SEPTEMBER 30, 1999,
AS UPDATED THOUGH OCTOBER 31, 1999
[GRAPHIC OMITTED]
BT Mutual Funds
International
Equity Fund
Annual Report
TRUST: BT INVESTMENT FUNDS
INVESTMENT ADVISOR: BANKERS TRUST COMPANY
<PAGE>
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International Equity Fund
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareholders ..........................................3
International Equity Fund
Statements of Assets and Liabilities .........................8
Statements of Operations .....................................9
Statements of Changes in Net Assets .........................10
Financial Highlights ........................................11
Notes to Financial Statements ...............................12
Report of Independent Accountants ...........................14
Tax Information .............................................14
International Equity Portfolio
Schedules of Portfolio Investments ...........................15
Statements of Assets and Liabilities .........................21
Statements of Operations .....................................22
Statements of Changes in Net Assets ..........................23
Financial Highlights .........................................23
Notes to Financial Statements ................................24
Report of Independent Accountants ............................28
Proxy Results ..................................................29
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The Fund is not insured by the FDIC and is not a deposit obligation of or
guaranteed byBankers Trust Company. The Fund is subject to investment risks,
including possible loss of principal amount invested.
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2
<PAGE>
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International Equity Fund
Letter to Shareholders
- --------------------------------------------------------------------------------
We are pleased to present you with this annual report for the International
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
Performance of world markets improved considerably during the fiscal period, as
investors focused on renewed global economic growth and benign inflation.
o The specter of emerging market collapse, which led to broad market downturns
in the fall of 1998, dissipated with appropriate intervention by the
International Monetary Fund and individual nations' central banks.
o Confidence in the leadership of the US Federal Reserve Board, the Bank of
England, and the European Central Bank contributed significantly to all-time
highs experienced by many European and North American stock markets.
o For the first time in many years, EAFE markets closely tracked the strong
performance of US stocks, due primarily to a revived interest in Japanese
equities, as investors weighed the impact of restructuring announcements and
ongoing fiscal stimulus measures.
Europe
Europe delivered a 21.9% return in US dollar terms for the period, as the region
entered an unprecedented stage in its efforts to merge the common interests of
the eleven EMU member nations with the introduction of the euro currency on
January 1, 1999.
o Interest rate cuts prior to and following the introduction of the new
currency, along with convergence in short-term interest rates, provided a
stimulus for a resurgence in economic growth.
o However, after considerable outperformance for European equity markets during
the 1998 calendar year, many fund managers took profits to diversify
elsewhere during the first calendar quarter of 1999. The resulting move out
of Europe and into Japan and emerging markets led to weakness in European
stocks as well as in the euro. Fighting in Kosovo and a brief increase in
interest rates further led to outflows from the region.
o An unexpected 0.50% cut in interest rates to 2.5% in April by the European
Central Bank then reignited investor confidence along with positive economic
news.
France led the larger markets with a 37.7% gain in US dollar terms, and the
United Kingdom and Germany returned 20.2% and 12.5%, respectively.
o The continent's smaller markets generally delivered lackluster returns,
although Nordic markets soared due to strong demand for communication
equipment, technology and other industrial stocks in Finland and Sweden, up
127.5% and 58.0% in US dollar terms, respectively. Norway rose 21.2% due
primarily to firmer oil prices.
o Technical factors hindered the performance of other markets in the periphery,
such as Ireland, as local investors sought diversification by selling
domestic stocks, regardless of their attractive valuations, while purchasing
those of their larger neighbors.
- ----------------------------------------------------------
Ten Largest Stock Holdings % of Net Assets
- ----------------------------------------------------------
Total Fina SA Class B (Oil) 2.8%
- ----------------------------------------------------------
Murata Manufacturing Co. Ltd.
(Electronic Components) 2.1%
- ----------------------------------------------------------
NTT Mobile Communications
(Telecommunications) 1.9%
- ----------------------------------------------------------
COLT Telecom Group PLC
(Telecommunications) 1.8%
- ----------------------------------------------------------
Nortel Networks Corp.
(Telecommunications Equipment) 1.7%
- ----------------------------------------------------------
Nokia Oyj ADR
(Telecommunications Equipment 1.7%
- ----------------------------------------------------------
Mannesmann AG (Telecommunications) 1.6%
- ----------------------------------------------------------
Vodafone Air Touch PLC
(Telecommunications) 1.6%
- ----------------------------------------------------------
ING Groep NV (Finance) 1.5%
- ----------------------------------------------------------
Fujitsu Ltd. (Electronics) 1.5%
- ----------------------------------------------------------
Asia
Japan rose a staggering 85.3% in US dollar terms for the reporting period,
undergoing a dramatic revival after falling to its worst market close in 13
years on March 31, 1999.
o Unprecedented foreign buying, fueled by incipient announcements of corporate
restructuring and economic recovery, helped to push the yen and the market
higher. In fact, half of the market's gain came from a revitalized currency.
o The absence of strong domestic purchases limited the upside movement of the
market, but equity leadership moved to the financial sector as investors
applauded announcements of mergers and government efforts to inject capital
into floundering banks.
o Technology-related shares benefited from gains in US equity peers. In
addition, demand for personal computers, software and Internet services
continued to rise at a torrid pace despite weakness in most segments of the
Japanese economy.
Recovery in Asia ex-Japan markets was exceptional, with a gain of 86.8% in US
dollar terms during the Fund's fiscal period, after massive declines experienced
during previous months' crisis.
o Triggers for the sustained rally included:
- lower interest rates globally and in Asia particularly, where rates
dropped to pre-crisis levels
- sustained strengthening of the yen
- stronger than expected economic rebound in the region
- rapidly improving and ample liquidity conditions supported by strong fund
flows and large current account surpluses.
3
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Letter to Shareholders
- --------------------------------------------------------------------------------
o Star performers were primarily those harder hit countries of the Asian
economic and financial crisis, including Indonesia, South Korea, and
Malaysia, whose equity markets each tripled over the Fund's fiscal period.
Specifically, Indonesia gained 315.1%; South Korea was up 249.0%, and
Malaysia rose 212.7%. Trade center Singapore posted a return of 135.3%.
o Those countries less affected by last year's regional crisis, such as Taiwan,
India, the Philippines, and Hong Kong, lagged in comparison, but still
produced impressive returns of 45%-75%.
o Likewise, Australia which did not experience the deep sell-off of its
neighbors, rose 22.1% during the period.
o In the last few months of the fiscal period, the region's markets pulled back
slightly, on rising risk aversion due to concerns over US interest rates,
Year 2000 preparedness, and equity supply.
Other Markets
Emerging markets experienced great volatility, but also staged a broad recovery
from the sharp losses of the previous year, outperforming most developed global
markets for the period ended October 31, 1999.
Latin American markets fared well with a 34.3% gain in US dollar terms, even
though Brazil's currency devaluation in January, Ecuador's eurobond default in
the last fiscal quarter, and constant US interest rate concerns did overhang the
region.
o Latin America benefited from its export profile, as global commodity prices
troughed in the early spring of 1999.
o The region's strong performance was led by Mexico's 54.9% US dollar return,
as export and domestic demand improved, oil prices and the peso firmed, and
free elections bolstered investor demand.
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 Chile and Venezuela, both countries with large commodity exposures, advanced
32.0% and 36.9% in US dollar terms, respectively.
o Brazil ended the fiscal year up 12.5% in US dollar terms, with investors
scrutinizing the country's reform progress following Supreme Court rulings
blocking several fiscal reform measures.
Emerging Europe, up 79.7%, rebounded soundly off lows, led by Russia and Greece.
o The largest gains for the region were in Russia, up a stunning 215.3%,
despite being among Emerging Europe's most illiquid markets.
o Greece posted an impressive 93.6% retail-driven performance despite repeated
"irrational exuberance" speeches by its government officials. Greece also
rose on its positioning towards joining EMU.
o Greece's long-time rival Turkey improved by 75.3%, despite experiencing its
worst earthquake in history.
INVESTMENT REVIEW
During the Fund's fiscal period, we maintained our preference toward continental
European equities, but we nevertheless reduced our exposure there to gain access
to exciting opportunities in other regions around the world.
o Despite our concerns regarding macroeconomic factors in Japan, our purchase
of dominant technology and telecommunications stocks led to a higher
weighting there.
o We added positions in emerging markets as recovery gained ground in many
economies.
o Canada provided fertile offerings in communications and resources stocks.
Many of the stocks in the Portfolio were beneficiaries of the quickening pace of
domestic and global merger and acquisition (M&A) activity, as consolidation
benefits were sought by small and large firms alike.
o Banks, telecommunications companies, and cyclical industrial firms in
particular have been seeking economies of scale, operating synergies and
cross border exposure.
<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>
International Equity Fund/1
(inception 8/4/92) 4.63% 15.41% 60.24% 100.06% 191.75% 15.41% 17.02% 14.88% 15.94%
- -----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
International ("MSCI")
EAFE Index/2 3.75% 23.03% 41.15% 55.35% 132.05% 23.03% 12.17% 9.21% 12.31%
- -----------------------------------------------------------------------------------------------------------------------
Lipper International Equity
Funds Average/3 3.85% 25.56% 44.76% 58.85% 126.59% 25.56% 12.90% 9.50% 11.80%
- -----------------------------------------------------------------------------------------------------------------------
</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/ Indexes 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.
