SEPTEMBER 30, 1999,
AS UPDATED THROUGH OCTOBER 31, 1999
[Graphic Omitted] BT Mutual Funds
Latin American
Equity Fund
Annual Report
TRUST: BT INVESTMENT FUNDS
INVESTMENT ADVISOR: BANKERS TRUST COMPANY
<PAGE>
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Latin American Equity Fund
Table of Contents
- -------------------------------------------------------------------------------
Letter to Shareholders .................................................... 3
Latin American Equity Fund
Statements of Assets and Liabilities ................................... 6
Statements of Operations ............................................... 7
Statements of Changes in Net Assets .................................... 8
Financial Highlights ................................................... 9
Notes to Financial Statements .......................................... 10
Report of Independent Accountants ...................................... 12
Tax Information ........................................................ 12
Latin American Equity Portfolio
Schedules of Portfolio Investments ...................................... 13
Statements of Assets and Liabilities .................................... 15
Statements of Operations ................................................ 16
Statements of Changes in Net Assets ..................................... 17
Financial Highlights .................................................... 17
Notes to Financial Statements ........................................... 18
Report of Independent Accountants ....................................... 20
Proxy Results ............................................................. 21
------------------
The Fund is not insured by the FDIC and is not a deposit, obligation of or
guaranteed by Bankers Trust Company. The Fund is subject to investment risks,
including possible loss of principal amount invested.
------------------
2
<PAGE>
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Latin American Equity Fund
Letter to Shareholders
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We are pleased to present you with this annual report for the Latin American
Equity Fund (the "Fund"), providing a review of the markets, 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. Please note that the Fund's Board of
Trustees approved a change in its fiscal year end from September 30, 1999 to
October 31, 1999, thus, while this is an annual report, our review covers the
most recent thirteen months and life of the Fund as of the end of October.
MARKET ACTIVITY
Like the rest of the emerging markets, the Latin American equity markets
performed strongly, up 34.3% in US dollar terms over the fiscal period.
o Investor sentiment on the whole was buoyed by the perception that the last
shoe had dropped in the threat of emerging market collapse that had led to
broad market downturns in the fall of 1998. There was wide agreement that
emerging markets overall were due for a time of healing and recovery.
o Given the export profile of Latin America, the region also benefited as global
commodity prices troughed in the early spring of 1999.
o The only real clouds over the region during the fiscal period were Brazil's
currency devaluation in January, Ecuador's eurobond default in the last
quarter, and US interest rate fears throughout.
Mexico, up 54.9% in US dollar terms, led the region's equity markets as export
and domestic demand improved, oil prices firmed, and the peso gained ground.
o Better than expected inflation and economic data within the nation and a US
economy that showed little sign of slowing down also boosted Mexico's market.
o Still, the ride was not entirely smooth, as a volatile Wall Street plus
election concerns within Mexico did weigh on its own equity market at times.
Many of the other markets in the region also posted double-digit returns for the
fiscal year.
o Chile and Venezuela, both countries with large commodity exposures, advanced
32.0% and 36.9% in US dollar terms, respectively. The bulk of Venezuela's
gains came in the second half of the fiscal year, as the market was relieved
that its August constitutional crisis did not snowball into the formation of a
military government and that fiscal pressures eased on the back of higher oil
prices.
o Despite the deeper than anticipated recession in Argentina, Repsol's bid for
oil and gas company YPF Sociedad Anonima helped to re-rate the Argentine
market. Argentina's equity market rose 36.9% during the period.
o Initially, there was market euphoria in Brazil over positive developments
following its currency devaluation. However, realism set in once President
Cardoso's popularity plummeted to new lows and Supreme Court injunctions were
passed, blocking several measures in its fiscal reform program. Brazil ended
the fiscal year up 12.5% in US dollar terms.
o Colombia had the poorest showing, down 2.0% in US dollars, following a series
of setbacks, including deeper than expected economic contraction, credit
downgrades by the leading rating agencies, and currency devaluation.
INVESTMENT REVIEW
The Fund outperformed its Lipper category average for the one year ended October
31, 1999, but underperformed its benchmark. The Fund's performance is well ahead
of both its benchmark and its category average for the one month, three years,
five years and life of the Fund as of October 31, 1999.
Sector allocation was the primary factor impacting Fund performance. The Fund's
returns were enhanced by its overweight position in Chile during the first half
and subsequent underweight in the second half of the fiscal year. The Fund also
benefited from the portfolio's initial underweighting of Brazil and Colombia.
However, detracting from performance was the Fund's overweighting of Argentina
in the first half of the period and its overweighting of Peru in the second
half. Our move to underweight Argentina and Venezuela in the latter half of the
fiscal year did not help, although our strategy was to take advantage of the
strong market moves and increase the portfolio's exposure to a neutral position
in the more liquid markets of Brazil and Mexico.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Periods ended October 31, 1999 Cumulative Total Returns Average Annual Total Returns
- ---------------------------------------------------------------------------------------------------------------------------
Past 1 Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
month year years years inception year years years inception
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Latin American Equity Fund/1
(inception 10/25/93) 2.26% 20.81% 8.26% (15.53)% 17.24% 20.81% 2.68% (3.32)% 2.68%
- ---------------------------------------------------------------------------------------------------------------------------
IFCI Latin American Index/2 1.83% 23.39% 5.47% (20.84)% 11.40% 23.39% 1.79% (4.56)% 1.81%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Latin American Average/3 2.22% 16.19% (4.40)% (19.48)% (6.93)% 16.19% (1.79)% (4.58)% (1.39)%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------
1/ 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. During the period the
Fund waived certain fees and expenses. Had these fees and expenses not been
waived, the Fund's return would have been lower.
