<PAGE>
PACIFIC
EUROPEAN
GROWTH
FUND
[GRAPHIC]
1995
ANNUAL REPORT
<PAGE>
TABLE OF CONTENTS
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 2
FINANCIAL STATEMENTS AND NOTES . . . . . . . . . . . . . . . . . . . 7
INVESTMENTS IN SECURITIES . . . . . . . . . . . . . . . . . . . . . . 14
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . 17
FEDERAL INCOME TAX INFORMATION . . . . . . . . . . . . . . . . . . . 18
PACIFIC-EUROPEAN GROWTH FUND
Pacific-European Growth Fund is an open-end mutual fund seeking investment
opportunities primarily in the Pacific Basin and Europe. The fund's investment
objective is long-term capital appreciation; any current income realized is
incidental. To reach its objective, the fund invests primarily in common stocks
of companies in the Pacific Basin (for example, Japan, Hong Kong, Malaysia,
Singapore, South Korea and Thailand) or Europe (including Eastern Europe). Up to
25% of the fund's total assets may also be invested in other areas of the world.
The fund does not invest in common stock of U.S. companies.
MANAGEMENT EXPERIENCE
Piper Capital Management Incorporated has retained an experienced international
money manager, Edinburgh Fund Managers plc, to act as subadviser to the fund.
Iain Watt, Mike Balfour, Jamie Sandison, Christian Albuisson, David Currie and
Gavin Grant co-manage Pacific-European Growth Fund. Iain Watt is managing
director of Edinburgh Fund Managers and Mike Balfour is the chief investment
director. Both also serve as directors on the fund's board. Jamie Sandison is a
portfolio manager in the Pacific department, Christian Albuisson in the European
department, David Currie in the Japanese department, and Gavin Grant in the
Latin American department. Edinburgh Fund Managers is a publicly listed company
established in 1969 and a majority-owned subsidiary of the British Investment
Trust plc, a Scottish closed-end investment company which was founded in 1889.
The company provides investment services to institutional clients and investment
management services directly, or through subsidiaries, to closed- and open-end
funds and discretionary funds, including pension plans and charities.
THIS REPORT IS INTENDED FOR SHAREHOLDERS OF PACIFIC-EUROPEAN GROWTH FUND, BUT
MAY ALSO BE USED AS SALES LITERATURE IF PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
THE PROSPECTUS GIVES DETAILS ABOUT THE CHARGES, INVESTMENT RESULTS, RISKS AND
OPERATING POLICIES OF THE FUND.
<PAGE>
SHAREHOLDER SERVICES
LOW MINIMUM INVESTMENTS
You can open a Piper mutual fund account with a minimum investment of $250.
QUANTITY DISCOUNTS
If your initial investment exceeds a specified amount, if an investment combined
with the value of your existing Piper shares exceeds a specified amount, or if
your investments combined during a 13-month period exceed a specified amount,
you can reduce or even eliminate the front-end sales charge.
WAIVER OF SALES CHARGES
Money market funds carry no sales charges.* Sales charges on other Piper funds
are waived on purchases of $500,000 or more. However, a contingent deferred
sales charge may be imposed. See your prospectus for details.
AUTOMATIC REINVESTMENT OF DIVIDENDS
For maximum growth of your assets, you can reinvest dividends and capital gains
automatically in additional shares of your fund without a sales charge.
CROSS-REINVESTMENT OF DISTRIBUTIONS
Diversify your holdings by reinvesting dividends and capital gains from one
Piper fund to another.
CASH DISTRIBUTIONS
If you prefer, take your dividends and/or capital gains in cash.
AUTOMATIC MONTHLY MONEY TRANSFER PROGRAM
If you are starting a savings discipline or seeking a convenient way to invest,
you can transfer a minimum of $100 automatically from your bank, savings and
loan or other financial institution into many of the Piper funds.
AUTOMATIC MONTHLY INVESTMENT PROGRAM
You may automatically transfer $25 or more each month from any Piper money
market fund into many other Piper funds.*
EXCHANGE PRIVILEGES
Revise your investment plan without incurring a sales charge by moving assets
from one Piper fund to another with the same fee structure. See your prospectus
for restrictions involving exchanges between funds with different sales
charges.
REINVESTMENT PRIVILEGES
If you buy a fund with a sales charge and later redeem your shares, you may
reinvest all or part of the proceeds in shares of that fund or another Piper
fund within 30 days and pay no additional sales charge, subject to each fund's
minimum investment requirements.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of $5,000 or more, you can elect to receive periodic
payments of $100 or more, at no cost, excluding money market funds.
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
Defer taxes on earnings in a taxable fund by contributing up to $2,000 annually
to your IRA. Deductibility of contributions depends on your adjusted gross
income and amounts invested in employer-sponsored plans.
SMALL BUSINESS PLANS
If you have a corporation or small business, you can make tax-deductible
contributions to a tax-sheltered retirement account through a qualified plan,
where all earnings grow tax-deferred.
401(k) PLANS
You pay no sales charge if shares are purchased through your employer's 401(k)
plan.
ACCOUNT STATEMENTS
Whenever you add to or withdraw money from your account, you will receive a
monthly statement from Piper Jaffray. Accounts with no activity receive a
quarterly statement instead. Periodic dividend and capital gain distributions,
if any, also appear on your statement.
CONFIRMATION OF TRANSACTIONS
You receive a confirmation statement following every transaction, except in the
money market funds. All transactions are reflected on your account statement.
$25 MILLION SHAREHOLDER PROTECTION
If you have a Piper Jaffray PRIME or PAT account, you are protected up to $25
million in the unlikely event that Piper Jaffray was to fail financially. This
is in addition to basic Securities Investor Protection Corporation (SIPC)
coverage, which protects up to $500,000 in cash and securities ($100,000 in cash
only) per customer. This protection does not cover market loss.
*AN INVESTMENT IN A PIPER MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1 PER SHARE.
AS A SHAREHOLDER IN PIPER GLOBAL FUNDS, YOU HAVE ACCESS TO A FULL RANGE OF
SERVICES AND BENEFITS. CHECK YOUR PROSPECTUS FOR DETAILS ABOUT SERVICES AND ANY
LIMITATIONS THAT MIGHT APPLY TO YOUR FUND.
