[Deutsche Asset Management logo omitted]
Mutual Fund
Semi-Annual Report
April 30, 2000
International Equity
Formerly BTInvestment International Equity Fund
[Deutsche Bank Group logo omitted]
<PAGE>
International Equity
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS .................................... 3
INTERNATIONAL EQUITY
Statement of Assets and Liabilities .................... 9
Statement of Operations ................................ 10
Statements of Changes in Net Assets .................... 11
Financial Highlights ................................... 12
Notes to Financial Statements .......................... 13
INTERNATIONAL EQUITY PORTFOLIO
Schedule of Portfolio Investments ...................... 15
Statement of Assets and Liabilities .................... 19
Statement of Operations ................................ 20
Statements of Changes in Net Assets .................... 21
Financial Highlights ................................... 22
Notes to Financial Statements .......................... 23
----------------------------------------------------
The Fund is not insured by the FDIC and is not a
deposit, obligation of or guaranteed byDeutsche
Bank. The Fund is subject to investment risks,
including possible loss of principal amount
invested.
----------------------------------------------------
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2
<PAGE>
International Equity
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LETTER TO SHAREHOLDERS
We are pleased to present you with this semi-annual report for the period ended
April 30, 2000 for International Equity Fund (the "Fund"). It provides 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.
The name of the Fund has changed to International Equity to reflect the
acquisition of Bankers Trust by Deutsche Bank. The Fund's investment objectives,
policies and strategies, as well as its portfolio managers, remain the same.
MARKET ACTIVITY
EAFE MARKETS CLOSELY TRACKED THE PERFORMANCE OF U.S. STOCKS DURING THE
SEMI-ANNUAL PERIOD, AS THE BENEFITS OF SYNCHRONIZED GLOBAL ECONOMIC EXPANSION
CONTINUED TO SPREAD. STILL, AS IN THE U.S., MARKET VOLATILITY PERSISTED.
o Fears that Year 2000 disruptions would adversely affect global equity markets
were dispelled in the closing months of 1999, as an impressive rally took many
world markets to all-time highs. Inflation and interest rate concerns
persisted but were offset to a large degree by strong earnings growth.
o In the closing weeks of the semi-annual period, volatility not seen since the
emerging market crises of 1998 struck most equity markets based on the concern
that valuations for technology, media and telecommunications (TMT) stocks had
become unreasonable.
o Recommendations by U.S. market strategists to lower equity exposure amid
rising domestic interest rates led to a short-term spillover effect for
international markets.
o Central banks moved to raise interest rates in order to quell rising inflation
in the U.S. and the U.K. and to support a weakening currency in the Eurozone.
EUROPE
EUROPE OVERALL OUTPERFORMED ALL DEVELOPED MARKET REGIONS, POSTING AN 8.5% RETURN
IN U.S. DOLLAR TERMS FOR THE PERIOD.
o As clearer signs of accelerating economic growth became evident, investors
sought to purchase attractively valued cyclical stocks and fast growing TMT
securities.
--------------------------------------------------------------------------------
TEN LARGEST STOCK HOLDINGS
(percentages are based on market value of total investments in the Portfolio)
--------------------------------------------------------------------------------
Vodafone Airtouch PLC ......................... 2.77%
Total Fina SA ................................. 2.45
Nokia Oyj ..................................... 2.27
Canal Plus .................................... 1.91
Ericsson LM ................................... 1.89
Philips Electronics NV ........................ 1.80
Reckitt &Colman PLC ........................... 1.72
ShellTransport & Trading Co. PLC .............. 1.71
Takeda Chemical Industries Ltd. ............... 1.65
STMicroelectronics NV ......................... 1.64
--------------------------------------------------------------------------------
o The two markets with the highest degree of telecommunications equipment and
infrastructure exposure relative to market capitalization -- Finland and
Sweden -- soared 81.4% and 53.1%, respectively, as web-enabled mobile
telephony captured investor interest.
o Despite a series of interest rate hikes by the European Central Bank, the euro
touched an all-time low, as foreign investors sought dollar exposure after
exceptionally strong U.S. economic reports.
GERMANY LED THE LARGER EUROPEAN MARKETS WITH A 15.5% IMPROVEMENT IN U.S. DOLLAR
TERMS, REFLECTING POSITIVE MARKET RESPONSES TO PROPOSED CAPITAL GAINS TAX CUTS
AND IMPROVING ECONOMIC FUNDAMENTALS.
o France followed closely behind Germany, rising 14.6%, as corporate earnings
estimates continued to be revised upwards.
o The United Kingdom fell 3.1% for the period amid fears that higher interest
rates would constrain earnings growth.
o Performance in Europe's smaller markets was mixed.
-- In many cases, domestic investment managers continued to seek
diversification through the purchase of other Eurozone equities, funding
such purchases through the sale of domestic securities.
-- Southern European markets, spurred on by attractive valuations, fared well,
with Italy gaining 9.6%, Spain 8.1% and Portugal 4.0%. Other small markets
generally fared poorly, with Switzerland and Austria down 7.8% and 13.3%,
respectively, and Ireland and Belgium declining 8.0% and 21.0%,
respectively.
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3
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International Equity
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LETTER TO SHAREHOLDERS
ASIA
JAPAN MANAGED A POSITIVE, THOUGH SUBDUED, 3.4% PERFORMANCE IN U.S. DOLLAR TERMS
FOR THE SEMI-ANNUAL PERIOD, AS NEWS THAT ITS ECONOMY HAD FALLEN BACK INTO
RECESSION WEIGHED ON INVESTOR SENTIMENT.
o Volatility buffeted the market, as speculation grew that maturing postal
savings accounts would find their way into the equity markets. Also, evidence
of an organized "price keeping operation" to prop up the market and to
strengthen the yen upon the close of the March 31 fiscal year created doubt
for foreign investors regarding domestic investor support for the market.
o Much of the excitement generated by restructuring announcements and positive
economic indicators since the autumn of 1998 was replaced with skepticism.
Indeed, last year's rebound in the Japanese equity market may have resulted in
complacency by institutions who found that they could be rewarded for
announcing restructuring plans rather than actually following through on those
plans.
o After a strong run fueled by merger announcements, bank stocks declined by
more than 27% during the semi-annual period, as investors doubted that these
previously announced mergers would create value.
o Telecommunications and technology stocks tracked the performance of their
global counterparts, rising during the first half of the semi-annual period
and declining in the second. Despite very strong growth numbers, investors
questioned whether valuations had become noticeably stretched.
ASIA EX-JAPAN MARKETS GAINED 7.2% IN U.S. DOLLAR TERMS DURING THE FUND'S
SEMI-ANNUAL PERIOD.
o Within the six months, Asia ex-Japan markets surged with a NASDAQ-inspired,
liquidity-driven rally at the close of 1999, only to succumb to market
weakness toward the end of the period based on interest rate nervousness and
in spite of strong macroeconomic and corporate profit data.
o Several markets recorded double-digit gains for the semi-annual period,
including Malaysia, India, Taiwan and Hong Kong.
-- These better performing markets were those with technical support from
anticipated higher MSCI Index weightings, including Malaysia and Taiwan
and/or those with greater Index exposure to high growth sectors, including
Hong Kong and Taiwan.
-- Despite China's threats of war, Taiwan elected the pro-independence party
candidate as its President, ending the KMT party's rule of more than 50
years. Its market reacted positively.
o The smaller markets, like Indonesia, the Philippines and Thailand, posted
losses.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 6 Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
April 30, 2000 months year years years Inception year years years inception
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
International Equitey(1)
(inception 8/4/92) 15.75% 22.68% 62.97% 127.55% 237.70% 22.68% 17.68% 17.87% 17.03%
--------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Interantional ("MSCI")
EAFE Index(2)
(since 7/31/92) 6.72% 13.89% 48.30% 63.74% 147.64% 13.89% 14.04% 10.36% 12.41%
--------------------------------------------------------------------------------------------------------------------
Lipper International Equity
Funds Average(3)
(since 7/31/92) 14.14% 24.76% 55.50% 89.14% 153.67% 24.76% 15.38% 13.16% 12.56%
--------------------------------------------------------------------------------------------------------------------
<FN>
(1) PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. 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. Performance figures
assume reinvestment of dividends and capital gain distributions. 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) The MSCI EAFE Index is an unmanaged capitalization-weighted index containing
approximately 1,100 equity securities of companies located outside of the
United States.