2/ Indices are unmanaged, and investments cannot be made in an index.
3/ Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper, Inc. as falling into the respective
categories indicated. These figures do not reflect sales charges.
3
<PAGE>
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Latin American Equity Fund
Letter to Shareholders
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Ten Largest Stock Holdings
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Telefonos De Mexico Class L ADR 9.7%
...............................................................................
Telenorte Leste Participation 4.7%
...............................................................................
Grupo Televisa GDR 4.6%
...............................................................................
Telesp Participacoes Pfd 4.1%
...............................................................................
Telecentro Sul Participa 4.0%
...............................................................................
Grupo Modelo Ser `C' 3.8%
...............................................................................
Vale Rio Doce ADR 3.7%
...............................................................................
Banco De Galicia 3.7%
...............................................................................
Formento Economico Mexico 3.4%
...............................................................................
Kimberly Clark De Mexico 3.3%
- -------------------------------------------------------------------------------
During the second half of the fiscal period, we carried out several stock
specific and sector allocation strategies for the Fund.
o We increased the Fund's banking exposures via Argentina's Banco Galicia,
Chile's Banco Santander, and Peru's Credicorp, with the view that the region's
economy had troughed.
o For similar reason, exporters like CVRD and Concha y Toro were reduced in
favor of domestically-oriented company purchases.
o Telecommunications should be a prime beneficiary of any economic recovery, and
so we increased the portfolio's Brazilian holdings in Embratel, Telecentro
Sul, and Telesp Cellular as well as in Chile's CTC.
o Our holding in Argentine oil and gas company YPF Sociedad Anonima received a
big boost when Spain's Repsol made a bid for the remaining shares it did not
own.
o The recovering oil price also lifted Petrobras shares in Brazil.
o In Mexico, we added to the Fund's holdings in economic recovery plays, such as
cement company Cemex, beverage firm Femsa, and media company Televisa. Upon
the fiscal period end, we increased the cash position of the Fund to provide
cushion for possible volatility of fund flows over Year 2000 issues.
MANAGER OUTLOOK
While Latin America continues to face numerous challenges, our outlook for the
year 2000 will likely improve with ongoing recovery from this past year's
economic slump. Within the emerging markets, we believe that Latin America
actually has the best return potential next year if risk premiums and emerging
market bond spreads can narrow. We expect this should happen once the US bond
market stabilizes. Brazilian
Diversification of Portfolio Investments
By Country as of October 31, 1999
(percentages are based on market value)
Argentina 5% Peru 5%
Brazil 37% Mexico 44%
Chile 8% Colombia 1%
equities remain very inexpensive on numerous parameters, but the nation has to
make further progress on tackling the fiscal front. In our view, Mexico remains
the stable quality play within the region, with the potential for credit rating
upgrades.
As we approach the end of 1999, we expect increased volatility in the region's
equity markets on Year 2000 concerns. However, we believe that Year 2000 will
pose only limited and temporary setbacks to the region.
We will, of course, continue monitoring economic conditions and how they affect
the financial markets, as we seek long-term capital appreciation.
/s/ Michaelle Levy
/s/ Julie Wang
Michael Levy and Julie Wang
Portfolio Manager of the
Latin American Equity Portfolio
October 31, 1999
4
<PAGE>
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Latin American Equity Fund
Performance Comparison
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Comparison of Change in As of October 31, 1999
Value of a $10,000
Investment in the Latin Latin American IFCI Latin
American Equity Fund and Equity Fund - $11,724 American Index - $11,140
the IFCI Latin American --------------------- -------------------------
Index since October 31, Oct-93 10000 10000
1993. Mar-94 12822 12275
Sep-94 14526 14736
- --------------------------------------- Mar-95 7350 7686
Total Return for the Periods Sep-95 8618 9602
Ended October 31, 1999 Mar-96 9408 9652
Sep-96 10838 10763
One Five Since Mar-97 12463 12536
Year Year 10/25/93/1 Sep-97 15961 15933
20.81% (3.32)%/2 2.68%/2 Mar-98 15484 13922
Sep-98 8777 8000
Mar-99 11876 10292
Ended September 30, 1999 Sep-99 11465 10939
One Five Since Oct-99 11724 11140
Year Year 10/25/93/1
28.54% (4.68)%/2 2.33%/2 As of September 30, 1999
1/ The Fund's inception date. Latin American IFCI Latin
2/ Annualized. Equity Fund - $11,465 American Index - $10,939
--------------------- -------------------------
Investment return and principal Oct-93 10000 10000
value will fluctuate so that shares, Mar-94 12822 12275
when redeemed, may be worth more or Sep-94 14526 14736
less than their original cost. Mar-95 7350 7686
- --------------------------------------- Sep-95 8618 9602
Mar-96 9408 9652
Sep-96 10838 10763
Mar-97 12463 12536
Sep-97 15961 15933
Mar-98 15484 13922
Sep-98 8777 8000
Mar-99 11876 10292
Sep-99 11465 10939
Past performance is not indicative of future performance. Performance figures
assume the reinvestment of dividends and capital gain distributions.
