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SEMIANNUAL
REPORT
April 30, 1998
WARBURG PINCUS
INTERNATIONAL EQUITY FUND
WARBURG PINCUS
JAPAN OTC FUND
WARBURG PINCUS
EMERGING MARKETS FUND
WARBURG PINCUS
JAPAN GROWTH FUND
WARBURG PINCUS
GLOBAL POST-VENTURE CAPITAL FUND
WARBURG PINCUS
MAJOR FOREIGN MARKETS FUND
More complete information about the Funds, including charges and expenses,
is provided in the Prospectus, which must precede or accompany this report
and which should be read carefully before investing. You may obtain
additional copies by calling 800-WARBURG (800-927-2874) or by writing to
Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
[Logo]
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From time to time, the Funds' investment adviser and co-administrators may waive
some fees and/or reimburse some expenses, without which performance would be
lower. Waivers and/or reimbursements are subject to change.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
than original cost.
International investing entails special risk considerations, including currency
fluctuations, lower liquidity, economic and political risks, and differences in
accounting methods.
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this semiannual report are as of April 30, 1998;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this semiannual report is a recommendation to purchase or sell
securities.
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WARBURG PINCUS INTERNATIONAL EQUITY FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus International Equity Fund (the 'Fund') is
long-term capital appreciation. The Fund pursues its objective by investing
primarily in a broadly diversified portfolio of equity securities of companies
that have their principal business activities and interests outside the U.S.
For the six months ended April 30, 1998, the Fund had a total return of
12.28%, vs. a return of 15.43% for the Morgan Stanley Europe, Australasia and
Far East ('EAFE') Index.* The Fund's one-year return through April 30 was 9.33%.
Its five-year and since-inception (on May 2, 1989) average annual total returns
through April 30 were 11.85% and 12.25%, respectively.
The reporting period saw a marked divergence in performance among foreign
equity markets. European markets showed across-the-board strength, propelled by
robust corporate profits, improved economic growth and optimism toward the
prospects for European Monetary Union. Virtually all of Europe's markets had
double-digit gains for the period in U.S. dollar terms, and a handful (Italy,
Spain and Portugal) had returns in excess of 40%. The performance of most other
non-U.S. markets was less inspiring. Asian-Pacific markets generally fell, with
a number falling sharply, weighed down by worries over the region's spiraling
economic difficulties. Most Latin American markets also posted losses, while the
smaller emerging markets of Eastern Europe, the Middle East and Africa were
mixed.
Warburg Pincus International Equity Fund managed a healthy gain for the
period, albeit one that trailed the rise in its benchmark, the EAFE Index. Most,
if not all, of that underperformance stemmed from the Fund's higher-than-index
weighting in the Asia-Pacific region heading into the period. Though the Fund's
overweighting at the time was relatively small, virtually any additional
exposure to the region proved harmful in terms of relative performance,
particularly on an opportunity-cost basis, given the strong run-up in European
markets. (It should be noted that we reduced the Fund's Asian-Pacific stake as
the period progressed, based on a combination of macroeconomic and
company-specific concerns, and by period end the Fund was underweighted vs. the
EAFE Index.) For the same reason, the Fund was also held back somewhat by its
exposure to Latin America, a region not represented in the benchmark. Latin
America accounted for approximately 6% of the portfolio as of April 30, 1998.
At the other end of the spectrum, performance-wise, the Fund saw very strong
gains from its holdings in Europe, benefiting from these markets'
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* The Morgan Stanley Europe, Australasia and Far East Index is an unmanaged
index (with no defined investment objective) of international equities that
includes reinvestment of dividends, and is the exclusive property of Morgan
Stanley & Co. Incorporated.
1
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WARBURG PINCUS INTERNATIONAL EQUITY FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
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general upward bias and from good stock selection. Among the better performers
for the Fund were its holdings in France and Italy, as well as its Nordic stocks
collectively. We increased Europe's weighting in the Fund steadily through the
period (from approximately 44% on October 31 to roughly 65% on April 30),
reflecting our belief that the region's positive fundamental backdrop warranted
a higher level of exposure, especially viewed from a risk-adjusted perspective.
This geographical shift -- i.e., into Europe, at the expense of Asia -- was the
most noteworthy strategic move in the Fund during the six months.
Looking out over the remainder of 1998 and into 1999, we see both substantial
opportunity and a fair amount of risk in foreign markets. Some of the most
promising investments continue to reside in Europe, we believe, given the
dynamics surrounding the launch of the single currency and the growing number of
positive developments on the corporate front. Particularly encouraging, with
regard to the latter, is the increasing emphasis among European corporate
managements on building shareholder value, a trend that suggests improved
efficiencies and rising per-share profitability over time. We also see pockets
of opportunity in Asia, including Japan, but are approaching these markets with
higher degrees of caution, given the ongoing economic and political
uncertainties. The same holds for our approach to emerging markets in general.
All told, we believe the Fund is well positioned, with regard to both country
weightings and specific holdings, to benefit from the type of investment
environment we foresee in the coming months, and we look forward to the
opportunities ahead.
<TABLE>
<S> <C>
Richard H. King Harold W. Ehrlich
Portfolio Manager Associate Portfolio Manager
P. Nicholas Edwards Vincent J. McBride
Associate Portfolio Manager Associate Portfolio Manager
</TABLE>
2
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WARBURG PINCUS JAPAN OTC FUND
SEMIANNUAL REPORT (FOR THE SIX MONTHS ENDED APRIL 30, 1998)
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Japan OTC Fund (the 'Fund') is long-term
capital appreciation. The Fund pursues its objective by investing primarily in
securities traded in the Japanese over-the-counter (OTC) market.
For the six months ended April 30, 1998, the Fund had a total return of
- 0.98%, vs. returns of - 10.61% and - 18.64% for the yen- and dollar-
denominated JASDAQ indexes,* respectively. The Fund's one-year return through
April 30 was - 10.66%. Its three-year and since-inception (on September 30,
1994) average annual total returns through April 30 were - 5.37% and - 10.75%,
respectively.
The reporting period was an extremely difficult one for Japan's OTC stocks.
Weighing on the group were general worries over the Asian/Pacific region's
ongoing difficulties and specific concerns over Japan's economy. The stocks'
poor performance was magnified in dollar terms, as the yen lost approximately
10% of its value against the U.S. currency during the six months.
Set against this backdrop, Warburg Pincus Japan OTC Fund ended the period
with a modest loss. The one bright spot for the Fund was its strong relative
performance, as the Fund once again handily outpaced its benchmark, the JASDAQ
index, as has been the case since the Fund's inception. We have long held that
careful stock selection (vs. a passive, or indexed, approach) can yield superior
returns in the OTC market, given the market's considerable inefficiencies, and
the Fund's performance to date bears that out. Still, it must be admitted that
the asset class itself has provided little to cheer about for some time, and the
Fund's good relative performance has at best mitigated this.
With the reporting period now, however, behind us, what can reasonably be
expected from Japan's smaller-company stocks going forward? Near term, the
group's fortunes will remain closely tied to investor sentiment, and sentiment
toward Japan at this point is almost overwhelmingly negative. This suggests that
small-cap stocks, including JASDAQ listed issues, will mark time or possibly
trend lower in the coming weeks, if not months, until the tide of bearishness
covering the group begins to recede. In this environment, we believe an
above-average level of caution is warranted, and we are taking what we deem to
be appropriately defensive steps in managing the portfolio (e.g., holding a
relatively larger cash position).
A more-extended view of Japan's small-company stocks gives us cause for
optimism, however, and on two fronts in particular. One is macroeconomic.
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* The JASDAQ Over-the-Counter Composite Index is an unmanaged index (with no
defined investment objective) of stocks traded over the counter in Japan.
3
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WARBURG PINCUS JAPAN OTC FUND
SEMIANNUAL REPORT (FOR THE SIX MONTHS ENDED APRIL 30, 1998) (CONT'D)
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Japan's government recently announced a record $125 billion economic-stimulus
package. Though the package has been derided by some in terms of its likely
effectiveness, it should ultimately do much to stabilize Japan's economy after
its recent slide. A revitalized Japanese economy would give a direct,
significant boost to the earnings of Japan's smaller companies, given their
primarily domestic orientation. Stronger growth would also help these companies
by easing Japan's current credit crunch, which is taking a significant toll on
smaller companies, since they typically rely heavily on bank financing.
The second major reason for optimism, in our view, is valuations. Japan's
smaller-company market, after its recent weakness, is now by most measures
extremely cheap. Investors concerned about the generally elevated level of
valuations in developed markets (e.g., the U.S. and Europe) can at some point,
we think, be expected to cast an eye to the Japanese small-cap market.
Contrarians and 'bottom-fishers' also stand to emerge as potential buyers. Even
a small pickup in buying interest here could have a measurable impact on share
prices, given the sector's relatively small size.
There are other, secular factors arguing for smaller-company stocks as well.
These include Japan's continued steps toward the reform and liberalization of
its economy, illustrated most recently by the April 1 launch of the so-called
Big Bang, or financial-sector deregulation; the potential for Japan's huge
pension funds to further raise their allocation to equities, a portion of which
could make its way into OTC stocks; and the nascent but rapidly growing trend in
corporate Japan toward recognition of the shareholder, reflected in the record
number of share-repurchase programs announced so far this year.
Given these forces, we believe there is ample scope for improved performance
for Japan's smaller-company stocks going forward, especially over the longer
term. (Nearer term, as noted, our outlook is guarded.) Accordingly, we remain
optimistic, and will continue our efforts to identify those stocks with the best
long-term prospects for appreciation.
We are also excited about a recently proposed change in the Fund's investment
objective and policies. The change, which has been approved by the Fund's Board
of Directors but awaits shareholder approval (a shareholder vote is scheduled
for August), will greatly expand the Fund's investment universe of small
companies. (Since its inception, the Fund has concentrated its investments, per
charter, in smaller-company stocks traded on Japan's JASDAQ and Frontier
markets. With the proposed change, the Fund may still invest in stocks traded on
these markets, but will have the latitude to invest in smaller-company stocks
traded on other Japanese securities exchanges as well, e.g., the Second Section
of the Tokyo Stock Exchange. The securities traded on these other exchanges
have, at times, had relatively greater liquidity.) This will give the Fund
access to a greater variety of securities,
4
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WARBURG PINCUS JAPAN OTC FUND
SEMIANNUAL REPORT (FOR THE SIX MONTHS ENDED APRIL 30, 1998) (CONT'D)
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which may permit greater portfolio diversification by industry and issuer and
enhancing portfolio choices. We believe this change would prove beneficial for
the Fund and its shareholders.
<TABLE>
<S> <C>
P. Nicholas Edwards
Portfolio Manager
</TABLE>
5
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WARBURG PINCUS EMERGING MARKETS FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Emerging Markets Fund (the 'Fund') is growth
of capital. The Fund pursues its objective by investing primarily in equity
securities of non-U.S. issuers consisting of companies in emerging securities
markets.
For the six months ended April 30, 1998, the Fund had a total return of
- 0.58%, vs. returns of 0.89% for the Lipper Emerging Markets Funds Index* and
3.65% for the Morgan Stanley Capital International Emerging Markets Free
Index.** The Fund's one-year return through April 30 was -21.59%. It average
annual total return since inception (on December 30, 1994) was 2.93%.
The reporting period was a difficult one for emerging markets, due in large
measure to continued economic and political instability in the Asian-Pacific
region. The region's woes cast a pall over emerging markets collectively, with
investors largely shunning the group in favor of the developed markets of Europe
and the U.S. While there were some bright spots for emerging markets -- several
East Asian markets rallied strongly in the initial months of 1998, recouping a
portion of their earlier losses, and a handful of markets elsewhere (e.g., in
Latin America and the Middle East) notched solid gains -- by period end the
group had little if any upward momentum, and ultimately closed the six months
with less-than-inspiring results.
Set against this backdrop, Warburg Pincus Emerging Markets Fund posted a
small loss for the six months. In terms of performance attribution, broadly
speaking, the Fund was hindered by its Asian/Pacific exposure, though several
portfolio holdings actually performed well over the period, notwithstanding the
region's general weakness. The Fund's Latin American issues had mixed results
but overall fared better, and the Fund benefited from the fact that its largest
country weighting throughout was Brazil, the region's top performer for the six
months. Returns for the Fund's smaller weightings in Eastern Europe and the
Middle East varied.
In terms of geographic emphasis, the most significant development in the Fund
during the period was a reduction in its Asian-Pacific weighting (to
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* The Lipper Emerging Markets Funds Index is an equal-weighted performance
index, adjusted for capital-gains distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled by
Lipper Analytical Services Inc.
** The Morgan Stanley Capital International Emerging Markets Free Index is a
market-capitalization-weighted index of emerging-market countries determined
by Morgan Stanley. The index includes only those countries open to non-local
investors.
6
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WARBURG PINCUS EMERGING MARKETS FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
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approximately 33% as of April 30, from approximately 45% on October 31), and a
redeployment of those assets to stocks in other regions, most notably Latin
America and the Middle East. This reflected general concern over the
Asian-Pacific region's considerable currency, economic and political turmoil,
but more specifically the broadly negative impact of such on corporate earnings.
In cases where we believed a given holding had suffered a marked deterioration
in fundamentals, one not yet fully reflected in its share price, we sold our
position and invested elsewhere. Such sales notwithstanding, we maintained a
fair amount of exposure to the Asian-Pacific region, with noteworthy
concentrations in China/Hong Kong and Singapore, and in fact did some selective
buying of stocks we believed had been sold off unjustly vis-a-vis the companies'
earnings prospects.
As noted, much of the proceeds from the Fund's reduced weighting in
Asian/Pacific countries was reallocated to Latin America, with particular
emphasis on Brazil. We were drawn to the Brazilian market based on the generally
attractive level of prices (Brazil was Latin America's cheapest market through
the six months, judged on such measures as price relative to cash flow and price
relative to book value) and on the pro-business steps being taken by the
Brazilian government, which we believed created a favorable backdrop for the
stock market.
Looking ahead, our outlook on the immediate-term prospects for emerging
markets remains somewhat guarded, given the still-unsettled state of affairs in
Asia and investors' general wariness toward the group. Once Asia finally
stabilizes, however, we believe there is the potential for a broad rally in the
asset class, and for particularly large gains in individual stocks, given how
far many of these issues have fallen. A vast number of stocks across the
emerging-market universe have been driven down to record- or near-record-low
valuations, while the earnings prospects for specific companies remain quite
strong. We believe that this disconnect between earnings prospects and
valuations is unlikely to persist indefinitely, and hence view the present time
as a potentially attractive buying opportunity for individuals with a
sufficiently long-term (i.e., minimum two- to three-year) investment horizon.
As ever, though, the potential for substantial short-term volatility remains,
given the nature of emerging markets, and we would encourage investors to
approach the asset class with a realistic view of the potential risks involved.
<TABLE>
<S> <C>
Richard H. King Vincent J. McBride
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
7
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WARBURG PINCUS JAPAN GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Japan Growth Fund (the 'Fund') is long-term
growth of capital. The Fund pursues its objective by investing primarily in
equity securities of Japanese issuers that present attractive opportunities for
growth.