(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
category indicated. These figures do not reflect sales charges.
</FN>
</TABLE>
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4
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International Equity
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LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
By Country as of April 30, 2000
(percentages are based on market value of total investments in the Portfolio)
--------------------------------------------------------------------------------
United Kingdom ............................... 15%
France ....................................... 14
Japan ........................................ 12
Germany ...................................... 9
Netherlands .................................. 8
Italy ........................................ 5
Finland ...................................... 5
Spain ........................................ 4
Ireland ...................................... 3
Sweden ....................................... 3
Switzerland .................................. 3
Canada ....................................... 3
Hong Kong .................................... 2
South Korea .................................. 2
Other(1) ..................................... 10
Cash & Cash Equivalent ....................... 2
--------------------------------------------------------------------------------
(1) Includes countries with weightings of less than 2%.
o South Korea's Kospi Index was a disappointment, falling 17.2% during the
semi-annual period, despite high earnings growth and inexpensive valuations.
Selling pressure had emanated from local investment trusts facing redemptions
and domestic retail investors fretting about the economy being too strong and
about the financial viability of several investment trust companies.
o Deflationary pressure appeared to be ending in China, and private consumption
in major cities rebounded faster than expected.
OTHER MARKETS
Emerging markets, benefiting from higher global economic growth, rose 13.9% in
U.S. dollar terms. The emerging markets overall outperformed the EAFE markets
for the semi-annual period, as the risk premium for many emerging market regions
has been declining due to improved economic and political outlooks.
LATIN AMERICAN MARKETS PERFORMED STRONGLY, GAINING 22.9% IN U.S. DOLLAR TERMS.
LED BY BRAZIL'S SHARP RISE, ALL OF THE REGION'S MARKETS, WITH THE EXCEPTION OF
VENEZUELA, DELIVERED POSITIVE GAINS.
o Although much feared, Y2K turned out to be a non-event for Latin American
economies and companies.
o Brazil advanced 34.4% on the back of a series of good news on the inflation,
interest rate, fiscal surplus, and growth fronts. Additionally, the long
awaited Fiscal Responsibility Law was passed, and a minority shareholders'
rights bill is under discussion.
o Mexico gained 21.0%, reflecting the booming domestic economy, firmer oil
prices, robust exports to the U.S., and Mexico's newly awarded investment
grade status.
EMERGING EUROPE CHALKED UP AN IMPRESSIVE 24.5% JUMP, DESPITE PROFIT TAKING IN
GREECE.
o Turkey and Russia each surged over 120%. Investors cheered Turkey's
International Monetary Fund agreement and its credible fiscal/inflation
program. Russia benefited from high oil prices and reduced political risk
following favorable parliamentary elections, Yeltsin's surprise resignation,
and Vladimir Putin winning the Presidential election.
o Elsewhere, improvement in the peace process and a series of interest rate cuts
propelled Israel's equity market higher by 49.7%.
INVESTMENT REVIEW
DURING THE FUND'S SEMI-ANNUAL PERIOD, WE MAINTAINED OUR PREFERENCE FOR
CONTINENTAL EUROPEAN EQUITIES, BUT WE CONTINUED TO REDUCE OUR EXPOSURE THERE TO
GAIN ACCESS TO EXCITING OPPORTUNITIES IN OTHER REGIONS AROUND THE WORLD.
o We increased the Fund's U.K. weighting through selective purchases and through
Mannesmann's conversion into Vodafone shares upon completion of its
acquisition.
o Although underweight in Japan relative to the benchmark, the Fund's exposure
to this market remained relatively stable during the semi-annual period.
o We continued to add to positions in emerging markets, as domestic recovery
progressed and export demand improved.
o Canada continued to provide excellent investment opportunities in the
technology, media, and telecommunications sectors.
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5
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International Equity
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LETTER TO SHAREHOLDERS
WHILE THE FUND REMAINED OVERWEIGHT IN THE TECHNOLOGY AND TELECOMMUNICATIONS
SECTORS, WE DID TAKE THE OPPORTUNITY TO TAKE PROFITS IN SEVERAL HOLDINGS, AS
VALUATIONS SURGED DURING THE FIRST QUARTER OF 2000.
o In the information technology sub-sector, we purchased European software
companies Business Objects and Logica, Indian software firms NIIT and Satyam
Computer, Finnish information system developer Tietoenator, and Canadian
contract manufacturer Celestica. We also added Japanese electronic components
firm Kyocera and electric products company Toshiba to the portfolio.
o We trimmed positions in communications equipment providers Alcatel, Nortel and
Nokia; semiconductor firms ASM Lithography, Epcos, Murata and
STMicroelectronics; diversified electronics manufacturer Fujitsu; U.K.
software group Sema; and Japan's leading Internet play Softbank.
o In Asia ex-Japan, we continued to favor the top semiconductor firms. We added
to the Portfolio's exposure to Samsung Electronics and United Microelectronics
and established positions in flash memory firm Macronix and semiconductor test
and assembly company Malaysian Pacific Industries.
o On the back of Internet and mobile telecommunications spin-off announcements,
many of the European telecommunications stocks became much more expensive than
their U.S. peers.
-- Thus, during the period, we reduced holdings in Finnish telecommunications
provider Sonera and in alternative carriers like Colt Telecom, Equant,
Global Telesys, and KPNQwest. We also lowered exposure to cellular service
provider NTT Docomo and took profits in Telecom Italia Mobile.
-- However, we added or topped up attractively valued telecommunications
operators like Cable & Wireless, KPN and NTT.
THE CONVERGENCE OF MEDIA WITH TECHNOLOGY AND COMMUNICATIONS HAS CREATED NEW
MARKETS AND NEW OPPORTUNITIES. WE FOCUSED THE FUND'S MEDIA EXPOSURE ON VALUABLE
CONTENT AND DISTRIBUTION PROVIDERS.
o Media stocks globally were boosted by the AOL-Time Warner merger deal, which
highlighted the importance of content as well as distribution capability.
o We found new opportunities in French television channel TF1, international
media group News Corp., newspaper monopoly Singapore Press Holdings, and cable
holding company United Globalcom. o While we are still very positive on Canal
Plus and Seat Pagine, we did trim our positions recently to harvest profits.
DESPITE THE HIGHER INTEREST RATE ENVIRONMENT, WE ADDED TO THE PORTFOLIO'S
EUROPEAN BANKS, SINCE WE FEEL THAT EUROPEAN RATES DO NOT HAVE TO RISE AS MUCH AS
U.S. RATES AND THAT BANKS WILL LIKELY BE BENEFICIARIES OF EUROPE'S ECONOMIC
ACCELERATION.
o We sold Switzerland's investment bank UBS and Austria's Erste Bank in favor of
more retail-oriented banks like Spain's BSCH, Royal Bank of Scotland, and
Hungary's OTP Bank.
o We added to our holdings in France's BNP Paribas, Bank of Ireland, and the
U.K.'s Barclays when the market severely de-rated anything not in the TMT
sectors.
o We reduced the portfolio's insurance weighting with sales of Italy's Generali
and Switzerland's Zurich Allied, both of which proved disappointing on
transparency issues.
o Germany's proposals to eliminate the capital gains tax on cross-held shares is
very positive for financials with large investment portfolios. We bought
insurance company Munich Re on the back of the proposed tax reform because of
the potential for shareholder value to be unlocked.
WE TURNED SIGNIFICANTLY MORE CAUTIOUS ON THE PROSPECTS FOR MATERIAL COMPANIES,
LEADING US TO MOVE TO AN UNDERWEIGHTED POSITION IN THE SECTOR.
o Such a position is based on recent data showing a peaking in Organization for
Economic Cooperation and Development (OECD) leading indicators that suggest
global economic growth may be nearing a top.
o We sold metals and mining companies Inco and Western Mining. We swapped steel
producer Usinor for Thyssen Krupp, which has a more immediate catalyst from
restructuring and imminent listing of its steel operation.
o We sold paper producers Stora Enso and UPM-Kymmene after their disappointing
bid announcements for Consolidated Papers and Champion International,
respectively.
o On the other hand, we increased the portfolio's overweighting in the oil
sector, given favorable supply-demand dynamics. We added to the Fund's
holdings in BP Amoco and Shell, and we switched out of Repsol into the much
cheaper ENI.
