UAM FUNDS INC, N-30D, 1998-01-05

UAM FUNDS INC
N-30D, 1998-01-05

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<PAGE>

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UAM FUNDS
ACADIAN EMERGING MARKETS PORTFOLIO

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OFFICERS AND DIRECTORS

Norton H. Reamer Peter M. Whitman, Jr.
Director, President Director
and Chairman
William H. Park
John T. Bennett, Jr. Vice President
Director
Michael E. DeFao
Nancy J. Dunn Secretary
Director
Karl O. Hartmann
Philip D. English Assistant Secretary
Director
Gary L. French
William A. Humenuk Treasurer
Director
Robert R. Flaherty
Charles H. Salisbury, Jr. Assistant Treasurer
Director and Executive
Vice President Gordon M. Shone
Assistant Treasurer

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INVESTMENT ADVISER
Acadian Asset Management, Inc.
Two International Place
Boston, MA 02110

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ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street Boston, MA 02110

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CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245

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LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103

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INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110

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DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110

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This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

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[LOGO OF UAM FUNDS APPEARS HERE]

ACADIAN
EMERGING
MARKETS
PORTFOLIO

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

ANNUAL REPORT
OCTOBER 31, 1997
<PAGE>

November 18, 1997

Dear Shareholder,

We are pleased to present the annual report for The Acadian Emerging Markets
Portfolio. This commentary covers the twelve months from November 1, 1996 to
October 31, 1997, focusing on the Portfolio's performance and some of the
economic and market conditions that impacted returns.

ACADIAN EMERGING MARKETS PORTFOLIO

PORTFOLIO PERFORMANCE REVIEW

For the twelve months ended October 31, 1997, the Acadian Emerging Markets
Portfolio returned -5.71%, versus -10.20% for the IFC Investable Index, a
widely-followed emerging markets benchmark.

ECONOMIC AND MARKET CONDITIONS

The world's emerging equity markets, as represented by the IFC Investable
Index, had volatile returns during the twelve months ended October 31, 1997.
The index was up a strong 9.6% for the first six months of the period, only to
drop -18.4% in the second half, with the result that for the 12 months as a
whole the emerging markets were down just over -10%. Negative emerging market
returns were highly concentrated in Asia, as Thailand's devaluation of the
baht caused widespread currency speculation and fears of slowing growth and
financial sector problems shook markets from Malaysia to Korea. Latin American
markets also fell as worries spread to this region in October. Emerging Europe
remained relatively calm, with such markets as Greece and Turkey up strongly.

INVESTMENT STRATEGY USED DURING THE YEAR

Acadian continues to pursue its highly structured and disciplined approach to
the emerging markets. Our emerging markets process emphasizes country
selection but also examines a variety of factors at the stock level. This
bottom-up/top-down process resulted in the Portfolio being invested in 18
markets. Key overweightings were Greece, China, Brazil, Korea, and Thailand,
while key underweightings were South Africa, Taiwan, Mexico, and Malaysia. The
Portfolio had very attractive valuation characteristics, with a price/book
value, price/sales ratio, and price/earnings ratio all significantly lower
than the benchmark index.

COMMENTARY ON THE PORTFOLIO'S INVESTMENT PERFORMANCE

As noted above, the Acadian Emerging Markets Portfolio returned -5.71% for the
twelve months ended October 31, 1997, versus a return of -10.20% for the IFC
Investable Index. The outperformance of 4.49% was mainly the result of country
allocations. Stock selection was negative in the first half of the year, but
made up some ground in the second half, to detract a net 80 basis points of
return relative to the benchmark. Country selection outperformed by 550 basis
points, resulting in a net outperformance of 470 basis points.

The Portfolio's performance during the year was enhanced by investments in:

. GREECE: An overweighting which helped the Portfolio was Greece, which
returned over 30% compared to the IFC's -10.20% overall return. The Greek
market was made buoyant by continued good economic news and the success of
the country's bid to host the Olympic Games. Acadian's country overweighting
combined with value-based stock selection added 170 basis points of
benchmark-relative return.

1
<PAGE>

. TURKEY: The Portfolio was overweighted in Turkey, which added 170 basis
points as this market outperformed the index by a wide margin. The market
posted new highs after investors received encouraging news on inflation and
bond yields. Acadian's stock selection underperformed, but there was still
value added of 50 basis points.

. MALAYSIA: Turmoil in Asia caused the Malaysian stock market to drop over
60%. Acadian's underweighting added 330 basis points.

. SOUTH AFRICA: The Portfolio's stock selection in South Africa added 80 basis
points. The Portfolio's holdings were centered mostly around gold mines and
service oriented stocks, avoiding finance and consumer goods stocks that are
more vulnerable to currency and interest rate fluctuations.

. BRAZIL: The Portfolio's overweighting in Brazil had a strong positive impact
in the first half as this market rose steadily. In the second half the
overweighting added less to returns but was still positive. Stock selection,
in contrast, was negative in the first half of the year but added strongly
to returns in the second half. Total value added for the Portfolio was 160
basis points.

The main investments detracting from Portfolio return were the following:

. CHILE: The Portfolio had no holdings in Chile, which detracted 100 basis
points of benchmark--relative return as this market outperformed the IFC
Index.

. KOREA: The Portfolio was overweighted in Korea, which detracted 210 basis
points as the Asian market turmoil caused Korea to fall over 50%. The
Portfolio's Korean stocks did slightly better than the market as a whole,
but the total value lost to the Portfolio was still 190 basis points.

. THAILAND: The overweighting in Thailand detracted 400 basis points as this
market shared in the Asian "flu." The Portfolio's continued concentration in
the services sector and avoidance of troubled finance companies led to
outperformance at the stock level, and stock selection added back 130 basis
points for a net underperformance of 270 basis points.

CURRENT OUTLOOK

Since the recent declines in many markets, valuations have become
significantly more attractive. Even some markets we viewed earlier this year
as overvalued are now quite attractively cheap on many measures. Given the
recent volatility, however, the natural question to ask is whether these cheap
markets may become still cheaper before they are done. While predicting
exactly when these markets will turn is extremely difficult to do, we remain
focused on a couple of key points:

1. EMERGING MARKETS' STRONG LONG-TERM FUNDAMENTALS ARE STILL IN PLACE. Despite
the revised economic forecasts that are coming out currently, and despite our
view that economic growth will likely slow over the next two years in many
emerging markets, it is important to remember that over the longer term, all
of the arguments for this asset class remain:

. Still-high savings and reinvestment rates.

. Favorable demographics, with a large cohort of young people moving into the
workforce and into their prime productive years.

. Export-oriented economies with very attractive labor costs.