4
<PAGE>
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International Equity Fund
Letter to Shareholders
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Diversification of Portfolio Investments
By Country as of October 31, 1999
(percentages are based on net assets)
[GRAPHIC OMITTED]
Sweden 5% South Korea 2%
Other/1 6% France 14%
Australia 2% Hong Kong 2%
Cash & Cash Equivalent 6% Singapore 2%
United Kingdom 14% Germany 7%
Ireland 2% Switzerland 3%
Canada 3% Spain 4%
Italy 4% Finland 4%
Japan 14% Netherlands 6%
- ----------
1/ Includes countries with weightings of less than 2%.
o As part of the ongoing restructuring of European businesses, spin-offs of
non-core assets and strategic alliances also provided rare opportunities.
o We found excellent stocks in France, where economic growth and M&A activity
is accelerating, as highlighted by the recent acquisition of Paribas by money
center bank BNP.
o Italy is also seeing more M&A transactions, including the acquisition of
Banca San Paolo di Brescia by Credit Agrario Bresciano and the merger of
Unicredito and Credito Italiano to form Unicredito Italiano.
o In contrast, we reduced exposure to the United Kingdom, which had benefited
from an extended strong economic cycle but more recently has been contending
with the risk of overheating and the adverse impact of a strong currency.
o Germany's bumpy road to recovery has been a market damper. But we are
optimistic looking forward and have built positions in several exciting
industrial restructuring opportunities, including Bayer and Veba.
We were impressed by the tremendous growth opportunities offered by foreign
technology and telecommunications stocks.
o In most cases, foreign technology and telecommunications companies have been
attractively priced, while their US counterparts challenge traditional
valuation criteria.
o Since we last reported, we added telecommunications equipment leaders Nokia
and Ericsson, beneficiaries of the continuing rise in cellular telephony
penetration in virtually every market in the world.
o Service providers have been rushing to consolidate, with many of the Fund's
holdings, such as Mannesmann in Germany in its acquisition move for Orange in
the UK, and Vodafone AirTouch, which appears eager to acquire or align with
Mannesmann, driving the consolidation process.
o We took profits in several second-tier telecommunications ventures, including
Equant, Esat Telecom, Global Crossing, and Global Telesys.
o We added exposure to Finland's Sonera, a major Nordic cellular operator with
other European market holdings and a promising technology for processing
secure e-commerce transactions.
o Asia offered exciting opportunities in Korea's leading mobile phone company,
SK Telecom, and Korea Telecom, which complement our other regional
holdings--NTT and NTT Docomo in Japan and China Telecom in Hong Kong.
Acceleration of economic growth around the globe led to the sharp increase in
our exposure to materials.
o Stronger demand, cost cutting, and consolidation improved the outlook for
many companies in the sector after a long period of sagging commodity prices.
o In Europe, we purchased shares in the diversified chemical companies Bayer
and DSM, specialty chemical maker Clariant, steel producer Usinor, engineered
materials manufacturer St. Gobain, and Nordic pulp & paper giant Stora Enso,
complementing our position in UPM-Kymmene.
o We added Canadian nickel leader Inco, Australian mining company WMC, and
Korean iron and steel maker Pohang.
We made several strategic moves within the energy and oil services sector.
o The Portfolio benefited from both OPEC commitments to limit oil production
and the acceleration of industrial consolidation by participating in the
acquisition of French oil giant Elf Aquitaine by rival Total Fina. The
combination creates one of Europe's largest energy companies as well as a
substantially improved profit outlook.
o Similarly, we purchased Anglo-American integrated oil leader BP Amoco, which
has bid for ARCO, and Shell T&T, an undervalued oil major with significant
restructuring potential.
o Heightened global demand and a recovery in oil prices led the Fund to
identify inexpensive stocks in the sector with excellent growth prospects,
including Norsk Hydro and Spain's Repsol.
We significantly added to our Japanese holdings, purchasing strong companies
that are competitive on a global basis or are well-positioned to succeed in a
weak economy at home.
o Following the purchase of electronic components leader Murata and computer
giant Fujitsu in the first half, we added Kyoto-based semiconductor maker
Rohm based on firm demand in consumer and industrial applications.
o We bought Internet bellwether Softbank to capture the explosive growth of the
web-based businesses in Japan, Europe and the US.
o Our preference for profitable Japanese companies that have demonstrated
resilience in both good and bad economic scenarios led us to Sanrio, a
character goods maker known for its popular `Hello Kitty' line, and to
consumer finance companies Acom and Aiful.
o It is important to note that our Japanese weighting increased as we
identified exciting, stock specific opportunities, not out of a belief that
economic recovery is sustainable in the near term or because we feel the bad
debt crisis in the financial sector has been resolved.
5
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Letter to Shareholders
- --------------------------------------------------------------------------------
In Asia ex-Japan, we carried out several stock specific and sector allocation
strategies for the Fund.
o We reduced the Portfolio's holdings in interest-rate sensitive companies like
Westpac Bank, Thai Farmer's Bank, Sun Hung Kai Properties, and property firm
Wing Tai in favor of cyclical and trade recovery plays, such as Pohang Iron &
Steel, Western Mining Corporation, Neptune Orient Line, and Cosco Pacific.
o In light of the uncertainty caused by the Daewoo bankruptcy, the Fund cut its
exposure in South Korea, taking profits in Samsung Securities, Korean Air,
Korea Electric Power, and Shinhan Bank.
o We focused our holdings in the secular growth areas of technology,
telecommunications and multimedia. Thus, the following purchases were made:
CDROM manufacturer Ritek, foundry Taiwan Semiconductor, IT software company
Silverline, Samsung Electronics, Natsteel Electronics, Korea Telecom, mobile
operator SK Telecom, media company Singapore Press Holdings, and conglomerate
Wharf Holdings.
o Increasing concern over Indonesia's political stability prompted us to sell
PT Telkom and Indah Kiat.
Among the emerging markets, we were also actively buying and selling.
o We established positions in Turkey's financial services company Akbank and
conglomerate Sabanci on the belief that Turkey will receive an International
Monetary Fund package and that its government will take necessary reform
measures to lower inflation.
o We saw opportunity in South Africa given firming commodity prices and
declining local interest rates, and we identified life insurer Old Mutual and
media firm MIH Limited as excellent prospects.
o In Greece, valuation considerations caused us to sell Alpha Credit Bank, but
we replaced it with telecommunications holdings OTE and Panafon, respectively
the fixed line and cellular operators there.
o OTP Bank was sold on disappointing macroeconomic data in Hungary.
MANAGER OUTLOOK
We believe that low inflation and global economic growth will spur the world's
equity markets higher in the coming year, especially in Europe. Europe appears
to offer an edge in that growth is accelerating, monetary conditions are
favorable, and valuations remain relatively attractive. The fruits of economic
and monetary union are becoming increasingly evident.
We believe that although the Japanese economy shows some signs of bottoming, it
remains quite fragile and prone to recessionary pressures. The strong yen,
dependence on deficit spending, and consumer nervousness contribute to our
cautionary posture. Still, there are very good stocks to be found in Japan,
especially global companies with competitive cost bases, domestic companies
shielded from a weak economy, and technology-related shares benefiting from
spending shifts toward information technology, personal computing, and the
Internet.
Emerging markets stand to continue to benefit from the cyclical global recovery
currently underway. We believe that interest rates in Asia have bottomed, and so
equity returns in that region going forward will likely be more muted but still
healthy, driven by strong earnings performance and restructuring. We are
particularly optimistic on Taiwan, India, and, once the Daewoo crisis is sorted
out, South Korea. In our view, Latin America has greater return potential next
year if risk premiums and emerging market bond spreads can narrow. We expect
this is likely to happen once the US bond market stabilizes. Brazilian equities
remain very inexpensive on numerous parameters, but the nation has to make
further progress on the fiscal front. We believe Emerging Europe should benefit
from the burgeoning recovery of the European Union economies, particularly
Hungary. Poland, in our opinion, has been oversold on current account fears.
While the overall Greek market is overvalued, we are comfortable with our
reasonably priced holdings.
As we near the end of 1999, we expect increased volatility in the emerging
markets on Year 2000 concerns. However, we believe that these near-term fears
over liquidity and Y2K preparedness will pose only limited and temporary
setbacks to these markets.
A word of caution must be expressed relative to mounting pressure for a
correction in the US large cap equity market, which is challenging historical
valuation parameters.
o Corrections of 20% or more have historically helped to consolidate and
prepare US stocks for higher long-term moves. However, the absence of such an
occurrence for the greater part of this decade, especially after a long
string of double-digit annual gains, suggests that a much larger pullback may
be in store.
o Short term, the reverberations of such an event would be felt in foreign
markets, although in most cases, valuation support abroad provides
encouragement for a quick rebound and relative outperformance, especially in
US dollar terms since a US correction would not likely occur alongside dollar
weakness.
We will, of course, continue to monitor economic conditions and political
initiatives and their effect on financial markets as we seek long-term capital
appreciation.
We sincerely value your ongoing support of the International Equity Fund and
look forward to continuing to serve your investment needs in the years ahead.
/s/ Michael Levy /s/ Robert Reiner
/s/ Julie Wang
Michael Levy, Robert Reiner and Julie Wang
Portfolio Managers of the
International Equity Portfolio
October 31, 1999
6
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Performance Comparison
- --------------------------------------------------------------------------------
Comparison of Change in Value
of a $10,000 Investment in the
International Equity Fund and
the Morgan Stanley Capital
International EAFE Index since
August 31, 1992.
- ------------------------------------
Total Return for the Periods
Ended October 31, 1999
One Year
15.41%
Five Year Since 8/4/92/1
14.88%/2 15.94%/2
Ended September 30, 1999
One Year
17.35%
Five Year Since 8/4/92/1
14.47%/2 15.41%/2
1/ The Fund's inception date.
2/ Annualized.
Investment return and principal
value will fluctuate so that shares,
when redeemed, may be worth
more or less than their original
cost.