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6
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International Equity
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LETTER TO SHAREHOLDERS
EMERGING MARKET STOCKS WERE ACTIVELY TRADED DURING THE SEMI-ANNUAL PERIOD.
o In India, we sold engineering firm Larsen & Toubro in order to purchase long
distance operator VSNL.
o We increased our weighting in Latin America with undervalued
telecommunications firms Embratel and Telenorte Leste and with Televisa, the
world's largest Spanish language broadcaster.
o We sold Greece's mobile operator Panafon on competition concerns, and we added
cellular firms Mobinil and Partner in Egypt and Israel, respectively.
o In Turkey, we swapped out of Akbank and Sabanci in favor of Yapi Kredi Bank
and Dogan Holdings.
MANAGER OUTLOOK
WE MAINTAIN OUR BELIEF THAT LOW INFLATION AND GLOBAL ECONOMIC GROWTH WILL SPUR
THE WORLD'S EQUITY MARKETS HIGHER FROM CURRENT LEVELS. Europe is benefiting from
accelerating earnings growth, buoyed by the weak euro, and from valuations that
remain attractive relative to other regions.
WE ARE DOUBTFUL THAT THE JAPANESE ECONOMY HAS REACHED A STAGE OF SUSTAINABLE
RECOVERY DESPITE ONGOING FISCAL STIMULUS SPENDING, AND WE QUESTION THE EXTENT
AND PACE OF CORPORATE RESTRUCTURING, WHICH APPEARS TO HAVE SLOWED IN RECENT
MONTHS.
o Questions also remain as to whether market transparency is being hindered by
government intercession. Insurers and corporations, who have been net sellers
for most of the past five years for liquidity reasons, bought domestic shares
in record volume during the last week of the nation's fiscal year in March,
presumably to prop up the market.
o Foreigners, who have been the predominant buyers of Japanese equities for most
of the past year or so, became net sellers. Unless Japanese domestic investors
can be convinced that equities are attractive, it is difficult to see what
will take the market higher.
o We do believe that there are good stocks to be found in Japan, but they remain
within only a few key sectors that are not dependent on the weak domestic
economy.
ASIA EX-JAPAN AND EMERGING MARKETS OVERALL WILL LIKELY REMAIN CAPTIVE TO U.S.
STOCK MARKET VOLATILITY.
o If the NASDAQ Composite ever stabilizes, the positive macroeconomic and
corporate fundamentals of Asia and the emerging markets could reassert
themselves. These positives include corporate streamlining and deleveraging,
which are continuing at a rapid pace.
o We are neutral in our view of the developed Asian equity markets, namely
Australia and Hong Kong, as these markets are more directly affected by the
global tightening of interest rates, while the emerging Asian markets show
relatively stronger earnings prospects.
o Emerging Europe should, in our view, be the most resilient emerging market
region, given its gearing to strong continental European economies and its
lower exposure to the TMT sectors.
o Latin America is, in our view, the most sensitive region in terms of U.S.
interest rate tightening and a U.S. hard-landing economic scenario. Still,
economic data within the region continues to be encouraging.
AT A TIME OF HIGH MARKET VOLATILITY, IT IS WORTHWHILE TO REITERATE THE PRECEPT
THAT EQUITY INVESTING AT HOME AND ABROAD IS A LONG-TERM ENDEAVOR THAT SHOULD NOT
BE MEASURED IN SHORT-TERM TIME FRAMES.
o As we mentioned in our last shareholder report, double-digit corrections have
historically helped to consolidate and prepare markets for higher long-term
moves.
o The current low inflation global economic environment is supportive for
heightened corporate earnings growth.
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/SIGNATURES
Michael Levy
Robert Reiner
Julie Wang
Michael Levy, Robert Reiner and Julie Wang
Portfolio Managers of the
INTERNATIONAL EQUITY PORTFOLIO
April 30, 2000
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7
<PAGE>
International Equity
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PERFORMANCE COMPARISON
[line graph omitted]
plot points as follows:
International Equity MSCI EAFE IX
08/30/1992 10000 10417
03/31/1993 10851 11216
09/30/1993 12434 13163
03/31/1994 13923 13740
09/30/1994 14126 14457
03/31/1995 14257 14576
09/30/1995 16150 15293
03/31/1996 17115 16373
09/30/1996 18317 16611
03/31/1997 20409 16611
09/30/1997 24684 18634
03/31/1998 27532 19701
09/30/1998 23763 17081
03/31/1999 26595 20896
09/30/1999 27885 22368
10/31/1999 29175 23205
04/30/2000 33770 24764
Average Annual Total Return for the Periods Ended April 30, 2000
One Year 22.68% Five Year 17.87% Since 8/4/92(1) 17.03%
--------------------------------------------------------------------------------
(1) The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Performance figures assume the reinvestment of
dividends and capital gain distributions. During the period, the Fund waived
certain fees and expenses.
The MSCI EAFE Index is unmanaged. The index return does not reflect expenses,
which have been deducted from the Fund's return.
Benchmark returns are for the period beginning July 31, 1992.
--------------------------------------------------------------------------------
8
<PAGE>
International Equity
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
AS OF
APRIL 30, 2000
--------------------------------------------------------------------------------
ASSETS
Investment in International Equity Portfolio, at Value ..... $2,397,730,600
Receivable for Shares of Beneficial Interest Subscribed .... 3,865,165
Prepaid Expenses and Other ................................. 38,314
--------------
Total Assets .................................................. 2,401,634,079
--------------
LIABILITIES
Payable for Shares of Beneficial Interest Redeemed ......... 18,242,765
Due to Bankers Trust ....................................... 1,464,328
Accrued Expenses and Other ................................. 56,764
--------------
TOTAL LIABILITIES ............................................. 19,763,857
--------------
NET ASSETS .................................................... $2,381,870,222
==============
COMPOSITION OF NET ASSETS
Paid-in Capital ............................................ $1,741,486,515
Distributions in Excess of Net Investment Income ........... (7,374,829)
Accumulated Net Realized Gain from Investment, Options,
Foreign Futures, Foreign Currency and Forward Foreign
Currency Transactions .................................... 156,901,301
Net Unrealized Appreciation on Investment, Options,
Foreign Futures, Foreign Currencies and Forward
Foreign Currency Contracts ............................... 490,857,235
--------------
NET ASSETS .................................................... $2,381,870,222
==============
SHARES OUTSTANDING ($0.001 par value per share, unlimited
number of shares of beneficial interest authorized) ........ 81,258,393
==============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) ................. $ 29.31
==============
See Notes to Financial Statements.
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9
<PAGE>
International Equity
-------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
FOR THE SIX
MONTHS ENDED
APRIL 30, 2000
-------------------------------------------------------------------------------
INVESTMENT INCOME
Income Allocated from International Equity Portfolio, net .... $ 3,186,095
------------
EXPENSES
Administration and Services Fees ............................. 10,173,538
Registration Fees ............................................ 79,182
Printing and Shareholder Reports ............................. 102,992
Professional Fees ............................................ 19,902
Trustees Fees ................................................ 2,139
Miscellaneous ................................................ 3,380
------------
Total Expenses .................................................. 10,381,133
Less: Fee Waivers ............................................... (803,862)
------------
Net Expenses .................................................... 9,577,271
------------
EXPENSES IN EXCESS OF INVESTMENT INCOME ......................... (6,391,176)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT,
OPTIONS, FOREIGN FUTURES, FOREIGN CURRENCIES
AND FORWARD FOREIGN CURRENCY CONTRACTS
Net Realized Gain (Loss) from:
Investment Transactions ...................................... 174,892,953
Option Transactions .......................................... (556,359)
Foreign Futures Transactions ................................. (17,671,152)
Foreign Currency Transactions ................................ 19,726,832
Forward Foreign Currency Transactions ........................ (4,405,122)
Net Change in Unrealized Appreciation/Depreciation
on Investment, Options, Foreign Futures, Foreign
Currency and Forward Foreign Currency Contracts ................ 143,611,839
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT, OPTIONS,
FOREIGN FUTURES, FOREIGN CURRENCIES, AND FORWARD
FOREIGN CURRENCY CONTRACTS ................................... 315,598,991
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $309,207,815
============
See Notes to Financial Statements.