</TABLE>
5
<PAGE>
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Latin American Equity Fund
Statements of Assets and Liabilities
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 31, 1999/1 September 30, 1999
------------------- ------------------
<S> <C> <C>
Assets
Investment in Latin American Equity Portfolio, at Value .................... $ 4,781,424 $ 4,743,190
Receivable for Shares of Beneficial Interest Subscribed .................... 250 250
Prepaid Expenses and Other ................................................. 12,291 12,303
Due from Bankers Trust ..................................................... 43,771 40,764
-------------- ---------------
Total Assets .................................................................. 4,837,736 4,796,507
-------------- ---------------
Liabilities
Payable for Shares of Beneficial Interest Redeemed ......................... 6,358 4,333
Accrued Expenses and Other ................................................. 25,199 23,887
-------------- ---------------
Total Liabilities ............................................................. 31,557 28,220
-------------- ---------------
Net Assets .................................................................... $ 4,806,179 $ 4,768,287
============== ===============
Composition of Net Assets
Paid-in Capital ............................................................ $ 12,848,260 $ 12,868,643
Undistributed Net Investment Income ........................................ 100,309 100,309
Accumulated Net Realized Loss from Investment, Foreign Currency and
Forward Foreign Currency Transactions .................................... (8,039,358) (7,979,522)
Net Unrealized Depreciation on Investment and Foreign Currencies ........... (103,032) (221,143)
-------------- ---------------
Net Assets .................................................................... $ 4,806,179 $ 4,768,287
============== ===============
Net Asset Value, Offering and Redemption Price Per Share (net assets divided
by shares outstanding) ..................................................... $ 10.85 $ 10.61
============== ===============
Shares Outstanding ($0.001 par value per share, unlimited number of shares of
beneficial interest authorized) ......................................... 443,019 449,622
============== ===============
</TABLE>
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1/ On September 8, 1999, the Board of Trustees approved the change of the fiscal
year end from September 30 to October 31.
See Notes to Financial Statements.
6
<PAGE>
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Latin American Equity Fund
Statements of Operations
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period For the
October 1, 1999 to year ended
October 31, 1999/1 September 30, 1999
------------------ ------------------
<S> <C> <C>
Investment Income
Income (Expenses in Excess) Allocated from Latin American Equity
Portfolio, net ........................................................ $ (332) $ 152,368
-------------- ----------------
Expenses
Administration and Services Fees ......................................... 3,746 62,189
Professional Fees ........................................................ 4,839 30,832
Printing and Shareholder Reports ......................................... 1,018 23,095
Registration Fees ........................................................ 30 15,982
Trustees Fees ............................................................ 364 6,376
Miscellaneous ............................................................ 306 7,144
------------- ----------------
Total Expenses ........................................................... 10,303 145,618
Less Fees Waived/Expenses Reimbursed by Bankers Trust .................... (6,754) (86,410)
------------- ----------------
Net Expenses .......................................................... 3,549 59,208
------------- ---------------
Net Investment (Expenses in Excess of) Income ............................... (3,881) 93,160
------------- ---------------
Realized and Unrealized Gain (Loss) on Investment, Foreign Currencies and
Forward Foreign Currency Contracts
Net Realized Gain (Loss) from:
Investment Transactions ............................................... (59,836) (935,651)
Foreign Currency Transactions ......................................... (2,042) (61,801)
Forward Foreign Currency Transactions ................................. (1,159) 210,639
Net Change in Unrealized Appreciation/Depreciation on Investment and
Foreign Currencies .................................................... 173,993 1,876,393
------------- ---------------
Net Realized and Unrealized Gain on Investment, Foreign Currencies, and
Forward Foreign Currency Contracts ....................................... 110,956 1,089,580
------------- ---------------
Net Increase in Net Assets from Operations .................................. $ 107,075 $ 1,182,740
============= ===============
</TABLE>
- --------------
1/ On September 8, 1999, the Board of Trustees approved the change of the fiscal
year end from September 30 to October 31.
See Notes to Financial Statements.
7
<PAGE>
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Latin American Equity Fund
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period For the period For the
October 1, 1999 to year ended year ended
October 31, 1999/1 September 30, 1999 September 30, 1998
---------------- ----------------------------------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment (Expense in Excess of) Income ......... $ (3,881) $ 93,160 $ 362,238
Net Realized Loss from Investment, Foreign
Currency and Forward Foreign Currency
Transactions ....................................... (63,037) (786,813) (5,595,775)
Net Change in Unrealized Appreciation/Depreciation
on Investment and Foreign Currencies ............... 173,993 1,876,393 (7,638,638)
---------------- ---------------- ----------------
Net Increase (Decrease) in Net Assets from Operations ... 107,075 1,182,740 (12,872,175)
---------------- ---------------- ----------------
Distributions to Shareholders
Net Investment Income ................................ -- (378,358) (68,996)
---------------- ---------------- ----------------
Capital Transactions in Shares of Beneficial Interest
Proceeds from Sales of Shares ........................ 26,125 16,499,619 45,435,848
Dividend Reinvestments ............................... -- 312,608 41,257
Cost of Shares Redeemed .............................. (95,308) (19,104,660) (63,692,767)
---------------- ---------------- ----------------
Net Decrease from Capital Transactions in Shares
of Beneficial Interest ................................ (69,183) (2,292,433) (18,215,662)
---------------- ---------------- ----------------
Total Increase (Decrease) in Net Assets ................. 37,892 (1,488,051) (31,156,833)
Net Assets ..............................................
Beginning of Period ..................................... 4,768,287 6,256,338 37,413,171
---------------- ---------------- ----------------
End of Period (Including undistributed net investment
income of $100,309, $100,309 and $236,669,
respectively) ......................................... $ 4,806,179 $ 4,768,287 $ 6,256,338
================ ================ ================
</TABLE>
- ---------------
1/ On September 8, 1999, the Board of Trustees approved the change of the fiscal
year end from September 30 to October 31.
