PIPER GLOBAL FUNDS INC /MN, N-30D, 1997-05-30

PIPER GLOBAL FUNDS INC /MN
N-30D, 1997-05-30

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<PAGE>

1997 Semiannual Report

[LOGO]

[GRAPHIC]

INTERNATIONAL
GROWTH FUNDS

EMERGING MARKETS GROWTH FUND
- -------------------------------

PACIFIC-EUROPEAN GROWTH FUND
- -------------------------------
<PAGE>

CONTENTS

EMERGING MARKETS GROWTH FUND

Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . . 9
Investments in Securities. . . . . . . . . . . . . . . . . . . . . . . . . .22
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Glossary***. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

PACIFIC-EUROPEAN GROWTH FUND

Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . . 9
Investments in Securities. . . . . . . . . . . . . . . . . . . . . . . . . .24
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Glossary***. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

International investing involves risks not typically associated with U.S.
investing, including currency fluctuations, political instability and different
accounting standards. Risks are particularly significant when investing in
emerging markets. See the prospectus for more complete information regarding
risks.

This report is intended for shareholders of Emerging Markets Growth Fund and
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 funds.

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

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

[LOGO]

INTERNATIONAL GROWTH FUNDS
- --------------------------------------------------------------------------------
Emerging Markets Growth Fund International investments offer
Pacific-European Growth Fund geographic diversification, often
considered essential for
successful equity investing.

U.S. GROWTH FUNDS
- -------------------------------------
Small Company Growth Fund
Emerging Growth Fund
Growth Fund

GROWTH AND INCOME FUNDS
- -------------------------------------
Growth and Income Fund
Balanced Fund

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

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

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

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

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

<PAGE>

PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
May 15, 1997
- --------------------------------------------------------------------------------

[PHOTO]
WILLIAM H. ELLIS
President
Piper Capital Management
- ----------------------------

INVESTOR EXPECTATIONS
- --------------------------------------------------------------------------------
What investors expect from the stock market over the next 10 years.

[CHART]

56% Expect a 14% return.
29% Expect more than a 14% return.
14% Expect less than a 14% return.

Source: Louis Harris and
Associates, 1996

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

DEAR SHAREHOLDERS:

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

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

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

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

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

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

Sincerely,

/s/ William H. Ellis

William H. Ellis

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1 1997 Semiannual Report-International Growth Funds
<PAGE>

EMERGING MARKETS GROWTH FUND
- --------------------------------------------------------------------------------
May 15, 1997
- --------------------------------------------------------------------------------

[PHOTO]
RICHARD MUCKART
is investment director and head of emerging markets investing at Edinburgh Fund
Managers plc and manager of Emerging Markets Growth Fund. He has 25 years of
financial experience.
- --------------------------------------------------------------------------------

DEAR SHAREHOLDERS:

EMERGING MARKETS GROWTH FUND CLASS A RETURNED 12.94%* FOR THE SIX-MONTH PERIOD
ENDED MARCH 31, 1997, WHICH INCLUDES REINVESTED DISTRIBUTIONS BUT NOT THE FUND'S
SALES CHARGE. This compares to a 7.83% return for the MSCI Emerging Markets Free
Index+ and an 11.08% return for the Lipper Emerging Markets Funds Average++ over
the same time period. The fund's strong performance compared to the index and
the average was largely due to our overweighted*** position in Latin America,
which recorded solid investment results.

DURING THE FIRST THREE MONTHS OF THE PERIOD, THE LATIN AMERICAN MARKETS TRENDED
LOWER BUT THEN RECORDED EXCELLENT RESULTS IN JANUARY AND FEBRUARY BEFORE
RETREATING IN MARCH. Economic conditions continued to improve in the region. In
Mexico, for example, inflation declined, while the economy, bolstered by rising
industrial production, showed clear signs of strength. Rising industrial
production and political stability helped other key markets in the region, most
notably Brazil and Argentina.

THE BEST PERFORMING MARKET IN LATIN AMERICA WAS BRAZIL, FOLLOWED BY ARGENTINA
AND COLOMBIA. The solid performance in Brazil was due to the acceleration of the
country's privatization program and significant tariff increases for
telecommunications and electricity companies. One of our better

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

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

[CHART]

Emerging Markets
"Growth Fund Class A,"
reflects the fund's MSCI Emerging Lipper Emerging
maximum 4% Markets Markets Funds
sales charge Free Index+ Average++
11-93 9581 10000 10000
10608 11653 11494
3-94 10454 10599 10643
8774 10447 10006
11443 12615 11974
8688 10800 10215
3-95 6010 9464 8804
6913 10445 9600
7009 10378 9653
6798 10238 9295
3-96 7624 10875 10097
8488 11330 10560
8497 10920 10318
8789 10855 10390
3-97 9596 11775 11215

+ The Morgan Stanley Capital International (MSCI) Emerging Markets Free Index is
an unmanaged index of securities from emerging markets that are open to foreign
investors.

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

Class A Average Annualized Total Returns
Includes the fund's maximum 4% front-end sales charge.

One Year 20.85%
- --------------------------------------------------------------------------------
Three Year -4.13%
- --------------------------------------------------------------------------------
Since Inception (11/9/93) -1.21%
- --------------------------------------------------------------------------------

Class B Cumulative Total Returns
Includes the fund's contingent deferred sales charge.

Since Inception (2/18/97) -5.42%
- --------------------------------------------------------------------------------

During some periods, the fund's adviser waived or paid certain fund expenses
and/or the fund's distributor voluntarily limited certain 12b-1 fees for the
fund. Otherwise, the class A average annualized total returns would have been:
19.04% one year, -5.45% three year and -2.57% since inception; and the class B
cumulative since inception total return would have been -6.65%.

* Past performance does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that fund shares, when sold,
may be worth more or less than their original cost. PLEASE REMEMBER, YOU COULD
LOSE MONEY WITH THIS INVESTMENT. SAFETY OF PRINCIPAL IS NOT GUARANTEED.

The fund operated as Hercules Latin American Value Fund until June 21, 1996. Up
to that point, it invested only in Latin American securities.

All fund and benchmark returns include reinvested distributions.

