<PAGE>
- BT INVESTMENT FUNDS -
SMALL CAP FUND
SEMI-ANNUAL REPORT
------------------
MARCH - 1997
<PAGE>
- -------------------------------------------------------------------------------
SMALL CAP FUND
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . .3
SMALL CAP FUND
Statement of Assets and Liabilities. . . . . . . . . . . . .6
Statement of Operations. . . . . . . . . . . . . . . . . . .6
Statement of Changes in Net Assets . . . . . . . . . . . . .7
Financial Highlights . . . . . . . . . . . . . . . . . . . .7
Notes to Financial Statements. . . . . . . . . . . . . . . .8
SMALL CAP PORTFOLIO
Schedule of Portfolio Investments. . . . . . . . . . . . . .9
Statement of Assets and Liabilities. . . . . . . . . . . . 11
Statement of Operations. . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets. . . . . . . . . . . . .12
Financial Highlights. . . . . . . . . . . . . . . . . . . .12
Notes to Financial Statements. . . . . . . . . . . . . . . 13
2
<PAGE>
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SMALL CAP FUND
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
We are pleased to present you with this semi-annual report for the Small Cap
Fund, providing a review of the market, the portfolio, and our outlook as well
as a complete financial summary of the Fund's operations and a listing of the
Portfolio's holdings.
The Small Cap Fund (the "Fund") had a total return of (16.13)%* for the six
months ended March 31, 1997, as compared to (5.17)% for the Russell 2000 Index**
and (6.91)% for the Lipper Small Cap Growth Average+. Since its inception on
October 21, 1993, the Fund has returned 77.44% cumulatively, or 18.13%
annualized. The Fund returned (16.78)% for the year ended March 31, 1997.
OBJECTIVE
Seeks to provide long-term capital growth by investing primarily in equity
securities of smaller companies. Current income is a secondary goal.
MARKET ACTIVITY
In sharp contrast to the strong small cap market performance of the previous
twelve months, the six months ended March 31, 1997 were characterized by
investor concerns regarding inflation, corporate earnings, and market valuation
levels. Exacerbating concerns about overall stock market valuations were
Federal Reserve Board Chairman Alan Greenspan's "irrational exuberance"
comments. The direction of interest rates also tempered investor enthusiasm due
to the highly anticipated Federal Reserve Board tightening and reservations
about its effect on economic growth and earnings performance. On March 25,
1997, the fed funds rate was, in fact, raised by 0.25%. Overall, volatility
during the semi-annual period was higher than in the recent past.
Given this climate, investors shied away from small aggressive growth companies,
focusing instead on larger capitalization and lower growth/lower multiple
value-oriented stocks. Even within the small cap segment, value sharply
outperformed growth. As a result, small cap companies that generate high
earnings growth came under pressure, despite the fact that their fundamentals
remain intact. In turn, the Russell 2000 Index lagged both the mid- and large
cap segments of the market for the six month period.++
INVESTMENT INSTRUMENTS
Generally common stocks of smaller U.S. corporations and, to a lesser
extent, foreign corporations.
INVESTMENT REVIEW
The Fund's relative underperformance can be attributed to style and sector
positioning. As aggressive growth managers, we overweight the Fund in those
sectors that we believe will exhibit superior earnings growth over the long
term, including technology and health care. These two sectors were among the
worst performing in the Russell 2000 Index over the last six months. Technology
was hurt by concerns about earnings growth as well as earnings shortfalls from
several large and visible market leaders. Health care was hurt by investors'
mounting concerns about both potential reimbursement cuts related to Medicare
reform and the possibility of renewed attempts at health care reform. The
Fund's underperformance can also be partly attributed to its underweighted
position in more value-oriented sectors such as consumer staples, financial
services, and materials and processing, each of which performed well during
these six months.
On the other hand, our sell discipline helped the Fund during this difficult
period. For example, we sold the Fund's holdings of Citrix and Clarify, two
technology stocks. These were both sold due to their underperformance of their
peer group and on the basis of our discussions with their management regarding
company fundamentals. Both of these stocks, in fact, have experienced large
declines since we sold them. We also trimmed the Fund's exposure to the energy
sector early in 1997 due to high valuations. This move proved timely, given the
sell-off in this sector during February, as seasonal factors dominated. Still,
we remain very positive about the long-term prospects of the energy sector,
especially the oil field services stocks.
TEN LARGEST STOCK HOLDINGS
Pride Petroleum Services, Inc. Wolverine Worldwide, Inc.
Global Industries Ltd. Papa John's International
Cliffs Drilling Co. Rational Software
Trico Marine Services, Inc. Sepracor, Inc.
