PIPER FUNDS INC, N-30D, 1997-05-28

PIPER FUNDS INC
N-30D, 1997-05-28

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<PAGE>

1997 Semiannual Report

[GRAPHICS]

U.S. GROWTH FUNDS

Small Company Growth Fund
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Emerging Growth Fund
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Growth Fund
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<PAGE>

CONTENTS

SMALL COMPANY GROWTH FUND

Letter to Shareholders.........................................................2

Financial Statements and Notes................................................11

Investments in Securities.....................................................23

Directors and Officers........................................................28

Shareholder Services..........................................................29

Glossary***...................................................................33

EMERGING GROWTH FUND

Letter to Shareholders.........................................................5

Financial Statements and Notes................................................11

Investments in Securities.....................................................25

Directors and Officers........................................................28

Shareholder Services..........................................................29

Glossary***...................................................................33

GROWTH FUND

Letter to Shareholders.........................................................8

Financial Statements and Notes................................................11

Investments in Securities.....................................................27

Directors and Officers........................................................28

Shareholder Services..........................................................29

Glossary***...................................................................33

This report is intended for shareholders of Small Company Growth Fund, Emerging
Growth Fund and Growth Fund, but may also be used as sales literature if
preceded or accompanied by a prospectus. The prospectus gives details about the
charges, investment results, risks and operating policies of the funds.

*An investment in a Piper money market fund is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the fund will be able to
maintain a stable net asset value of $1 per share.

*** This report includes a glossary to help you understand financial words used
in the portfolio managers' letters. When you see this symbol, it indicates a
word that is defined in the glossary.

INTERNATIONAL GROWTH FUNDS
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Emerging Markets Growth Fund
Pacific-European Growth Fund

U.S. GROWTH FUNDS
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Small Company Growth Fund Portfolios that offer the
Emerging Growth Fund opportunity for long-term capital
Growth Fund appreciation are valued by many
investors for their potential to
build wealth over time.

GROWTH AND INCOME FUNDS
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Growth and Income Fund
Balanced Fund

INCOME FUNDS
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Government Income Fund
Intermediate Bond Fund
Adjustable Rate Mortgage Securities Fund

TAX-EXEMPT INCOME FUNDS
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National Tax-Exempt Fund
Minnesota Tax-Exempt Fund

CASH MANAGEMENT FUNDS*
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Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Money Market Fund
Institutional Money Market Fund

Piper Funds provide you with the flexibility to help you pursue your financial
goals. Among our funds, we offer a spectrum of investment objectives and
convenient shareholder services to meet the varied needs of today's investors.

Contact your Piper Jaffray Investment Executive for more information about the
Piper Funds, including prospectuses, or call Mutual Fund Services at 1 800
866-7778. Please read the prospectuses carefully before investing.

<PAGE>

PRESIDENT'S LETTER
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[PHOTO]
William H. Ellis
President
Piper Capital Management
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May 15, 1997
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DEAR SHAREHOLDERS:

What are you expecting from the markets this year? There's no denying that the
stock market's been on a bit of a roller coaster ride of late. The past six
months alone have seen record Dow highs, followed by quick downturns and
rebounds that are higher still. In fact, stock and bond prices have seen
unprecedented growth for almost 15 years. And, fortunately, more of you than
ever are sharing in these gains.

Word has it that investors' EXPECTATIONS have soared right along with these
phenomenal returns, and that's troubling. Don't get me wrong - we're happy about
the gains investors have enjoyed. But it's important that we all understand the
markets' potential for volatility and balance that with a good dose of reality.

Here's what I mean. According to Ibbotson Associates, the markets have, on
average, returned 11% in large-company stocks and 5% in long-term government
bonds per year since 1926.* Yet today's investors expect much more. I recently
read the results of a national survey by Louis Harris and Associates that found
a wide majority of investors expect at least a 14% stock market return over the
next 10 years (which is the average annual return from the last decade). Some
predict even greater returns.

No matter what the markets bring this year, I believe it's important to
maintain a long-term perspective. History shows that it's common for investors
to bail out at the first signs of a market downturn. But if I've learned one
thing from my 30 years in the financial services industry, it's this: you can
gain only if you stay in the game for the long term. Remember that market and
interest rate volatility (like we saw in March) are normal parts of investing.
I've never met anyone who can always time the market to their advantage. Here's
an adage to keep in mind: focus on "TIME IN the market," not "TIMING the
market."

My other advice for weathering the bumpy markets? Stay in touch with your
Investment Executive. Together, you have probably already set your financial
goals and formulated a plan to help you reach them. Stick to that plan. During
this uncertain time, your Investment Executive can help you sort through the
clutter and tune out the market noise. Best of all, your broker can lend you the
perspective gained from years of experience and help you focus on long-term
results.

Thank you for your investment and best wishes for the balance of 1997.

Sincerely,

/s/William H. Ellis

William H. Ellis

Investor Expectations
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What investors expect from the stock market over the next 10 years.

[GRAPH]

Source: Louis Harris and
Associates, 1996

*Past performance does not guarantee future results. Keep in mind that stocks
are more volatile than bonds, and long-term government bonds are guaranteed by
the U.S. government or its agencies as to payment of principal and interest.

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1 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

SMALL COMPANY GROWTH FUND
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[PHOTO]
SANDRA SHREWSBURY, CFA
is primarily responsible for the management of Small Company Growth Fund. She
has 14 years of financial experience. Other management team members are shown on
pages 3-7.
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May 15, 1997
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DEAR SHAREHOLDERS:

FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1997, SMALL COMPANY GROWTH FUND CLASS A
RECORDED A TOTAL RETURN OF -2.44%,* WHICH INCLUDES REINVESTED DISTRIBUTIONS BUT
NOT THE FUND'S SALES CHARGES. In comparison, the Standard & Poor's SmallCap 600
Index+ had a total return of -0.18%. While the fund underperformed its
benchmark*** index for the six-month period, we are pleased that it
performed better than the funds that make up the Lipper Small Company Funds
Average,** which returned -4.65%. We'll discuss the factors that contributed
to the fund's performance, and the fund's strategy for the coming months
below.

THE SMALL-CAP MARKET HAS BEEN A VERY TOUGH ENVIRONMENT SINCE OUR TEAM TOOK OVER
THE MANAGEMENT OF THIS FUND LAST FALL. In July 1996, market leadership shifted
dramatically from small- and mid-cap stocks to large-cap stocks and from growth
to value styles. Since that time, large-cap stocks with strong current earnings
have shown the greatest price gains, while small-and mid-cap stocks have lagged
in performance by a considerable amount.

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CLASS A AVERAGE ANNUALIZED TOTAL RETURNS
Includes the fund's maximum 4% front-end sales charge.

One Year -5.79%
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Five Year 6.85%
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Ten Year 7.69%
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Since Inception (3/16/87) 7.66%
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CLASS B CUMULATIVE TOTAL RETURNS
Includes the fund's contingent deferred sales charge.

Since Inception (2/18/97) -15.14%
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During some periods, the fund's adviser waived or paid certain fund expenses
and/or the fund's distributor voluntarily limited certain 12b-1 fees for the
fund. Otherwise, the class A average annualized total returns would have been:
- -6.53% one year, 6.21% five year, 7.04% ten year and 6.91% since inception; and
the class B cumulative since inception total return would have been: -15.80%.

* The fund operated as Equity Strategy Fund until September 13, 1996, with an
objective of high total investment return consistent with prudent investment
risk. Past performance does not guarantee future results. The investment return
and principal value of an investment will fluctuate so that fund shares, when
sold, may be worth more or less than their original cost. PLEASE REMEMBER, YOU
COULD LOSE MONEY WITH THIS INVESTMENT. SAFETY OF PRINCIPAL IS NOT GUARANTEED.
Stocks of small companies are more volatile than stocks of larger companies. The
fund's investments may face special risks such as lack of manage-ment
experience, limited financial resources and product diversification or the lack
of competitive strength as compared to larger companies. See the prospectus for
more complete information regarding risks.

FUND PERFORMANCE THROUGH MARCH 31, 1997*
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Growth of $10,000 Invested Since Inception

[GRAPH]

** An unmanaged index, that includes no expenses or transaction charges, of
large-capitalization stocks.

+ The average total return, not including sales charges, of similar funds as
characterized by Lipper Analytical Services.

All fund and benchmark returns include reinvested distributions.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

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2 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

SMALL COMPANY GROWTH FUND (CONTINUED)
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[PHOTO]
JILL THOMPSON, CFA
assists with the management of Small Company Growth Fund and Emerging Growth
Fund. She has eight years of financial experience.
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SMALL COMPANY GROWTH FUND REMAINS OVERWEIGHTED*** IN TECHNOLOGY, A SECTOR***
THAT HAS SUFFERED DURING RECENT MONTHS. We did decrease the fund's holdings
in the sector somewhat over the last three months; however, we believe in the
potential of this area for the long term - especially the companies whose
stocks the fund holds. These include Natural MicroSystems Corp. (which
represented 2% of the fund's total assets as of March 31, 1997), DuPont
Photomasks (1%) and Cymer, Inc. (1%). The fund's diversification within the
technology sector, its emphasis on semiconductor companies, and its lack of
stocks in the networking area (which recently suffered great losses) have
worked to its advantage during this period.

DURING THIS VOLATILE TIME, WE'RE REMAINING TRUE TO OUR INVESTMENT PHILOSOPHY AND
FOCUSING ON SMALL COMPANIES WITH EXCELLENT FUNDAMENTALS,*** STRONG POTENTIAL
FOR GROWTH AND GOOD VALUES. We look for companies that have seasoned
management, competitive advantages and strong financial conditions. Right
now, small-cap stock prices are quite attractive in comparison to stocks of
larger companies, and we're excited about the opportunities this presents to
purchase good companies at good prices.

WHILE THE SMALL-CAP MARKET CONTINUES TO BE A CHALLENGING ONE, OUR TEAM IS
EXPERIENCED AND HAS BEEN THROUGH CHALLENGING MARKETS BEFORE. Near term, we see
the potential for further increases in interest rates, which is a risk. But
despite the volatility in the market, our outlook for small-cap stocks is
positive. Valuations*** are as low as they've been in years, and the
companies that we own should deliver good earnings. We believe that, overall,
the economic environment is positive for them. We

TOP 10 HOLDINGS
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As a percentage of total assets on March 31, 1997.

1 Herman Miller 3%
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2 Natural MicroSystems 2%
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3 TCF Financial 2%
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4 Comverse Technology 2%
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5 ReliaStar Financial 2%
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6 TriQuint Semiconductor 2%
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7 INSO 2%
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8 JP Foodservice 2%
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9 Stratasys 2%
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10 Genesis Health Ventures 2%
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PORTFOLIO COMPOSITION BY SECTOR
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.