See Notes to Financial Statements.
8
<PAGE>
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Latin American Equity Fund
Financial Highlights
- -------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for the periods
indicated for the Latin American Equity Fund.
<TABLE>
<CAPTION>
For the period For the years ended September 30,
October 1, 1999 to --------------------------------------------
October 31, 1999/2 1999 1998 1997 1996 1995
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value, Beginning of Period .............. $10.61 $ 8.75 $15.74 $10.71 $ 8.50 $ 14.59
------ ------ ------ ------ ------- -------
Income fromInvestment Operations
Net Investment (Expenses in Excess of) Income .. (0.01) 0.08 0.44 0.001 0.02 0.03
Net Realized and Unrealized Gain (Loss) on
Investment, Foreign Currencies and Forward
Foreign Currency Transactions ................ 0.25 2.30 (7.40) 5.03 2.19 (5.92)
------ ------ ------ ------ ------- -------
Total from Investment Operations .................. 0.24 2.38 (6.96) 5.03 2.21 (5.89)
------ ------ ------ ------ ------- -------
Distributions to Shareholders
Net Investment Income .......................... -- (0.52) (0.03) 0.001 -- --
Net Realized Gains -- -- -- -- -- (0.20)
------ ------ ------ ------ ------- -------
Total Distributions ............................... -- (0.52) (0.03) -- -- (0.20)
------ ------ ------ ------ ------- -------
Net Asset Value, End of Period .................... $10.85 $10.61 $ 8.75 $15.74 $ 10.71 $ 8.50
====== ====== ====== ====== ======= =======
Total Investment Return ........................... 2.26% 28.54% (44.28)% 47.00% 26.00% (40.68)%
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) $4,806 $4,768 $6,256 $37,413 $16,997 $13,624
Ratios to Average Net Assets:
Net Investment (Expenses in Excess of) Income 1.00%/3 1.42% 1.42% 0.16% 0.16% 0.29%
Expenses, Including Expenses of the
Latin American Equity Portfolio ........... 1.90%/3 1.90% 2.00% 2.00% 2.00% 2.00%
Decrease Reflected in Above Expense
Ratio Due to Fees Waived/Expenses
Reimbursed by Bankers Trust ............... 6.07%/3 2.38% 0.66% 0.44% 0.66% 1.17%
</TABLE>
- ---------------
1/ Less than $0.01.
2/ On September 8, 1999, the Board of Trustees approved the change of the fiscal
year end from September 30 to October 31.
3/ Annualized.
See Notes to Financial Statements.
9
<PAGE>
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Latin American Equity Fund
Notes to Financial Statements
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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 began operations
on October 25, 1993. The Fund seeks to achieve its investment objective by
investing 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 value of the Fund's investment in the Portfolio
reflects its proportionate interest in the net assets of the Portfolio. At
September 30, 1999, the Fund's investment was approximately 100% of the
Portfolio. At October 31, 1999, 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 and should be read in
conjunction with the Fund's financial statements.
B. Investment Valuation
Valuation of securities by the Portfolio is discussed in Note 1B of the
Portfolio's Notes to Financial Statements which are included elsewhere in this
report.
C. 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.
D. Distributions
It is the Fund's policy to declare and distribute dividends annually 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 are also made annually to the extent they are offset by any
capital loss carryforwards.
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. The Fund may periodically make reclassifications among certain of its
capital accounts as a result of the differences in the characterization and
allocation of certain income and capital gain distributions determined annually
in accordance with federal tax regulations which may differ from generally
accepted accounting principles. The Fund has capital loss carryforwards in the
amounts of $749,851, $6,200,128, and $661,170 expiring in 2003, 2006, and 2007,
respectively.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
each fund. Expenses directly attributable to a fund are charged to that fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them. Investment transactions are accounted for on the trade date basis.
Realized gains and losses are determined on the identified cost basis.
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. Actual results could
differ from those estimates.
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 .95% of the Fund's average daily net assets.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Fund, to the extent necessary, to limit all expenses to .90% of
the average daily net assets of the Fund, excluding expenses of the Portfolio
and 1.90% of the average daily net assets of the Fund, including expenses of the
Portfolio.
ICC Distributors, Inc. provides distribution services to the Fund.
Bankers Trust was a wholly owned subsidiary of Bankers Trust Corporation ("BT
Corp."). On June 4, 1999, BT Corp. was acquired by Deutsche Bank AG ("Deutsche
Bank"). As a result of the transaction, Bankers Trust became an indirect
wholly-owned subsidiary of Deutsche Bank.
10
<PAGE>
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Latin American Equity Portfolio
Notes to Financial Statements
- -------------------------------------------------------------------------------
Note 3--Shares of Beneficial Interest
At October 31, 1999, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
For the period For the
October 1,1999 to year ended
October 31, 1999 September 30, 1999
------------------- ----------------------
Shares Amount Shares Amount
------ ------ ------ ------
Sold 2,470 $ 26,125 1,615,521 $ 16,499,619
Reinvested -- -- 36,098 312,608
Redeemed (9,073) (95,308) (1,917,401) (19,104,660)
------ ---------- ---------- ------------
Net Decrease (6,603) $ (69,183) (265,782) $ (2,292,433)
====== ========== ========== ============
For the
year ended
September 30, 1998
----------------------
Shares Amount
------ --------
Sold 3,404,954 $ 45,435,848
Reinvested 3,104 41,257
Redeemed (5,069,215) (63,692,767)
---------- ------------
Net Decrease (1,661,157) $(18,215,662)
========== ============
Note 4--Risks of Investing in Emerging Markets
The risks involved when investing in emerging markets are of a nature generally
not encountered when investing in securities traded on major international
markets.