- ------------------------------------
As of October 31, 1999
[GRAPHIC OMITTED]
International Equity Fund - $29,175 MSCI EAFE Index - $23,205
Aug-92 10000 10000
Sep-92 9665 9803
Mar-93 10424 10554
Sep-93 11944 12386
Mar-94 13717 12930
Sep-94 13977 13603
Mar-95 14046 13715
Sep-95 15911 14391
Mar-96 16862 15406
Sep-96 18057 15630
Mar-97 20108 15630
Sep-97 24318 18634
Mar-98 27532 19701
Sep-98 23763 17081
Mar-99 26595 20896
Sep-99 27885 22368
Oct-99 29175 23205
As of September 30, 1999
[GRAPHIC OMITTED]
International Equity Fund - $27,885 MSCI EAFE Index - $22,368
Aug-92 10000 10000
Sep-92 9665 9803
Mar-93 10424 10554
Sep-93 11944 12386
Mar-94 13717 12930
Sep-94 13977 13603
Mar-95 14046 13715
Sep-95 15911 14391
Mar-96 16862 15406
Sep-96 18057 15630
Mar-97 20108 15630
Sep-97 24318 18634
Mar-98 27532 19701
Sep-98 23763 17081
Mar-99 26595 20896
Sep-99 27885 22368
Past performance is not indicative of future performance. Performance figures
assume the reinvestment of dividends and capital gain distributions.
7
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 31, 1999/1 September 30, 1999
------------------ ------------------
<S> <C> <C>
Assets
Investment in International Equity Portfolio, at Value ................... $ 1,920,059,246 $ 1,825,653,442
Receivable for Shares of Beneficial Interest Subscribed .................. 5,086,012 29,360,753
Prepaid Expenses and Other ............................................... 38,284 39,198
--------------- ---------------
Total Assets ................................................................ 1,925,183,542 1,855,053,393
--------------- ---------------
Liabilities
Payable for Shares of Beneficial Interest Redeemed ....................... 9,144,388 2,684,790
Due to Bankers Trust ..................................................... 2,275,041 1,027,235
Accrued Expenses and Other ............................................... 97,319 110,972
--------------- ---------------
Total Liabilities ........................................................... 11,516,748 3,822,997
--------------- ---------------
Net Assets .................................................................. $ 1,913,666,794 $ 1,851,230,396
=============== ===============
Composition of Net Assets
Paid-in Capital .......................................................... $ 1,583,051,150 $ 1,606,752,489
Undistributed Net Investment Income (Loss) ............................... (973,857) 3,610,542
Accumulated Net Realized Loss from Investment, Option, Foreign Currency,
Forward Foreign Currency and Foreign Futures Transactions .............. (15,655,895) (12,855,969)
Net Unrealized Appreciation on Investment, Options, Foreign Currencies
and Forward Foreign Currency Contracts ................................. 347,245,396 253,723,334
--------------- ---------------
Net Assets .................................................................. $ 1,913,666,794 $ 1,851,230,396
=============== ===============
Net Asset Value, Offering and Redemption Price Per Share
(net assets divided by shares outstanding) ............................... $ 25.33 $ 24.22
=============== ===============
Shares Outstanding ($0.001 par value per share, unlimited number of shares of
beneficial interest authorized) .......................................... 75,553,610 76,449,542
=============== ===============
</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>
- --------------------------------------------------------------------------------
International Equity Fund
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the For the
period ended year ended
October 31, 1999/1 September 30, 1999
------------------ ------------------
<S> <C> <C>
Investment Income
Income (Expenses in Excess) Allocated from International Equity Portfolio, net .. $ (206,199) $ 17,111,975
------------- -------------
Expenses
Administration and Services Fees ................................................ 1,352,481 14,725,503
Registration Fees ............................................................... 10,862 --
Printing and Shareholder Reports ................................................ 7,510 152,092
Professional Fees ............................................................... 5,051 30,419
Trustees Fees ................................................................... 364 5,122
Miscellaneous ................................................................... 1,681 1,741
------------- -------------
Total Expenses .................................................................. 1,377,949 14,914,877
Less Fees Waived/Expense Reimbursed by Bankers Trust ............................ (104,676) (1,056,985)
------------- -------------
Net Expenses ................................................................. 1,273,273 13,857,892
------------- -------------
Net Investment (Expenses in Excess of) Income ...................................... (1,479,472) 3,254,083
------------- -------------
Realized and Unrealized Gain (Loss) on Investment, Options, Foreign Currencies,
Forward Foreign Currency and Foreign Futures Contracts
Net Realized Gain (Loss) from:
Investment Transactions ...................................................... (2,819,115) 34,225,636
Option Transactions .......................................................... -- (3,221,008)
Foreign Currency Transactions ................................................ (623,120) (42,148)
Forward Foreign Currency Transactions ........................................ (2,936,669) (7,791,080)
Foreign Futures Transactions ................................................. -- (22,020,599)
Net Change in Unrealized Appreciation/Depreciation on Investment, Options,
Foreign Currency and Forward Foreign Currency Contracts ...................... 93,522,062 232,624,850
------------- -------------
Net Realized and Unrealized Gain on Investment, Options, Foreign Currencies,
Forward Foreign Currency and Foreign Futures Contracts .......................... 87,143,158 233,775,651
------------- -------------
Net Increase in Net Assets from Operations ......................................... $ 85,663,686 $ 237,029,734
============= =============
</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.
9
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
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, 1999/1 September 30, 1999 September 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment (Expenses in Excess of) Income ....... $ (1,479,472) $ 3,254,083 $ 5,740,259
Net Realized Gain (Loss) from Investment, Option,
Foreign Currency, Forward Foreign Currency and
Foreign Futures Transactions ...................... (6,378,904) 1,150,801 (40,667,938)
Net Change in Unrealized Appreciation/Depreciation
on Investment, Options, Foreign Currencies and
Forward Foreign Currency Contracts ................ 93,522,062 232,624,850 (82,397,152)
--------------- --------------- ---------------
Net Increase (Decrease) in Net Assets from Operations .. 85,663,686 237,029,734
(117,324,831)
--------------- --------------- ---------------
Distributions to Shareholders
Net Investment Income ............................... -- (3,594,378) (402,898)
Net Realized Gain from Investment Transactions ...... -- -- (15,924,100)
--------------- --------------- ---------------
Total Distributions .................................... -- (3,594,378) (16,326,998)
--------------- --------------- ---------------
Capital Transactions in Shares of Beneficial Interest
Proceeds from Sales of Shares ....................... 242,653,438 2,139,841,944 1,500,555,521
Dividend Reinvestments .............................. -- 3,024,024 12,079,856
Cost of Shares Redeemed ............................. (265,880,726) (1,776,650,526) (652,924,155)
--------------- --------------- ---------------
Net Increase (Decrease) from Capital Transactions in
Shares of Beneficial Interest ........................ (23,227,288) 366,215,442 859,711,222
--------------- --------------- ---------------
Total Increase in Net Assets ........................... 62,436,398 599,650,798 726,059,393
Net Assets
Beginning of Period .................................... 1,851,230,396 1,251,579,598 525,520,205
--------------- --------------- ---------------
End of Period (including undistributed net investment
income (loss) of $(973,857), $3,610,542, and
$7,649,393, respectively) ............................ $ 1,913,666,794 $ 1,851,230,396 $ 1,251,579,598
=============== =============== ===============
</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.
10
<PAGE>
- --------------------------------------------------------------------------------
International 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 International Equity Fund.
<TABLE>
<CAPTION>
For the period For the years ended For the period For the
October 1, 1999 to September 30, Jan. 1, 1995 year ended
October 31, -------------------------------------------- to Sept. 30, Dec. 31,
1999/3 1999 1998 1997 1996 1995/1 1994
------------------ ---- ---- ---- ---- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value, Beginning of Period ......... $ 24.22 $ 20.68 $ 22.13 $ 16.77 $ 15.47 $ 13.37 $ 13.18
Income fromInvestment Operations
Net Investment (Expenses in Excess of)
Income ................................. (0.02) 0.04 0.02 0.09 0.18 0.14 0.10
Net Realized and Unrealized Gain (Loss) on
Investment, Option, Foreign Currency,
Forward Foreign Currency and Foreign
Futures Contracts ...................... 1.13 3.56 (0.87) 5.63 1.80 1.97 0.44
---------- ---------- ---------- -------- -------- -------- --------
Total from Investment Operations ............. 1.11 3.60 (0.85) 5.72 1.98 2.11 0.54
---------- ---------- ---------- -------- -------- -------- --------
Distributions to Shareholders
Net Investment Income ..................... -- (0.06) (0.01) (0.16) (0.31) -- (0.09)
Net Realized Gains ........................ -- -- (0.59) (0.20) (0.37) (0.01) (0.26)
---------- ---------- ---------- -------- -------- -------- --------
Total Distributions .......................... -- (0.06) (0.60) (0.36) (0.68) (0.01) (0.35)
---------- ---------- ---------- -------- -------- -------- --------
Net Asset Value, End of Period ............... $ 25.33 $ 24.22 $ 20.68 $ 22.13 $ 16.77 $ 15.47 $ 13.37
========== ========== ========== ======== ======== ======== ========
Total Investment Return ...................... 4.63% 17.35% (3.73)% 34.76% 13.42% 15.82% 4.12%
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) .. $1,913,667 $1,851,230 $1,251,580 $525,520 $161,692 $ 82,807 $ 56,020
Ratios to Average Net Assets:
Net Investment (Expenses in Excess of)
Income ............................... (0.93)%/2 0.19% 0.61% 0.53% 0.91% 1.55%/2 0.84%
Expenses, Including Expenses of the
International Equity Portfolio ....... 1.50%/2 1.50% 1.50% 1.50% 1.50% 1.50%/2 1.50%
Decrease Reflected in Above Expense
Ratio Due to Fees Waived/Expenses
Reimbursed by Bankers Trust .......... 0.20%/2 0.16% 0.20% 0.18% 0.26% 0.33%/2 0.37%
</TABLE>
- ----------
1/ On August 2, 1995, the Board of Trustees approved the change of the fiscal
year end from December 31 to September 30.
2/ Annualized.
3/ 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.