[GRAPH]

+ An unmanaged index, that includes no expenses or transaction charges, of
small-capitalization stocks.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

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3 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

SMALL COMPANY GROWTH FUND (CONTINUED)
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[PHOTO]
Joyce Halbe, CFA
assists with the management of Emerging Growth Fund and Small Company Growth
Fund. She has 12 years of financial experience.
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are committed to our investment process and we believe that companies with
strong fundamentals will be rewarded in the long run. At some point, market
sentiment will shift, and our goal for your fund is to be positioned with the
very best companies in the portfolio at that time.

We thank you for your investment in Small Company Growth Fund. As this new fund
weathers this very demanding market, we want to assure you that we remain
committed to providing quality management services.

Sincerely,

/S/Sandra Shrewsbury

Sandra Shrewsbury
Portfolio Manager

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4 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

EMERGING GROWTH FUND
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[PHOTO]
SANDRA SHREWSBURY, CFA
is primarily responsible for the management of Emerging Growth Fund. She has 14
years of financial experience. Other management team members are shown on
pages 3-7.
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May 15, 1997
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DEAR SHAREHOLDERS:

FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1997, EMERGING GROWTH FUND CLASS A
RECORDED A TOTAL RETURN OF -10.47%,* WHICH INCLUDES REINVESTED DISTRIBUTIONS BUT
NOT THE FUND'S SALES CHARGES. In comparison, the Lipper MidCap Funds Average+
returned -3.62%, and the Standard & Poor's MidCap 400 Index** had a total return
of 4.48%. We're disappointed in the fund's underperformance, which we attribute
to two things: a market that is currently unfavorable for mid- and small-cap
growth stocks, and the fund's overweighting in the poorly performing health care
and technology sectors.***

IT'S IMPORTANT THAT YOU, AS SHAREHOLDERS, UNDERSTAND THE VOLATILITY THAT THE
MID- AND SMALL-CAP MARKETS ARE CURRENTLY EXPERIENCING. Last summer, market
leadership dramatically shifted from mid- and small-cap stocks to large-cap
stocks and from growth to value styles. Since that time, large-cap stocks with
strong current earnings have shown great price gains. However, the same can't be
said for mid- and small-cap stocks, so this trend has been a frustrating
challenge to those of us who invest in these markets. For Emerging Growth Fund,
which focuses on smaller, more growth-oriented companies than the Lipper average
and S&P index, this environment has produced disappointing relative returns for
the past few quarters.

CLASS A AVERAGE ANNUALIZED TOTAL RETURNS
Includes the fund's maximum 4% front-end sales charge.

One Year -8.44%
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Five Year 11.65%
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Since Inception (4/23/90) 15.08%
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CLASS B AND Y CUMULATIVE TOTAL RETURNS
Class B shares include the fund's contingent deferred sales charge. Sales
charges do not apply to Class Y shares.

Class B Since Inception (2/18/97) -13.65%
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Class Y Since Inception (2/18/97) -9.97%
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During some periods, the fund's adviser waived or paid certain fund expenses
and/or the fund's distributor voluntarily limited certain 12b-1 fees for the
fund. Otherwise, the class A average annualized total returns would have been:
- -8.60% one year, 11.45% five year and 14.86% since inception.

* Past performance does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that fund shares, when sold,
may be worth more or less than their original cost. PLEASE REMEMBER, YOU COULD
LOSE MONEY WITH THIS INVESTMENT. SAFETY OF PRINCIPAL IS NOT GUARANTEED. Stocks
of mid-sized companies are more volatile than stocks of larger companies. The
fund's investments may face special risks such as limited product lines, markets
or financial resources. See the prospectus for more complete information
regarding risks.

FUND PERFORMANCE THROUGH MARCH 31, 1997*
- --------------------------------------------------------------------------------
Growth of $10,000 Invested Since Inception

[GRAPH]

** An unmanaged index, that includes no expenses or transaction charges, of
mid-capitalization stocks.

+ The average total return, not including sales charges, of similar funds as
characterized by Lipper Analytical Services.

All fund and benchmark returns include reinvested distributions.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

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5 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

EMERGING GROWTH FUND (CONTINUED)
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[PHOTO]
Mary Hoyme, CFA
assists with the management of Emerging Growth Fund and Small Company Growth
Fund. She has 14 years of financial experience.
- --------------------------------------------------------------------------------

CHANGES IN THE FUNDAMENTALS*** AND STRATEGIES OF SOME OF THE COMPANIES
IN THE FUND, ALONG WITH DISAPPOINTING PERFORMANCE FROM OTHERS, CAUSED US TO
MAKE SOME CHANGES TO THE FUND'S PORTFOLIO. In the health care sector, the
fund sold its position in IDEXX Laboratories because we were concerned about
their dependence on their core veterinarian test products, which have
experienced slowing growth. We also removed U.S. Filter from the portfolio,
because we were concerned about the risks involved with a change in business
strategy. This company recently disclosed plans to open retail water outlets
in malls, in addition to the commercial and municipal water services areas of
its business. Other companies' stocks were removed from the portfolio because
of disappointing performance. These included Corporate Express, an office
products supplier, and Alternative Resources, a temporary services firm.

WE RECENTLY ADDED TO THE FUND'S HOLDINGS IN THE CORRECTIONS AREA, AS WELL AS THE
CONTRACT RESEARCH AND BIOTECHNOLOGY AREAS. WE HAVE LIKED THE UNDERLYING
fundamentals in these industries for some time, but the valuations*** on
the stocks have been extremely high. These stocks are now more reasonably
priced, and we have been able to make some investments in these types of
companies, including Wackenhut Corrections, a private corrections company;
Biochem Pharma, a Canadian biotechnology company; and Quintiles
Transnational, a company that provides clinical trial management services to
pharmaceutical and biotechnology companies. These three companies represented
0.66%, 0.52% and 0.70% of the fund's total assets as of March 31, 1997,
respectively.

TOP 10 HOLDINGS
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As a percentage of total assets on March 31, 1997.

1 Stewart Enterprises Class A 3%
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2 Altera 2%
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3 United Waste Systems 2%
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4 Andrew Corporation 2%
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5 The FINOVA Group 2%
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6 Wisconsin Central Transportation 2%
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7 Smith International 2%
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8 TCF Financial 2%
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9 Green Tree Financial 2%
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10 CUC International 2%
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PORTFOLIO COMPOSITION BY SECTOR
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As a percentage of total assets on March 31, 1997.

[GRAPH]

** An unmanaged index, that includes no expenses or transaction charges,
of mid-capitalization stocks.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

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6 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

EMERGING GROWTH FUND (CONTINUED)
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[PHOTO]
ADAM BENSON
assists with the management of Emerging Growth Fund and Small Company Growth
Fund. He has three years of financial experience.
- --------------------------------------------------------------------------------

DURING THIS VOLATILE TIME, WE'RE REMAINING TRUE TO OUR INVESTMENT PHILOSOPHY AND
FOCUSING ON MID-SIZED COMPANIES WITH EXCELLENT FUNDAMENTALS, STRONG POTENTIAL
FOR GROWTH AND GOOD VALUES. We look for companies that have seasoned management,
competitive advantages and strong financial conditions. Right now, mid-cap stock
prices are quite attractive in comparison to stocks of larger companies, and
we're excited about the opportunities this presents to purchase good companies
at good prices.

THE MID-CAP MARKET HAS BEEN A CHALLENGING ONE OVER THE PAST 10 MONTHS; HOWEVER,
OUR TEAM IS EXPERIENCED AND HAS BEEN THROUGH CHALLENGING MARKETS BEFORE. Near
term, we see the potential for further increases in interest rates, which is a
risk. But despite the volatility in the market, our outlook for mid-cap stocks
remains positive. Valuations are as low as they've been in years, and the
companies that we own should deliver good earnings. We believe that, overall,
the economic environment is positive for them. We are committed to our
investment process and we believe that companies with strong fundamentals will
be rewarded in the long run. At some point, market sentiment will shift, and our
goal for your fund is to be positioned with the very best companies in the
portfolio at that time.

We thank you for your investment in Emerging Growth Fund. We are committed to
providing you with quality service as you work to achieve your financial goals.

Sincerely,

/S/Sandra Shrewsbury

Sandra Shrewsbury
Portfolio Manager

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7 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

GROWTH FUND
- --------------------------------------------------------------------------------

[PHOTO]
STEVE MARKUSEN, CFA
is primarily responsible for the management of Growth Fund's portfolio. He has
13 years of financial experience.
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May 15, 1997
- --------------------------------------------------------------------------------

DEAR SHAREHOLDERS:

FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1997, GROWTH FUND CLASS A PROVIDED A
TOTAL RETURN OF 3.68%,* WHICH INCLUDES REINVESTED DISTRIBUTIONS BUT NOT THE
FUND'S SALES CHARGES. In comparison, the Lipper Growth Funds Average+ returned
4.07%, and the Standard & Poor's 500 Index** had a total return of 11.23%. The
index's performance was driven by a very small group of blue-chip
stocks.*** Growth Fund's investments represent a broader range of stocks,
and so the fund underperformed the S&P 500 for the six-month period. However,
the fund underperformed other growth funds, as represented by the Lipper
average, only modestly.

IN JULY 1996, MARKET LEADERSHIP SHIFTED FROM SMALL- AND MID-CAP STOCKS TO
LARGE-CAP STOCKS AND FROM GROWTH TO VALUE STYLES. Since that time, the largest
stocks with strong current earnings have shown the greatest price gains. For
example, the performance of the S&P 500 has been driven by stocks of very large
companies like General Electric, Coca-Cola, Merck and Microsoft. Your fund's
philosophy is to invest in mid- to large-sized companies that offer long-term
growth opportunities and sell at reasonable values. This investment style has
not done well in the current stock market environment.

IN OUR OPINION, THE LEADING STOCKS OF THE PAST SEVERAL MONTHS WENT FROM BEING
OVERVALUED*** TO BEING EXTREMELY OVERVALUED; HOWEVER, WE BELIEVE THIS
MAY BE CORRECTING ITSELF. Recently, U.S. economic growth has been strong,
which has prompted the Federal Reserve Board to increase interest rates to
head off
- --------------------------------------------------------------------------------

CLASS A AVERAGE ANNUALIZED TOTAL RETURNS
Includes the fund's maximum 4% front-end sales charge.

One Year 2.70%
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Five Year 8.95%
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Ten Year 11.64%
- --------------------------------------------------------------------------------
Since Inception (3/16/87) 11.62%
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Class B Cumulative Total Returns
Includes the fund's contingent deferred sales charge.