Marine Drilling Co., Inc. The Men's Wearhouse, Inc.
We also exploited the period's volatility to the Fund's advantage, using periods
of weakness to initiate or add to positions in companies hurt temporarily but
with strong future prospects. For example, we added to the Fund's holdings in
West Marine after a pullback in the stock resulting both from market volatility
and concerns regarding a flat first calendar quarter following an acquisition.
The company's fundamentals remained strong, however, and investors have since
recognized this, rewarding the stock.
Our investment themes for the Fund continue to point to potentially attractive
investment opportunities. Life on the Net, for instance, is a theme that has
evolved again. We are focusing on companies that develop practical applications
for the internet, including security, network management, and financial
transaction capabilities. The Life Sciences Revolution includes selected
biotechnology and drug companies that should benefit from improved profitability
and an unprecedented number of drugs in late-stage clinical trials.
Re-Energizing America includes energy service companies, which should see strong
earnings growth as a result of strong exploration and production spending in
1997 as well as robust demand for natural gas and oil in emerging markets
worldwide. The New Healthcare Paradigm focuses on value-added medical device
and managed care companies. In addition, health care information service
companies,
- ------------------------------
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
** Indexes are unmanaged, and investments cannot be made in an index.
+ Lipper figures represent the average of the total returns reported by all
of the mutual funds designated by Lipper Analytical Sevices, Inc. as
falling into the respective categories indicated. These figures do not
reflect sales charges.
++ Small cap stocks have historically experienced greater volatility than
average.
3
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SMALL CAP FUND
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
DIVERSIFICATION OF PORTFOLIO INVESTMENTS
By Theme as of March 31, 1997
(PERCENTAGES ARE BASED ON MARKET VALUE)
[CHART]
Flourishing in the Managed Care Environment 5%
America's Changing Leisure Time 5%
Our Strengthening Financial Structure 6%
The Ubiquitous Semiconductor 7%
New Consumer 7%
New Healthcare Paradigm 8%
Stores of Value 5%
Telecommunications 5%
Managing the Information Age 4%
Other 26%+
Re-Energizing America 11%
Life Sciences Revolution 11%
- ------------------------------
+ Includes cash and themes with weightings of less than 4%.
should be strong as the need to measure cost and quality continues to be a
major challenge to this industry. Stores of Value and the New Consumer,
which look at dominant retail operators, should benefit from continued strong
economic growth and high consumer confidence levels.
We are also developing another investment theme for the Fund that will seek to
capitalize on the increasing usage of technology coupled with a shortage of
skilled workers to implement and manage that technology, particularly when
preparing for the year 2000, a process requiring enormous resources.
MANAGER OUTLOOK
While we are disappointed with the recent performance of the Fund, there are
several reasons why we think the long-term outlook remains promising for small
cap companies that generate superior and consistent earnings growth. First, the
earnings multiple of the Russell 2000 Index relative to the S&P 500 Index* is at
its lowest level in four years-even with a very positive earnings outlook for
small cap growth companies. Second, throughout this period of uncertainty, our
continued contacts with and monitoring of managements of small cap companies
indicate that fundamentals are strong and earnings growth remains intact. We
believe that this combination of reasonable valuation levels with sound
fundamentals should bode well for the small cap segment of the market over the
longer term.
Finally, our outlook for the economy leads us to be positive. We are
forecasting GDP growth in the area of 2.5-3.0% for calendar 1997, with interest
rates and inflation moving slightly higher. Under this economic scenario, small
higher growth companies are expected to perform well. While we do expect
continued volatility throughout the year, historically, investors have been
willing to pay for reasonably priced earnings growth, and the small cap sector
has performed well over time.
As always, our strategy is to remain true to the philosophy and disciplines that
have benefited the Fund's investors over the long term. We continue to focus on
using:
- - good fundamental research to identify companies with consistently strong
earnings and revenue growth
- - a thematic approach and screening process to help us identify unrecognized
growth companies and/or sectors
- - the volatility of the marketplace to our investors' advantage by initiating
or adding to positions on weakness, and
- - our sell discipline to help mitigate risk in the portfolio.
We will, of course, continue monitoring economic conditions and how they affect
the financial markets, as we seek long-term capital growth.
We value your ongoing support of the BT Investment Small Cap Fund and look
forward to continuing to serve your investment needs in the years ahead.
/s/ Timothy Woods
/s/ Mary P. Dugan
Mary Dugan and Tim Woods
Portfolio Managers of the
SMALL CAP PORTFOLIO
March 31, 1997
4
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SMALL CAP FUND
PERFORMANCE COMPARISON
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE SMALL CAP FUND AND
THE RUSSELL 2000 INDEX SINCE OCTOBER 31, 1993.
