Fund has returned 2.85%.
The modest performance of the Asian equity markets over the course of the past
six months was characterized by high volatility and sharp divergences between
markets. Those markets most sensitive to U.S. monetary policy, due to a
combination of semi-fixed exchange rates and/or large current account deficits,
performed poorly in the last months of 1994 and into 1995 as the Federal
Reserve Board continued to raise U.S. interest rates. These include Hong Kong,
Thailand, and Malaysia. Hong Kong was also negatively affected by a worsening
property market slump and ongoing problems in the Chinese economy. As 1995
began, the problems in much of Latin America put pressure on the Asian emerging
markets as well.
On the other hand, despite a very weak U.S. dollar, pressures on global
interest rates abated with signs of slowing in the U.S. economy and a cut in
official German rates late in the first quarter of 1995. After reaching lows in
January, most Asian markets recovered strongly over the balance of the quarter.
Other catalysts for this recovery included signs that financial stresses in
Latin America were easing, resolution of trade talks between China and the
U.S., positive corporate profit announcements, and indications that U.S.
interest rates may have peaked. While stock selection was a positive for your
Fund, it underperformed its benchmark primarily due to its underweighted
position in Hong Kong. It should also be noted that while the strength or
volatility of the Japanese Yen and equity markets may clearly affect the other
Pacific Basin markets, as of November 2, 1994, your Fund amended its investment
policy so as to end any investment in issuers based in Japan. The Fund's
overall sector and stock investment themes remain basically the same. These
are:
- - Rising Consumption--As incomes in the region increase, the demand for
consumer goods also rises. Stocks which benefit from this trend fall into
the consumer and communication industry sectors.
- - Recovery in External Demand--As the developed world comes out of
recession, demand for goods and services is showing signs of strong
growth. High technology, electronics and capital equipment goods are
already seeing improving demand conditions.
- - Regional Infrastructure Investment--This translates into growth prospects
in such industries as construction, building materials, heavy equipment,
and capital goods manufacturers, as well as specialists in electricity
generation, water supply and port construction.
Looking ahead, the short term outlook remains uncertain, primarily due to
liquidity concerns. Nevertheless, we remain very positive on the medium term
outlook for the Asian markets. We continue to believe that the attractive
fundamentals of continued strong earnings growth and reasonable valuations will
result in strong capital gains.
<PAGE> 5
PACIFIC BASIN EQUITY FUND 4
---------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The following graph illustrates the Fund's return versus the MSCI Combined Far
East Free ex Japan Index since November 30, 1993, assuming a $10,000 initial
investment:
COMPARISON OF CHANGE
IN VALUE OF A $10,000
INVESTMENT IN THE
PACIFIC BASIN EQUITY
FUND AND MSCI
COMBINED FAR EAST
FREE EX JAPAN INDEX
<TABLE>
<CAPTION>
- --------------------------------------------------------
PACIFIC BASIN MSCI COMBINED
EQUITY FAR EAST FREE
FUND EX JAPAN INDEX
<S> <C> <C>
- --------------------------------------------------------
11/30/93 10,000 10,000
- --------------------------------------------------------
12/31/93 13,127 12,419
- --------------------------------------------------------
3/31/94 10,392 9,673
- --------------------------------------------------------
6/30/94 11,115 10,039
- --------------------------------------------------------
9/30/94 12,198 11,227
- --------------------------------------------------------
12/31/94 10,913 10,058
- --------------------------------------------------------
3/31/95 10,614 9,880
- --------------------------------------------------------
</TABLE>
THE TABLE REFLECTS THE SAME INFORMATION AS THE GRAPH SHOWN IN THE FUND'S REPORT.
<TABLE>
<CAPTION>
TOTAL RETURN
ended March 31, 1995
<S> <C>
One Year Since 11/1/93*
2.13% 2.85%
</TABLE>
* The Fund's inception date
Investment return and principal value may fluctuate so that shares,
when redeemed, may be worth more or less than their original cost.
<TABLE>
<S> <C>
ABOUT THE PAUL DURHAM
PORTFOLIO MANAGER VICE PRESIDENT
- Portfolio Manager: - BT Investment Funds Pacific Basin Equity Fund
- BT South East Asia Fund (Offshore Fund)
- BTA South East Asia Fund (Offshore Fund)
- Attended University of Sydney
- Graduated 1987 with an Economics Degree
- Joined Bankers Trust in Sydney in 1988
</TABLE>
<PAGE> 6
PACIFIC BASIN EQUITY FUND 5
---------------------------------------------------
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
OBJECTIVE Seeks to provide long term capital growth through investments in Pacific Basin stock
markets.
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Primarily common stocks and corporate issued intermediate to long-term bonds.
- ------------------------------------------------------------------------------------------------------------------------------------
TEN LARGEST United Engineers Berhad Technology Resources Industrial
HOLDINGS Singapore Land Hopewell Holdings, LTD
Samsung Electronics City Developments
Hutchison Whampoa Sahaviriya Steel Industries
Hong Kong Electric Overseas Chinese Banking
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY COUNTRY
as of March 31, 1995 (unaudited)
(percentages are based on market value)
<TABLE>
<S> <C>
SOUTH KOREA 4.58%
- --------------------------------------------------
INDONESIA 10.66%
- --------------------------------------------------
HONG KONG 29.30%
- --------------------------------------------------
INDIA 4.01%
- --------------------------------------------------
MALAYSIA 16.25%
- --------------------------------------------------
SINGAPORE 13.36%
- --------------------------------------------------
THAILAND 10.78%
- --------------------------------------------------
PHILIPPINES 7.89%
- --------------------------------------------------
OTHER* 3.17%
- --------------------------------------------------
</TABLE>
*NO ONE COUNTRY REPRESENTS MORE THAN 3.0% OF PORTFOLIO HOLDINGS.
THE TABLE REFLECTS THE SAME INFORMATION AS THE PIE CHART SHOWN IN THE FUND'S
REPORT.
<PAGE> 7
PACIFIC BASIN EQUITY FUND 6
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------------------------------------------------------------
March 31, 1995 (unaudited)
- -----------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------
Investment in Pacific Basin Equity Portfolio, at Value $20,860,069
- -----------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 1,000
- -----------------------------------------------------------------------------------------
Deferred Organizational Expenses 12,926
- -----------------------------------------------------------------------------------------
Prepaid Expenses 5,642
- -----------------------------------------------------------------------------------------
Total Assets 20,879,637
- -----------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------
Due to Bankers Trust 5,853
- -----------------------------------------------------------------------------------------
Payable for Shares of Beneficial Interest Redeemed 549,345
- -----------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 20,602
- -----------------------------------------------------------------------------------------
Total Liabilities 575,800
- -----------------------------------------------------------------------------------------
NET ASSETS (Applicable to 2,045,779 Outstanding Shares of
$0.001 Par Value Per Share, Unlimited Number of Shares of Beneficial
Interest Authorized) $20,303,837
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, Subscription and Redemption Price Per Share
($20,303,837/2,045,779 Shares) $ 9.92
- -----------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 2,046
- -----------------------------------------------------------------------------------------
Paid-in Capital 22,717,285
- -----------------------------------------------------------------------------------------
Undistributed Net Investment Income 18,470
- -----------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities and Foreign
- -----------------------------------------------------------------------------------------
Currency Transactions (1,006,222)
- -----------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (1,471,656)
- -----------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 12,155
- -----------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 31,759
- -----------------------------------------------------------------------------------------
NET ASSETS, MARCH 31, 1995 $20,303,837
- -----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 8
PACIFIC BASIN EQUITY FUND 7
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
- -------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------
Income Allocated from Pacific Basin Equity Portfolio, net $ 104,095
- -------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------
Administration and Services Fee $ 85,625
- -------------------------------------------------------------------------------------------------------
Professional Fees 5,247
- -------------------------------------------------------------------------------------------------------
Registration Fees 8,704
- -------------------------------------------------------------------------------------------------------
Trustees Fees 769
- -------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,785
- -------------------------------------------------------------------------------------------------------
Shareholders Reports 13,457
- -------------------------------------------------------------------------------------------------------
Insurance 451
- -------------------------------------------------------------------------------------------------------
Miscellaneous 639
- -------------------------------------------------------------------------------------------------------
Total Expenses 116,677
- -------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (31,052) 85,625
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 18,470
- -------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES AND FOREIGN CURRENCY
- -------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (777,702)
- -------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (48,948)
- -------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (2,709,369)
- -------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 19,675
- -------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 35,912
- -------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED (LOSS) ON SECURITIES AND FOREIGN CURRENCY (3,480,432)
- -------------------------------------------------------------------------------------------------------
NET (DECREASE) IN NET ASSETS FROM OPERATIONS $(3,461,962)
- -------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 9
PACIFIC BASIN EQUITY FUND 8
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------
For the period
For the November 1, 1993
six months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) $ 18,470 $ (91,888)
- --------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities and Foreign
Currency Transactions (826,650) 744,135
- --------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation)
on Securities and Foreign Currency (2,653,782) 1,226,040
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations (3,461,962) 1,878,287
- --------------------------------------------------------------------------------------------------------------
FROM DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions (831,819) --
- --------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Distributions (831,819) --
- --------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (764,264) 23,483,595
- --------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,058,045) 25,361,882
- --------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Beginning of Period 25,361,882 --
- --------------------------------------------------------------------------------------------------------------
End of Period [including Undistributed Net Investment
Income of $18,470 for 1995] $ 20,303,837 $25,361,882
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 10
PACIFIC BASIN EQUITY FUND 9
---------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the Pacific Basin Equity Fund.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the November 1, 1993
six months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.82 $ 10.00
------- -------
Income from Investment Operations
Net Investment Income (Loss) 0.01 (0.04)
Net Realized and Unrealized Gain (Loss) on Securities
and Foreign Currency (1.53) 1.86
------- -------
Total from Investment Operations (1.52) 1.82
------- -------
Less Distributions
Distributions from Net Realized Gain from Securities
Transactions (0.38) --
------- -------
Net Asset Value, End of Period $ 9.92 $ 11.82
TOTAL INVESTMENT RETURN (12.99%) 20.11%*
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income (Loss) to Average Net Assets 0.16%* (0.59%)*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Pacific Basin Equity Portfolio 1.75%* 1.75%*
Decrease Reflected in Above Expense Ratio Due to Absorption
of Expenses by Bankers Trust 0.49%* 0.60%*
Net Assets, End of Period (000's omitted) $20,304 $25,362
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 11
PACIFIC BASIN EQUITY PORTFOLIO 10
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------------------------------------------------------
March 31, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------------
Investments, at Value (Cost $20,090,927) $ 18,619,271
- ---------------------------------------------------------------------------------------------------------------
Foreign Cash (Cost $409,977) 420,644
- ---------------------------------------------------------------------------------------------------------------
Cash 1,652,534
- ---------------------------------------------------------------------------------------------------------------
Receivable for Securities Sold 850,690
- ---------------------------------------------------------------------------------------------------------------
Dividends and Interest Receivable 26,996
- ---------------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 12,926
- ---------------------------------------------------------------------------------------------------------------
Prepaid Expenses 1,522
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 31,759
- ---------------------------------------------------------------------------------------------------------------
Total Assets 21,616,342
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 14,808
- ---------------------------------------------------------------------------------------------------------------
Payable for Securities Purchased 712,428
- ---------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 29,028
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities 756,264
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS $ 20,860,078
- ---------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Paid-in Capital $ 22,287,820
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (1,471,656)
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 12,155
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 31,759
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS, MARCH 31, 1995 $ 20,860,078
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 12
PACIFIC BASIN EQUITY PORTFOLIO 11
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding tax of $6,955) $ 218,433
- ---------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------
Advisory Fee $ 85,753
- ---------------------------------------------------------------------------------------------------------------
Administration and Services Fee 28,584
- ---------------------------------------------------------------------------------------------------------------
Professional Fees 10,106
- ---------------------------------------------------------------------------------------------------------------
Transfer Tax 8,794
- ---------------------------------------------------------------------------------------------------------------
Insurance 1,363
- ---------------------------------------------------------------------------------------------------------------
Interest 1,045
- ---------------------------------------------------------------------------------------------------------------
Trustees Fees 806
- ---------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,785
- ---------------------------------------------------------------------------------------------------------------
Miscellaneous 733
- ---------------------------------------------------------------------------------------------------------------
Total Expenses 138,969
- ---------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (24,632) 114,337
- ---------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 104,096
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES AND FOREIGN CURRENCY
- ---------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (777,702)
- ---------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (48,952)
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (2,709,369)
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 19,675
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 35,912
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED (LOSS) ON SECURITIES AND FOREIGN CURRENCY (3,480,436)
- ---------------------------------------------------------------------------------------------------------------
NET (DECREASE) IN NET ASSETS FROM OPERATIONS $(3,376,340)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 13
PACIFIC BASIN EQUITY PORTFOLIO 12
---------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
For the period
For the November 1, 1993
six months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net Investment Income $ 104,096 $ 24,084
- ----------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities and
Foreign Currency Transactions (826,654) 744,140
- ----------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on
Securities and Foreign Currency (2,653,782) 1,226,040
- ----------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations (3,376,340) 1,994,264
- ----------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 4,694,607 27,367,327
- ----------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (5,824,463) (3,995,317)
- ----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Transactions (1,129,856) 23,372,010
- ----------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (4,506,196) 25,366,274
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Beginning of Period 25,366,274 --
- ----------------------------------------------------------------------------------------------------------------
End of Period $20,860,078 $25,366,274
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 14
PACIFIC BASIN EQUITY PORTFOLIO 13
---------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Pacific Basin Equity Portfolio.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the November 1, 1993
six months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average Net Assets 0.91%* 0.16%*
Ratio of Expenses to Average Net Assets 1.00%* 1.00%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.22%* 0.26%*
Portfolio Turnover Rate 42% 40%
Net Assets, End of Period (000's omitted) $20,860 $25,366
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 15
PACIFIC BASIN EQUITY PORTFOLIO 14
---------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------
March 31, 1995 (unaudited)
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 86.17%
- ------------------------------------------------------------------------------------------------------------------
HONG KONG - 26.01%
- ------------------------------------------------------------------------------------------------------------------
44,000 Citic Pacific, LTD
(Holding Company-Diversified) $ 108,691
- ------------------------------------------------------------------------------------------------------------------
252,000 Consolidated Electric Power
(Utility-Electric) 521,469
- ------------------------------------------------------------------------------------------------------------------