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10
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International Equity
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STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD FOR THE
MONTHS ENDED OCTOBER 1, 1999 YEAR ENDED
APRIL 30, TO OCTOBER 31, SEPTEMBER 30,
2000(2) 1999(1) 1999
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Income (Expenses in
Excess of Investment Income) ................... $ (6,391,176) $ (1,479,472) $ 3,254,083
Net Realized Gain (Loss) from Investment,
Option, Foreign Futures, Foreign Currency,
and Forward Foreign Currency Transactions ...... 171,987,152 (6,378,904) 1,150,801
Net Change in Unrealized Appreciation/
Depreciation on Investment, Options,
Foreign Futures, Foreign Currencies and
Forward Foreign Currency Contracts ............. 143,611,839 93,522,062 232,624,850
--------------------------------------------------------
Net Increase in Net Assets
from Operations .................................. 309,207,815 85,663,686 237,029,734
--------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income ............................ -- -- (3,594,378)
Net Realized Gain from Investment
Transactions ................................... -- -- --
--------------------------------------------------------
Total Distributions ................................. -- -- (3,594,378)
--------------------------------------------------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from Sales of Shares .................... 1,893,205,854 242,653,438 2,139,841,944
Dividend Reinvestments ........................... -- -- 3,024,024
Cost of Shares Redeemed .......................... (1,734,210,241) (265,880,726) (1,776,650,526)
--------------------------------------------------------
Net Increase (Decrease) from Capital
Transactions in Shares of Beneficial Interest .... 158,995,613 (23,227,288) 366,215,442
--------------------------------------------------------
TOTAL INCREASE IN NET ASSETS ........................ 468,203,428 62,436,398 599,650,798
NET ASSETS
Beginning of Period .............................. $ 1,913,666,794 $1,851,230,396 $1,251,579,598
--------------------------------------------------------
End of Period (including undistributed
(distributions in excess of) net
investment income of $(7,374,829),
$(973,857), and $3,610,542,
respectively) .................................. $ 2,381,870,222 $1,913,666,794 $1,851,230,396
========================================================
--------------------------------------------------------------------------------
<FN>
(1) On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
(2) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
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11
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International Equity
--------------------------------------------------------------------------------
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 International Equity.
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE
SIX PERIOD FOR THE YEARS ENDED PERIOD YEAR
MONTHS OCT. 1, 1999 SEPTEMBER 30, JAN. 1, 1995 ENDED
ENDED TO ----------------------------- TO DEC. 31,
APRIL 30, 2000(4) OCT. 31, 1999(3) 1999 1998 1997 1996 SEPT. 30, 1995(1) 1994
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.33 $ 24.22 $ 20.68 $ 22.13 $ 16.77 $ 15.47 $ 13.37 $13.18
INCOME FROM INVESTMENT OPERATIONS
Net Investment (Expenses in Excess of)
Income (0.09) (0.02) 0.04 0.02 0.09 0.18 0.14 0.10
Net Realized and Unrealized Gain (Loss)
on Investment, Options, Foreign
Futures Foreign Currency, and
Forward Foreign Currency Contracts 4.07 1.13 3.56 (0.87) 5.63 1.80 1.97 0.44
---------- ---------- ---------- ---------- -------- -------- ------- -------
Total from Investment Operations 3.98 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 $ 29.31 $ 25.33 $ 24.22 $ 20.68 $ 22.13 $ 16.77 $ 15.47 $ 13.37
========== ========== ========== ========== ======== ======== ======= =======
TOTAL INVESTMENT RETURN 15.75% 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) $2,381,870 $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 (0.54)%(2) (0.93)%(2) 0.19% 0.61% 0.53% 0.91% 1.55%(2) 0.84%
Expenses After Waivers, Including
Expenses of the International 1.50%(2) 1.50%(2) 1.50% 1.50% 1.50% 1.50% 1.50%(2) 1.50%
Equity Portfolio
Expenses Before Waivers, Including
Expenses of the International
Equity Portfolio 1.67%(2) 1.70%(2) 1.66% 1.70% 1.68% 1.76% 1.83%(2) 1.87%
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(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.
(4) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12
<PAGE>
International Equity
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. International Equity (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 April
30, 2000, the Fund's investment was approximately 62% of the Portfolio.
The financial statements of the Portfolio, including a list of assets held, are
contained elsewhere in this report and should be read in conjunction with the
Fund's financial statements.
B. INVESTMENT VALUATION
Valuation of securities by the Portfolio is discussed in Note 1B of the
Portfolio's Notes to Financial Statements, which are included elsewhere in this
report.
C. INVESTMENT INCOME
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from 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
are made at least annually to the extent they exceed capital loss carryforwards.
E. FEDERAL INCOME TAXES
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute substantially
all of its taxable income to shareholders. Therefore, no federal income tax
provision is required. The Fund may periodically make reclassifications among
certain of its capital accounts as a result of 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 of its funds. Expenses directly attributable to a fund are charged to the
fund, while expenses that are attributable to the Trust are allocated among the
funds in the Trust.
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"), an indirect wholly owned subsidiary of Deutsche
Bank A.G. Under this 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 contractually agreed to waive its fees through February 28,
2001 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.
--------------------------------------------------------------------------------
13
<PAGE>
International Equity
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 3 -- SHARES OF BENEFICIAL INTEREST
At April 30, 2000, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
FOR THE SIX FOR THE PERIOD
MONTHS ENDED OCTOBER 1, 1999 TO
APRIL 30, 2000(1) OCTOBER 31, 1999(2)
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- -------------
Sold 61,757,847 $ 1,893,205,854 9,872,995 $ 242,653,438
Reinvested -- -- -- --
Redeemed (56,053,064) (1,734,210,241) (10,768,927) (265,880,726)
----------- --------------- ----------- -------------
Net Increase
(Decrease) 5,704,783 $ 158,995,613 (895,932) $ (23,227,288)
=========== =============== =========== =============
FOR THE
YEAR ENDED
SEPTEMBER 30, 1999
---------------------------
SHARES AMOUNT
-------------------------
Sold 91,035,744 $ 2,139,841,944
Reinvested 129,786 3,024,024
Redeemed (75,245,376) (1,776,650,526)
----------- ---------------
Net Increase 15,920,154 $ 366,215,442
=========== ===============
--------------------------------------------------------------------------------
(1) Unaudited.
(2) On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
--------------------------------------------------------------------------------
14
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS April 30, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 95.7%
ARGENTINA -- 0.1%
333,735 Impsat Fiber Networks, Inc.(1)
(Technology -- Other
Telecommunications) ........................... $ 5,277,185
-------------
AUSTRALIA -- 1.5%
562,900 Brambles Industries Ltd.
(Diversified Commercial Services) ............. 15,831,665
660,020 News Corp., Ltd. ADR (Media
Conglomerates) ................................ 29,040,880
2,486,100 Telstra Corp. (Telecommunications) .............. 6,353,909
1,261,400 Telstra Corp. Ltd.
(Telecommuncations) ........................... 5,402,530
-------------
56,628,984
-------------
BOTSWANA -- 0.1%
5,341,900 Sechaba Breweries Ltd.
(Alcoholic Beverages) ......................... 4,736,941
-------------
BRAZIL -- 1.0%
425,900 Embratel Participacoes SA ADR
(Telecommunications) .......................... 9,582,750
187,490 Telebras ADR(1)
(Telecommuncations) ........................... 22,158,974
428,404 Tele Norte Leste Participacoes SA
ADR (Telecommunications) ...................... 7,630,947
-------------
39,372,671
-------------
CANADA -- 2.7%
471,708 Celestica Inc.(1) (Electronic Production
Equipment) .................................... 25,437,344
416,950 Nortel Networks Corp.