1
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PACIFIC-EUROPEAN GROWTH FUND
April 17, 1995
Dear Shareholders:
WORLD MARKETS WERE LARGELY UNSETTLED IN 1994, WITH A WORLDWIDE RISE IN INTEREST
RATES AND THE DEVALUATION OF THE MEXICAN PESO DOMINATING THE FINANCIAL NEWS. For
the fiscal year ended February 28, 1995, Pacific-European Growth Fund
surrendered some of the gains it established in 1993 and underperformed the
European, Australian, Far East (EAFE) Index.* The fund's total return for this
period, with distributions reinvested and not including sales charges, was
- -11.09%, while the EAFE Index showed a return of -4.19%.** This underperformance
was primarily the result of the fund's overweighting in the Pacific Basin
(excluding Japan). Despite substantially decreasing its exposure to this region
from 50% at the beginning of 1994 to 28% by February 28, 1995, the fund remained
overweighted relative to the EAFE Index. The fund's investment in Latin America
also hindered performance due to the financial crisis created by the devaluation
of the Mexican peso.
AFTER EXPERIENCING STRONG RETURNS IN THE PACIFIC BASIN MARKETS IN 1993, WE
ADVISED INVESTORS THAT SIMILAR GAINS IN 1994 WERE UNLIKELY. However, we did not
predict the degree of correction that occurred. Hong Kong was hit hardest with
property stocks suffering major declines as interest rates increased.
Fortunately, we had aggressively reduced the fund's weighting in this market
early in 1994, as Hong Kong turned out to be the worst performing market in the
region. The fund's investments in Malaysia and Indonesia had a slightly negative
effect on the fund, despite these areas' strong performances in 1993. The
Malaysian stock market fell sharply in 1994, reflecting concerns that the
country's economy was expanding too fast and inflationary pressures were
mounting. Despite strong corporate earnings growth, Indonesia also performed
poorly due to investors' concerns over politics and labor unrest. As a result,
we have reduced the fund's holdings in these areas. However, the fund did
benefit from its investments in South Korea and Taiwan, as both enjoyed strong
stock markets for most of 1994. As of February 28, 1995, the fund's holdings in
South Korea and Taiwan had been increased to 4.4% and 1.8% of total assets,
respectively.
BOOSTED BY A STRENGTHENING YEN, JAPAN'S ECONOMY CONTINUED TO RECOVER, ALTHOUGH
SLOWLY, THROUGHOUT 1994. Because we believe the prospects for this area are
improving, we have increased the fund's weighting in Japan from 17% in early
1994 to its current weighting of 32%. However, Japanese investors continue to
avoid the equity market as their confidence has been shaken by a series of
negative events, including
[Picture]
[Picture]
Iain Watt (above)
IS MANAGING DIRECTOR OF EDINBURGH FUND
MANAGERS PLC AND CO-MANAGER OF PACIFIC-EUROPEAN GROWTH FUND.
Mike Balfour (below)
IS CHIEF INVESTMENT DIRECTOR AT EDINBURGH FUND MANAGERS PLC AND CO-MANAGER OF
PACIFIC-EUROPEAN GROWTH FUND.
* THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EAFE INDEX IS AN UNMANAGED
INDEX OF SECURITIES LISTED ON THE STOCK EXCHANGES OF EUROPE, AUSTRALIA, AND
THE FAR EAST.
** PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE RETURN AND PRINCIPAL
VALUE OF YOUR INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
2
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PACIFIC-EUROPEAN GROWTH FUND
[Graphic]
IF YOU HAD INVESTED $10,000 IN THE FUND IN APRIL 1990 AND HELD IT THROUGH
FEBRUARY 28, 1995, REINVESTING ALL DISTRIBUTIONS, YOUR INVESTMENT WOULD HAVE
GROWN TO $12,465. PACIFIC-EUROPEAN GROWTH FUND RESULTS REFLECT THE FUND'S
MAXIMUM 4% SALES CHARGE, AS IF IT WAS APPLIED SINCE THE FUND'S INCEPTION. THIS
FUND OPERATED AS A CLOSED-END FUND UNTIL AUGUST 31, 1992. IN COMPARING THE FUND
TO THE EAFE INDEX AND THE LIPPER AVERAGE, KEEP IN MIND THAT THE FUND'S
PERFORMANCE REFLECTS THE SALES CHARGE, WHILE NO SUCH CHARGES ARE REFLECTED IN
THE INDEX OR THE AVERAGE. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
AVERAGE ANNUAL TOTAL RETURNS
(THROUGH 2/28/95; INCLUDES 4% SALES CHARGE)
One-Year . . . . . . . . . . . . . -14.64%
Three-Year . . . . . . . . . . . . . 7.92%
Since Inception (4/27/90) . . . . . . 4.66%
the poorly handled privatization of Japan Tobacco in October 1994 and the Kobe
earthquake in early 1995. Foreign investors' interest in the Japanese market was
also subdued throughout 1994.
ON THE EUROPEAN FRONT, THE FUND'S EMPHASIS ON COUNTRIES THAT ARE ECONOMICALLY
AND POLITICALLY STABLE PROVED TO BE A SOUND STRATEGY. The fund benefited from
its investments in the United Kingdom - its second largest country weighting -
as the area's economic growth forecasts increased and the economy continued to
strengthen. Germany showed a strong performance in 1994 as its returns rose by
17% over the preceding year. The Netherlands also yielded strong returns during
the year. On the other hand, the French stock market was restrained by political
uncertainty and a weak bond market, which led to decreases in most share prices.
Given the significant corporate restructuring that has taken place in Europe, we
believe further market strength in 1995 looks encouraging.
LATIN AMERICAN MARKETS PERFORMED WELL FOR MOST OF 1994, BUT THE SUDDEN
DEVALUATION OF THE MEXICAN PESO IN DECEMBER THOROUGHLY UNDERMINED CONFIDENCE IN
THE REGION AND PROVOKED A SHARP SELL-OFF. By the end of February 1995, the
fund's holdings in Latin America were just 2% of its total assets. The case for
long-term investment in Latin America still exists; however, a period of
stability will be necessary to rebuild confidence in the region's stock markets.