223,000 Hong Kong Electric
(Utility-Electric) 713,819
- ------------------------------------------------------------------------------------------------------------------
801,000 Hopewell Holdings, LTD
(Property Infrastructure) 564,595
- ------------------------------------------------------------------------------------------------------------------
426 HSBC Holdings (Banking) 4,807
- ------------------------------------------------------------------------------------------------------------------
169,000 Hutchison Whampoa (Diversified) 745,331
- ------------------------------------------------------------------------------------------------------------------
30,000 Jardine Matheson Holdings
(Diversified) 270,000
- ------------------------------------------------------------------------------------------------------------------
1,200,000 Manhattan Card, LTD
(Financial Services) 484,997
- ------------------------------------------------------------------------------------------------------------------
570,000 National Mutual Asia, LTD
(Financial Services) 352,011
- ------------------------------------------------------------------------------------------------------------------
450,000 Orient Overseas International, LTD
(Transportation-Shipping) 256,079
- ------------------------------------------------------------------------------------------------------------------
260,000 San Miguel Brewery (Beverages) 174,858
- ------------------------------------------------------------------------------------------------------------------
1,530,000 Shanghai Petrochemical (Chemicals) 469,963
- ------------------------------------------------------------------------------------------------------------------
58,000 Swire Pacific, LTD Cl. A (Diversified) 395,693
- ------------------------------------------------------------------------------------------------------------------
484,000 Tomei International Holdings
(Electronics) 33,802
- ------------------------------------------------------------------------------------------------------------------
101,000 Wharf Holdings (Diversified) 329,831
- ------------------------------------------------------------------------------------------------------------------
5,425,946
==================================================================================================================
INDIA - 2.60%
- ------------------------------------------------------------------------------------------------------------------
35,000 Calcutta Electric, GDR
(Utility-Electric) (a) 201,250
- ------------------------------------------------------------------------------------------------------------------
700 Core Healthcare LTD, GDR
(Health Care) (a) 3,938
- ------------------------------------------------------------------------------------------------------------------
16,000 Indian Petrochemicals, GDR
(Chemicals) (a) 236,000
- ------------------------------------------------------------------------------------------------------------------
10,000 Mahindra & Mahindra Limited,
GDR (Automotive) 100,000
- ------------------------------------------------------------------------------------------------------------------
541,188
==================================================================================================================
INDONESIA - 9.51%
- ------------------------------------------------------------------------------------------------------------------
52,700 Bank International Indonesia PT
(Banking) 127,747
- ------------------------------------------------------------------------------------------------------------------
58,833 Duta Anggada Realty (Property) 37,461
- ------------------------------------------------------------------------------------------------------------------
101,000 Bank Dagang Nasional Indonesia PT
(Banking) 151,184
- ------------------------------------------------------------------------------------------------------------------
40,000 Gadjah Tunggal PT (Tire & Rubber) 42,895
- ------------------------------------------------------------------------------------------------------------------
237,000 Indah Kiat Pulp & Paper
(Pulp & Paper) 320,342
- ------------------------------------------------------------------------------------------------------------------
9,500 Indosat (Indonesia Satellite), ADR
(Telecommunications) (a) 334,875
- ------------------------------------------------------------------------------------------------------------------
47,000 Modern Photo Film PT
(Photo &Optical) 192,158
- ------------------------------------------------------------------------------------------------------------------
254,700 Mulia Industrindo PT
(Glass Manufacturing) (a) 443,847
- ------------------------------------------------------------------------------------------------------------------
32,000 Tempo Scan Pacific PT
(Pharmaceuticals) 135,836
- ------------------------------------------------------------------------------------------------------------------
9,000 TriPolyta Indonesia PT, ADR
(Chemicals) (a) 198,000
- ------------------------------------------------------------------------------------------------------------------
1,984,345
==================================================================================================================
MALAYSIA - 14.51%
- ------------------------------------------------------------------------------------------------------------------
123,000 Commerce Asset Holding (Banking) 500,899
- ------------------------------------------------------------------------------------------------------------------
16,000 Industrial Oxygen Berhad
(Diversified) 21,255
- ------------------------------------------------------------------------------------------------------------------
192,000 Pilecon Engineering Berhad
(Construction) 227,735
- ------------------------------------------------------------------------------------------------------------------
176,000 Tanjong PLC (Gaming) 518,415
- ------------------------------------------------------------------------------------------------------------------
207,000 Technology Resources Industrial
(Telecommunications) 593,358
- ------------------------------------------------------------------------------------------------------------------
199,000 United Engineers Berhad
(Construction) 1,164,456
- ------------------------------------------------------------------------------------------------------------------
3,026,118
==================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 16
PACIFIC BASIN EQUITY PORTFOLIO 15
---------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------
March 31, 1995 (unaudited)
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PHILIPPINES - 7.05%
- ------------------------------------------------------------------------------------------------------------------
24,364 Benpres Holdings, GDR
(Diversified) (a) $ 191,745
- ------------------------------------------------------------------------------------------------------------------
10,625 Metropolitan Trust &Bank
(Banking) 196,911
- ------------------------------------------------------------------------------------------------------------------
4,560 Philippine Long Distance Telephone
(Telecommunications) 271,135
- ------------------------------------------------------------------------------------------------------------------
54 Philippine National Bank (Banking) 460
- ------------------------------------------------------------------------------------------------------------------
8,100 Philippine Savings Bank
(Banking) (a) 184,517
- ------------------------------------------------------------------------------------------------------------------
729,000 SM Prime Holding, Cl. B
(Diversified) (a) 219,544
- ------------------------------------------------------------------------------------------------------------------
5,000,000 Southeast Asia Cement Holdings
(Cement) (a) 405,406
- ------------------------------------------------------------------------------------------------------------------
1,469,718
==================================================================================================================
SINGAPORE - 11.92%
- ------------------------------------------------------------------------------------------------------------------
98,000 City Developments (Real Estate) 538,080
- ------------------------------------------------------------------------------------------------------------------
52,000 Oversea Chinese Banking
(Banking) 523,131
- ------------------------------------------------------------------------------------------------------------------
58,000 Overseas Union Bank (Banking) 345,165
- ------------------------------------------------------------------------------------------------------------------
133,000 Singapore Land
(Property Development) 843,323
- ------------------------------------------------------------------------------------------------------------------
14,000 Singapore Press Holdings (Media) 237,053
- ------------------------------------------------------------------------------------------------------------------
2,486,752
==================================================================================================================
SOUTH KOREA - 4.09%
- ------------------------------------------------------------------------------------------------------------------
18,600 Samsung Electronics (Non-Voting),
GDS (Electronics) (a)(b) 827,700
- ------------------------------------------------------------------------------------------------------------------
397 Samsung Electronics (Voting), GDS
(Electronics) (a)(b) 25,805
- ------------------------------------------------------------------------------------------------------------------
853,505
==================================================================================================================
SRI LANKA - 0.50%
- ------------------------------------------------------------------------------------------------------------------
14,000 John Keells Holdings LTD, GDR
(Diversified) 105,000
- ------------------------------------------------------------------------------------------------------------------
TAIWAN - 0.36%
- ------------------------------------------------------------------------------------------------------------------
4,000 Yageo, GDR (Electronics)(a) $ 76,000
==================================================================================================================
THAILAND - 9.62%
- ------------------------------------------------------------------------------------------------------------------
125,000 Electricity Generating Publishing
(Utility-Electric) (a) 332,487
- ------------------------------------------------------------------------------------------------------------------
46,500 Hana Microelectronics (Electronics) 241,706
- ------------------------------------------------------------------------------------------------------------------
38,800 Hemaraj Land Development
(Real Estate) 81,933
- ------------------------------------------------------------------------------------------------------------------
201,500 Sahaviriya Steel Industries
(Metals-Steel) (a) 531,878
- ------------------------------------------------------------------------------------------------------------------
3,700 Siam Cement, LTD (Cement) 212,459
- ------------------------------------------------------------------------------------------------------------------
28,400 Thai Petrochemical (Chemicals) (a) 48,439
- ------------------------------------------------------------------------------------------------------------------
52,000 TPI Polyne Company (Cement) 282,964
- ------------------------------------------------------------------------------------------------------------------
39,300 Unithai Line Public
(Transportation-Shipping) 274,502
- ------------------------------------------------------------------------------------------------------------------
2,006,368
==================================================================================================================
TOTAL COMMON STOCKS
(Cost $19,461,234) $17,974,940
- ------------------------------------------------------------------------------------------------------------------
WARRANTS - 0.15%
- ------------------------------------------------------------------------------------------------------------------
HONG KONG - 0.15%
- ------------------------------------------------------------------------------------------------------------------
41,000 Henderson Investment
(Real Estate) (a) $ 3,128
- ------------------------------------------------------------------------------------------------------------------
470,000 Hutchison Whampoa
(Diversified) (a) 27,050
- ------------------------------------------------------------------------------------------------------------------
30,178
==================================================================================================================
MALAYSIA - 0.00%
- ------------------------------------------------------------------------------------------------------------------
250 Development and Commercial
Bank (Banking) (a) 178
==================================================================================================================
TOTAL WARRANTS
(Cost $52,367) $ 30,356
==================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 17
PACIFIC BASIN EQUITY PORTFOLIO 16
---------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------
March 31, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
==================================================================================================================
<S> <C>
CORPORATE DEBENTURES - 2.94%
==================================================================================================================
INDIA - 0.98%
- ------------------------------------------------------------------------------------------------------------------
$ 130,000 Essar Gujarat (Conv.) (Iron & Steel),
5.50%, 8/5/98 $ 159,250
- ------------------------------------------------------------------------------------------------------------------
35,000 Gujarat Ambuja (Conv.) (Cement),
3.50%, 6/30/99 45,850
- ------------------------------------------------------------------------------------------------------------------
205,100
==================================================================================================================
TAIWAN - 1.96%
- ------------------------------------------------------------------------------------------------------------------
125,000 United Micro Electronics (Conv.)
(Electronics), 1.25%, 6/8/04 198,438
- ------------------------------------------------------------------------------------------------------------------
175,000 Walsin Lihwa Electric Wire and
Cable (Conv.) (Electronics),
3.25%, 6/16/04 210,437
- ------------------------------------------------------------------------------------------------------------------
408,875
==================================================================================================================
TOTAL CORPORATE DEBENTURES
(Cost $577,326) $ 613,975
==================================================================================================================
TOTAL INVESTMENTS
(Cost $20,090,927) 89.26% $ 18,619,271
==================================================================================================================
Other Assets in Excess of
Liabilities 10.74% 2,240,807
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.00% $ 20,860,078
==================================================================================================================
</TABLE>
(a) Non-Income Producing Security
(b) Securities exempt from registation 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 the period
end, the value of these securities amounted to $853,505 or 4.09% of net
assets.
<TABLE>
<CAPTION>
Industry Diversification (as a percentage of Total Value of Investments):
<S> <C>
Banking . . . . . . . . . . . . . . . . . . . 8.24%
Cement . . . . . . . . . . . . . . . . . . . 5.08%
Chemicals . . . . . . . . . . . . . . . . . . 5.12%
Construction . . . . . . . . . . . . . . . . 7.48%
Diversified . . . . . . . . . . . . . . . . . 12.97%
Electronics . . . . . . . . . . . . . . . . . 8.67%
Financial . . . . . . . . . . . . . . . . . . 4.50%
Other* . . . . . . . . . . . . . . . . . . . 20.89%
Property . . . . . . . . . . . . . . . . . . 7.76%
Real Estate . . . . . . . . . . . . . . . . . 3.35%
Telecommunication . . . . . . . . . . . . . . 6.44%
Utility . . . . . . . . . . . . . . . . . . . 9.50%
-------
100.00%
=======
</TABLE>
* No one industry represents more than 3% of Portfolio holdings
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 18
PACIFIC BASIN EQUITY FUND 17
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as a business trust under
the laws of the Commonwealth of Massachusetts. The Pacific Basin Equity Fund
(the "Fund") is one of the funds offered to investors by the Trust. The Fund
commenced operations and began offering shares of beneficial interest on
November 1, 1993. The Fund invests substantially all of its assets in the
Pacific Basin Equity Portfolio (the "Portfolio"). The Portfolio is an open-end
management investment company registered under the Act. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects the
Fund's proportionate interest in the net assets of the Portfolio. At March 31,
1995, the Fund's investment was approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions and foreign currency of the Portfolio
are allocated pro rata among the investors in the Portfolio at the time of such
determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends annually to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term
capital gains, if any, earned by the Fund will be made annually to the extent
they are not offset by any capital loss carryforwards.
The Fund may periodically make reclassifications among certain of its capital
accounts as a result of the timing and characterization of certain income and
capital gains distributions determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to that Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 19
PACIFIC BASIN EQUITY FUND 18
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.75 of 1% of the Fund's average daily net assets.
For the six months ended March 31, 1995, this fee aggregated $85,625.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 under the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended March 31, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.75 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
1.75 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended March 31, 1995, expenses of the Fund
have been reduced $31,052.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At March 31, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the period
For the November 1, 1993
six months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
--------------------- -----------------------
Shares Amount Shares Amount
-------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Sold 444,718 4,685,608 2,481,528 $27,377,317
Reinvested 36,517 375,029 -- --
Redeemed (581,437) (5,824,901) (335,547) (3,893,722)
-------- ---------- --------- -----------
Net Increase
(Decrease) (100,202) (764,264) 2,145,981 $23,483,595
======== ========== ========= ===========
</TABLE>
<PAGE> 20
PACIFIC BASIN EQUITY PORTFOLIO 19
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Pacific Basin Equity Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on August 6, 1993 as
an unincorporated trust under the laws of New York and commenced operations on
November 1, 1993. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Securities traded
primarily on a principal securities exchange (domestic or foreign) are valued
at their last reported sale price on that exchange. If no sale is reported, or
if local custom or regulation so provides, the mean of the latest bid and asked
price is used. Securities traded over-the-counter are valued using either the
mean between the bid and asked price or, where local custom or regulations so
provide, the last sales price. Short-term obligations with remaining maturities
of 60 days or less are valued at amortized cost which with accrued interest
approximates value. Securities for which quotations are not available are
stated at fair value as determined by the Trustees.