(Telecommunications Equipment) ................ 47,107,621
1,209,960 Rogers Communications, Inc.(1)
(Cable Television) ............................ 31,480,899
-------------
104,025,864
-------------
EGYPT -- 0.3%
319,545 Egyptian Mobile Phone Service(1)
(Telecommunications) .......................... 12,182,325
-------------
FINLAND -- 4.5%
2,196,300 Jot Automation Group OYJ
(Industrial Machinery/Components) .............. 15,910,976
1,508,160 Nokia Oyj ADR (Telecommunications
Equipment) .................................... 85,776,600
322,630 Tietonator OYJ (EDP Services) ................... 15,581,836
989,520 Sonera Group OYJ(2)
(Telecommunication) ........................... 54,552,916
-------------
171,822,328
-------------
FRANCE -- 13.6%
266,400 AXA(2) (Multi-Line Insurance) ................... 39,593,710
427,830 Banque Nationale de Paris
(Non-U.S. Banks) .............................. 34,658,600
166,242 Business Objects SA ADR(1)
(Computer Software) ........................... 16,270,936
372,137 Canal Plus (Cable Television) ................... 71,891,365
80,434 Christian Dior (Alcoholic Beverages) ............ 19,166,790
819,670 Sanofi-Synthelabo SA(1) (Major
Pharmaceuticals) .............................. 30,661,276
142,846 Societe Generale(1,2)
(Non-U.S. Banks) .............................. 29,652,398
325,770 STMicroelectronics NV(2)
(Semi-Conductors) ............................. 61,794,497
272,800 Suez Lyonnaise des Eaux
(Engineering & Construction) .................. 42,881,650
43,632 Television Francaise (Broadcasting) ............. 29,939,057
608,684 Total Fina SA -- Class B(1) (Oil
Refining/Marketing) ........................... 92,573,406
546,150 Vivendi(2) (Multi-Sector Companies) ............. 54,147,555
-------------
523,231,240
-------------
GERMANY -- 9.0%
1,113,172 Bayer AG(2) (Major Chemicals) ................... 46,204,968
459,200 Bayerische Vereinsbank(2)
(Non-U.S. Banks) .............................. 28,496,204
413,874 Epcos AG(1,2) (Electronic Components) ........... 58,645,751
145,240 Infineon Technologies AG(1)
(Semi Conductors) ............................. 10,025,520
102,077 Intershop Communications AG(1,2)
(Internet Services) ........................... 45,439,180
1,014,220 Lufthansa AG(2) (Airlines) ...................... 21,210,596
111,863 Muenchener Rueckversicherungs-
Gesellschaft AG (Multi-Line
Insurance) .................................... 32,721,222
56,410 SAP AG(2) (Computer Software) ................... 33,258,174
281,190 Siemens AG (Diversified Electronic
Products) ..................................... 41,586,887
1,319,130 Thyssenkrupp AG(1,2) (Multi-Sector
Companies) .................................... 27,767,552
-------------
345,356,054
-------------
GREECE -- 0.3%
510,761 Hellenic Telecommunication
Organization SA
(Telecommunications) .......................... 11,490,343
-------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
15
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS April 30, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
--------------------------------------------------------------------------------
HONG KONG -- 2.0%
3,908,500 China Telecom Ltd.(1)
(Cellular Telephone) ......................... $ 28,226,166
2,500,300 Hutchison Whampoa Ltd.
(Multi-Sector Companies) ..................... 36,434,031
2,581,500 Li & Fung Ltd.
(Wholesale Distributors) ..................... 9,976,033
90,438 Utstarcom, Inc.(1)
(Telecommunications Equipment) ............... 4,295,805
-------------
78,932,035
-------------
HUNGARY -- 0.2%
179,600 Otp Bank Rt (Non-U.S. Banks) ................... 7,975,376
-------------
INDIA -- 1.0%
224,700 Niit Limited (Miscellaneous) ................... 10,499,971
130,100 Satyam Computer Services(1)
(Miscellaneous) .............................. 9,297,940
42,300 Satyam Computer Services(1)
(Miscellaneous) .............................. 3,023,081
571,200 Silverline Industries(1)
(Miscellaneous) .............................. 5,526,059
443,300 Videsh Sanchar Nigam Ltd. GDR
(Telecommunications) ......................... 8,378,370
-------------
36,725,421
-------------
IRELAND -- 3.3%
5,611,486 Bank of Ireland (Non-U.S. Banks) ............... 37,941,964
2,543,170 CRH PLC (Building Materials) ................... 40,787,405
1,081,700 Elan Corp. PLC ADR(1)
(Other Pharmaceuticals) ...................... 46,377,887
-------------
125,107,256
-------------
ISRAEL -- 0.3%
967,411 Partner Communications Co. Ltd.(1)
(Cellular Telecommunications) ................ 10,339,205
-------------
ITALY -- 4.8%
6,961,710 ENI SPA (Integrated Oil
Companies) ................................... 34,700,943
2,551,728 San Paolo-- IMI SPA(1)
(Non-U.S. Banks) ............................. 35,809,076
8,035,667 Seat-Pagine Gialle Spa(2)
(Printing/Forms) ............................. 35,367,721
3,032,320 Telecom Italia SPA
(Telecommunications) ......................... 42,498,087
8,493,810 Unicredito Italiano SPA(2)
(Non-U.S. Banks) ............................. 34,520,368
-------------
182,896,195
-------------
JAPAN -- 12.0%
1,551,000 Fujitsu Ltd.(2) (Electronic Data
Processing) .................................. 43,915,896
191,400 Kyocera Corp.(2) (Diversified
Electronic Products) ......................... 32,002,846
215,000 Murata Manufacturing Co. Ltd.
(Electronic Components) ...................... 41,777,868
703,100 Nichiei Co., Ltd.
(Finance Companies) .......................... 13,922,569
3,221 Nippon Telegraph & Telephone
Corp. (Telecommunications) .................. 39,937,791
1,455 NTT Mobile Communications(2)
(Cellular Telephone) ......................... 48,602,512
111,744 Rohm Company
(Semi Conductors) ............................ 37,430,127
93,130 Shohkoh Fund & Co., Ltd.(2)
(Finance Companies) .......................... 16,631,654
73,800 Softbank Corporation(1)
(Electronics Distributors) ................... 18,164,628
147,400 Sony Corp.(1,2) (Consumer Electronics/
Appliances) .................................. 16,926,134
117,400 Sony Corp. New(1) (Consumer
Electronics/Appliances) ...................... 13,578,964
943,900 Takeda Chemical Industries Ltd.(1)
(Major Pharmaceuticals) ...................... 62,098,928
2,002,000 The Furukawa Electric Co. Ltd.