For the six months ended April 30, 1998, the Fund had a total return of
4.31%, vs. returns of - 7.21% for the Lipper Japanese Funds Average* and
- 12.44% for the U.S.-dollar-denominated Tokyo Stock Exchange Price Index
('Topix').** The Fund's one-year return through April 30 was 7.74%. Its since-
inception (on December 29, 1995) average annual total return through April 30
was 1.80%.
The reporting period was a trying one for investors in Japanese equities. The
market was buffeted by negative sentiment stemming from East Asia's financial
crisis, as well as specific concerns over the Japanese economy. All major
Japanese stock indexes showed losses for the six months, and particularly steep
losses in dollar terms, given the yen's roughly 10% fall in value against the
dollar.
This largely hostile environment notwithstanding, Warburg Pincus Japan Growth
Fund managed to post a respectable gain for the period, outdistancing both its
peers and its benchmark by a wide margin. This resulted from good stock
selection, primarily, but also from our decision to keep the Fund's yen exposure
fully hedged throughout, which spared the Fund currency-translation losses. In
terms of specific stocks, the Fund benefited from relatively strong showings
from its holdings in the so-called Nifties, which are large, blue-chip,
export-oriented companies. (Examples of such include electronics firm Sony, one
of the portfolio's largest positions through the period and one of its better
performers). These stocks have figured prominently in our strategy for some time
and remain well represented in the portfolio, since we continue to see value in
the group. One area that weighed on the Fund's performance over the six months,
conversely, was banking, as the sector was hurt by concerns over the banks' loan
exposure to Southeast Asia and by general bad-debt-related worries.
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* The Lipper Japanese Funds Average measures the average total return of all
Japanese funds tracked by Lipper Analytical Services Inc.
** The Tokyo Stock Exchange Price Index ('Topix') is a capitalization- weighted
index designed to reflect the general movement of the Japanese stock market.
The index consists of all shares listed on the First Section of the Tokyo
Stock Exchange, which is generally reserved for Japan's larger companies.
8
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WARBURG PINCUS JAPAN GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
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Looking ahead, though investor sentiment toward Japan is largely negative at
this point, we believe there are grounds for encouragement, particularly if one
is willing to look past the immediate term. On a macroeconomic level, Japan's
government recently announced an economic-stimulus package worth some $125
billion, its largest ever. Though the package has been derided by some in terms
of its likely effectiveness, it should ultimately do much to halt the economy's
recent slide and ease related fears among investors. Equally noteworthy is the
fact that Japan's commitment to financial-sector deregulation has remained firm,
despite the economy's troubles, as evidenced by the recent on-schedule launch of
'Big Bang.' (Effective April 1, most restraints on foreign-exchange trading were
removed, and brokerage commissions in the securities industry were deregulated.)
This suggests that broader reform and liberalization of Japan's economy is
merely a matter of time.
On the company level, meanwhile, there is a quiet revolution taking place in
corporate governance. Japanese companies are paying increasing heed to their
shareholders and are taking concrete steps to enhance shareholder value, as
witnessed by the record number of share buybacks announced so far this year.
This represents a sea change in mindset among the Japanese, who have largely
ignored their shareholders in the past, and stands to unleash a tremendous
amount of value in the stock market as the trend gathers pace.
A final, perhaps nearer-term, reason for optimism regarding the Japanese
stock market is the current level of valuations. Much of the market is trading
at or near historically low multiples. Indeed, as of this writing, well over
half of the Tokyo Stock Exchange's First Section (representing larger companies)
is trading below book value, and smaller-company valuations as a rule are even
more compelling. Contrast this with the record multiples across most of Europe
and in the U.S., and the Japanese market's appeal from a value perspective is
clear.
All told, we remain optimistic about Japan, particularly as a longer-term
investment thesis, and continue our efforts to identify those companies with the
best prospects for appreciation.
<TABLE>
<S> <C>
P. Nicholas Edwards
Portfolio Manager
</TABLE>
9
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WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Global Post-Venture Capital Fund (the 'Fund')
is long-term growth of capital. The Fund pursues its objective by investing
primarily in equity securities of U.S. and foreign companies considered to be in
their post-venture-capital stage of development.
For the six months ended April 30, 1998, the Fund had a total return of
20.54%, vs. returns of 16.64% for the Lipper Global Funds Index* and 9.96% for
the Russell 2000 Growth Index.** The Fund's one-year return through April 30 was
42.77%. Its since-inception (on September 29, 1995) average annual total return
through April 30 was 32.03%.
The Fund had a positive showing vs. its benchmarks for the period, driven by
strong performances from both its U.S. and foreign holdings. Among the former,
the Fund saw particularly impressive gains from its business-services,
financial-services and software stocks, a number of which were up sharply over
the six months. Noteworthy foreign holdings that performed well for the Fund
included its British telecommunications stocks, Italian media issues and
Scandinavian shares collectively. (Virtually all of the Fund's overseas exposure
through the period was in Europe. The Fund had no Asian exposure.)
We are encouraged by the Fund's strength during the reporting period, and
grow increasingly positive on its longer-term prospects as well. Much of this
optimism reflects continued bullishness on the asset class. A wealth of
empirical data (e.g., the Eighth Annual Economic Impact of Venture Capital
Study, jointly produced by Coopers & Lybrand and the National Venture Capital
Association, 1998) has attested to the growth potential of U.S. venture-backed
firms. Venture-backed companies tend to occupy the economy's most rapidly
growing industries (e.g., software, biotechnology and
semiconductors/electronics). They have historically generated superior earnings
and revenue growth vs. their non-venture-backed peers, and their shares have
tended to outperform in the stock market, at least in the first five years after
going public.
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* The Lipper Global Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the largest
qualifying funds in this investment objective, and is compiled by Lipper
Analytical Services Inc.
** The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. It includes reinvestment of
dividends, and is compiled by Frank Russell Company.
10
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WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
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Hence the argument for investing in domestic venture-backed firms is well
established. The case for investing in foreign venture-backed companies, though,
to date has had less evidence to back it, largely due to the fact that
venture-capital financing has been relatively uncommon in most non-U.S.
countries, with a few notable exceptions (e.g., the United Kingdom). But this is
changing, and changing rapidly. Venture-capital-backed firms have sprouted up in
increasing numbers overseas during the past several years, both in developed
markets (Continental Europe, in particular, has seen a surge in venture
activity) and in emerging ones as well. What this means for investors in this
asset class is an increasing list of high-growth-potential companies from which
to choose. It also means increased opportunity for geographical diversification,
which can be a useful tool in managing risk.
We believe Warburg Pincus is uniquely well-positioned to take advantage of
this exciting environment, given our considerable experience in the
venture-capital arena and our extensive research capabilities overseas, and that
the Fund represents an attractive opportunity for investors. We would caution
investors, however, that investing in venture-backed companies entails potential
risks (e.g., that of heightened volatility) along with the potential for
significant long-term rewards. Because of the nature of the Fund's holdings and
certain strategies it may use, an investment in the Fund should only be
considered for the aggressive portion of an investor's portfolio and may not be
appropriate for all investors. Investors should review the Prospectus carefully
before purchase.
<TABLE>
<S> <C>
Elizabeth B. Dater Harold E. Sharon
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
11
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WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
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Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Major Foreign Markets Fund (the 'Fund') is
long-term capital appreciation. The Fund pursues its objective by investing in
equity securities of issuers that have their principal business activities and
interests in countries considered to be major foreign securities markets. These
markets currently include the following European and Pacific Basin countries:
Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland and the United Kingdom.
For the six months ended April 30, 1998, the Fund had a gain of 15.07%, vs. a
gain of 15.43% for the Morgan Stanley Europe, Australasia and Far East ('EAFE')
Index.* The Fund's one-year return through April 30 was 24.65%. Its average
annual total return since inception (on March 31, 1997) was 24.89%.
In terms of performance, the reporting period clearly belonged to Europe.
Europe's equity markets showed across-the-board strength, beneficiaries of a
confluence of forces: stronger economic growth, improved profits, optimism
toward the prospects for European Monetary Union, low interest rates and
inflation, falling bond yields, and merger and acquisition activity. The
combination powered all of these markets to double-digit gains, and several
markets had huge advances.
Most Asian-Pacific markets, conversely, struggled, hurt by a plunge in
investor confidence stemming from the region's financial crisis. The region's
performance was particularly disappointing from the perspective of dollar-based
investors, as nearly all local currencies fell in value against the dollar.
In this environment, it obviously paid to be concentrated in Europe and
underweighted in Asian-Pacific markets, and this was the Fund's stance
throughout. Heading into the period, the Fund has approximately 61% of its
assets in Europe. By period end that weighting had risen to 76%, a function of
both price appreciation and active buying on our part. By country, we found some
of the best opportunities in the United Kingdom (13.2% of the Fund as of April
30), France (12.7%) and Germany (9.1%), and our holdings in all three markets
made a significant contribution to the Fund's performance. Other noteworthy
contributors to the Fund's return were its Italian stocks (4.9% of the Fund as
of April 30), as Italy's market was one of Europe's strongest over the six
months.
- ------------
* The Morgan Stanley Europe, Australasia and Far East Index is an unmanaged
index (with no defined investment objective) of international equities that
includes reinvestment of dividends, as is the exclusive property of Morgan
Stanley & Co. Incorporated.
12
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WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
The Fund's Asian-Pacific exposure was more problematic, in terms of
performance, though a number of our holdings had solid gains for the six months,
despite the region's overall weakness. Most of our exposure here was in Japan.
We entered the period with a 25% stake in Japan, a slight underweighting vs. our
benchmark index, but we scaled this position down significantly as the period
progressed, to approximately 9% on April 30. This reflected some profit-taking
on specific stocks that hit our price targets (e.g., electronics maker Sony),
but more so our concern over Japan's deteriorating fundamental backdrop, a
concern that remains as of this writing. We maintained smaller weightings in
Hong Kong and Singapore, and some exposure to Australia and New Zealand as well.
We held no assets in Malaysia during the reporting period, the last of the
region's markets that currently meet our definition of 'major.'
Heading into the second half of 1998, the bulk of our emphasis remains on
Europe. We continue to find attractively valued stocks in these markets, despite
their strong recent gains, and believe that the forces that have driven stocks
higher remain largely in place. We continue to seek opportunities in
Asian-Pacific markets as well, but are much more guarded in our general approach
to the region, given the number of still-unsettled economic and political
questions.
Richard H. King
Co-Portfolio Manager
Harold W. Ehrlich
Co-Portfolio Manager
P. Nicholas Edwards
Co-Portfolio Manager
13
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (90.9%)
Argentina (2.4%)
Telefonica de Argentina SA ADR 514,100 $ 19,824,981
YPF SA ADR 998,000 34,805,250
--------------
54,630,231
--------------
Australia (0.4%)
Burns, Philp & Company, Ltd. 32,221,810 4,201,595
Foodland Associated, Ltd. 702,178 5,081,647
--------------
9,283,242
--------------
Austria (4.1%)
Bank Austria AG 416,400 32,182,831
Maculan Holdings AG Vorzuege'D' 1,820 12,971