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

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

2 1997 Semiannual Report-International Growth Funds

<PAGE>

EMERGING MARKETS GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

performing stocks in Brazil was Telebras, a major telecommunications provider
(as of March 31, 1997, this stock represented 4% of the fund's total assets). In
1996 alone, the stock advanced approximately 60% due to a sharp increase in
earnings. Telebras also continued to benefit from deregulation and privatization
in Brazil. Strong cash flows into the newly established pension funds helped
bolster the Argentinian stock market. Colombia rallied on improving political
and economic conditions.

DURING THE PERIOD, THE FUND BROADENED ITS EXPOSURE TO TAKE ADVANTAGE OF
INVESTMENT OPPORTUNITIES IN SOUTHEAST ASIA, EASTERN EUROPE AND AFRICA. Several
companies in these regions appear to have excellent earnings growth prospects
and are still selling at attractive valuations*** relative to stocks in mature
markets. Moreover, the economies in which they operate are growing at a healthy
rate. Two examples include NMBZ Holdings (0.8%), a national merchant bank in
Zimbabwe, and Sasol (2%), a South African synthetic oil company. To expand into
these areas, we used new cash inflows into the fund and the sale of Latin
American stocks that met our target prices.

IN MARCH, THE FUND SLOWED ITS BUYING PROGRAM IN SOUTHEAST ASIA, EASTERN EUROPE
AND AFRICA AND SLIGHTLY INCREASED ITS CASH POSITION BY TAKING ADDITIONAL PROFITS
IN LATIN AMERICAN STOCKS. The move was due to the downturn in the U.S. financial
markets because of stronger-than-expected domestic economic growth and its
effect on most overseas markets. The fund's above-average cash position late in
the period helped protect shareholder capital during this period.

- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.

[CHART]
Malaysia 16%
Brazil 16%
South Africa 6%
Chile 5%
Hong Kong 4%
Philippines 4%
Argentina 3%
Indonesia 4%
Thailand 3%
Mexico 9%
Other Assets 13%
Other Countries* 17%

* Other countries include China, Hungary, Papua New Guinea, Russia, Taiwan,
Egypt, Ghana, Greece, India, Pakistan, Peru and South Korea.

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

COMPANY SECTOR COUNTRY

1 Telecomunicacoes Brasileiras
(Telebras) Telecommunications Brazil 4%
- --------------------------------------------------------------------------------
2 Grupo Financiero
Banorte Class B Financial Services Mexico 3%
- --------------------------------------------------------------------------------
3 Malayan Cement Construction Materials Malaysia 3%
- --------------------------------------------------------------------------------
4 Chilectra ADR Utilities Chile 2%
- --------------------------------------------------------------------------------
5 Telekomunikasi Indonesia Telecommunications Indonesia 2%
- --------------------------------------------------------------------------------
6 Centrais Eletricas
Brasileiras (Electrobras) Utilities Brazil 2%
- --------------------------------------------------------------------------------
7 Guinness Anchor Brewers & Distillers Malaysia 2%
- --------------------------------------------------------------------------------
8 Usinas Siderurgica de Minas
Gerais (Usiminas) Preferred Stock Metal Products Brazil 2%
- --------------------------------------------------------------------------------
9 Belle Real Estate Philippines 2%
- --------------------------------------------------------------------------------
10 Tan Chong Motor Automobiles Malaysia 2%
- --------------------------------------------------------------------------------

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

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

3 1997 Semiannual Report-International Growth Funds
<PAGE>

EMERGING MARKETS GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

OUR FORECAST FOR EMERGING MARKETS REMAINS POSITIVE. On balance, economies are
expanding at a healthy pace, earnings growth rates are strong, and the political
landscape appears stable. Given the correction*** that took place in Latin
American markets in 1995 and the downturn in many Pacific Basin markets in 1996,
prices of many stocks are also attractive. The same can be said for valuations
in our other principal areas of investment, namely Eastern Europe and North
Africa. We expect interest rates in Mexico, Brazil and Chile to fall as
inflation declines. Lower interest rates should benefit corporate earnings. We
don't believe China's takeover of Hong Kong in July will have a negative impact
on financial markets in southeast Asia. In fact, a non-eventful takeover may be
viewed positively by investors. While the strength of the U.S. economy may cause
continued volatility in the domestic markets, we don't anticipate significant
performance correlation between U.S. securities and the fund's current holdings.

Thank you for your investment in the Emerging Markets Growth Fund. We consider
it a privilege to manage your money and remain dedicated to helping you pursue
your long-term financial goals through superior investment results.

Sincerely,

/s/ Richard Muckart

Richard Muckart
Portfolio Manager

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

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

4 1997 Semiannual Report-International Growth Funds
<PAGE>

PACIFIC-EUROPEAN GROWTH FUND
- --------------------------------------------------------------------------------
May 15, 1997
- --------------------------------------------------------------------------------

[PHOTO]
RICHARD MUCKART
is investment director and head of emerging markets investing at Edinburgh Fund
Managers plc and manager of Pacific-European Growth Fund. He has 25 years of
financial experience.
- --------------------------------------------------------------------------------

DEAR SHAREHOLDERS:

FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1997, PACIFIC-EUROPEAN GROWTH FUND
CLASS A PRODUCED A TOTAL RETURN OF -1.55%,* WHICH INCLUDES REINVESTED
DISTRIBUTIONS BUT NOT THE FUND'S SALES CHARGE. Over the same
time frame, the MSCI European, Australian, Far East (EAFE) Index+, the fund's
benchmark,*** returned 0.15% and the Lipper International Funds Average++
returned 5.33%. Our underperformance was due largely to our overweighting***
in the Pacific Basin and our underweighting*** in Europe. For the period,
European markets significantly outperformed their Pacific Basin counterparts.