11
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 International Equity Fund (the "Fund") is
one of the funds offered to investors by the Trust. The Fund began operations on
August 4, 1992. The Fund seeks to achieve its investment objective by investing
substantially all of its assets in the International Equity Portfolio (the
"Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The value of the investment in the Portfolio reflects
the Fund's proportionate interest in the net assets of the Portfolio. At
September 30, 1999, the Fund's investment was approximately 63% of the
Portfolio. At October 31, 1999, the Fund's investment was approximately 64% 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's income, net of expenses, is earned daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from 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. 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 also be made annually to the extent they are not 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 and distribute substantially all of its 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
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 carryovers of $12,855,970 and $2,799,926 expiring October
31, 2006, and October 31, 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 the 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. 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 .85% 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 .80% of
the average daily net assets of the Fund, excluding expenses of the Portfolio
and 1.50% 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.
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
October 1, 1999 to For the year ended
October 30, 1999 September 30, 1999
--------------------------- ------------------------------
Shares Amount Shares Amount
----------- ------------- ----------- ---------------
Sold 9,872,995 $ 242,653,438 91,035,744 $ 2,139,841,944
Reinvested -- -- 129,786 3,024,024
Redeemed (10,768,927) (265,880,726) (75,245,376) (1,776,650,526)
----------- ------------- ---------- ---------------
Net Increase
(Decrease) (895,932) $ (23,227,288) 15,920,154 $ 366,215,442
=========== ============= =========== ===============
For the period ended
September 30, 1998
---------------------------
Shares Amount
---------- --------------
Sold 64,961,016 $1,500,555,521
Reinvested 608,250 12,079,856
Redeemed (28,791,427) (652,924,155)
----------- --------------
Net Increase 36,777,839 $ 859,711,222
-========== -=============
12
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 4--Risks of Investing in Foreign Securities
The Portfolio invests in foreign securities. Investing in foreign companies and
foreign governments involves special risks and considerations not typically
associated with investing in U.S. companies and the U.S. government. These risks
include devaluation of currencies and future adverse political and economic
developments. Moreover, securities of many foreign companies and foreign
governments and their markets may be less liquid and their prices more volatile
than those of securities of comparable U.S. companies and the U.S. government.
This is particularly true with respect to emerging markets in developing
countries.
13
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees of BT Investment Funds
and Shareholders of International 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 International Equity Fund (one of the funds comprising BT Investment Funds,
hereafter referred to as the "Fund") at October 31, 1999 and September 30, 1999
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 Year Ended September 30, 1999)
- --------------------------------------------------------------------------------
During the year ended September 30, 1999, the Fund received income from foreign
sources in the amount of $26,123,873 or $0.347 per share. The Fund has paid
foreign taxes in the amount of $2,400,233 or $0.032 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.
14
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments October 31, 1999
- --------------------------------------------------------------------------------
Shares Description Value
------ ----------- -----
COMMON STOCKS - 94.9%
Australia - 1.7%
562,900 Brambles Industries Ltd.
(Transportation) ............................... $ 15,818,850
2,087,600 TABCORP Holdings Ltd./2
(Leisure Related) .............................. 13,223,266
2,486,100 Telstra Corporation Ltd.
(Telecommunications) ........................... 7,968,777
3,311,700 WMC Ltd. (Mining) ............................... 14,202,707
--------------
51,213,600
--------------
Austria - 0.7%
388,787 Erste Bank (Banks) .............................. 20,464,420
--------------
Botswana - 0.2%
5,817,600 Sechaba Breweries Ltd. (Beverages) .............. 5,801,723
--------------
Canada - 3.3%
1,045,200 Inco Ltd. (Mining) .............................. 21,033,327
852,000 Nortel Networks Corp.
(Telecommunications Equipment) ................. 52,449,929
1,349,660 Rogers Communications, Inc. - Class B/1
(Cable Television) ............................. 27,343,713
--------------
100,826,969
--------------
Finland - 4.3%
437,700 Nokia Oyj ADR (Telecommunications
Equipment) ..................................... 50,581,706
1,148,140 Sonera Group Oyj/2
(Telecommunication Services) ................... 34,452,785
1,894,090 Stora Enso Oyj R Shares (Paper) ................. 24,884,791
648,280 UPM-Kymmene Oyj Corp./2 (Paper) ................. 20,441,241
--------------
130,360,523
--------------
France - 14.2%
241,600 AXA (Insurance) ................................. 34,052,507
278,720 Banque Nationale de Paris (Banks) ............... 24,461,213
634,320 Canal Plus/2 (Broadcasting) ..................... 44,002,334
219,710 Carrefour Supermarche SA
(Food Retailing) ............................... 40,643,010
122,490 Compagnie de Saint-Gobain
(Building Materials) ........................... 21,242,614
142,846 Societe Generale (Banks) ........................ 31,078,626
650,268 Societe Generale D'Enterprises SA
(Engineering and Construction) ................. 30,209,117
392,940 STMicroelectronics NV/2
(Semi-Conductors) .............................. 35,708,423
272,800 Suez Lyonnaise des Eaux/2
(Diversified Utility) .......................... 44,012,509
624,636 Total Fina SA - Class B (Oil) ................... 84,363,312
144,630 Unibail (Real Estate) ........................... 21,129,857
1,568,731 Usinor SA (Steel) ............................... 21,780,842
--------------
432,684,364
--------------
Germany - 7.0%
931,630 Bayer AG (Chemicals) ............................ 38,090,480
74,820 Celanese AG/1 (Chemicals) ....................... 1,179,593
661,070 Epcos AG/1 (Electronics) ........................ 27,083,991
748,200 Hoechst AG/2 (Pharmaceuticals) .................. 32,910,656
117,907 Intershop Communications AG/1
(Computer Software) ............................ 14,747,212
308,880 Mannesmann AG
(Telecommunications) ........................... 48,534,924
Shares Description Value
------ ----------- -----
50,480 SAP AG/2 (Computer Software) .................... $ 22,230,885
470,730 Veba AG (Diversified Utility) ................... 25,430,703
--------------
210,208,444
--------------
Greece - 0.7%
651,961 Hellenic Telecommunication
Organization SA (Telecommuncations) ............ 13,815,152
560,480 Panafon Hellenic Telecom SA
(Telecommunications) ........................... 7,411,748
--------------
21,226,900
--------------
Hong Kong - 2.0%
7,010,500 China Telecom Ltd./1,2
(Telecommunications) ........................... 24,001,402
12,483,400 Cosco Pacific Ltd./2 (Transportation) ........... 9,238,612
5,666,300 First Pacific Company Ltd./2
(Diversified) .................................. 3,281,845
1,211,300 Hutchison Whampoa Ltd. (Diversified) ............ 12,160,524
4,204,000 Wharf Holdings Ltd./2 (Real Estate) ............. 12,147,448
--------------
60,829,831
--------------
India - 0.6%
1,201,600 Larsen & Toubro Ltd. (Construction
Equipment) ..................................... 11,024,582
975 NIIT Ltd./1 (Computer Software) ................. 48,660
788,100 Silverline Industries/1
(Computer Software) ............................ 6,909,266
--------------
17,982,508
--------------
Indonesia - 0.2%
2,122,700 PT Hanjay Mandala Sampoerna
TBK/1 (Tobacco) ................................ 4,945,183
--------------
Israel - 0.4%
699,911 Partner Communications Co. Ltd./1
(Telecommunications) ........................... 10,936,109
--------------
Ireland - 2.1%
3,632,600 Bank of Ireland (Banks) ......................... 28,329,888
1,902,870 CRH PLC (Building Materials) .................... 35,900,207
--------------
64,230,095
--------------
Italy - 4.4%
805,925 Assicurazioni Generali (Insurance) .............. 25,835,558
2,169,390 San Paolo - IMI SPA (Banks) ..................... 28,091,292
15,923,840 Seat-Pagine Gialle SPA/2 (Publishing) ........... 22,678,299
3,024,234 Telecom Italia SPA
(Telecommunications) ........................... 26,096,480
6,269,790 Unicredito Italiano SPA/2 (Banks) ............... 29,324,889
--------------
132,026,518
--------------
Japan - 13.6%
46,450 Aiful Corp. (Finance) ........................... 7,210,518
4,242,000 Fuji Heavy Industries Ltd./2
(Autos and Trucks) ............................. 36,013,898
1,551,000 Fujitsu Ltd./2 (Electronics) .................... 46,666,710
494,000 Murata Manufacturing Co. Ltd.
(Electronic Components) ........................ 63,430,405
23,360 Nippon Telegraph & Telephone Corp.
(Telecommunications) ........................... 35,814,473
1,142,000 Nissan Motor Co. Ltd. (Automobiles/
Trucks) ....................................... 6,839,303
21,080 NTT Mobile Communications
(Telecommunications) ........................... 55,952,064
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments October 31, 1999
- --------------------------------------------------------------------------------
Shares Description Value
------ ----------- -----
111,400 Rohm Company
(Electronic Components) ........................ $ 24,978,525
354,000 Sanrio Company Ltd.
(Consumer Goods) ............................... 18,656,565
70,200 Softbank Corporation (Diversified) .............. 29,126,664
801,900 Takeda Chemical Industries Ltd.
(Pharmaceuticals) .............................. 46,027,011
844,000 Yamanouchi Pharmaceutical Co. Ltd.
(Pharmaceuticals) .............................. 38,253,337
--------------
408,969,473
--------------
Mexico - 0.8%
334,200 Grupo Televisa SA GDR/1 (Broadcasting) .......... 14,203,500
112,700 Telefonos de Mexico SA ADR/1,2
(Telecommunications) ........................... 9,635,850
--------------
23,839,350
--------------
Netherlands - 5.7%
500,740 ASM Lithography Holding NV/1
(Semi-Conductors) .............................. 35,314,916
275,081 Benckiser NV - B Shares
(Consumer Goods) ............................... 16,248,762
553,800 DSM NV (Chemicals) .............................. 20,954,574
792,464 ING Groep NV (Finance) .......................... 46,710,114
425,378 Nutreco Holding NV (Foods) ...................... 14,530,540
370,950 Philips Electronics NV (Electronics) ............ 38,013,982
--------------
171,772,888
--------------
Norway - 0.9%
676,620 Norsk Hydro ASA (Diversified) ................... 26,997,188
--------------
Poland - 0.2%
1,399,293 Telekomunikacja Polska SA GDR
Rule 144A/2,3 (Telecommunications) ............. 7,031,447
--------------
Singapore - 1.8%
3,456,200 NatSteel Electronics Ltd./2 (Electronics) ....... 13,502,055
6,462,200 Neptune Orient Lines Ltd.