C. Foreign Currency Transactions
The books and records of the Portfolio are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at prevailing exchange rates. Purchases and sales of
investment securities, dividend and interest income, and certain expenses are
translated at the rates of exchange prevailing on the respective dates of such
transactions. The portfolio does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in the market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain or
loss from securities.
D. Forward Foreign Currency Contracts
The Portfolio may enter into forward foreign currency contracts for the purpose
of settling specific purchases or sales of securities denominated in a foreign
currency or with respect to the Portfolio's investments generally. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Portfolio and the resulting unrealized appreciation or depreciation are
determined using prevailing exchange rates. With respect to forward foreign
currency contracts, losses in excess of amounts recognized in the Statement of
Assets and Liabilities may arise due to changes in the value of the foreign
currency or if the counterparty does not perform under the contract.
E. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Dividend income, less foreign taxes withheld (if
any), is recorded on the ex-dividend date or upon receipt of ex-dividend
notification in the case of certain foreign securities. Interest income is
recorded on the accrual basis and includes amortization of premium and discount
on investments. Realized gains and losses from security transactions are
recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from securities and foreign currency transactions of the Portfolio are
allocated pro rata among the investors of the Portfolio at the time of such
determination.
<PAGE> 21
PACIFIC BASIN EQUITY PORTFOLIO 20
---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
F. Organizational Expenses
Costs incurred by the Portfolio in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
G. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.25 of 1% of the Portfolio's average daily
net assets. For the six months ended March 31, 1995, this fee aggregated
$28,584.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, Bankers Trust manages the Portfolio in accordance with
the Portfolio's investment objective and stated investment policies in return
for a fee computed daily and paid monthly at an annual rate of 0.75 of 1% of
the Portfolio's average daily net assets. For the six months ended March 31,
1995, this fee aggregated $85,753.
Bankers Trust has entered into a Sub-Advisory Agreement with BT Fund Managers
International Limited ("BT Fund Managers International"), a wholly owned
subsidiary of Bankers Trust Australia Limited. Under this Sub-Advisory
Agreement, BT Fund Managers International receives a fee from Bankers Trust for
providing investment advice and research services, computed daily and paid
monthly at an annual rate of 0.60 of 1% of the Portfolio's average daily net
assets.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 1.00 of 1% of the
average daily net assets of the Portfolio. For the six months ended March 31,
1995, expenses of the Portfolio have been reduced $24,632.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended March 31, 1995, were
$8,865,474 and $8,436,329, respectively. The aggregate gross unrealized
appreciation for all investments was $1,274,661 and the aggregate gross
unrealized depreciation for all investments was $2,746,317.
NOTE 4 - OPEN FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As of March 31, 1995, the Portfolio has entered into the following open forward
foreign currency exchange contracts:
<TABLE>
<CAPTION>
Net
Contracts In Unrealized
to Exchange Settlement Value (Depreciation)
Deliver For Date (US $) (US $)
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales
- --------------------------------------------------------------------------
IDR 4,254,278,689 USD 1,908,504 4/3/95 1,904,253 4,251
- --------------------------------------------------------------------------
IDR 3,247,476,047 USD 1,445,861 5/3/95 1,445,861 0
- --------------------------------------------------------------------------
PHP 28,070,900 USD 1,093,818 5/16/95 1,066,118 27,700
- --------------------------------------------------------------------------
4,448,183 4,416,232 $31,951
- --------------------------------------------------------------------------
Purchases
- --------------------------------------------------------------------------
USD 452,641 HKD 3,500,000 4/3/95 452,664 23
- --------------------------------------------------------------------------
USD 3,306,229 IDR 906,802,642 4/3/95 3,308,034 1,805
- --------------------------------------------------------------------------
USD 151,959 PHP 3,947,899 5/16/95 149,939 (2,020)
- --------------------------------------------------------------------------
3,910,829 $3,910,637 (192)
- --------------------------------------------------------------------------
$31,759
-------
</TABLE>
<PAGE> 22
BT INVESTMENT FUNDS
LATIN
AMERICAN
EQUITY FUND
SEMI-ANNUAL REPORT
MARCH 31, 1995
<PAGE> 23
LATIN AMERICAN EQUITY FUND 1
------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
======================================================================================================
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . . . . . . . . . . . . . . . . 3
LATIN AMERICAN EQUITY FUND
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . 6
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
LATIN AMERICAN EQUITY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . 10
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . . . . . . . . 14
LATIN AMERICAN EQUITY FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 17
LATIN AMERICAN EQUITY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Latin American
Equity Fund may be obtained by calling or writing to Investors Fiduciary Trust
Company or Signature Broker-Dealer Services, Inc., the primary Servicing Agent
and Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Latin American Equity Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 24
LATIN AMERICAN EQUITY FUND 2
------------------------------------------
INTRODUCTION FROM PRESIDENT
================================================================================
May, 1995
Dear Shareholders:
We are pleased to present your Semi-Annual Report for the BT Investment Funds
Latin American Equity Fund. This Report provides you with an investment
overview as well as a financial summary of the Fund's operations for the six
months ended March 31, 1995. We have also included a Letter from the Investment
Adviser detailing the factors that affected the Fund's performance and a
performance chart which illustrates your Fund's return versus a relevant
financial index. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Latin American Equity Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 25
LATIN AMERICAN EQUITY FUND 3
------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
================================================================================
The Latin American Equity Fund returned (49.40)% for the six months ended March
31, 1995, as compared to (47.87)% for the IFCI Latin American Index, (42.97)%
for the IFCG Latin American Index and (47.47)% for the Lipper Latin American
Average. Since its inception on October 25, 1993, the Fund has returned
(26.28)%.
In contrast to the strongly positive market activity reported in our last
letter to you, these last six months in the Latin American markets were
dominated by political uncertainty, economic crises, and the devaluation of the
Mexican peso on December 20th. All of these markets, with the exception of
Chile and Colombia, experienced a major correction at the end of 1994 and into
January 1995, registering significant losses during this time period. February
saw a continuation of the downward trend in the major Latin American markets of
Mexico, Brazil, and Argentina and flat returns in the smaller markets of Chile,
Venezuela, and Colombia. From March 8th to the end of the month, however, we
saw a strong technical rebound in these markets. Argentina, Mexico, and Brazil
were the best performing markets during this period, rising 46%, 31%, and 37%,
respectively. Despite these strong price movements, the rally only retraced a
small portion of the heavy losses incurred since the devaluation, with most of
the region still down significantly for the six months ended March 31, 1995.
The Fund's slight underperformance over the past six months was primarily a
result of large scale redemptions requiring selling at inopportune times. We
also lost some ground during the March rally as the Fund was underweighted in
both Mexico and Argentina. Our investment strategy going forward is to remain
underweighted in Mexico and Argentina out of concern over the economic outlook
over the next few months. However, we believe there is enough momentum to keep
the markets strong over the short-term. We are overweighted in Brazil, Chile
and the Andean Pact, as we believe these markets have been unfairly punished
due to the crisis in Mexico and Argentina. The Fund's strategy is to focus on
countries that are not dependent on external capital and have strong economic
fundamentals independent of the international environment.
Looking ahead, we believe that as the perception of the Mexican situation
continues to improve, equity markets in Brazil, Chile and the Andean Pact will
start trading in line with their underlying fundamentals. We further believe
that there are opportunities in equities in Mexico and Argentina, as some
stocks have underperformed both the market and their respective sectors and
offer long-term value. In both of these countries, we are focusing on large
cap, liquid names with attractively-valued assets.
<PAGE> 26
LATIN AMERICAN EQUITY FUND 4
------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
================================================================================
The following graph illustrates the Fund's return versus the IFCG Latin
American Index since October 31, 1993, assuming a $10,000 initial investment:
================================================================================
COMPARISON OF CHANGE
IN VALUE OF A $10,000
INVESTMENT IN THE
LATIN AMERICAN EQUITY
FUND AND IFCG LATIN
AMERICAN INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
LATIN AMERICAN IFCG
EQUITY FUND LATIN AMERICAN INDEX
-------------- --------------------
<S> <C> <C>
10/31/93 $10,000 $10,000
12/31/93 $12,432 $12,127
3/31/94 $12,822 $12,589
6/30/94 $10,917 $11,418
9/30/94 $14,526 $15,339
12/31/94 $11,071 $12,086
3/31/95 $ 7,350 $ 8,751
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN
ended March 31, 1995
<S> <C>
One Year Since 10/25/93*
(42.67)% (26.28)%
</TABLE>
* The Fund's inception date
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost.
Past performance is not indicative of future performance
<TABLE>
<CAPTION>
====================================================================================================================================
ABOUT THE
PORTFOLIO MANAGER MARIA-ELENA CARRION
CFA, VICE PRESIDENT
<S> <C>
Joined Bankers Trust's Investment Management Group in the Spring of 1993. Maria-Elena has eight
years of investment experience having previously worked at Latin American Securities (London) and
US Trust (NYC). At Latin American Securities, she was head of the Argentine/Colombian investment
team and managed regional portfolios that invested in the whole Latin American region. At US
Trust, she concentrated on stock-picking around the world to complement US portfolios and also
managed US based portfolios. Maria-Elena earned her undergraduate degree at the Wharton School,
University of Pennsylvania, and her MBA at Columbia University.
</TABLE>
<PAGE> 27
LATIN AMERICAN EQUITY FUND 5
------------------------------------------
<TABLE>
<S> <C>
====================================================================================================================================
OBJECTIVE Seeks long-term capital appreciation through investment primarily in the equity securities (or
other securities with equity characteristics) of companies domiciled in, or doing business in,
Latin America.
====================================================================================================================================
INVESTMENT INSTRUMENTS Primarily common and preferred stocks, rights, warrants, American Depositary Receipts ("ADRs") and
convertible securities.
====================================================================================================================================
TEN LARGEST Chilgener S.A., ADR Telefonos de Mexico S.A., Cl 'L'
STOCK HOLDINGS Electrobras Gran Cadenalco, ADR
Grupo Carso S.A. de CV, Cl 'A1' CESP (Cia Energetica de Sao Paulo)
Compania Vale do Rao Doce Telecomunicacoes de Sao Paulo S.A.