POOR PERFORMANCE BY JAPANESE STOCKS HAD A NEGATIVE IMPACT ON THE FUND'S
INVESTMENT RESULTS. Weakness in the Japanese market was due to several factors.
Investors were concerned over the 1997 draft budget, which requires fiscal
tightening to curb government debt. A slowing economy also affected performance.
After showing signs of an improving economy early in 1996, Japan's economy
slowed late in the year and into 1997. Additionally, problems within the
country's banking system had a significantly negative effect on stock prices.
Two holdings in the fund that recorded disappointing results were FUJI Bank (1%
of total assets as of March 31) and Topre (0.5%), an automotive parts

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

[CHART]

Pacific European
"Growth Fund Class A,"
reflects the fund's
maximum 4% Lipper International
sales charge MSCI EAFE Index+ Funds Average++
4-90 9635 10000 10000
9793 11049 10969
7885 8714 9042
8347 9641 9491
3-91 9269 10366 10203
9072 9808 9892
8902 10658 10580
9286 10845 10729
9205 9567 10501
9766 9778 11008
9187 9935 10430
9205 9560 10315
3-93 11005 10715 11197
10742 11802 11758
11610 12593 12893
13840 12710 14352
13168 13163 14101
13640 13844 14263
14149 13867 14800
13427 13735 14168
3-95 13172 14001 14010
13035 14114 14658
13633 14714 15389
14234 15321 15707
14811 15775 16366
14838 16037 16953
14307 16029 16936
14086 16296 17760
3-97 14086 16052 18012

+ 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.

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

Class A Average Annualized Total Returns
Includes the fund's maximum 4% front-end sales charge.

One Year -8.70%
- --------------------------------------------------------------------------------
Five Year 7.99%
- --------------------------------------------------------------------------------
Since Inception (4/27/90) 5.07%
- --------------------------------------------------------------------------------

Class B And Y Cumulative Total Returns
Class B shares include the fund's contingent deferred sales charge. Sales
charges do not apply to Class Y shares.

Class B Since Inception (2/18/97) -5.15%
- --------------------------------------------------------------------------------
Class Y Since Inception (2/18/97) -1.20%
- --------------------------------------------------------------------------------

During some periods, the fund's adviser waived or paid certain fund expenses
and/or the fund's distributor voluntarily limited certain 12b-1 fees for the
fund. Otherwise, the class A average annualized total returns would have been:
- -8.92% one year, 7.73% five year and 4.88% since inception.

The fund operated as a closed-end fund until
August 31, 1992.

All fund and benchmark returns include reinvested distributions.

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

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

5 1997 Semiannual Report-International Growth Funds
<PAGE>

PACIFIC-EUROPEAN GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

supplier. Since we believe the banking system will inevitably recover, we
maintain our favorable long-term outlook on FUJI Bank. We sold our position in
Topre following the end of the period.

AHEAD OF THE DECLINE IN JAPANESE STOCKS, THE FUND ADOPTED A DEFENSIVE STANCE BY
REDUCING ITS ASSET ALLOCATION*** IN JAPAN FROM 46% OF TOTAL ASSETS ON
SEPTEMBER 30, 1996, TO 29% ON MARCH 31, 1997. This strategy reduced the impact
of Japan's stock market performance on the fund's investment results. Despite
Japan's problems, the fund enjoyed good performance from blue-chip***
companies there, namely Matsushita Electric Works (0.8%), Hitachi (2%) and
Murata Manufacturing (2%). Since these companies have significant business
interests in other countries, they are less affected by local market and
economic conditions than most other Japanese companies.

CONTINENTAL EUROPEAN MARKETS PRODUCED SOLID RETURNS, BUT WEAKNESS IN THE DOLLAR
CUT SLIGHTLY INTO THOSE GAINS. Strength in Europe was largely due to a generally
improving economic environment. Germany and Switzerland were two of the better
performing markets. The fund received good investment results from Bayer (2%),
one of the world's largest chemical companies; electronics and communications
giant Siemens (1%); Swiss-based Nestle (2%); and French oil giant Total (2%).
Due to the Easter holidays, the late-quarter decline in U.S. stocks was not
fully reflected in European markets. In March, the fund maintained a defensive
investment posture by emphasizing value stocks in both the Pacific Basin and
European markets. These stocks tend to fare better than growth stocks when
markets trend lower.

- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION BY REGION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.

[GRAPH]

Pacific-European
Growth Fund MSCI EAFE Index**
Japan 29.0 30.0
Other Pacific Basin 13.0 11.0
Europe 48.0 59.0
Latin America 5.0 0.0
Other Assets 4.0 0.0
Short-Term 1.0 0.0

** The MSCI EAFE Index is an unmanaged index of securities listed on the stock
exchanges of Europe, Australia and the Far East.

COMPANY SECTOR COUNTRY

1 Verenigde Nederlandse
Uitgeversbedrijven Verenigd
Bezit (VNU) Printing & Publishing Netherlands 2%
- --------------------------------------------------------------------------------
2 Hitachi Electronics Japan 2%
- --------------------------------------------------------------------------------
3 Bayer Industrials &
Conglomerates Germany 2%
- --------------------------------------------------------------------------------
4 Nestle Food & Beverage Switzerland 2%
- --------------------------------------------------------------------------------
5 AXA Insurance France 2%
- --------------------------------------------------------------------------------
6 Koninklijke Ahold Retail Netherlands 2%
- --------------------------------------------------------------------------------
7 Total Class B Oil & Gas France 2%
- --------------------------------------------------------------------------------
8 Rhone-Poulenc Class A Pharmaceuticals France 2%
- --------------------------------------------------------------------------------
9 Pinault-Printemps-Redoute Retail France 2%
- --------------------------------------------------------------------------------
10 Hoechst Chemicals Germany 2%
- --------------------------------------------------------------------------------

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

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

6 1997 Semiannual Report-International Growth Funds
<PAGE>

PACIFIC-EUROPEAN GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

PACIFIC BASIN MARKETS RECORDED MIXED INVESTMENT RESULTS. For example, while Hong
Kong and Indonesia recorded double digit percentage increases, Singapore, Korea
and Thailand turned in double digit percentage losses. In February, Deng
Xiaoping's death had little impact on Hong Kong and other Chinese related
markets. Some of the fund's better performing stocks included Hutchison Whampoa
(0.8%), an industrial conglomerate in Hong Kong, and Bank International
Indonesia (0.4%), the third largest public bank in Indonesia.

DURING THE PERIOD, THE FUND ENJOYED ATTRACTIVE INVESTMENT RESULTS FROM ITS SMALL
POSITION IN LATIN AMERICA. The best performing market in the region was Brazil,
followed by Colombia and Argentina. Improving economic conditions in key markets
were largely responsible for the gains. In Mexico, for example, inflation
declined, while the economy, bolstered by rising industrial production, showed
clear signs of strength. Rising industrial production and political stability
helped Brazil and Argentina. Due to the uncertainty in the U.S. financial
markets and its potential impact on some markets in the region, the fund reduced
its exposure to Latin America late in the period by selling stocks that had
already reached their price targets for 1997.