Radex-Heraklith Industries 754,237 38,105,900
V.A. Technologie AG 170,411 24,492,773
--------------
94,794,475
--------------
Belgium (0.5%)
Dexia Belgium 85,556 11,713,034
--------------
Brazil (0.6%)
Compannia de Saneamento Basico do Estado de Sao Paulo 33,735,700 7,667,070
Telecomunicacoes Brasileiras SA ADR 63,560 7,742,402
--------------
15,409,472
--------------
China (1.2%)
Cosco Pacific, Ltd. 30,200,000 20,468,497
Guangshen Railway Co., Ltd. 16,986,790 3,179,794
Guangshen Railway Co., Ltd. ADR 535,737 5,256,919
--------------
28,905,210
--------------
Denmark (2.7%)
International Service System AS Class B 439,200 23,746,855
SAS Danmark AS 1,057,069 18,845,393
Unidanmark AS Class A 241,800 20,317,309
--------------
62,909,557
--------------
Finland (0.6%)
Rauma OY 722,773 13,531,870
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
France (9.2%)
Banque Nationale de Paris 353,300 $ 29,765,743
Compagnie de Saint Gobain 164,380 27,370,443
Elf Aquitaine SA 219,700 28,805,286
Lagardere Groupe SCA 598,987 22,893,404
Rhone Poulenc, Ltd. Class A 828,975 40,513,671
Societe Generale d'Entreprises SA 922,100 35,932,382
Total Cie Franc des Petroles Class B 222,105 26,389,400
--------------
211,670,329
--------------
Germany (6.2%)
Degussa AG 449,300 24,687,088
Fresenius Medical Care AG 283,700 19,429,774
Hannover Rueckversicherungs AG 191,800 24,347,751
Hoechst AG 605,030 24,376,522
Mannesmann AG 14,556 11,469,593
Muenchener Rueckversicherungs-Gesellschaft AG 52,000 23,993,313
Schmalbach Lubeca AG 57,200 14,114,327
--------------
142,418,368
--------------
Hong Kong (2.1%)
First Pacific Co., Ltd. 17,914,383 8,614,852
HSBC Holdings PLC 1,181,200 33,700,428
Jardine Matheson Holdings, Ltd. 1,277,401 5,390,632
--------------
47,705,912
--------------
India (1.6%)
Bharat Petroleum Corp., Ltd. 200 2,014
Hindalco Industries, Ltd. 231,925 4,408,997
Reliance Industries, Ltd. 2,126,100 10,241,038
Reliance Industries, Ltd. GDS 99,100 904,287
State Bank Of India, Ltd. 2,625,800 19,422,254
State Bank Of India, Ltd. GDR 52,100 992,505
Tata Engineering & Locomotive Co., Ltd. 25 175
--------------
35,971,270
--------------
Ireland (0.4%)
Greencore Group PLC 1,457,000 8,901,334
--------------
Israel (2.0%)
ECI Telecommunications Limited Designs 1,179,200 35,965,600
Orbotech, Ltd.'D' 300,700 10,862,788
--------------
46,828,388
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Italy (5.3%)
Assicurazioni Generali SpA 784,800 $ 23,606,667
Ente Nazionale Idrocarburi SpA 4,077,500 27,372,023
Parmalat Finanziaria SpA 10,115,200 22,805,507
Seat SpA 22,714,000 11,280,407
Telecom Italia SpA 4,944,400 36,972,426
--------------
122,037,030
--------------
Japan (10.6%)
Advantest Corp. 151,030 10,173,063
Fujitsu, Ltd. 2,383,000 27,864,485
Hankyu Realty Co., Ltd. 1,448,000 6,860,273
Minebea Co., Ltd. 2,147,000 24,048,736
NEC Corp. 2,567,000 28,947,472
Nichiei Co., Ltd. 104,550 8,150,040
Orix Corp. 514,600 35,636,035
Rohm Co., Ltd. 373,000 42,175,276
Sony Corp. 271,500 22,623,284
Takefuji Corp. 227,400 11,961,173
TDK Corp. 347,000 27,470,063
--------------
245,909,900
--------------
Mexico (1.0%)
Fomento Economico Mexicano SA de CV 230,000 1,725,773
Gruma SA de CV Class B 2,795,746 6,415,094
Panamerican Beverages, Inc. Class A 380,446 15,170,284
--------------
23,311,151
--------------
Netherlands (6.2%)
CSM NV 102,000 5,517,716
Hagemeyer NV 437,800 20,909,424
ING Groep NV 758,300 49,277,059
Koninklijke Pakhoed NV 230,300 8,434,603
Philips Electronics NV 672,100 59,209,704
--------------
143,348,506
--------------
New Zealand (2.2%)
Brierley Investments, Ltd. 42,847,604 24,760,602
Fletcher Challenge Building 6,677,922 13,506,538
Sky City, Ltd. 2,873,250 8,094,363
Wrightson, Ltd. 14,548,459 5,092,826
--------------
51,454,329
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Norway (1.1%)
Smedvig ASA Class B 275,000 $ 5,530,922
Sparebanken NOR 172,600 5,970,821
Transocean Offshore, Inc. 242,450 13,546,894
--------------
25,048,637
--------------
Portugal (0.1%)
Banco Mello SA 218,700 3,256,424
--------------
Singapore (1.8%)
DBS Land, Ltd. 6,492,600 9,799,439
Development Bank of Singapore, Ltd. 3,589,550 23,802,029
Development Bank of Singapore, Ltd. Class A 1,325,565 8,622,296
--------------
42,223,764
--------------
South Korea (2.0%)
Hyundai Heavy 242,597 7,805,213
L.G. Electronics 1,270,110 15,110,170
Pohang Iron & Steel Co., Ltd. 690 37,349
Samsung Display Devices Co. 290,030 14,430,968
Samsung Heavy Industries Co., Ltd. 1,334,200 9,423,751
--------------
46,807,451
--------------
Spain (2.0%)
Argentaria SA 260,600 21,714,528
Iberdrola SA 1,496,100 24,049,108
--------------
45,763,636
--------------
Sweden (6.7%)
ABB AB Series B 2,476,000 38,393,450
Biora AB ADR'D' 154,000 4,831,750
Electrolux AB Series B 473,700 44,071,835
Nordbanken Holding AB 5,074,500 37,376,047
SKF AB Series B 1,467,700 29,586,061
--------------
154,259,143
--------------
Switzerland (4.6%)
Julius Baer Holding AG 12,248 33,805,832
Oerlikon-Buehrle Holding AG'D' 105,790 18,055,549
Schweizerische Rueckversicherungs-Gesellschaft 10,900 24,053,629
Sulzer AG 21,669 15,530,071
TAG Heuer International SA'D' 138,680 14,608,211
--------------
106,053,292
--------------
Thailand (0.0%)
Siam Cement Co., Ltd. 40,850 576,705
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
United Kingdom (13.3%)
British Airport Authority PLC 2,272,664 $ 23,122,218
Cookson Group PLC 8,382,535 37,631,657
Dixons Group PLC 1,236,100 11,826,959
Glaxo Wellcome PLC 779,600 22,028,870
Imperial Chemical Industries PLC 933,154 16,944,034
Medeva PLC 4,823,100 14,313,911
Orange PLC'D' 3,916,500 28,108,787
Pilkington PLC 11,805,000 24,770,992
Rolls-Royce PLC 4,916,000 22,932,413
Royal & Sun Alliance Insurance Group PLC 1,780,300 19,883,981
Safeway PLC 1,095,000 6,526,906
Standard Chartered Bank PLC 1,295,900 19,847,264
Thistle Hotels PLC 4,352,400 12,771,432
Williams Holdings PLC 5,987,900 45,953,744
--------------
306,663,168
--------------
TOTAL COMMON STOCKS (Cost $1,807,398,869) 2,101,385,828
--------------
PREFERRED STOCK (3.6%)
Brazil (1.9%)
Companhia Vale Rio Doce 546,500 12,897,939
Petroleo Brasileiro SA 49,440,200 12,532,699
Telecomunicacoes de Sao Paulo SA 39,387,000 13,392,723
Telecomunicacoes do Rio de Janeiro SA 33,096,000 5,207,322
--------------
44,030,683
--------------
Germany (1.5%)
GEA AG 46,270 18,693,647
KSB AG 48,200 16,008,470
--------------
34,702,117
--------------
United Kingdom (0.2%)
Singer & Friedlander Group PLC 8.50% (Convertible) 1,435,737 4,657,044
--------------
TOTAL PREFERRED STOCK (Cost $69,541,879) 83,389,844
--------------
CALL OPTIONS (0.0%)
New Zealand (0.0%)
Air New Zealand, Ltd., 05/01/98 (Strike Price $2.4615)'D' 21,250,000 0
Air New Zealand, Ltd., 05/01/98 (Strike Price $2.5895)'D' 21,250,000 0
--------------
TOTAL CALL OPTIONS (Cost $3,486,565) 0
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
------------ --------------
<S> <C> <C> <C>
CORPORATE BONDS (0.0%)
New Zealand (0.0%)
Brierley Investments, Ltd. (Convertible)
9.00%, 06/30/98 (A)1,314,875 $ 730,610
--------------
TOTAL CORPORATE BONDS (Cost $748,766) 730,610
--------------
REPURCHASE AGREEMENTS (1.6%)
Repurchase agreement with Goldman, Sachs &
Co. dated 04/30/98 at 5.47% to be
repurchased at $36,111,486 on 05/01/98.
(Collateralized by pro rata amount of U.S.
Treasury Notes ranging in par values from
$39,650,000 to $50,000,000, 5.75%-7.25%,
09/30/01-05/15/04. Market value of
collateral is $36,854,756.) (Cost
$36,106,000) $ 36,106,000 36,106,000
--------------
TOTAL INVESTMENTS AT VALUE (96.1%) (Cost $1,917,282,079*) 2,221,612,282
OTHER ASSETS IN EXCESS OF LIABILITIES (3.9%) 89,182,494
--------------
NET ASSETS (100.0%) (applicable to 95,364,094 Common Shares
and 20,895,104 Advisor Shares) $2,310,794,776
--------------
--------------
NET ASSET VALUE, offering and redemption price per Common
Share
($1,898,196,182[div]95,364,094) $19.90
------
------
NET ASSET VALUE, offering and redemption price per Advisor
Share
($412,598,594[div]20,895,104) $19.75
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $1,918,847,086.
(A) Denominated in New Zealand Dollars.
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (98.6%)
Business Services (4.0%)
Bellsystem 24, Inc. 11,000 $ 1,528,494
-----------
Capital Equipment (2.6%)
GL Sciences, Inc.## 67,000 998,940
-----------
Chemicals (1.9%)
C. Uyemura & Co., Ltd. 27,000 715,205
-----------
Computers (8.3%)
Data Communication Systems 60,000 1,055,778
Nidec Corp. 39,200 2,106,410
-----------
3,162,188
-----------
Electronics (39.7%)
Advantest Corp. 16,500 1,111,405
Disco Corp. 60,000 1,725,573
I.O. Data Device, Inc. 70,000 794,672
Mabuchi Motor Co., Ltd. 20,000 1,159,464
Mimasu Semiconductor Industry 60,000 885,491
Minebea Co., Ltd. 110,000 1,232,120
Nemic-Lambda K.K. 47,500 570,158
Rohm Co., Ltd. 30,000 3,392,113
Tokyo Electron, Ltd. 35,000 1,377,431
Tokyo Seimitsu Co., Ltd. 60,000 1,766,442
Yamaichi Electronics Co., Ltd. 64,000 1,186,710
-----------
15,201,579
-----------
Financial Services (21.4%)
Japan Associated Finance Co., Ltd. 40,000 1,335,049
Orix Corp. 35,000 2,423,749
Shohkoh Fund & Co., Ltd. 10,000 3,186,255
Takefuji Corp.'D' 24,000 1,262,393
-----------
8,207,446
-----------
Food, Beverages & Tobacco (1.2%)
Pokka Corp. 100,000 443,503
-----------
Healthcare (2.3%)
Kawasumi Laboratories 56,000 875,199
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Industrial Mfg. & Processing (16.0%)
Arisawa Manufacturing Co., Ltd. 65,000 $ 718,232
Hoya Corp. 18,000 596,685
Nissei ASB Machine Co. 80,000 666,011
Nitta Industrial Corp. 50,000 412,473
Shinkawa, Ltd. 63,700 1,108,832
THK Co., Ltd. 120,000 1,153,409
Union Tool 39,300 1,487,171
-----------
6,142,813
-----------
Telecommunications & Equipment (1.2%)
Hikari Tsushin, Inc. 16,050 450,658
-----------
TOTAL COMMON STOCKS (Cost $42,528,736) 37,726,025
-----------
<CAPTION>
PAR
---------
<S> <C> <C>
REPURCHASE AGREEMENTS (1.4%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $551,084 on
05/01/98. (Collateralized by pro rata amount of
U.S. Treasury Notes ranging in par values from
$39,650,000 to $50,000,000, 5.75%-7.25%,
09/30/01-05/15/04. Market value of collateral is
$562,426.) (Cost $551,000) $551,000 551,000
-----------
TOTAL INVESTMENT AT VALUE (100.0%) (Cost $43,079,736*) $38,277,025
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
## Not readily marketable security.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (81.7%)
Argentina (4.7%)
Banco de Galicia y Buenos Aires SA de CV ADR 71,177 $ 1,743,836
Telefonica de Argentina SA ADR 21,000 809,812
YPF SA ADR 76,200 2,657,475
------------
5,211,123
------------
Australia (0.4%)
Novus Petroleum, Ltd. 221,223 460,103
------------
Brazil (9.2%)
Companhia de Eletricidade do Estado da Bahia 32,897,000 1,854,737
Companhia de Saneamento Basico do Estado de Sao Paulo 14,748,500 3,351,873
Telecomunicacoes Brasileiras SA 13,349,400 1,324,415
Telecomunicacoes Brasileiras SA ADR 13,960 1,700,502
Unico de Bancos Brasileiros SA GDR 49,000 1,947,750
------------
10,179,277
------------
Chile (5.0%)
Banco Santander Chile ADR 192,900 2,700,600
Supermercados Unimarc SA ADR 258,566 2,795,745
------------
5,496,345
------------
China (3.8%)
Cosco Pacific, Ltd. 4,482,000 3,037,742
Guangshen Railway Co., Ltd. 1,282,000 239,980
Guangshen Railway Co., Ltd. ADR 82,168 806,274
Tingyi Holding Corp.'D' 1,412,000 138,538
------------
4,222,534
------------
Egypt (0.1%)
Commercial International Bank, Ltd. 2,280 39,221
Mibbank International 4,608 118,550
------------
157,771
------------
Hong Kong (4.0%)
First Pacific Co., Ltd. 1,901,275 914,305
HSBC Holdings PLC 58,000 1,654,779
Jardine Matheson Holdings, Ltd. 43,617 184,064
Wing Hang Bank, Ltd. 617,600 1,738,135
------------
4,491,283
------------
</TABLE>
See Accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
India (5.5%)
Aptech, Ltd. 80,600 $ 1,652,995
Bombay Suburban Electric Supply Co., Ltd. 3,450 15,906
Grasim Industries, Ltd. 506 4,322
Hindalco Industries, Ltd. 55,075 1,047,000
Hindalco Industries, Ltd. GDR 33,000 643,500
Reliance Industries, Ltd. 39,309 189,344
Reliance Industries, Ltd. GDS 55,300 504,613
State Bank of India, Ltd. 119,900 886,864
State Bank of India, Ltd. GDR 63,000 1,200,150
Tata Engineering & Locomotive Co., Ltd. 70 490
------------
6,145,184
------------
Indonesia (1.7%)
P.T. Semen Gresik 762,100 509,638
P.T. Telekomunikasi Indonesia ADR 164,935 1,319,480
------------
1,829,118
------------
Israel (10.6%)
Blue Square Israel Co., Ltd. ADR 218,000 3,488,000
ECI Telecommunications, Ltd. 90,000 2,745,000
Formula Systems, Ltd.'D' 17,400 671,310
Formula Systems, Ltd. ADR'D' 2,300 93,725
Orbotech, Ltd.'D' 82,321 2,973,846
Teva Pharmaceutical Industries, Ltd. ADR 41,050 1,754,888
------------
11,726,769
------------
Kazakhstan (3.1%)
Hurricane Hydrocarbons, Ltd.'D' (CAN) 494,000 3,021,924
Hurricane Hydrocarbons, Ltd.'D' (US) 74,000 453,250
------------
3,475,174
------------
Luxembourg (1.4%)
Millicom International Cellular SA ADR'D' 38,800 1,518,050
------------
Malaysia (0.2%)
Technology Resources Industries BHD 216,000 221,775
------------
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Mexico (9.7%)
Cintra SA'D' 2,963,600 $ 2,862,528
Consorcio Hogar SA de CV Series B'D' 1,691,000 2,438,043
Fomento Economico Mexicano SA de CV 109,000 817,866
Grupo Industrial Durango SA ADR 149,100 2,143,313
Grupo Industrial Saltillo SA de CV 580,000 2,473,164
------------
10,734,914
------------
Philippines (0.6%)
C & P Homes, Inc. 6,819,000 577,449
Filinvest Land, Inc. 814,900 56,830
------------
634,279
------------
Poland (2.7%)
Bank Slaski SA 35,431 3,035,575
------------
Portugal (2.5%)
Banco Mello SA 71,800 1,069,096
Mota e Companhia SA 101,600 1,670,780
------------
2,739,876
------------
Russia (1.9%)
Russian Prosperity Fund A 105,278 2,158,199
------------
Singapore (6.4%)
DBS Land, Ltd. 694,000 1,047,471
Development Bank of Singapore, Ltd. 404,000 2,678,893
Development Bank of Singapore, Ltd. Class A 121,200 788,360
Keppel Bank 1,227,000 1,596,234
Keppel Land, Ltd. 875,000 1,038,845
------------
7,149,803
------------
South Korea (4.0%)