. Higher relative economic growth rates over the longer term.

. Generally stable, democracy-oriented governments.

2
<PAGE>

As to the impact of the changed economic fundamentals on corporate
profitability, near-term profits will clearly be reduced significantly from
the levels that were expected before the current economic uncertainties.
However, markets are discounting mechanisms, and the still generally
optimistic expectations for the emerging world will most likely lead to
investors buying into these markets in advance of profit recovery.

2. SYNCHRONIZED MARKET DECLINES ARE ALMOST ALWAYS SHORT-TERM IN
NATURE. Looking at the situation in Mexico in late 1994 can provide some
valuable insight into the likely pattern of events following an emerging
market meltdown. Acadian's research has shown that while markets do tend to
react in concert following some extraordinary event, these periods of
correlation tend to be short-lived. Over the longer term, markets are driven
much more by domestic issues and evidence relatively low levels of
correlation.

Acadian remains firmly optimistic about the prospects for emerging markets.
Current valuations signal a clear buying opportunity. While we cannot rule out
the possibility of further market turmoil over the next few months, we believe
that emerging market stocks will recover over a reasonable time frame.

If we can provide any further information, please contact me at (617) 946-
3500.

Sincerely,

/s/ Churchill G. Franklin

Churchill G. Franklin
Senior Vice President
Acadian Asset Management, Inc.

The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. For a complete discussion of the risks associated with
international investing, please refer to the Portfolio's prospectus. For a
complete discussion of the risks associated with international investing,
please refer to the Portfolio's prospectus.

3
<PAGE>

Performance Comparison
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COMPARISON OF THE CHANGE IN VALUE OF A $100,000 PURCHASE IN THE
ACADIAN EMERGING MARKETS PORTFOLIO
AND THE IFC INVESTABLE INDEX

[LINE GRAPH APPEARS HERE]

AVERAGE ANNUAL TOTAL RETURN
FOR PERIOD ENDED OCTOBER 31, 1997**
- -----------------------------------

1 YEAR SINCE 6/17/93**
- -----------------------------------
<S> <C>
(5.71)% 3.37%
- -----------------------------------

</TABLE>

<TABLE>
<CAPTION>
ACADIAN EMERGING IFC INVESTABLE
MARKETS PORTFOLIO+ INDEX+
------------------ --------------
<S> <C> <C>
6/17/93* 100,000 100,000
10/31/93 113,400 125,490
10/31/94 140,880 159,060
10/31/95 112,759 120,917
10/31/96 122,592 133,492
10/31/97 115,592 119,876
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate.
When shares are redeemed, they may be worth more or less than the original
cost.

* Commencement of Operations
** Total return of the Portfolio reflects fees waived by the Adviser. Without
such waiver of fees, total return would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities
(net of withholding taxes) in the index.

Definition of the Comparative Index
-----------------------------------

The IFC Investable Index is an unmanaged emerging markets index maintained by
the International Finance Corporation. The index consists of 890 companies in
25 emerging equity markets, and is designed to measure more precisely the
returns portfolio managers might receive from investment in emerging markets
equity securities, by focusing on companies and markets that are legally and
practically accessible to foreign investors.

Please note that one cannot invest in an unmanaged index.

4
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

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COMMON STOCKS (84.7%)
- -------------------------------------------------------------------------------
ARGENTINA (4.3%)
Astra Cia Argentina de Petro.......................... 178,280 $ 278,289
Banco de Galicia y Buenos Aires S.A., Class B......... 70,069 434,697
*Bansud S.A., Class B................................. 4,201 37,412
Capex S.A., Class A................................... 8,500 45,078
Central Puerto S.A., Class B.......................... 78,000 171,707
Cia Naviera Perez Companc, Class B.................... 44,900 281,248
Citicorp Equity Investments S.A., Class B............. 30,567 122,344
Garovaglio y Zorraquin S.A. .......................... 26,100 74,431
Juan Minetti S.A. .................................... 30,266 99,940
Molinos Rio de la Plata S.A., Class B................. 56,583 139,847
Siderar S.A., Class A................................. 9,316 48,100
Siderca S.A., Class A................................. 249,838 599,983
Telecom Argentina S.A., Class B....................... 23,100 115,572
Transportadora de Gas del Sur S.A., Class B........... 138,200 262,743
YPF S.A., Class D..................................... 22,100 705,427
-----------
3,416,818
- -------------------------------------------------------------------------------
BRAZIL (5.0%)
Albarus S.A. ......................................... 212,000 144,231
Alparagatas S.A. ..................................... 980,000 48,893
Brahma................................................ 305,172 205,404
Brasilit S.A. ........................................ 229,250 513,650
Cia Acos Especiais-Acesita............................ 14,335,000 19,505
Cia Antarctica Paulista-Industria..................... 1,400 121,916
Cia Siderurgica Nacional.............................. 13,300,000 482,583
Cia Vidraria Santa Marina............................. 37,000 71,825
Cigarros Souza Cruz................................... 11,000 89,505
Eletrobras............................................ 2,000,000 807,329
Gerdau Metalurgica S.A. .............................. 497,729 19,640
Light Participacoes S.A. ............................. 1,015,000 259,643
Light Servicos Electricas............................. 1,000,000 332,003
Mineracao da Trindade-Samitri......................... 4,735,500 128,869
Santista Alimentos S.A. .............................. 137,000 279,617
*Serrana S.A. ........................................ 131,000 152,105
*Sociedade de Participacoes Cimente................... 131,000 236,475
Telebras.............................................. 1,511,794 134,380
-----------
4,047,573
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</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
CHINA (4.5%)
Guangdong Electric Power Development Co., Ltd., Class
B.................................................... 242,400 $ 136,723
Jilin Chemical Industrial Co., Ltd., Class H.......... 1,500,000 269,728
Maanshan Iron & Steel Co., Class H.................... 2,540,000 404,166
Qingling Motors Co., Class H.......................... 1,074,000 701,643
Shanghai Dajiang Group Co., Ltd., Class B............. 198,979 43,377
*Shanghai Dazhong Taxi Co., Class B................... 346,910 274,059
Shanghai Jinqiao Export Processing Zone Development
Co., Ltd., Class B................................... 365,300 184,842
Shanghai Petrochemical Co., Ltd., Class H............. 2,324,000 623,842
*Shanghai Shangling Electric Appliances Co., Ltd.,
Class B.............................................. 284,000 53,392
Shanghai Tyre & Rubber Co., Ltd., Class B............. 500,000 144,000
Shanghai Waigaoqiao Free Trade Zone Development Co.,
Ltd., Class B ....................................... 353,360 165,372
Shanghai Yaohua Pilkington Glass Co., Ltd., Class B... 313,000 90,770
*Shenzhen China Bicycle Co., Ltd., Class B............ 624,000 154,184
*Tsingtao Brewing Co., Ltd., Class H.................. 992,000 336,869
-----------
3,582,967
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CZECH REPUBLIC (0.9%)
*CEZ A.S.............................................. 4,100 130,617
Ceska Sporitelna A.S. ................................ 4,700 35,936
Komercni Banka A.S. .................................. 2,200 96,787
*SPT Telecom A.S. .................................... 2,000 230,589
*Skoda Plzen A.S. .................................... 4,100 106,981
*Unipetrol A.S. ...................................... 37,400 124,459
-----------
725,369
- -------------------------------------------------------------------------------
GREECE (2.8%)
Alpha Credit Bank..................................... 8,994 593,520
Commercial Bank of Greece S.A. ....................... 16,440 696,028
Hellenic Bottling Co. S.A. ........................... 15,000 618,835
Heracles General Cement Co. S.A. ..................... 4,700 91,349
*Ionian Bank.......................................... 3,399 67,309
*National Bank of Greece.............................. 440 45,986
Titan Cement Co. ..................................... 3,200 156,192
-----------
2,269,219
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</TABLE>
The accompanying notes are an integral part of the financial statements.