LOOKING AHEAD, OUR NEAR-TERM FORECAST FOR JAPAN REMAINS CAUTIOUS. While Japan's
banking difficulties are likely to continue in the coming months, we believe the
potential long-term impact of these problems has been overstated. Just as U.S.
banks overcame their financial woes in the early 1990s, we expect Japanese banks
will inevitably rise beyond their difficulties. Although Japanese bank stocks
are

- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION BY COUNTRY
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.

[MAP]

Short-term assets of 1% and other assets of 4% are not included in the chart.

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

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

7 1997 Semiannual Report-International Growth Funds
<PAGE>

PACIFIC-EUROPEAN GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------

not attractive to us now, our opinion could change once their values begin to
firm and the local economy starts to show clear signs of a sustainable rebound.

AS FOR CONTINENTAL EUROPE AND THE PACIFIC BASIN, OUR OUTLOOK REMAINS FAVORABLE.
From a macro-perspective, several structural developments in these regions bode
well for financial assets. For example, an increasing number of industries are
shifting from government to private control, and entire economies are opening
their markets and eliminating centralized management. Moreover, valuations***
are still attractive, corporate earnings growth remains strong and interest
rates are under control. In the coming months, uncertainty in the U.S. financial
markets is likely to affect some non-U.S. markets. Longer-term, however, we
believe the strong fundamentals underpinning most European and Pacific Basin
economies will be beneficial to stocks in these regions.

We appreciate your investment in the Pacific-European Growth Fund and will do
our best to deliver improved performance in pursuit of the fund's investment
objective.

Sincerely,

/s/ Richard Muckart

Richard Muckart
Portfolio Manager

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

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

8 1997 Semiannual Report-International Growth Funds
<PAGE>
Financial Statements (Unaudited)

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

<TABLE>
<CAPTION>
EMERGING
MARKETS PACIFIC-EUROPEAN
GROWTH FUND GROWTH FUND
------------ -----------------
<S> <C> <C>
ASSETS:
Investments in securities at market value* (including
repurchase agreements of $0 and $1,610,000, respectively)
(note 2) ................................................. $15,033,451 $113,749,271
Cash in bank on demand deposit ............................. 1,746,811 1,086,991
Foreign cash in bank on demand deposit ..................... 273,842 1,483
Receivable for investment securities sold .................. 117,698 3,179,238
Receivable for fund shares sold ............................ 4,469 4,649
Organization costs ......................................... 32,906 --
Dividends and accrued interest receivable .................. 74,563 455,513
Other assets ............................................... 1,911 --
------------ -----------------
Total assets ............................................. 17,285,651 118,477,145
------------ -----------------

LIABILITIES:
Net unrealized depreciation of forward foreign currency
contracts held (note 5) .................................. 614 9,830
Payable for investment securities purchased ................ 597,981 2,479,861
Payable for fund shares redeemed ........................... 50 220,982
Accrued investment management fee .......................... 14,207 98,909
Accrued distribution and service fees ...................... 4,995 29,356
------------ -----------------
Total liabilities ........................................ 617,847 2,838,938
------------ -----------------
Net assets applicable to outstanding capital stock ....... $16,667,804 $115,638,207
------------ -----------------
------------ -----------------

COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital ............... $21,077,217 $114,982,304
Accumulated net investment loss ............................ (52,250) (989,354)
Accumulated net realized loss on investments and foreign
currency translations .................................... (5,980,757) (375,457)
Unrealized appreciation of investments and on translation of
other assets and liabilities denominated in foreign
currencies ............................................... 1,623,594 2,020,714
------------ -----------------

Total - representing net assets applicable to outstanding
capital stock .......................................... $16,667,804 $115,638,207
------------ -----------------
------------ -----------------

NET ASSET VALUE AND OFFERING PRICE:

CLASS A:
Net assets ................................................. $16,588,042 $ 99,108,479
Shares outstanding ......................................... 1,660,462 7,993,303
Net asset value ............................................ $ 9.99 $ 12.40
Maximum offering price per share (net asset value plus 4% of
offering price) .......................................... $ 10.41 $ 12.92

CLASS B:
Net assets ................................................. $ 79,762 $ 24,523
Shares outstanding ......................................... 7,992 1,978
Net asset value and offering price per share ............... $ 9.98 $ 12.40

CLASS Y:
Net assets ................................................. -- $ 16,505,205
Shares outstanding ......................................... -- 1,330,550
Net asset value and offering price per share ............... -- $ 12.40

* Investments in securities at identified cost ............. $13,399,321 $111,712,460
------------ -----------------
------------ -----------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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

1 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
EMERGING
MARKETS PACIFIC-EUROPEAN
GROWTH FUND GROWTH FUND
------------ -----------------
<S> <C> <C>
INCOME:
Dividends (net of foreign withholding taxes of $12,588 and
$69,616, respectively) ................................... $ 95,160 $ 625,758
Interest ................................................... 1,802 17,955
------------ -----------------

Total income ............................................. 96,962 643,713
------------ -----------------

EXPENSES (NOTE 6):
Investment management fee .................................. 74,227 540,872
Distribution and service fees:
Class A .................................................. 37,084 351,610
Class B .................................................. 55 21
Class Y .................................................. -- --
Custodian and accounting fees .............................. 224 194,792
Transfer agent and dividend disbursing agent fees .......... 17,434 67,309
Registration fees .......................................... 14,999 28,757
Reports to shareholders .................................... 33,544 30,219
Amortization of organization costs ......................... 8,925 --
Directors' fees ............................................ 2,522 2,203
Audit and legal fees ....................................... 52,932 47,552
Other expenses ............................................. 11,277 32,180
------------ -----------------
Total expenses ........................................... 253,223 1,295,515
Less Class A expenses waived by the distributor ........ (13,601) (127,715)
Less expenses waived by the adviser .................... (90,598) --
------------ -----------------