L.G. Electronics 37,110 441,488
Samsung Display Devices Co. 33,587 1,671,182
Samsung Heavy Industries Co., Ltd. 335,220 2,367,733
Ssangyong Oil Refining Co., Ltd.'D' 500 3,615
------------
4,484,018
------------
Thailand (1.6%)
Hana Microelectronics Public Co., Ltd. 216,200 944,738
Siam Cement Co., Ltd. 59,300 837,175
------------
1,781,913
------------
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Turkey (0.9%)
Yapi ve Kredi Bankasi AS 21,003,000 $ 1,029,044
------------
United Kingdom (1.7%)
Standard Chartered PLC 122,100 1,870,014
------------
TOTAL COMMON STOCKS (Cost $93,827,952) 90,752,141
------------
PREFERRED STOCK (11.6%)
Brazil (9.2%)
Companhia Vale do Rio Doce 55,600 1,312,215
Petroleo Brasileiro SA 14,186,100 3,596,064
Telecomunicacoes de Sao Paulo SA 6,977,000 2,372,382
Telecomunicacoes do Rio de Janeiro SA 18,373,000 2,890,806
------------
10,171,467
------------
Russia (0.2%)
LUKoil Holding 34,600 299,290
------------
South Korea (2.2%)
L.G. Electronics 262,500 950,617
Samsung Display Devices Co. 81,000 1,459,848
------------
2,410,465
------------
TOTAL PREFERRED STOCK (Cost $11,403,294) 12,881,222
------------
CORPORATE BONDS (2.5%) PAR
Malaysia (0.1%)
Technology Resources Industries BHD, 2.750%, 11/28/04 $ 135,000 144,531
------------
Philippines (1.4%)
Metro Pacific Capital, 2.500%, 04/11/03 1,720,000 1,525,296
------------
South Korea (1.0%)
Ssangyong Oil Refining Co., Ltd. (Convertible), 3.750%,
12/31/08 $ 1,280,000 1,070,080
------------
TOTAL CORPORATE BONDS (Cost $2,227,107) 2,739,907
------------
REPURCHASE AGREEMENTS (2.9%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $3,242,493 on
05/01/98. (Collateralized by pro rata amount of
U.S. Treasury Notes ranging in par values from $39,650,000
to $50,000,000, 5.75%-7.25%, 09/30/01-05/15/04. Market
value of collateral is $3,309,232.) (Cost $3,242,000) 3,242,000 3,242,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS AT VALUE (98.7%) (Cost $110,700,353*) $109,615,270
OTHER ASSETS IN EXCESS OF LIABILITIES (1.3%) 1,400,397
------------
NET ASSETS (100.0%) (applicable to 10,832,524 Common Shares
and 16,413 Advisor Shares $111,015,667
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($110,847,094[div]10,832,524) $10.23
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($168,573[div]16,413) $10.27
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C> <C>
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
26
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN GROWTH FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (95.1%)
Banks & Savings & Loans (7.0%)
Fuji Bank, Ltd. 150,000 $ 845,758
Sakura Bank, Ltd. 260,000 895,330
Toyo Trust & Banking 120,000 698,403
-----------
2,439,491
-----------
Computers (4.0%)
Net One System Co., Ltd. 30,000 106,259
Nidec Corp. 23,900 1,284,265
-----------
1,390,524
-----------
Electronics (53.2%)
Advantest Corp. 19,470 1,311,458
Aiwa Co., Ltd. 35,000 1,046,318
Brother Industries Ltd. 400,000 1,492,469
Fanuc, Ltd. 33,000 1,218,799
Fujitsu, Ltd. 100,000 1,169,303
Furukawa Electric Co., Ltd. 250,000 908,196
Mabuchi Motor Co. , Ltd. 20,000 1,159,464
Minebea Co., Ltd. 103,000 1,153,712
Nippon Electric Corp. 95,000 1,071,293
Rohm Co., Ltd. 13,000 1,469,916
Sony Corp. 14,800 1,233,240
TDK Corp. 18,000 1,424,960
Tokyo Electron, Ltd. 35,000 1,377,431
Tokyo Seimitsu Co., Ltd. 54,000 1,589,798
Toshiba Corp. 220,000 1,022,326
-----------
18,648,683
-----------
Energy (0.7%)
Shinmei Electric Co.## 18,000 253,387
-----------
Financial Services (15.9%)
Credit Saison Co., Ltd. 44,000 955,725
Japan Asia Investment Co., Ltd. 50,000 91,955
Nomura Securities Co., Ltd. 85,000 1,038,939
Orix Corp. 17,000 1,177,249
Shohkoh Fund & Co., Ltd. 4,000 1,274,502
Takefuji Corp. 20,000 1,051,994
-----------
5,590,364
-----------
Food, Beverages & Tobacco (1.3%)
Pokka Corp. 100,000 443,503
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Healthcare (2.2%)
Kawasumi Laboratories 49,000 $ 765,799
-----------
Industrial Mfg. & Processing (2.4%)
Hoya Corp. 16,000 530,387
Union Tool 8,500 321,653
-----------
852,040
-----------
Pharmaceuticals (2.4%)
Yamanouchi Pharmaceutical Co., Ltd. 35,000 829,108
-----------
Real Estate (3.0%)
Hankyu Realty Co., Ltd. 62,000 293,741
Meiwa Estate Co., Ltd. 23,400 210,747
Mitsui Fudosan Co., Ltd. 60,000 548,551
-----------
1,053,039
-----------
Telecommunications & Equipment (3.0%)
Nippon Television Network Corp. 3,600 1,065,314
-----------
TOTAL COMMON STOCKS (Cost $33,700,058) 33,331,252
-----------
<CAPTION>
PAR
---------
<S> <C> <C>
REPURCHASE AGREEMENTS (1.5%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $534,081 on
05/01/98. (Collateralized by pro rata amount of
U.S. Treasury Notes ranging in par values from
$39,650,000 to $50,000,000, 5.75%-7.25%,
09/30/01-05/15/04. Market value of collateral is
$545,074.) (Cost $534,000) $534,000 534,000
-----------
TOTAL INVESTMENTS AT VALUE (96.6%) (Cost $34,234,058*) 33,865,252
OTHER ASSETS IN EXCESS OF LIABILITIES (3.4%) 1,203,408
-----------
NET ASSETS (100.0%) (applicable to 3,447,168 Common Shares
and 3,292 Advisor Shares) $35,068,660
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($35,034,705[div]3,447,168) $10.16
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($33,955[div]3,292) $10.31
------
------
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
## Not readily marketable security.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
28
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCK (65.6%)
Business Services (3.7%)
CSG Systems International, Inc.'D' 600 $ 27,300
Protection One, Inc.'D' 3,500 42,766
QuickResponse Services, Inc.'D' 800 37,600
Wilmar Industries, Inc.'D' 1,300 31,037
----------
138,703
----------
Communications & Media (3.2%)
Central European Media Enterprises, Ltd. Class A'D' 2,000 55,875
Outdoor Systems, Inc.'D' 2,075 65,881
----------
121,756
----------
Computers (15.7%)
BMC Software, Inc.'D' 900 84,206
Brio Technology, Inc.'D' 300 3,300
Citrix Systems, Inc.'D' 900 55,912
Hyperion Software Corp.'D' 800 34,700
JDA Software Group, Inc.'D' 1,000 50,562
Parametric Technology Corp.'D' 1,200 38,362
PeopleSoft , Inc.'D' 2,200 102,300
PLATINUM Technology, Inc.'D' 1,500 38,250
QuadraMed Corp.'D' 1,300 37,050
Radiant Systems, Inc.'D' 1,500 33,750
Tecnomatix Technologies, Ltd.'D' 3,000 76,125
Transaction Systems Architects, Inc. Class A'D' 1,000 42,000
----------
596,517
----------
Consumer Non-Durables (2.3%)
Central Garden & Pet Co.'D' 1,200 41,100
dELiA*s, Inc.'D' 1,800 45,450
----------
86,550
----------
Electronics (10.9%)
ASM Lithography Holding NV'D' 300 27,488
Cable Design Technologies, Inc.'D' 1,300 34,613
Etec Systems, Inc.'D' 600 34,050
Linear Technology Corp. 600 48,300
Maxim Integrated Products, Inc.'D' 2,000 80,750
Uniphase Corp.'D' 2,700 146,475
Vitesse Semiconductor Corp.'D' 700 40,381
----------
412,057
----------
Energy (0.9%)
Stone Energy Corp.'D' 900 34,481
----------
</TABLE>
See Accompanying Notes to Financial Statements.
29
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Environmental Services (2.2%)
American Disposal Services, Inc.'D' 900 $ 36,084
USA Waste Services, Inc.'D' 1,000 49,063
----------
85,147
----------
Financial Services (2.9%)
Franklin Resources, Inc. 600 32,100
Price (T. Rowe) Associates, Inc. 600 45,300
Sirrom Capital Corp. 1,100 32,863
----------
110,263
----------
Food, Beverages & Tobacco (0.6%)
Starbucks Corp.'D' 500 24,063
----------
Industrial Mfg. & Processing (0.8%)
Mettler-Toledo International, Inc.'D' 1,600 32,200
----------
Leisure & Entertainment (3.5%)
Coach USA, Inc.'D' 1,500 71,156
Premier Parks, Inc.'D' 1,100 61,188
----------
132,344
----------
Metals & Mining (1.2%)
Metals USA, Inc.'D' 2,300 44,850
----------
Oil Services (1.1%)
Pride International, Inc.'D' 1,700 41,331
----------
Pharmaceuticals (2.8%)
Alkermes, Inc.'D' 1,200 28,650
SangStat Medical Corp.'D' 1,000 33,813
Watson Pharmaceuticals, Inc.'D' 1,000 43,000
----------
105,463
----------
Publishing (1.4%)
Petersen Companies, Inc. Class A'D' 2,000 52,000
----------
Retail (2.8%)
Rite Aid Corp. 1,540 49,473
Staples, Inc.'D' 2,300 56,781
----------
106,254
----------
</TABLE>
See Accompanying Notes to Financial Statements.
30
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Telecommunications & Equipment (9.6%)
Cisco Systems, Inc.'D' 850 $ 62,263
Gilat Communications, Ltd.'D' 2,600 25,025
Intermedia Communications, Inc.'D' 700 51,089
McLeodUSA, Inc. Class A'D' 1,600 73,600
Paging Network, Inc.'D' 3,700 52,031
TTI Team Telecom International, Ltd.'D' 6,900 55,200
WorldCom, Inc.'D' 1,080 46,204
----------
365,412
----------
TOTAL COMMON STOCK (Cost $1,779,522) 2,489,391
----------
FOREIGN COMMON STOCKS (20.0%)
Canada (1.4%)
Certicom Corp. 'D' 2,300 54,671
----------
France (2.3%)
Business Objects SA ADR'D' 2,000 37,750
Transgene SA ADR'D' 2,800 50,400
----------
88,150
----------
Italy (3.0%)
Seat SpA'D' 150,000 112,926
----------
Norway (1.4%)
Petroleum Geo Services ADR'D' 800 52,600
----------
Netherlands (0.9%)
Security Capital U.S. Realty Class A REIT'D' 2,500 32,750
----------
United Kingdom (11.0%)
3i Group PLC 5,583 55,028
AMVESCAP PLC ADR 940 53,110
Cookson Group PLC 8,970 40,269
EMAP PLC 3,100 63,183
Expro International Group PLC 4,700 39,567
Hays PLC 5,836 98,992
Sema Group PLC 1,900 68,714
----------
418,863
----------
TOTAL FOREIGN COMMON STOCKS (Cost $574,178) 759,960
----------
</TABLE>
See Accompanying Notes to Financial Statements.
31
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
---------- ----------
<S> <C> <C>
REPURCHASE AGREEMENTS (14.4%)
Repurchase agreement with Goldman, Sachs & Co. dated 04/30/98
at 5.47% to be repurchased at $545,083 on 05/01/98.
(Collateralized by a pro rata amount of U.S. Treasury Notes
ranging in par values from $39,650,000 to $50,000,000,
5.75%-7.25%, 09/30/01-05/15/04. Market value of collateral
is $556,302.) (Cost $545,000) $545,000 $ 545,000
----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $2,898,700*) $3,794,351
----------
----------
</TABLE>
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
REIT = Real Estate Investment Trust
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $2,903,645.
See Accompanying Notes to Financial Statements.
32
<PAGE>
<PAGE>
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (86.2%)
Australia (0.1%)
Burns, Philp & Co., Ltd. 274,198 $ 35,754
------------
Austria (5.4%)
Bank Austria AG 5,800 448,272
OMV AG 2,463 365,509
Radex-Heraklith Industriebeteiligungs AG 4,200 212,194
VA Technologie AG 1,651 237,294
------------
1,263,269
------------
Belgium (1.9%)
Bekaert NV 537 395,141
Dexia Belgium 380 52,024
------------
447,165
------------
China (0.7%)
Cosco Pacific, Ltd. 225,000 152,497
------------
Denmark (2.1%)
SAS Danmark AS 2,855 50,899
Tele Danmark AS Class B 1,500 126,038
Unidanmark AS Class A 3,650 306,692
------------
483,629
------------
Finland (2.2%)
Huhtamaki OY Class I 5,500 318,001
Rauma OY 10,085 188,813
------------
506,814
------------
France (12.7%)
Axa-UAP SA 1,500 175,979
Banque Nationale de Paris 5,240 441,473
Compagnie de Saint Gobain 2,010 334,679
Elf Aquitaine SA 2,230 292,380
Etablissements Economiques du Casino Guichard-Perrachon SA 4,100 274,571
Rhone-Poulenc SA Class A 6,620 323,533
Scor SA 5,600 345,059
Societe Generale d'Entreprises SA 5,400 210,427
Total SA Class B 1,800 213,867
Vallourec SA 4,400 371,434
------------
2,983,402
------------
</TABLE>
See Accompanying Notes to Financial Statements.
33
<PAGE>
<PAGE>
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Germany (9.1%)
Degussa AG 5,600 $ 307,696
Fresenius Medical Care AG 3,070 210,255
Hannover Rueckversicherungs AG 2,400 304,664
Hoechst AG 6,066 244,398
Mannesmann AG 250 196,991
Muenchener Rueckversicherungs-Gesellschaft AG 700 322,987
Preussag AG 700 241,850
Schmalbach Lubeca AG 1,200 296,105
------------
2,124,946
------------
Hong Kong (1.9%)
First Pacific Co., Ltd. 305,391 146,860
HSBC Holdings PLC 10,800 308,131
------------
454,991
------------
Ireland (0.7%)
Kerry Group PLC Class A 10,400 164,321
------------
Italy (4.9%)
Ente Nazionale Idrocarburi SpA 32,449 217,828
Parmalat Finanziaria SpA 117,400 264,687
Seat SpA 'D' 438,000 217,523
Telecom Italia SpA 61,500 459,875
------------
1,159,913
------------
Japan (8.6%)
Advantest Corp. 4,310 290,313
Fujikura, Ltd. 10,000 51,616
Fujitsu, Ltd. 6,000 70,158
Minebea Co., Ltd. 30,000 336,033
NEC Corp. 10,000 112,768
Nichiei Co., Ltd. 560 43,654
Orix Corp. 1,700 117,725
Rohm Co., Ltd. 2,000 226,141
Sony Corp. 1,000 83,327
Sumitomo Bank, Ltd. 500 4,730
Takefuji Corp. 3,300 173,579
TDK Corp. 3,000 237,493
Tokyo Electron, Ltd. 7,000 275,486
------------
2,023,023
------------
</TABLE>
See Accompanying Notes to Financial Statements.
34
<PAGE>
<PAGE>
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Netherlands (6.4%)
CSM NV 2,700 $ 146,057
Hagemeyer NV 5,500 262,681
ING Groep NV 6,700 435,390
Koninklijke Pakhoed NV 5,700 208,759
Philips Electronics NV 5,100 449,292
------------
1,502,179
------------
New Zealand (0.6%)
Brierley Investments, Ltd. 259,200 149,785
------------
Norway (2.3%)
Smedvig ASA ADR Class B 6,150 123,000
Sparebanken NOR 1,500 51,890
Transocean Offshore, Inc. 6,500 363,187
------------
538,077
------------
Portugal (0.1%)
Banco Mello SA 1,900 28,291
------------
Singapore (0.8%)
Development Bank of Singapore, Ltd. 21,400 141,902
Development Bank of Singapore, Ltd. Class A 6,420 41,760
------------
183,662
------------
Spain (2.0%)
Argentaria SA 3,400 283,305
Catalana Occidente SA'D' 300 20,608
Iberdrola SA 9,700 155,923
------------
459,836
------------
Sweden (6.7%)
ABB AB Series B 16,400 254,302
Biora AB ADR 'D' 4,800 150,600
Electrolux AB Series B 3,930 365,637
Nordbanken Holding AB 57,200 421,305
SKF AB Series B 18,400 370,909
------------
1,562,753
------------
Switzerland (3.8%)
Julius Baer Holding AG 65 179,407
Oerlikon-Buehrle Holding AG 'D' 383 65,368
Schweizerische Rueckversicherungs-Gesellschaft 170 375,148
Sulzer AG 309 221,459
TAG Heuer International SA ADR'D' 5,600 60,900
------------
902,282
------------
</TABLE>
See Accompanying Notes to Financial Statements.