TOTAL RETURN FOR THE PERIOD
ENDED MARCH 31, 1997
Six Months Since 10/21/93*
(16.13)% 77.44%
* 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.
Small Cap Fund - $17,517 Russell 2000 Index - $13,933
Oct-93 10000 10000
Dec-93 10326 10002
Mar-94 10375 9735
Jun-94 9951 9354
Sep-94 11451 10004
Dec-94 12320 9819
Mar-95 14107 10272
Jun-95 15903 11236
Sep-95 18263 12345
Dec-95 19536 12613
Mar-96 21049 13256
Jun-96 23181 13919
Sep-96 23074 13967
Dec-96 20884 14693
Mar-97 17517 13933
Past performance is not indicative of future performance.
5
<PAGE>
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SMALL CAP FUND
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in Small Cap Portfolio, at Value. . . . . . . . . $ 148,258,862
Receivable for Shares of Beneficial Interest Subscribed. . . 130,920
Prepaid Expenses and Other . . . . . . . . . . . . . . . . . 18,511
--------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . 148,408,293
--------------
LIABILITIES
Due to Bankers Trust . . . . . . . . . . . . . . . . . . . . 79,168
Payable for Shares of Beneficial Interest Redeemed . . . . . 1,715,290
Accrued Expenses and Other . . . . . . . . . . . . . . . . . 36,982
--------------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 1,831,440
--------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146,576,853
--------------
--------------
COMPOSITION OF NET ASSETS
Paid-in Capital. . . . . . . . . . . . . . . . . . . . . . . $ 147,487,045
Acculumated Net Investment Loss. . . . . . . . . . . . . . . (2,354,993)
Accumulated Net Realized Gain from Investments . . . . . . . 5,798,508
Net Unrealized Depreciation on Investments . . . . . . . . . (4,353,707)
--------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146,576,853
--------------
--------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) . . . . . . . . . . $ 15.24
--------------
--------------
SHARES OUTSTANDING ($0.001 par value per share,
unlimited number of shares of beneficial interest authorized) 9,615,452
--------------
</TABLE>
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STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Loss Allocated from Small Cap Portfolio, net. . . . . . . . $ (342,450)
---------------
EXPENSES
Administration and Services Fees. . . . . . . . . . . . . . 631,806
Printing and Shareholder Reports. . . . . . . . . . . . . . 6,250
Registration Fees . . . . . . . . . . . . . . . . . . . . . 8,890
Professional Fees . . . . . . . . . . . . . . . . . . . . . 4,747
Trustees Fees . . . . . . . . . . . . . . . . . . . . . . . 1,430
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 2,822
---------------
Total Expenses. . . . . . . . . . . . . . . . . . . . . . . 655,945
Less Expenses Absorbed by Bankers Trust . . . . . . . . . . (24,139)
---------------
Net Expenses . . . . . . . . . . . . . . . . . . . . . 631,806
---------------
NET INVESTMENT LOSS . . . . . . . . . . . . . . . . . . . . . . (974,256)
---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain from Investment Transactions. . . . . . . 15,388,703
Net Change in Unrealized Depreciation on Investments. . . . (65,128,828)
---------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS . . . . . . . . (49,740,125)
---------------
NET DECREASE IN NET ASSETS FROM OPERATIONS. . . . . . . . . . . $ (50,714,381)
---------------
---------------
</TABLE>
See Notes to Financial Statements on Page 8
6
<PAGE>
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SMALL CAP FUND
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997+ SEPTEMBER 30, 1996
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Income Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (974,256) $ (1,380,737)
Net Realized Gain from Investment Transactions . . . . . . . . . . . . . . . . . . . 15,388,703 4,946,585
Net Change in Unrealized Appreciation (Depreciation) on Investments. . . . . . . . . (65,128,828) 38,472,178
--------------- -----------------
Net Increase (Decrease) in Net Assets from Operations. . . . . . . . . . . . . . . . . . (50,714,381) 42,038,026
--------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment Transactions . . . . . . . . . . . . . . . . . . . (13,993,488) (10,302,003)
--------------- -----------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Sales of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,534,815 249,711,457
Dividend Reinvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,338,678 7,579,445
Cost of Shares Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (113,825,000) (169,725,477)