Net expenses before expenses paid indirectly ............. 149,024 1,167,800
Less expenses paid indirectly .......................... -- (2,252)
------------ -----------------

Total net expenses ....................................... 149,024 1,165,548
------------ -----------------

Net investment loss ...................................... (52,062) (521,835)
------------ -----------------

NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments (including foreign tax benefit of $0 and
$926,949, respectively) (note 3) ......................... 887,589 2,613,025
Foreign currency transactions .............................. (12,755) (307,435)
------------ -----------------

Net realized gain on investments and foreign currency .... 874,834 2,305,590
Net change in unrealized appreciation or depreciation of
investments and on translation of other assets and
liabilities denominated in foreign currencies ............ 941,453 (4,498,620)
------------ -----------------

Net gain (loss) on investments and foreign currency ...... 1,816,287 (2,193,030)
------------ -----------------

Net increase (decrease) in net assets resulting from
operations ........................................... $ 1,764,225 $ (2,714,865)
------------ -----------------
------------ -----------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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

2 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Financial Statements (continued)
- --------------------------------------------------------------------------------

STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
PACIFIC-EUROPEAN
EMERGING MARKETS GROWTH FUND GROWTH FUND
--------------------------------------------- -------------
Six Months Three Months Six Months
Ended 3/31/97 Ended Year Ended Ended 3/31/97
(Unaudited) 9/30/96 6/30/96* (Unaudited)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) .............................. $ (52,062) $ 9,030 $ 28,691 $ (521,835)
Net realized gain (loss) on investments and foreign currency
transactions ............................................ 874,834 (235,353) 1,703,865 2,305,590
Net change in unrealized appreciation or depreciation of
investments and on translation of other assets and
liabilities denominated in foreign currencies ........... 941,453 256,946 1,774,245 (4,498,620)
------------- ------------- ------------- -------------

Net increase (decrease) in net assets resulting from
operations ............................................ 1,764,225 30,623 3,506,801 (2,714,865)
------------- ------------- ------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income .............................. (7,719) -- -- (659,213)
From net realized gains ................................. -- -- -- (3,746,346)
CLASS B:
From net investment income .............................. -- -- -- --
From net realized gains ................................. -- -- -- --
CLASS Y:
From net investment income .............................. -- -- -- --
From net realized gains ................................. -- -- -- --
------------- ------------- ------------- -------------
Total distributions ..................................... (7,719) -- -- (4,405,559)
------------- ------------- ------------- -------------

CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A ................................................... 1,058,214 (194,919) (12,194,639) (66,396,586)
CLASS B .................................................... 81,186 -- -- 24,774
CLASS Y .................................................... -- -- -- 16,676,773
------------- ------------- ------------- -------------
Increase (decrease) in net assets from capital share
transactions .......................................... 1,139,400 (194,919) (12,194,639) (49,695,039)
------------- ------------- ------------- -------------
Total increase (decrease) in net assets ................. 2,895,906 (164,296) (8,687,838) (56,815,463)

Net assets at beginning of period ......................... 13,771,898 13,936,194 22,624,032 172,453,670
------------- ------------- ------------- -------------

Net assets at end of period ............................... $16,667,804 $ 13,771,898 $ 13,936,194 $ 115,638,207
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

Undistributed net investment income (accumulated net
investment loss) ........................................ $ (52,250) $ 7,531 $ -- $ (989,354)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

* REPRESENTS HISTORICAL FINANCIAL RESULTS OF HERCULES LATIN AMERICAN VALUE FUND PRIOR TO JUNE 21, 1996. SEE NOTE 1 TO
FINANCIAL STATEMENTS.

<CAPTION>
Seven Months
Ended Year Ended
9/30/96 2/29/96
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .............................. $ 292,446 $ 593,324
Net realized gain (loss) on investments and foreign currency
transactions ............................................ 9,295,452 10,814,732
Net change in unrealized appreciation or depreciation of
investments and on translation of other assets and
liabilities denominated in foreign currencies ........... (13,137,979) 13,491,482
------------- -------------
Net increase (decrease) in net assets resulting from
operations ............................................ (3,550,081) 24,899,538
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income .............................. -- (593,324)
From net realized gains ................................. (8,239,435) (10,077,791)
CLASS B:
From net investment income .............................. -- --
From net realized gains ................................. -- --
CLASS Y:
From net investment income .............................. -- --
From net realized gains ................................. -- --
------------- -------------
Total distributions ..................................... (8,239,435) (10,671,115)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A ................................................... 20,931,482 (5,309,571)
CLASS B .................................................... -- --
CLASS Y .................................................... -- --
------------- -------------
Increase (decrease) in net assets from capital share
transactions .......................................... 20,931,482 (5,309,571)
------------- -------------
Total increase (decrease) in net assets ................. 9,141,966 8,918,852
Net assets at beginning of period ......................... 163,311,704 154,392,852
------------- -------------
Net assets at end of period ............................... $ 172,453,670 $ 163,311,704
------------- -------------
------------- -------------
Undistributed net investment income (accumulated net
investment loss) ........................................ $ 191,694 $ --
------------- -------------
------------- -------------
* REPRESENTS HISTORICAL FINANCIAL RESULTS OF HERCULES LATIN
FINANCIAL STATEMENTS.
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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

3 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------

(1) ORGANIZATION
................................
Piper Global Funds Inc. (the company) is registered under
the Investment Company Act of 1940 (as amended) as a
single, open-end management investment company. The
company currently has outstanding two series (the funds):
Emerging Markets Growth Fund is a non-diversified series
and Pacific-European Growth Fund is a diversified series.
The company's articles of incorporation permit the board
of directors to create additional series in the future.

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

CLASS A:
- Subject to a front-end sales charge
- Lower annual expenses than Class B

CLASS B:
- No front-end sales charge
- Subject to a contingent deferred sales charge upon
redemption
- Higher annual expenses than Class A
- Automatic conversion to Class A shares at the beginning
of the sixth year after issuance

CLASS Y:
- Requires an initial investment of $1 million or more
- No front-end or contingent deferred sales charges
- Lower annual expenses than other classes

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

Emerging Markets Growth Fund invests primarily in common
stocks of companies in the world's emerging securities
markets. Emerging Markets Growth Fund commenced operations
and acquired the net assets of Hercules Latin American
Value Fund, a series of Hercules Funds Inc., on June 21,
1996, via a tax-free reorganization. Emerging Markets
Growth Fund had no assets or liabilities prior to the
acquisition. Consequently, the information presented for
Emerging Markets Growth Fund prior to June 21, 1996
represents the financial history of Hercules Latin
American Value Fund.