Since Inception (2/18/97) -9.83%
- --------------------------------------------------------------------------------

During some periods, the fund's adviser waived or paid certain fund expenses
and/or the fund's distributor voluntarily limited certain 12b-1 fees for the
fund. Otherwise, the class A average annualized total returns would have been:
2.49% one year, 8.75% five year, 11.39% ten year and 11.37% since inception.

* Past performance does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that fund shares, when sold,
may be worth more or less than their original cost. PLEASE REMEMBER, YOU COULD
LOSE MONEY WITH THIS INVESTMENT. SAFETY OF PRINCIPAL IS NOT GUARANTEED. The fund
is subject to certain risks, including market volatility. See the prospectus for
more complete information regarding risks.

Fund Performance Through March 31, 1997*
- --------------------------------------------------------------------------------
Growth of $10,000 Invested Since Inception

[GRAPH]

** An unmanaged index, that includes no expenses or transaction charges, of
large-capitalization stocks.

+ The average total return, not including sales charges, of similar funds as
characterized by Lipper Analytical Services.

All fund and benchmark returns include reinvested distributions.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

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8 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

GROWTH FUND (CONTINUED)
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[PHOTO]
BRENT MELLUM, CFA
assists with the management of Growth Fund. He has three years of financial
experience.
- --------------------------------------------------------------------------------

inflation. The rise in rates has finally resulted in a correction*** of
large stocks. During the last month of this reporting period, the S&P 500 had
a -4.1% return, and some of the leaders early in the year (Philip Morris,
AT&T, Merck and Cisco Systems) were large contributors to that decline.

THE CURRENT MARKET TREND PRESENTS A REAL CHALLENGE TO THOSE OF US WHO INVEST IN
GROWTH STOCKS, BECAUSE WE BELIEVE STRONGLY IN THE GROWTH POTENTIAL OF COMPANIES
LIKE THOSE THAT MAKE UP THIS FUND. The companies in this fund have done very
well during this period from a business standpoint, even though their stock
prices have not. Look, for example, at some of the companies in the fund's Top
10 Holdings list. Over the past few years, we've seen great growth in oil
service company Baker Hughes (which represented 4% of the fund's total assets on
March 31, 1997) and The Gap (4%), a specialty retailing company. We expect this
growth to continue. Yet, their stock prices are down 17% and 12%, respectively,
from their highs of a year ago. These are strong, well-managed companies, with
good growth prospects, and we believe they are excellent investment
opportunities.

WE BELIEVE THE STOCKS THAT THE FUND OWNS REPRESENT A COMBINATION OF LONG-TERM
GROWTH AND VALUE. Energy and energy-related stocks provided consistent good
performance for the fund during the period. We continue to overweight this
sector,*** and our holdings include Transocean Offshore (4%), a deep water
drilling company. In addition, the fund has significant investments in growth
cyclical*** stocks like AlliedSignal (5%), an aerospace and industrial
products company; and in growth stocks like AirTouch Communications (3%), a
global wireless communications company. AirTouch is a company we're excited
about. We believe this company will see high growth in cashflow and earnings
as its cellular properties mature over the next three years.

THE FUND MAINTAINED ITS UNDERWEIGHTING*** IN TECHNOLOGY STOCKS DURING THE
PERIOD, AS THE SECTOR CONTINUED ITS POOR PERFORMANCE. However, we believe it
will be worth our time to research this area in the coming

TOP 10 HOLDINGS
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As a percentage of total assets on March 31, 1997.

1 AlliedSignal 5%
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2 Morton International 5%
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3 Schlumberger Limited 5%
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4 Baker Hughes 4%
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5 Enron 4%
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6 Transocean Offshore 4%
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7 The Gap 4%
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8 AirTouch Communications 3%
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9 Magna International Class A 3%
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10 Ford Motor 3%
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PORTFOLIO COMPOSITION BY SECTOR
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.

[GRAPH]

** An unmanaged index, that includes no expenses or transaction charges,
of large-capitalization stocks.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

- --------------------------------------------------------------------------------
9 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

months. A number of technology stocks have lost from 50% to 80% of their value
over the last year, so there may be some opportunities there. We'll also look at
companies in the financial services and health care sectors, two other areas in
which the fund has been underweighted. We recently boosted the fund's
investments in these sectors by adding to holdings in American International
Group (2%), The FINOvA Group (1%) and Columbia Healthcare (1%).

AS LONG AS THE ECONOMY STAYS STRONG, WE BELIEVE THERE WILL CONTINUE TO BE UPWARD
PRESSURE ON INTEREST RATES. We have positioned Growth Fund consistent with our
market outlook and investment discipline. We'll continue to focus on individual
stocks that we feel offer long-term earnings growth and good value. We know the
companies that are in the fund's portfolio. We have met with and have confidence
in the managements, we understand their businesses, and we believe they offer
long-term growth potential to the fund.

Thank you for your investment in Growth Fund. We appreciate the opportunity to
help you meet your investment goals.

Sincerely,

/s/Steve Markusen /s/Brent Mellum

Steve Markusen Brent Mellum
Portfolio Manager Portfolio Manager

- --------------------------------------------------------------------------------
10 1997 Semiannual Report - U.S. Growth Funds

<PAGE>
Financial Statements (Unaudited)

- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES March 31, 1997
..................................................................

<TABLE>
<CAPTION>
SMALL
COMPANY EMERGING
GROWTH GROWTH GROWTH
FUND FUND FUND
------------ ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at market value* (note 2)
(including repurchase agreements of $1,236,000;
$19,558,000 and $111,000, respectively) .................. $26,007,135 $265,459,577 $172,331,541
Cash in bank on demand deposit ............................. 170,449 10,720 10,918
Receivable for investment securities sold .................. 126,246 1,585,770 1,661,270
Receivable for fund shares sold ............................ 24,237 37,625 10,348
Dividends and accrued interest receivable .................. 3,042 72,293 172,811
------------ ------------- -------------
Total assets ............................................. 26,331,109 267,165,985 174,186,888
------------ ------------- -------------

LIABILITIES:
Payable for fund shares redeemed ........................... 4,477 239,714 144,111
Accrued investment management fee .......................... 18,304 166,098 109,295
Accrued distribution and service fees ...................... 8,343 71,013 52,827
------------ ------------- -------------
Total liabilities ........................................ 31,124 476,825 306,233
------------ ------------- -------------
Net assets applicable to outstanding capital stock ....... $26,299,985 $266,689,160 $173,880,655
------------ ------------- -------------
------------ ------------- -------------

COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital ............... $26,642,722 $185,545,429 $116,629,019
Distributions in excess of net investment income ........... (52,941) (789,551) (101,170)
Accumulated net realized gain (loss) on investments ........ (889,281) 13,480,482 10,023,554
Unrealized appreciation of investments ..................... 599,485 68,452,800 47,329,252
------------ ------------- -------------

Total - representing net assets applicable to outstanding
capital stock .......................................... $26,299,985 $266,689,160 $173,880,655
------------ ------------- -------------
------------ ------------- -------------

NET ASSET VALUE AND OFFERING PRICE:
Class A:
Net assets ............................................... $26,244,525 $225,354,471 $173,828,770
Shares outstanding ....................................... 4,097,433 19,975,849 17,572,053
Net asset value .......................................... $ 6.41 $ 11.28 $ 9.89
Maximum offering price per share (net asset value plus 4%
of offering price) ..................................... $ 6.68 $ 11.75 $ 10.30
Class B:
Net assets ............................................... $ 55,460 $ 187,428 $ 51,885
Shares outstanding ....................................... 8,659 16,621 5,247
Net asset value and offering price per share ............. $ 6.40 $ 11.28 $ 9.89
Class Y:
Net assets ............................................... -- $ 41,147,261 --
Shares outstanding ....................................... -- 3,645,195 --
Net asset value and offering price per share ............. -- $ 11.29 --

* Investments in securities at identified cost ............. $25,407,650 $197,006,777 $125,002,289
------------ ------------- -------------
------------ ------------- -------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

- --------------------------------------------------------------------------------

11 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

STATEMENTS OF OPERATIONS For the Six Months Ended March
31, 1997
..................................................................

<TABLE>
<CAPTION>
SMALL
COMPANY EMERGING
GROWTH GROWTH GROWTH
FUND FUND FUND
------------ ------------- ------------
<S> <C> <C> <C>
INCOME:
Dividends (net of foreign withholding taxes of $0; $0 and
$8,953, respectively) .................................... $ 39,230 $ 471,175 $ 1,281,222
Interest ................................................... 109,196 516,724 123,045
------------ ------------- ------------

Total income ............................................. 148,426 987,899 1,404,267
------------ ------------- ------------

EXPENSES (NOTE 5):
Investment management fee .................................. 111,631 1,011,964 647,270
Distribution and service fees:
Class A .................................................. 74,394 716,819 459,559
Class B .................................................. 34 137 36
Class Y .................................................. -- -- --
Transfer agent and dividend disbursing agent fees .......... 22,113 86,402 55,899
Custodian and accounting fees .............................. 22,944 105,342 76,229
Registration fees .......................................... 19,800 30,706 19,168
Reports to shareholders .................................... 15,195 22,070 18,490
Directors' fees ............................................ 3,619 3,619 3,619
Audit and legal fees ....................................... 33,991 27,872 28,112
Other expenses ............................................. 3,993 23,102 14,366
------------ ------------- ------------
Total expenses ........................................... 307,714 2,028,033 1,322,748
Less Class A expenses waived by the distributor ........ (25,990) (249,809) (159,671)
Less expenses waived by the adviser .................... (81,804) -- --
------------ ------------- ------------

Net expenses before expenses paid indirectly ............. 199,920 1,778,224 1,163,077
Less expenses paid indirectly .......................... (392) (774) (25)
------------ ------------- ------------

Total net expenses ....................................... 199,528 1,777,450 1,163,052
------------ ------------- ------------

Net investment income (loss) ............................. (51,102) (789,551) 241,215
------------ ------------- ------------

NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain on investments (note 3) .................. 2,319,238 15,108,064 13,434,502
Net change in unrealized appreciation or depreciation of
investments .............................................. (2,855,660) (45,482,874) (6,780,661)
------------ ------------- ------------

Net gain (loss) on investments ........................... (536,422) (30,374,810) 6,653,841
------------ ------------- ------------

Net increase (decrease) in net assets resulting from
operations ........................................... $ (587,524) $(31,164,361) $ 6,895,056
------------ ------------- ------------
------------ ------------- ------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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12 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Financial Statements (continued)
- --------------------------------------------------------------------------------

STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
SMALL COMPANY
GROWTH FUND EMERGING GROWTH FUND
----------------------------- -------------------------------
Six Months Six Months
Ended 3/31/97 Year Ended Ended 3/31/97 Year Ended
(Unaudited) 9/30/96 (Unaudited) 9/30/96
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................... $ (51,102) $ 84,218 $ (789,551) $ (1,124,687)
Net realized gain on investments ........................... 2,319,238 7,564,663 15,108,064 32,003,899
Net change in unrealized appreciation or depreciation of
investments .............................................. (2,855,660) (5,498,330) (45,482,874) 13,771,971
------------- ------------- -------------- --------------

Net increase (decrease) in net assets resulting from
operations ............................................. (587,524) 2,150,551 (31,164,361) 44,651,183
------------- ------------- -------------- --------------

DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income ............................... (82,511) (175,841) -- --
From net realized gains .................................. (8,846,747) (3,725,755) (27,377,820) (23,854,784)
CLASS B:
From net investment income ............................... -- -- -- --
From net realized gains .................................. -- -- -- --
CLASS Y:
From net investment income ............................... -- -- -- --
From net realized gains .................................. -- -- -- --
------------- ------------- -------------- --------------
Total distributions ...................................... (8,929,258) (3,901,596) (27,377,820) (23,854,784)
------------- ------------- -------------- --------------

CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A .................................................... 4,788,090 (15,702,321) (24,257,198) 30,340,269
CLASS B .................................................... 60,765 -- 200,886 --
CLASS Y .................................................... -- -- 45,518,965 --
------------- ------------- -------------- --------------
Increase (decrease) in net assets from capital share
transactions ........................................... 4,848,855 (15,702,321) 21,462,653 30,340,269
------------- ------------- -------------- --------------
Total increase (decrease) in net assets .................. (4,667,927) (17,453,366) (37,079,528) 51,136,668

Net assets at beginning of period .......................... 30,967,912 48,421,278 303,768,688 252,632,020
------------- ------------- -------------- --------------

Net assets at end of period ................................ $26,299,985 $ 30,967,912 $ 266,689,160 $ 303,768,688
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------

Undistributed (distributions in excess of) net investment
income ................................................... $ (52,941) $ 80,672 $ (789,551) --
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------

GROWTH FUND
------------------------------

Six Months
Ended 3/31/97 Year Ended
(Unaudited) 9/30/96
------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................... $ 241,215 $ 498,018
Net realized gain on investments ........................... 13,434,502 16,132,322
Net change in unrealized appreciation or depreciation of
investments .............................................. (6,780,661) 10,738,269
------------- --------------
Net increase (decrease) in net assets resulting from
operations ............................................. 6,895,056 27,368,609
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income ............................... (389,354) (511,937)
From net realized gains .................................. (17,840,007) (19,384,717)
CLASS B:
From net investment income ............................... -- --
From net realized gains .................................. -- --
CLASS Y:
From net investment income ............................... -- --
From net realized gains .................................. -- --
------------- --------------
Total distributions ...................................... (18,229,361) (19,896,654)
------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A .................................................... 6,858,104 (1,655,157)
CLASS B .................................................... 54,776 --
CLASS Y .................................................... -- --
------------- --------------
Increase (decrease) in net assets from capital share
transactions ........................................... 6,912,880 (1,655,157)
------------- --------------
Total increase (decrease) in net assets .................. (4,421,425) 5,816,798
Net assets at beginning of period .......................... 178,302,080 172,485,282
------------- --------------
Net assets at end of period ................................ $173,880,655 $ 178,302,080
------------- --------------
------------- --------------
Undistributed (distributions in excess of) net investment
income ................................................... $ (101,170) $ 46,969
------------- --------------
------------- --------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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13 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------

(1) ORGANIZATION
................................
Piper Funds Inc. (the company) is registered under the
Investment Company Act of 1940 (as amended) as a single,
open-end management investment company. The company
currently has 12 series, including Small Company Growth
Fund, Emerging Growth Fund, and Growth Fund (the funds),
each of which is classified as a diversified series. The
company's articles of incorporation permit the board of
directors to create additional series in the future.

The funds commenced offering Class B shares and Emerging
Growth Fund commenced offering Class Y shares on February
18, 1997. All shares existing prior to that date were
classified as Class A shares. Key features of each class
are:

CLASS A:
- Subject to a front-end sales charge

- Lower annual expenses than Class B

CLASS B:
- No front-end sales charge

- Subject to a contingent deferred sales charge upon
redemption

- Higher annual expenses than Class A

- Automatic conversion to Class A shares at the beginning
of the sixth calendar year after issuance

CLASS Y:
- Requires a minimum initial investment of $1 million or
more

- No front-end or contingent deferred sales charges

- Lower annual expenses than other classes

The classes of shares have the same rights and are
identical in all respects except that each class bears
different distribution expenses, has exclusive voting
rights with respect to matters affecting that class and
has different exchange privileges.

Small Company Growth Fund invests primarily in common
stocks of small-capitalization companies.

Emerging Growth Fund invests primarily in common stocks
and securities convertible into common stocks of emerging
growth companies, emphasizing those with headquarters,
offices or manufacturing facilities in states where Piper
Jaffray maintains offices.

Growth Fund invests in a broadly diversified mix of stocks
from many industries.

(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
................................
INVESTMENTS IN SECURITIES
Investments in securities traded on a national securities
exchange or on the Nasdaq National Market System are
valued at the last reported sales price that day.
Securities traded on a national securities exchange or on
the Nasdaq National Market System for which there were no
sales on that day and securities traded on other
over-the-counter markets for which market quotations are
readily available

- --------------------------------------------------------------------------------

14 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
are valued at the mean of the bid and asked prices.
Exchange-traded options are valued at the last sales price
on the exchange prior to the time when assets are valued.
If no sales were reported that day, the options will be
valued at the mean between the current closing bid and
asked prices. Financial futures are valued at the last
settlement price established each day by the board of
trade or exchange on which they are traded. Such
valuations are determined using independent pricing
services or prices quoted by independent brokers.

The value of certain fixed income securities will be
provided by an independent pricing service, which
determines these valuations at a time earlier than the
close of the New York Stock Exchange. Fixed income
securities for which prices are not available from an
independent pricing service but where an active market
exists will be valued using market quotations obtained
from one or more dealers that make markets in the
securities.

Occasionally, events affecting the value of such
securities may occur between the time valuations are
determined and the close of the Exchange. If events
materially affecting the value of such securities occur,
if the fund's management determines for any other reason
that valuations provided by the pricing service or dealers
are inaccurate or when market quotations are not readily
available, securities will be valued at their fair value
according to procedures decided upon in good faith by the
board of directors. Short-term securities with maturities
of 60 days or less are valued at amortized cost, which
approximates market value.

Securities transactions are accounted for on the date the
securities are purchased or sold. Realized gains and
losses are calculated on the identified-cost basis.
Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond discount
and premium computed on a level-yield basis, is accrued
daily.

OPTIONS TRANSACTIONS
For hedging purposes, the funds may buy and sell put and
call options, write covered call options on portfolio
securities and write cash-secured puts. The risk in
writing a call option is that the funds give up the
opportunity of profit if the market price of the security
increases. The risk in writing a put option is that the
funds may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying
an option is that the funds pay a premium whether or not
the option is exercised. The funds also have the
additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist.

Option contracts are valued daily and unrealized
appreciation or depreciation is recorded. The funds will
realize a gain or loss upon expiration or closing of the
option transaction. When an option is exercised, the
proceeds on the sale of a written call option, the
purchase cost of a written put option, or the cost of a
security for purchased put and call options is adjusted by
the amount of premium received or paid.

- --------------------------------------------------------------------------------

15 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

FUTURES TRANSACTIONS
For hedging purposes, the funds may buy and sell stock
index futures contracts and related options. Risks of
entering into futures contracts and related options
include the possibility that there may be an illiquid
market and that a change in the value of the contract or
option may not correlate with changes in the value of the
underlying securities.

Upon entering into a futures contract, the funds are
required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the
contract value. Subsequent payments (variation margin) are
made or received by the funds each day. The variation
margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains and
losses. The funds recognize a realized gain or loss when
the contract is closed or expires.

FEDERAL TAXES
Each fund is treated separately for federal income tax
purposes. Each fund intends to comply with the
requirements of the Internal Revenue Code applicable to
regulated investment companies and not be subject to
federal income tax. Therefore, no income tax provision is
required. In addition, on a calendar-year basis, the funds
will distribute substantially all of their taxable net
investment income and realized gains, if any, to avoid the
payment of any federal excise taxes.

Net investment income and net realized gains (losses) may
differ for financial statement and tax purposes primarily
because of losses deferred due to "wash sale"
transactions. The character of distributions made during
the year from net investment income or net realized gains
may differ from its ultimate characterization for federal
income tax purposes. Distributions which exceed the net
investment income or net realized gains for financial
statement purposes are presented as an "excess
distribution" in the statements of changes in net assets
and the financial highlights. In addition, due to the
timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the
income or realized gains (losses) were recorded by the
funds.

ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES
Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Class-specific expenses, which include distribution and
service fees, are charged directly to such class.

DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income
will be declared separately for each class and paid at
least annually. Net realized gains distributions, if any,
will be made at least annually. Distributions are payable
in cash or reinvested in additional shares of the same
class.

REPURCHASE AGREEMENTS
For repurchase agreements entered into with certain
broker-dealers, the funds, along with other affiliated
registered investment companies, may transfer uninvested
cash balances to a joint trading account, the daily
aggregate of which is invested in repurchase agreements
secured by U.S. government or agency obligations.
Securities pledged as collateral for all individual and
joint

- --------------------------------------------------------------------------------

16 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
repurchase agreements are held by the funds' custodian
bank until maturity of the repurchase agreement.
Provisions for all agreements ensure that the daily market
value of the collateral is in excess of the repurchase
amount, including accrued interest, to protect the funds
in the event of a default.

USE OF ESTIMATES
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 these estimates.

(3) INVESTMENT
SECURITY
TRANSACTIONS
................................
Cost of purchases and proceeds from sales of securities,
other than temporary investments in short-term securities,
for the six months ended March 31, 1997, were as follows:

<TABLE>
<CAPTION>
SMALL
COMPANY EMERGING GROWTH
GROWTH FUND GROWTH FUND FUND
------------ ------------- ------------
<S> <C> <C> <C>
Purchases ................................... $22,145,705 $ 86,774,179 $ 30,065,059
Proceeds from sales ......................... $25,330,314 $ 103,098,763 $ 42,962,211
</TABLE>

For the six months ended March 31, 1997, brokerage
commissions paid to Piper Jaffray Inc., an affiliated
broker, amounted to $1,800, $0 and $0 for Small Company
Growth Fund, Emerging Growth Fund, and Growth Fund,
respectively.