(Electrical Products) ........................ 27,768,615
5,072,000 Toshiba Corp. (Diversified
Electronic Products) ......................... 49,184,589
-------------
461,943,121
-------------
MALAYSIA -- 0.5%
2,484,800 AMMB Holdings Berhad
(Investment Bankers/Brokers/
Services) .................................... 9,416,305
795,000 Malaysian Pacific Industries
(Containers/Packaging) ....................... 8,891,656
-------------
18,307,961
-------------
MEXICO -- 1.0%
314,700 Grupo Televisa SA GDR(1,2)
(Broadcasting) ............................... 19,963,781
303,400 Telefonos de Mexico SA ADR
(Telecommunications) ......................... 17,843,713
-------------
37,807,494
-------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS April 30, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
--------------------------------------------------------------------------------
NETHERLANDS -- 8.0%
1,477,050 ASM Lithography Holding(1)
(Electronic Production
Equipment) ................................... $ 57,876,421
1,887,370 Buhrmann NV
(Wholesale Distributors) ..................... 48,758,252
884,494 ING Groep NV
(Diversified Financial Services) ............. 48,375,882
480,020 Koninklijke KPN
(Telecommunications) ......................... 48,487,863
418,240 Kpnqwest NV(1,2)
(Telecommunications) ......................... 17,417,258
1,519,920 Philips Electronics NV
(Diversified Electronic Products) ............ 67,963,354
355,225 Unitedglobalcom Inc.(1)
(Cable Television) ........................... 18,871,328
-------------
307,750,358
-------------
POLAND -- 0.3%
1,399,293 Telekomunikacja Polska
SA GDR Rule 144A(1,3)
(Telecommunications) ......................... 10,739,574
-------------
SINGAPORE -- 1.1%
913,000 DBS Group Holdings Ltd.(2)
(Non-U.S. Banks) ............................. 12,565,895
2,803,200 Natsteel Electronics Ltd.(2)
(Diversified Electronic Products) ............ 16,089,219
716,400 Singapore Press Holdings Ltd.(2)
(Newspapers) ................................. 14,013,830
-------------
42,668,944
-------------
SOUTH KOREA -- 1.8%
331,506 Korea Telecom Corp. ADR(1)
(Telecommunications) ......................... 11,436,957
376,600 Pohang Iron & Steel Co. Ltd. ADR(2)
(Steel/Iron Ore) ............................. 7,908,600
115,200 Samsung Electronics (Diversified
Electronic Products) ......................... 31,143,143
609,100 SK Telecom Co., Ltd. ADR(1)
(Cellular Telephone) ......................... 19,529,269
-------------
70,017,969
-------------
SPAIN -- 4.2%
2,958,023 Banco Bilbao Vizcaya Argenta(2)
(Non-U.S. Banks) ............................. 40,432,521
3,743,016 Banco Santander Central Hispano
(Non-U.S. Banks) ............................. 39,122,187
1,958,108 Telefonica SA(1,2)
(Telecommunications) ......................... 43,680,346
2,023,200 Union Electrica Fenosa SA
(Non-U.S. Utilities) ......................... 38,845,559
-------------
162,080,613
-------------
SWEDEN -- 2.9%
799,570 Ericsson LM B Shares(1,2)
(Telecommunications Equipment) ............... 71,180,379
1,648,690 Sandvik AB B Shares(1,2)
(Industrial Machinery/
Components) .................................. 39,409,258
-------------
110,589,637
-------------
SWITZERLAND -- 2.9%
319,951 ABB Ltd. (Electrical Products) ................. 35,984,550
55,330 Adecco SA(1) (Diversified
Commercial Services) ......................... 45,506,009
9,395 Ares Serono Group (Other
Pharmaceuticals) ............................. 28,914,413
-------------
110,404,972
-------------
TAIWAN -- 1.2%
519,000 Asustek Computer, Inc.
(Electronic Data Processing) ................. 5,746,031
4,112,000 Macronix International
(Semi Conductors) ............................ 12,422,122
1,835,400 Systex Corp. (EDP Services) .................... 8,002,265
6,453,000 United Microelectronics Corp.
(Semi Conductors) ............................ 21,812,375
-------------
47,982,793
-------------
TURKEY -- 0.4%
9,127,360 Vestel Elektronik Sanayi(1)
(Consumer Electronics/
Appliances) .................................. 3,435,538
382,621,000 Yapi Ve Kredi Bankasi
(Non-U.S. Banks) ............................. 12,212,308
-------------
15,647,846
-------------
UNITED KINGDOM -- 14.7%
1,567,613 Barclays PLC (Non-U.S. Banks) .................. 40,449,984
134,590 Bookham Technology ADR(1)
(Electronic Components) ...................... 6,998,680
1,025,890 BP Amoco PLC ADR
(Integrated Oil Companies) ................... 52,320,390
2,394,910 Cable & Wireless PLC
(Telecommunications) ......................... 39,911,463
1,803,495 Celltech Group PLC(1)
(Biotechnology) .............................. 29,886,134
999,760 COLT Telecom Group PLC(1)
(Telecommunications) ......................... 43,788,240
804,480 Logica PLC (EDP Services) ...................... 24,472,050
409,868 NTL, Inc.(1) (Telecommunications) .............. 31,354,902
6,301,700 Old Mutual PLC (Diversified
Financial Services) .......................... 14,298,305
6,274,725 Reckitt & Colman PLC (Package
Goods/Cosmetics) ............................. 64,852,445
See Notes to Financial Statements.
--------------------------------------------------------------------------------
17
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS April 30, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
--------------------------------------------------------------------------------
3,175,640 Royal Bank of Scotland Group PLC
(Non-U.S. Banks) ............................. $ 49,717,262
7,848,000 Shell Transport & Trading Co. PLC
(Integrated Oil Companies) ................... 64,472,890
22,791,741 Vodafone AirTouch PLC
(Cellular Telephone) ......................... 104,675,356
--------------
567,198,101
--------------
TOTAL COMMON STOCK
(Cost $2,944,712,600) ................................... 3,679,238,806
--------------
OPTION -- INDEX -- 0.1%
10,740 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
20,922.68 and Expiration 6/30/00) ............ 637,225
4,912 Nikkei 225 Index (Options on Nikkei
Exchange withStrike Price of
20,434.27 and Expiration
6/9/00) ...................................... 298,972
3,936 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
19,727.47 andExpiration
6/9/00) ...................................... 243,644
4,893 Nikkei 225 Index (Options on Nikkei
Exchange with Strike Price of
20,239.31 andExpiration 6/30/00) 609,036
148,400,000 Eur/Jpy Option (StrikePrice of 99.00
andExpiration 5/24/00) ....................... 1,964,816
--------------
TOTAL OPTION -- INDEX
(Cost $19,563,044) ...................................... 3,753,693
--------------
SHORT-TERM INSTRUMENT -- 2.4%
MUTUAL FUNDS -- 2.4%
91,492,387 Institutional Cash Management
Fund,
(Cost $91,492,387) ........................... 91,492,387
--------------
TOTAL INVESTMENTS
(Cost $3,036,204,986) ............................ 98.2% $3,774,484,886
OTHER ASSETS IN EXCESS OF LIABILITIES ............... 1.8 67,937,534
----- --------------
NET ASSETS .......................................... 100.0% $3,842,422,420
===== ==============
--------------------------------------------------------------------------------
(1) Non-income producing security.
(2) Securities on loan.
(3) This security may be resold in transactions exempt from registrations,
normally to qualified institutional buyers.