[Graphic]
3
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PACIFIC-EUROPEAN GROWTH FUND
ALTHOUGH SHARPLY RISING U.S. INTEREST RATES THROUGHOUT 1994 AND INTO 1995 HAD A
NEGATIVE INFLUENCE ON MOST OF THE MARKETS IN WHICH THE FUND INVESTED LAST YEAR,
WE BELIEVE INTEREST RATE MOVEMENT IS LIKELY TO PLAY A MORE BENIGN ROLE IN 1995.
Evidence that the U.S. economy may be slowing could prevent the need for further
monetary tightening by the Federal Reserve Board. We believe this would have
positive implications for a number of stock markets, particularly those in the
Pacific Basin. We have already begun to increase the weighting in the Pacific
Basin, with particular emphasis on Hong Kong. Good earnings prospects exist in
Hong Kong with many stocks trading below our projected long-term values. We also
expect the Japanese market to perform well as analysts are upgrading corporate
earnings estimates with increasing frequency, and the rally in the Japanese bond
market is providing additional support for equities.
IN ADDITION, WE BELIEVE NEW INVESTMENT POSSIBILITIES ARE EMERGING IN EASTERN
EUROPE. Although we have no immediate plans to invest in this region, we are
actively researching Poland and Hungary.
Thank you for your investment in Pacific-European Growth Fund.
We consider it a privilege to manage your money and to serve your investment
needs.
Sincerely,
/s/ Iain Watt
Iain Watt
Director
/s/ Mike Balfour
Mike Balfour
Director
/s/ William H. Ellis
William H. Ellis
President, Piper Capital Management
4
<PAGE>
PACIFIC-EUROPEAN GROWTH FUND
PORTFOLIO COMPOSITION BY COUNTRY
FEBRUARY 28, 1995
(AS A PERCENTAGE OF TOTAL ASSETS)
EUROPE
PACIFIC BASIN
LATIN AMERICA
[graphic (map)]
5
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PACIFIC-EUROPEAN GROWTH FUND
TEN LARGEST HOLDINGS
FEBRUARY 28, 1995
(PERCENTAGE OF NET ASSETS)
NOMURA Nomura is Japan's largest securities firm. The company's
JAPAN, 1.9% earnings are positioned to improve significantly as the stock
market recovers and trading volumes increase.
MITSUBISHI This company was formed by the merger last October between top
CHEMICAL petrochemical producer, Mitsubishi Petrochemical, and
JAPAN, 1.9% Mitsubishi Kasei Corporation. The company has benefited from
company restructuring, reducing product lines, reorganizing
supply and downsizing.
MITSUI FUDOSAN Mitsui Fudosan is one of the largest real estate developers in
JAPAN, 1.8% Japan and a member of the Mitsui Industrial Group. Despite
falling over 45% from their peak, real estate prices are well
positioned to recover in 1995.
MITSUBISHI Mitsubishi Trust and Banking is Japan's largest trust bank in
TRUST AND terms of funds under management. As with other trust banks, its
BANKING fortunes are tied to the stock market. The company is expected
JAPAN, 1.7% to experience a sharp rise in profits as a result of the
pricing de-regulation on its loan trust accounts.
BANCO POPULAR Banco Popular concentrates almost exclusively on domestic
SPAIN, 1.6% retail business. It is well known for its conservative strategy
and focus on profitability. The company is one of the most
profitable banks in the world. It also enjoys a solid
financial position with a solvency ratio of 13.8%. We expect
the stock to continue to perform well due to the success of its
existing strategy and the quality of its management.
ASAHI BANK Asahi Bank, one of the large city banks in Japan, is
JAPAN, 1.6% particularly strong in the Tokyo area. The new governor of Bank
of Japan has said he will focus on the debt problem within
Japan's financial system. As a result, the financial position
of banks should improve as they begin to control their bad
debts.
SIAM CEMENT Siam Cement is a diversified industrial conglomerate that
THAILAND, 1.6% provides broad exposure to Thailand's strong economic growth.
The company is the largest cement producer in the country with
additional interests in the automobile and petrochemical
industries. Earnings soared in 1994 and strong growth is
forecast for 1995.
NIHON CEMENT Nihon Cement is the oldest cement manufacturer in Japan. The
COMPANY, LTD company is expanding overseas with plans to start productions
JAPAN, 1.5% in Vietnam and China. Cost-cutting measures taken in 1994
should boost profitability in 1995.
MATSUSHITA Matsushita Electric Works is a leading manufacturer of building
ELECTRIC WORKS materials and lighting equipment. The company also produces
JAPAN, 1.5% electronic goods and control equipment. It has plans to
increase overseas production and imports while focusing on
cost-cutting measures.
HONDA MOTORS Honda, as well as an automobile manufacturer, is the world's
JAPAN, 1.5% leading motorcycle manufacturer. The company should benefit in
1995 from reorganization of production systems and an
impressive new model line.
6
<PAGE>
PIPER CAPITAL
MANAGEMENT
PIPER CAPITAL MANAGEMENT INCORPORATED
222 SOUTH NINTH STREET, MPLS, MN 55402-3804 1 800 866-7778
PIPER JAFFRAY INC., FUND DISTRIBUTOR AND NASD MEMBER.
THIS DOCUMENT IS PRINTED ON PAPER MADE FROM 50% TOTAL RECOVERED FIBER, INCLUDING
15% POST-CONSUMER WASTE.