Cementos Paz del Rio S.A., ADR Maderas Y Sinteticos S.A., ADR
====================================================================================================================================
</TABLE>
DIVERSIFICATION OF EQUITY
INVESTMENTS BY COUNTRY
as of March 31, 1995 (unaudited)
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Peru 8.90%
Mexico 9.66%
Colombia 10.77%
Chile 10.38%
Panama 2.84%
Venezuela 7.82%
Brazil 49.63%
</TABLE>
The Table Reflects the Same Information as the Pie Chart Shown in the Fund's
Report
<PAGE> 28
LATIN AMERICAN EQUITY FUND 6
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
==============================================================================================================================
March 31, 1995 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investment in Latin American Equity Portfolio, at Value $10,160,995
- ------------------------------------------------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 10,978
- ------------------------------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 12,848
- ------------------------------------------------------------------------------------------------------------------------------
Prepaid Expenses 5,356
- ------------------------------------------------------------------------------------------------------------------------------
Due from Bankers Trust 23,732
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 10,213,909
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for Shares of Beneficial Interest Redeemed 3,089
- ------------------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 22,421
- ------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 25,510
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 1,406,076 Outstanding Shares of
$.001 Par Value Per Share, Unlimited Number of Shares of Beneficial
Interest Authorized) $10,188,399
==============================================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($10,188,399/1,406,076 Shares) $ 7.25
==============================================================================================================================
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 1,406
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in Capital 22,007,375
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Net Investment (Loss) (36,638)
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities and Foreign Currency Transactions (9,030,927)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (2,747,335)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (5,482)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, MARCH 31, 1995 $10,188,399
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 29
LATIN AMERICAN EQUITY FUND 7
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
==============================================================================================================================
For the six months ended March 31, 1995 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Income Allocated from Latin American Equity Portfolio, net $ 65,217
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Administration and Services Fee $ 99,992
- ------------------------------------------------------------------------------------------------------------------------------
Shareholders Reports 12,663
- ------------------------------------------------------------------------------------------------------------------------------
Registration Fees 7,944
- ------------------------------------------------------------------------------------------------------------------------------
Professional Fees 6,797
- ------------------------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,794
- ------------------------------------------------------------------------------------------------------------------------------
Trustees Fees 769
- ------------------------------------------------------------------------------------------------------------------------------
Insurance 451
- ------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 396
- ------------------------------------------------------------------------------------------------------------------------------
Total Expenses 130,806
- ------------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (25,552) 105,254
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT (LOSS) (40,037)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES AND FOREIGN CURRENCY
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (8,615,211)
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (137,303)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (5,529,788)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (3,098)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED (LOSS) ON SECURITIES AND FOREIGN CURRENCY (14,285,400)
- ------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) IN NET ASSETS FROM OPERATIONS $(14,325,437)
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 30
LATIN AMERICAN EQUITY FUND 8
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
==============================================================================================================================
For the period
For the six October 25, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) $ (40,037) $ 3,399
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities and Foreign Currency Transactions (8,752,514) 201,391
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities
- ------------------------------------------------------------------------------------------------------------------------------
and Foreign Currency Translation (5,532,886) 2,780,069
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations (14,325,437) 2,984,859
- ------------------------------------------------------------------------------------------------------------------------------
FROM DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions (479,804) -
- ------------------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Distributions (479,804) -
- ------------------------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions in
- ------------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest (2,495,431) 24,504,212
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,300,672) 27,489,071
==============================================================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of Period 27,489,071 -
- ------------------------------------------------------------------------------------------------------------------------------
End of Period [including Undistributed Net Investment Income
of $3,399 for 1994 and Accumulated Net Investment (Loss)
of ($36,638) for 1995] $ 10,188,399 $27,489,071
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 31
LATIN AMERICAN EQUITY FUND 9
------------------------------------------
FINANCIAL HIGHLIGHTS
================================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Latin American Equity Fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
For the period
For the six October 25, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $14.59 $10.00
Income from Investment Operations
Net Investment Income (Loss) (0.03) 0.00#
Net Realized and Unrealized Gain (Loss) on Securities
and Foreign Currency (7.11) 4.59
------- ------
Total from Investment Operations (7.14) 4.59
------- ------
Less Distributions from Net Realized Gain from Securities Transactions (0.20) --
------- ------
Net Asset Value, End of Period $ 7.25 $14.59
======= ======
TOTAL INVESTMENT RETURN (49.40)% 50.01%*
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income (Loss) to Average Net Assets (0.38)%* 0.03%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Latin American Equity Portfolio 2.00%* 2.00%*
Decrease Reflected in Above Expense Ratio Due to Absorption
of Expenses by Bankers Trust 1.20%* 1.27%*
Net Assets, End of Period (000's omitted) $10,188 $27,489
</TABLE>
* Annualized
# Less than $0.01 per share
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 32
LATIN AMERICAN EQUITY PORTFOLIO 10
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
==============================================================================================================================
March 31, 1995 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at Value (Cost $12,627,935) $ 9,880,599
- ------------------------------------------------------------------------------------------------------------------------------
Foreign Cash (Cost $572,939) 567,679
- ------------------------------------------------------------------------------------------------------------------------------
Cash 24,104
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and Interest Receivable 21,099
- ------------------------------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 12,848
- ------------------------------------------------------------------------------------------------------------------------------
Prepaid Expense 1,521
- ------------------------------------------------------------------------------------------------------------------------------
Due from Bankers Trust 10,708
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 10,518,558
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for Securities Purchased 328,587
- ------------------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 28,970
- ------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 357,557
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $10,161,001
==============================================================================================================================
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in Capital $12,913,819
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (2,747,336)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (5,482)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, MARCH 31, 1995 $10,161,001
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 33
LATIN AMERICAN EQUITY PORTFOLIO 11
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
==============================================================================================================================
For the six months ended March 31, 1995 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding tax of $3,083) $ 86,922
- ------------------------------------------------------------------------------------------------------------------------------
Interest 85,391
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Income $ 172,313
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Advisory Fee 107,096
- ------------------------------------------------------------------------------------------------------------------------------
Administration and Services Fee 21,419
- ------------------------------------------------------------------------------------------------------------------------------
Transfer Tax 66,511
- ------------------------------------------------------------------------------------------------------------------------------
Professional Fees 10,106
- ------------------------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,794
- ------------------------------------------------------------------------------------------------------------------------------
Insurance 1,363
- ------------------------------------------------------------------------------------------------------------------------------
Trustees Fees 806
- ------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 726
- ------------------------------------------------------------------------------------------------------------------------------
Total Expenses 209,821
- ------------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (102,725) 107,096
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 65,217
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES AND FOREIGN CURRENCY
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (8,615,214)
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (137,303)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Securities (5,529,789)
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (3,098)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED (LOSS) ON SECURITIES AND FOREIGN CURRENCY (14,285,404)
- ------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) IN NET ASSETS FROM OPERATIONS $ (14,220,187)
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 34
LATIN AMERICAN EQUITY PORTFOLIO 12
------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
==============================================================================================================================
For the period
For the six October 25, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 65,217 $ 106,308
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities and Foreign Currency Transactions (8,752,517) 201,391
- ------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities
and Foreign Currency Translation (5,532,887) 2,780,069
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations (14,220,187) 3,087,768
- ------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 12,909,191 27,627,247
- ------------------------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (15,894,019) (3,348,999)
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Capital Transactions (2,984,828) 24,278,248
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,205,015) 27,366,016
==============================================================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of Period 27,366,016 -
- ------------------------------------------------------------------------------------------------------------------------------
End of Period $ 10,161,001 $27,366,016
==============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 35
LATIN AMERICAN EQUITY PORTFOLIO 13
------------------------------------------
FINANCIAL HIGHLIGHTS
================================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Latin American Equity Portfolio.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
For the period
For the six October 25, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average Net Assets 0.61%* 1.03%*
Ratio of Expenses to Average Net Assets 1.00%* 1.00%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.96%* 0.79%*
Portfolio Turnover Rate 78% 124%
Net Assets, End of Period (000's omitted) $10,161 $27,366
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 36
LATIN AMERICAN EQUITY PORTFOLIO 14
------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
======================================================================================================
March 31, 1995 (unaudited)
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKs - 57.23%
======================================================================================================
BRAZIL - 20.44%
- ------------------------------------------------------------------------------------------------------
18,028 Aracruz Celulose S.A., ADR
(Paper) $ 216,336
- ------------------------------------------------------------------------------------------------------
5,000 Cesp (Cia Energetica de Sao Paulo),
ADR (Utility-Electric) (a) 58,526
- ------------------------------------------------------------------------------------------------------
7,000,000 Cesp (Cia Energetica de Sao Paulo)
(Utility-Electric) (a) 236,959
- ------------------------------------------------------------------------------------------------------
23,865,600 Compania Acos Especiais Itabira
(Steel) 158,927
- ------------------------------------------------------------------------------------------------------
4,184,000 Compania Paulista de Forca Luz
(Utility-Electric) (a) 183,427
- ------------------------------------------------------------------------------------------------------
3,000 Compania Siderurgica Nacional,
ADR (Steel) 70,125
- ------------------------------------------------------------------------------------------------------
9,435,000 Compania Siderurgica Nacional (Steel) 219,801
- ------------------------------------------------------------------------------------------------------
2,344 Compania Vale do Rao Doce,
ADR (Steel) 79,989
- ------------------------------------------------------------------------------------------------------
1,669,270 Electrobras (Utility-Electric) 327,925
- ------------------------------------------------------------------------------------------------------
6,100 Telebras, ADR (Telecommunications) 164,563
- ------------------------------------------------------------------------------------------------------
7,768,000 Telebras, "ON"
(Telecommunications) 180,190
- ------------------------------------------------------------------------------------------------------
15,500 Usiminas, ADR (Steel) (a)(b) 180,188
- ------------------------------------------------------------------------------------------------------
2,076,956
======================================================================================================
CHILE - 7.58%
- ------------------------------------------------------------------------------------------------------
13,565 Chilgener S.A., ADR (Utility-Energy) 339,125
- ------------------------------------------------------------------------------------------------------
17,500 Chilquinta S.A., ADR (Utility) (b) 209,452
- ------------------------------------------------------------------------------------------------------
13,055 Maderas Y Sinteticos S.A., ADR
(Building & Construction) 221,935
- ------------------------------------------------------------------------------------------------------
770,512
======================================================================================================
COLOMBIA - 7.87%
- ------------------------------------------------------------------------------------------------------
10,000 Carulla & CIA S.A., ADR, Cl 'B'
(Retail) (a)(b) 188,800
- ------------------------------------------------------------------------------------------------------
6,000 Cementos Diamante, ADR, Cl 'B'
(Building & Construction) (b) $ 116,220
- ------------------------------------------------------------------------------------------------------
14,000 Cementos Paz del Rio S.A., ADR
(Building & Construction) (a)(b) 250,250
- ------------------------------------------------------------------------------------------------------
15,125 Gran Cadenalco, ADR (Retail) (a)(b) 243,891
- ------------------------------------------------------------------------------------------------------
799,161
======================================================================================================
MEXICO - 7.06%
- ------------------------------------------------------------------------------------------------------
24 Controladora de Valores 0
- ------------------------------------------------------------------------------------------------------
63,600 Grupo Carso S.A. de CV, Cl 'A1'
(Diversified) (a) 277,928
- ------------------------------------------------------------------------------------------------------
24,867 Grupo Industrial Durango, ADR
(Paper) (a) 149,202
- ------------------------------------------------------------------------------------------------------
1,480 Telefonos de Mexico S.A., ADR, Cl 'L'
(Telecommunications) 42,180
- ------------------------------------------------------------------------------------------------------
175,000 Telefonos de Mexico S.A., Cl 'L'
(Telecommunications) 247,605
- ------------------------------------------------------------------------------------------------------
716,915
======================================================================================================
PANAMA - 2.07%
- ------------------------------------------------------------------------------------------------------
8,069 Panamerican Beverages, ADR, Cl 'A'
(Beverages) 210,802
======================================================================================================
PERU - 6.50%
- ------------------------------------------------------------------------------------------------------
92,294 Backus Y Johnson Brewery, Cl 'T'
(Beverages) 169,703
- ------------------------------------------------------------------------------------------------------
71,114 Banco de Credito del Peru (Banks) 115,951
- ------------------------------------------------------------------------------------------------------
62,701 Cementos Norte Pacasmayo
(Building & Construction) 187,520
- ------------------------------------------------------------------------------------------------------
12,901 Cervezeria San Juan (Beverages) 21,949
- ------------------------------------------------------------------------------------------------------
89,033 Compania Peruana de Telefonos S.A.,
Cl 'B' (Telecommunications) (a) 103,352
- ------------------------------------------------------------------------------------------------------
48,792 Enrique Ferreyros (Capital Goods) 61,828
- ------------------------------------------------------------------------------------------------------
660,303
======================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 37
LATIN AMERICAN EQUITY PORTFOLIO 15
------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
======================================================================================================
March 31, 1995 (unaudited)
SHARES DESCRIPTION VALUE
======================================================================================================
<S> <C> <C>
VENEZUELA - 5.71%
- ------------------------------------------------------------------------------------------------------
14,700 Banco Mercantil, Series 'A-B'
(Banks) $ 20,952
- ------------------------------------------------------------------------------------------------------
2,352 Banco Mercantil, Series 'B' (Banks) 3,082
- ------------------------------------------------------------------------------------------------------
6,376 Banco Provincial (Banks) 14,158
- ------------------------------------------------------------------------------------------------------
2,016 Banco Venezolano de Credito,
Series 'A-B' (Banks) 80,148
- ------------------------------------------------------------------------------------------------------
40,800 Ceramica Carabobo, ADR, Cl 'B'
(Building & Construction) 30,600
- ------------------------------------------------------------------------------------------------------
25,960 Corimon Saca, ADR
(Building & Construction) 184,965
- ------------------------------------------------------------------------------------------------------
93,111 Electricidad de Caracas
(Utility-Energy) 98,713
- ------------------------------------------------------------------------------------------------------
722,587 Sudamtex (Textiles) 106,397
- ------------------------------------------------------------------------------------------------------
304,500 Venaseta, Cl 'A' (Finance) (a) 26,005
- ------------------------------------------------------------------------------------------------------
60,900 Venaseta, Cl 'B' (Finance) 5,022
- ------------------------------------------------------------------------------------------------------
20,000 Venezolana Pulpa Y Papel (Paper) 10,602
- ------------------------------------------------------------------------------------------------------
580,644
======================================================================================================
TOTAL COMMON STOCKS
(Cost $7,985,437) $5,815,293
======================================================================================================
PREFERRED STOCKS - 15.80%
- ------------------------------------------------------------------------------------------------------
BRAZIL - 15.80%
- ------------------------------------------------------------------------------------------------------
824,000 Compania Cervejaria Brahma
(Beverages) $ 196,635
- ------------------------------------------------------------------------------------------------------
23,212 Compania Siderurgica Paulista,
Series 'B' (Steel) (a) 40,447
- ------------------------------------------------------------------------------------------------------
366,000 Compania Tecidos Norte de Minas
(Textile) 95,461
- ------------------------------------------------------------------------------------------------------
2,022,900 Compania Vale do Rao Doce (Steel) 272,788
- ------------------------------------------------------------------------------------------------------
459,000 Iochpe-Maxion
(Consumer Goods) 221,604
- ------------------------------------------------------------------------------------------------------
6,683,800 Lojas Renner S.A. (Retail) 117,653
- ------------------------------------------------------------------------------------------------------
610,800 Mesbla (Retail) (a) 60,334
- ------------------------------------------------------------------------------------------------------
109,855,971 Refrigeracao Parana S.A.
(Consumer Goods) $ 210,933
- ------------------------------------------------------------------------------------------------------
5,731,000 Telebras (Telecommunications) 153,929
- ------------------------------------------------------------------------------------------------------
2,286,426 Telecomunicacoes de Sao Paulo S.A.
(Telecommunications) 236,002
======================================================================================================
TOTAL PREFERRED STOCKS
(Cost $2,171,730) $ 1,605,786
======================================================================================================
CALL OPTION - 0.05%
- ------------------------------------------------------------------------------------------------------
BRAZIL - 0.05%
- ------------------------------------------------------------------------------------------------------
3,100 Compania Paulista de Forca
Luz, Call Option, Strike price 70,
Expires 10/16/95 (Cost $37) (a) $ 5,161
- ------------------------------------------------------------------------------------------------------
PRINCIPAL FOREIGN TREASURY
AMOUNT (c) CERTIFICATES - 7.81%
- ------------------------------------------------------------------------------------------------------
$ 189,611 Mexican Government Cetes, 4/6/95 $ 188,152
- ------------------------------------------------------------------------------------------------------
614,672 Mexican Government Cetes, 4/12/95 605,048
======================================================================================================
TOTAL FOREIGN TREASURY CERTIFICATES
(Cost $809,572) $ 793,200
- ------------------------------------------------------------------------------------------------------
TIME DEPOSITS - 16.35%
- ------------------------------------------------------------------------------------------------------
$ 1,661,159 Canadian Imperial Bank, 6.313%,
4/3/95 (Cost $1,661,159) $ 1,661,159
======================================================================================================
TOTAL INVESTMENTS
(Cost $12,627,935) 97.24% $ 9,880,599
- ------------------------------------------------------------------------------------------------------
Other Assets in Excess of Liabilities 2.76% 280,402
- ------------------------------------------------------------------------------------------------------
Net Assets 100.00% $10,161,001
======================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 38
LATIN AMERICAN EQUITY PORTFOLIO 16
------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
================================================================================
March 31, 1995 (unaudited)
FOOTNOTES
================================================================================
(a) Non-Income Producing Security
(b) 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 the period
end, the value of these securities amounted to $1,188,801 or 11.7% of
net assets.
(c) Principal amount stated in U.S. dollars unless otherwise noted.