6
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
HUNGARY (1.2%)
*Danubius Hotels Rt................................... 5,300 $ 165,940
EGIS Rt............................................... 5,900 277,012
Gedeon Richter Ltd. GDS............................... 2,700 251,100
Pick Szeged Rt GDR.................................... 2,100 172,817
Primagaz Rt........................................... 2,475 101,711
-----------
968,580
- -------------------------------------------------------------------------------
INDONESIA (2.4%)
Argha Karya Prima Industry (Foreign).................. 27,500 13,214
Astra International (Foreign)......................... 86,400 64,379
Bank Dagang Nasional (Foreign)........................ 364,000 50,696
Dharmaal Intiland (Foreign)........................... 41,500 28,322
Gajah Tunggal (Foreign)............................... 348,000 58,162
Hanjaya Mandala Sampoerna (Foreign)................... 52,500 91,765
Indah Kiat Pulp & Paper Co. (Foreign)................. 356,776 136,648
Indosat (Foreign)..................................... 107,500 243,297
Mulialand (Foreign)................................... 77,000 57,911
Pabrik Kertas Tjiwi Kimia (Foreign)................... 218,517 80,651
Polysindo Eka Perkasa (Foreign)....................... 108,000 42,117
Putra Surya Perkasa (Foreign)......................... 515,500 276,417
SMART Corp. (Foreign)................................. 9,600 2,540
Telekomunikasi Indonesia.............................. 811,500 757,249
Tempo Scan Pacific (Foreign).......................... 54,000 38,733
-----------
1,942,101
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ISRAEL (1.6%)
Bank Hapoalim Ltd. ................................... 177,600 419,263
Bank Leumi Le-Israel.................................. 252,000 385,689
Delek Israel Fuel Corp., Ltd. ........................ 4,500 136,221
Koor Industries Ltd. ................................. 3,500 360,555
-----------
1,301,728
- -------------------------------------------------------------------------------
KOREA (5.9%)
Central Investment & Finance.......................... 3,612 20,318
Cheil Industrial, Inc. ............................... 14,500 98,177
Commercial Bank of Korea.............................. 108,000 420,750
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
KOREA--(CONTINUED)
Daewoo Corp. ......................................... 27,100 $ 177,844
Dongbu Steel Co. ..................................... 3,960 40,012
Hanjin Shipping Co., Ltd. ............................ 4,000 33,750
*Hanjin Transportation Co. ........................... 2,123 24,105
Hyundai Electronics Industries Co. ................... 4,000 83,333
*Hyundai Engineering & Construction Co. .............. 5,100 75,969
Keum Kang Development Industries Co. ................. 17,932 179,694
*Kia Motors Corp. .................................... 11,000 85,135
Korea Electric Power Corp. ADR........................ 36,000 513,750
Korea Exchange Bank................................... 83,000 383,875
Korea Express (The) Co. .............................. 8,365 89,749
Korea Kumho Petrochemical Co. ........................ 16,000 91,667
Korea Long Term Credit Bank........................... 14,975 121,048
LG Electronics........................................ 32,700 442,812
LG International Corp. ............................... 22,000 119,396
LG Metal.............................................. 11,000 98,542
LG Semiconductor Co. ................................. 9,680 160,325
Mando Machinery Corp. ................................ 2,100 64,531
Samsung Corp. ........................................ 16,000 130,000
Samsung Display Devices Co. .......................... 4,000 122,917
Samsung Electro-Mechanics Co. ........................ 9,000 145,312
Samsung Electronics................................... 4,212 166,286
Shinhan Investment & Finance.......................... 16,114 293,745
Shinsegae Department Store Co. ....................... 4,000 69,167
Ssangyong Cement Co., Ltd. ........................... 12,000 84,375
Ssangyong Oil Refining Co., Ltd. ..................... 13,780 188,040
Tai Han Electric Wire Co. ............................ 6,700 59,323
Tongyang Investment & Finance......................... 112 892
Yuhan Corp. .......................................... 1,349 45,248
Yukong Ltd. .......................................... 9,405 127,359
-----------
4,757,446
- -------------------------------------------------------------------------------
MALAYSIA (11.9%)
AMMB Holdings Bhd. ................................... 180,000 294,683
Angkasa Marketing Bhd. ............................... 103,000 64,356
</TABLE>