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
--------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION (Unaudited)
(as a percent of Total Investments in the Portfolio)
--------------------------------------------------------------------------------
Telecommunications ........................... 12.53%
Non-U.S. Banks ............................... 10.70
Diversified Electronic Products .............. 6.31
Cellular Telecommunications .................. 5.93
TelecommunicationsEquipment .................. 5.53
Integrated Oil Companies ..................... 4.02
Semi Conductors .............................. 3.81
Cable Television ............................. 3.24
Multi-Sector Companies ....................... 3.14
Electronic Components ........................ 2.85
Major Pharmaceuticals ........................ 2.46
Oil Refining/Marketing ....................... 2.46
Electronic Production Equipment .............. 2.21
Other Pharmaceuticals ........................ 2.00
Multi-Line Insurance ......................... 1.92
Package Goods/Cosmetics ...................... 1.72
Electrical Products .......................... 1.69
Diversified Financial Services ............... 1.66
Diversified Commercial Services .............. 1.63
Wholesale Distributors ....................... 1.56
Industrial Machinery/Components .............. 1.47
Broadcasting ................................. 1.32
Electronic Data Processing ................... 1.32
Computer Software ............................ 1.31
EDP Services ................................. 1.27
Major Chemicals .............................. 1.23
Internet Services ............................ 1.21
Engineering &Construction .................... 1.14
Building Materials ........................... 1.08
Non-U.S. Utilities ........................... 1.03
Other Industries(1) .......................... 7.82
------
97.57%
Cash & Cash Equivalent ....................... 2.43
------
100.00%
======
--------------------------------------------------------------------------------
(1) No one industry represents more than 1% of Portfolio holdings.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
AS OF
APRIL 30, 2000
--------------------------------------------------------------------------------
ASSETS
Investments, at Value:
Common Stock and Purchased Options (Cost $2,964,275,644) .. $3,682,992,499
Short-Term Instrument (Cost $91,492,387) .................. 91,492,387
--------------
Total Investments, at Value .................................... 3,774,484,886
Cash(1) ..................................................... 23,253,218
Receivable for Securities Sold .............................. 52,703,354
Receivable for Collateral Under Security Loan Agreements .... 496,895,089
Unrealized Appreciation on Forward Foreign Currency Contracts 39,729,639
Dividends and Interest Receivable ........................... 8,105,652
Receivable for Foreign Taxes Withheld ....................... 3,410,112
Receivable for Shares of Beneficial Interest Subscribed ..... 27,133,824
Securities Lending Income Receivable ........................ 111,230
Prepaid Expenses and Other .................................. 107,377
--------------
Total Assets ................................................... 4,425,934,381
--------------
LIABILITIES
Payable for Options Sold (Cost $2,095,119) .................. 2,206,704
Payable for Securities Purchased ............................ 53,295,558
Payable for Collateral Under Security Loan Agreements ....... 496,895,089
Unrealized Depreciation on Forward Foreign Currency Contracts 28,916,155
Due to Bankers Trust ........................................ 2,179,078
Accrued Expenses and Other .................................. 19,377
--------------
Total Liabilities .............................................. 583,511,961
--------------
NET ASSETS ..................................................... $3,842,422,420
==============
COMPOSITION OF NET ASSETS
Paid-in Capital ............................................. $3,147,449,623
Net Unrealized Appreciation on Investments, Options,
Foreign Futures, Foreign Currencies Foreign
Currencies and Forward Foreign Currency Contracts ......... 694,972,797
--------------
NET ASSETS ..................................................... $3,842,422,420
==============
--------------------------------------------------------------------------------
(1) Includes foreign cash of $19,232,798 with a cost of $20,003,622.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
19
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
FOR THE SIX
MONTHS ENDED
APRIL 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign withholding tax of $1,476,044) ..... $ 15,244,118
Interest ..................................................... 2,587,829
Securities Lending Income .................................... 682,592
------------
TOTAL INVESTMENT INCOME ......................................... 18,514,539
------------
EXPENSES
Advisory Fees ................................................ 12,365,322
Administration and Services Fees ............................. 2,871,036
Professional Fees ............................................ 38,252
Trustees Fees ................................................ 2,622
Printing and Shareholder Reports ............................. 1,000
Miscellaneous ................................................ 47,725
------------
Total Expenses .................................................. 15,325,957
Less: Fee Waivers ............................................... (2,006,292)
------------
Net Expenses .................................................... 13,319,665
------------
NET INVESTMENT INCOME ........................................... 5,194,874
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
OPTIONS, FOREIGN FUTURES, FOREIGN CURRENCIES, AND
FORWARD FOREIGN CURRENCY CONTRACTS
Net Realized Gain (Loss) from:
Investment Transactions .................................... 277,208,809
Option Transactions ........................................ (839,447)
Foreign Futures Transactions ............................... (28,337,693)
Foreign Currency Transactions .............................. 31,757,616
Forward Foreign Currency Transactions ...................... (6,924,471)
Net Change in Unrealized Appreciation/Depreciation on
Investments, Options, Foreign Futures, Foreign Currencies
and Forward Foreign Currency Contracts ..................... 204,838,595
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS, OPTIONS,
FOREIGN FUTURES, FOREIGN CURRENCIES, AND FORWARD FOREIGN
CURRENCY CONTRACTS ........................................... 477,703,409
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $482,898,283
============
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD FOR THE
MONTHS ENDED OCTOBER 1, 1999 TO YEAR ENDED
APRIL 30, OCTOBER 31, SEPTEMBER 30,
2000(2) 1999(1) 1999
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment (Expenses in Excess of)
Income .......................................... $ 5,194,874 $ (323,887) $ 26,238,345
Net Realized Gain (Loss) from Investment,
Option, Foreign Futures, Foreign Currency,
and Forward Foreign Currency Transactions ....... 272,864,814 (9,960,988) 4,300,697
Net Change in Unrealized Appreciation/
Depreciation on Investments, Options,
Foreign Futures, Foreign Currencies and
Forward Foreign Currency Contracts .............. 204,838,595 146,111,035 345,753,008
--------------- -------------- ---------------
Net Increase in Net Assets from
Operations ...................................... 482,898,283 135,826,160 376,292,050
--------------- -------------- ---------------
CAPITAL TRANSACTIONS
Proceeds from Capital Invested .................... 2,898,384,435 340,860,574 3,135,914,534
Value of Capital Withdrawn ........................ (2,556,221,132) (357,182,232) (2,446,602,079)
--------------- -------------- ---------------
Net Increase (Decrease) in Net Assets from
Capital Transactions .............................. 342,163,303 (16,321,658) 689,312,455
--------------- -------------- ---------------
TOTAL INCREASE IN NET ASSETS ......................... 825,061,586 119,504,502 1,065,604,505
NET ASSETS
Beginning of Period ............................... 3,017,360,834 2,897,856,332 1,832,251,827
--------------- -------------- ---------------
End of Period ..................................... $ 3,842,422,420 $3,017,360,834 $ 2,897,856,332
=============== ============== ===============
--------------------------------------------------------------------------------------------------------------------
<FN>
(1) On September 8, 1999, the Board of Trustees approved the change of the
fiscal year end from September 30 to October 31.
(2) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
21
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below are selected supplemental data and ratios to
average net assets for the periods indicated for the International
Equity Portfolio.
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE
SIX PERIOD FOR THE YEARS ENDED PERIOD YEAR
MONTHS OCT. 1, 1999 SEPTEMBER 30, JAN. 1, 1995 ENDED
ENDED TO --------------------------------- TO DEC. 31,
APRIL 30, 2000(4) OCT. 31, 1999(3) 1999 1998 1997 1996 SEPT. 30, 1995(2) 1994
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period
(000s omitted) $3,842,422 $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 0.14%(1) (0.13)%(1) 1.00% 1.52% 1.35% 1.76% 2.39%(1) 1.69%
Expenses After Waivers 0.70%(1) 0.70%(1) 0.70% 0.66% 0.65% 0.65% 0.65%(1) 0.65%
Expenses Before Waivers 0.81%(1) 0.83%(1) 0.80% 0.81% 0.82% 0.85% 0.87%(1) 0.89%
Portfolio Turnover Rate 114% 5% 106% 65% 63% 68% 21% 15%
----------------------------------------------------------------------------------------------------------------------------------
<FN>
(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.
(4) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 accretion of discount on investments. Expenses are recorded as
incurred. Realized gains and losses from securities transactions are recorded on
the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security and foreign currency transactions of the Portfolio are
allocated pro rata among the investors in the Portfolio at the time of such
determination.
D. FOREIGN CURRENCY TRANSACTIONS
The books and records of the Portfolio are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at prevailing exchange rates. Purchases and sales of
investment securities, dividend and interest income and certain expenses are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
E. FORWARD FOREIGN CURRENCY CONTRACTS
The Portfolio may enter into forward foreign currency contracts for the purpose
of settling specific purchases or sales of securities denominated in a foreign
currency or with respect to the Portfolio's investments. The net U.S. dollar
value of foreign currency underlying all contractual commitments held by the
Portfolio and the resulting unrealized appreciation or depreciation are
determined using prevailing exchange rates. With respect to forward foreign
currency contracts, losses in excess of amounts recognized in the Statement of
Assets and Liabilities may arise due to changes in the value of the foreign
currency or if the counterparty does not perform under the contract.
F. 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. Variation margin payments are made
or received by the Portfolio each day, depending 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.
--------------------------------------------------------------------------------
23
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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.
NOTE 2 -- FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"), an indirect wholly owned subsidiary of
Deutsche Bank A.G. Under this 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 agreement, the Portfolio pays Bankers Trust a fee computed daily and paid
monthly at an annual rate of .65% of the Portfolio's average daily net assets.
Bankers Trust has contractually agreed to waive its fees and
reimburse expenses of the Portfolio, through February 28, 2001, 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 "Cash
Management Fund"), an open-end management investment company managed by Bankers
Trust. The Cash Management Fund is offered as a cash management option to the
Portfolio and other accounts managed by Bankers Trust. Distributions from the
Cash Management Fund to the Portfolio for the six months ended April 30, 2000,
amounted to $2,216,254 and are included in dividend income.