Investment in securities of issuers based in underdeveloped emerging markets
involves special risks and considerations not typically associated with
investing in U.S. companies. These risks include: (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) the smaller size of the market for such
securities and a low or nonexistent volume of trading, resulting in lack of
liquidity and in price volatility. Additionally, developments affecting emerging
market investments can not always be foreseen.
11
<PAGE>
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Latin American Equity Fund
Report of Independent Accountants
- -------------------------------------------------------------------------------
To the Trustees of BT Investment Funds and
Shareholders of Latin American Equity Fund:
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Latin American Equity Fund (one of the funds comprising BT Investment Funds,
hereafter referred to as the "Fund") at October 31, 1999 and September 30, 1999,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the fiscal periods presented, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 and
September 30, 1999 by correspondence with the transfer agent, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 19, 1999
- -------------------------------------------------------------------------------
Tax Information (Unaudited For the Periods Ended October 31, 1999 and
September 30, 1999)
- -------------------------------------------------------------------------------
During the year ended September 30, 1999, the Fund received income from foreign
sources in the amount of $187,224. The Fund has paid foreign taxes in the amount
of $5,889 or $0.013 per share. Such amounts are eligible for the foreign tax
credit. You should consult your tax advisor relating to the appropriate
treatment of foreign taxes paid.
12
<PAGE>
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Latin American Equity Portfolio
Schedule of Portfolio Investments October 31, 1999
- -------------------------------------------------------------------------------
Shares Security Value
- ------ -------- -----
COMMON STOCK - 78.5%
Argentina - 4.9%
8,300 Banco de Galicia y Buenos Aires
SA de C.V. ADR ..................................... $ 175,337
4,982 Perez Companc SA ADR ................................. 60,511
----------
235,848
----------
Brazil - 17.6%
4,904 Centrais Electricas Brasileiras SA ................... 84,415
9,000 Companhia Vale do Rio Doce ADR ....................... 175,524
5,700 Embratel Participacoes SA ADR ........................ 73,387
3,200 Tele Centro Sul Participacoes SA ADR ................. 191,200
13,313 Tele Norte Leste Participacoes SA ADR ................ 224,657
1,400 Telesp Celular Participacoes SA ADR .................. 34,475
2,500 Uniao de Bancos Brasileiros SA GDR ................... 57,812
----------
841,470
----------
Chile - 8.1%
2,900 Banco Santander Chile ADR ............................ 47,488
3,709 Chilectra SA Chile ADR ............................... 65,956
4,634 Cia de Telecomunicaciones de Chile SA
ADR ................................................ 77,330
4,800 Distribucion y Servicio D&S SA ADR ................... 78,300
4,400 Embotelladora Andina SA ADR .......................... 71,500
3,800 Empresa Nacional de Electricidad
SA ADR ............................................. 48,450
----------
389,024
----------
Colombia - 1.3%
19,500 Bavaria SA ........................................... 64,623
----------
Mexico - 42.1%
40,000 Alfa Corp. SA ........................................ 153,231
6,779 Cemex SA de CV ADR (a) ............................... 152,528
175,000 Desc SA de CV Series B ............................... 141,707
4,900 Fomento Economico Mexicano SA de CV
ADR ................................................ 160,781
23,192 Grupo Carso de CV Series 1A (a) ...................... 97,029
35,233 Grupo Financiero Banamex Accival, SA
de CV "O" shares (a) ............................... 87,968
30,000 Grupo Industrial Saltillo SA de CV
Series B ........................................... 78,017
75,000 Grupo Modelo SA de CV Series C ....................... 182,974
5,205 Grupo Televisa SA GDR (a) ............................ 221,213
48,771 Kimberly-Clark de Mexico SA de CV
Series A ........................................... 155,945
30,807 Organizacion Soriana SA de CV Series B 114,177
5,446 Telefonos de Mexico SA ADR - Class L 465,633
----------
2,011,203
----------
Peru - 4.5%
42,341 Cementos Lima SA ..................................... 49,047
7,200 Credicorp Ltd. ....................................... 76,500
75,000 Telefonica de Peru S.A.A. Series B ................... 87,951
----------
213,498
----------
Total Common Stock (Cost $3,846,940) .............................. 3,755,666
----------
Shares Security Value
- ------ -------- -----
PREFERRED STOCK - 17.4%
Brazil - 17.4%
1,831 Banco Estado de Sao Paolo SA ......................... 46,999
2,500 Banco Itau SA ........................................ 143,440
11,805 Companhia Cervejaria Brahma ADR ...................... 147,563
8,538 Gerdau SA ............................................ 154,413
906 Petroleo Brasileiro SA ............................... 144,261
12,206 Telesp Participacoes SA .............................. 195,718
----------
Total Preferred Stock (Cost $846,015) ............................. 832,394
----------
OTHER SECURITIES - 0.2%
14 Banco Hipotecario SA Warrants (a)
(Cost $700) ........................................ 7,984
----------
Total Investments (Cost $4,693,655)...................... 96.1% 4,596,044
Other Assets in Excess of Liabilities.................... 3.9% 185,387
----- ----------
Net Assets .............................................. 100.0% $4,781,431
===== ==========
- ---------------
(a) Non-Income Producing Security
Abbreviations:
ADR - American Depository Receipt
GDR - Global Depository Receipt
Industry Diversification (as a percentage of Total Investments):
Telecommunications ............. 29.38%
Banks .......................... 12.09%
Brewery ........................ 8.60%
Diversified .................... 8.53%
Steel Producers ................ 5.06%
Beverages ...................... 5.05%
Broadcasting ................... 4.81%
Oil ............................ 4.46%
Utilities ...................... 4.33%
Mining ......................... 3.82%
Consumer Goods ................. 3.39%
Building Materials ............. 3.32%
Retail ......................... 2.48%
Finance ........................ 1.91%
Retail/Foods ................... 1.70%
Building & Construction ........ 1.07%
-------
100.00%
======
See Notes to Financial Statements.