<TABLE>
<S> <C>
Industry Diversification (as a percentage of Total Investments):
Beverages . . . . . . . . . . . . . . . . . . . . . . . 6.06%
Building & Construction . . . . . . . . . . . . . . . . 10.03%
Consumer Goods . . . . . . . . . . . . . . . . . . . . 4.38%
Foreign Treasury Certificates . . . . . . . . . . . . . 8.03%
Other* . . . . . . . . . . . . . . . . . . . . . . . . 8.17%
Paper . . . . . . . . . . . . . . . . . . . . . . . . . 3.81%
Retail . . . . . . . . . . . . . . . . . . . . . . . . 6.18%
Steel . . . . . . . . . . . . . . . . . . . . . . . . . 10.35%
Telecommunications . . . . . . . . . . . . . . . . . . 11.41%
Time Deposits . . . . . . . . . . . . . . . . . . . . . 16.81%
Utilities . . . . . . . . . . . . . . . . . . . . . . . 14.77%
-------
100.00%
=======
</TABLE>
* No one industry represents more than 3% of Portfolio holdings
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 39
LATIN AMERICAN EQUITY FUND 17
------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
================================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as a business trust under
the laws of the Commonwealth of Massachusetts. The Latin American Equity Fund
(the "Fund") is one of the funds offered to investors by the Trust. The Fund
commenced operations and began offering shares of beneficial interest on
October 25, 1993. The Fund invests substantially all of its assets in the Latin
American Equity Portfolio (the "Portfolio"). The Portfolio is an open-end
management investment company registered under the Act. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects the
Fund's proportionate interest in the net assets of the Portfolio. At March 31,
1995, the Fund's investment was approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained else-where in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions and foreign currency of the Portfolio
are allocated pro rata among the investors in the Portfolio at the time of such
determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends annually to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term
capital gains, if any, earned by the Fund will be made annually to the extent
they are not offset by any capital loss carryforwards.
The Fund may periodically make reclassifications among certain of its capital
accounts as a result of the timing and characterization of certain income and
capital gains distributions determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to that Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 40
LATIN AMERICAN EQUITY FUND 18
------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
================================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.95 of 1% of the Fund's average daily net assets.
For the six months ended March 31, 1995, this fee aggregated $99,992.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended March 31, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 1.00 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
2.00 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended March 31, 1995, expenses of the Fund
have been reduced $25,552.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At March 31, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the period
For the six October 25, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------------------- -------------------------
Shares Amount Shares Amount
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold 1,058,864 $12,791,467 2,139,065 $27,763,764
Reinvested 27,924 327,552 - -
Redeemed (1,564,855) (15,614,450) (254,922) (3,259,552)
---------- ------------ --------- -----------
Net Increase
(Decrease) (478,067) $ (2,495,431) 1,884,143 $24,504,212
========== ============ ========= ===========
</TABLE>
<PAGE> 41
LATIN AMERICAN EQUITY PORTFOLIO 19
------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
================================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Latin American Equity Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on August 6, 1993 as
an unincorporated trust under the laws of New York and commenced operations on
October 25, 1993. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Securities traded
primarily on a principal securities exchange (domestic or foreign) are valued
at their last reported sale price on that exchange. If no sale is reported, or
if local custom or regulation so provides, the mean of the latest bid and asked
price is used. Securities traded over-the-counter are valued using either the
mean between the bid and asked price or, where local custom or regulations so
provide, the last sales price. Short-term obligations with remaining maturities
of 60 days or less are valued at amortized cost which with accrued interest
approximates value. Securities for which quotations are not available are
stated at fair value as determined by the Trustees.
C. Foreign Currency Transactions
The books and records of the Portfolio are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at prevailing exchange rates. Purchases and sales of
investment securities, dividend and interest income, and certain expenses are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from securities.
D. Forward Foreign Currency Contracts
The Portfolio may enter into forward foreign currency contracts for the purpose
of settling specific purchases or sales of securities denominated in a foreign
currency or with respect to the Portfolio's investments generally. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Portfolio and the resulting unrealized appreciation or depreciation are
determined using prevailing exchange rates. With respect to forward foreign
currency contracts, losses in excess of amounts recognized in the Statement of
Assets and Liabilities may arise due to changes in the value of the foreign
currency or if the counterparty does not perform under the contract.
E. Option Contracts
Upon the purchase of a put option or a call option by the Portfolio, the
premium paid is recorded as an investment, the value of which is
marked-to-market daily to reflect the current market value. When a purchased
option expires, the Portfolio will realize a loss in the amount of the cost of
the option. When the Portfolio enters into a closing sale transaction, the
Portfolio will realize a gain or loss depending on whether the sale proceeds
from the closing sale transaction are greater or less than the cost of the
option. When the Portfolio exercises a put option, it realizes a gain or loss
from the sale of the underlying security and the proceeds from such sale will
be decreased by the premium originally paid. When the Portfolio exercises a
call option, the cost of the security which the Portfolio purchases upon
exercise will be increased by the premium originally paid.
<PAGE> 42
LATIN AMERICAN EQUITY PORTFOLIO 20
------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
================================================================================
F. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Dividend income, less foreign taxes withheld (if
any), is recorded on the ex-dividend date or upon receipt of ex-dividend
notification in the case of certain foreign securities. Interest income is
recorded on the accrual basis and includes amortization of premium and discount
on investments. Realized gains and losses from securities transactions are
recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from security and foreign currency transactions of the Portfolio are allocated
pro rata among the investors of the Portfolio at the time of such
determination.
G. Organizational Expenses
Costs incurred by the Portfolio in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
H. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.20 of 1% of the Portfolio's average daily
net assets. For the six months ended March 31, 1995, this fee aggregated
$21,419.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, Bankers Trust manages the Portfolio in accordance with
the Portfolio's investment objective and stated investment policies in return
for a fee computed daily and paid monthly at an annual rate of 1.00 of 1% of
the Portfolio's average daily net assets. For the six months ended March 31,
1995, this fee aggregated $107,096.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 1.00 of 1% of the
average daily net assets of the Portfolio. For the six months ended March 31,
1995, expenses of the Portfolio have been reduced $102,725.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations and options purchased, for the six months ended
March 31, 1995, were $15,294,965 and $21,705,050, respectively. The aggregate
gross unrealized appreciation for all investments was $179,207 and the
aggregate gross unrealized depreciation for all investments was $2,926,543.
<PAGE> 43
BT INVESTMENT FUNDS
- --------------------------------------------------------------------------------
SMALL
CAP
FUND
Semi-Annual Report
March 31, 1995
<PAGE> 44
SMALL CAP FUND 1
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Introduction from President................................................. 2
Letter to Shareholders from Investment Adviser.............................. 3
Small Cap Fund
Statement of Assets and Liabilities....................................... 6
Statement of Operations................................................... 7
Statement of Changes in Net Assets........................................ 8
Financial Highlights...................................................... 9
Small Cap Portfolio
Statement of Assets and Liabilities....................................... 10
Statement of Operations................................................... 11
Statement of Changes in Net Assets........................................ 12
Financial Highlights...................................................... 13
Schedule of Portfolio Investments......................................... 14
Small Cap Fund
Notes to Financial Statements............................................. 17
Small Cap Portfolio
Notes to Financial Statements............................................. 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Small Cap Fund
may be obtained by calling or writing to Investors Fiduciary Trust Company or
Signature Broker-Dealer Services, Inc., the primary Servicing Agent and
Distributor, respectively, of BT Investment Funds:
BT Investment Funds
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
(800) 422-6577
BT Investment Funds
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
(800) 545-1074
You may write to the Small Cap Fund at the following address:
BT Investment Funds
6 St. James Avenue
Boston, MA 02116
<PAGE> 45
SMALL CAP FUND 2
- --------------------------------------------------------------------------------
INTRODUCTION FROM PRESIDENT
- --------------------------------------------------------------------------------
May, 1995
Dear Shareholders:
We are pleased to present your Semi-Annual Report for the BT Investment Funds
Small Cap Fund. This Report provides you with an investment overview as well as
a financial summary of the Fund's operations for the six months ended March 31,
1995. We have also included a Letter from the Investment Adviser, detailing the
factors that affected the Fund's performance and a performance chart which
illustrates your Fund's return versus a relevant financial index. Also
presented in your Report is a pie chart displaying diversification of Portfolio
Investments, financial statements, financial highlights and a listing of the
Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Small Cap Fund and look forward to
continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 46
SMALL CAP FUND 3
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
For the six months ended March 31, 1995, the Fund again significantly
outperformed its benchmark, the Russell 2000 Index, with a return of 23.19%
versus the Index's 2.65%. The Fund also notably outperformed its competitors,
being ranked #2 in performance out of the 278 funds in its category for the six
month period ended March 31, 1995. The Lipper Small Cap Average return for this
period was just 5.38%. Since inception on October 21, 1993, the Fund has
returned 42.90%.
Although small cap stocks in general had weak performance throughout this semi-
annual period, the Fund posted strong results primarily due to its overweighting
in the technology and healthcare sectors, which had the largest gains, and its
underweighting in the integrated oils, financial and utilities sectors, which
performed poorly.
The Fund's strategy continues to be one based on strong fundamental analysis,
which is designed to result in a focus on the best positioned and fastest
growing companies in their respective sectors, and on the discipline to use the
market's emotionalism to our investors' advantage, i.e. by initiating or adding
to positions in these companies during periods of market weakness. During this
period, we strengthened our positions in healthcare and technology by increasing
our holdings in companies like Corvel Corp. and ParcPlace Systems, and we added
new issues, such as MediSense Inc. and Security Dynamics Tech. We also continued
to find good opportunities in companies that are newly going public such as
Tivoli Systems Inc. and P-Com Inc. Finally, we eliminated many positions in the
consumer cyclical sector and sold other positions that we believed were fully
priced.
Looking ahead, we anticipate continuing to be overweighted in technology,
repositioning within the sector to emphasize software rather than
semiconductors, and in healthcare, with an additional focus on capturing the
growing influence of physician practice groups. Given the uncertainty
surrounding the pace of U.S. economic growth in general and equity market
conditions more specifically, the Fund intends to remain focused on companies
that have strong, consistent earnings and revenue growth potential.
<PAGE> 47
SMALL CAP FUND 4
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The following graph illustrates the Fund's return versus the Russell 2000 Index
since October 31, 1993, assuming a $10,000 initial investment:
- --------------------------------------------------------------------------------
Comparison of Change in Value
of a $10,000 Investment in the
Small Cap Fund and the Russell 2000 Index
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
SMALL CAP RUSSELL 2000
FUND INDEX
--------- ------------
<S> <C> <C>
10/31/93 $10,000 $10,000
12/31/93 $10,326 $10,005
3/31/94 $10,375 $ 9,739
6/30/94 $ 9,951 $ 9,360
9/30/94 $11,451 $10,010
12/31/94 $12,320 $ 9,823
3/31/95 $14,107 $10,276
</TABLE>
Total Return
ended March 31, 1995
One Year Since 10/21/93*
35.97% 42.90%
* The Fund's inception date
Investment return and principal
value may fluctuate so that shares,
when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
About the Portfolio Manager
Mary Lisanti
Managing Director & Portfolio Manager
. Manager of the Small Cap Fund, Capital Appreciation Fund and separate
aggressive growth accounts
. 15 years of investment experience as a portfolio manager and analyst in
Small/Mid cap equities
. Joined Bankers Trust from Lieber & Company/The Evergreen Funds, where for
three years she was Vice President of Investments and a portfolio manager
working on their $800 million small and mid-sized company fund
. Senior Vice President at Shearson Lehman Brothers, headed the firm's emerging
growth stock investment strategy and research effort; member of the Investment
Policy Committee
. Earned the #1 ranking in Institutional Investor's All Star Research Team in
1989 (ranked #2 and #3 in 1987 and 1986, respectively) for her work as a small
company stock analyst
. B.A. -- Princeton University
. Member, New York Society of Security Analysts and Financial Analyst Federation
<PAGE> 48
SMALL CAP FUND 5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Objective Seeks to provide long-term capital growth by investing
primarily in equity securities of smaller companies. The
production of any current income is secondary to this
objective.
- --------------------------------------------------------------------------------
Investment Instruments Primarily common stocks of smaller U.S. corporations
and, to a lesser extent, in foreign corporations.
- --------------------------------------------------------------------------------
Ten Largest Common Affiliated Computer Services Remedy
Stock Holdings Alternative Resources Ascend Communications
Atria Software Tivoli
Medpartners Dollar Tree Stores
Macromedia CareerStaff Unlimited
- --------------------------------------------------------------------------------
Diversification of Portfolio
Investments by Theme
as of March 31, 1995 (unaudited)
(percentages are based on market value)
[GRAPH APPEARS HERE]
<TABLE>
<S> <C>
Interactive Media 3.14%
Client Server Computing 19.98%
Moved to Outsourcing 8.69%
Greying of America 4.41%
New Health Care Paradigm 20.18%
Productivity Enhancement 15.95%
Other* 7.71%
Stores of Value 5.02%
Telecommunications 6.12%
U.S. Treasury Bills 8.80%
</TABLE>
*No one Investment Theme represents more than 3% of Portfolio Holdings.
<PAGE> 49
SMALL CAP FUND 6
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investment in Small Cap Portfolio, at Value $41,476,335
Receivable for Shares of Beneficial Interest Sold 66,794
Deferred Organizational Expenses 12,828
Prepaid Expenses 5,871
-----------
Total Assets 41,561,828
-----------
Liabilities
Due to Bankers Trust 17,970
Payable for Shares of Beneficial Interest Redeemed 31,897
Accrued Expenses and Accounts Payable 36,714
-----------
Total Liabilities 86,581
-----------
Net Assets (Applicable to 2,902,352 Outstanding Shares
of $0.001 Par Value Per Share, Unlimited Number of
Shares of Beneficial Interest Authorized) $41,475,247
===========
Net Asset Value, Subscription and Redemption Price Per
Share ($41,475,247/2,902,352 Shares) $ 14.29
===========
Composition of Net Assets
Shares of Beneficial Interest, at Par $ 2,902
Paid-in Capital 32,442,947
Accumulated Net Investment (Loss) (95,485)
Undistributed Net Realized Gain from Securities Transactions 50,123
Net Unrealized Appreciation on Securities 9,074,760
-----------
Net Assets, March 31, 1995 $41,475,247
===========
</TABLE>
See Notes to Financial Statements on Pages 17 and 18.