--------------- -----------------
NET INCREASE (DECREASE) FROM CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST . . . (30,951,507) 87,565,425
--------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . (95,659,376) 119,301,448
NET ASSETS
Beginning of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242,236,229 122,934,781
--------------- -----------------
End of Period (includes undistributed net investment loss of $2,354,993 and $0,
respectively). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146,576,853 $ 242,236,229
--------------- -----------------
--------------- -----------------
</TABLE>
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FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, other supplemental data and ratios to average net assets for the periods
indicated for the Small Cap Fund.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED OCTOBER 21, 1993
FOR THE SEPTEMBER 30, (COMMENCEMENT
SIX MONTHS ENDED ------------------ OF OPERATIONS) TO
MARCH 31, 1997+ 1996 1995 SEPTEMBER 30, 1994
--------------- ------ ------ ------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD. . . . . . . . . $21.66 $ 18.50 $ 11.60 $ 10.00
-------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss . . . . . . . . . . . . . . . (0.12) (0.12) (0.14) (0.03)
Net Realized and Unrealized Loss on Investments . (4.88) 4.65 6.94 1.63
-------- -------- -------- -------
Total Income (Loss) from Investment Operations. . . . (5.00) 4.53 6.90 1.60
-------- -------- -------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment Transactions. . (1.42) (1.37) -- --
-------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD. . . . . . . . . . . . $15.24 $ 21.66 $ 18.50 $ 11.60
-------- -------- -------- -------
TOTAL INVESTMENT RETURN . . . . . . . . . . . . . . . (16.13)% 26.41% 59.48% 17.06%*
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period (000s omitted). . . . . $146,577 $242,236 $122,935 $21,332
Ratios to Average Net Assets:
Net Investment Loss. . . . . . . . . . . . . (1.00)%* (0.70)% (0.46)% (0.58)%*
Expenses, including Expenses of the
Small Cap Portfolio. . . . . . . . . . . . 1.25%* 1.25% 1.25% 1.25%*
Decrease Reflected in Above Expense
Ratio Due to Absorption of Expenses
by Bankers Trust . . . . . . . . . . . . . 0.18%* 0.22% 0.34% 0.86%*
</TABLE>
- -------------------------------
+ Unaudited
* Annualized
See Notes to Financial Statements on Page 8
7
<PAGE>
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SMALL CAP FUND
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, 1997, the Fund's investment was 99% 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 Small Cap
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. DIVIDENDS
It is the Fund's policy to declare and distribute dividends quarterly to
shareholders from net investment income, if any. Dividends and distributions
payable to shareholders are recorded by the Fund on the ex-dividend 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.
D. 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
substantially all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
E. 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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements.
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, 1997, this fee aggregated $631,806.
The Trust entered into a Distribution Agreement with Edgewood Services, Inc.
("Edgewood"). Under the Distribution Agreement with the Trust, pursuant to Rule
12b-1 of the 1940 Act, Edgewood 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, 1997, 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, 1997, expenses of the Fund
have been reduced by $24,139.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Edgewood. 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, 1997, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997 (UNAUDITED) SEPTEMBER 30, 1996
-------------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------- --------- ------------
<S> <C> <C> <C> <C>
Sold 3,899,577 $ 72,534,815 12,796,190 $249,711,457
Reinvested 571,830 10,338,678 439,133 7,579,445
Redeemed (6,041,669) (113,825,000) (8,695,218) (169,725,477)
---------- ------------- ---------- ------------
Net Increase (Decrease) (1,570,262) $ (30,951,507) 4,540,105 $ 87,565,425
---------- ------------- ---------- ------------
---------- ------------- ---------- ------------
</TABLE>
8
<PAGE>
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SMALL CAP PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