13
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Schedule of Portfolio Investments September 30, 1999
- -------------------------------------------------------------------------------
Shares Security Value
- ------ -------- -----
COMMON STOCK - 78.7%
Argentina - 3.6%
4,982 Perez Companc SA ADR ................................. $ 60,592
4,231 Telefonica de Argentina SA ADR ....................... 111,593
------------
172,185
------------
Brazil - 22.1%
1,889 Companhia Energetica de Minas Geras
SA ADR ............................................. 28,542
14,805 Companhia Cervejaria Brahma ADR ...................... 177,660
11,592 Companhia Brasileira Distribuicao
Grupo Pao Acucar ADR ............................... 229,666
11,400 Companhia Vale Rio Doce ADR .......................... 240,473
4,904 Centrais Electricas Brasileiras SA ................... 81,738
1,500 Tele Centro Sul Participacoes SA ADR ................. 83,250
13,313 Tele Norte Leste Participacoes SA ADR ................ 206,351
------------
1,047,680
------------
Chile - 7.1%
3,709 Chilectra SA Chile ADR ............................... 70,311
4,634 Cia de Telecomunicaciones de Chile
SA ADR ............................................. 83,702
4,836 Vina Concha Y Toro Chile SA ADR ...................... 182,559
------------
336,572
------------
Colombia - 1.3%
19,500 Bavaria SA .......................................... 59,353
------------
Mexico - 41.3%
40,000 Alfa Corp. SA ........................................ 169,266
4,680 Cemex SA de CV ADR (a) ............................... 112,905
45,802 Corporacion GEO SA de CV
Series B (a) ....................................... 115,899
175,000 Desc SA de CV Series B ............................... 149,793
23,192 Grupo Carso de CV Series 1A (a) ...................... 96,776
35,233 Grupo Financiero Banamex Accival,
SA de CV "O" shares (a) ............................ 63,407
30,000 Grupo Industrial Saltillo SA de
CV Series B ........................................ 81,530
75,000 Grupo Modelo SA de CV Series C ....................... 190,184
5,005 Grupo Televisa SA GDR (a) ............................ 199,887
48,771 Kimberly-Clark de Mexico SA de
CV Series A ........................................ 172,202
47,507 Organizacion Soriana SA de CV Series B 190,613
5,846 Telefonos de Mexico SA ADR Class L ................... 416,527
------------
1,958,989
------------
Peru - 3.3%
42,341 Cementos Lima, SA .................................... 53,865
75,000 Telefonica de Peru S.A.A. Series B ................... 101,701
------------
155,566
------------
Total Common Stock (Cost $3,946,891) .............................. 3,730,345
------------
Shares Security Value
- ------ -------- -----
PREFERRED STOCK - 15.0%
Brazil - 15.0%
10,000 Banco Bradesco SA PN ................................. $ 47,865
1,831 Banco Estado de Sao Paolo SA ......................... 43,396
2,500 Banco Itau SA ........................................ 130,210
8,538 Gerdau SA Pfd ........................................ 133,421
1,492 Petroleo Brasileiro SA ............................... 223,151
8,750 Telesp Participacoes SA .............................. 134,911
------------
Total Preferred Stock (Cost $772,961) ............................ 712,954
------------
OTHER SECURITIES - 0.1%
Argentina - 0.1%
14 Banco Hipotecario SA Warrants
(Cost $700) ........................................ $ 6,021
------------
Total Investments (Cost $4,720,552) ..................... 93.8% 4,449,320
Other Assets in Excess of Liabilities ................... 6.2% 293,878
----- ------------
Net Assets .............................................. 100.0% $ 4,743,198
===== ============
- ---------------
(a) Non-Income Producing Security
Abbreviations:
ADR - American Depository Receipt
GDR - Global Depository Receipt
Industry Diversification (as a percentage of Total Investments):
Telecommunications ............. 25.58%
Brewery ........................ 9.60%
Diversified .................... 9.35%
Oil ............................ 6.38%
Mining ......................... 5.40%
Food-Retail .................... 5.16%
Banks .......................... 5.11%
Steel Producers ................ 4.83%
Broadcasting ................... 4.49%
Retail ......................... 4.28%
Beverages ...................... 4.10%
Utilities ...................... 4.06%
Consumer Goods ................. 3.87%
Real Estate .................... 2.60%
Building Materials ............. 2.54%
Finance ........................ 1.43%
Building & Construction ........ 1.22%
-------
100.00%
======
See Notes to Financial Statements.