(4) CAPITAL SHARE
TRANSACTIONS
................................
Small Company Growth Fund, Emerging Growth Fund, and
Growth Fund declared 100% stock dividends on October 21,
1996, December 23, 1995, and October 21, 1996,
respectively. Shareholders received one additional share
of capital stock for each share they owned and the net
asset value of each share was reduced by half.

Capital share transactions for all classes of the funds
were as follows:

(A) REPRESENTS PERIOD FROM FEBRUARY 18 (COMMENCEMENT OF OFFERING OF SHARES) TO MARCH 31, 1997, FOR CLASS B AND
CLASS Y.
</TABLE>

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17 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997(A) SEPTEMBER 30, 1996
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
EMERGING GROWTH FUND:
CLASS A (authorized four billion shares of $0.01 par value):
Purchases of fund shares .................. 3,253,612 $ 40,058,058 4,424,067 $ 65,931,347
Issued for reinvested distributions ....... 2,159,866 26,933,532 986,585 23,845,752
Redemptions of fund shares ................ (3,604,815) (44,514,947) (3,766,383) (59,436,830)
Redemptions in exchange for Class Y
shares .................................. (3,744,871) (46,733,841) -- --
Issued for stock dividend ................. -- -- 10,529,165 --
----------- ------------- ----------- -------------
(1,936,208) $ (24,257,198) 12,173,434 $ 30,340,269
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
CLASS B (authorized two billion shares of $0.01 par value):
Purchases of fund shares .................. 16,621 $ 200,886
----------- -------------
----------- -------------
16,621 $ 200,886
----------- -------------
----------- -------------
CLASS Y (authorized one billion shares of $0.01 par value):
Purchases of fund shares .................. 29,094 $ 349,442
Purchases in exchange for Class A
shares .................................. 3,744,871 46,733,841
Redemptions of fund shares ................ (128,770) (1,564,318)
----------- -------------
3,645,195 $ 45,518,965
----------- -------------
----------- -------------
</TABLE>

(A) REPRESENTS PERIOD FROM FEBRUARY 18 (COMMENCEMENT OF OFFERING OF SHARES) TO MARCH 31, 1997, FOR CLASS B AND
CLASS Y.
</TABLE>

Sales charges received by Piper Jaffray Inc. (Piper
Jaffray), the funds' distributor, for distributing the
funds' shares for the six months ended March 31, 1997,
were as follows:

<TABLE>
<CAPTION>
SMALL COMPANY EMERGING
GROWTH FUND GROWTH FUND GROWTH FUND
------------------- -------------------------------- -------------------
CLASS A CLASS B CLASS A CLASS B CLASS Y CLASS A CLASS B
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Front-end sales charges ..................... $4,629 $ -- $ 20,552 $ -- $ -- $8,289 $ --
Contingent deferred sales charges ........... 935 -- 5,341 -- -- 1,384 --
------- ------- -------- ------- ------- ------- -------
$5,564 $ -- $ 25,893 $ -- $ -- $9,673 $ --
------- ------- -------- ------- ------- ------- -------
------- ------- -------- ------- ------- ------- -------
</TABLE>

Front-end sales charges received by Piper Jaffray for
distributing the funds' shares were $23,234, $695,309 and
$169,574 for Small Company Growth Fund, Emerging Growth
Fund, and Growth Fund, respectively, for the year ended
September 30, 1996.

(5) EXPENSES
................................
INVESTMENT MANAGEMENT FEE
The company has entered into an investment management
agreement with Piper Capital Management Incorporated
(Piper Capital) under which Piper Capital manages each
fund's assets and

- --------------------------------------------------------------------------------

18 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
furnishes related office facilities, equipment, research
and personnel. The agreement requires each fund to pay
Piper Capital a monthly fee based on average daily net
assets. The fee for each fund is equal to an annual rate
of 0.75% of the first $100 million in net assets, 0.65% of
the next $200 million and decreasing percentages
thereafter to 0.50% of net assets in excess of $500
million.

DISTRIBUTION AND SERVICE FEES
Each fund also pays Piper Jaffray fees accrued daily and
paid quarterly for providing shareholder services and
distribution-related services. The fees for each class,
which are being voluntarily limited for Class A for the
year ending September 30, 1997, are stated below as a
percent of average daily net assets attributable to such
class.

<TABLE>
<CAPTION>
SMALL COMPANY EMERGING
GROWTH FUND GROWTH FUND GROWTH FUND
--------------- ------------------------- ---------------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B A B Y A B
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution fee ............................ 0.25% 0.75% 0.25% 0.75% -- 0.25% 0.75%
Service fee ................................. 0.25% 0.25% 0.25% 0.25% -- 0.25% 0.25%
----- ----- ----- ----- ----- ----- -----
Total distribution and service fees ....... 0.50% 1.00% 0.50% 1.00% -- 0.50% 1.00%
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
Total distribution and service fees after
voluntary limitation .................... 0.33% 1.00% 0.33% 1.00% -- 0.33% 1.00%
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
</TABLE>

SHAREHOLDER ACCOUNT SERVICING FEES
The company has also entered into shareholder account
servicing agreements under which Piper Jaffray and Piper
Trust Company (Piper Trust) perform various transfer and
dividend disbursing agent services for accounts held at
the respective company. The fees, which are paid monthly
to Piper Jaffray and Piper Trust for providing these
services, are equal to an annual rate of $6.00 per active
shareholder account and $1.60 per closed account. For the
six months ended March 31, 1997, Piper Jaffray and Piper
Trust received the following amounts in connection with
the shareholder account servicing agreements:

<TABLE>
<CAPTION>
SMALL
COMPANY EMERGING
GROWTH GROWTH GROWTH
FUND FUND FUND
-------- -------- --------
<S> <C> <C> <C>
Piper Jaffray ............................... $14,564 $67,830 $39,602
Piper Trust ................................. 49 11,072 8,796
-------- -------- --------
$14,613 $78,902 $48,398
-------- -------- --------
-------- -------- --------
</TABLE>

OTHER FEES AND EXPENSES
In addition to the investment management, distribution and
shareholder account servicing fees, each fund is
responsible for paying most other operating expenses
including: outside directors' fees and expenses; custodian
fees; registration fees; printing and shareholder reports;
transfer agent fees and expenses; legal, auditing and
accounting services; insurance; interest; taxes and other
miscellaneous expenses. For the year ending September 30,
1997, Piper Capital voluntarily limited total fees and
expenses for Small Company Growth Fund to annual rates of
1.34% and 2.00% of average daily net assets attributable
to such shares for Class A and Class B, respectively.

Expenses paid indirectly represent a reduction of
custodian fees for earnings on miscellaneous cash balances
maintained by the funds.

- --------------------------------------------------------------------------------

19 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each
period are as follows:

SMALL COMPANY GROWTH FUND

<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
1997 --------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
----------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA (A)
Net asset value, beginning of period ........ $ 9.41 $ 9.73 $ 8.59 $ 8.42 $ 6.79 $ 6.41
----------- -------- ------- ------- ------- -------
Operations:
Net investment income (loss) .............. (0.02) 0.03 0.05 0.04 0.01 0.04
Net realized and unrealized gains (losses)
on investments .......................... (0.12) 0.48 1.14 0.15 1.65 0.36
----------- -------- ------- ------- ------- -------
Total from operations ................... (0.14) 0.51 1.19 0.19 1.66 0.40
----------- -------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income ................ (0.02) (0.04) (0.05) (0.02) (0.03) (0.02)
From net realized gains on investments .... (2.84) (0.79) -- -- -- --
----------- -------- ------- ------- ------- -------
Total distributions to shareholders ..... (2.86) (0.83) (0.05) (0.02) (0.03) (0.02)
----------- -------- ------- ------- ------- -------
Net asset value, end of period .............. $ 6.41 $ 9.41 $ 9.73 $ 8.59 $ 8.42 $ 6.79
----------- -------- ------- ------- ------- -------
----------- -------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (b) ............................ (2.44)% 5.38% 13.88% 2.12% 24.56% 6.18%
Net assets at end of period (in millions) ... $ 26 $ 31 $ 48 $ 78 $ 84 $ 9
Ratio of expenses to average daily net assets
(f) ....................................... 1.34%(e) 1.32% 1.40% 1.32% 1.28% 1.47%
Ratio of net investment income (loss) to
average daily net assets .................. (0.34)%(e) 0.20% 0.43% 0.37% 0.50% 0.56%
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600 $ 0.0600 n/a n/a n/a n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 80% 125% 182% 177% 154% 420%
Ratios before waivers by the adviser and/or
distributor:
Ratio of expenses to average daily net
assets before waivers ................... 2.07%(e) 1.79% 1.63% 1.54% 1.86% 2.49%
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. (1.07)%(e) (0.27)% 0.20% 0.15% (0.08)% (0.46)%
</TABLE>

<TABLE>
<CAPTION>
CLASS B
-----------
Period
Ended
March 31,
1997(d)
(Unaudited)
-----------
<S> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 7.24
-----------
Operations:
Net investment loss ....................... (0.01)
Net realized and unrealized loss on
investments ............................. (0.83)
-----------
Total from operations ................... (0.84)
-----------
Net asset value, end of period .............. $ 6.40
-----------
-----------

SELECTED INFORMATION
Total return (b) ............................ (11.60)%
Net assets at end of period (in
thousands) ................................ $ 55
Ratio of expenses to average daily net
assets .................................... 1.98%(e)
Ratio of net investment income (loss) to
average daily net assets .................. (1.55)%(e)
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600
Portfolio turnover rate (excluding short-term
securities) ............................... 80%
Ratios before waivers by the adviser:
Ratio of expenses to average daily net
assets before waivers ................... 2.53%(e)
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. (2.10)%(e)
</TABLE>

(A) PER-SHARE AMOUNTS HAVE BEEN ADJUSTED TO REFLECT THE EFFECT OF THE STOCK
DIVIDEND DECLARED ON OCTOBER 21, 1996. SEE NOTE 4 IN THE NOTES TO FINANCIAL
STATEMENTS.
(B) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(C) DISCLOSED IN ACCORDANCE WITH GUIDELINES ADOPTED IN 1996.
(D) COMMENCEMENT OF OFFERING OF CLASS B SHARES WAS FEBRUARY 18, 1997.
(E) ANNUALIZED.
(F) INCLUDES 0.15% OF INCOME TAX EXPENSE FOR FISCAL 1992.