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
MALAYSIA--(CONTINUED)
Austral Enterprises Bhd. .............................. 181,000 $ 243,581
Bandar Raya Developments Bhd. ......................... 563,000 248,606
Berjaya Capital Bhd. .................................. 211,000 114,722
Berjaya Group Bhd. .................................... 394,000 171,613
Boustead Holdings Bhd. ................................ 132,000 150,676
Cement Industries of Malaysia Bhd. .................... 60,000 72,815
Commerce Asset Holding Bhd. ........................... 120,000 93,722
*Datuk Keramat Holdings Bhd. .......................... 171,000 113,007
Edaran Otomobil Nasional Bhd. ......................... 55,000 173,476
Genting Bhd. .......................................... 248,000 700,270
Golden Hope Plantations Bhd. .......................... 303,000 396,840
Guinness Anchor Bhd. .................................. 87,000 102,968
Guthrie Ropel Bhd. .................................... 79,000 79,261
Hicom Holdings Bhd. ................................... 88,000 74,809
Highlands & Lowlands Bhd. ............................. 160,000 181,676
Ho Hup Construction Co. Bhd. .......................... 44,000 48,904
Hong Leong Credit Bhd. ................................ 46,000 64,392
Hong Leong Properties Bhd. ............................ 172,000 66,134
IOI Properties Bhd. ................................... 67,000 53,133
Jaya Tiasa Holdings Bhd. .............................. 59,000 124,061
Kuala Lumpur Kepong Bhd. .............................. 139,000 334,034
Kulim (Malaysia) Bhd. ................................. 176,000 198,786
LARUT Consolidated Bhd. ............................... 96,000 34,028
Lion Land Bhd. ........................................ 141,000 46,591
MBF Capital Bhd. ...................................... 143,000 84,193
Malaysian Airline System Bhd. ......................... 285,000 376,690
Malaysian Industrial Development Finance Bhd. ......... 142,000 80,192
Malaysian International Shipping Bhd. (Foreign)........ 149,000 250,646
Malaysian Oxygen Bhd. ................................. 17,000 53,620
Multi-Purpose Holdings Bhd. ........................... 740,000 389,006
Negara Properties (Malaysia) Bhd. ..................... 36,000 110,303
*PPB Oil Palms Bhd. ................................... 129,000 127,876
Pan Pacific Asia Bhd. ................................. 35,000 38,690
Pelangi Bhd. .......................................... 197,000 95,275
Perlis Plantations Bhd. ............................... 61,750 113,150
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
MALAYSIA--(CONTINUED)
Pernas International Holdings Bhd. ................... 240,000 $ 113,908
Perusahaan Otomobil Nasional Bhd. .................... 66,000 158,606
Petronas Dagangan Bhd. ............................... 101,000 141,382
Petronas Gas Bhd. .................................... 147,000 397,417
Pilecon Engineering Bhd. ............................. 53,000 21,811
RHB Capital Bhd. ..................................... 326,000 274,196
Rothmans of Pall Mall Bhd. ........................... 39,000 313,382
*Rashid Hussain Bhd. ................................. 169,000 291,904
Shangri-La Hotels Malaysia Bhd. ...................... 89,000 35,023
Sime Darby Bhd. ...................................... 558,000 804,566
Southern Bank Bhd. (Foreign) ......................... 50,250 33,963
Southern Steel Bhd. .................................. 58,000 79,796
*Tongkah Holdings Bhd. ............................... 129,000 75,176
Telekom Malaysia Bhd. ................................ 122,000 317,002
Tenaga Nasional Bhd. ................................. 80,000 173,025
*Westmont Industries Bhd. ............................ 481,000 164,716
*YTL Power International Bhd. ........................ 195,000 156,398
-----------
9,519,056
- -------------------------------------------------------------------------------
MEXICO (10.9%)
Apasco S.A. de C.V., Class A.......................... 51,000 311,497
*Banacci, Class B..................................... 34,000 67,511
Carso Global Telecom, Class A......................... 80,000 266,347
*Cemex S.A., Class B.................................. 13,837 60,899
*Cemex S.A. CPO....................................... 191,000 758,281
Cifra S.A. de C.V., Class A........................... 33,322 61,057
Cifra S.A. de C.V., Class B........................... 22,688 45,267
Cifra S.A. de C.V., Class C........................... 220,000 382,036
Coca-Cola Femsa S.A., Class L......................... 64,000 279,761
Controladora Comercial Mexicana S.A. de C.V........... 358,000 358,429
Empresas ICA Sociedad Controladora.................... 208,800 467,612
Grupo Carso S.A. de C.V., Series A1................... 80,000 510,659
Grupo Casa Autrey S.A. de C.V. ....................... 110,000 197,605
Grupo Celanese S.A., Class B1......................... 200,000 431,138
Grupo Financiero Inbursa S.A. de C.V., Class B........ 87,791 310,160
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
MEXICO--(CONTINUED)
Grupo Industrial Bimbo S.A. de C.V., Class A.............. 22,000 $ 166,252
Grupo Industrial Maseca, Class B.......................... 239,000 231,844
Grupo Mexico S.A., Class B................................ 48,000 186,826
*Grupo Televisa S.A. CPO.................................. 30,600 480,072
Industrias Penoles S.A. .................................. 78,000 310,599
Kimberly-Clark de Mexico S.A. de C.V., Class A............ 200,000 880,240
Telefonos de Mexico S.A. de C.V., Class L................. 885,300 1,929,636
Transportacion Maritima Mexicana S.A. de C.V., Class L.... 8,000 61,317
----------
8,755,045
- --------------------------------------------------------------------------------
PHILIPPINES (2.6%)
Ayala Corp., Class B...................................... 136,000 50,371
First Philippine Holdings Corp., Class B.................. 42,450 35,677
JG Summit Holding, Inc. .................................. 863,700 92,276
Manila Electric Co. ...................................... 166,944 513,674
Metro Pacific Corp. ...................................... 1,798,000 120,891
Metropolitan Bank & Trust Co. ............................ 97,320 679,299
Philippine Long Distance Telephone Co. ................... 19,200 478,633
*Primetown Property Group, Inc. .......................... 445,900 82,574
SM Prime Holdings, Inc. .................................. 149,800 26,460
----------
2,079,855
- --------------------------------------------------------------------------------
PORTUGAL (4.1%)
Banco Comercial Portugues S.A. ........................... 17,767 361,808
Banco Espirito Santo e Comercial de Lisboa................ 18,840 546,553
Banco Portugues de Investimento (Registered).............. 12,352 277,885
Banco Totta & Acores, Class B (Registered)................ 4,690 90,705
Cimpor Cimentos de Portugal S.A. ......................... 1,900 48,094
Corticeira Amorim S.A. ................................... 16,000 191,126
Credito Predial Portugues, S.A. .......................... 11,550 118,194
Estabelecimentos Jeronimo Martins & Filho SGPS S.A. ...... 7,598 497,025
*Inparsa-Industria e Participacoes SGPS S.A. ............. 6,000 118,089
Modelo Continente SGPS S.A. .............................. 3,200 150,153
Portugal Telecom S.A. (Registered)........................ 11,842 486,007
Sonae Industria e Investimento............................ 12,000 448,464
----------
3,334,103
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.