149-95 PGPEX-01
<PAGE>
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INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS
PIPER GLOBAL FUNDS INC.:
We have audited the accompanying statement of
assets and liabilities, including the schedule
of investments in securities, of the
Pacific-European Growth Fund (a series of
Piper Global Funds Inc.) as of February 28,
1995, and the related statement of operations
for the year then ended, the statements of
changes in net assets for each of the years in
the two-year period then ended and the
financial highlights for each of the years in
the four-year period then ended and for the
period from April 27, 1990, (commencement of
operations) to February 28, 1991. These
financial statements and the financial
highlights are the responsibility of the
fund's management. Our responsibility is to
express an opinion on these financial
statements and the financial highlights based
on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements and the
financial highlights are free of material
misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts
and disclosures in the financial statements
and the financial highlights. Investment
securities held in custody are confirmed to us
by the custodian. As to securities purchased
and sold but not received or delivered, we
request confirmations from brokers, and where
replies are not received, we carry out other
appropriate auditing procedures. An audit also
includes assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation. We believe
that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and
the financial highlights referred to above
present fairly, in all material respects, the
financial position of Pacific-European Growth
Fund as of February 28, 1995, and the results
of its operations for the year then ended, the
changes in its net assets for each of the
years in the two-year period then ended and
the financial highlights for the periods
specified in the first paragraph above, in
conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
April 7, 1995
<PAGE>
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FEDERAL INCOME TAX INFORMATION
Fiscal Year Ended February 28, 1995
Information for federal income tax purposes is
presented below to aid shareholders in
reporting taxable distributions made by the
fund during the fiscal year ended February 28,
1995. In early February 1995, you should have
received Form 1099-DIV which reported this
distribution. Shareholders should consult a
tax advisor on how to report this distribution
at the state and local levels.
<TABLE>
<CAPTION>
Payable Date Per Share
- ------------------------------------------------------------------------- -----------
<S> <C>
December 19, 1994 ..................................................... $ 1.05179*
-----------
-----------
</TABLE>
* THIS DISTRIBUTION INCLUDES $0.11491 OF NET
SHORT-TERM CAPITAL GAINS AND $0.93688 OF NET
LONG-TERM CAPITAL GAINS.
<PAGE>
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DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
DIRECTORS Jaye F. Dyer, PRESIDENT, DYER MANAGEMENT COMPANY
William H. Ellis, PRESIDENT, PIPER JAFFRAY COMPANIES INC., PIPER CAPITAL
MANAGEMENT INCORPORATED
Karol D. Emmerich, PRESIDENT, THE PARACLETE GROUP
Luella G. Goldberg, DIRECTOR, TCF FINANCIAL, RELIASTAR FINANCIAL CORP.,
HORMEL FOODS CORP.
John T. Golle, PRESIDENT AND DIRECTOR, EDUCATION ALTERNATIVES
George Latimer, DIRECTOR, SPECIAL ACTIONS OFFICE, OFFICE OF THE SECRETARY,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Iain Watt, MANAGING DIRECTOR, EDINBURGH FUND MANAGERS PLC
Michael Balfour, DIRECTOR, EDINBURGH FUND MANAGERS PLC
OFFICERS William H. Ellis, CHAIRMAN OF THE BOARD
Paul A. Dow, PRESIDENT
Robert H. Nelson, VICE PRESIDENT
Nancy S. Olsen, VICE PRESIDENT
David E. Rosedahl, SECRETARY
Charles N. Hayssen, TREASURER
INVESTMENT ADVISER Piper Capital Management Incorporated
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
INVESTMENT SUBADVISER Edinburgh Fund Managers plc
DONALDSON HOUSE, 97 HAYMARKET TERRACE,
EDINBURGH, SCOTLAND EH12 5HD
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
4200 NORWEST CENTER, MINNEAPOLIS, MN 55402
CUSTODIAN First Trust
180 EAST FIFTH STREET, ST. PAUL, MN 55101
TRANSFER AGENT Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
LEGAL COUNSEL Dorsey & Whitney P.L.L.P.
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402
</TABLE>
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FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities at market value* (including a
repurchase agreement of $7,311,000) (note 2) ......... $ 152,296,245
Cash in bank on demand deposit ........................... 1,270,617
Receivable for investment securities sold ................ 2,951,128
Receivable for foreign currency contracts held, at value
(notes 2 and 4) ........................................ 3,758,231
Receivable for fund shares sold .......................... 789,934
Dividends and accrued interest receivable ................ 635,718
----------------
Total assets ......................................... 161,701,873
----------------
LIABILITIES:
Payable for foreign currency contracts held, at value
(notes 2 and 4) ........................................ 3,776,257
Payable for investment securities purchased .............. 2,062,100
Payable for fund shares redeemed ......................... 751,965
Payable for foreign capital gains taxes .................. 507,794
Accrued investment management fee ........................ 84,440
Accrued distribution reimbursement fee ................... 27,852
Other accrued expenses ................................... 98,613
----------------
Total liabilities .................................... 7,309,021
----------------
Net assets applicable to outstanding capital stock ....... $ 154,392,852
----------------
----------------
REPRESENTED BY:
Capital stock - authorized 2 billion shares of $0.01 par
value; outstanding, 12,130,925 shares (note 1) ....... $ 121,309
Additional paid-in capital ............................... 147,092,548
Accumulated net realized gain on investments and foreign
currency transactions .................................. 2,119,404
Unrealized appreciation of investments and translation of
other assets and liabilities denominated in foreign
currencies ............................................. 5,059,591
----------------
Total - representing net assets applicable to
outstanding capital stock ........................ $ 154,392,852
----------------
----------------
Net asset value per share of outstanding capital stock ... $ 12.73
----------------
----------------
* Investments in securities at identified cost ........... $ 147,245,984
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
FEBRUARY 28, 1995
<TABLE>
<S> <C>
INCOME:
Dividends (net of foreign withholding taxes of
$303,013) ............................................ $ 2,339,778
Interest ................................................. 284,350
----------------
Total investment income .............................. 2,624,128
----------------
EXPENSES (NOTE 5):
Investment management fee ................................ 1,731,719
Distribution reimbursement fee ........................... 476,639
Custodian, accounting and transfer agent fees ............ 574,145
Directors' fees .......................................... 14,116
Reports to shareholders .................................. 58,738
Audit and legal fees ..................................... 32,794
Other expenses ........................................... 59,897
----------------
Total expenses ....................................... 2,948,048
----------------
Net investment loss .................................. (323,920)
----------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain (loss) on:
Investments (net of foreign withholding taxes of
$311,238) (note 3) ................................... 14,202,471
Foreign currency transactions .......................... (662,331)
----------------
Net realized gain ...................................... 13,540,140
----------------
Net change in unrealized appreciation or depreciation of:
Investments ............................................ (32,417,352)
Translation of other assets and liabilities denominated
in foreign currencies ................................ (148,391)
----------------
Net change in unrealized appreciation or
depreciation ......................................... (32,565,743)
----------------
Net loss on investments ................................ (19,025,603)
----------------
Net decrease in net assets resulting from
operations ....................................... $ (19,349,523)
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
2/28/95 2/28/94
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment loss .................................... $ (323,920) (309,959)
Net realized gain on investments and foreign currency
transactions ........................................... 13,540,140 6,195,828
Net change in unrealized appreciation or depreciation of
investments and translation of other assets and
liabilities denominated in foreign currencies .......... (32,565,743) 32,607,735
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ........................................... (19,349,523) 38,493,604
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains .................................. (11,890,084) (594,015)
---------------- ----------------
CAPITAL-SHARE TRANSACTIONS:
Proceeds from sale of 3,448,028 and 6,291,594 shares,
respectively ........................................... 50,722,931 82,929,112
Issuance of 774,367 and 33,041 shares for reinvestment of
distributions, respectively ............................ 10,384,329 479,113
Payments for 2,819,369 and 1,126,597 shares redeemed,
respectively ........................................... (41,129,910) (15,443,726)
---------------- ----------------
Increase in net assets from capital share
transactions ......................................... 19,977,350 67,964,499
---------------- ----------------
Total increase (decrease) in net assets .............. (11,262,257) 105,864,088
Net assets at beginning of year ............................ 165,655,109 59,791,021
---------------- ----------------
Net assets at end of year ................................ $ 154,392,852 165,655,109
---------------- ----------------
---------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
The Pacific-European Growth Fund (the fund) is
a series of Piper Global Funds Inc. (Piper
Global) and is registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. The fund is the only series of Piper
Global currently outstanding. On July 6, 1992,
the shareholders approved the conversion of
the fund from a diversified, closed-end
management investment company to a
diversified, open-end "series" management
investment company. The conversion was
implemented on August 31, 1992, when the
registration statement as an open-end fund
became effective. Piper Global is authorized
to issue 100 billion shares of common stock,
two billion of which have been designated for
the fund with a par value of $0.01 per share.
The company's articles of incorporation permit
the board of directors to create additional
funds in the future.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
The significant accounting policies followed
by the fund are as follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on U.S. or
foreign securities exchanges or included in a
national market system are valued at the last
quoted sales price. In instances where market
quotations are not readily available and in
certain other circumstances, fair value is
determined according to methods selected in
good faith by the board of directors.
Short-term securities with maturities of less
than 60 days when acquired or subsequently
within 60 days of maturity are valued at
amortized cost, which approximates market
value.
Securities transactions are accounted for on
the date the securities are purchased or sold.
Realized gains and losses are calculated on
the identified cost basis. Dividend income is
recognized on the ex-dividend date or upon
receipt of ex-dividend notification in the
case of certain foreign securities. Interest
income, including level-yield amortization of
premium and discount, is accrued daily.
FEDERAL TAXES
The fund intends to comply with the
requirements of the Internal Revenue Code
applicable to regulated investment companies
and also intends to distribute all of its
taxable income to shareholders. Therefore, no
income tax provision is required. In addition,
on a calendar-year basis, the fund will
distribute substantially all of its net
investment income and realized gains, if any,
to avoid the payment of any federal excise
taxes.
Net investment income and net realized gains
(losses) differ for financial statement and
tax purposes primarily because of the
recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax
purposes, the "mark-to-market" of certain
Passive Foreign Investment Companies (PFICs)
for tax purposes, and losses deferred due to
"wash sale" transactions. The character of
distributions made during the year from net
investment income or net realized gains may
differ from their ultimate characterization
for federal income tax purposes. Also, due to
the timing of dividend distributions, the
fiscal year in which amounts are distributed
may differ from the year that the income or
realized gains were recorded by the fund.
On the statement of assets and liabilities, as
a result of permanent book-to-tax differences
relating to net operating loss, foreign
currency gains (losses) and PFIC adjustments,
a reclassification adjustment has been made to
increase undistributed net investment income
by $323,920 and decrease accumulated net
realized gain on investments and foreign
currency transactions by $418,766, resulting
in a net increase in additional paid-in
capital of $94,846.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DISTRIBUTIONS TO SHAREHOLDERS
The fund will generally pay dividends from net
investment income and realized capital gains,
if any, on an annual basis. These
distributions are recorded as of the close of
business on the ex-dividend date. Such
distributions are payable in cash or
reinvested in additional shares.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
Securities and other assets and liabilities
denominated in foreign currencies are
translated into U.S. dollars at the closing
rate of exchange. Foreign currency amounts
related to the purchase or sale of securities
and income and expenses are translated at the
exchange rate on the transaction date. It is
not practical to identify that portion of
realized and unrealized gain (loss) on
investments arising from changes in the
exchange rates from the portion arising from
changes in the market value of investments.
The fund also may enter into forward foreign
currency exchange contracts for hedging
purposes. The net U.S. dollar value of foreign
currency underlying all contractual
commitments held by the fund and the resulting
unrealized appreciation or depreciation are
determined using foreign currency exchange
rates from independent pricing sources. The
fund is subject to the credit risk that the
other party will not complete the obligations
of the contract.
(3) INVESTMENT
SECURITY
TRANSACTIONS
Purchases of securities and proceeds from
sales, other than temporary investments in
short-term securities, for the year ended
February 28, 1995, were $99,899,689 and
$90,072,311, respectively.