- --------------------------------------------------------------------------------

20 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each
period are as follows:

EMERGING GROWTH FUND

SELECTED INFORMATION
Total return (b) ............................ (10.47)% 17.84% 34.68% (2.38)% 36.92% 4.55%
Net assets at end of period (in millions) ... $ 225 $ 304 $ 253 $ 224 $ 191 $ 110
Ratio of expenses to average daily net
assets .................................... 1.23%(e) 1.18% 1.24% 1.24% 1.29% 1.30%
Ratio of net investment loss to average daily
net assets ................................ (0.56)%(e) (0.41)% (0.51)% (0.38)% (0.34)% (0.14)%
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600 $ 0.0600 n/a n/a n/a n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 31% 44% 33% 31% 30% 21%
Ratios before waivers by the adviser and/or
distributor:
Ratio of expenses to average daily net
assets before waivers ................... 1.40%(e) 1.37% 1.42% 1.44% 1.49% 1.56%
Ratio of net investment loss to average
daily net assets before waivers ......... (0.73)%(e) (0.60)% (0.69)% (0.58)% (0.54)% (0.40)%
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS Y
----------- -----------
Period Period
Ended Ended
March 31, March 31,
1997(d) 1997(d)
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 12.54 $ 12.54
----------- -----------
Operations:
Net investment loss ....................... (0.01) --
Net realized and unrealized loss on
investments ............................. (1.25) (1.25)
----------- -----------
Total from operations ................... (1.26) (1.25)
----------- -----------
Net asset value, end of period .............. $ 11.28 $ 11.29
----------- -----------
----------- -----------

SELECTED INFORMATION
Total return (b) ............................ (10.05)% (9.97)%
Net assets at end of period (in thousands and
millions for Class B and Class Y,
respectively) ............................. $ 187 $ 41
Ratio of expenses to average daily net
assets .................................... 1.87%(e) 0.87%
Ratio of net investment income (loss) to
average daily net assets .................. (1.09)%(e) (0.09)%
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600 $0.0600
Portfolio turnover rate (excluding short-term
securities) ............................... 31% 31%
</TABLE>

(A) PER-SHARE AMOUNTS HAVE BEEN ADJUSTED TO REFLECT THE EFFECT OF THE STOCK
DIVIDEND DECLARED ON DECEMBER 23, 1995. SEE NOTE 4 IN THE NOTES TO
FINANCIAL STATEMENTS.
(B) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(C) DISCLOSED IN ACCORDANCE WITH GUIDELINES ADOPTED IN 1996.
(D) COMMENCEMENT OF OFFERING OF CLASS B AND CLASS Y SHARES WAS FEBRUARY 18,
1997.
(E) ANNUALIZED.

- --------------------------------------------------------------------------------

21 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each
period are as follows:

GROWTH FUND

SELECTED INFORMATION
Total return (b) ............................ 3.68% 16.87% 20.60% (1.51)% 13.85% 5.76%
Net assets at end of period (in millions) ... $ 174 $ 178 $ 172 $ 195 $ 252 $ 200
Ratio of expenses to average daily net
assets .................................... 1.27%(e) 1.24% 1.27% 1.23% 1.26% 1.29%
Ratio of net investment income to average
daily net assets .......................... 0.26%(e) 0.28% 0.40% 0.43% 0.66% 1.04%
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600 $ 0.0600 n/a n/a n/a n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 17% 19% 80% 11% 45% 36%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net
assets before waivers ................... 1.44%(e) 1.43% 1.45% 1.42% 1.44% 1.47%
Ratio of net investment income to average
daily net assets before waivers ......... 0.09%(e) 0.09% 0.22% 0.24% 0.48% 0.86%
</TABLE>

<TABLE>
<CAPTION>
CLASS B
-----------
Period
Ended
March 31,
1997(d)
(Unaudited)
-----------
<S> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 10.53
-----------
Operations:
Net investment loss ....................... (0.01)
Net realized and unrealized loss on
investments ............................. (0.63)
-----------
Total from operations ................... (0.64)
-----------
Net asset value, end of period .............. $ 9.89
-----------
-----------

SELECTED INFORMATION
Total return (b) ............................ (6.08)%
Net assets at end of period (in
thousands) ................................ $ 52
Ratio of expenses to average daily net
assets .................................... 1.89%(e)
Ratio of net investment income (loss) to
average daily net assets .................. (0.75)%(e)
Average commission rate paid on portfolio
transactions (c) .......................... $0.0600
Portfolio turnover rate (excluding short-term
securities) ............................... 17%
</TABLE>

- --------------------------------------------------------------------------------

22 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Investments in Securities (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND March 31, 1997
.........................................................................................

Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)

COMMON STOCK (94.2%):
BASIC MATERIALS (4.6%):
Brunswick Technologies .............................. 30,000(b) $ 285,000
CFC International, Inc. ............................. 9,000(b) 105,750
ChiRex Inc. ......................................... 20,000(b) 205,000
Nuco2 Inc. .......................................... 7,500(b) 91,875
OM Group ............................................ 15,000 421,875
Valspar Corp. ....................................... 3,000 86,250
------------
1,195,750
------------

CAPITAL GOODS AND SERVICES (10.0%):
Aftermarket Technology .............................. 20,000(b) 310,000
Chicago Miniature Lamp .............................. 19,000(b) 372,875
Control Devices Inc. ................................ 15,000(b) 187,500
Cuno Inc. ........................................... 27,000(b) 415,125
Miller (Herman) ..................................... 10,000 682,500
OmniQuip International Inc. ......................... 1,000(b) 14,500
Perceptron Inc. ..................................... 10,000(b) 262,500
Tower Automotive .................................... 10,000(b) 390,000
------------
2,635,000
------------

COMMERCIAL SERVICES (8.4%):
ABR Information Services ............................ 18,000 324,000
Interim Services .................................... 10,000(b) 388,750
JP Foodservice ...................................... 20,000(b) 552,500
Metro Information Services .......................... 5,000(b) 63,125
Wackenhut Corrections ............................... 17,000(b) 272,000
Watsco Inc. ......................................... 12,000 306,000
Wilmar Industries ................................... 20,000(b) 310,000
------------
2,216,375
------------

CONSUMER NON-DURABLES (1.4%):
Carson Inc 'A' ...................................... 20,000(b) 230,000
Robert Mondavi Class A .............................. 4,150(b) 150,437
------------
380,437
------------

CONSUMER SERVICES (4.3%):
Carriage Services 'A' ............................... 7,000(b) 133,875
Equity Corp. International .......................... 17,000(b) 357,000
Evergreen Media Corporation 'A' ..................... 10,000(b) 291,875
York Group Inc. ..................................... 18,000 337,500
------------
1,120,250
------------

FINANCIAL SERVICES (10.0%):
AMRESCO Inc. ........................................ 13,000(b) 216,125
Commerce Bancorp .................................... 6,825 187,687
First Republic Bancorp (CA) ......................... 20,000(b) 445,000
First Savings Bank of Washington .................... 15,000 283,125
Money Store ......................................... 15,000 315,000
ReliaStar Financial ................................. 10,000 591,250
TCF Financial ....................................... 15,000 594,375
------------
2,632,562
------------
</TABLE>

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>

HEALTH CARE (15.0%):
Biosite Diagnostics ................................. 15,000(b) $ 146,250
Daou Systems Inc. ................................... 31,000(b) 209,250
Digene Corp. ........................................ 35,000(b) 398,125
Enterprise Systems Inc. ............................. 15,000(b) 337,500
Express Scripts 'A' ................................. 14,000(b) 500,500
FPA Medical Management Inc. ......................... 15,000(b) 288,750
Genesis Health Ventures ............................. 17,000(b) 531,250
HPR Inc. ............................................ 20,000(b) 225,000
IDEXX Laboratories .................................. 7,000(b) 98,000
NeXstar Pharmaceuticals ............................. 8,000(b) 80,000
Novoste Corp. ....................................... 9,000(b) 135,000
Patterson Dental .................................... 10,000(b) 340,000
Physio-Control International ........................ 11,000(b) 152,625
SEQUUS Pharmaceuticals .............................. 20,000(b) 152,500
Urogen .............................................. 10,000(b)(d) 10
Urologix Inc. ....................................... 20,000(b) 340,000
------------
3,934,760
------------

RETAIL TRADE (7.1%):
Eagle Hardware and Garden ........................... 10,000(b) 180,000
Mazel Stores ........................................ 10,000(b) 205,000
O'Reilly Automotive ................................. 6,500(b) 238,875
Pier 1 Imports ...................................... 20,000 352,500
Stage Stores ........................................ 17,000(b) 374,000
Sunglass Hut International .......................... 23,000(b) 161,000
Zale Corp. .......................................... 20,000(b) 367,500
------------
1,878,875
------------

TECHNOLOGY (25.7%):
Actel Corp. ......................................... 15,000(b) 326,250
BISYS Group ......................................... 8,000(b) 252,000
Coherent Communication Systems Corp. ................ 15,000(b) 258,750
Comverse Technology ................................. 15,000(b) 592,500
Cymer, Inc. ......................................... 10,000(b) 358,750
Dataworks Corp. ..................................... 25,000(b) 362,500
DuPont Photomasks ................................... 10,000(b) 377,500
FSI International ................................... 20,000(b) 225,000
INSO Corp. .......................................... 15,000(b) 563,438
Natural MicroSystems Corp. .......................... 30,000(b) 596,250
Ontrack Data International .......................... 30,000(b) 450,000
Renaissance Solutions ............................... 10,000(b) 252,500
Sipex Corp. ......................................... 15,000(b) 438,750
Stratasys Inc. ...................................... 30,000(b) 532,500
Technology Solutions ................................ 10,000(b) 276,250
Tecnomatix Technologies Ltd. ........................ 15,000(b) 311,250
TriQuint Semiconductor .............................. 24,000(b) 573,000
------------
6,747,188
------------

TRANSPORTATION (1.8%):
Knightsbridge Tankers Ltd. .......................... 20,000(b) 485,000
------------

ENERGY (5.9%):
Lomak Petroleum ..................................... 16,000 304,000
Marine Drilling ..................................... 19,000(b) 337,250
Newpark Resources ................................... 12,000(b) 525,000
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

- --------------------------------------------------------------------------------

23 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- --------------------------------------------------------------------------------

SMALL COMPANY GROWTH FUND
(CONTINUED)

<TABLE>
<CAPTION>
Number of
Shares or
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
Smith International ................................. 8,300(b) $ 378,688
------------
1,544,938
------------

Total Common Stock
(cost: $24,171,650) ............................ 24,771,135
------------

SHORT-TERM SECURITIES (4.7%):
Repurchase agreement with Goldman Sachs, acquired on
3/31/97, interest of $224, 6.53%, 4/1/97
(cost: $1,236,000) ................................ $ 1,236,000(c) 1,236,000
------------

Total Investments in Securities
(cost: $25,407,650) (e) ........................ $ 26,007,135
------------
------------
</TABLE>

NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) CURRENTLY NON-INCOME PRODUCING.
(C) REPURCHASE AGREEMENT IN A JOINT TRADING ACCOUNT WHICH IS COLLATERALIZED BY
U.S. GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS
INTEREST DUE AT MATURITY OF THE REPURCHASE AGREEMENT.
(D) SECURITY IS RESTRICTED (CANNOT BE OFFERED FOR PUBLIC SALE) AND ILLIQUID.
SECURITY WAS ACQUIRED AS A RESULT OF A SPINOFF FROM MEDSTONE INTERNATIONAL.
OWNERSHIP OF SECURITY CANNOT BE LEGALLY TRANSFERRED BEFORE DEC. 31, 1997.
(E) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 2,934,073
GROSS UNREALIZED DEPRECIATION ...... (2,334,588)
------------
NET UNREALIZED APPRECIATION ...... $ 599,485
------------
------------
</TABLE>

- --------------------------------------------------------------------------------

24 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Investments in Securities (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
EMERGING GROWTH FUND March 31, 1997
.......................................................................................