14
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Statements of Assets and Liabilities
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 31, 1999/2 September 30, 1999
------------------ ------------------
<S> <C> <C>
Assets
Investments, at Value (Cost $4,693,655 and $4,720,552, respectively) ...... $ 4,596,044 $ 4,449,320
Cash/1 .................................................................... 119,957 239,236
Dividends and Interest Receivable ......................................... 65,619 77,575
Due from Bankers Trust .................................................... 20,772 8,454
-------------- ---------------
Total Assets ................................................................. 4,802,392 4,774,585
-------------- ---------------
Liabilities
Accrued Expenses and Other ................................................ 20,961 31,387
-------------- ---------------
Total Liabilities ............................................................ 20,961 31,387
-------------- ---------------
Net Assets ................................................................... $ 4,781,431 $ 4,743,198
============== ===============
Composition of Net Assets
Paid-in Capital ........................................................... $ 4,884,836 $ 5,020,596
Net Unrealized Depreciation on Investments and Foreign Currency ........... (103,405) (277,398)
-------------- ---------------
Net Assets ................................................................... $ 4,781,431 $ 4,743,198
============== ===============
</TABLE>
- ---------------
1/ Includes foreign cash of $13,481 and $1,361, with a cost of $13,311 and
$1,341, respectively.
2/ On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
See Notes to Financial Statements.
15
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Statements of Operations
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period For the
October 1, 1999 to year ended
October 31, 1999/1 September 30, 1999
------------------ ------------------
<S> <C> <C>
Investment Income
Dividends (net of foreign withholding tax of $0 and $5,889, respectively) ............ $ 2,869 $ 190,402
Interest ............................................................................. 717 27,176
------------ -----------
Total Investment Income ................................................................. 3,586 217,578
------------ -----------
Expenses
Advisory Fees ........................................................................ 3,918 65,209
Professional Fees .................................................................... 15,491 33,606
Custody Fees ......................................................................... 328 15,302
Administration and Services Fees ..................................................... 784 13,076
Trustees Fees ........................................................................ 276 6,228
Miscellaneous ........................................................................ 140 874
------------ -----------
Total Expenses ....................................................................... 20,937 134,295
Less Fees Waived/Expenses Reimbursed by Bankers Trust ................................ (17,019) (69,086)
------------ -----------
Net Expenses ...................................................................... 3,918 65,209
------------ -----------
Net Investment (Expenses in Excess of) Income ........................................... (332) 152,369
------------ -----------
Realized and Unrealized Gain (Loss) on Investments, Foreign Currencies
and Forward Foreign Currency Contracts ...............................................
Net Realized Gain (Loss) from: .......................................................
Investment Transactions ........................................................... (59,836) (935,652)
Foreign Currency Transactions ..................................................... (2,042) (61,801)
Forward Foreign Currency Transactions ............................................. (1,159) 210,639
Net Change in Unrealized Appreciation/Depreciation on Investments and
Foreign Currencies ................................................................ 173,993 1,876,394
------------ -----------
Net Realized and Unrealized Gain on Investments, Foreign Currencies and
Forward Foreign Currency Contracts ................................................... 110,956 1,089,580
------------ -----------
Net Increase in Net Assets from Operations .............................................. $ 110,624 $ 1,241,949
============ ============
</TABLE>
- ---------------
1/ On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
16
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period For the For the
October 1, 1999 to year ended year ended
October 31, 19991 September 30, 1999 September 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment (Expenses in Excess of) Income ................. $ (332) $ 152,369 $ 616,975
Net Realized Loss from Investments, Foreign Currency,
and Forward Foreign Currency Transactions .................. (63,037) (786,814) (5,595,779)
Net Change in Unrealized Appreciation/Depreciation
on Investments and Foreign Currencies ...................... 173,993 1,876,394 (7,638,639)
------------- ------------- --------------
Net Increase (Decrease) in Net Assets from Operations ............ 110,624 1,241,949 (12,617,443)
------------- ------------- --------------
Capital Transactions
Proceeds from Capital Invested ................................ 26,125 15,579,130 45,172,546
Value of Capital Withdrawn .................................... (98,516) (18,532,001) (63,505,446)
------------- ------------- --------------
Net Decrease in Net Assets from Capital
Transactions .................................................. (72,391) (2,952,871) (18,332,900)
------------- ------------- --------------
Total Increase (Decrease) in Net Assets .......................... 38,233 (1,710,922) (30,950,343)
Net Assets
Beginning of Period .............................................. 4,743,198 6,454,120 37,404,463
------------- ------------- --------------
End of Period .................................................... $ 4,781,431 $ 4,743,198 $ 6,454,120
============= ============= ==============
</TABLE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
Contained below are selected ratios to average net assets and other supplemental
data for the periods indicated for the Latin American Equity Portfolio.
<TABLE>
<CAPTION>
For the period For the years ended September 30,
October 1, 1999 to -----------------------------------------------------
October 31, 19991 1999 1998 1997 1996 1995
------------------- ------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) $4,781 $4,743 $6,454 $37,404 $17,051 $13,658
Ratios to Average Net Assets:
Net Investment (Expenses in
Excess of) Income (0.08)%/2 2.33% 2.41% 1.16% 1.21% 1.27%
Expenses 1.00%/2 1.00% 1.00% 1.00% 1.00% 1.00%
Decrease Reflected in Above Expense
Ratio Due to Fees Waived/Expenses
Reimbursed by Bankers Trust 4.35%/2 1.06% 0.53% 0.32% 0.31% 0.80%
Portfolio Turnover Rate 23% 369% 92% 122% 171% 161%
</TABLE>
- ---------------
1/ On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
2/ Annualized.
See Notes to Financial Statements.