(4) FORWARD FOREIGN
CURRENCY CONTRACTS
On February 28, 1995, the fund had entered
into 11 foreign currency exchange contracts
that obligate the fund to deliver and receive
currencies at specified future dates. The
unrealized depreciation of $18,026 on these
contracts is included in the accompanying
financial statements. The terms of the open
contracts are as follows:
<TABLE>
<CAPTION>
Exchange Currency to U.S. $ Value Currency to U.S. $ Value
Date Be Delivered as of 2/28/95 Be Received as of 2/28/95
- -------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
3/1/95 365,240USD $ 365,240 35,399,039JPY $ 366,071
3/3/95 459,853USD 459,853 290,403GBP 459,853
3/2/95 944,900CHF 762,570 753,629USD 753,629
3/2/95 815,048DEM 557,946 553,626USD 553,626
3/2/95 1,526,102FRF 297,370 296,740USD 296,740
3/2/95 1,513,885FRF 294,989 294,364USD 294,364
3/2/95 16,078,741ITL 9,680 9,795USD 9,795
3/3/95 56,430,683ITL 33,974 33,593USD 33,593
3/6/95 936,158,853ITL 563,612 560,745USD 560,745
3/9/95 59,227,200IDR 26,763 26,728USD 26,728
3/13/95 255,296GBP 404,260 403,087USD 403,087
------------- -------------
$3,776,257 $3,758,231
------------- -------------
------------- -------------
<FN>
CHF = SWISS FRANC
DEM = GERMAN DEUTSCHE MARK
FRF = FRENCH FRANC
GBP = BRITISH POUND STERLING
IDR = INDONESIAN RUPIAH
ITL = ITALIAN LIRA
JPY = JAPANESE YEN
USD = U.S. DOLLAR
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(5) FEES AND EXPENSES
The fund has entered into the following
agreement with Piper Capital Management
Incorporated (the adviser):
The investment advisory agreement provides the
adviser with a monthly investment management
fee calculated at the annualized rate of 1% of
the fund's average daily net assets up to $100
million, 0.875% on net assets of $100 million
to $200 million and 0.75% on net assets in
excess of $200 million.
Starting in April 1991, the basic fee has been
subject to a performance adjustment for the
applicable performance period, based on the
performance of the fund relative to the Morgan
Stanley Capital International EAFE Index. Such
performance period has consisted of a rolling
12-month period. For each percentage point the
fund outperforms or underperforms the EAFE
Index during the applicable performance
period, the monthly fee is increased or
decreased by 0.05% (on an annualized basis) up
to a maximum of 1/12 of 0.25% of the fund's
average daily net assets during the month for
which the calculation is made. During the year
ended February 28, 1995, the performance
adjustment increased the management fee by
$142,288. Edinburgh Fund Managers plc has been
retained by the adviser as subadviser and is
paid a fee equal to 65% of the investment
management fee plus or minus 90% of the
performance adjustment.
The fund also pays Piper Jaffray Inc. (the
distributor) a monthly fee in connection with
the servicing of each shareholder account and
in connection with distribution related
service provided to the fund. The monthly fee
is limited to a maximum of 1/12 of 0.50% of
the average daily net assets of the fund. The
0.50% reimbursement fee includes 0.25% payable
as a servicing fee and 0.25% payable as a
distribution fee. For the year ended February
28, 1995, Piper Jaffray Inc. voluntarily
agreed to limit the reimbursement fee to an
annual rate of 0.28% of average daily net
assets.
In addition to the investment management fee
and the distribution reimbursement fee, the
fund is responsible for paying most other
operating expenses, including outside
directors' fees and expenses, custodian fees,
registration fees, printing and shareholder
reports, transfer agent fees and expenses,
legal, auditing and accounting services,
insurance and other miscellaneous expenses.
Sales charges received by Piper Jaffray Inc.
for distributing the fund's shares were
$459,632 for the year ended February 28, 1995.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(6) FINANCIAL
HIGHLIGHTS
Per-share data for a share of capital stock
outstanding throughout each period and
selected information for each period are as
follows:
<TABLE>
<CAPTION>
Year Ended February 28,
------------------------------------------------- 4/27/90* to
1995 1994 1993 1992 2/28/91
---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........... $ 15.44 10.81 10.53 10.18 10.97
---------- ---------- ---------- ---------- -----------
Operations
Investment income (loss) -- net................. (0.03) (0.03) -- 0.06 0.20
Net realized and unrealized gains (losses)...... (1.63) 4.72 0.28 0.37 (0.79)
---------- ---------- ---------- ---------- -----------
Total from operations......................... (1.66) 4.69 0.28 0.43 (0.59)
---------- ---------- ---------- ---------- -----------
Distributions to shareholders from:
Net investment income........................... -- -- -- (0.06) (0.20)
Return of capital............................... -- -- -- (0.02) --
Net realized gains.............................. (1.05) (0.06) -- -- --
---------- ---------- ---------- ---------- -----------
Total distributions........................... (1.05) (0.06) -- (0.08) (0.20)
---------- ---------- ---------- ---------- -----------
Net asset value, end of period ................. $ 12.73 15.44 10.81 10.53 10.18
---------- ---------- ---------- ---------- -----------
---------- ---------- ---------- ---------- -----------
SELECTED INFORMATION
Total return++.................................... (11.09%) 43.45% 2.66% 4.44% (5.03%)
Net assets at end of period (000s omitted) ..... $ 154,393 165,655 59,791 35,680 34,492
Ratio of expenses to average daily net
assets+++....................................... 1.76% 1.81% 2.25% 1.92% 1.77%+
Ratio of net investment income (loss) to average
daily net assets+++............................. (0.19%) (0.29%) 0.03% 0.60% 2.36%+
Portfolio turnover rate (excluding short-term
securities)..................................... 57% 52% 59% 69% 10%
</TABLE>
* COMMENCEMENT OF OPERATIONS.
+ ADJUSTED TO AN ANNUAL BASIS.
++ TOTAL RETURN IS BASED ON THE CHANGE IN NET ASSET VALUE
DURING THE PERIOD, ASSUMES REINVESTMENT OF ALL
DISTRIBUTIONS AND DOES NOT REFLECT A SALES CHARGE.