Shares Description Value
- ------ ----------- -----
COMMON STOCKS - 91.36%
AMERICA'S CHANGING LEISURE TIME - 5.33%
61,200 Applebees International, Inc. (a) . . . . . . . . . . .$ 1,476,450
39,700 Cinar Films, Inc. (a) . . . . . . . . . . . . . . . . . 972,650
80,025 Papa John's International (a) . . . . . . . . . . . . . 2,110,659
53,100 Signature Resorts, Inc. (a) . . . . . . . . . . . . . . 1,247,850
58,600 Suburban Lodges of America, Inc. (a). . . . . . . . . . 1,054,800
53,200 Vail Resorts, Inc. (a). . . . . . . . . . . . . . . . . 1,037,400
--------------
7,899,809
--------------
AMERICA'S INDUSTRIAL RENAISSANCE - 3.38%
69,100 Advanced Lighting Technologies, Inc. (a). . . . . . . . 1,520,200
51,300 BE Aerospace, Inc. (a). . . . . . . . . . . . . . . . . 1,256,850
71,900 Larson Davis, Inc. (a). . . . . . . . . . . . . . . . . 665,075
89,400 Special Metals Corp. (a). . . . . . . . . . . . . . . . 1,564,500
--------------
5,006,625
--------------
CLIENT-SERVER COMPUTING - 3.32%
39,600 Indus Group, Inc. (a) . . . . . . . . . . . . . . . . . 574,200
96,800 Rational Software (a) . . . . . . . . . . . . . . . . . 1,996,500
56,000 Siebel Systems, Inc. (a). . . . . . . . . . . . . . . . 938,000
73,300 Systems & Computer Technology Corp. (a) . . . . . . . . 1,420,187
--------------
4,928,887
--------------
FLOURISHING IN THE MANAGED CARE ENVIRONMENT - 5.31%
33,200 CRA Managed Care (a). . . . . . . . . . . . . . . . . . 1,245,000
70,600 Curative Health Services, Inc. (a). . . . . . . . . . . 1,623,800
81,700 FPA Medical Management, Inc. (a). . . . . . . . . . . . 1,572,725
84,100 OccuSystems, Inc. (a) . . . . . . . . . . . . . . . . . 1,892,250
46,600 Pediatrix Medical Group (a) . . . . . . . . . . . . . . 1,531,975
--------------
7,865,750
--------------
LIFE ON THE NET - 2.39%
58,300 Excite, Inc. (a). . . . . . . . . . . . . . . . . . . . 626,725
102,900 E*TRADE Group, Inc. (a) . . . . . . . . . . . . . . . . 1,852,200
39,900 Infoseek Corp. (a). . . . . . . . . . . . . . . . . . . 284,287
55,000 Lycos, Inc. (a) . . . . . . . . . . . . . . . . . . . . 773,438
--------------
3,536,650
--------------
LIFE SCIENCES REVOLUTION - 10.76%
10,200 Agouron Pharmaceuticals (a) . . . . . . . . . . . . . . 720,375
54,700 Alkermes, Inc. (a). . . . . . . . . . . . . . . . . . . 765,800
56,200 Biopsys Medical, Inc. (a) . . . . . . . . . . . . . . . 1,390,950
77,000 Endovascular Technologies (a) . . . . . . . . . . . . . 1,058,750
47,500 Human Genome Sciences (a) . . . . . . . . . . . . . . . 1,543,750
69,300 IDEC Pharmaceuticals Corp. (a). . . . . . . . . . . . . 1,650,206
73,300 Immunex Corp. (a) . . . . . . . . . . . . . . . . . . . 1,942,450
54,700 Neurex Corp. (a). . . . . . . . . . . . . . . . . . . . 649,563
43,900 Protein Design Labs, Inc. (a) . . . . . . . . . . . . . 1,317,000
86,000 Sepracor, Inc. (a). . . . . . . . . . . . . . . . . . . 1,983,375
117,200 U.S. Bioscience, Inc. (a) . . . . . . . . . . . . . . . 1,362,450
38,800 Vertex Pharmaceuticals, Inc. (a). . . . . . . . . . . . 1,561,700
--------------
15,946,369
--------------
MANAGING THE INFORMATION AGE - 3.69%
40,500 Computer Task Group, Inc. (a) . . . . . . . . . . . . . 1,437,750
94,700 Metro Information Services, Inc. (a). . . . . . . . . . 1,195,588
42,200 National Data Corp. . . . . . . . . . . . . . . . . . . 1,492,825
49,000 Transaction Systems Architects-Cl. A (a). . . . . . . . 1,347,500
--------------
5,473,663
--------------
MOVE TO OUTSOURCING - 1.87%
12,900 Catalina Marketing Corp. (a). . . . . . . . . . . . . . 524,063
28,700 Metzler Group, Inc. (a) . . . . . . . . . . . . . . . . 663,688
45,400 MSC Industrial Direct (a) . . . . . . . . . . . . . . . 1,322,275
9,600 The Vincam Group, Inc. (a). . . . . . . . . . . . . . . 262,800
--------------
2,772,826
--------------
NEW CONSUMER -7.10%
67,400 Converse, Inc. (a). . . . . . . . . . . . . . . . . . . 1,221,625
71,000 Helen of Troy Ltd. (a). . . . . . . . . . . . . . . . . 1,686,250
31,500 Nautica Enterprises, Inc. (a) . . . . . . . . . . . . . 791,437
32,600 Samsonite Corp. (a) . . . . . . . . . . . . . . . . . . 1,409,950
7,700 St. John Knits, Inc. (a). . . . . . . . . . . . . . . . 333,025
33,400 West Marine, Inc. (a) . . . . . . . . . . . . . . . . . 1,102,200
128,000 Windmere-Durable Holdings, Inc. (a) . . . . . . . . . . 1,808,000
59,800 Wolverine World Wide, Inc.. . . . . . . . . . . . . . . 2,182,700
--------------
10,535,187
--------------
NEW HEALTHCARE PARADIGM - 7.60%