(Transportation) ............................... 9,360,199
2,520,840 Overseas-Chinese Bank Corp./2 (Banks) ........... 18,938,385
716,400 Singapore Press Holdings Ltd.
(Publishing) ................................... 12,271,230
--------------
54,071,869
--------------
South Africa - 0.6%
395,400 MIH Ltd./1,2 (Cable Television) ................. 17,694,150
--------------
South Korea - 1.7%
331,506 Korea Telecom Corp ADR/1
(Telecommunications) ........................... 11,685,587
471,900 Pohang Iron & Steel Co. Ltd. ADR
(Steel) ........................................ 15,749,663
82,600 Samsung Electronics (Electronics) ............... 13,772,403
720,900 SK Telecom Co., Ltd. ADR/2
(Telecommunications) ........................... 9,416,756
--------------
50,624,409
--------------
Spain - 4.3%
1,939,908 Amadeus Global Travel Distribution
SA/1,2 (Transportation Services) ............... 11,601,570
1,355,560 Argentaria SA/2 (Banks) ......................... 30,062,464
Shares Description Value
------ ----------- -----
1,098,540 Fomento de Construcciones SA
(Diversified) .................................. $ 27,537,698
1,392,340 Repsol - Y.P.F. SA/2 (Oil) ...................... 28,683,012
1,919,714 Telefonica SA (Telecommunications) .............. 31,557,069
--------------
129,441,813
--------------
Sweden - 5.0%
862,651 Atlas Copco AB - A shares
(Machinery) .................................... 22,722,773
2,096,190 Electrolux AB Series B (Appliances) ............. 41,729,286
685,600 Ericsson LM B Shares
(Telecommunications Equipment) ................. 28,461,866
1,508,620 Sandvik AB B Shares (Machinery) ................. 39,005,506
892,470 SKF AB B Shares/2 (Machinery) ................... 18,091,582
--------------
150,011,013
--------------
Switzerland - 3.4%
291,081 ABB Ltd./1 (Engineering &
Construction) .................................. 29,323,288
30,440 Clariant AG (Chemicals) ......................... 13,324,793
104,000 UBS AG (Banks) .................................. 30,270,316
50,190 Zurich Allied AG/2 (Insurance) .................. 28,426,146
--------------
101,344,543
--------------
Taiwan - 0.6%
547,110 Ritek Corp GDR Rule 144A/1,2,3
(Electronics) .................................. 7,303,919
2,769,000 Taiwan Semiconductor (Electronics) .............. 12,300,843
--------------
19,604,762
--------------
Turkey - 0.5%
42,858,700 Akbank T.A.S. (Banks) ........................... 6,686,642
25,325,600 Haci Omer Sabanci Holding AS
(Diversified) .................................. 7,507,277
--------------
14,193,919
--------------
United Kingdom - 14.0%
1,213,593 Barclays PLC (Banks) ............................ 37,179,153
513,600 BP Amoco PLC ADR/2 (Oil) ........................ 29,660,400
1,860,110 COLT Telecom Group PLC/1
(Telecommunications) ........................... 55,612,077
3,101,600 Granada Group PLC (Diversified) ................. 24,607,324
7,111,284 Invensys PLC (Engineering) ...................... 34,948,373
1,601,100 Next PLC (Retail) ............................... 17,247,863
6,301,700 Old Mutual PLC/1 (Insurance) .................... 13,313,342
1,528,302 Orange PLC/1 (Telecommunications) ............... 37,967,952
2,367,420 Peninsular & Orient Steam
Navigation Co. (Transportation) ................ 33,835,732
946,400 Reckitt & Colman PLC
(Consumer Goods) ............................... 11,476,284
1,587,262 SEMA Group PLC (Computer Services) .............. 20,680,033
5,485,980 Shell Transport & Trading
Co. PLC (Oil) .................................. 41,994,072
502,700 Tyco International Ltd. (Diversified) ........... 20,076,581
10,067,130 Vodafone AirTouch PLC
(Telecommunications) ........................... 46,914,396
--------------
425,513,582
--------------
Total Common Stocks (Cost $2,374,284,599) ................... 2,864,847,593
--------------
See Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments October 31, 1999
- --------------------------------------------------------------------------------
Shares/
Par Value Description Value
--------- ----------- -----
CONVERTIBLE CORPORATE NOTES & BONDS - 0.2%
(Y)592,000,000 Acom Co. Ltd. 0.00%, 3-31-02
(Finance) (Cost $4,953,828) ................ $ 6,665,386
--------------
OPTIONS - INDEX - 0.2%
3,140 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
18,993.08 and Expiration 02/10/2000 ........ 1,327,386
3,261 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
19,027.77 and Expiration 02/10/2000 ........ 1,343,070
2,241 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
18,613.35 and Expiration 03/10/2000 ........ 1,505,105
--------------
Total Option - Index (Cost $7,766,495) ...................... 4,175,561
--------------
SHORT TERM INSTRUMENTS - 2.6%
77,849,400 Institutional Cash Management Fund
(Cost $77,849,400) ........................ 77,849,400
--------------
Total Investments (Cost $2,464,854,322) ............ 97.9% 2,953,537,940
Other Assets in Excess of Liabilities .............. 2.1% 63,822,894
----- --------------
Net Assets ......................................... 100.0% $3,017,360,834
===== ==============
- ----------
1/ Non-Income Producing Security
2/ Securities on Loan
3/ Security exempt from registration under Rule 144A of the Securities Act of
1933. This Security may be resold in transactions exempt from registrations,
normally to qualified institutional buyers.
ADR - American Depository Receipt
GDR - Global Depository Receipt
(Y) - Japanese Yen
Industry Diversification (as a percent of Total Investments):
Telecommunications ..................... 16.28%
Banks .................................. 9.65%
Oil .................................... 6.25%
Electronics ............................ 5.37%
Diversified ............................ 5.12%
Telecommunications Equipment ........... 4.45%
Pharmaceuticals ........................ 3.97%
Insurance .............................. 3.44%
Electronic Components .................. 2.99%
Machinery .............................. 2.70%
Transportation ......................... 2.70%
Chemicals .............................. 2.49%
Semi-Conductors ........................ 2.40%
Diversified Utilities .................. 2.35%
Finance ................................ 2.05%
Engineering ............................ 2.02%
Engineering Construction ............... 2.00%
Broadcasting ........................... 1.97%
Building Materials ..................... 1.93%
Food Retailing ......................... 1.87%
Construction Equipment ................. 1.57%
Consumer Goods ......................... 1.57%
Paper .................................. 1.53%
Cable Television ....................... 1.52%
Autos and Trucks ....................... 1.45%
Appliances ............................. 1.41%
Steel .................................. 1.27%
Mining ................................. 1.19%
Publishing ............................. 1.18%
Real Estate ............................ 1.13%
Other* ................................. 4.18%
------
100.00%
======
- ----------
* No one industry represents more than 1% of Portfolio holdings.
See Notes to Financial Statements.
17
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments September 30, 1999
- --------------------------------------------------------------------------------
Shares Description Value
------ ----------- -----
COMMON STOCKS - 94.2%
Australia - 1.6%
562,900 Brambles Industries Ltd.
(Transportation) ............................... $ 16,299,879
2,087,600 TABCORP Holdings Ltd./2
(Leisure Related) .............................. 14,169,167
3,311,700 WMC Ltd. (Mining) ............................... 16,858,126
--------------
47,327,172
--------------
Austria - 0.7%
388,787 Erste Bank (Banks) .............................. 19,837,340
--------------
Botswana - 0.2%
5,817,600 Sechaba Breweries Ltd. (Beverages) .............. 6,258,659
--------------
Canada - 3.1%
1,045,200 Inco Ltd. (Mining) .............................. 22,333,820
852,000 Nortel Networks Corp.