Pacific-European Growth Fund invests primarily in common
stocks of companies in the Pacific Basin and Europe
(including Eastern Europe). Pacific-European Growth Fund
acquired the net assets of Hercules European Value Fund
and Hercules Pacific Basin Value Fund on June 21, 1996 via
a tax-free reorganization.

(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
................................
INVESTMENTS IN SECURITIES
Investments in securities traded on a U.S. or foreign
securities exchange or included in a national market
system are valued at the last quoted sales price.
Securities for which there were no sales reported on that
day are valued at the mean of the bid and asked prices. In
instances where market

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

4 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
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 60 days or less
are valued at amortized cost, which approximates market
value.

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

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

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

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

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

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

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

5 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

Net investment income and net realized gains (losses) may
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, the "mark-to-market"
of certain investments for tax purposes, losses deferred
due to "wash sale" transactions, and the non-deductibility
of amortization of organization costs.

The character of distributions made during the year from
net investment income or net realized gains may differ
from its ultimate characterization for federal income tax
purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or
realized gains (losses) were recorded by the funds.

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

ORGANIZATION COSTS
Organization costs were incurred in connection with the
start up and initial registration of Emerging Markets
Growth Fund's predecessor. These costs are amortized over
60 months on a straight-line basis. If any or all of the
shares representing initial capital of the fund are
redeemed by any holder thereof prior to the end of the
amortization period, the proceeds will be reduced by the
unamortized organization cost balance in the same
proportion as the number of shares redeemed bears to the
number of initial shares outstanding preceding the
redemption.

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. For financial reporting purposes the
realized and unrealized gain (loss) on investments
reflects changes in exchange rates as well as changes in
the market value of investments.

The funds 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 funds, and the
resulting unrealized appreciation or depreciation, are
determined using foreign currency exchange rates from
independent pricing sources. The funds are subject to the
credit risk that the other party will not complete the
obligations of the contract.

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

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

6 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
repurchase agreements are held by the custodian bank until
maturity of the repurchase agreement. Provisions for all
agreements ensure that the daily market value of the
collateral is in excess of the repurchase amount,
including accrued interest, to protect the funds in the
event of a default.

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

CONCENTRATION OF RISK
Investments in countries with limited or developing
capital markets may involve greater risks than investments
in more developed markets and the prices of such
investments may be volatile. The consequences of
political, social or economic changes in these markets may
have disruptive effects on the market prices of the funds'
investments and the income they generate, as well as the
funds' ability to repatriate such amounts.

USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts in the financial statements. Actual
results could differ from these estimates.

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

<TABLE>
<CAPTION>
EMERGING
MARKETS PACIFIC-EUROPEAN
GROWTH FUND GROWTH FUND
------------ ------------
<S> <C> <C>
Purchases ................................... $11,689,072 $42,577,283
Proceeds from sales ......................... $10,968,241 $97,635,383
</TABLE>

For the six months ended March 31, 1997, no brokerage
commissions were paid to Piper Jaffray Inc., an affiliated
broker.

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

7 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

(4) CAPITAL SHARE
TRANSACTIONS
................................
Capital share transactions for all classes of the funds
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30,
MARCH 31, 1997 (A) SEPTEMBER 30, 1996 1996
----------------------------- ---------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES
----------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
EMERGING MARKETS GROWTH FUND:
CLASS A (authorized 800 million shares of
$0.01 par value):
Purchases of fund shares .................. 540,235 $ 5,048,223 570,420 $ 4,970,884 1,061,183
Issued for reinvested distributions ....... 850 7,638 -- -- --
Redemptions of fund shares ................ (436,026) (3,997,647) (590,645) (5,165,803) (2,625,903)
----------- ------------- ----------- ------------ -----------
105,059 $ 1,058,214 (20,225) $ (194,919) (1,564,720)
----------- ------------- ----------- ------------ -----------
CLASS B (authorized 400 million shares of
$0.01 par value):
Purchases of fund shares .................. 7,995 $ 81,215
Redemptions of fund shares ................ (3) (29)
----------- -------------
7,992 $ 81,186
----------- -------------

<CAPTION>
AMOUNT
-------------
<S> <C>
EMERGING MARKETS GROWTH FUND:
CLASS A (authorized 800 million shares of
$0.01 par value):
Purchases of fund shares .................. $ 8,309,695
Issued for reinvested distributions ....... (20,504,334)
Redemptions of fund shares ................ --
-------------
$ (12,194,639)
-------------
CLASS B (authorized 400 million shares of
$0.01 par value):
Purchases of fund shares ..................
Redemptions of fund shares ................
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED SEVEN MONTHS ENDED FEBRUARY
MARCH 31, 1997 (A) SEPTEMBER 30, 1996 29, 1996
----------------------------- ---------------------------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES
----------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
PACIFIC-EUROPEAN GROWTH FUND:
CLASS A (authorized 800 million shares of
$0.01 par value):
Purchases of fund shares .................. 1,132,217 $ 14,075,156 1,035,524 $ 13,832,617 2,173,410
Issued for reinvested distributions ....... 341,246 4,263,873 610,491 8,150,058 795,210
Redemptions of fund shares ................ (5,350,232) (66,451,223) (2,238,550) (29,624,360) (3,316,664)
Redemptions in exchange for Class Y
shares .................................. (1,459,399) (18,284,392)
Issued in connection with acquisition (note
8) ...................................... 2,139,125 28,573,167 --
----------- ------------- ----------- ------------ -----------
(5,336,168) $ (66,396,586) 1,546,590 $ 20,931,482 (348,044)
----------- ------------- ----------- ------------ -----------
CLASS B (authorized 400 million shares of
$0.01 par value):
Purchases of fund shares .................. 1,978 $ 24,774
----------- -------------
1,978 $ 24,774
----------- -------------
CLASS Y (authorized 200 million shares of
$0.01 par value):
Purchases of fund shares .................. 17,720 $ 221,209
Purchases in exchange for Class A
shares .................................. 1,459,399 18,284,392
Redemptions of fund shares ................ (146,569) (1,828,828)
----------- -------------
1,330,550 $ 16,676,773
----------- -------------