<PAGE> 50
SMALL CAP FUND 7
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Income Allocated from Small Cap Portfolio, net $ 5,921
Expenses
Administration and Services Fee $101,406
Shareholders Reports 23,242
Registration Fees 12,148
Professional Fees 4,706
Amortization of Organizational Expenses 1,785
Trustees Fees 769
Insurance 451
Miscellaneous 502
--------
Total Expenses 145,009
Less: Expenses Absorbed by Bankers Trust (43,603) 101,406
-------- ----------
Net Investment (Loss) (95,485)
----------
Net Realized and Unrealized Gain (Loss) on Securities
Net Realized Gain from Securities Transactions 1,222,600
Net Unrealized Appreciation on Securities 5,899,596
----------
Net Realized and Unrealized Gain on Securities 7,122,196
----------
Net Increase in Net Assets from Operations $7,026,711
==========
</TABLE>
See Notes to Financial Statements on Pages 17 and 18.
<PAGE> 51
SMALL CAP FUND 8
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six October 21, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
From Operations
Net Investment (Loss) $ (95,485) $ (62,208)
Net Realized Gain (Loss) from Securities Transactions 1,222,600 (1,172,477)
Net Unrealized Appreciation on Securities 5,899,596 3,175,164
----------- -----------
Net Increase in Net Assets from Operations 7,026,711 1,940,479
----------- -----------
From Transactions in Shares of Beneficial Interest
Net Increase in Net Assets from Transactions in
Shares of Beneficial Interest 13,116,879 19,391,178
----------- -----------
Total Increase in Net Assets 20,143,590 21,331,657
=========== ===========
Net Assets
Beginning of Period 21,331,657 -
End of Period $41,475,247 $21,331,657
=========== ===========
</TABLE>
See Notes to Financial Statements on Pages 17 and 18.
<PAGE> 52
SMALL CAP FUND 9
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the Small Cap Fund.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six October 21, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Selected Per Share Data
Net Asset Value, Beginning of Period $ 11.60 $ 10.00
----------- -----------
Income from Investment Operations
Net Investment (Loss) (0.03) (0.03)
Net Realized and Unrealized Gain on Securities 2.72 1.63
----------- -----------
Total from Investment Operations 2.69 1.60
----------- -----------
Net Asset Value, End of Period $ 14.29 $ 11.60
=========== ===========
Total Investment Return 23.19% 17.06%*
Ratios and Supplemental Data
Ratio of Net Investment (Loss) to Average Net Assets (0.61%)* (0.58%)*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Small Cap Portfolio 1.25%* 1.25%*
Decrease Reflected in Above Expense Ratio Due to Absorption
of Expenses by Bankers Trust 0.48%* 0.86%*
Net Assets, End of Period (000's omitted) $ 41,475 $ 21,332
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 17 and 18.
<PAGE> 53
SMALL CAP PORTFOLIO 10
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at Value (Cost $32,624,286) $41,699,048
Cash 13,937
Receivable for Securities Sold 752,858
Deferred Organizational Expenses 12,828
Prepaid Expenses 1,521
-----------
Total Assets 42,480,192
-----------
Liabilities
Due to Bankers Trust 30,502
Payable for Securities Purchased 947,267
Accrued Expenses and Accounts Payable 26,076
-----------
Total Liabilities 1,003,845
-----------
Net Assets $41,476,347
===========
Composition of Net Assets
Paid-in Capital $32,401,585
Net Unrealized Appreciation on Securities 9,074,762
-----------
Net Assets, March 31, 1995 $41,476,347
===========
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 54
SMALL CAP PORTFOLIO 11
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividends $ 3,042
Interest 96,545
--------
Total Investment Income $ 99,587
----------
Expenses
Advisory Fee 101,472
Administration and Services Fee 15,611
Professional Fees 3,881
Amortization of Organizational Expenses 1,785
Insurance 1,363
Trustees Fees 806
Miscellaneous 705
--------
Total Expenses 125,623
Less: Expenses Absorbed by Bankers Trust (31,957) 93,666
-------- ----------
Net Investment Income 5,921
----------
Net Realized and Unrealized Gain (Loss) on Securities
Net Realized Gain from Securities Transactions 1,222,600
Net Unrealized Appreciation on Securities 5,899,598
----------
Net Realized and Unrealized Gain on Securities 7,122,198
----------
Net Increase in Net Assets from Operations $7,128,119
==========
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 55
SMALL CAP PORTFOLIO 12
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six October 21, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
From Operations
Net Investment Income $ 5,921 $ 7,187
Net Realized Gain (Loss) from Securities Transactions 1,222,600 (1,172,477)
Net Unrealized Appreciation on Securities 5,899,598 3,175,164
----------- -----------
Net Increase in Net Assets from Operations 7,128,119 2,009,874
----------- -----------
From Capital Transactions
Proceeds from Capital Invested 17,348,575 21,058,530
Value of Capital Withdrawn (4,327,858) (1,740,893)
----------- -----------
Net Increase in Net Assets from Capital Transactions 13,020,717 19,317,637
----------- -----------
Total Increase in Net Assets 20,148,836 21,327,511
=========== ===========
Net Assets
Beginning of Period 21,327,511 -
End of Period $41,476,347 $21,327,511
=========== ===========
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 56
SMALL CAP PORTFOLIO 13
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Small Cap Portfolio.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six October 21, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 0.04%* 0.07%*
Ratio of Expenses to Average Net Assets 0.60%* 0.60%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.20%* 0.38%*
Portfolio Turnover Rate 70% 154%
Net Assets, End of Period (000's omitted) $41,476 $21,328
</TABLE>
*Annualized
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 57
SMALL CAP PORTFOLIO 14
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Shares Description Value
- ------ ----------- -----
<C> <S> <C>
COMMON STOCKS 91.70%
America's Changing
Leisure Time-0.96%
8,200 Applebees International (a) $ 181,425
8,900 Rock Bottom Restaurants (a) 183,562
2,700 Sodak Gaming (a) 31,725
-----------
396,712
===========
America's Educational
Crisis-0.53%
8,200 Apollo Group (a) 218,325
===========
Client Server Computing-20.09%
9,500 Alantec (a) 420,375
16,700 Atria Software (a) 793,250
13,900 Business Objects SA-SP, ADR (a) 437,850
3,700 Cable Design Technologies (a) 55,500
7,200 Chipcom (a) 271,800
5,000 C*ATS Software (a) 75,000
11,800 Dialogic (a) 334,825
11,900 Digital Link (a) 365,925
900 Fair Issac & Company (a) 43,200
24,000 Frame Technology (a) 456,000
13,200 FTP Software 419,100
8,300 Hyperion Software (a) 388,025
4,200 Integrated Silicon Systems (a) 121,800
7,000 Mercury Interactive (a) 118,125
9,000 National Instruments (a) 162,000
7,100 NetManage (a) 298,200
12,400 Network General (a) 353,400
15,400 Oak Technology (a) 458,150
11,600 ParcPlace Systems (a) 176,900
7,700 Platinum Technology (a) 160,738
18,100 PRI Automation (a) 402,725
3,200 Progress Software (a) 166,400
15,000 Santa Cruz Operation (a) 206,250
<CAPTION>
Shares Description Value
- ------ ----------- -----
<C> <S> <C>
8,800 Security Dynamics Tech (a) $ 297,000
17,300 Software Artistry (a) 415,200
9,500 Systemsoft (a) 81,938
20,900 Transactions Systems Architects (a) 436,287
5,100 Veritas Software (a) 146,625
9,400 XcelleNet (a) 270,250
-----------
8,332,838
===========
Environmental Crisis-1.01%
21,400 Tetra Technologies (a) 417,300
===========
Greying of America-4.43%
12,500 Advocat (a) 159,375
8,900 Living Centers of America (a) 334,862
7,000 Medaphis (a) 441,000
36,700 Regency Health Services (a) 486,275
11,400 Target Therapeutics (a) 416,100
-----------
1,837,612
===========
Interactive Media-3.16%
17,000 Antec (a) 408,000
21,400 Macromedia (a) 722,250
11,600 Pinnacle Systems (a) 179,800
-----------
1,310,050
===========
Life Sciences Revolution-1.61%
14,000 Idexx Laboratories (a) 581,000
8,100 Martek Biosciences (a) 74,925
700 Minntech 10,675
-----------
666,600
===========
Moved to Outsourcing-8.74%
20,600 Adflex Solutions (a) 412,000
28,600 Affiliated Computer Services (a) 836,550
20,100 Alternative Resources (a) 798,975
30,300 CareerStaff Unlimited (a) 590,850
11,100 Credence Systems (a) 346,875
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 58
SMALL CAP PORTFOLIO 15
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Shares Description Value
- ------ ----------- -----
<C> <S> <C>
23,000 Daisytek International (a) $ 497,375
4,800 Kent Electronics (a) 141,600
-----------
3,624,225
===========
New Consumer-1.39%
7,150 Blyth Industries (a) 196,625
15,000 ITI Technologies (a) 378,750
-----------
575,375
===========
New Health Care
Paradigm-20.29%
23,200 A.L. Pharmaceuticals Cl A (a) 530,700
2,400 CareLine (a) 15,600
7,400 Cerner (a) 358,900
19,500 Corvel (a) 550,875
9,400 Express Scripts (a) 263,200
13,000 Gulf South Medical Supply (a) 529,750
20,000 HCIA (a) 490,000
10,400 Medic Computer Systems (a) 452,400
13,900 MediSense (a) 274,525
35,000 Medpartners (a) 774,375
7,700 Nellcor (a) 293,563
10,500 Omnicare 551,250
22,300 Pediatric Services America (a) 373,525
17,500 Phamis (a) 380,625
15,600 Physician Reliance Network (a) 401,700
14,000 Professional Sports Care Management (a) 154,000
10,900 Quintiles Transactional (a) 395,125
18,700 RightCHOICE Managed Care (a) 336,600
15,600 Rotech Medical (a) 487,500
28,000 TheraTx(a) 469,000
11,300 Watson Pharmaceutical (a) 333,350
-----------
8,416,563
===========
<CAPTION>
Shares Description Value
- ------ ----------- -----
<C> <S> <C>
Productivity Enhancement-16.03%
20,200 Applix (a) $ 457,025
18,000 Aspen Technology (a) 355,500
8,000 Boole & Babbage (a) 228,000
12,300 Cheyenne Software (a) 175,275
12,500 Datastream Systems (a) 253,125
21,000 Delrina (a) 299,250
8,000 Digi International (a) 176,000
14,700 DSP Communications (a) 194,775
3,900 Electroglas (a) 170,625
9,200 Epic Design Technology (a) 246,100
6,300 Information Storage Devices (a) 135,450
11,100 Integrated Silicon Solution (a) 388,500
14,900 Mcafee Associates (a) 432,100
8,700 Micrel (a) 152,250
8,500 Microchip Technology (a) 239,063
20,000 Pheriphonics (a) 325,000
12,000 Quickresponse Services (a) 231,000
20,000 Remedy (a) 717,500
20,000 SDL (a) 515,000
10,100 Symbol Technologies (a) 310,575
17,500 Tivoli Systems (a) 647,500
-----------
6,649,613
===========
Special Situations-2.27%
23,800 Toy Biz (a) 467,075
16,700 Wackenhut Corrections (a) 473,862
-----------
940,937
===========
Stores of Value-5.04%
8,400 Baby Superstore (a) 329,700
21,600 Corporate Express (a) 572,400
29,500 Dollar Tree Stores (a) 619,500
13,000 Hechinger (a) 144,625
25,400 Lechters (a) 425,450
-----------
2,091,675
===========
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 59
SMALL CAP PORTFOLIO 16
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Shares Description Value
- ------ ----------- -----
<C> <S> <C>
Telecommunications-6.15%
29,900 Applied Digital Access (a) $ 478,400
10,000 Ascend Communications (a) 647,500
2,200 Aspect Telecommunications (a) 80,850
16,500 CIDCO (a) 497,063
4,200 National Data (a) 72,975
8,400 P-COM (a) 161,700
4,400 Spectrian (a) 132,550
12,700 Summa Four (a) 307,975
28,400 Telebit (a) 173,950
-----------
2,552,963
===========
Total Common Stocks
(Cost $28,957,132) $38,030,788
===========
<CAPTION>
Principal
Amount Description Value
- --------- ----------- -----
<C> <S> <C>
U.S. Treasury Bills-8.84%
$ 69,000 5.624%, 4/6/95 $ 68,946
115,000 5.62%, 4/13/95 114,787
53,000 5.70%, 4/20/95 52,840
43,000 5.71%, 4/27/95 42,823
57,000 5.84%, 5/4/95 56,705
137,000 5.67%, 5/18/95 135,986
189,000 5.80%, 5/25/95 187,390
1,329,000 5.69%, 6/1/95 1,316,649
1,529,000 5.68%, 6/15/95 1,511,452
183,000 5.76%, 6/22/95 180,682
-----------
Total U.S. Treasury Bills
(Cost $3,667,154) $ 3,668,260
===========
Total Investments
(Cost $32,624,286) 100.54% $41,699,048
Liabilities in Excess of Other Assets (0.54%) (222,701)
------- -----------
Net Assets 100.00% $41,476,347
======= ===========
(a) Non-Income Producing Securities
</TABLE>
See Notes to Financial Statements on Pages 19 and 20.
<PAGE> 60
SMALL CAP FUND 17
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. The Small Cap Fund (the "Fund") is one of the
funds offered to investors by the Trust. The Fund commenced operations and began
offering shares of beneficial interest on October 21, 1993. The Fund invests
substantially all of its assets in the Small Cap Portfolio (the "Portfolio").
The Portfolio is an open-end management investment company registered under the
Act. The Fund seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio. The value of such investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio. At March 31, 1995, the Fund's investment was approximately 100% of
the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends quarterly to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term capital
gains, if any, earned by the Fund will be made annually to the extent they are
not offset by any capital loss carryforwards.
The Fund may periodically make reclassifications among certain of its capital
accounts as a result of the timing and characterization of certain income and
capital gains distributions determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all of the Trust's funds are allocated among
them.
<PAGE> 61
SMALL CAP FUND 18
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.65 of 1% of the Fund's average daily net assets.