11
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
SOUTH AFRICA (12.6%)
ABSA Group Ltd. ....................................... 86,800 $ 513,876
Allied Electronics Corp., Ltd. ........................ 40,600 71,687
Anglo-American Gold Investment Co., Ltd. .............. 1,200 53,345
Anglo-American Industrial Corp., Ltd. ................. 14,000 418,779
Anglovaal Industries Ltd. ............................. 89,267 207,684
Barlow Ltd. ........................................... 43,900 442,283
Driefontein Consolidated Ltd. ......................... 27,400 195,511
*Eastvaal Gold Holdings Ltd. .......................... 136,100 128,636
Edgars Stores Ltd. .................................... 2,900 65,783
Ellerine Holdings Ltd. ................................ 17,510 132,762
First National Bank Holdings Ltd. ..................... 12,300 92,876
Free State Consolidated Gold Mines Ltd. ............... 10,800 55,077
*Harmony Gold Mining Co., Ltd. ........................ 8,500 29,310
Johannesburg Consolidated ............................. 34,000 381,388
Kersaf Investments Ltd. ............................... 20,100 125,051
Kloof Gold Mining Co., Ltd. ........................... 29,500 125,623
Liberty Life Association of Africa Ltd. ............... 42,800 1,066,888
LibLife Strategic Investments Ltd. .................... 121,850 379,674
Malbak Ltd. ........................................... 39,500 46,113
Murray & Roberts Holdings Ltd. ........................ 75,500 141,151
Nampak Ltd. ........................................... 67,000 208,766
Nedcor Ltd. ........................................... 49,000 1,028,043
Pick'n Pay Stores Ltd. ................................ 27,300 41,115
Pick'n Pay Stores Ltd., Class N........................ 54,600 74,857
Polfin Ltd. ........................................... 103,600 193,685
Premier Group (The) Ltd. .............................. 101,090 111,296
Rembrandt Group Ltd. .................................. 61,300 502,981
Safmarine & Rennies Holdings Ltd. ..................... 39,900 87,027
Sappi Ltd. ............................................ 36,100 228,718
Sasol Ltd. ............................................ 83,300 1,003,614
South African Breweries Ltd. .......................... 13,400 356,294
South African Iron & Steel Industrial Corp., Ltd. ..... 218,600 113,523
Standard Bank Investment Corp., Ltd. .................. 13,400 567,844
Sun International (South Africa) Ltd. ................. 251,200 140,889
Tongaat-Hulett Group Ltd. ............................. 26,200 356,481
</TABLE>

The accompanying notes are an integral part of the financial statements.

12
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
SOUTH AFRICA--(CONTINUED)
Toyota South Africa Ltd. ............................. 16,700 $ 104,071
Vaal Reefs Exploration & Mining Co., Ltd. ............ 1,100 47,437
Wooltru Ltd., Class N................................. 58,800 195,430
*Woolworths Holdings Ltd. ............................ 50,568 87,711
-----------
10,123,279
- -------------------------------------------------------------------------------
SRI LANKA (0.8%)
Blue Diamond Jewelry World............................ 96,642 13,344
Development Finance Corp. of Ceylon................... 48,400 204,941
Hayleys Ltd. ......................................... 36,000 132,552
John Keells Holdings Ltd. ............................ 35,525 181,341
Sampath Bank Ltd. .................................... 105,000 110,711
-----------
642,889
- -------------------------------------------------------------------------------
THAILAND (5.6%)
*Advance Agro Public Co., Ltd. ....................... 81,000 79,024
*Advance Agro Public Co., Ltd. (Foreign).............. 80,300 78,342
Advanced Info Service Public Co., Ltd. (Foreign)...... 155,600 819,746
Asia Credit Co., Ltd. (Foreign)....................... 32,000 42,927
Bangchak Petroleum Public Co., Ltd. (Foreign)......... 80,800 17,342
*Bangkok Expressway Public Co., Ltd. (Foreign)........ 284,500 208,171
BEC World Public Co., Ltd. (Foreign).................. 73,000 373,903
Ch. Harnchang Public Co., Ltd. (Foreign).............. 48,900 64,405
Dhana Siam Finance and Securities Public Co., Ltd.
(Foreign)............................................ 200,000 87,805
Electricity Generating Public Co., Ltd. (Foreign)..... 58,400 95,434
First Bangkok City Bank Ltd. (Foreign)................ 272,600 103,056
Hemaraj Land and Development Public Co., Ltd. (For-
eign)................................................ 103,500 138,841
I.C.C. International Public Co., Ltd. (Foreign)....... 34,000 66,342
Italian-Thai Development Corp. (Foreign).............. 16,300 19,480
Krungthai Thanakit plc (Foreign)...................... 66,200 34,311
Land and House Co., Ltd. (Foreign).................... 87,176 74,419
National Finance & Securities Co., Ltd. (Foreign)..... 286,900 124,207
Nava Finance and Securities Public Co., Ltd. (For-
eign)................................................ 167,300 61,207
PTT Exploration & Production (Foreign)................ 19,800 198,000
Precious Shipping plc (Foreign)....................... 26,700 20,676
Samart Corp. plc (Foreign)............................ 29,600 37,541
</TABLE>

The accompanying notes are an integral part of the financial statements.

13
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
THAILAND--(CONTINUED)
Shinawatra Satellite Public Co., Ltd. (Foreign)....... 94,600 $ 29,995
Siam City Cement Co., Ltd. (Foreign).................. 11,700 97,595
Siam Commercial Bank Co., Ltd. (Foreign).............. 86,700 165,999
Siam Makro Public Co., Ltd. (Foreign)................. 73,100 90,929
Siam Pulp & Paper Public Co., Ltd. (Foreign).......... 271,200 277,815
*TelecomAsia Corp. Public Co., Ltd. (Foreign)......... 507,800 219,840
Thai Airways International Ltd. ...................... 354,000 397,171
Thai Petrochemical Industry Public Co., Ltd. (For-
eign)................................................ 708,940 146,975
Thai Plastic & Chemical Public Co., Ltd. (Foreign).... 68,200 133,905
*Thai Telephone & Communication Public Co., Ltd. (For-
eign)................................................ 126,450 25,290
United Communication Industry (Foreign)............... 87,200 142,498
-----------
4,473,191
- -------------------------------------------------------------------------------
TURKEY (5.3%)
Akbank TAS............................................ 7,931,000 540,495
Aksa Akrilik Kimya Sanayii AS......................... 793,352 68,124
Cimentas AS........................................... 481,068 60,979
Eregli Demir Ve Celik Fabrikalari TAS................. 3,152,000 515,538
Finans Bank AS........................................ 3,093,254 64,928
*Ihlas Holding AS..................................... 2,912,450 408,874
*Netas Telekomunik.................................... 646,000 193,708
Tat Konserve Sanayii AS............................... 1,504,997 82,873
Tofas Turk Otomobil Fabrikasi AS...................... 13,105,500 910,997
*Turk Hava Yollari A.O. .............................. 719,069 150,933
Turkiye Garanti Bankasi AS............................ 10,553,000 546,579
Yapi ve Kredi Bankasi AS.............................. 22,323,000 681,544
-----------
4,225,572
- -------------------------------------------------------------------------------
VENEZUELA (2.3%)
CANTV................................................. 21,000 122,309
Corporacion Venezolana de Cementos, S.A.C.A. ......... 26,020 52,222
Electricidad de Caracas............................... 771,867 1,014,677
Manufacturas Textiles................................. 53,130 1,333
Siderurgica Venezolana Sivensa........................ 1,528 8,617
</TABLE>

The accompanying notes are an integral part of the financial statements.