35
<PAGE>
<PAGE>
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (CONT'D)
United Kingdom (13.2%)
Arcadia Group PLC 34,800 $ 273,180
Cookson Group PLC 94,300 423,340
Dixons Group PLC 34,100 326,268
Glaxo Wellcome PLC 1,300 36,734
Guardian Royal Exchange PLC 24,600 165,655
Imperial Chemical Industries PLC 5,300 96,236
Medeva PLC 16,050 47,633
Orange PLC 25,000 179,425
Pilkington PLC 103,100 216,340
Rolls-Royce PLC 44,100 205,720
Royal & Sun Alliance Insurance Group PLC 9,900 110,572
Safeway PLC 31,700 188,952
Seibe PLC 6,000 134,027
Standard Chartered PLC 23,100 353,786
Williams Holdings PLC 43,667 335,120
------------
3,092,988
------------
TOTAL COMMON STOCKS (Cost $18,275,469) 20,219,577
------------
PREFERRED STOCK (2.9%)
Germany (2.9%)
GEA AG 900 363,611
KSB AG 430 142,814
Moebel Walther AG 4,200 177,877
------------
TOTAL PREFERRED STOCK (Cost $616,867) 684,302
------------
PAR
-----------
REPURCHASE AGREEMENTS (16.6%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $3,885,590 on
05/01/98. (Collateralized by pro rata amount of
U.S. Treasury Notes ranging in par values from $39,650,000
to $50,000,000, 5.75%-7.25%, 09/30/01-05/15/04. Market
value of collateral is $3,965,566.) (Cost $3,885,000) $3,885,000 3,885,000
------------
TOTAL INVESTMENTS AT VALUE (105.7%) (Cost $22,777,336*) 24,788,879
LIABILITIES IN EXCESS OF OTHER ASSETS (5.7%) (1,336,144)
------------
NET ASSETS (100.0%) (applicable to 1,934,005 Common Shares
outstanding) $ 23,452,735
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($23,452,735[div]1,934,005) $12.13
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $22,778,313.
See Accompanying Notes to Financial Statements.
36
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN OTC FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $43,079,736) $38,277,025
Receivable for unrealized gains on forward contracts 1,183,088
Other assets 409,638
Receivable for investments sold (Cost $320,726) 321,005
Receivable for realized gains on forward contracts 258,118
Dividends, interest, and reclaims receivable (Cost $116,489) 113,500
Deferred offering costs/organizational 60,952
Receivable for fund shares sold 35,269
Foreign currency (Cost $19,303) 19,303
-----------
TOTAL ASSETS 40,677,898
-----------
LIABILITIES
Payable for investments purchased (Cost $711,957) 712,592
Other liabilities 130,386
-----------
TOTAL LIABILITIES 842,978
-----------
NET ASSETS, applicable to 6,456,054 Common Shares outstanding and
122 Advisor Shares $39,834,920
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($39,834,166[div]6,456,054) $6.17
-----
-----
NET ASSET VALUE, offering and redemption price per Advisor Share
($754[div]122) $6.18
-----
-----
</TABLE>
See Accompanying Notes to Financial Statements.
37
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $2,898,700) $3,794,351
Receivable for investments sold (Cost $336,855) 336,923
Deferred offering costs/organizational 3,328
Dividends, interest, and reclaims receivable (Cost $2,374) 2,370
Other assets 147
Foreign currency (Cost $30) 31
----------
TOTAL ASSETS 4,137,150
----------
LIABILITIES
Payable for investments purchased (Cost $254,271) 254,271
Other liabilities 49,942
----------
TOTAL LIABILITIES 304,213
----------
NET ASSETS, applicable to 296,072 Common Shares outstanding and
112 Advisor Shares $3,832,937
----------
----------
NET ASSET VALUE, offering and redemption price per Common Share
($3,831,495[div]296,072) $12.94
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($1,442[div]112) $12.88
------
------
</TABLE>
See Accompanying Notes to Financial Statements.
38
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
39
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY JAPAN OTC
FUND FUND
-------------------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 23,011,857 $ 161,608
Interest 2,448,419 93,742
Foreign taxes withheld (2,936,688) (24,241)
----------- -----------
Total investment income 22,523,588 231,109
----------- -----------
EXPENSES:
Investment advisory 11,909,917 262,977
Administrative services 1,980,125 46,284
Audit 40,906 7,468
Custodian/Sub-Custodian 714,119 12,638
Directors 5,102 3,720
Insurance 22,042 1,148
Interest 48,408 1,323
Legal 123,869 9,987
Offering/Organizational costs 0 21,050
Printing 109,306 5,500
Registration 66,320 32,678
Shareholder servicing/distribution 1,082,071 52,598
Transfer Agent 862,279 72,067
Miscellaneous 108,726 8,863
----------- -----------
17,073,190 538,301
Less: fees waived, expenses reimbursed and transfer agent
offsets (61,866) (170,131)
----------- -----------
Total expenses 17,011,324 368,170
----------- -----------
Net investment income (loss) 5,512,264 (137,061)
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from security and other related
transactions (111,319,778) (9,008,971)
Net realized gain (loss) from foreign currency related items 44,725,487 3,585,692
Net change in unrealized appreciation (depreciation) from
investments and foreign currency related items 308,429,201 5,122,793
----------- -----------
Net realized and unrealized gain (loss) from investments and
foreign currency related items 241,834,910 (300,486)
----------- -----------
Net increase (decrease) in net assets resulting from
operations $247,347,174 $ (437,547)
----------- -----------
----------- -----------
</TABLE>
See Accompanying Notes to Financial Statements.
40
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING MARKETS JAPAN GROWTH GLOBAL POST-VENTURE MAJOR FOREIGN
FUND FUND CAPITAL FUND MARKETS FUND
---------------- ------------ ------------------- -------------
<S> <C> <C> <C> <C>
$ 1,147,957 $ 141,440 $ 5,197 $ 123,154
349,581 121,278 4,134 64,421
(207,741) (21,216 ) (890) (17,152)
---------------- ------------ ------- -------------
1,289,797 241,502 8,441 170,423
---------------- ------------ ------- -------------
739,901 197,306 19,663 56,594
130,222 34,725 4,895 16,067
6,589 5,966 6,123 7,254
127,695 9,172 18,994 5,213
4,225 3,720 3,768 3,836
1,410 437 166 168
235 2,054 14 5
9,184 8,778 20,021 182
19,549 2,129 588 26,031
9,660 5,327 4,545 147
38,492 29,656 19,915 7,144
148,222 39,487 3,934 2,142
127,921 14,465 3,780 447
56,518 6,446 5,402 1,714
---------------- ------------ ------- -------------
1,419,823 359,668 111,808 126,944
(442,848) (83,413 ) (85,852) (71,922)
---------------- ------------ ------- -------------
976,975 276,255 25,956 55,022
---------------- ------------ ------- -------------
312,822 (34,753 ) (17,515) 115,401
---------------- ------------ ------- -------------
(32,960,350) (2,619,254 ) 208,884 293,229
(251,655) 3,240,559 2,182 112,201
29,426,389 1,190,806 416,470 2,189,619
---------------- ------------ ------- -------------
(3,785,616) 1,812,111 627,536 2,595,049
---------------- ------------ ------- -------------
$ (3,472,794) $ 1,777,358 $ 610,021 $ 2,710,450
---------------- ------------ ------- -------------
---------------- ------------ ------- -------------
</TABLE>
41
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JAPAN OTC FUND EMERGING MARKETS FUND
INTERNATIONAL EQUITY FUND ----------------------------- -----------------------------
------------------------------- FOR THE FOR THE
FOR THE SIX MONTHS SIX MONTHS
SIX MONTHS FOR THE ENDED FOR THE ENDED FOR THE
ENDED YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
-------------- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income
(loss) $ 5,512,264 $ 16,595,226 $ (137,061) $ (816,043) $ 312,822 $ 590,856
Net realized gain
(loss) from security
and other related
transactions (111,319,778) 242,233,285 (9,008,971) (29,824,743) (32,960,350) 3,573,949
Net realized gain
(loss) from foreign
currency related
items 44,725,487 81,782,235 3,585,692 6,929,625 (251,655) (692,650)
Net change in
unrealized
appreciation
(depreciation) from
investments and
foreign currency
related items 308,429,201 (164,531,003) 5,122,793 4,776,152 29,426,389 (19,880,535)
-------------- -------------- ------------- ------------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations 247,347,174 176,079,743 (437,547) (18,935,009) (3,472,794) (16,408,380)
-------------- -------------- ------------- ------------- ------------- -------------
FROM DISTRIBUTIONS:
Dividends from net
investment income
Common Shares 0 (15,677,127) 0 0 (746,649) (559,579)
Advisor Shares 0 (959,277) 0 0 (1,539) 0
Distributions in
excess of net
investment income
Common Shares 0 0 0 0 0 0
Advisor Shares 0 0 0 0 0 0
Distributions from
realized gains
Common Shares (290,210,429) (101,110,864) (826,659) (1,134,461) (4,907,505) (717,029)
Advisor Shares (62,627,172) (17,984,137) (62) 0 (10,109) (55)
Distributions in
excess of realized
gains
Common Shares 0 0 0 0 0 0
Advisor Shares 0 0 0 0 0 0
-------------- -------------- ------------- ------------- ------------- -------------
Net decrease in net
assets from
distributions (352,837,601) (135,731,405) (826,721) (1,134,461) (5,665,802) (1,276,663)
-------------- -------------- ------------- ------------- ------------- -------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares 444,135,243 910,099,943 43,859,799 83,695,394 73,362,677 209,438,660
Reinvested dividends 335,103,771 122,187,954 764,550 1,057,739 5,384,035 1,143,771
Net asset value of
shares redeemed (1,175,469,039) (1,646,039,200) (45,155,801) (177,514,277) (114,664,827) (255,395,357)
-------------- -------------- ------------- ------------- ------------- -------------
Net increase in net
assets from
capital share
transactions (396,230,025) (613,751,303) (531,452) (92,761,144) (35,918,115) (44,812,926)
-------------- -------------- ------------- ------------- ------------- -------------
Net increase in net
assets (501,720,452) (573,402,965) (1,795,720) (112,830,614) (45,056,711) (62,497,969)
NET ASSETS:
Beginning of period 2,812,515,228 3,385,918,193 41,630,640 154,461,254 156,072,378 218,570,347
-------------- -------------- ------------- ------------- ------------- -------------
End of period $2,310,794,776 $2,812,515,228 $ 39,834,920 $ 41,630,640 $ 111,015,667 $ 156,072,378
-------------- -------------- ------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- ------------- -------------
Undistributed net
investment income $ 0 $ 31,630,382 $ 0 $ 510,516 $ 0 $ (2,119,820)
-------------- -------------- ------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- ------------- -------------
</TABLE>
42
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JAPAN GROWTH FUND
---------------------------- GLOBAL POST-VENTURE CAPITAL FUND MAJOR FOREIGN MARKETS FUND
FOR THE ------------------------------------ --------------------------------------
SIX MONTHS FOR THE FOR THE FOR THE PERIOD
ENDED FOR THE SIX MONTHS FOR THE SIX MONTHS MARCH 31, 1997
APRIL 30, YEAR ENDED ENDED YEAR ENDED ENDED (COMMENCEMENT OF
1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OPERATIONS) THROUGH
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) OCTOBER 31, 1997
------------- ------------ -------------- ------------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
$ (34,753) $ (214,098) $ (17,515) $ (37,882) $ 115,401 $ 18,658
(2,619,254) (3,584,648) 208,884 40,384 293,229 91,300
3,240,559 2,225,388 2,182 736 112,201 (1,829)
1,190,806 643,764 416,470 514,579 2,189,619 (144,276)
------------- ------------ -------------- ---------- -------------- ----------
1,777,358 (929,594) 610,021 517,817 2,710,450 (36,147)
------------- ------------ -------------- ---------- -------------- ----------
0 0 (79,726) 0 (104,761) 0
0 0 (30) 0 0 0
0 (394,010) 0 0 0 0
0 0 0 0 0 0
0 0 (30,652) 0 (106,759) 0
0 0 (12) 0 0 0
0 (91,320) 0 0 0 0
0 0 0 0 0 0
------------- ------------ -------------- ---------- -------------- ----------
0 (485,330) (110,420) 0 (211,520) 0
------------- ------------ -------------- ---------- -------------- ----------
49,145,365 43,567,995 397,898 2,110,772 16,743,627 4,832,000
0 436,422 108,141 0 211,520 0
(40,825,706) (37,776,299) (371,220) (2,443,987) (797,195) 0
------------- ------------ -------------- ---------- -------------- ----------
8,319,659 6,228,118 134,819 (333,215) 16,157,952 4,832,000
------------- ------------ -------------- ---------- -------------- ----------
10,097,017 4,813,194 634,420 184,602 18,656,882 4,795,853
24,971,643 20,158,449 3,198,517 3,013,915 4,795,853 0
------------- ------------ -------------- ---------- -------------- ----------
$ 35,068,660 $ 24,971,643 $ 3,832,937 $ 3,198,517 $ 23,452,735 $ 4,795,853
------------- ------------ -------------- ---------- -------------- ----------
------------- ------------ -------------- ---------- -------------- ----------
$ 0 $ 0 $ 0 $ 0 $ 102,443 $ 62,604
------------- ------------ -------------- ---------- -------------- ----------
------------- ------------ -------------- ---------- -------------- ----------
</TABLE>
43
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 --------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $20.76 $20.69 $19.30 $20.51 $17.00 $12.22
-------------- ---------- ---------- ---------- ---------- --------
Income from Investment
Operations:
Net Investment Income
(Loss) (0.17) 0.04 0.22 0.12 0.09 0.09
Net Gain (Loss) from
Securities and
Foreign Currency
Related Items (both
realized and
unrealized) 2.17 0.88 1.73 (0.67) 3.51 4.84
-------------- ---------- ---------- ---------- ---------- --------
Total from
Investment
Operations 2.00 0.92 1.95 (0.55) 3.60 4.93
-------------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends from Net
Investment Income (0.00) (0.11) (0.56) (0.13) (0.04) (0.02)
Distributions in Excess
of Net Investment
Income 0.00 0.00 0.00 0.00 (0.01) 0.00
Distributions from
Realized Gains (2.86) (0.74) 0.00 (0.53) (0.04) (0.13)
-------------- ---------- ---------- ---------- ---------- --------
Total Distributions (2.86) (0.85) (0.56) (0.66) (0.09) (0.15)
-------------- ---------- ---------- ---------- ---------- --------
NET ASSET VALUE, END OF
PERIOD $19.90 $20.76 $20.69 $19.30 $20.51 $17.00
-------------- ---------- ---------- ---------- ---------- --------
-------------- ---------- ---------- ---------- ---------- --------
Total Return 12.28%'D' 4.54% 10.35% (2.55%) 21.22% 40.68%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000s) $1,898,192 $2,312,042 $2,885,453 $2,068,207 $1,533,872 $378,661
Ratios to average daily
net assets:
Operating expenses 1.36%*@ 1.33%@ 1.38%@ 1.39% 1.44% 1.48%
Net investment income (.01)%* .56% .62% .69% .19% .38%
Portfolio Turnover Rate 43.82%'D' 61.80% 32.49% 39.24% 17.02% 22.60%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .01%, .01% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Common Shares' operating expense ratio after reflecting
these arrangements were 1.35%, 1.32% and 1.37% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
44
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN OTC FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SEPTEMBER 30, 1994
SIX MONTHS (COMMENCEMENT OF
ENDED FOR THE YEAR ENDED OCTOBER 31, OPERATIONS)
APRIL 30, 1998 ----------------------------------- THROUGH
(UNAUDITED) 1997 1996 1995 OCTOBER 31, 1994
-------------- ------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $6.37 $8.47 $9.09 $9.85 $10.00
------ ------- -------- -------- ------
Income from Investment
Operations:
Net Investment Loss (0.05) (1.22) (0.23) 0.00 0.00
Net Loss from Securities and
Foreign Currency Related
Items (both realized and
unrealized) (0.03) (0.79) (0.01) (0.76) (0.15)
------ ------- -------- -------- ------
Total from Investment
Operations (0.08) (2.01) (0.24) (0.76) (0.15)
------ ------- -------- -------- ------
Less Distributions:
Dividends from Net Investment
Income (0.00) 0.00 (0.38) 0.00 0.00
Distributions from Realized
Gains (0.12) (0.09) 0.00 0.00 0.00
------ ------- -------- -------- ------
Total Distributions (0.12) (0.09) (0.38) 0.00 0.00
------ ------- -------- -------- ------
NET ASSET VALUE, END OF PERIOD $6.17 $6.37 $8.47 $9.09 $ 9.85
------ ------- -------- -------- ------