For the six months ended March 31, 1995, this fee aggregated $101,405.
The Trust has entered into a Distribution Agreement with Signature Broker-Dealer
Services, Inc. ("Signature"). Under the Distribution Agreement with the Trust,
pursuant to Rule 12b-1 under the 1940 Act, Signature may seek reimbursement, at
an annual rate not exceeding 0.20 of 1% of the Fund's average daily net assets,
for expenses incurred in connection with any activities primarily intended to
result in the sale of the Fund's shares. For the six months ended March 31,
1995, there were no reimbursable expenses incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.65 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
1.25 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended March 31, 1995, expenses of the Fund
have been reduced $43,603.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received compensation
for services as trustee of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At March 31, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six For the period
months ended October 21, 1993
March 31, 1995 (Commencement of Operations)
(unaudited) to September 30, 1994
---------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 1,396,688 $17,397,369 1,997,724 $21,076,520
Redeemed 333,251 (4,280,490) (158,809) (1,685,342)
--------- ----------- --------- -----------
Net Increase 1,063,437 $13,116,879 1,838,915 $19,391,178
========= =========== ========= ===========
</TABLE>
<PAGE> 62
SMALL CAP PORTFOLIO 19
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Small Cap Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 (the "Act"), as amended, as an open-end management
investment company. The Portfolio was organized on August 6, 1993 as an
unincorporated trust under the laws of New York and commenced operations on
October 21, 1993. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Securities traded on
national exchanges or traded in the NASDAQ National Market System are valued at
the last sales prices reported at the close of business on each day. Over-the-
counter securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations with remaining maturities of 60 days or
less, are valued at amortized cost which with accrued interest approximates
value. Securities for which quotations are not available are stated at fair
value as determined by the Trustees.
C. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order to
buy or sell is executed). Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis and includes amortization of
premium and discount on investments. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Adviser, subject to the
seller's agreement to repurchase such securities at a mutually agreed upon
price. Securities purchased subject to repurchase agreements are deposited with
the Portfolio's custodian, and pursuant to the terms of the repurchase agreement
must have an aggregate market value greater than or equal to the repurchase
price plus accrued interest at all times. If the value of the underlying
securities falls below the value of the repurchase price plus accrued interest,
the Portfolio will require the seller to deposit additional collateral by the
next business day. If the request for additional collateral is not met, or the
seller defaults on its repurchase obligation, the Portfolio maintains the right
to sell the underlying securities at market value and may claim any resulting
loss against the seller.
All of the net investment income and realized and unrealized gains and losses
from the securities transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
D. Organizational Expenses
Costs incurred by the Portfolio in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 63
SMALL CAP PORTFOLIO 20
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.10 of 1% of the Portfolio's average daily
net assets. For the six months ended March 31, 1995, this fee aggregated
$15,611.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, Bankers Trust manages the Portfolio in accordance with
the Portfolio's investment objective and stated investment policies in return
for a fee computed daily and paid monthly at an annual rate of 0.65 of 1% of the
Portfolio's average daily net assets. For the six months ended March 31, 1995,
this fee aggregated $101,472.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.60 of 1% of the
average daily net assets of the Portfolio. For the six months ended March 31,
1995, expenses of the Portfolio have been reduced $31,957.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended March 31, 1995, were
$31,994,593 and $20,129,226, respectively. The aggregate gross unrealized
appreciation for all investments was $9,441,308 and the aggregate gross
unrealized depreciation for all investments was $366,546.
<PAGE> 64
BT INVESTMENT FUNDS
- --------------------------------------------------------------------------------
GLOBAL
HIGH YIELD
SECURITIES
FUND
Semi-Annual Report
March 31, 1995
<PAGE> 65
GLOBAL HIGH YIELD SECURITIES FUND 1
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Introduction from President........................................... 2
Letter to Shareholders from Investment Adviser........................ 3
Global High Yield Securities Fund
Statement of Assets and Liabilities................................. 6
Statement of Operations............................................. 7
Statement of Changes in Net Assets.................................. 8
Financial Highlights................................................ 9
Global High Yield Securities Portfolio
Statement of Assets and Liabilities................................. 10
Statement of Operations............................................. 11
Statement of Changes in Net Assets.................................. 12
Financial Highlights................................................ 13
Schedule of Portfolio Investments................................... 14
Global High Yield Securities Fund
Notes to Financial Statements....................................... 16
Global High Yield Securities Portfolio
Notes to Financial Statements....................................... 18
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Global High
Yield Securities Fund may be obtained by calling or writing to Investors
Fiduciary Trust Company or Signature Broker-Dealer Services, Inc., the primary
Servicing Agent and Distributor, respectively, of BT Investment Funds:
BT Investment Funds
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
(800) 422-6577
BT Investment Funds
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
(800) 545-1074
You may write to the Global High Yield Securities Fund at the following address:
BT Investment Funds
6 St. James Avenue
Boston, MA 02116
<PAGE> 66
GLOBAL HIGH YIELD SECURITIES FUND 2
- --------------------------------------------------------------------------------
INTRODUCTION FROM PRESIDENT
- --------------------------------------------------------------------------------
May, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for BT Investment Funds
Global High Yield Securities Fund. This Report provides you with an investment
overview as well as a financial summary of the Fund's operations for the six
months ended March 31, 1995. We have also included a Letter from the Investment
Adviser detailing the factors that affected the Fund's performance and a
performance chart which illustrates your Fund's return versus a relevant
financial index. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Global High Yield Securities Fund and
look forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 67
GLOBAL HIGH YIELD SECURITIES FUND 3
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The Global High Yield Securities Fund's return was down 11.02% for the period
from October 1, 1994 through March 31, 1995, versus a negative 18.53% for the
J.P. Morgan Emerging Bond Market Index over the same period. Since its inception
on December 14, 1993, the Fund's return was down 8.44%.
The Fund's outperformance is a result of both asset allocation and security
selection. First, during the crisis in Mexico, the Fund was significantly
underweighted in Mexican issues, and held no peso-denominated securities. Thus,
the damage to the Fund's emerging markets positions was limited. By late March,
conditions began to improve in many emerging markets, causing a turnaround in
sentiment. The subsequent rally was led by a rally in Argentine Brady bonds, the
Fund's largest holdings.
Secondly, the Fund benefited from its holdings in United States high yield debt.
United States high yield bond spreads to Treasuries widened during October and
November. This trend reversed in December, and United States high yield bonds
appreciated significantly. These bonds continued to perform well throughout the
first quarter of 1995 due to strength in the United States government bond
market, continued growth in cash flows of high yield companies and large net
inflows into United States high yield bond mutual funds. Although significant
new issue supply is planned for April, we believe that the strong demand from
mutual funds will provide a firm tone to the markets.
Looking ahead, we believe that the emerging debt markets will continue to offer
significant long-term values. Although Latin America still has many long-term
issues that need to be resolved, we believe that the worst of the crisis has
passed. In the United States high yield market, we believe that positive
fundamental and technical factors should lead to continued credit improvement
and spread tightening. We will also continue to monitor East European markets.
We believe that Poland is likely to receive a strong rating during the second
quarter and that the bonds will continue to outperform the market.
<PAGE> 68
GLOBAL HIGH YIELD SECURITIES FUND 4
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The following graph illustrates the Fund's return versus the J.P. Morgan
Emerging Bond Market Index since December 31, 1993, assuming a $10,000 initial
investment:
- --------------------------------------------------------------------------------
Comparison of Change in
Value of a $10,000 Invest-
ment in the Global High
Yield Securities Fund and
the J.P. Morgan Emerging
Bond Market Index
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
J.P. MORGAN
GLOBAL HIGH EMERGING
YIELD SECURITIES BOND
FUND MARKET INDEX
---------------- ------------
<S> <C> <C>
12/31/93 $10,000 $10,000
3/31/94 $ 9,870 $ 8,141
6/30/94 $ 9,711 $ 8,006
9/30/94 $10,259 $ 8,876
12/31/94 $ 9,694 $ 8,132
3/31/95 $ 9,128 $ 7,231
</TABLE>
Total Return
ended March 31, 1995
One Year Since 12/14/93*
(7.52%) (8.44%)
*The Fund's inception date.
Investment return and principal value
may fluctuate so that shares, when
redeemed, may be worth more or less
than their original cost.
- ------------------------------------------------------------------------------
About the Portfolio Managers
Stephen C. Freidheim
Managing Director & Portfolio Manager
. Responsible for portfolio management and trading of high yield investment
products
. Formerly Senior Vice President and Director of Research and Trading. Board of
Directors: Nomura Corporate Research and Asset Management; Director of
Research: Kidder Peabody High Yield Asset Management
. Eight years investment experience, including two years as a sell-side industry
analyst for Kidder Peabody
. Joined Bankers Trust Global High Yield group in 1993
. B.A. (Economics) - Yale University
- --------------------------------------------------------------------------------
David A. Reiss
Vice President & Emerging Markets Portfolio Manager
. Responsible for portfolio management, trading and credit analysis of emerging
markets
. Managed $700MM of high yield assets for Kidder Peabody Asset Management
. Served as Associate in Mortgage Research at Goldman Sachs
. Joined Bankers Trust in 1994
. M.B.A. (Finance) Wharton School of Business
B.A. (Mathematics) University of Pennsylvania
<PAGE> 69
GLOBAL HIGH YIELD SECURITIES FUND 5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Objective Seeks a high level of current income, with a secondary
objective of capital appreciation, through investments
in the global high yield debt markets.
- --------------------------------------------------------------------------------
Investment Instruments Primarily high yield, non-investment grade debt
securities issued in many of the world's securities
markets.
- --------------------------------------------------------------------------------
Diversification of Portfolio
Investments by Asset Type
as of March 31, 1995 (unaudited)
(percentages are based on market value)
[GRAPH APPEARS HERE]
<TABLE>
<S> <C>
U.S. Corporate Debentures 27.64%
Government Bonds 40.40%
Foreign Corporate Debentures 27.29%
Foreign Perferred Stocks 4.67%
</TABLE>
<PAGE> 70
GLOBAL HIGH YIELD SECURITIES FUND 6
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investment in Global High Yield Securities Portfolio,
at Value $14,068,757
Receivable for Shares of Beneficial Interest Sold 20,000
Deferred Organizational Expenses 13,351
Prepaid Expenses 5,497
Due from Bankers Trust 6,601
-----------
Total Assets 14,114,206
-----------
Liabilities
Payable for Shares of Beneficial Interest Redeemed 25,232
Accrued Expenses and Accounts Payable 23,755
-----------
Total Liabilities 48,987
-----------
Net Assets (Applicable to 1,614,144 Outstanding Shares
of $.001 Par Value Per Share, Unlimited Number of
Shares of Beneficial Interest Authorized) $14,065,219
===========
Net Asset Value, Subscription and Redemption Price Per
Share ($14,065,219/1,614,144 Shares) $ 8.71
===========
Composition of Net Assets
Shares of Beneficial Interest, at Par $ 1,614
Paid-in Capital 16,299,884
Undistributed Net Investment Income 403,748
Accumulated Net Realized (Loss) from Securities
and Foreign Currency Transactions (815,359)
Net Unrealized (Depreciation) on Securities (1,824,124)
Net Unrealized (Depreciation) on Foreign Currency
Translation (544)
-----------
Net Assets, March 31, 1995 $14,065,219
===========
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 71
GLOBAL HIGH YIELD SECURITIES FUND 7
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Income Allocated from Global High Yield
Securities Portfolio, net $ 779,173
Expenses
Administration and Services Fee $ 70,333
Professional Fees 5,247
Registration Fees 15,999
Trustees Fees 769
Amortization of Organizational Expenses 1,795
Shareholders Reports 17,129
Insurance 451
Miscellaneous 411
--------
Total Expenses 112,134
Less: Expenses Absorbed by Bankers Trust (38,099) 74,035
-------- -----------
Net Investment Income 705,138
-----------
Net Realized and Unrealized Gain (Loss) on Securities
and Foreign Currency
Net Realized (Loss) from Securities Transactions (631,004)
Net Realized (Loss) from Foreign Currency
Transactions (1,325)
Net Unrealized (Depreciation) on Securities (1,861,121)
Net Unrealized Appreciation on Foreign Currency
Translation 3,049
-----------
Net Realized and Unrealized (Loss) on Securities
and Foreign Currency (2,490,401)
-----------
Net (Decrease) in Net Assets from Operations $(1,785,263)
===========
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 72
GLOBAL HIGH YIELD SECURITIES FUND 8
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six December 14, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
From Operations
Net Investment Income $ 705,138 $ 449,268
Net Realized (Loss) from Securities and
Foreign Currency Transactions (632,329) (183,030)
Net Unrealized Appreciation (Depreciation) on
Securities and Foreign Currency Translation (1,858,072) 33,404
----------- -----------
Net Increase (Decrease) in Net Assets from
Operations (1,785,263) 299,642
----------- -----------
From Dividends
Net Investment Income (750,658) -
----------- -----------
Net (Decrease) in Net Assets from Dividends (750,658) -
----------- -----------
From Transactions in Shares of Beneficial Interest
Net Increase in Net Assets from Transactions in
Shares of Beneficial Interest 1,862,784 14,438,714
----------- -----------
Total Increase (Decrease) in Net Assets (673,137) 14,738,356
=========== ===========
Net Assets
Beginning of Period 14,738,356 -
End of Period (including Undistributed Net Investment
Income of $403,748 and $449,268 for 1995 and 1994,
respectively) $14,065,219 $14,738,356
=========== ===========
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 73
GLOBAL HIGH YIELD SECURITIES FUND 9
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the Global High Yield Securities Fund.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six December 14, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Selected Per Share Data
Net Asset Value, Beginning of Period $ 10.29 $ 10.00
----------- -----------
Income from Investment Operations