14
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
VENEZUELA--(CONTINUED)
Siderurgica Venezolana Sivensa, Class A............... 909,000 $ 496,223
Venezolana de Cementos................................ 55,881 113,162
-----------
1,808,543
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $79,885,390)................. 67,973,334
- -------------------------------------------------------------------------------
PREFERRED STOCKS (13.9%)
- -------------------------------------------------------------------------------
BRAZIL (13.9%)
Banco Bradesco........................................ 74,097,003 551,157
Banco Do Brasil S.A. ................................. 46,000,000 388,062
Banco Itau S.A. ...................................... 1,118,000 451,297
Bombril S.A. ......................................... 102,520,000 863,943
Brahma................................................ 830,909 520,072
Brasmotor S.A. ....................................... 1,100,000 154,663
Ceval Alimentos S.A. ................................. 20,000,000 159,470
Cia Acos Especiais Itabira............................ 19,740,000 29,545
Cia Brasil Petroleo Ipiranga.......................... 26,700,000 387,518
Cia Brasileira de Frigorificos........................ 272,000 148,041
Cia Brasileira de Petroleo Ipiranga................... 30,600,000 516,292
Cia Energetica de Minas Gerais........................ 15,600,000 622,641
*Cia Energetica de Sao Paulo ......................... 7,500,000 469,430
Cia Siderurgica Tubarao, Class B...................... 6,400,000 81,277
Cia Vale do Rio Doce.................................. 19,960 385,657
Eletrobras, Class B................................... 945,602 409,155
*Eletropaulo.......................................... 2,000,000 341,074
Fertilizantes Fosfatados.............................. 109,300,000 436,248
Gerdau Metalurgica S.A. .............................. 8,821,960 351,150
Gerdau S.A. .......................................... 20,216,866 313,596
Globex Utilidades S.A. ............................... 6,000 65,312
Itausa Investimentos Itau S.A. ....................... 800,000 544,267
Mineracao da Trindade-Samitri......................... 3,003,000 83,084
Petrobras............................................. 1,358,666 252,655
Petrobras Distribuidora S.A. ......................... 11,250,000 203,080
Refinaria de Petroleo Ipiranga........................ 16,800,000 143,099
Ripasa S.A. .......................................... 164,000 53,556
Sadia Concordia S.A. ................................. 215,000 156,023
</TABLE>

The accompanying notes are an integral part of the financial statements.

15
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- --------------------------------------------------------------------------------
PREFERRED STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
BRAZIL--(CONTINUED)
Telebras............................................... 6,880,060 $ 686,508
Telemig, Class B....................................... 1,300,000 162,736
Telepar S.A. .......................................... 150,000 78,237
Telesp S.A. ........................................... 3,453,782 902,294
*Uniao de Industrias Pertoquimicas S.A., Class B....... 191,875 59,178
Usiminas............................................... 22,520 168,532
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $9,773,763)................ 11,138,849
- --------------------------------------------------------------------------------
<CAPTION>
NO. OF
RIGHTS
- --------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS (0.0%)
- --------------------------------------------------------------------------------
BRAZIL (0.0%)
*Telepar S.A., expiring 11/12/97....................... 7,316 --
*Telesp S.A., expiring 11/12/97........................ 115,486 3,133
-----------
3,133
- --------------------------------------------------------------------------------
GREECE (0.0%)
*National Bank of Greece, expiring 11/14/97............ 440 1,775
- --------------------------------------------------------------------------------
MALAYSIA (0.0%)
*Affin Holdings Bhd., expiring 12/12/97................ 65,800 --
*Southern Bank Bhd., expiring 12/1/97.................. 16,750 2,013
-----------
2,013
- --------------------------------------------------------------------------------
TOTAL RIGHTS (0.0%) (COST $0)........................... 6,921
- --------------------------------------------------------------------------------
<CAPTION>
NO. OF
WARRANTS
- --------------------------------------------------------------------------------
<S> <C> <C>
WARRANTS (0.0%)
- --------------------------------------------------------------------------------
MALAYSIA (0.0%)
*Affin Holdings Bhd., expiring 11/15/99 (COST $0)...... 32,900 12,551
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

16
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

<TABLE>
<CAPTION>
FACE AMOUNT VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (4.3%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (4.3%)
Chase Securities, Inc. 5.60% dated 10/31/97, due
11/03/97, to be repurchased at $3,407,589,
collateralized by $3,265,580 of various
U.S. Treasury Notes, 5.50-8.75%, due from 5/15/00-
6/30/02, valued at $3,407,921 (COST $3,406,000)..... $3,406,000 $ 3,406,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (102.9%) (COST $93,065,153) (A)..... 82,537,655
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-2.9%).................. (2,318,073)
- -------------------------------------------------------------------------------
NET ASSETS (100%)..................................... $80,219,582
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $93,065,153. At October 31,
1997, net unrealized depreciation for all securities based on tax cost was
$10,527,498. This consisted of aggregate gross unrealized appreciation for
all securities of $13,657,599 and aggregate gross unrealized depreciation
for all securities of $24,185,097.

The accompanying notes are an integral part of the financial statements.