COMMON STOCK (92.2%):
BASIC MATERIALS (5.2%):
Ecolab Inc. ......................................... 77,000 $ 2,926,000
Fuller (HB) ......................................... 60,000 2,925,000
Sealed Air .......................................... 108,000(b) 4,441,500
Valspar Corp. ....................................... 128,000 3,680,000
------------
13,972,500
------------

CAPITAL GOODS AND SERVICES (9.1%):
Danaher Corp. ....................................... 100,000 4,162,500
Fastenal Co. ........................................ 75,000 2,625,000
Miller (Herman) ..................................... 33,000 2,252,250
Pentair, Inc. ....................................... 100,000 2,887,500
Thermo Electron ..................................... 157,500(b) 4,862,812
U.S. Filter ......................................... 40,000(b) 1,235,000
United Waste Systems Inc. ........................... 170,000(b) 6,332,500
------------
24,357,562
------------

COMMERCIAL SERVICES (6.1%):
AccuStaff Inc. ...................................... 95,000(b) 1,591,250
Cintas Corp. ........................................ 35,000 1,846,250
G & K Services Class A .............................. 50,000(b) 1,500,000
Interim Services .................................... 80,000(b) 3,110,000
Richfood Holdings ................................... 167,500 3,140,625
Viking Office Products .............................. 175,000(b) 3,390,625
Wackenhut Corrections ............................... 110,000(b) 1,760,000
------------
16,338,750
------------

CONSUMER NON-DURABLES (4.3%):
Rexall Sundown ...................................... 115,000(b) 2,946,875
Robert Mondavi Class A .............................. 44,150(b) 1,600,437
Sola International .................................. 115,000(b) 2,659,375
Tommy Hilfiger ...................................... 80,000(b) 4,180,000
------------
11,386,687
------------

CONSUMER SERVICES (10.2%):
Apollo Group Class A ................................ 110,000(b) 2,695,000
Clear Channel Communication ......................... 76,000(b) 3,258,500
CUC International ................................... 225,000(b) 5,062,500
DeVRY Inc. .......................................... 120,000(b) 2,640,000
Papa John's International Inc. ...................... 113,000(b) 2,980,375
Regal Cinemas ....................................... 130,000(b) 3,510,000
Stewart Enterprises Class A ......................... 195,000 7,117,500
------------
27,263,875
------------

FINANCIAL SERVICES (13.5%):
AMRESCO Inc. ........................................ 125,000(b) 2,078,125
Commercial Federal .................................. 105,000 3,543,750
FINOVA Group ........................................ 87,000 5,883,375
Firstar Corp. ....................................... 100,000 2,750,000
Green Tree Financial ................................ 154,000 5,197,500
MGIC Investment ..................................... 40,000 2,830,000
Nationwide Financial Services, Inc. ................. 7,200(b) 185,400
PMI Group ........................................... 56,000 2,807,000
</TABLE>

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
ReliaStar Financial ................................. 35,000 $ 2,069,375
Schwab (Charles) Corp. .............................. 100,000 3,187,500
TCF Financial ....................................... 135,000 5,349,375
------------
35,881,400
------------

HEALTH CARE (10.1%):
BioChem Pharma ...................................... 32,000(b) 1,376,000
Cardinal Health ..................................... 35,000 1,903,125
Daou Systems Inc. ................................... 114,500(b) 772,875
Elan Corp. PLC - ADR ................................ 130,000(b) 4,436,250
Genesis Health Ventures ............................. 108,500(b) 3,390,625
Genzyme Corp. - General Division .................... 100,000(b) 2,250,000
Oxford Health Plans ................................. 30,000(b) 1,758,750
PhyCor Inc. ......................................... 140,625(b) 3,832,031
Physician Sales & Service ........................... 215,000(b) 2,714,375
Quintiles Transnational ............................. 34,625(b) 1,865,422
Stryker Corp. ....................................... 110,000 2,736,250
------------
27,035,703
------------

RETAIL TRADE (3.8%):
Consolidated Stores ................................. 83,750(b) 2,952,188
Kohl's Corp. ........................................ 90,000(b) 3,813,750
Stage Stores ........................................ 120,000(b) 2,640,000
Sunglass Hut International .......................... 90,000(b) 630,000
------------
10,035,938
------------

TECHNOLOGY (21.1%):
ADC Telecommunications .............................. 100,000(b) 2,687,500
Altera Corp. ........................................ 150,000(b) 6,450,000
American Management Systems ......................... 75,000(b) 1,650,000
Analog Devices ...................................... 133,333(b) 2,999,993
Andrew Corp. ........................................ 168,750(b) 6,096,094
ASM Lithography Holding NV .......................... 60,000(b) 4,500,000
BISYS Group ......................................... 78,000(b) 2,457,000
Cambridge Technology Partners Inc. .................. 130,000(b) 3,006,250
Comverse Technology ................................. 80,000(b) 3,160,000
EMC Corp. ........................................... 100,000(b) 3,550,000
Fiserv Inc. ......................................... 80,000(b) 2,980,000
FORE Systems ........................................ 75,000(b) 1,125,000
INSO Corp. .......................................... 100,000(b) 3,756,250
KLA Instruments ..................................... 75,000(b) 2,737,500
PeopleSoft Inc. ..................................... 30,000(b) 1,200,000
Sterling Commerce ................................... 96,300(b) 2,792,700
Teradyne Inc. ....................................... 65,000(b) 1,876,875
VeriFone Inc. ....................................... 100,000(b) 3,275,000
------------
56,300,162
------------

TRANSPORTATION (2.2%):
Wisconsin Central Transportation .................... 165,000(b) 5,816,250
------------

ENERGY (6.6%):
ENSCO International ................................. 60,000(b) 2,955,000
Falcon Drilling ..................................... 55,000(b) 2,035,000
Noble Affiliates .................................... 110,000 4,152,500
Reading & Bates ..................................... 132,000(b) 2,986,500
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

- --------------------------------------------------------------------------------

25 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- --------------------------------------------------------------------------------

EMERGING GROWTH FUND
(CONTINUED)

<TABLE>
<CAPTION>
Number of
Shares or
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
Smith International ................................. 118,000(b) $ 5,383,750
------------
17,512,750
------------

Total Common Stock
(cost: $177,448,777) ........................... 245,901,577
------------

SHORT-TERM SECURITIES (7.3%):
Repurchase agreement with Goldman Sachs, acquired on
3/31/97, interest of $3,548, 6.53%, 4/1/97
(cost: $19,558,000) ............................... $19,558,000(c) 19,558,000
------------

Total Investments in Securities
(cost: $197,006,777) (d) ....................... $265,459,577
------------
------------
</TABLE>

NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) CURRENTLY NON-INCOME PRODUCING.
(C) REPURCHASE AGREEMENT IN A JOINT TRADING ACCOUNT WHICH IS COLLATERALIZED BY
U.S. GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS
INTEREST DUE AT MATURITY OF THE REPURCHASE AGREEMENT.
(D) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 79,060,612
GROSS UNREALIZED DEPRECIATION ...... (10,607,812)
------------
NET UNREALIZED APPRECIATION ...... $ 68,452,800
------------
------------
</TABLE>

- --------------------------------------------------------------------------------

26 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Investments in Securities (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
GROWTH FUND March 31, 1997
.......................................................................................

COMMON STOCK (99.0%):
BASIC MATERIALS (13.9%):
Aluminum Company of America ......................... 50,000 $ 3,400,000
Morton International ................................ 200,000 8,450,000
Newmont Mining ...................................... 75,000 2,906,250
Phelps Dodge ........................................ 50,000 3,656,250
USX - U.S. Steel Group .............................. 100,000 2,662,500
Willamette Industries ............................... 50,000 3,125,000
------------
24,200,000
------------

CAPITAL GOODS AND SERVICES (18.6%):
AlliedSignal Inc. ................................... 125,000 8,906,250
Fluor Corp. ......................................... 20,000 1,050,000
Magna International Class A ......................... 100,000 4,962,500
Pentair, Inc. ....................................... 150,000 4,331,250
Transocean Offshore Inc. ............................ 120,000 6,735,000
Wabash National ..................................... 98,000 1,702,750
WMX Technologies, Inc. .............................. 150,000 4,593,750
------------
32,281,500
------------

COMMERCIAL SERVICES (1.2%):
Sensormatic Electronics ............................. 125,000 2,109,375
------------

CONSUMER DURABLES (4.3%):
Ford Motor .......................................... 150,000 4,706,250
General Motors ...................................... 50,000 2,768,750
------------
7,475,000
------------

CONSUMER NON-DURABLES (2.6%):
Reebok International ................................ 100,000 4,487,500
------------

CONSUMER SERVICES (1.8%):
Darden Restaurants .................................. 200,000 1,575,000
H&R Block ........................................... 55,000 1,615,625
------------
3,190,625
------------

FINANCIAL SERVICES (10.9%):
American International Group ........................ 30,000 3,521,250
Federal National Mortgage Association 70,000 2,528,750
FINOVA Group ........................................ 35,000 2,366,875
Franklin Resources .................................. 60,000 3,060,000
Norwest Corp. ....................................... 100,000 4,625,000
TCF Financial ....................................... 70,000 2,773,750
------------
18,875,625
------------