At April 30, 2000, the Portfolio was a participant with other affiliated
entities in a revolving credit facility in the amount of $200,000,000 that
expires April 27, 2001. A commitment fee on the average daily amount of the
available commitment is payable on a quarterly basis and apportioned among all
participants. For the six months ended April 30, 2000, $19,900,000 was drawn
down under the credit facility at an interest rate range of 6.125% to 8.50%.
Total interest charges as a result of these borrowings amounted to $11,360,
which were paid prior to April 30, 2000. No amounts were outstanding or drawn
down under the credit facility as of April 30, 2000.
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.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended April 30, 2000, were
$2,371,371,652 and $2,053,569,888, respectively.
For Federal income tax purposes, the tax basis of investments held at April 30,
2000, was $3,055,768,031. The aggregate gross unrealized appreciation for all
investments at April 30, 2000, was $901,838,236, and the aggregate gross
unrealized depreciation for all investments was $182,676,271.
--------------------------------------------------------------------------------
24
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 4 -- OPEN FORWARD FOREIGN CURRENCY CONTRACTS
On April 28, 2000, the International Equity Portfolio had the following open
forward foreign currency contracts outstanding:
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
CONTRACT (DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR SETTLEMENT DATE VALUE (U.S.$) (U.S.$)
----------------------------------------------------------------------------------------------------------------------
SALES
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Australian Dollar 17,633,294 U.S. Dollar 10,550,000 5/8/00 10,289,204 $ 260,796
Australian Dollar 34,668,595 U.S. Dollar 21,100,000 5/8/00 20,242,299 857,701
Swiss Franc 117,691,730 U.S. Dollar 71,000,000 5/25/00 68,461,247 2,538,753
Euro 8,000,000 U.S. Dollar 7,291,200 5/3/00 7,290,008 1,192
Euro 113,594,802 U.S. Dollar 105,600,000 5/25/00 103,513,377 2,086,623
Euro 113,353,371 U.S. Dollar 105,600,000 5/25/00 103,293,372 2,306,628
Euro 74,400,000 U.S. Dollar 70,944,832 5/17/00 67,717,392 3,227,440
Euro 74,200,000 U.S. Dollar 70,991,827 5/17/00 67,535,356 3,456,471
Euro 74,400,000 U.S. Dollar 71,771,409 5/17/00 67,717,392 4,054,017
Euro 74,200,000 U.S. Dollar 69,901,439 5/25/00 67,574,682 2,326,757
Euro 74,200,000 U.S. Dollar 69,894,322 5/25/00 67,574,682 2,319,640
Euro 7,840,000 U.S. Dollar 7,236,320 5/31/00 7,143,024 93,296
Euro 2,182,000 U.S. Dollar 1,992,275 5/31/00 1,988,020 4,255
British Pound 6,670,123 U.S. Dollar 10,550,000 5/8/00 10,437,408 112,592
British Pound 44,552,887 U.S. Dollar 70,300,000 5/25/00 69,716,357 583,643
British Pound 13,364,157 U.S. Dollar 21,100,000 5/8/00 20,754,537 345,463
Japanese Yen 6,733,699,375 U.S. Dollar 63,770,320 5/8/00 62,307,775 1,462,545
Japanese Yen 7,481,270,000 U.S. Dollar 71,000,000 5/10/00 69,225,141 1,774,859
Japanese Yen 7,463,165,000 U.S. Dollar 70,868,531 5/10/00 69,057,613 1,810,918
Japanese Yen 7,363,533,800 U.S. Dollar 70,691,824 5/17/00 68,135,713 2,556,111
Japanese Yen 115,455,200 U.S. Dollar 1,111,857 5/17/00 1,068,322 43,535
Japanese Yen 50,964,000 U.S. Dollar 492,325 5/17/00 471,576 20,749
Japanese Yen 14,903,808,000 U.S. Dollar 143,453,616 5/17/00 138,151,724 5,301,892
Norwegian Krone 89,594,820 U.S. Dollar 10,550,000 5/8/00 10,014,213 535,787
Norwegian Krone 176,476,180 U.S. Dollar 21,100,000 5/8/00 19,744,261 1,355,739
New Zealand Dollar 21,229,500 U.S. Dollar 10,549,999 5/8/00 10,321,868 228,132
New Zealand Dollar 43,314,926 U.S. Dollar 21,100,000 5/8/00 21,035,894 64,105
----------------------------------------------------------------------------------------------------------------------
Total Sales 39,729,639
----------------------------------------------------------------------------------------------------------------------
PURCHASES
----------------------------------------------------------------------------------------------------------------------
Canadian Dollar 104,731,390 U.S. Dollar 71,000,000 5/25/00 70,730,999 (269,001)
Canadian Dollar 104,824,400 U.S. Dollar 71,000,000 5/25/00 70,793,814 (206,186)
Swiss Franc 34,526,700 U.S. Dollar 21,125,000 5/8/00 20,068,121 (1,056,879)
Swiss Franc 69,750,525 U.S. Dollar 42,250,000 5/8/00 40,472,627 (1,777,373)
Euro 10,970,727 U.S. Dollar 10,550,000 5/8/00 9,997,086 (552,914)
Euro 74,200,000 U.S. Dollar 70,691,824 5/17/00 67,614,824 (3,077,000)
Euro 21,716,756 U.S. Dollar 21,100,000 5/8/00 19,753,344 (1,346,656)
Euro 148,800,000 U.S. Dollar 143,453,616 5/17/00 135,434,784 (8,018,832)
Euro 5,059,000 U.S. Dollar 4,610,773 5/3/00 4,610,019 (754)
British Pound 5,160,000 U.S. Dollar 8,154,348 5/2/00 8,074,368 (79,980)
British Pound 44,931,874 U.S. Dollar 71,000,000 5/25/00 69,788,187 (1,211,813)
Japanese Yen 2,239,989,375 U.S. Dollar 21,125,000 5/8/00 20,726,906 (398,094)
Japanese Yen 4,493,710,000 U.S. Dollar 42,250,000 5/8/00 41,589,172 (660,828)
Japanese Yen 7,478,989,000 U.S. Dollar 70,991,827 5/17/00 69,326,928 (1,664,899)
Japanese Yen 7,474,038,000 U.S. Dollar 70,944,832 5/17/00 69,281,034 (1,663,797)
Japanese Yen 7,480,734,000 U.S. Dollar 71,771,409 5/17/00 69,343,103 (2,428,306)
Japanese Yen 7,287,924,000 U.S. Dollar 69,901,439 5/25/00 67,649,903 (2,251,536)
Japanese Yen 7,287,182,000 U.S. Dollar 69,894,322 5/25/00 67,643,015 (2,251,307)
----------------------------------------------------------------------------------------------------------------------
Total Purchases (28,916,155)
----------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation $ 10,813,484
</TABLE>
--------------------------------------------------------------------------------
25
<PAGE>
International Equity Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 5 -- CALL AND PUT OPTIONS
Call and Put Options written and related premiums received during the period
were as follows:
<TABLE>
<CAPTION>
CALLS -- ACTUAL PUTS -- ACTUAL
---------------------------------------------------------------------------------------------------------------------
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding, October 31, 1999
Options written 397,284 2,517,509 500,950 3,632,888
Options closed (397,284) (2,517,509) (246,950) (1,537,769)
Options expired -- -- -- --
Options exercised -- -- -- --
---------------------------------------------------------------------------------------------------------------------
Options outstanding, April 30, 2000 -- -- 254,000 2,095,119
---------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 6 -- 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% of the current market value of the loaned
securities for both domestic and international securities, respectively.
At April 30, 2000
Market Value Market Value % of Portfolio
of Loaned Securities of Collateral on Loan
---------------- ---------- -------
$473,695,902 $496,895,089 12.87
NOTE 7 -- 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 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.
--------------------------------------------------------------------------------
26
<PAGE>
<PAGE>
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:
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER
P.O. BOX 219210
KANSAS CITY, MO 64121-9210
or call our toll-free number: 1-800-730-1313
This report must be preceded or accompanied by a current
prospectus for the Fund.
International Equity CUSIP #055922868
BT INVESTMENT FUNDS 1663SA (04/00)
Distributed by:
ICC Distributors, Inc.