+++ DURING 1995 AND 1994, THE FUND'S DISTRIBUTION FEE WAS
VOLUNTARILY LIMITED BY THE DISTRIBUTOR TO 0.28% AND 0.30%,
RESPECTIVELY, OF AVERAGE DAILY NET ASSETS. HAD THE MAXIMUM
FEE OF 0.50% BEEN IN EFFECT, THE RATIOS OF EXPENSES AND NET
INVESTMENT INCOME (LOSS) WOULD HAVE BEEN 1.98%/(0.41%) AND
2.01%/(0.49%), RESPECTIVELY. DURING 1993, VARIOUS FEES AND
EXPENSES WERE VOLUNTARILY LIMITED OR ABSORBED BY THE
ADVISER AND THE DISTRIBUTOR. HAD THE FUND PAID ALL 1993
EXPENSES, THE RATIOS OF EXPENSES AND NET INVESTMENT INCOME
(LOSS) TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN 2.59%
AND (0.31%). INCLUDED IN 1993 GROSS EXPENSES WERE EXPENSES
OF APPROXIMATELY 0.32% OF AVERAGE DAILY NET ASSETS THAT
RELATED TO CONVERTING TO AN OPEN-END FUND.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
PACIFIC-EUROPEAN GROWTH FUND
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
Number Market
Name of Issuer of Shares Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
COMMON STOCK (92.6%):
EUROPE (28.9%):
FRANCE (5.4%):
Alcatel Alsthom - telecommunications ................. 17,249 $1,388,121
Elf Aquitaine - oil company .......................... 30,040 2,155,832
Eridania Berghim Say - sugar company ................. 10,130 1,480,417
Pinaut Printemps - retail stores ..................... 9,500 1,814,108
Schneider - electronic and electrical equipment ...... 22,100 1,520,129
----------
8,358,607
----------
GERMANY (4.9%):
BASF - chemicals ..................................... 8,150(b) 1,800,945
Deutsche Bank - bank ................................. 3,520 1,733,735
Mannesmann - industrial machinery/manufacturing ...... 5,270 1,535,761
Siemens - electronic capital goods ................... 3,100 1,441,347
VEBA - utilities ..................................... 2,775 1,003,011
----------
7,514,799
----------
ITALY (1.0%):
Stet-societa Finanz Telefon - telecommunications and
cellular ............................................ 537,050 1,498,631
----------
NETHERLANDS (2.7%):
DSM - chemicals ...................................... 21,880 1,776,907
Klondike Post Netherland NV - telecommunications and
cellular ............................................ 34,000 1,199,976
Vnu-Ver Ned Uitgev Ver Bezit - publishing company .... 11,000 1,223,117
----------
4,200,000
----------
NORWAY (1.0%):
Hafslund A - pharmaceuticals ......................... 74,800 1,504,215
----------
SPAIN (1.6%):
Banco Popular Espanol - bank ......................... 19,560 2,484,174
----------
SWITZERLAND (2.4%):
Brown Boveri - general engineering ................... 1,310 1,138,625
Nestle-Registered - food and beverage/processing ..... 820 790,154
Roche Holdings - pharmaceutical company .............. 335 1,850,597
----------
3,779,376
----------
UNITED KINGDOM (9.9%):
Abbey National - bank ................................ 179,700 1,253,465
Allied Lyons PLC - brewing and distilling 84,000 669,060
Bluebird Toys PLC - toy manufacturer ................. 119,600 488,617
British Petroleum - oil and gas ...................... 180,000 1,128,719
British Telecom - telecommunications ................. 200,000 1,195,543
BTR - conglomerate ................................... 193,700 961,580
Compass Group - contract catering .................... 115,600 576,616
GKN - tires and auto parts ........................... 100,000(b) 902,595
Glaxo Holdings - pharmaceuticals ..................... 128,100 1,286,046
Hays Group - business services ....................... 218,400 1,020,217
Marks & Spencer - retail-general ..................... 171,900 1,013,959
</TABLE>
<TABLE>
<CAPTION>
Number Market
Name of Issuer of Shares Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
Pearson PLC - printing and publishing ................ 150,000 $1,314,701
Rank Organisation PLC - multimedia ................... 146,000 853,095
Sheffield Insulation Group - building materials ...... 80,000(b) 295,164
Tesco PLC - retail stores ............................ 248,000 983,734
Trinity Holdings PLC - investment fund ............... 97,000 497,662
Watmoughs - printing and publishing .................. 73,000 410,364
Yorkshire Chemicals - chemicals ...................... 82,500 442,864
----------
15,294,001
----------
Total Europe Common Stocks .......................... 44,633,803
----------
LATIN AMERICA (2.0%):
ARGENTINA (0.5%):
Telecom Argentina Class B - telecommunications ....... 21,100 770,150
----------
BRAZIL (0.5%):
Telebras ADR - telecommunications .................... 25,000(b) 709,500
----------
CHILE (0.7%):
Five Arrows Chile Fund - closed-end fund 400,000 1,012,000
Five Arrows Chile Warrants - closed-end fund ......... 80,000 39,200
----------
1,051,200
----------
MEXICO (0.3%):
Telefonos de Mexico (Telmex) - communications ........ 18,000 499,500
----------
Total Latin America Common Stocks ................... 3,030,350
----------
PACIFIC BASIN (61.7%):
AUSTRALIA (1.9%):
Amcor LTD - freight handling ......................... 205,000 1,480,707
M.I.M. Holdings - mining ............................. 260,000 399,813
Western Mining - metal mining company . 190,000 1,019,791
----------
2,900,311
----------
HONG KONG (3.3%):
Consolidated Electric Power - electric utility ....... 670,000 1,395,382
Dao Heng Bank Group - bank ........................... 509,574 1,176,625
Esprit Asia Holdings - retail ........................ 2,500,000 970,183
Hutchison Whampoa - diversified holding company ...... 300,000 1,272,880
Sun Hung Kai Properties - property ................... 50,000 336,330
----------
5,151,400
----------
INDIA (0.2%):
Videocon International-GDR - electronics 127,000(b) 393,700
----------
INDONESIA (3.2%):
Gadjah Tunggal - tire manufacturer ................... 570,000 700,925
Indonesia Satellite Corporation - telecommunications
and cellular ........................................ 385,000(b) 1,394,235
Mayora Indah - biscuit manufacturer and
distributor ......................................... 231,400 1,127,762
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
PACIFIC-EUROPEAN GROWTH FUND
(CONTINUED)
<TABLE>
<CAPTION>
Number Market
Name of Issuer of Shares Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
PT Bank International Indonesia - banking ............ 360,000 $ 938,177
Pt Indocement - construction materials ............... 160,000 541,516
Texmaco Jaya - textiles .............................. 96,000 179,783
----------
4,882,398
----------
JAPAN (33.4%):
Asahi Bank - bank .................................... 208,000 2,430,610
DDI - telecommunications ............................. 319(b) 2,365,284