(Telecommunications Equipment) ................. 43,484,533
1,349,660 Rogers Communications, Inc.-
Class B/1 (Cable Television) ................... 22,823,630
--------------
88,641,983
--------------
Finland - 3.0%
437,700 Nokia Oyj ADR (Telecommunications
Equipment) ..................................... 39,310,931
1,894,090 Stora Enso Oyj R Shares/2 (Paper) ............... 25,113,977
648,280 UPM-Kymmene Oyj Corp./2 (Paper) ................. 22,093,175
--------------
86,518,083
--------------
France - 15.1%
147,865 Alcatel (Telecommincations
Equipment) ..................................... 20,377,232
241,600 AXA (Insurance) ................................. 30,567,428
278,720 Banque National de Paris/2 (Banks) .............. 22,247,709
634,320 Canal Plus/2 (Broadcasting) ..................... 37,898,044
219,710 Carrefour Supermarche SA
(Food Retailing) ............................... 35,168,540
122,490 Compagnie de Saint-Gobain
(Building Materials) ........................... 22,828,859
170,530 ELF Aquitaine SA (Oil) .......................... 29,784,490
263,390 Equant NV/1,2 (Telecommunications) .............. 21,430,790
318,000 STMicroelectronics NV/2
(Semi-Conductors) .............................. 23,532,000
142,846 Societe Generale (Banks) ........................ 29,437,070
650,268 Societe Generale D'Enterprises SA
(Engineering and Construction) ................. 32,756,618
272,800 Suez Lyonnaise des Eaux/2
(Diversified Utility) .......................... 44,160,449
375,400 Total Fina SA - Class B/2 (Oil) ................. 47,176,075
144,630 Unibail (Real Estate) ........................... 20,501,327
1,297,001 Usinor SA (Steel) ............................... 18,302,134
--------------
436,168,765
--------------
Germany - 6.1%
931,630 Bayer AG (Chemicals) ............................ 37,157,015
748,200 Hoechst AG/2 (Pharmaceuticals) .................. 32,566,259
150,097 Intershop Communications AG/1
(Computer Software) ............................ 15,585,551
308,880 Mannesmann AG
(Telecommunications) ........................... 49,343,117
Shares Description Value
------ ----------- -----
39,350 SAP AG/2 (Computer Software) .................... $ 17,642,997
470,730 Veba AG (Diversified Utility) ................... 25,793,055
--------------
178,087,994
--------------
Greece - 0.8%
651,961 Hellenic Telecommunication
Organization SA (Telecommuncations) ............ 15,215,420
280,240 Panafon Hellenic Telecom SA
(Telecommunications) ........................... 7,630,258
--------------
22,845,678
--------------
Hong Kong - 2.2%
6,134,000 China Telecomm/1,2
(Telecommunications) ........................... 18,913,178
12,483,400 Cosco Pacific Ltd./2 (Transportation) ........... 9,883,783
12,514,000 First Pacific Company Ltd. (Diversified) ........ 7,652,529
1,211,300 Hutchison Whampoa Ltd. (Diversified) ............ 11,266,909
8,636,400 New World China Land Ltd./1
(Real Estate) .................................. 5,058,938
4,204,000 Wharf Holdings Ltd./2 (Real Estate) ............. 12,150,503
--------------
64,925,840
--------------
India - 0.3%
1,201,600 Larsen & Toubro Ltd. (Construction
Equipment) ..................................... 10,088,278
975 NIIT Ltd./1 (Computer Software) ................. 63,194
--------------
10,151,472
--------------
Indonesia - 0.4%
3,523,700 PT Hanjay Mandala Sampoerna
TBK/1 (Tobacco) ................................ 6,231,504
16,026,500 PT Indah Kiah Pulp & Paper
Corporation TBK/1 (Paper) ....................... 5,706,793
--------------
11,938,297
--------------
Ireland - 2.3%
3,632,600 Bank of Ireland (Banks) ......................... 29,634,109
1,902,870 CRH PLC (Building Materials) .................... 36,437,145
--------------
66,071,254
--------------
Italy - 4.7%
805,925 Assicurazioni Generali (Insurance) .............. 26,779,024
2,169,390 San Paolo - IMI SpA (Banks) ..................... 28,186,620
15,923,840 Seat-Pagine Gialle SpA/2 (Publishing) ........... 23,267,378
3,024,234 Telecom Italia SpA
(Telecommunications) ........................... 26,281,556
6,269,790 Unicredito Italiano SpA (Banks) ................. 30,648,640
--------------
135,163,218
--------------
Japan - 13.2%
940,000 Canon Inc. (Electronics) ........................ 27,370,046
4,242,000 Fuji Heavy Industries Ltd./2
(Autos and Trucks) ............................. 33,707,536
1,551,000 Fujitsu Ltd./2 (Electronics) .................... 48,365,520
494,000 Murata Manufacturing Co. Ltd.
(Electronic Components) ........................ 49,647,422
23,360 Nippon Telegraph & Telephone Corp.
(Telecommunications) ........................... 28,742,869
21,080 NTT Mobile Communicatons
Network, Inc. (Telecommunications) ............. 41,579,176
111,400 Rohm Company
(Electronic Components) ........................ 23,280,976
See Notes to Financial Statements.
18
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments September 30, 1999
- --------------------------------------------------------------------------------
Shares Description Value
------ ----------- -----
354,000 Sanrio Company Ltd.
(Consumer Goods) ............................... $ 19,783,640
70,200 Softbank Corporation (Diversified) .............. 26,704,110
801,900 Takeda Chemical Industries Ltd.
(Pharmaceuticals) .............................. 43,308,589
844,000 Yamanouchi Pharmaceutical Co. Ltd./2
(Pharmaceuticals) .............................. 39,557,513
--------------
382,047,397
--------------
Mexico - 0.7%
334,200 Grupo Televisa SA GDR/1 (Broadcasting) .......... 13,347,113
112,700 Telefonos de Mexico SA ADR
(Telecommunications) ........................... 8,029,875
--------------
21,376,988
--------------
Netherlands - 7.1%
500,740 ASM Lithography Holding NV/1
(Semi-Conductors) .............................. 33,916,805
275,081 Benckiser NV - B Shares
(Consumer Goods) ............................... 17,094,129
553,800 DSM NV (Chemicals) .............................. 21,969,732
792,464 ING Groep NV (Finance) .......................... 43,042,278
473,566 Koninklijke Ahold NV (Food
Retailing) ..................................... 15,584,201
425,378 Nutreco Holding NV (Foods) ...................... 14,723,258
370,950 Philips Electronics NV (Electronics) ............ 37,332,985
342,390 United Pan-Europe Communications
NV/1,2 (Telecommunications) .................... 21,149,232
--------------
204,812,620
--------------
Norway - 1.0%
676,620 Norsk Hydro ASA (Diversified) ................... 28,627,949
--------------
Poland - 0.2%
1,357,193 Telekomunikacja Polska SA GDR
Rule 144A/2,3 (Telecommunications) ............. 6,684,176
--------------
Singapore - 2.0%
3,456,200 NatSteel Electronics Ltd./2 (Electronics) ....... 12,906,370
6,462,200 Neptune Orient Lines Ltd.
(Transportation) ............................... 7,752,506
2,400,800 Overseas-Chinese Banking Corp./2 (Banks) ........ 18,636,375
716,400 Singapore Press Holdings Ltd./2
(Publishing) ................................... 11,290,727
8,880,900 Wing Tai Holdings Ltd./2 (Real Estate) .......... 7,050,538
--------------
57,636,516
--------------
South Africa - 0.4%
395,400 MIH Ltd. (Cable Television) ..................... 11,417,175
--------------
South Korea - 2.0%
336,640 Korea Electric Power Corp. ADR/2
(Utilities) .................................... 5,407,280
331,506 Korea Telecom Corp ADR1
(Telecommunications) ........................... 12,265,722
278,910 Korean Air (Airlines) ........................... 4,012,390
471,900 Pohang Iron & Steel Company Ltd.
(Steel) ........................................ 14,776,369
82,600 Samsung Electronics (Electronics) ............... 13,376,648
720,900 SK Telecom Co., Ltd. ADR
(Telecommunications) ........................... 7,434,281
--------------
57,272,690
--------------
Shares Description Value
------ ----------- -----
Spain - 4.4%
1,355,560 Argentaria SA/2 (Banks) ......................... $ 29,825,971
1,409,782 Fomento de Construcciones SA
(Diversified) .................................. 38,480,978
1,392,340 Repsol - Y.P.F. SA/2 (Oil) ...................... 27,269,210
1,919,714 Telefonica SA (Telecommunications) .............. 30,728,477
--------------
126,304,636
--------------
Sweden - 5.0%
754,820 Atlas Copco AB - A shares
(Machinery) .................................... 21,177,553
2,234,010 Electrolux AB Series B (Appliances) ............. 41,694,722
685,600 Ericsson LM B Shares
(Telecommunications Equipment) ................. 21,242,668
1,508,620 Sandvik AB B Shares (Machinery) ................. 41,222,319
892,470 SKF AB B Shares/2 (Machinery) ................... 20,031,616
--------------
145,368,878
--------------
Switzerland - 3.5%
291,081 ABB Ltd./1 (Engineering &
Construction) .................................. 30,066,835
30,440 Clariant AG (Chemicals) ......................... 13,794,161
104,000 UBS AG (Banks) .................................. 29,316,723
50,190 Zurich Allied AG (Insurance) .................... 27,995,251
--------------
101,172,970
--------------
Turkey - 0.4%
42,858,700 Akbank T.A.S. (Banks) ........................... 6,418,062
25,325,600 Haci Omer Sabanci Holding AS
(Diversified) .................................. 6,595,638
--------------
13,013,700
--------------
United Kingdom - 13.8%
1,213,593 Barclays PLC (Banks) ............................ 35,616,234
256,800 BP Amoco PLC ADR (Oil) .......................... 28,456,650
1,860,110 COLT Telecom Group PLC
(Telecommunications) ........................... 44,113,178
3,101,600 Granada Group PLC (Diversified) ................. 26,689,431
7,111,284 Invensys PLC (Engineering) ...................... 34,432,026
1,601,100 Next PLC (Retail) ............................... 16,097,979
6,301,700 Old Mutual PLC/1 (Insurance) .................... 13,413,914
1,528,302 Orange PLC/1 (Telecommunications) ............... 30,153,188
2,367,420 Peninsular & Orient Steam
Navigation Co. (Transportation) ................ 36,025,873
946,400 Reckitt Benckiser PLC
(Consumer Goods) ............................... 11,868,938
1,587,262 SEMA Group PLC (Computer Services) .............. 19,383,268
5,485,980 Shell Transport & Trading Co.
PLC (Oil) ...................................... 41,018,267
145,430 Tyco International Ltd. (Diversified) ........... 15,015,648
2,013,426 Vodafone AirTouch PLC
(Telecommunications) ........................... 47,649,645
--------------
399,934,239
--------------
Total Common Stocks (Cost $2,379,431,610) ................... 2,729,605,689
--------------
PREFERRED STOCKS - 0.5%
91,626,000 Petroleo Brasileiro SA (Oil),
(Cost $14,755,276) ............................. 13,696,385
--------------
See Notes to Financial Statements.