<CAPTION>
AMOUNT
-------------
<S> <C>
PACIFIC-EUROPEAN GROWTH FUND:
CLASS A (authorized 800 million shares of
$0.01 par value):
Purchases of fund shares .................. $ 29,496,476
Issued for reinvested distributions ....... 10,633,411
Redemptions of fund shares ................ (45,439,458)
Redemptions in exchange for Class Y
shares ..................................
Issued in connection with acquisition (note
8) ...................................... --
-------------
$ (5,309,571)
-------------
CLASS B (authorized 400 million shares of
$0.01 par value):
Purchases of fund shares ..................
CLASS Y (authorized 200 million shares of
$0.01 par value):
Purchases of fund shares ..................
Purchases in exchange for Class A
shares ..................................
Redemptions of fund shares ................
</TABLE>

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

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

8 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------

(5) FORWARD FOREIGN
CURRENCY CONTRACTS
................................
On March 31, 1997, the funds had open foreign currency
exchange contracts which obligate the fund to deliver and
receive currencies at specified future dates. The
unrealized appreciation (depreciation) on these contracts
is included in the accompanying financial statements. The
terms of the open contracts are as follows:

<TABLE>
<CAPTION>
U.S. U.S.
CURRENCY $ VALUE CURRENCY $ VALUE
TO BE AS OF TO BE AS OF APPRECIATION
SETTLEMENT DATE DELIVERED 3/31/97 RECEIVED 3/31/97 (DEPRECIATION)
- ----------------------------------- --------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
EMERGING MARKETS GROWTH FUND:
3-Apr-97 .......................... 149,924 AUD $ 117,699 117,211 USD $ 117,211 $ (488)
2-Apr-97 .......................... 674,830 MYR 272,301 272,175 USD 272,175 (126)
------------ ------------ --------------
$ 390,000 $ 389,386 $ (614)
------------ ------------ --------------
------------ ------------ --------------
PACIFIC-EUROPEAN GROWTH FUND:
7-Apr-97 .......................... 427,942 GBP $ 702,467 697,161 USD 697,161 $ (5,306)
7-Apr-97 .......................... 423,052 GBP 694,440 689,194 USD 689,194 (5,246)
7-Apr-97 .......................... 463,710 GBP 761,181 755,430 USD 755,430 (5,751)
7-Apr-97 .......................... 653,194 USD 653,194 400,954 GBP 658,166 4,972
7-Apr-97 .......................... 751,309 USD 751,309 461,181 GBP 757,027 5,718
1-Apr-97 .......................... 37,239,757 JPY 301,171 299,596 USD 299,596 (1,575)
1-Apr-97 .......................... 39,877,237 JPY 322,501 320,814 USD 320,814 (1,687)
1-Apr-97 .......................... 187,674 MYR 75,803 75,728 USD 75,728 (75)
1-Apr-97 .......................... 739,623 MYR 298,741 298,446 USD 298,446 (295)
1-Apr-97 .......................... 757,639 MYR 306,018 305,715 USD 305,715 (303)
2-Apr-97 .......................... 550,081 MYR 222,111 221,964 USD 221,964 (147)
3-Apr-97 .......................... 124,264 MYR 50,185 50,142 USD 50,142 (43)
4-Apr-97 .......................... 220,813 MYR 89,178 89,101 USD 89,101 (77)
7-Apr-97 .......................... 58,417 MYR 23,587 23,572 USD 23,572 (15)
------------ ------------ --------------
$ 5,251,886 $ 5,242,056 $ (9,830)
------------ ------------ --------------
------------ ------------ --------------
</TABLE>

AUD = AUSTRALIAN DOLLAR
GBP = BRITISH POUND
JPY = JAPANESE YEN
MYR = MALAYSIAN RINGGIT
USD = UNITED STATES DOLLAR

(6) EXPENSES
................................
INVESTMENT MANAGEMENT FEE
The company has entered into an investment management
agreement with Piper Capital Management Incorporated
(Piper Capital) under which Piper Capital manages the
funds' assets and furnishes related office facilities,
equipment, research and personnel. The agreement requires
each fund to pay Piper Capital a monthly fee based on
average daily net assets. For Emerging Markets Growth Fund
the fee is equal to an annual rate of 1% of the fund's
average daily net assets. For Pacific-European Growth
Fund, the fee is equal to an annual rate of 1% on the
first $100 million in average daily net assets, 0.875% of
the next $100 million and 0.75% of the net assets in
excess of $200 million.

Since April 1991, the basic fee for Pacific European
Growth Fund has been subject to a performance adjustment.
The adjustment is computed monthly by comparing the
performance of the fund relative to the Morgan Stanley
Capital International EAFE Index, over the preceding 12
month period. For each percentage point the fund
outperforms or underperforms the EAFE Index the monthly
fee is

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

9 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
increased or decreased by 0.05% (on an annual basis) up to
a maximum of 0.25% (on an annual basis) of the fund's
average daily net assets. During the six months ended
March 31, 1997, the performance adjustment decreased the
management fee by $153,582.

Edinburgh Fund Managers plc has been retained by Piper
Capital as the subadviser of Pacific-European Growth Fund
and is paid a fee equal to 65% of the basic investment
management fee plus or minus 90% of the performance
adjustment. Edinburgh Fund Managers plc has entered into
an expense reimbursement agreement with the adviser under
which it pays the adviser a monthly fee equal to 10% of
the basic investment management fee. This 10% fee is a
reimbursement to the adviser for certain expenses it bears
in connection with the administration of Pacific-European
Growth Fund. Edinburgh Fund Managers plc has been retained
by Piper Capital as the subadviser of Emerging Markets
Growth Fund and is paid a fee equal to 0.50% of the fund's
average daily net assets.