17
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1997

At October 31, 1997 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
SECTOR DIVERSIFICATION (UNAUDITED) ASSETS VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Automotive................................................ 3.0 $ 2,407,070
Banks..................................................... 11.8 9,462,513
Beverages, Food & Tobacco................................. 6.0 4,781,806
Building Materials........................................ 0.9 754,185
Building Related.......................................... 0.2 159,470
Capital Equipment......................................... 0.4 310,599
Chemicals................................................. 3.5 2,831,318
Construction.............................................. 4.1 3,300,575
Consumer Cyclical......................................... 0.2 157,271
Consumer Durables......................................... 0.4 309,407
Electronics............................................... 1.9 1,521,383
Energy.................................................... 4.3 3,428,766
Entertainment & Leisure................................... 0.3 265,940
Financial Services........................................ 10.0 8,027,197
Forest Products & Paper................................... 0.1 53,556
Holding Company........................................... 8.4 6,721,410
Home Furnishings & Appliances............................. 0.3 208,055
Industrial................................................ 0.7 563,376
Insurance................................................. 1.3 1,066,888
Iron & Steel.............................................. 1.9 1,532,965
Lodging & Restaurants..................................... 0.2 200,962
Manufacturing............................................. 2.2 1,790,855
Metals.................................................... 1.6 1,292,944
Mining.................................................... 0.8 634,939
Multi-Industry............................................ 2.6 2,126,143
Oil & Gas................................................. 1.9 1,496,088
Paper & Packaging......................................... 2.4 1,891,179
Pharmaceuticals........................................... 1.0 809,697
Real Estate............................................... 2.0 1,635,101
Repurchase Agreement...................................... 4.3 3,406,000
Retail.................................................... 3.1 2,461,855
Services.................................................. 1.0 832,960
Telecommunications........................................ 10.2 8,209,126
Textiles & Apparel........................................ 0.3 208,418
Transportation............................................ 2.4 1,895,884
Utilities................................................. 7.2 5,781,754
- --------------------------------------------------------------------------------
Total Investments........................................ 102.9% $82,537,655
Other Assets and Liabilities (Net)........................ (2.9) (2,318,073)
- --------------------------------------------------------------------------------
Net Assets............................................... 100.0% $80,219,582
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

18
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Value (Cost $93,065,153) ....................... $ 82,537,655
Foreign Currency, at Value (Cost $768,754) ..................... 741,505
Receivable for Investments Sold................................. 2,648,428
Dividends Receivable............................................ 68,322
Receivable for Portfolio Shares Sold............................ 58,990
Foreign Withholding Tax Reclaim Receivable...................... 816
Interest Receivable............................................. 530
Deferred Organization Costs--Note A............................. 344
Other Assets.................................................... 2,297
- -------------------------------------------------------------------------------
Total Assets................................................... 86,058,887
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased............................... 4,777,522
Payable for Shares Redeemed..................................... 40
Payable to Custodian--Note D.................................... 658,610
Payable for Custodian Fees--Note D.............................. 278,704
Payable for Investment Advisory Fees--Note B.................... 77,852
Payable for Administrative Fees--Note C......................... 13,143
Payable for Directors' Fees--Note G............................. 821
Payable for Account Service Fees--Note F........................ 11
Other Liabilities............................................... 32,602
- -------------------------------------------------------------------------------
Total Liabilities.............................................. 5,839,305
- -------------------------------------------------------------------------------
NET ASSETS....................................................... $ 80,219,582
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital................................................. $ 86,448,554
Undistributed Net Investment Income............................. 816,556
Accumulated Net Realized Gain................................... 3,580,938
Unrealized Depreciation......................................... (10,626,466)
- -------------------------------------------------------------------------------
NET ASSETS....................................................... $ 80,219,582
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value) (Authorized
25,000,000).................................................... 7,111,123
Net Asset Value, Offering and Redemption Price Per Share........ $ 11.28
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

19
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1997

<TABLE>
- ---------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends........................................................ $ 2,372,537
Interest......................................................... 187,747
Less Foreign Taxes Withheld...................................... (142,637)
- ---------------------------------------------------------------------------------
Total Income.................................................... 2,417,647
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B................................. 862,391
Custodian Fees--Note D........................................... 193,906
Administrative Fees--Note C...................................... 140,787
Printing Fees.................................................... 20,045
Registration and Filing Fees..................................... 19,847
Audit Fees....................................................... 18,330
Legal Fees....................................................... 7,142
Directors' Fees--Note G.......................................... 3,129
Amortization of Organizational Costs--Note A..................... 559
Account Services Fees--Note F.................................... 76
Other Expenses................................................... 27,522
- ---------------------------------------------------------------------------------
Total Expenses.................................................. 1,293,734
Expense Offset--Note A........................................... (233)
- ---------------------------------------------------------------------------------
Net Expenses.................................................... 1,293,501
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME............................................. 1,124,146
- ---------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON:
Investments...................................................... 3,598,763
Foreign Exchange Transactions.................................... (211,261)
- ---------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN ON INVESTMENTS AND FOREIGN EXCHANGE TRANS-
ACTIONS.......................................................... 3,387,502
- ---------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments...................................................... (11,318,067)
Foreign Exchange Translations.................................... (65,718)
- ---------------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION.......... (11,383,785)
- ---------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS AND FOREIGN EXCHANGE TRANSACTIONS......... (7,996,283)
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $ (6,872,137)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

20
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net Investment Income................................ $ 1,124,146 $ 710,560
Net Realized Gain.................................... 3,387,502 62,405
Net Change in Unrealized Appreciation/Depreciation... (11,383,785) 2,004,764
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations......................................... (6,872,137) 2,777,729
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................ (690,005) (60,888)
Net Realized Gain.................................... (195,793) (182,665)
- ----------------------------------------------------------------------------------
Total Distributions................................. (885,798) (243,553)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................... 23,222,058 36,059,283
--In Lieu of Cash Distributions.................... 855,408 241,843
Redemption Fees--Note J.............................. 14,952 --
Redeemed............................................. (5,764,196) (3,130,062)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........ 18,328,222 33,171,064
- ----------------------------------------------------------------------------------
Total Increase....................................... 10,570,287 35,705,240
Net Assets:
Beginning of Year.................................... 69,649,295 33,944,055
- ----------------------------------------------------------------------------------
End of Year (including undistributed net investment
income of $816,556 and $606,127, respectively)...... $ 80,219,582 $69,649,295
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued....................................... 1,726,498 2,951,393
In Lieu of Cash Distributions....................... 73,049 22,372
Shares Redeemed..................................... (432,801) (251,153)
- ----------------------------------------------------------------------------------
1,366,746 2,722,612
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