19
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Schedule of Portfolio Investments September 30, 1999
- --------------------------------------------------------------------------------
Shares/
Par Value Description Value
--------- ----------- -----
CONVERTIBLE CORPORATE NOTES & BONDS - 0.3%
(Y)592,000,000 Acom Co. Ltd. 0.00%, 3-31-02
(Finance) (Cost $4,958,274) ................ $ 7,423,162
--------------
OPTION - INDEX - 0.2%
3,140 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
18,993.08 and Expiration 02/10/2000) ...... 1,538,632
3,261 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
19,027.77 and Expiration 02/10/2000) ....... 1,567,087
2,241 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
18,613.35 and Expiration 03/10/2000) ....... 1,570,739
--------------
Total Option - Index (Cost $7,766,495) ...................... 4,676,458
--------------
OTHER - 0.0%
107,831 Atlas Copco AB Rights Expiration
10/1/99 (Cost $0) .......................... 920,760
--------------
SHORT TERM INSTRUMENT - 3.3%
97,016,565 Institutional Cash Management
Fund, (Cost $97,016,566) ................... 97,016,566
--------------
Total Investments (Cost $2,503,928,221) ............ 98.5% 2,853,339,020
Other Assets in Excess of Liabilities .............. 1.5% 44,517,312
----- --------------
Net Assets ......................................... 100.0% $2,897,856,332
===== ==============
- ----------
1/ Non-Income Producing Security
2/ Securities on Loan
3/ Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registrations,
normally to qualified institutional buyers.
ADR - American Depository Receipt
GDR - Global Depository Receipt
(Y) - Japanese Yen
Industry Diversification (as a percent of Total Investments):
Telecommunications ...................... 14.62%
Banks ................................... 9.81%
Oil ..................................... 6.57%
Diversified ............................. 5.64%
Electronics ............................. 4.88%
Telecommunications Equipment ............ 4.36%
Pharmaceuticals ......................... 4.05%
Insurance ............................... 3.46%
Engineering ............................. 3.41%
Money Market ............................ 3.40%
Machinery ............................... 2.92%
Chemicals ............................... 2.56%
Electronic Components ................... 2.56%
Diversified Utilities ................... 2.45%
Transportation .......................... 2.45%
Building Materials ...................... 2.08%
Paper ................................... 1.85%
Broadcasting ............................ 1.80%
Food Retailing .......................... 1.78%
Finance ................................. 1.77%
Consumer Goods .......................... 1.71%
Real Estate ............................. 1.57%
Appliances .............................. 1.46%
Mining .................................. 1.37%
Publishing .............................. 1.21%
Cable Television ........................ 1.20%
Semi-conductor Production Equipment ..... 1.19%
Autos and Trucks ........................ 1.18%
Computer Software ....................... 1.16%
Steel ................................... 1.16%
Other* .................................. 4.37%
------
100.00%
======
- ----------
*No one industry respresents more than 1% of Portfolio holdings.
See Notes to Financial Statements.
20
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 31, 1999/2 September 30, 1999
------------------ ------------------
<S> <C> <C>
Assets
Investments, at Value:
Common Stock and Options (Cost $2,387,004,922 and $2,406,911,655,
respectively) ......................................................... $2,875,688,540 $2,756,322,454
Short Term Instruments (Cost $77,849,400 and $97,016,566,
respectively) ......................................................... 77,849,400 97,016,566
-------------- --------------
Total Investments, at Value ............................................... 2,953,537,940 2,853,339,020
Cash/1 .................................................................... 46,163,995 7,288,694
Receivable for Securities Sold ............................................ 11,968,864 47,316,442
Collateral for Securities Loaned .......................................... 288,538,523 272,287,712
Unrealized Appreciation on Forward Foreign Currency Contracts ............. 3,140,361 4,762,239
Dividends and Interest Receivable ......................................... 3,910,703 4,714,880
Receivable for Foreign Taxes Withheld ..................................... 3,635,770 3,864,617
Receivable for Shares of Beneficial Interest Subscribed ................... 14,144,889 1,529,342
Securities Lending Income Receivable ...................................... 103,189 84,334
-------------- --------------
Total Assets ................................................................. 3,325,144,234 3,195,187,280
-------------- --------------
Liabilities
Payable for Securities Purchased .......................................... 14,248,569 12,850,580
Payable Under Security Loan Agreements .................................... 288,538,523 272,287,712
Unrealized Depreciation on Forward Foreign Currency Contracts ............. 1,609,674 10,468,708
Due to Bankers Trust ...................................................... 3,366,243 1,697,533
Accrued Expenses and Other ................................................ 20,391 26,415
-------------- --------------
Total Liabilities ............................................................ 307,783,400 297,330,948
-------------- --------------
Net Assets ................................................................... $3,017,360,834 $2,897,856,332
============== ==============
Composition of Net Assets
Paid-in Capital ........................................................... $2,527,231,632 $2,553,833,165
Net Unrealized Appreciation on Investments, Options, Foreign Currencies and
Forward Foreign Currency Contracts ..................................... 490,129,202 344,023,167
-------------- --------------
Net Assets ................................................................... $3,017,360,834 $2,897,856,332
============== ==============
</TABLE>
- ----------
1/ Includes foreign cash of $45,581,296 and $6,490,382 with a cost of
$45,628,022 and $6,464,710, 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.
21
<PAGE>
- --------------------------------------------------------------------------------
International 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 $3,809,883, respectively) .. $ 1,285,387 $ 42,317,068
Interest ....................................................................... 25,900 609,701
Securities Lending Income ...................................................... 108,365 1,663,581
------------- -------------
Total Investment Income ........................................................... 1,419,652 44,590,350
------------- -------------
Expenses
Advisory Fees .................................................................. 1,609,018 16,908,174
Administration and Service Fees ................................................ 373,616 3,932,321
Professional Fees .............................................................. 24,431 34,598
Trustees Fees .................................................................. 276 4,812
Miscellaneous .................................................................. 50,121 46,617
------------- -------------
Total Expenses ................................................................. 2,057,462 20,926,522
Less Fees Waived/Expenses Reimbursed by Bankers Trust .......................... (313,923) (2,574,517)
------------- -------------
Net Expenses ................................................................ 1,743,539 18,352,005
------------- -------------
Net Investment (Expenses in Excess of) Income ..................................... (323,887) 26,238,345
------------- -------------
Realized and Unrealized Gain (Loss) on Investments, Options, Foreign
Currencies, Forward Foreign Currency and Foreign Futures Contracts
Net Realized Gain (Loss) from:
Investment Transactions ...................................................... (4,403,352) 52,443,225
Option Transactions .......................................................... -- (4,733,039)
Foreign Currency Transactions ................................................ (982,368) 24,182
Forward Foreign Currency Transactions ........................................ (4,575,268) (11,059,587)
Foreign Futures Transactions ................................................. -- (32,374,084)
Net Change in Unrealized Appreciation/Depreciation on Investments, Options,
Foreign Currencies and Forward Foreign Currency Contracts ................... 146,111,035 345,753,008
------------- -------------
Net Realized and Unrealized Gain on Investments, Options, Foreign
Currencies, Forward Foreign Currency and Foreign Futures Contracts .............. 136,150,047 350,053,705
------------- -------------
Net Increase in Net Assets from Operations ........................................ $ 135,826,160 $ 376,292,050
============= =============
</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.
22
<PAGE>
- --------------------------------------------------------------------------------
International 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, 1999/3 September 30, 1999 September 30, 1998
----------------------------------------------------------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment (Expenses in Excess of) Income ....... $ (323,887) $ 26,238,345 $ 19,824,918
Net Realized Gain (Loss) from Investment, Option,
Foreign Currency, Forward Foreign Currency and
Foreign Futures Transactions ...................... (9,960,988) 4,300,697 (57,508,505)
Net Change in Unrealized Appreciation/Depreciation
on Investments, Options, Foreign Currencies and
Forward Foreign Currency Contracts ................ 146,111,035 345,753,008 (106,649,538)
--------------- --------------- ---------------
Net Increase (Decrease) in Net Assets from Operations .. 135,826,160 376,292,050
(144,333,125)
--------------- --------------- ---------------
Capital Transactions
Proceeds from Capital Invested ...................... 340,860,574 3,135,914,534 2,330,783,580
Value of Capital Withdrawn .......................... (357,182,232) (2,446,602,079) (926,603,490)
--------------- --------------- ---------------
Net Increase in Net Assets from Capital Transactions ... (16,321,658) 689,312,455 1,404,180,090
--------------- --------------- ---------------
Total Increase in Net Assets ........................... 119,504,502 1,065,604,505 1,259,846,965
Net Assets
Beginning of Period ................................. 2,897,856,332 1,832,251,827 572,404,862
--------------- --------------- ---------------
End of Period ....................................... $ 3,017,360,834 $ 2,897,856,332 $ 1,832,251,827
=============== =============== ===============
</TABLE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Contained below are selected ratios to average net assets and other supplemental
data for periods indicated for the International Equity Portfolio.
<TABLE>
<CAPTION>
For the
For the years ended year
For the period September 30, For the period ended
October 1, 1999 to ------------------------------------- January 1, 1995 Dec. 31,
October 31, 1999/3 1999 1998 1997 1996 to Sept. 30, 1995/2 1994
------------------ ---- ---- ---- ---- ------------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Supplemental Data and Ratios:
Net Assets, End of Period
(000s omitted) ................ $3,017,361 $2,897,856 $1,832,252 $572,405 $164,813 $83,313 $56,042
Ratios to Average Net Assets:
Net Investment (Expenses in
Excess of) Income ............ (0.13)%/1 1.00% 1.52% 1.35% 1.76% 2.39%/1 1.69%
Expenses ........................ 0.70%/1 0.70% 0.66% 0.65% 0.65% 0.65%/1 0.65%
Decrease Reflected in Above
Expense Ratio Due to Fees
Waived/Expenses Reimbursed
by Bankers Trust ............. 0.13%/1 0.10% 0.15% 0.17% 0.20% 0.22%/1 0.24%
Portfolio Turnover Rate ............ 5% 106% 65% 63% 68% 21% 15%
</TABLE>
- ----------
1/ Annualized.
2/ On August 2, 1995, the Board of Trustees approved the change of the fiscal
year end from December 31 to September 30.
3/ 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.