Net Investment Income 0.41 0.31
Net Realized and Unrealized (Loss) on Securities
and Foreign Currency (1.51) (0.02)
----------- -----------
Total from Investment Operations (1.10) 0.29
----------- -----------
Less Dividends
Dividends from Net Investment Income (0.48) -
----------- -----------
Net Asset Value, End of Period $ 8.71 $ 10.29
=========== ===========
Total Investment Return (11.02%) 3.66%*
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 9.52%* 5.44%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Global High Yield Securities Portfolio 1.75%* 1.75%*
Decrease Reflected in Above Expense Ratio Due to Absorption
of Expenses by Bankers Trust 0.96%* 1.08%*
Net Assets, End of Period (000's omitted) $14,065 $14,738
</TABLE>
*Annualized
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 74
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 10
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at Value (Cost $15,477,592) $13,653,421
Cash 462,894
Interest Receivable 440,921
Prepaid Expenses 1,526
Deferred Organizational Expenses 13,350
-----------
Total Assets 14,572,112
-----------
Liabilities
Due to Bankers Trust 7,750
Payable for Securities Purchased 465,260
Accrued Expenses and Accounts Payable 28,041
-----------
Total Liabilities 501,051
-----------
Net Assets $14,071,061
===========
Composition of Net Assets
Paid-in Capital $15,895,776
Net Unrealized (Depreciation) on Securities (1,824,171)
Net Unrealized (Depreciation) on Foreign Currency Translation (544)
-----------
Net Assets, March 31, 1995 $14,071,061
===========
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 75
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 11
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the six months ended March 31, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Interest (net of foreign withholding tax of $1,298) $ 834,882
Expenses
Advisory Fee $ 59,368
Administration and Services Fee 14,842
Professional Fees 10,106
Insurance 1,359
Trustees Fees 806
Amortization of Organizational Expenses 1,795
Miscellaneous 732
--------
Total Expenses 89,008
Less: Expenses Absorbed by Bankers Trust (33,351) 55,657
-------- -----------
Net Investment Income 779,225
-----------
Net Realized and Unrealized Gain (Loss) on Securities and Foreign Currency
Net Realized (Loss) from Securities Transactions (631,017)
Net Realized (Loss) from Foreign Currency Transactions (1,325)
Net Unrealized (Depreciation) on Securities (1,861,168)
Net Unrealized Appreciation on Foreign Currency Translation 3,049
-----------
Net Realized and Unrealized (Loss) on Securities and Foreign Currency (2,490,461)
-----------
Net (Decrease) in Net Assets from Operations $(1,711,236)
===========
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 76
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 12
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
For the six December 14, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
From Operations
Net Investment Income $ 779,225 $ 531,903
Net Realized (Loss) from Securities and Foreign
Currency Transactions (632,342) (183,030)
Net Unrealized Appreciation (Depreciation) on Securities
and Foreign Currency Translation (1,858,119) 33,404
----------- -----------
Net Increase (Decrease) in Net Assets from Operations (1,711,236) 382,277
----------- -----------
From Capital Transactions
Proceeds from Capital Invested 6,202,581 21,182,075
Value of Capital Withdrawn (5,149,282) (6,835,354)
----------- -----------
Net Increase in Net Assets from Capital Transactions 1,053,299 14,346,721
----------- -----------
Total Increase (Decrease) in Net Assets (657,937) 14,728,998
=========== ===========
Net Assets
Beginning of Period 14,728,998 -
End of Period $14,071,061 $14,728,998
=========== ===========
</TABLE>
See Notes to Finanacial Statements on Pages 18 and 19
<PAGE> 77
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 13
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Global High Yield Securities Portfolio.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
For the six December 14, 1993
months ended (Commencement
March 31, 1995 of Operations) to
(unaudited) September 30, 1994
-------------- ------------------
<S> <C> <C>
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 10.50%* 6.44%*
Ratio of Expenses to Average Net Assets 0.75%* 0.75%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.45%* 0.59%*
Portfolio Turnover Rate 63% 347%
Net Assets, End of Period (000's omitted) $14,071 $14,729
</TABLE>
* Annualized
See Notes to Finanacial Statements on Pages 18 and 19
<PAGE> 78
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 14
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Description Value
- --------- ----------- -----
<S> <C> <C>
GOVERNMENT BONDS - 39.20%
Argentina - 11.78%
$2,000,000 Argentina Par Series L-GL
7.125%, 3/31/23 (a) $1,082,500
1,400,000 Argentina Par Series L-GP
4.25%, 3/31/23 (a) 574,875
----------
1,657,375
==========
Brazil - 10.95%
357,000 Brazil C 8.00%,
4/15/14 131,867
1,224,000 Brazil C Series L 8.00%,
4/15/14 452,115
1,000,000 Brazil Series EI-L, 6.687%,
4/15/06 (a) 505,000
1,000,000 Brazil New Money Bond
6.75%, 4/15/09 (a) 452,500
----------
1,541,482
==========
Bulgaria - 2.40%
1,000,000 Bulgaria IAB Series PDI 7.563%,
7/28/11 (a) 337,500
==========
Mexico - 4.18%
1,000,000 Mexico Discount Series D 7.25%,
12/31/19 (a) 587,500
==========
Morocco - 3.30%
800,000 Morocco Reconstruction &
Consolidation Agreement Series A
7.375%, 1/1/09 (a) 464,000
==========
Panama - 2.00%
700,000 Panama Refinance Loan 0.00%,
1/1/00 (d) 281,750
==========
Poland - 2.88%
275,000 Poland Discount 6.813%,
10/27/24 176,516
<CAPTION>
Principal
Amount Description Value
- --------- ----------- -----
<S> <C> <C>
$145,000 Poland Series PDI 3.25%,
10/27/14 $ 58,181
521,000 Poland Series RSTA 2.75%,
10/27/24 171,279
----------
405,976
==========
Uruguay - 1.71%
500,000 Uruguay Discount Note Series B
7.875%, 2/18/07 (a) 240,000
==========
Total Government Bonds (Cost $7,258,034) $5,515,583
==========
CORPORATE DEBENTURES - 53.30%
Argentina - 1.13%
$ 200,000 Baesa Embotelladora 8.50%,
12/29/00 (c) $ 159,500
==========
Canada - 4.97%
1,000,000 Call - Net Enterprises 0.00%,
12/1/04 (d) 552,500
250,000 Rogers Cablesystems 9.65%,
1/15/14 146,612
----------
699,112
==========
Colombia - 2.86%
500,000 Celcaribe 0.00%,
3/15/04 (b) (c) 402,500
==========
Costa Rica - 2.14%
700,000 Banco Central de Costa Rica
Series A 6.25%, 5/21/10 301,000
==========
Hong Kong - 2.77%
500,000 Goldlion Capital 4.875%,
2/1/99 389,375
==========
Indonesia - 4.57%
700,000 PT Polysindo 13.00%,
6/15/01 644,000
==========
South Africa - 3.81%
500,000 Liberty Life Association 6.50%,
9/30/04 536,250
==========
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 79
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 15
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Description Value
- --------- ----------- -----
<S> <C> <C>
United Kingdom - 4.23%
$1,000,000 Videotron Holdings 0.00%,
7/1/04 (d) $ 595,000
===========
United States - 26.82%
250,000 Cencall Communications 0.00%,
1/15/04 (b) 93,750
500,000 Crown Packaging 10.75%,
11/1/00 495,000
250,000 Fort Howard Corporation 14.125%,
11/1/04 251,250
500,000 Hollywood Casino 14.00%,
4/1/98 532,500
500,000 Icon Health and Fitness 13.00%,
7/15/02 (c) 532,500
500,000 Petroleum Heat and Water
12.25%, 2/1/05 522,500
750,000 Pricellular 0.00%,
11/15/01 (d) 555,000
250,000 S.D. Warren 12.00%,
12/15/04 (c) 263,750
500,000 Schuller International Group
10.875%, 12/15/04 527,500
-----------
3,773,750
===========
Total Corporate Debentures (Cost $7,678,565) $ 7,500,487
===========
OTHER SECURITIES - 0.00%
Mexico - 0.00%%
$3,540,650 Mexico Recovery Rights
Expire 6/30/03 $ 0
===========
<CAPTION>
Shares Description Value
- ------ ----------- -----
<S> <C> <C>
PREFERRED STOCK - 4.53%
South Africa - 4.53%
8,800 Sasol 8.5% Convertible $ 84,201
10,000 South African Breweries,
Cl. A 276,575
10,000 South African Breweries,
Cl. B 276,575
-----------
Total Preferred Stock (Cost $540,993) $ 637,351
===========
Total Investments
(Cost $15,477,592) 97.03% $13,653,421
Other Assets in Excess of Liabilities 2.97% 417,640
------- -----------
Net Assets 100.00% $14,071,061
======= ===========
</TABLE>
(a) Floating Rate Security
(b) Purchased at Deep Discount
(c) Securities 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 the period
end, the value of these securities amounted to $1,358,250 or 9.65% of net
assets.
(d) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 80
GLOBAL HIGH YIELD SECURITIES FUND 16
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. The Global High Yield Securities Fund (the
"Fund") is one of the funds offered to investors by the Trust. The Fund
commenced operations and began offering shares of beneficial interest on
December 14, 1993. The Fund invests substantially all of its assets in the
Global High Yield Securities Portfolio (the "Portfolio"). The Portfolio is an
open-end management investment company registered under the Act. The Fund seeks
to achieve its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio. At March 31, 1995,
the Fund's investment was approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions and foreign currency of the Portfolio
are allocated pro rata among the investors in the Portfolio at the time of such
determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
On August 3, 1994, the Board of Trustees approved a change in the Fund's policy
to declare and distribute dividends to shareholders from net investment income
from annually to quarterly. Dividends payable to shareholders are recorded by
the Fund on the ex-dividend date, which is the same as the declaration date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund will be made annually to the extent they are not offset by
any capital loss carryforwards.
The Fund may periodically make reclassifications among certain of its capital
accounts as a result of the timing and characterization of certain income and
capital gains distributions determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all of the Trust's funds are allocated among
them.
<PAGE> 81
GLOBAL HIGH YIELD SECURITIES FUND 17
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 2 -- FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.95 of 1% of the Fund's average daily net assets.
For the six months ended March 31, 1995, this fee aggregated $70,333.
The Trust has entered into a Distribution Agreement with Signature Broker-Dealer
Services, Inc. ("Signature"). Under the Distribution Agreement with the Trust,
pursuant to Rule 12b-1 of the 1940 Act, Signature may seek reimbursement, at an
annual rate not exceeding 0.20 of 1% of the Fund's average daily net assets, for
expenses incurred in connection with any activities primarily intended to result
in the sale of the Fund's shares. For the six months ended March 31, 1995, there
were no reimbursable expenses incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 1.00 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
1.75 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended March 31, 1995, expenses of the Fund
have been reduced $38,099.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received compensation
for services as trustee of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
NOTE 3 -- SHARES OF BENEFICIAL INTEREST
At March 31, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six For the period
months ended December 14, 1993
March 31, 1995 (Commencement of Operations)
(unaudited) to September 30, 1994
---------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 655,599 $ 6,220,190 2,104,030 $21,182,065
Reinvested 23,474 221,767 - -
Redeemed (496,798) (4,579,173) (672,161) (6,743,351)
-------- ----------- --------- -----------
Net Increase 182,275 $ 1,862,784 1,431,869 $14,438,714
======== =========== ========= ===========
</TABLE>
NOTE 4 -- CAPITAL LOSS CARRYFORWARD
At September 30, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$155,004 which will expire in 2002.
<PAGE> 82
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 18
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Global High Yield Securities Portfolio (the "Portfolio") is registered under
the Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on August 6, 1993 as
an unincorporated trust under the laws of New York and commenced operations on
December 14, 1993. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Investments for which
quoted bid prices in the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in such securities)
and asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute a majority of
the portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices of
securities of comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions. Securities traded primarily
on a principal securities exchange (domestic or foreign) are valued at their
last reported sale price on that exchange. If no sale is reported, or if local
custom or regulation so provides, the mean of the latest bid and asked price is
used. Securities traded over-the-counter are valued using either the mean
between the bid and asked price or, where local custom or regulations so
provide, the last sales price. Short-term obligations with remaining maturities
of 60 days or less are valued at amortized cost which with accrued interest
approximates value. Securities for which quotations are not available are stated
at fair value as determined by the Trustees.
C. Foreign Currency Transactions
The books and records of the Portfolio are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at prevailing exchange rates. Purchases and sales of
investment securities and interest income, and certain expenses are translated
at the rates of exchange prevailing on the respective dates of such
transactions.
D. Forward Foreign Currency Contracts
The Portfolio may enter into forward foreign currency contracts for the purpose
of settling specific purchases or sales of securities denominated in a foreign
currency or with respect to the Portfolio's investments generally. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Portfolio and the resulting unrealized appreciation or depreciation are
determined using prevailing exchange rates. With respect to forward foreign
currency contracts, losses in excess of amounts recognized in the Statement of
Assets and Liabilities may arise due to changes in the value of the foreign
currency or if the counterparty does not perform under the contract.
E. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis and
includes amortization of premium and discount on investments. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from securities and foreign currency transactions of the Portfolio are allocated
pro rata among investors of the Portfolio at the time of such
determination.
F. Organizational Expenses
Costs incurred by the Portfolio in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
G. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 83
GLOBAL HIGH YIELD SECURITIES PORTFOLIO 19
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
NOTE 2 -- FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.20 of 1% of the Portfolio's average daily
net assets. For the six months ended March 31, 1995, this fee aggregated
$14,842.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, Bankers Trust manages the Portfolio in accordance with
the Portfolio's investment objective and stated investment policies in return
for a fee computed daily and paid monthly at an annual rate of 0.80 of 1% of the
Portfolio's average daily net assets. For the six months ended March 31, 1995,
this fee aggregated $59,368.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.75 of 1% of the
average daily net assets of the Portfolio. For the six months ended March 31,
1995, expenses of the Portfolio have been reduced $33,351.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended March 31, 1995, were
$10,670,086 and $9,015,105, respectively. The aggregate gross unrealized
appreciation for all investments was $319,657 and the aggregate gross unrealized
depreciation for all investments was $2,143,828.
NOTE 4 -- CREDIT RISKS
Although the Portfolio's investments are diversified, the Portfolio invests in
primarily high yield, non-investment grade debt securities issued in many of the
world's securities markets. Investments in higher yielding securities are
accompanied by a greater degree of credit risk and the risk tends to be more
sensitive to economic conditions than higher rated securities. The risk of loss
due to default by the issuer may be significantly greater for the holders of
high yielding securities because such securities are generally unsecured and are
often subordinated to other creditors of the issuer.