21
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<CAPTION>
YEARS ENDED
OCTOBER 31, JUNE 17, 1993**
----------------------------------- TO OCTOBER 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $ 12.12 $ 11.23 $ 14.00 $11.34 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss)................ 0.16 0.13 0.05 (0.03) (0.01)
Net Realized and
Unrealized Gain
(Loss)................ (0.85) 0.84 (2.82) 2.74 1.35
- -------------------------------------------------------------------------------
Total from Investment
Operations........... (0.69) 0.97 (2.77) 2.71 1.34
- -------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.. (0.12) (0.02) -- -- --
Net Realized Gain...... (0.03) (0.06) -- (0.05) --
- -------------------------------------------------------------------------------
Total Distributions... (0.15) (0.08) -- (0.05) --
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD................. $ 11.28 $ 12.12 $ 11.23 $14.00 $11.34
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN............ (5.71)% 8.72% (19.79)% 23.97%+ 13.40%+
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Pe-
riod (Thousands)....... $80,220 $69,649 $33,944 $5,558 $3,927
Ratio of Expenses to
Average Net Assets..... 1.50% 1.79% 1.78% 2.07% 2.43%*
Ratio of Net Investment
Income (Loss) to Aver-
age Net Assets......... 1.31% 1.29% 0.86% (0.25)% (0.37)%*
Portfolio Turnover
Rate................... 28% 11% 21% 9% 2%
Average Commission Rate
#...................... $0.0003 $0.0004 N/A N/A N/A
- -------------------------------------------------------------------------------
Voluntarily Waived Fees
and Expenses Assumed by
the Adviser Per Share.. N/A N/A $ 0.02 $ 0.12 $ 0.04
Ratio of Expenses to Av-
erage Net Assets In-
cluding Expense Off-
sets................... 1.50% 1.79% 1.77% N/A N/A
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Total return would have been lower had certain fees not been waived during
the periods indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.

The accompanying notes are an integral part of the financial statements.

22
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Acadian
Emerging Markets Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc.,
is a diversified, open-end management investment company. At October 31, 1997,
the UAM Funds were comprised of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Portfolio is to seek long-term capital appreciation by investing
primarily in common stocks of emerging country issuers.

A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.

1. SECURITY VALUATION: Securities listed on a United States securities
exchange for which market quotations are readily available are valued at
the last quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid price on
such day. Securities listed on a foreign exchange are valued at their
closing price. Price information on listed securities is taken from the
exchange where the securities are primarily traded. Over-the-counter and
unlisted securities are valued at the current bid prices. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Directors.

2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements. The
Portfolio may be subject to taxes imposed by countries in which it invests.
Such taxes are generally based on either income or gains earned or
repatriated. The Portfolio accrues such taxes when the related income is
earned.

3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.

Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same
collateral requirements as discussed above.

23
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO

NOTES TO FINANCIAL STATEMENTS --(CONTINUED)

U.S. dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in net
realized and unrealized gain and loss on investments on the statement of
operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid.

5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy and sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily using the
current forward rate and the change in market value is recorded by the
Portfolio as unrealized gain or loss. The Portfolio recognizes realized
gain or loss when the contract is closed, equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and are generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from the
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.

6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income annually. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $223,712 to decrease
undistributed net investment income, and $224,270 to increase accumulated
net realized gain, with a decrease to paid in capital of $558.

Current year permanent book-tax differences are not included in ending
undistributed net investment income for the purpose of calculating net
investment income per share in the financial highlights.

7. ORGANIZATION COST: Costs incurred by the Portfolio in connection with
its organization have been deferred and are being amortized on a straight-
line basis over a five year period.

8. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based

24
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

on their relative net assets. Custodian fees for the Portfolio have been
increased to include expense offsets for custodian balance credits, if any.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Acadian Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a monthly fee calculated at an annual rate of
1.00% of average daily net assets for the month. The Adviser has voluntarily
agreed to waive a portion of its advisory fees and to assume expenses, if
necessary, in order to keep the Portfolio's total annual operating expenses,
after the effect of expense offset arrangements, from exceeding 2.50% of
average daily net assets.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific annual fee payable monthly of
0.06% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, under which CGFSC
agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the year ended October 31, 1997, UAM Fund
Services, Inc. earned $140,787 from the Portfolio as Administrator of which
$89,053 was paid to CGFSC for its services.

D. CUSTODIAN: The Chase Manhattan Bank, an affiliate of CGFSC, is custodian
for the Portfolio's assets held in accordance with the custodian agreement. As
part of the custodian agreement, the custodian bank has a lien on the
securities of the Portfolio to cover any advances made by the custodian to the
Portfolio. At October 31, 1997, the payable to the custodian bank represents
the amount due for cash advanced for shareholder redemptions.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.

F. ACCOUNT SERVICES: Effective February 28, 1997, the UAM Funds entered into
an Account Services Agreement (the "Services Agreement") with UAM Retirement
Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of
UAM. Under the Services Agreement, the Service Provider agrees to perform
certain services for participants in a self-directed, defined contribution
plan, and for whom the Service Provider provides participant record keeping.
Pursuant to the Services Agreement, the Service Provider is entitled to
receive, after

25
<PAGE>

ACADIAN EMERGING MARKETS PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

the end of each month, a fee at the annual rate of 0.15% of the average
aggregate daily net asset value of shares of the UAM Funds in the accounts for
which they provide services.

G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Board meetings.

H. PURCHASES AND SALES: For the year ended October 31, 1997, the Portfolio
made purchases of $40,782,429 and sales of $22,698,079 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government securities.

I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the year ended
October 31, 1997, the Portfolio had no borrowings under the agreement.

J. OTHER: At October 31, 1997, 69.7% of total shares outstanding were held by
2 record shareholders owning 10% or greater of the aggregate total shares
outstanding.

The Portfolio retains a redemption fee of 1.00% on redemptions of capital
shares held for less than 90 days in the Portfolio.

At October 31, 1997, the net assets of the Portfolio were substantially
comprised of foreign denominated securities and/or currency. Changes in
currency exchange rates will affect the value of and investment income from
such securities and currency.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.

26
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
UAM Funds, Inc. and Shareholders of
Acadian Emerging Markets Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Acadian Emerging
Markets Portfolio (the "Portfolio"), a Portfolio of the UAM Funds, Inc., at
October 31, 1997, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where securities were not yet received by the custodian, provide a
reasonable basis for the opinion expressed above.

Price Waterhouse LLP
Boston, Massachusetts
December 11, 1997

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

FEDERAL INCOME TAX INFORMATION (UNAUDITED)

Foreign taxes during the fiscal year ended October 31, 1997 amounted to
$142,637 are expected to be passed through to the shareholders as foreign tax
credits on Form 1099-DIV for the year ending December 31, 1997 which
shareholders of this Portfolio will receive in late January, 1998. Acadian
Emerging Markets Portfolio hereby designates $80,621 as a long-term capital
gain dividend for purposes of the dividend paid deduction on its federal
income tax return. In addition, for the year ended October 31, 1997, gross
income derived from sources within foreign countries amounted to $2,373,685
for the Portfolio.

27
<PAGE>

- --------------------------------------------------------------------------------
UAM FUNDS
ACADIAN INTERNATIONAL EQUITY
PORTFOLIO
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS

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

INVESTMENT ADVISER
Acadian Asset Management, Inc.
Two International Place
Boston, MA 02110

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

ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110