37,000 Applied Analytical Industries, Inc. (a) . . . . . . . . 721,500
76,500 Cytyc Corp. (a) . . . . . . . . . . . . . . . . . . . . 1,434,375
71,600 Enterprise Systems, Inc. (a). . . . . . . . . . . . . . 1,611,000
56,000 ESC Medical Systems Ltd. (a). . . . . . . . . . . . . . 1,414,000
60,500 Heartport, Inc. (a) . . . . . . . . . . . . . . . . . . 1,482,250
56,500 IDX Systems (a) . . . . . . . . . . . . . . . . . . . . 1,539,625
5,200 Rexall Sundown, Inc. (a). . . . . . . . . . . . . . . . 133,250
76,600 Safeskin Corp. (a). . . . . . . . . . . . . . . . . . . 1,388,375
51,000 Total Renal Care Holdings (a) . . . . . . . . . . . . . 1,549,125
--------------
11,273,500
--------------
OUR STRENGHENING FINANCIAL STRUCTURE - 6.28%
59,700 Capmac Holdings, Inc. . . . . . . . . . . . . . . . . . 1,589,513
28,900 CMAC Investment Corp. . . . . . . . . . . . . . . . . . 964,537
61,400 FIRSTPLUS Financial Group, Inc. (a) . . . . . . . . . . 1,849,675
42,900 Frontier Insurance Group, Inc.. . . . . . . . . . . . . 1,866,150
44,300 Penncorp Financial Group, Inc. (a). . . . . . . . . . . 1,417,600
51,300 Raymond James Financial, Inc. . . . . . . . . . . . . . 1,622,363
--------------
9,309,838
--------------
PRODUCTIVITY ENHANCEMENT - 3.38%
50,700 Remedy Corp. (a). . . . . . . . . . . . . . . . . . . . 1,939,275
46,200 Saville Systems Plc. (a). . . . . . . . . . . . . . . . 1,328,250
44,600 Visio Corp. (a) . . . . . . . . . . . . . . . . . . . . 1,739,400
--------------
5,006,925
--------------
REDISTRIBUTION OF DEBT - 1.76%
50,400 Amresco, Inc. (a) . . . . . . . . . . . . . . . . . . . 844,200
48,800 Sirrom Capital Corp.. . . . . . . . . . . . . . . . . . 1,769,000
--------------
2,613,200
--------------
RE-ENERGIZING AMERICA - 10.82%
231,500 Abacan Resource Corp. (a) . . . . . . . . . . . . . . . 1,823,062
39,000 Cliffs Drilling Co. (a) . . . . . . . . . . . . . . . . 2,315,625
36,700 Flores & Rucks, Inc. (a). . . . . . . . . . . . . . . . 1,486,350
115,100 Global Industries Ltd. (a). . . . . . . . . . . . . . . 2,460,262
40,900 Hvide Marine, Inc.-Cl. A (a). . . . . . . . . . . . . . 930,475
127,500 Marine Drilling Co., Inc. (a) . . . . . . . . . . . . . 2,263,125
120,300 Pride Petroleum Services, Inc. (a). . . . . . . . . . . 2,496,225
47,900 Trico Marine Services, Inc. (a) . . . . . . . . . . . . 2,275,250
--------------
16,050,374
--------------
RETURN TO HOME OWNERSHIP - 1.27%
20,800 Ethan Allen, Inc. . . . . . . . . . . . . . . . . . . . 904,800
65,100 Furniture Brands Intl., Inc. (a). . . . . . . . . . . . 976,500
--------------
1,881,300
--------------
See Notes to Financial Statements on Page 13
9
<PAGE>
- -------------------------------------------------------------------------------
SMALL CAP PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
Shares Description Value
- ------ ----------- -----
STORES OF VALUE - 4.98%
45,900 Dollar Tree Stores, Inc. (a). . . . . . . . . . . . . .$ 1,698,300
11,000 Goody's Family Clothing, Inc. (a) . . . . . . . . . . . 253,000
82,800 Morningstar Group, Inc. (a) . . . . . . . . . . . . . . 1,593,900
44,500 Quality Food Centers, Inc. (a). . . . . . . . . . . . . 1,869,000
71,400 The Men's Wearhouse, Inc. (a) . . . . . . . . . . . . . 1,963,500
--------------
7,377,700
--------------
TELECOMMUNICATIONS - 5.00%
91,200 Allen Group, Inc. (a) . . . . . . . . . . . . . . . . . 1,596,000
57,100 Digital Microwave Corp. (a) . . . . . . . . . . . . . . 1,099,175
47,700 Level One Communications, Inc. (a). . . . . . . . . . . 1,311,750
51,300 P-COM, Inc. (a) . . . . . . . . . . . . . . . . . . . . 1,333,800
35,400 REMEC, Inc. (a) . . . . . . . . . . . . . . . . . . . . 761,100
45,900 Sawtek, Inc. (a). . . . . . . . . . . . . . . . . . . . 1,319,625
--------------
7,421,450
--------------
THE UBIQUITOUS SEMICONDUCTOR - 7.12%
94,300 Electroglas, Inc. (a) . . . . . . . . . . . . . . . . . 1,638,463
98,900 Gasonics International Corp. (a). . . . . . . . . . . . 1,409,325
34,900 Lattice Semiconductor Corp. (a) . . . . . . . . . . . . 1,596,675
8,500 NeoMagic Corp. (a). . . . . . . . . . . . . . . . . . . 107,312
17,000 Novellus Systems (a). . . . . . . . . . . . . . . . . . 1,173,000
39,500 PRI Automation, Inc. (a). . . . . . . . . . . . . . . . 1,886,125
55,300 Triquint Semiconductor, Inc. (a). . . . . . . . . . . . 1,320,288
64,600 Ultratech Stepper (a) . . . . . . . . . . . . . . . . . 1,429,275
--------------
10,560,463
--------------
TOTAL COMMON STOCKS (Cost $140,111,632). . . . . . . . . . . . .$ 135,460,516
--------------
Principal