------ ------- -------- -------- ------
Total Return (.98%)'D' (23.98%) (2.79%) (7.72%) (1.50%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $39,834 $41,627 $154,460 $178,568 $19,878
Ratios to average daily net
assets:
Operating expenses 1.75%*@ 1.76%@ 1.76%@ 1.41% 1.00%*
Net investment income (.65%)* (1.10%) (1.22%) (.15%) .49%*
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements .80%* .51% .29% 1.35% 4.96%*
Portfolio Turnover Rate 16.27%'D' 100.60% 95.23% 82.98% .00%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00%, .01% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Common Shares' operating expense ratio after reflecting
these arrangements were 1.75%, 1.75% and 1.75% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
45
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX MONTHS FOR THE YEAR ENDED DECEMBER 30, 1994
ENDED OCTOBER 31, (COMMENCEMENT OF
APRIL 30, 1998 ------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1997 1996 OCTOBER 31, 1995
-------------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.82 $12.19 $11.28 $10.00
-------------- ---------- ---------- -----
Income from Investment Operations:
Net Investment Income (Loss) (0.08) 0.04 0.07 0.08
Net Gain (Loss) from Securities
and Foreign Currency Related
Items (both realized and
unrealized) (0.04) (1.34) 0.99 1.25
-------------- ---------- ---------- -----
Total from Investment
Operations (0.12) (1.30) 1.06 1.33
-------------- ---------- ---------- -----
Less Distributions:
Dividends from Net Investment
Income (0.06) (0.03) (0.08) (0.05)
Distributions from Realized Gains (0.41) (0.04) (0.07) 0.00
-------------- ---------- ---------- -----
Total Distributions (0.47) (0.07) (0.15) (0.05)
-------------- ---------- ---------- -----
NET ASSET VALUE, END OF PERIOD $10.23 $10.82 $12.19 $11.28
-------------- ---------- ---------- -----
-------------- ---------- ---------- -----
Total Return (.58%)'D' (10.71%) 9.46% 13.33%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $110,847 $155,806 $218,421 $6,780
Ratios to average daily net assets:
Operating expenses 1.66%*@ 1.66%@ 1.62%@ 1.00%*
Net investment income (.91%)* .24% .31% 1.25%*
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .74%* .46% .77% 11.08%*
Portfolio Turnover Rate 60.99%'D' 92.48% 61.84% 57.76%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .01%, .01% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Common Shares' operating expense ratio after reflecting
these arrangements were 1.65%, 1.65% and 1.61% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
46
<PAGE>
<PAGE>
WARBURG PINCUS JAPAN GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX MONTHS FOR THE DECEMBER 29, 1995
ENDED YEAR ENDED (COMMENCEMENT OF
APRIL 30, 1998 OCTOBER 31, OPERATIONS) THROUGH
(UNAUDITED) 1997 OCTOBER 31, 1996
-------------- ------------ -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.74 $9.85 $10.00
------- ------------ -------
Income from Investment Operations:
Net Investment Loss 0.07 (0.07) (0.06)
Net Gain (Loss) from Securities and Foreign
Currency
Related Items (both realized and
unrealized) 0.35 0.21 (0.09)
------- ------------ -------
Total from Investment Operations 0.42 0.14 (0.15)
------- ------------ -------
Less Distributions:
Dividends from Net Investment Income 0.00 (0.20) 0.00
Dividends from Realized Gains 0.00 (0.05) 0.00
Total Distributions 0.00 (0.25) 0.00
------- ------------ -------
NET ASSET VALUE, END OF PERIOD $10.16 $9.74 $ 9.85
------- ------------ -------
------- ------------ -------
Total Return 4.31%'D' 1.47% (1.50%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $35,035 $24,954 $20,157
Ratios to average daily net assets:
Operating expenses 1.75%*@ 1.75%@ 1.76%*@
Net investment income (.22%)* (1.03%) (1.03%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .52%* .81% 1.79%*
Portfolio Turnover Rate 31.01%'D' 93.84% 51.72%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00%, .00% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Common Shares' operating expense ratio after reflecting
these arrangements were 1.75%, 1.75% and 1.75% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
47
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX MONTHS FOR THE SEPTEMBER 30, 1996
ENDED YEAR ENDING (COMMENCEMENT OF
APRIL 30, 1998 OCTOBER 31 OPERATIONS) THROUGH
(UNAUDITED) 1997 OCTOBER 31, 1996
-------------- ----------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.15 $ 9.86 $10.00
------ ----------- ------
Income from Investment Operations:
Net Investment Loss (0.04) (0.13) 0.00
Net Gain (Loss) from Securities and Foreign
Currency
Related Items (both realized and
unrealized) 2.23 1.42 (0.14)
------ ----------- ------
Total from Investment Operations 2.19 1.29 (0.14)
------ ----------- ------
Less Distributions:
Dividends from Net Investment Income (0.29) 0.00 0.00
Distributions from Realized Gains (0.11) 0.00 0.00
------ ----------- ------
Total Distributions (0.40) 0.00 0.00
------ ----------- ------
NET ASSET VALUE, END OF PERIOD $12.94 $11.15 $ 9.86
------ ----------- ------
------ ----------- ------
Total Return 20.54% 13.08% (1.40%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $3,831 $3,197 $3,007
Ratios to average daily net assets:
Operating expenses 1.65%*@ 1.66%@ 1.65%*@
Net investment income (1.11%)* (.96%) (.20%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 5.43%* 6.48% 21.71%*
Portfolio Turnover Rate 59.11%'D' 207.25% 5.85%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00%, .01% and .00%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Common Shares' operating expense ratio after reflecting
these arrangements were 1.65%, 1.65% and 1.65% for the period ended April 30,
1998, and for the years ended October 31, 1997 and 1996, respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
48
<PAGE>
<PAGE>
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS MARCH 31, 1997
ENDED (COMMENCEMENT OF
APRIL 30, 1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997
-------------- ----------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.06 $10.00
------ ------
Income from Investment Operations:
Net Investment Income 0.19 0.08
Net Gain from Securities and Foreign Currency
Related
Items (both realized and unrealized) 1.36 0.98
------ ------
Total from Investment Operations 1.55 1.06
------ ------
Less Distributions:
Dividends from Net Investment Income (0.24) 0.00
Distributions from Realized Gains (0.24) 0.00
------ ------
Total Distributions (0.48) 0.00
------ ------
NET ASSET VALUE, END OF PERIOD $12.13 $11.06
------ ------
------ ------
Total Return 15.07%'D' 10.60%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $23,453 $4,796
Ratios to average daily net assets:
Operating expenses .95%*@ .95%*@
Net investment income 1.99%* 1.18%*
Decrease reflected in above operating expense ratios
due to waivers/reimbursements 1.24%* 6.69%*
Portfolio Turnover Rate 36.24%'D' 30.29%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expenses. These arrangements had no effect on the Common
Shares' expense ratio.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
49
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus International Equity Funds (the 'Funds') are comprised of
Warburg Pincus International Equity Fund (the 'International Equity Fund'),
Warburg Pincus Global Post-Venture Capital Fund (the 'Global Post-Venture
Capital Fund') and Warburg Pincus Major Foreign Markets Fund ('Major Foreign
Markets Fund') (formerly, the Warburg Pincus Managed EAFE@ Countries Fund) which
are registered under the Investment Company Act of 1940, as amended (the '1940
Act'), as diversified, open-end management investment companies, and Warburg
Pincus Japan OTC Fund (the 'Japan OTC Fund'), Warburg Pincus Emerging Markets
Fund (the 'Emerging Markets Fund') and Warburg Pincus Japan Growth Fund (the
'Japan Growth Fund') which are registered under the 1940 Act as non-diversified,
open-end management investment companies.
Investment objectives for each Fund are as follows: the International Equity
Fund, the Japan OTC Fund and the Major Foreign Markets Fund seek long-term
capital appreciation; the Emerging Markets Fund seeks growth of capital; and the
Japan Growth Fund and the Global Post-Venture Capital Fund seek long-term growth
of capital.
Each Fund (except the Major Foreign Markets Fund) offers two classes of
shares, one class being referred to as Common Shares and one class being
referred to as Advisor Shares. Common and Advisor Shares in each Fund represent
an equal pro rata interest in such Fund, except that they bear different
expenses which reflect the difference in the range of services provided to them.
Common Shares for the Japan OTC Fund, the Emerging Markets Fund, the Japan
Growth Fund, the Global Post-Venture Capital Fund and the Major Foreign Markets
Fund bear expenses paid pursuant to a shareholder servicing and distribution
plan adopted by each Fund at an annual rate not to exceed .25% of the average
daily net asset value of each Fund's outstanding Common Shares. Advisor Shares
for each Fund bear expenses paid pursuant to a distribution plan adopted by each
Fund at an annual rate not to exceed .75% of the average daily net asset value
of each Fund's outstanding Advisor Shares. Advisor Shares are currently bearing
expenses of .50% of average daily net assets. At April 30, 1998, there were no
outstanding Advisor Shares for the Major Foreign Markets Fund.
The net asset value of each Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. Each Fund's investments are
valued at market value, which is generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked price. In the absence of market
quotations, investments are generally valued at fair value as determined by or
under the direction of the Fund's Board. Short-term investments that mature in
60 days or less are valued on the basis of amortized cost, which approximates
market value.
50
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
When a Fund writes or purchases a call or a put option, an amount equal to
the premium received or paid by the Fund is recorded as a liability or asset,
the value of which is marked-to-market daily to reflect the current market value
of the option. When the option expires, the Fund realizes a gain or loss equal
to the amount of the premium received or paid. When the Fund exercises an option
or enters into a closing transaction by purchasing or selling an offsetting
option, it realizes a gain or loss without regard to any unrealized gain or loss
on the underlying security. The potential loss associated with purchasing an
option is limited to the premium paid, and the premium would partially offset
any gains achieved from its use.
The books and records of the Funds are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate
at the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting period and realized gains and losses on
the settlement of foreign currency transactions are reported in the results of
operations for the current period. The Funds do not isolate that portion of
realized gains and losses on investments in equity securities which are due to
changes in the foreign exchange rate from that which are due to changes in
market prices of equity securities. The Funds isolate that portion of realized
gains and losses on investments in debt securities which are due to changes in
the foreign exchange rate from that which are due to changes in market prices of
debt securities.
The Funds may invest in securities of foreign issuers which involve certain
risks in addition to those inherent in domestic investments. Such risks
generally include, among other things, fluctuations in currency exchange rates,
revaluation of currencies, adverse political and economic developments and the
imposition of other laws and restrictions. Securities of foreign issuers are
often subject to less rigorous regulatory practices and requirements than those
applied in the United States and may also be less liquid (and their prices more
volatile) than securities of comparable U.S. companies. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
many respects.
A Funds' investments in securities of issuers located in less developed
countries considered to be 'emerging markets' involve risks in addition to those
generally applicable to foreign securities. Investments in the securities of
issuers located in emerging markets expose the Fund to economic structures that
are generally less diverse and mature than, and to political systems that can be
expected to have less stability than, those of developed countries. The
typically
51
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
small size of the markets for securities of issuers located in emerging markets
may also result in a lack of liquidity and greater price volatility.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Income, expenses (excluding class-specific expenses,
principally distribution, shareholder servicing fees and transfer agent fees)
and realized/unrealized gains/losses are allocated proportionately to each class
of shares based upon the relative net asset value of outstanding shares. The
cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes.
Dividends from net investment income and distributions of net realized
capital gains, if any, are declared and paid annually for all Funds. However, to
the extent that a net realized capital gain can be reduced by a capital loss
carryover, such gain will not be distributed. Income and capital gain
distributions are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles.
No provision is made for federal taxes as it is each Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it from
federal income and excise taxes.
Costs incurred in connection with organization and offering of shares have
been deferred and are being amortized over a period of five years and one year,
respectively, from the date each Fund commenced its operations.
The Funds, together with other funds advised by Warburg Pincus Asset
Management Inc., the Funds' investment adviser ('Warburg') (collectively the
'Warburg Funds'), have established committed and uncommitted lines of credit
facilities with PNC Bank, National Association ('PNC') and an uncommitted line
of credit facility with Deutche Bank, AG ('Deutche Bank') for temporary or
emergency purposes primarily relating to unanticipated fund share redemptions.
Effective December 31, 1997, the terms of the committed line of credit with PNC
was amended. Under the terms of the committed line of credit, the Warburg Funds
with access to the facility pay a comittment fee at a rate of .07% per annum on
the average daily balance of the line of credit, which is undisbursed and
uncanceled during the preceding quarter. In addition, the Warburg Funds will pay
interest on borrowings at the bank's base rate plus .45%. Under the terms of the
Uncommitted lines of credit, the Warburg Funds will pay interest on borrowings
at the bank's base rate plus .55%. Aggregate borrowings for each fund under the
committed and uncommitted lines of credit with PNC may not exceed the lowest of
(a) thirty-three and one-third percent (33 1/3%) of the
52
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
assets of such fund, for any fund that does not invest at least sixty-five
percent (65%) of its assets in international equity or fixed income securities
(an 'International Fund') and twenty-five percent (25%) of the assets of any
fund that is an International Fund or (b) the maximum amount permitted by such
fund's investment policies and restrictions. Aggregate borrowings for each fund
under the uncommitted line of credit facility with Deutsche Bank may not exceed
thirty-three and one-third (33 1/3%) of the net assets of such fund. At April
30, 1998 and during the six months ended April 30, 1998, the following funds had
borrowings under these lines of credit facilities.