23
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 1--Organization and Significant Accounting Policies
A. Organization
The International 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 as an unincorporated
trust under the laws of New York and began operations on August 4, 1992. 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 prior to the time when the Portfolio assets are
valued. 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 currencies 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 may arise due to
changes in the value of the foreign currency or if the counterparty does not
perform under the contract.
F. 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 marked-to-market daily to reflect the
current market value. When a purchased option expires, the Portfolio will
realize a loss in the amount of the cost of the option. When the Portfolio
enters into a closing sale transaction, the Portfolio will realize a gain or
loss depending on whether the sale proceeds from the closing sale transaction
are greater or less than the cost of the option. When the Portfolio exercises a
put option, it realizes a gain or loss from the sale of the underlying security
and the proceeds from such sale will be decreased by the premium originally
paid. When the Portfolio exercises a call option, the cost of the security which
the Portfolio purchases upon exercise will be increased by the premium
originally paid.
G. Futures Contracts
The Portfolio may enter into financial futures contracts which are contracts to
buy a standard quantity of securities at a specified price on a future date. The
Portfolio is required to deposit either in cash or securities an amount equal to
a certain percentage of the contract amount. Subsequent payments are made or
received by the Portfolio each day, dependent on the daily fluctuations in the
value of the underlying security, and are recorded for financial statement
purposes as unrealized gains or losses by the Portfolio.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
H. Federal Income Taxes
The Portfolio is considered a Partnership under the Internal Revenue Code.
Therefore, no federal income tax provision is necessary.
I. Security Loans
The Portfolio receives compensation in the form of fees or it retains a portion
of interest on the investment of any cash received as collateral. The Portfolio
also continues to receive interest or dividends on the securities loaned. The
loans are secured by collateral at least equal, at all times, to the fair value
of the securities loaned plus accrued interest. Gain or loss in the fair value
of the securities loaned that may occur during the term of the loan will be for
the account of the Portfolio.
J. 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.
24
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Notes to 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 0.15% 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 .65% 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
0.70% 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 for the periods ended October 31, 1999 and September 30, 1999 amounted
to $350,496 and $4,656,980, respectively which 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. For the twelve month period ended
September 30, 1999, $40,000,000 was drawn down under the credit facility at an
interest rate range of 5.59% to 5.83%. Total interest charges as a result of
this borrowing amounted to $28,494 which were paid prior to September 30, 1999.
No amounts were outstanding under the credit facility for the periods ended
September 30, and October 31, 1999.
The Portfolio may use cash collateral from its securities lending transactions,
described in Note 1, I, to purchase shares of an affiliated fund and may pay
fees generated from those transactions to Bankers Trust.
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
$153,505,180 and $180,164,342, respectively. For the year ended September 30,
1999 the amounts were $3,309,983,361 and $2,638,798,308, respectively.
For Federal income tax purposes, the tax basis of investments held at October
31, 1999 was 2,466,509,661. The aggregate gross unrealized appreciation for all
investments at October 31, 1999 was $552,158,497, and the aggregate gross
unrealized depreciation for all investments was $65,130,218. At September 30,
1999 the tax basis of investments held was $2,505,583,560. The aggregate gross
unrealized appreciation for all investments at September 30, 1999 was
$420,701,033 and the aggregate gross unrealized depreciation for all investments
was $72,945,573.
25
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 4--Open Forward Foreign Currency Contracts
At October 31, 1999, the International Equity Portfolio had the following open
forward foreign currency contracts outstanding:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
(Depreciation)
Contracts to Deliver In Exchange For Settlement Date Value (US$) (US$)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales
- ------------------------------------------------------------------------------------------------------------
Australian Dollar 74,750,180 US Dollar 48,543,071 11/12/99 47,634,029 $ 909,042
Euro 38,000,000 US Dollar 39,903,040 11/2/99 39,939,900 (36,860)
British Pound 22,527,305 US Dollar 37,572,701 11/12/99 36,965,055 607,647
British Pound 29,129,267 US Dollar 48,532,811 11/12/99 47,798,214 734,597
British Pound 22,618,544 US Dollar 37,090,482 11/12/99 37,193,934 (103,451)
Singapore Dollar 2,320,000 US Dollar 1,391,722 11/1/99 1,394,362 (2,641)
Singapore Dollar 2,059,000 US Dollar 1,231,828 11/2/99 1,237,497 (5,669)
Singapore Dollar 1,522,000 US Dollar 907,465 11/3/99 914,750 (7,285)
Singapore Dollar 2,075,000 US Dollar 1,247,370 11/4/99 1,247,113 257
- ------------------------------------------------------------------------------------------------------------
Total Sales 2,095,637
- ------------------------------------------------------------------------------------------------------------
Purchases
- ------------------------------------------------------------------------------------------------------------
Canadian Dollar 71,717,532 US Dollar 48,543,071 11/12/99 48,757,585 214,515
Euro 34,709,193 US Dollar 37,572,701 11/12/99 36,481,097 (1,091,604)
Euro 34,823,474 US Dollar 37,090,482 11/12/99 36,728,318 (362,164)
Japanese Yen 5,135,256,738 US Dollar 48,532,811 11/12/99 49,207,115 674,303
- ------------------------------------------------------------------------------------------------------------
Total Purchases (564,950)
- ------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation $ 1,530,687
- ------------------------------------------------------------------------------------------------------------
</TABLE>
At September 30, 1999, the International Equity Portfolio had the following open
forward foreign currency contracts outstanding:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
(Depreciation)
Contracts to Deliver In Exchange For Settlement Date Value (US$) (US$)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Sales
- ------------------------------------------------------------------------------------------------------------
Hong Kong Dollar 1,715,000 US Dollar 220,778 10/4/99 220,790 $ (12)
Hong Kong Dollar 1,488,000 US Dollar 191,548 10/4/99 191,566 (18)
Indonesian Rupiah 17,331,000,000 US Dollar 2,063,214 10/1/99 2,074,388 (11,174)
Japanese Yen 342,330,000 US Dollar 3,269,222 10/5/99 3,215,370 53,852
Japanese Yen 7,261,707,500 US Dollar 69,500,000 10/12/99 68,206,338 1,293,662
Japanese Yen 15,527,652,000 US Dollar 140,700,000 10/12/99 146,183,883 (5,483,883)
Japanese Yen 13,245,120,000 US Dollar 120,000,000 10/12/99 124,695,161 (4,695,161)
Mexican Peso 8,935,000 US Dollar 954,849 10/1/99 956,001 (1,152)
- ------------------------------------------------------------------------------------------------------------
Total Sales (8,843,886)
- ------------------------------------------------------------------------------------------------------------
Purchases
- ------------------------------------------------------------------------------------------------------------
British Pound 2,000,000 US Dollar 3,298,480 10/4/99 3,293,800 (4,680)
Japanese Yen 312,885,000 USDollar 2,937,336 10/1/99 2,938,805 1,469
Japanese Yen 6,009,555,672 USDollar 56,718,000 10/12/99 56,445,372 (272,628)
Japanese Yen 22,763,216,328 USDollar 210,924,809 10/12/99 214,302,545 3,377,736
Singapore Dollar 6,810,000 USDollar 3,972,004 10/4/99 4,004,780 32,777
Singapore Dollar 1,465,000 USDollar 858,784 10/5/99 861,528 2,743
- ------------------------------------------------------------------------------------------------------------
Total Purchases 3,137,417
- ------------------------------------------------------------------------------------------------------------
Net Unrealized Depreciation $(5,706,469)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 5--Lending of Portfolio Securities
The Portfolio has the ability to lend its securities to brokers, dealers and
other financial organizations. Loans of portfolio securities are collateralized
by cash and/or government securities that are maintained at all times in an
amount equal to 102% and 105% to the current market value of the loaned
securities for both domestic and international securities, respectively.
At October 31, 1999
Market Value Market Value % of Portfolio
of Loaned Securities of Collateral on Loan
-------------------- ------------- --------------
$273,233,832 $288,538,523 11.75
At September 30, 1999
Market Value Market Value % of Portfolio
of Loaned Securities of Collateral on Loan
-------------------- ------------- --------------
$253,095,127 $272,287,712 11.55
Note 6--Foreign Securities
The Portfolio invests in foreign securities. Investing in foreign companies and
foreign governments involves special risks and considerations not typically
associated with investing in securities of U.S. companies and the U.S.
government. These risks include devaluation of currencies and future adverse
political and economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of securities of comparable U.S. companies and
the U.S. government. This is particularly true with respect to emerging markets
in developing countries.
27
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees and Holders of Beneficial Interest of
International Equity Portfolio:
In our opinion, the accompanying statements of assets 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 International 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
28
<PAGE>
- --------------------------------------------------------------------------------
International 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 45,204,189 477,834
Messr Dill 45,191,100 490,923
Messr Hale 45,218,689 463,334
Messr Langton 45,206,828 475,195
Messr Saunders 45,221,898 460,125
Messr Van Benschoten 45,158,358 523,665
Dr. Gruber 45,212,971 469,052
Dr. Herring 45,213,240 468,783
2. To approve the New Investment Advisory Agreement with Bankers Trust Company.
For Against Abstain
---------- ------- -------
44,700,172 425,364 556,487
3. To approve the New Investment Advisory Agreement with Morgan Grenfell, Inc.
For Against Abstain
---------- ------- -------
44,657,211 440,502 584,310
4. To approve the New Investment Sub-advisory Agreement with Bankers Trust
Company.
For Against Abstain
---------- ------- -------
44,656,379 446,472 579,172
5. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants of the Fund and its corresponding Portfolio.
For Against Abstain
---------- ------- -------
45,005,230 297,679 379,114
29
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[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: 1-800-368-4031
This report must be preceded or accompanied by a current prospectus for the
Fund.
InternationalEquity Fund CUSIP #055922868
BT Investment Funds 463ANN (9/99)
Distributed by:
ICC Distributors, Inc.
Two Portland Square
Portland, ME 04101