Shares Description Value
------ ----------- -----
SHORT TERM INSTRUMENTS - 6.80%
U.S. TREASURY BILLS - 6.80%
$10,090,000 5.01%, 5/29/97. . . . . . . . . . . . . . . . . . $ 10,005,960
70,000 5.00%, 4/24/97. . . . . . . . . . . . . . . . . . 69,776
--------------
TOTAL SHORT TERM INSTRUMENTS (Cost $10,074,884). . . . . . . . $ 10,075,736
--------------
TOTAL INVESTMENTS (Cost $150,186,516). . . . . . . . . 98.16% $ 145,536,252
Other Assets Less Liabilities. . . . . . . . . . . . . 1.84% 2,722,626
------- --------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . 100.00% $ 148,258,878
------- --------------
------- --------------
- ---------------
(a) Non-Income Producing Security
See Notes to Financial Statements on Page 13
10
<PAGE>
- -------------------------------------------------------------------------------
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
ASSETS
Investments, at Value (Cost of $150,186,516) . . . . . . . . $ 145,536,252
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,065
Receivable for Securities Sold . . . . . . . . . . . . . . . 3,654,400
Dividends and Interest Receivable. . . . . . . . . . . . . . 8,256
Prepaid Expenses and Other . . . . . . . . . . . . . . . . . 623
---------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . 149,536,596
---------------
LIABILITIES
Due to Bankers Trust . . . . . . . . . . . . . . . . . . . . 77,922
Payable for Securities Purchased . . . . . . . . . . . . . . 1,185,285
Accrued Expenses and Other . . . . . . . . . . . . . . . . . 14,511
---------------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . 1,277,718
---------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,258,878
---------------
---------------
COMPOSITION OF NET ASSETS
Paid-in Capital. . . . . . . . . . . . . . . . . . . . . . . $ 152,909,142
Net Unrealized Depreciation on Investments . . . . . . . . . (4,650,264)
---------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,258,878
---------------
---------------
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . $ 41,461
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 201,762
---------------
TOTAL INVESTMENT INCOME. . . . . . . . . . . . . . . . . . . . 243,223
---------------
EXPENSES
Advisory Fees. . . . . . . . . . . . . . . . . . . . . . . . 636,142
Administration and Services Fees . . . . . . . . . . . . . . 97,868
Professional Fees. . . . . . . . . . . . . . . . . . . . . . 12,800
Trustees Fees. . . . . . . . . . . . . . . . . . . . . . . . 1,050
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 737
---------------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . 748,597
Less Expenses Absorbed by Bankers Trust. . . . . . . . . . . (161,389)
Net Expenses . . . . . . . . . . . . . . . . . . . . . . . 587,208
---------------
NET INVESTMENT LOSS. . . . . . . . . . . . . . . . . . . . . . (343,985)
---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain from Investment Transactions . . . . . . . 15,512,358
Net Change in Unrealized Depreciation on Investments . . . . (65,550,426)
---------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS. . . . . . . . (50,038,068)
---------------
NET DECREASE IN NET ASSETS FROM OPERATIONS . . . . . . . . . . $ (50,382,053)
---------------
See Notes to Financial Statements on Page 13
11
<PAGE>
- -------------------------------------------------------------------------------
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997+ SEPTEMBER 30, 1996
--------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . $ (343,985) $ (95,874)
Net Realized Gain from Investment Transactions . . . . . . . . . . . . . 15,512,358 4,944,264
Net Change in Unrealized Appreciation (Depreciation) on Investments. . . (65,550,426) 38,597,216
--------------- ---------------
Net Increase (Decrease) in Net Assets from Operations. . . . . . . . . . . (50,382,053) 43,445,606
--------------- ---------------
CAPITAL TRANSACTIONS
Proceeds from Capital Invested . . . . . . . . . . . . . . . . . . . . . 83,138,799 259,905,685
Value of Capital Withdrawn . . . . . . . . . . . . . . . . . . . . . . . (130,112,959) (181,564,152)
--------------- ---------------
Net Increase (Decrease) in Net Assets from Capital Transactions. . . . . . (46,974,160) 78,341,533
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . . . . (97,356,213) 121,787,139
NET ASSETS
Beginning of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . 245,615,091 123,827,952
--------------- ---------------
End of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,258,878 $ 245,615,091