<TABLE>
<CAPTION>
AVERAGE DAILY AVERAGE MAXIMUM DAILY LOAN OUTSTANDING
FUND LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING AT 4/30/98
- ---------------- ------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Japan OTC 20,359 6.153 $ 954,000 $0
Emerging Markets 4,373 6.266 798,000 0
Japan Growth 32,121 6.193 2,059,000 0
</TABLE>
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, each Fund, along with other Warburg Funds, transfers uninvested cash
balances to a pooled cash account, which is invested in repurchase agreements
secured by U.S. government securities. Securities pledged as collateral for
repurchase agreements are held by the Funds' custodian bank until the agreements
mature. Each agreement requires that the market value of the collateral be
sufficient to cover payments of interest and principal; however, in the event of
default or bankruptcy by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of the transfer
agent expense. For the period ended April 30, 1998, the Funds received credits
or reimbursements under this arrangement as follows:
<TABLE>
<CAPTION>
FUND AMOUNT
- -------------------------------------------------------------- --------
<S> <C>
International Equity $61,866
Japan OTC 988
Emerging Markets 3,020
Japan Growth 735
Global Post-Venture Capital 78
Major Foreign Markets 283
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, which is indirectly controlled by Warburg, Pincus & Co., serves as
each Fund's investment adviser. For its investment advisory services, Warburg
receives the following fees based on each Fund's average daily net assets:
53
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR (CONT'D)
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- ------------------------------------------------ ----------------------------------
<S> <C>
International Equity 1.00% of average daily net assets
Japan OTC 1.25% of average daily net assets
Emerging Markets 1.25% of average daily net assets
Japan Growth 1.25% of average daily net assets
Global Post-Venture Capital 1.25% of average daily net assets
Major Foreign Markets 1.00% of average daily net assets
</TABLE>
For the period ended April 30, 1998, investment advisory fees, voluntary
waivers and reimbursements were as follows:
<TABLE>
<CAPTION>
GROSS NET EXPENSE
FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
- ------------------------- ------------ --------- ------------ --------------
<S> <C> <C> <C> <C>
International Equity $11,909,017 $ 0 $11,909,017 $ 0
Japan OTC 262,977 (143,897) 119,080 0
Emerging Markets 739,901 (439,828) 300,073 0
Japan Growth 197,306 (63,740) 133,566 0
Global Post-Venture
Capital 19,663 (19,663) 0 (64,223)
Major Foreign Markets 56,594 (56,594) 0 (8,095)
</TABLE>
Abbott Capital Management, LLC ('Abbott') serves as sub-investment adviser
for the Global Post-Venture Fund's assets invested in U.S. or foreign private
limited partnerships or other investment funds ('Private Fund Investments').
Pursuant to the sub-advisory agreement between Abbott and Warburg, Abbott is
entitled to a quarterly fee from Warburg at the annual rate of of 1.00% of the
net asset value of Private Fund Investments, which fee amount or a portion
thereof may be waived by Abbott. No compensation is paid by the Global
Post-Venture Capital Fund to Abbott for its sub-investment advisory services.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as each Fund's co-administrators. For its
administrative services, CFSI currently receives a fee calculated at an annual
rate of .10% of each Fund's average daily net assets. For the period ended April
30, 1998, administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
International Equity $ 1,190,992
Japan OTC 21,038
Emerging Markets 59,192
Japan Growth 15,784
Global Post-Venture Capital 1,573
Major Foreign Markets 5,792
</TABLE>
For administrative services, PFPC receives a fee calculated at an annual rate
of .12% on each Fund's first $250 million in average daily net assets, .10% on
the next $250 million in average daily net assets, .08% on the next $250 million
in average daily net assets, and .05% of the average daily net assets over $750
million. For the
54
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
period ended April 30, 1998, administrative service fees earned and voluntarily
waived by PFPC (including out of pocket) were as follows:
<TABLE>
<CAPTION>
NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
- --------------------------- --------------------- -------- ---------------------
<S> <C> <C> <C>
International Equity $ 789,133 $ 0 $ 789,133
Japan OTC 25,246 (25,246) 0
Emerging Markets 71,030 0 71,030
Japan Growth 18,941 (18,938) 3
Global Post-Venture Cap 3,322 (1,888) 1,434
Major Foreign Markets 10,275 (6,950) 3,325
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly-owned subsidiary of
Warburg, serves as each Fund's distributor. No compensation is paid by the
International Equity Fund to CSI for distribution services. For its shareholder
servicing and distribution services, CSI receives a fee at an annual rate of
.25% of the average daily net assets of each Fund's Common Shares pursuant to a
shareholder servicing and distribution plan adopted by each Fund pursuant to
Rule 12b-1 under the 1940 Act. For its shareholder servicing and distribution
services, CSI receives a fee at an annual rate of .50%, respectively, of the
average daily net assets of the Advisor Shares of the International Equity Fund,
the Japan OTC Fund, the Emerging Markets Fund, the Japan Growth Fund and the
Global Post-Venture Capital Fund pursuant to distribution plan adopted by each
Fund pursuant to Rule 12b-1 under the 1940 Act. No compensation is payable by
the Advisor Shares of the Global Post-Venture Capital Fund to CSI for
distribution services. For the period ended April 30, 1998, shareholder
servicing and distribution fees earned by CSI were as follows:
<TABLE>
<CAPTION>
SHAREHOLDER
SERVICING/
FUND DISTRIBUTION FEE
- -------------------------------------------------- --------------------
<S> <C>
International Equity Fund
Advisor shares $1,082,071
--------
--------
Japan OTC Fund
Common shares $ 52,593
Advisor shares 5
--------
$ 52,598
--------
--------
Emerging Markets Fund
Common shares $ 147,674
Advisor shares 548
--------
$ 148,222
--------
--------
Japan Growth Fund
Common shares $ 39,435
Advisor shares 52
--------
$ 39,487
--------
--------
Global Post-Venture Capital Fund
Common shares $ 3,931
Advisor shares 3
--------
$ 3,934
--------
--------
Major Foreign Markets Fund
Common shares $ 2,142
--------
--------
</TABLE>
55
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
3. INVESTMENTS IN SECURITIES
For the period ended April 30, 1998, purchases and sales of investment
securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- ----------------------------------------------- ------------ --------------
<S> <C> <C>
International Equity $994,944,568 $1,572,478,281
Japan OTC 12,220,060 6,078,636
Emerging Markets 66,192,902 101,786,999
Japan Growth 23,531,999 8,383,066
Global Post-Venture Capital 1,800,587 2,120,796
Major Foreign Markets 17,622,775 3,639,690
</TABLE>
At April 30, 1998, the net unrealized appreciation from investments for those
securities having an excess of value over cost and net unrealized depreciation
from investments for those securities having an excess of cost over value (based
on cost for federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION)
- ----------------------------------- ------------ ------------- --------------
<S> <C> <C> <C>
International Equity $447,460,388 $(144,695,192) $302,765,196
Japan OTC 2,957,770 (7,760,481) (4,802,711)
Emerging Markets 12,479,857 (13,564,940) (1,085,083)
Japan Growth 2,713,572 (3,082,378) (368,806)
Global Post-Venture Capital 901,827 (11,121) 890,706
Major Foreign Markets 2,551,893 (541,327) 2,010,566
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
Each Fund may enter into forward currency contracts for the purchase or sale
of a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. Each
Fund will enter into forward contracts primarily for hedging purposes. Forward
currency contracts are adjusted by the daily exchange rate of the underlying
currency and any gains or losses are recorded for financial statement purposes
as unrealized until the contract settlement date or an offsetting position is
entered into.
At April 30, 1998, the International Equity Fund, the Japan OTC Fund, the
Japan Growth Fund and the Major Foreign Markets Fund had the following open
forward foreign currency contracts:
56
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------
UNREALIZED
FOREIGN FOREIGN
EXPIRATION CURRENCY CONTRACT CONTRACT EXCHANGE
FORWARD CURRENCY CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ----------------------------- ---------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Japanese Yen 05/29/98 29,734,000,000 $234,079,906 $225,989,302 $ 8,090,604
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
JAPAN OTC FUND
- ----------------------------------------------------------------------------------------------------------------
UNREALIZED
FOREIGN FOREIGN
EXPIRATION CURRENCY CONTRACT CONTRACT EXCHANGE
FORWARD CURRENCY CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ----------------------------- ---------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Japanese Yen 05/29/98 4,348,000,000 $ 34,229,482 $ 33,046,394 $ 1,183,088
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
JAPAN GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------
UNREALIZED
FOREIGN FOREIGN
EXPIRATION CURRENCY CONTRACT CONTRACT EXCHANGE
FORWARD CURRENCY CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ------------------------------ ---------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Japanese Yen 05/29/98 3,830,000,000 $30,151,545 $29,109,404 $ 1,042,141
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
MAJOR FOREIGN MARKETS FUND
- ---------------------------------------------------------------------------------------------------------------
UNREALIZED
FOREIGN FOREIGN
EXPIRATION CURRENCY CONTRACT CONTRACT EXCHANGE
FORWARD CURRENCY CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ------------------------------ ---------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Japanese Yen 05/29/98 126,775,000 $ 998,032 $ 963,537 $ 34,495
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
5. EQUITY SWAP TRANSACTIONS
The International Equity Fund and the Emerging Markets Fund each entered into
a Korean equity swap agreement dated March 21, 1997, where each Fund receives a
quarterly payment, representing the total return (defined as market appreciation
and dividend income) on a basket of Korean common stocks ('Common Stocks'). In
return, the International Equity Fund and the Emerging Markets Fund pay
quarterly the LIBOR rate (London Interbank Offered Rate), plus 2.00% and 1.97%,
respectively, per annum on the market value of the Common Stocks ('Notional
Amount'). The Notional Amount is marked-to-market on each quarterly reset date.
In the event that the Common Stocks decline in value, each Fund will be required
to pay quarterly, the amount of any depreciation in value of the Notional Amount
from the previous quarter.
During the term of the equity swap transaction, changes in the value of the
Common Stocks as compared to the Notional Amount and the difference between the
accrued interest expense and dividend income are recognized as unrealized gain
or loss. At the quarterly reset date, the change in value of the Common Stock,
adjusted for accrued interest expense and dividend income, is recognized as
realized gain or loss. At April 30, 1998, each Fund realized a loss of
$6,553,028 and $853,210, respectively, on the equity swap transaction which is
included in the net realized gain (loss) from security and other related
transactions. At April 30, 1998, each Fund no longer held a position in the
swap.
57
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Each Fund, except the Global Post-Venture Capital Fund, is each authorized to
issue three billion full and fractional shares of capital stock, $.001 par value
per share, of which two billion shares of each Fund are designated as Advisor
Shares. The Global Post-Venture Capital Fund is authorized to issue three
billion full and fractional shares of capital stock, $.001 par value per share,
of which one billion shares are designated as Advisor Shares.
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
COMMON SHARES ADVISOR SHARES
--------------------------------------- ---------------------------------------
FOR THE SIX FOR THE FOR THE SIX
MONTHS ENDED YEAR ENDED MONTHS ENDED FOR THE
APRIL 30, 1998 OCTOBER 31, 1997 APRIL 30, 1998 YEAR ENDED
(UNAUDITED) (UNAUDITED) (UNAUDITED) OCTOBER 31, 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 22,456,690 37,712,671 1,442,044 3,593,153
Shares issued to
shareholders on
reinvestment of
dividends 16,336,304 5,078,533 3,778,779 937,692
Shares redeemed (54,825,212) (70,827,349) (8,693,119) (4,577,298)
----------------- ----------------- ----------------- -----------------
Net increase
(decrease) in
shares outstanding (16,032,218) (28,036,145) (3,472,296) (46,453)
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Proceeds from sale
of shares $ 417,289,533 $ 832,097,028 $ 26,845,710 $ 78,002,915
Reinvested dividends 272,489,400 103,246,572 62,614,371 18,941,382
Net asset value of
shares redeemed (1,016,149,943) (1,548,688,920) (159,319,096) (97,350,280)
----------------- ----------------- ----------------- -----------------
Net increase
(decrease) from
capital share
transactions $ (326,371,010) $ (613,345,320) $ (69,859,015) $ (405,983)
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
<CAPTION>
JAPAN OTC FUND
COMMON SHARES ADVISOR SHARES
--------------------------------------- ---------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
APRIL 30, 1998 MONTHS ENDED APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 7,246,383 11,479,393 8 7,459
Shares issued to
shareholders on
reinvestment of
dividends 136,273 132,383 11 0
Shares redeemed (7,465,701) (23,316,894) (394) (7,086)
----------------- ----------------- ----------------- -----------------
Net increase
(decrease) in
shares outstanding (83,045) (11,705,118) (375) 373
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Proceeds from sale
of shares $ 43,859,751 $ 83,642,891 $ 48 $ 52,503
Reinvested dividends 764,489 1,057,739 61 0
Net asset value of
shares redeemed (45,153,375) (177,463,703) (2,426) (50,574)
----------------- ----------------- ----------------- -----------------
Net increase
(decrease) from
capital share
transactions $ (529,135) $ (92,763,073) $ (2,317) $ 1,929
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
</TABLE>
58
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EMERGING MARKETS FUND
COMMON SHARES ADVISOR SHARES
--------------------------------------- ---------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
APRIL 30, 1998 YEAR ENDED APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
7,465,585 15,395,660 109 13,980
582,201 92,759 1,113 4
(11,608,925) (19,011,433) (9,291) (1,743)
----------------- ----------------- ------- -------
(3,561,139) (3,523,014) (8,069) 12,241
----------------- ----------------- ------- -------
----------------- ----------------- ------- -------
$ 73,361,665 $ 209,234,551 $ 1,012 $ 204,109
5,373,714 1,143,716 10,321 55
(114,572,208) (255,371,760) (92,619) (23,597)
----------------- ----------------- ------- -------
$ (35,836,829) $ (44,993,493) $ (81,286) $ 180,567
----------------- ----------------- ------- -------
----------------- ----------------- ------- -------
<CAPTION>
JAPAN GROWTH FUND
COMMON SHARES ADVISOR SHARES
--------------------------------------- ---------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
APRIL 30, 1998 YEAR ENDED APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
5,023,308 4,196,591 1,733 3,036
0 46,477 0 0
(4,139,348) (3,725,607) (176) (1,421)
----------------- ----------------- ------ -------
883,960 517,461 1,557 1,615
----------------- ----------------- ------ -------
----------------- ----------------- ------ -------
$ 49,128,384 $ 43,536,325 $ 16,981 $ 31,670
0 436,422 0 0
(40,823,960) (37,761,784) (1,746) (14,515)
----------------- ----------------- ------ -------
$ 8,304,424 $ 6,210,963 $ 15,235 $ 17,155
----------------- ----------------- ------ -------
----------------- ----------------- ------ -------
</TABLE>
59
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS (CONT'D)
<TABLE>
<CAPTION>
MAJOR FOREIGN
GLOBAL POST-VENTURE CAPITAL FUND MARKETS FUND
COMMON SHARES ADVISOR SHARES COMMON SHARES
---------------------------------- ---------------------------------- --------------
FOR THE SIX
MONTHS ENDED FOR THE SIX FOR THE FOR THE SIX
APRIL 30, FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED
1998 YEAR ENDED APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) 1997 (UNAUDITED)
------------ ----------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Shares sold 31,780 209,142 0 15 1,546,498
Shares issued to
shareholders on
reinvestment of
dividends 10,619 0 4 0 21,323
Shares redeemed (33,153) (227,374) 0 (564) (67,437)
------------ ----------- --- ------- --------------
Net increase
(decrease) in
shares outstanding 9,246 (18,232) 4 (549) 1,500,384
------------ ----------- --- ------- --------------
------------ ----------- --- ------- --------------
Proceeds from sale
of shares $397,898 $ 2,110,622 $ 0 $ 150 $ 16,743,627
Reinvested dividends 108,101 0 40 0 211,520
Net asset value of
shares redeemed (371,220) (2,438,359) 0 (5,627) (797,195)
------------ ----------- --- ------- --------------
Net increase
(decrease) from
capital share
transactions $134,779 $ (327,737) $ 40 $(5,477) $ 16,157,952
------------ ----------- --- ------- --------------
------------ ----------- --- ------- --------------
</TABLE>
7. LIABILITIES
At April 30, 1998, each Fund had the following affiliated and investment
related liabilities:
<TABLE>
<CAPTION>
GLOBAL MAJOR
EMERGING JAPAN POST-VENTURE FOREIGN
INTERNATIONAL JAPAN OTC MARKETS GROWTH CAPITAL MARKETS
EQUITY FUND FUND FUND FUND FUND FUND
------------- ---------- ---------- ------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Payable for securities
purchased
(at value) $17,404,567 $712,592 $1,192,196 $ 0 $254,271 $1,653,418
Investment advisory fee
payable 1,913,867 16,316 46,691 21,631 0 3,434
Administrative services
fee payable 191,387 3,305 9,574 2,794 293 1,783
Distribution fee payable 0 8,262 23,884 6,979 732 2,142
Payable for Fund shares
redeemed 1,200,138 0 6,009 0 0 0
Payable for forward
contracts 0 0 0 21,159 0 0
</TABLE>
8. NET ASSETS
At April 30, 1998, capital contributions, undistributed net investment
income, accumulated net realized gain (loss) from security transactions and
current period distribution have been adjusted for current period permanent
book/tax differences which arose principally from differing book/tax treatments
of foreign currency and equity swap transactions. The International Equity Fund,
the Japan OTC Fund, the Emerging Markets Fund, the Japan Growth Fund, the Global
Post-Venture Capital Fund and the Major
60
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Foreign Markets Fund reclassified ($16,915,095), ($32,911), ($1,104,865),
($3,507), $2,182 and $17,319, respectively, from accumulated net realized gain
(loss) on foreign currency related items to undistributed net investment income.