HEALTH CARE (2.1%):
Columbia / HCA Healthcare ........................... 52,500 1,765,313
Medtronic, Inc. ..................................... 30,000 1,867,500
------------
3,632,813
------------

RETAIL TRADE (10.1%):
Albertson's, Inc. ................................... 100,000 3,400,000
Gap Inc. ............................................ 200,000 6,700,000
Limited Inc. ........................................ 200,000 3,675,000
</TABLE>

<TABLE>
<CAPTION>
Number of
Shares or
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
Sears, Roebuck ...................................... 75,000 $ 3,768,750
------------
17,543,750
------------

TECHNOLOGY (4.0%):
CompuServe Corp. .................................... 75,000(b) 739,453
Imation Corp. ....................................... 100,000(b) 2,500,000
Intel Corp. ......................................... 10,000 1,391,250
Tech Data Corp. ..................................... 100,000(b) 2,412,500
------------
7,043,203
------------

TRANSPORTATION (4.1%):
AMR Corp. ........................................... 50,000(b) 4,125,000
Burlington Northern Santa Fe ........................ 40,000 2,960,000
------------
7,085,000
------------

UTILITIES (11.2%):
AirTouch Communications ............................. 250,000(b) 5,750,000
Enron ............................................... 200,000 7,600,000
Enron Global Power & Pipeline LLC ................... 105,200 2,906,150
GTE Corp. ........................................... 70,000 3,263,750
------------
19,519,900
------------

ENERGY (14.2%):
Anadarko Petroleum .................................. 50,000 2,806,250
Baker Hughes Inc. ................................... 200,000 7,675,000
Burlington Resources ................................ 80,000 3,420,000
Noble Affiliates .................................... 75,000 2,831,250
Schlumberger Ltd. ................................... 75,000 8,043,750
------------
24,776,250
------------

Total Common Stock
(cost: $124,891,289) ........................... 172,220,541
------------

SHORT-TERM SECURITIES (0.1%):
Repurchase agreement with Goldman Sachs, acquired on
3/31/97, interest of $20, 6.53%, 4/1/97
(cost: $111,000) .................................. $ 111,000(c) 111,000
------------

Total Investments in Securities
(cost: $125,002,289) (d) ....................... $172,331,541
------------
------------
</TABLE>

NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) CURRENTLY NON-INCOME PRODUCING.
(C) REPURCHASE AGREEMENT IN A JOINT TRADING ACCOUNT WHICH IS COLLATERALIZED BY
U.S. GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS
INTEREST DUE AT MATURITY OF THE REPURCHASE AGREEMENT.
(D) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 54,885,665
GROSS UNREALIZED DEPRECIATION ...... (7,556,413)
------------
NET UNREALIZED APPRECIATION ...... $ 47,329,252
------------
------------
</TABLE>

- --------------------------------------------------------------------------------

27 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>
Directors and Officers
- --------------------------------------------------

DIRECTORS
David T. Bennett, CHAIRMAN, HIGHLAND HOMES, INC., USL
PRODUCTS, INC., KIEFER BUILT, INC., OF COUNSEL, GRAY,
PLANT, MOOTY, MOOTY & BENNETT, P.A.
Jaye F. Dyer, PRESIDENT, DYER MANAGEMENT COMPANY
William H. Ellis, PRESIDENT, PIPER JAFFRAY COMPANIES INC.,
PIPER CAPITAL MANAGEMENT INCORPORATED
Karol D. Emmerich, PRESIDENT, THE PARACLETE GROUP
Luella G. Goldberg, DIRECTOR, TCF FINANCIAL, RELIASTAR
FINANCIAL CORP., HORMEL FOODS CORP.
David A. Hughey, RETIRED EXECUTIVE VICE PRESIDENT AND
CHIEF ADMINISTRATIVE OFFICER OF DEAN WITTER
INTERCAPITAL INC. AND DEAN WITTER TRUST CO.
George Latimer, CHIEF EXECUTIVE OFFICER, NATIONAL EQUITY
FUNDS

OFFICERS
William H. Ellis, CHAIRMAN OF THE BOARD
Paul A. Dow, PRESIDENT
Robert H. Nelson, VICE PRESIDENT AND TREASURER
Susan Sharp Miley, SECRETARY

INVESTMENT ADVISER
Piper Capital Management Incorporated
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804

TRANSFER AND DIVIDEND DISBURSING AGENTS
Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
Piper Jaffray Inc.
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
Piper Trust Company
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804

CUSTODIAN AND ACCOUNTING AGENT
Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716

LEGAL COUNSEL
Dorsey & Whitney LLP
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402

- --------------------------------------------------------------------------------

28 1997 Semiannual Report - U.S. Growth
Funds
<PAGE>

SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------

As a shareholder in Piper Funds, you have access to a full range of services and
benefits.

Check your prospectus for details about services and any limitations that might
apply to your fund.
- --------------------------------------------------------------------------------

LOW MINIMUM INVESTMENTS

You can open a Piper Fund account with a minimum investment of $250.

QUANTITY DISCOUNTS

If your initial investment exceeds a specified amount, if an investment combined
with the value of your existing Piper shares exceeds a specified amount, or if
your investments combined during a 13-month period exceed a specified amount,
you can reduce or even eliminate the front-end sales charge.

WAIVER OF SALES CHARGES

Money market funds carry no sales charges.* Sales charges on other Piper Funds
are waived on purchases of $500,000 or more. However, a contingent deferred
sales charge may be imposed. See your prospectus for details.

AUTOMATIC REINVESTMENT OF DISTRIBUTIONS

For maximum growth of your assets, you can reinvest dividends and capital gains
automatically in additional shares of your fund without a sales charge.

CROSS-REINVESTMENT OF DISTRIBUTIONS

Diversify your holdings by reinvesting dividends and capital gains from one
Piper Fund to another.

CASH DISTRIBUTIONS

If you prefer, take your dividends and/or capital gains in cash.

AUTOMATIC MONTHLY INVESTMENT PROGRAM

You may automatically transfer $25 or more each month from any Piper money
market fund* into many other Piper Funds.

AUTOMATIC MONTHLY MONEY TRANSFER PROGRAM

If you are starting a savings discipline or seeking a convenient way to invest,
you can transfer a minimum of $100 automatically from your bank, savings and
loan or other financial institution into many of the Piper Funds.

EXCHANGE PRIVILEGES

Revise your investment plan without incurring a sales charge by moving assets
from one Piper Fund to another with the same fee structure. See your prospectus
for restrictions involving exchanges between funds with different sales charges.

REINVESTMENT PRIVILEGES

If you buy a fund with a sales charge and later redeem your shares, you may
reinvest all or part of the proceeds in shares of that fund or another Piper
Fund within 30 days and pay no additional sales charge, subject to each fund's
minimum investment requirements.

SYSTEMATIC WITHDRAWAL PLAN

If your account has a value of $5,000 or more, you can elect to receive periodic
payments of $100 or more, at no cost, excluding money market funds.

ACCOUNT STATEMENTS

Whenever you add to or withdraw money from your account, you'll receive a
monthly statement from Piper Jaffray. Accounts with no activity receive a
quarterly statement instead. Periodic dividend and capital gain distributions,
if any, also appear on your statement.

CONFIRMATION OF TRANSACTIONS

You receive a confirmation statement following every transaction, except in the
money market funds. All transactions are reflected on your account statement.

* An investment in a Piper money market fund is neither insured nor guaranteed
by the U.S. government, and there can be no assurance that the fund will be able
to maintain a stable net asset value of $1 per share.

29 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

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30 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

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31 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

THIS PAGE WAS INTENTIONALLY LEFT BLANK.

32 1997 Semiannual Report - U.S. Growth Funds

<PAGE>

Glossary of Terms***

FOR MORE INFORMATION
By Phone [GRAPHIC]
1 800 866-7778

FOR GENERAL INFORMATION
press 5, our Mutual Fund Services
representatives are ready to answer
your questions.

TO LISTEN TO MONTHLY FUND UPDATES
press 3, press 1, then press:

12 for Small Company Growth Fund
13 for Emerging Growth Fund
14 for Growth Fund

TO ORDER LITERATURE
press 5, ask a service representative to
mail you additional literature, including a
Quarterly Update. You can also request to
be put on a mailing list to receive this
information automatically each quarter.

BY MAIL [GRAPHIC]
Piper Capital Management
Attn: Mutual Fund Services
222 South Ninth Street
Minneapolis, MN 55402-3804

In an effort to reduce costs to our
shareholders, we have implemented a
process to reduce duplicate mailings of
the funds' shareholder reports. This
householding process should allow us to
mail one report to each address where
one or more registered shareholders with
the same last name reside. If you would
like to have additional reports mailed to
your address, please call our Mutual
Fund Services area at 1 800 866-7778,
or mail a request to us.

ON-LINE [GRAPHIC]

http://www.piperjaffray.com/

BENCHMARK
An established basis of comparison for an investment's performance. Benchmarks
may be an unmanaged market index or a group of similar investments.

BLUE-CHIP STOCKS
Stock of a nationally-known company with a long record of profit growth and
dividend payment and a reputation for quality management, products and services.

CORRECTION
Reverse movement, usually downward, in the price of a stock.

CYCLICAL STOCKS
Shares of companies that are highly dependent on the state of the economy (also
called economically sensitive stocks). When the economy slows, their earnings
generally fall rapidly, and typically, so does the stock price. But when the
economy recovers, earnings generally rise rapidly, and the price of the stock
typically goes up.

FUNDAMENTALS
A company's fundamentals include its assets, earnings, sales, products,
management and markets. A portfolio manager who uses "fundamental analysis" in
decision making looks at these factors to determine whether a company's stock is
undervalued or overvalued at its current market price.

OVERVALUED
A security is overvalued if it is selling at a price higher than what analysts
believe it is worth.

OVERWEIGHTED OR OVERWEIGHTING
In portfolio management, overweighting means a fund's portfolio contains a
higher percentage of a certain sector than its benchmark.

SECTOR
Refers to a particular group of stocks, usually in one industry.

UNDERWEIGHTED OR UNDERWEIGHTING
In portfolio management, underweighting means a fund's portfolio contains a
lower percentage of a certain sector than its benchmark.

VALUATIONS
The determined or estimated value of a particular stock.

*** - This symbol represents a graduation cap, used throughout this report
to indicate terms defined in the glossary.

<PAGE>

U.S. Growth Funds

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PIPER FUNDS 222 South Ninth Street
Minneapolis, MN 55402-3804

PIPER JAFFRAY INC. FUND DISTRIBUTOR AND NASD MEMBER.

#20200 5/1997 152-97

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