--------------- ---------------
--------------- ---------------
</TABLE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Contained below are selected supplemental data and ratios to average net assets
for the periods indicated for the Small Cap Portfolio.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED OCTOBER 21, 1993
FOR THE SEPTEMBER 30, (COMMENCEMENT
SIX MONTHS ENDED -------------------- OF OPERATIONS) TO
MARCH 31, 1997+ 1996 1995 SEPTEMBER 30, 1994
---------------- -------- --------- ------------------
<S> <C> <C> <C> <C>
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period (000s omitted) . . . . . . $148,259 $245,615 $123,828 $21,328
Ratios to Average Net Assets:
Net Investment Income (Loss) . . . . . . . . . . . (0.35)% (0.05)% 0.19% 0.07%*
Expenses . . . . . . . . . . . . . . . . . . . . . 0.60% 0.60% 0.60% 0.60%*
Decrease Reflected in Above Expense Ratio Due to
Absorption of Expenses by Bankers Trust . . . . 0.16%* 0.17% 0.19% 0.38%*
Portfolio Turnover Rate. . . . . . . . . . . . . . . 111% 159% 161% 154%
Average Commission Per Share** . . . . . . . . . . . $0.056 $0.048
</TABLE>
- ---------------
+ Unaudited
* Annualized
** For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
See Notes to Financial Statements on Page 13
12
<PAGE>
- --------------------------------------------------------------------------------
SMALL CAP PORTFOLIO
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 listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the closing price of a
security traded on that exchange prior to the time when the Portfolio assets are
valued. Short-term obligations with remaining maturities of 60 days or less are
valued at amortized cost. Other short-term debt securities are valued on a
mark-to-market basis until such time as they reach a remaining maturity of 60
days, whereupon they will be valued at amortized cost using their value on the
61st day. All other securities and other assets are valued at their fair value
as determined in good faith under procedures established by and under the
general supervision of the Trustees.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on a trade date basis. 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 by the identified
cost basis.
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. REPURCHASE AGREEMENTS
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. However, in the event of default or bankruptcy by the
seller, realization and/or retention of the collateral may be subject to legal
proceedings.
E. FEDERAL INCOME TAXES
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code.
F. OPTION CONTRACTS
The Portfolio may enter into option contracts. Upon the purchase of a put option
or a call option by the Portfolio, the premium paid is recorded as an investment
and valued at mark-to-market daily to reflect the current market value. When a
purchased option expires, the Portfolio will realize a gain or 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.
G. OTHER
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements.
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, 1997, this fee aggregated
$97,868.
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, 1997,
this fee aggregated $636,142.
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,
1997, expenses of the Portfolio have been reduced by $161,389.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Edgewood. 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.
For the six months ended March 31, 1997, Small Cap Portfolio paid brokerage
commissions of $212,178.
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, 1997 were
$204,943,672 and $255,556,653, respectively.
For federal income tax purposes, the tax basis of investments held at March 31,
1997 was $151,136,981. The aggregate gross unrealized appreciation for all
investments was $8,039,801 and the aggregate gross unrealized depreciation for
all investments was $13,640,530.
13
<PAGE>
BT INVESTMENT FUNDS
SMALL CAP FUND
INVESTMENT ADVISER OF THE PORTFOLIO AND ADMINISTRATOR
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897
CUSTODIAN AND TRANSFER AGENT
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P
1100 Main Street, Suite 900
Kansas City, MO 64105
COUNSEL
WILLKIE FARR & GALLAGHER
153 East 53rd Street
New York, NY 10022
--------------------
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or the BT
Mutual Fund Service Center at (800) 730-1313.
--------------------
STA498100 (5/97)