The International Equity Fund, the Japan OTC Fund, the Emerging Markets Fund,
the Japan Growth Fund and the Global Post-Venture Capital Fund reclassified
$13,517,219, $486,177, $2,967,401, $38,260 and $95,824, respectively, from
accumulated net investment loss to capital contributions. The International
Equity Fund, the Japan OTC Fund, the Emerging Markets Fund, the Global
Post-Venture Capital Fund and the Major Foreign Markets Fund reclassified
$33,744,770, $826,721, ($692,650), $735 and ($11,880), respectively, of book
distributions from realized gains (losses) to distributions of net investment
income. Net investment income, net realized gain (loss) on investments and net
assets were not affected by this reclassification.
Net Assets at April 30, 1998, consisted of the following:
<TABLE>
<CAPTION>
GLOBAL MAJOR
EMERGING JAPAN POST-VENTURE FOREIGN
INTERNATIONAL JAPAN OTC MARKETS GROWTH CAPITAL MARKETS
EQUITY FUND FUND FUND FUND FUND FUND
-------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Capital
contributed,
net $2,065,822,049 $ 73,192,965 $144,522,046 $35,250,067 $2,733,276 $20,934,126
Undistributed
net investment
income 0 0 0 0 0 102,443
Accumulated net
realized gain
(loss) from
security
transactions (67,243,028) (29,735,077) (32,420,888) (853,250) 203,945 370,823
Net unrealized
appreciation
(depreciation)
from
investments and
foreign
currency
related items 312,215,755 (3,622,968) (1,085,491) 671,843 895,716 2,045,343
-------------- ------------ ------------ ----------- ------------ -----------
Net assets $2,310,794,776 $ 39,834,920 $111,015,667 $35,068,660 $3,832,937 $23,452,735
-------------- ------------ ------------ ----------- ------------ -----------
-------------- ------------ ------------ ----------- ------------ -----------
</TABLE>
9. CAPITAL LOSS CARRYOVER
At April 30, 1998, capital loss carryovers available to offset possible
future capital gains of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYOVER
FUND EXPIRING IN 2005
- --------------------------------------------------------------------- ----------------------
<S> <C>
Japan OTC $ 24,405,400
Japan Growth 623,934
</TABLE>
61
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
10. YEAR 2000 COMPLIANCE
Many services provided to the Funds and their shareholders by Warburg and
certain of its affiliates (the 'Warburg Service Providers') and the Funds' other
service providers rely on the functioning of their respective computer systems.
Many computer systems cannot distinguish the year 2000 from the year 1900, with
resulting potential difficulty in performing various calculations (the 'Year
2000 Issue'). The Year 2000 Issue could potentially have an adverse impact on
the handling of security trades, the payment of interest and dividends, pricing,
account services and other Fund operations.
The Warburg Service Providers recognize the importance of the Year 2000 Issue
and are taking appropriate steps necessary in preparation for the year 2000. At
this time, there can be no assurance that these steps will be sufficient to
avoid any adverse impact on the Funds nor can there be any assurance that the
Year 2000 Issue will not have an adverse effect on the Funds' investments or on
global markets or economies, generally. In addition, it has been reported that
foreign institutions have made less progress in addressing the Year 2000 Issue
than major U.S. entities, which could adversely effect the Funds' foreign
investments.
The Warburg Service Providers anticipate that their systems and those of the
Funds' other service providers will be adapted in time for the year 2000. To
further this goal, the Warburg Service Providers have coordinated a plan to
repair, adapt or replace systems that are not year 2000 compliant, and are
seeking to obtain similar representations from the Funds' other major service
providers. The Warburg Service Providers will be monitoring the Year 2000 Issue
in an effort to ensure appropriate preparation.
62
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
11. OTHER FINANCIAL HIGHLIGHTS
Each Fund (except the Major Foreign Markets Fund) currently offers one other
class of shares, Advisor Shares, representing equal prorata interests in each of
the respective Warburg Pincus International Funds. The financial highlights for
an Advisor Share of each Fund are as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
---------------------------------------------------------------------------
ADVISOR SHARES
---------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $20.54 $20.50 $19.16 $20.38 $16.91 $12.20
------ -------- -------- -------- -------- ---------
Income from Investment Operations:
Net Investment Income (Loss) (0.19) 0.04 0.18 0.03 0.16 (0.01)
Net Gain (Loss) from Securities
and Foreign Currency Related
Items (both realized and
unrealized) 2.16 0.78 1.68 (0.67) 3.35 4.86
------ -------- -------- -------- -------- ---------
Total from Investment
Operations 1.97 0.82 1.86 (0.64) 3.51 4.85
------ -------- -------- -------- -------- ---------
Less Distributions:
Dividends from Net Investment
Income (0,00) (0.04) (0.52) (0.05) 0.00 (0.01)
Distributions from Realized Gains (2.76) (0.74) 0.00 (0.53) (0.04) (0.13)
------ -------- -------- -------- -------- ---------
Total Distributions (2.76) (0.78) (0.52) (0.58) (0.04) (0.14)
------ -------- -------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $19.75 $20.54 $20.50 $19.16 $20.38 $16.91
------ -------- -------- -------- -------- ---------
------ -------- -------- -------- -------- ---------
Total Return 12.13%'D' 4.04% 9.89% (3.04%) 20.77% 40.06
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $412,599 $500,473 $500,465 $317,736 $199,404 $44,244
Ratios to average daily net assets:
Operating expenses 1.77%*@ 1.76%@ 1.81%@ 1.89% 1.94% 2.00%
Net investment income (loss) (.46%)* .15% .18% .20% (.29%) (.36%)
Portfolio Turnover Rate 43.82%'D' 61.80% 32.49% 32.49% 17.02% 22.60%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares' expenses by .01%, .00% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Advisor Shares' operating expense ratio after reflecting
these arrangements were 1.76%, 1.76% and 1.80% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
63
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JAPAN OTC FUND
-------------------------------------------------------------------------------
ADVISOR SHARES
-------------------------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS SEPTEMBER 30, 1994
ENDED FOR THE YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
APRIL 30, 1998 --------------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1997 1996 1995 OCTOBER 31, 1994
-------------- -------- -------- ------- ----------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $6.37 $8.45 $9.08 $9.85 $10.00
------ -------- -------- ------- ------
Income from Investment
Operations:
Net Investment Income (Loss) (0.97) 0.35 (0.13) (0.02) 0.00
Net Gain (Loss) from
Securities and Foreign
Currency Related Items
(both realized and
unrealized) 0.90 (2.43) (0.14) (0.75) (0.15)
------ -------- -------- ------- ------
Total from Investment
Operations (0.07) (2.08) (0.27) (0.77) (0.15)
------ -------- -------- ------- ------
Less Distributions:
Dividends from Net
Investment Income (0.00) 0.00 (0.36) 0.00 0.00
Distributions from realized
gains (0.12) 0.00 0.00 0.00 0.00
------ -------- -------- ------- ------
Total Distributions (0.12) 0.00 (0.36) 0.00 0.00
------ -------- -------- ------- ------
NET ASSET VALUE, END OF PERIOD $6.18 $6.37 $8.45 $9.08 $9.85
------ -------- -------- ------- ------
------ -------- -------- ------- ------
Total Return (.84%)'D' (24.62%) (3.17%) (7.82%) (1.50%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000s) $1 $3 $1 $1 $1
Ratios to average daily net
assets:
Operating expenses 2.00%*@ 2.00%@ 2.01%@ 1.31% 1.18%*
Net investment income (1.16%)* (1.10%) (1.57%) (.19%) .12%*
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements. 6.70%* 6.69% .28% 1.83% 4.74%*
Portfolio Turnover Rate 16.27%'D' 100.60%'D' 95.23% 82.98% .00%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares' expenses by .00%, .00% and .01%, for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Advisor Shares' operating expense ratio after reflecting
these arrangements were 2.00%, 2.00% and 2.00% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
64
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING MARKETS FUND
-----------------------------------------------------------------------
ADVISOR SHARES
-----------------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS FOR THE YEAR ENDED DECEMBER 30, 1994
ENDED OCTOBER 31, (COMMENCEMENT OF
APRIL 30, 1998 --------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1997 1996 OCTOBER 31, 1995
-------------- ----------- ----------- --------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.87 $12.21 $11.30 $10.00
-------------- ----------- ----------- --------
Income from Investment Operations:
Net Investment Income (Loss) (0.14) 0.00 (0.08) 0.14
Net Gain (Loss) from Securities
and Foreign Currency Related
Items (both realized and
unrealized) 0.01 (1.33) 1.11 1.19
-------------- ----------- ----------- --------
Total from Investment
Operations (0.13) (1.33) 1.03 1.33
-------------- ----------- ----------- --------
Less Distributions:
Dividends from Net Investment
Income (0.06) 0.00 (0.05) (0.03)
Distributions from Realized Gains (0.41) (0.01) (0.07) 0.00
-------------- ----------- ----------- --------
Total Distributions (0.47) (0.01) (0.12) (0.03)
-------------- ----------- ----------- --------
NET ASSET VALUE, END OF PERIOD $10.27 $10.87 $12.21 $11.30
-------------- ----------- ----------- --------
-------------- ----------- ----------- --------
Total Return (.67%)'D' (10.94%) 9.20% 13.29%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $169 $266 $149 $1
Ratios to average daily net assets:
Operating expenses 1.91%*@ 1.90%@ 1.90%@ 1.22%*
Net investment income (.96%)* (.09%) (.57%) 1.76%*
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .60%* .52% .65% 16.36%*
Portfolio Turnover Rate 60.99%'D' 92.48% 61.84% 57.76%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares' expenses by .01%, .00% and .00% for the period ending April
30, 1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively. The Advisor Shares' operating expense ratio after reflecting
these arrangements was 1.90%, 1.90% and 1.90% for the period ended April 30,
1998, and for the years ended October 31, 1997 and October 31, 1996,
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
65
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JAPAN GROWTH FUND
------------------------------------------------------------
ADVISOR SHARES
------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS DECEMBER 29, 1995
ENDED FOR THE (COMMENCEMENT OF
APRIL 30, 1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
-------------- ---------------- --------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.89 $9.83 $10.00
------ ------ ------
Income from Investment Operations:
Net Investment Loss 0.00 0.05 (0.09)
Net Gain (Loss) from Securities and Foreign
Currency Related Items (both realized and
unrealized) 0.42 0.01 (0.08)
------ ------ ------
Total from Investment Operations 0.42 0.06 (0.17)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.31 $9.89 $9.83
------ ------ ------
------ ------ ------
Total Return 4.25%'D' .61% (1.70%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $34 $17 $1
Ratios to average daily net assets:
Operating expenses 2.00%*@ 2.00%@ 2.00%*@
Net investment income (.57%)* (1.42%) (1.08%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .99%* 7.25% 3.43%*
Portfolio Turnover Rate 31.01%'D' 93.84% 51.72%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expenses. These arrangements had no effect on the Advisor
Shares' expense ratio.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
66
<PAGE>
<PAGE>
WARBURG PINCUS INTERNATIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
11. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
GLOBAL POST-VENTURE CAPITAL FUND
------------------------------------------------------------
ADVISOR SHARES
------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS SEPTEMBER 30, 1996
ENDED FOR THE (COMMENCEMENT OF
APRIL 30, 1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
-------------- ---------------- --------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.11 $9.85 $10.00
------ ------ ------
Income from Investment Operations:
Net Investment Loss (0.05) (0.15) 0.00
Net Gain (Loss) from Securities and Foreign
Currency Related Items (both realized and
unrealized) 2.21 1.41 (0.15)
------ ------ ------
Total from Investment Operations 2.16 1.26 (0.15)
------ ------ ------
Less Distributions:
Dividends from Net Investment Income (0.28) 0.00 0.00
Distributions from Realized Gains (0.11) 0.00 0.00
------ ------ ------
Total Distributions (0.39) 0.00 0.00
------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.88 $11.11 $9.85
------ ------ ------
------ ------ ------
Total Return 20.29%'D' 12.79% (1.50%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1 $1 $6
Ratios to average daily net assets:
Operating expenses 1.90%*@ 1.90%@ 1.90%*@
Net investment income (1.36%)* (1.15%)* (.78%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 73.13%* 11.16%* 22.23%*
Portfolio Turnover Rate 59.11%'D' 207.25%'D' 5.85%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expenses. These arrangements had no effect on the Advisor
Shares' expense ratio.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
67
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
[logo]
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874)
www.warburg.com
COUNSELLORS SECURITIES INC. DISTRIBUTOR. WPISF-3-0498
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as............................... 'D'
The division symbol shall be expressed as............................. [div]