17
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 began 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 listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the closing price of the
security traded on that exchange. Short-term debt securities are valued at
market value until such time as they reach a remaining maturity of 60 days,
whereupon they are 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 Interest Income
Security transactions are accounted for on a trade date basis. 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. Expenses are recorded as incurred. 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 the security and foreign currency transactions of the Portfolio are
allocated pro rata among the investors in the Portfolio at the time of such
determination.
D. 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.
E. 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. 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.
F. Federal Income Taxes
The Portfolio is considered a Partnership under the Internal Revenue Code.
Therefore, no federal income tax provision is necessary.
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. Actual results could
differ from those estimates.
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 .20% of the Portfolio's average daily net
assets.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 1.00% of the Portfolio's
average daily net assets.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Portfolio, to the extent necessary, to limit all expenses to
1.00% of the average daily net assets of the Portfolio.
The Portfolio may invest in the Institutional Cash Management Fund ("the Fund"),
an open-end management investment company managed by Bankers Trust Company ("the
Company"). The fund is offered as a cash management option to the Portfolio and
other accounts managed by the Company. Distributions from the fund to the
Portfolio as of October 31, 1999 and September 30, 1999 amounted to $0 and
$9,067, respectively, and are included in dividend income.
At September 30, 1999, the Portfolio was a participant with other affiliated
entities in a revolving credit facility in the amount of $100,000,000, which
expires April 29, 2000. A commitment fee of .10% per annum on the average daily
amount of the available commitment is payable on a quarterly basis and
apportioned equally among all participants. On October 8, 1999, the revolving
credit facility was increased to $150,000,000. No amounts were drawn down or
outstanding under the credit facility for the periods ended October 31, 1999 and
September 30, 1999.
18
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Notes to Financial Statements
- -------------------------------------------------------------------------------
Bankers Trust was a wholly owned subsidiary of Bankers Trust Corporation ("BT
Corp."). On June 4, 1999, BT Corp. was acquired by Deutsche Bank AG ("Deutsche
Bank"). As a result of the transaction, Bankers Trust became an indirect
wholly-owned subsidiary of Deutsche Bank.
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 period ended October 31, 1999, were
$1,080,668 and $1,047,729, respectively. For the year ended September 30, 1999,
the amounts were $22,305,513 and $24,652,243, respectively.
For Federal income tax purposes, the tax basis of investments held at October
31, 1999 was $5,121,864. The aggregate gross unrealized appreciation for all
investments at October 31, 1999 was $183,512, and the aggregate gross unrealized
depreciation for all investments was $709,332. At September 30, 1999 the tax
basis of investments held was $5,343,937. The aggregate gross unrealized
appreciation for all investments at September 30, 1999 was $11,763 and the
aggregate gross unrealized depreciation for all investments was $906,380.
Note 4--Risks of Investing in Emerging Markets
The risks involved when investing in emerging markets are of a nature generally
not encountered when investing in securities traded on major international
markets.
Investment in securities of issuers based in underdeveloped emerging markets
involves special risks and considerations not typically associated with
investing in U.S. companies. These risks include: (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) the smaller size of the market for such
securities and a low or nonexistent volume of trading, resulting in lack of
liquidity and in price volatility. Additionally, developments affecting emerging
market investments can not always be foreseen.
19
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Portfolio
Report of Independent Accountants
- -------------------------------------------------------------------------------
To the Trustees
and Holders of Beneficial Interest of Latin American Equity Portfolio:
In our opinion, the accompanying statements of asset and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Latin American Equity Portfolio
(hereafter referred to as the "Portfolio") at October 31, 1999 and September 30,
1999 and the results of its operations, the changes in its net assets and the
financial highlights for each of the fiscal periods presented, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 and
September 30, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 19, 1999
20
<PAGE>
- -------------------------------------------------------------------------------
Latin American Equity Fund
Proxy Results (unaudited)
- -------------------------------------------------------------------------------
For the year ended September 30, 1999, the Bankers Trust Funds shareholders
voted on the following proposals at the annual meeting of shareholders on
October 8, 1999 or as adjourned. The description of each proposal and number of
shares voted are as follows:
1. To elect the Bankers Trust Funds Board of Trustees.
Shares Shares Voted
Voted Withheld
For Authority
------ ------------
Messr Biggar 398,393 20,881
Messr Dill 398,393 20,881
Messr Hale 398,393 20,881
Messr Langton 398,393 20,881
Messr Saunders 398,393 20,881
Messr Van Benschoten 398,393 20,881
Dr. Gruber 398,393 20,881
Dr. Herring 398,393 20,881
2. To approve the New Investment Advisory Agreement with Bankers Trust Company.
For Against Abstain
--------- ------- -------
415,302 2,560 1,412
3. To approve the New Investment Advisory Agreement with Morgan Grenfell, Inc.
For Against Abstain
--------- ------- -------
414,849 2,778 1,647
4. To approve the New Investment Sub-advisory Agreement with Morgan Grenfell
Investment Services Ltd.
For Against Abstain
--------- ------- -------
414,849 2,778 1,647
5. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants of the Fund and its corresponding Portfolio.
For Against Abstain
--------- ------- -------
415,497 2,813964 964
21
<PAGE>
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<PAGE>
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<PAGE>
[GRAPHIC OMITTED] Bankers Trust
Architects of Value
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or write
to us at: BT Service Center
P.O. Box 419210
Kansas City, MO 64141-6210
or call our toll-free number: 1-800-730-1313
This report must be preceded or accompanied by a current prospectus for the
Fund.
Latin American Equity Fund CUSIP #055922785
BT Investment Funds 497ANN (9/99)
Distributed by:
ICC Distributors, Inc.
Two Portland Square
Portland, ME 04101