Honda Motor - motor vehicles ......................... 158,000 2,385,522
Ichiyoshi Securities - securities broker ............. 125,000 698,035
Isetan - retail stores ............................... 149,000 2,141,779
Japan Oil Transportation - transportation company .... 159,000 953,671
Japan Railway East - rail transportation ............. 432 1,903,123
Kobe Steel - iron/steel and aluminum ................. 820,000(b) 2,119,959
Kumagai Gumi - building materials .................... 400,000 1,981,386
Matsushita Electric Works - electricals .............. 237,000 2,389,607
Mitsubishi Trust and Banking - bank .................. 183,000(b) 2,592,658
Mitsubushi Chemical - chemicals and plastics ......... 603,200 2,894,362
Mitsui Fudosan - real estate ......................... 265,000 2,710,290
Nihon Cement Company, LTD - machine tool
manufacturer ........................................ 344,000 2,390,569
Nihon Jumbo Company - chemicals and plastics ......... 31,000 1,218,201
Nippon Kayaku - chemicals and plastics ............... 236,000 1,488,728
Nippon Telegraph and Telephone -
telecommunications .................................. 285 2,033,609
Nippon Yusen - shipping .............................. 392,000 2,229,576
Nissha Printing - print media/publishing ............. 75,000 1,186,660
Nomura - stock broker ................................ 168,000 2,901,344
Sony Corporation - electronics ....................... 49,000 2,128,232
Sumitomo Bank - commercial bank ...................... 120,000 2,184,074
Topy Industries - tires and auto parts ............... 240,000 1,109,411
Toshiba - electronics ................................ 350,000 2,211,479
Tosoh - chemicals and plastics ....................... 602,000(b) 2,253,608
Tsudakoma - machine tool manufacturer . 101,000 741,571
----------
51,643,348
----------
MALAYSIA (2.3%):
Genting Berhad - hotels and leisure .................. 37,500 324,644
Kim Hin Industries - ceramic tile manufacturer ....... 350,000(b) 1,658,963
Telekom Malaysia - telecommunications ................ 190,000(b) 1,332,263
UMW Holdings - car manufacturer ...................... 78,000 192,495
UMW Holdings Warrants - car manufacturer ............. 78,000 17,873
----------
3,526,238
----------
PAKISTAN (0.4%):
Pakistan Telecom - telecommunications ................ 6,500(b) 640,250
----------
PHILIPPINES (1.1%):
International Container - port operator .............. 650,000 454,369
</TABLE>
<TABLE>
<CAPTION>
Number Market
Name of Issuer of Shares Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
Manila Electric - utilities .......................... 102,808(b) $1,167,819
----------
1,622,188
----------
SINGAPORE (6.1%):
City Development - real estate ....................... 485,280 2,378,167
Clipsal Industries - electronics ..................... 250,000 560,000
Clipsal Warrants - warrants .......................... 20,000 15,800
Development Bank Singapore - financial services ...... 150,000 1,449,475
Genting Berhad - hotels and leisure .................. 150,000 1,298,574
GP Batteries International - manufacturing ........... 428,000(b) 1,236,920
Osprey Maritime - transportation ..................... 450,000(b) 981,000
United Overseas Bank - bank .......................... 148,500 1,445,231
----------
9,365,167
----------
SOUTH KOREA (4.6%):
Daewoo Heavy Industries - heavy equipment
manufacturer ........................................ 60,000(b) 797,037
Daewoo Securities - broker ........................... 900 27,737
Dong-Ah Construction - builder ....................... 26,261(b) 815,101
Pohang Iron And Steel - steel manufacturer ........... 18,000(b) 1,696,768
Shinhan Bank - commercial bank ....................... 44,977 946,648
Shinsegae Department Store - retail stores 10,000 1,041,180
Ssangyong Cement , Convertible, (U.S. dollar) -
building materials .................................. 35,000(b) 536,467
Yukong - oil company ................................. 31,805 1,322,250
----------
7,183,188
----------
TAIWAN (1.0%):
Taiwan ROC Fund - closed-end fund .................... 135,000(b) 1,501,875
----------
THAILAND (4.2%):
Bangkok Bank - bank .................................. 150,000 1,023,113
Pizza Company (Thailand) - food and beverage ......... 210,000 406,275
Pizza Company Warrants - warrants .................... 52,500 26,313
Siam Cement - cement manufacturer .................... 40,000 2,277,203
Srithai Superware - consumer durable goods ........... 100,000 612,804
Thai Farmers Bank - bank ............................. 150,000 944,206
Thai Petrochemical - chemicals and plastics .......... 555,000(b) 1,236,177
----------
6,526,091
----------
Total Pacific Basin Common Stocks ................... 95,336,154
----------
Total Common Stock
(cost: $137,381,085) ............................... 143,000,307
----------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
PACIFIC-EUROPEAN GROWTH FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- --------- ----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
CORPORATE BONDS (1.3%):
Industrial Credit & Investment Corp of India (ICICI),
convertible, (U.S. dollars) - financial services .... $ 850,000 $ 644,938
Teco Electric & Machinery, convertible, (U.S. dollar)
- consumer goods .................................... 1,600,000 1,340,000
----------
Total Corporate Bonds
(cost: $2,553,899) ................................. 1,984,938
----------
SHORT-TERM SECURITIES (4.7%):
Repurchase agreement with Morgan Stanley in a joint
trading account, collateralized by U.S. government
agency securities, acquired on 2/28/95, accrued
interest at repurchase date of $1,212, 5.97%, 3/1/95
(cost: $7,311,000) .................................. 7,311,000 7,311,000
----------
Total Investments in Securities (98.6%)
(cost: $147,245,984) (c) ........................... 152,296,245
----------
Other assets in excess of liabilities (1.4%) ........ 2,096,607
----------
Net assets (100.0%) ............................... $ 154,392,852
----------
----------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) PRESENTLY NON-INCOME PRODUCING.
(C) AT FEBRUARY 28, 1995, THE COST OF INVESTMENTS FOR FEDERAL INCOME TAX
PURPOSES WAS $147,775,955. THE AGGREGATE GROSS UNREALIZED APPRECIATION AND
DEPRECIATION OF INVESTMENTS IN SECURITIES BASED ON THIS COST WERE AS
FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION .... $ 17,268,366
GROSS UNREALIZED DEPRECIATION ...... (12,748,076)
----------
NET UNREALIZED APPRECIATION: ... $ 4,520,290
----------
----------
</TABLE>