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

<TABLE>
<CAPTION>
EMERGING MARKETS PACIFIC-EUROPEAN
GROWTH FUND GROWTH FUND
------------------- ------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS Y
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Payable as a distribution fee ............... 0.25% 0.75% 0.25% 0.75% --
Payable as a service fee .................... 0.25% 0.25% 0.25% 0.25% --
-------- -------- -------- -------- --------
Total distribution and service fees ....... 0.50% 1.00% 0.50% 1.00% --
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total distribution and service fees after
voluntary limitation .................... 0.33% 1.00% 0.33% 1.00% --
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

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

<TABLE>
<CAPTION>
EMERGING
MARKETS
GROWTH PACIFIC-EUROPEAN
FUND GROWTH FUND
---------- ----------------
<S> <C> <C>
Piper Jaffray ............................... $9,934 $46,720
Piper Trust ................................. -- 5,578
---------- ----------------
$9,934 $52,298
---------- ----------------
---------- ----------------
</TABLE>

OTHER FEES AND EXPENSES
In addition to the investment management, distribution and
shareholder account servicing fees, the funds are
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

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

10 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
expenses; legal, auditing and accounting services;
insurance; interest; taxes and other miscellaneous
expenses. For the year ending September 30, 1997, Piper
Capital is voluntarily limiting total fees and expenses
for Emerging Markets Growth Fund to annual rates of 2.00%
and 2.67% of average daily net assets attributable to such
shares for Class A and Class B, respectively.

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

(7) CAPITAL LOSS
CARRYOVERS
................................
For federal income tax purposes, the funds had capital
loss carryovers at September 30, 1996, which, if not
offset by subsequent capital gains, will expire as noted.
Of the total capital loss carryover for Emerging Markets
Growth Fund, utilization of $6,562,064 is limited to
$820,258 per year. Due to limits on utilization of the
capital loss carryovers which Pacific-European Growth Fund
acquired in the acquisition described in note 8,
$2,190,585 of net realized gains could not be offset by
these capital loss carryovers during the seven months
ended September 30, 1996. The utilization of these capital
loss carryovers is limited to $1,065,056 per year.

<TABLE>
<CAPTION>
CAPITAL
LOSS EXPIRATION
CARRYOVERS DATE
----------- --------------
<S> <C> <C>
Emerging Markets Growth Fund ................ $6,797,045 2003 and 2004
Pacific-European Growth Fund ................ $2,190,585 2003
</TABLE>

(8) ACQUISITION
................................
On June 21, 1996, the Pacific-European Growth Fund
acquired all of the net assets of Hercules European Value
Fund and Hercules Pacific Basin Value Fund (Hercules
Funds) in a tax-free reorganization approved by the
Hercules Funds' shareholders on June 18, 1996. The fund
issued 759,622 shares in exchange for net assets of
$10,146,587 of Hercules European Value Fund and 1,379,503
shares for net assets of $18,426,580 of Hercules Pacific
Basin Value Fund. Included in the net assets acquired was
$1,106,240 in unrealized appreciation and $2,940,783 in
accumulated losses. The aggregate net assets of the
combined fund following the transaction totalled
$190,869,104.

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

11 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

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

EMERGING MARKETS GROWTH FUND

<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
(Unaudited)
Six Three
Months Months
Ended Ended Year Ended June 30,
March September --------------------------------
31, 1997 30, 1996 1996(c) 1995 1994(d)
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 8.85 $ 8.84 $ 7.20 $ 9.14 $ 10.00
-------- -------- ------- ------- --------
Operations:
Net investment income (loss) .............. (0.03) -- 0.01 -- 0.01
Net realized and unrealized gains (losses)
on investments .......................... 1.18 0.01 1.63 (1.94) (0.87)
-------- -------- ------- ------- --------
Total from operations ................... 1.15 0.01 1.64 (1.94) (0.86)
-------- -------- ------- ------- --------
Distributions to shareholders:
From net investment income ................ (0.01) -- -- -- --
-------- -------- ------- ------- --------
Net asset value, end of period .............. $ 9.99 $ 8.85 $ 8.84 $ 7.20 $ 9.14
-------- -------- ------- ------- --------
-------- -------- ------- ------- --------
SELECTED INFORMATION
Total return (a) ............................ 12.94% 0.11% 22.78% (21.23)% (8.60)%
Net assets at end of period (in millions) ... $ 17 $ 14 $ 14 $ 23 $ 28
Ratio of expenses to average daily net
assets .................................... 2.00%(f) 2.00%(f) 2.00% 2.00% 2.00%(f)
Ratio of net investment income (loss) to
average daily net assets .................. (0.69)%(f) 0.26%(f) 0.15% (0.03)% 0.14%(f)
Average commission rate paid on portfolio
transactions (b) .......................... $0.0005 $0.0009 n/a n/a n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 82% 0% 140% 161% 78%
Ratios before waivers by the adviser and
distributor:
Ratio of expenses to average daily net
assets before waivers ................... 3.41%(f) 4.09%(f) 3.54% 3.47% 3.10%(f)
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. (2.10)%(f) (1.83)%(f) (1.39)% (1.50)% (0.96)%(f)
</TABLE>

<TABLE>
<CAPTION>
CLASS B
-----------
(Unaudited)
Period
Ended
March 31,
1997(e)
-----------
<S> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 10.13
-----------
Operations:
Net realized and unrealized loss on
investments ............................. (0.15)
-----------
Net asset value, end of period .............. $ 9.98
-----------
-----------
SELECTED INFORMATION
Total return (a) ............................ (1.48)%
Net assets at end of period (in
thousands) ................................ $ 80
Ratio of expenses to average daily net
assets .................................... 2.65%(f)
Ratio of net investment income to average
daily net assets .......................... 0.04%(f)
Average commission rate paid on portfolio
transactions (b) .......................... $0.0005
Portfolio turnover rate (excluding short-term
securities) ............................... 82%
Ratios before waivers by the adviser:
Ratio of expenses to average daily net
assets before waivers ................... 3.92%(f)
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. (1.23)%(f)
</TABLE>

(A) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(B) DISCLOSED IN ACCORDANCE WITH GUIDELINES ADOPTED IN 1996. THE COMPARABILITY
OF THIS INFORMATION MAY BE AFFECTED BY THE FACT THAT COMMISSION RATES PER
SHARE VARY SIGNIFICANTLY AMONG FOREIGN COUNTRIES.
(C) EMERGING MARKETS GROWTH FUND COMMENCED OPERATIONS AND ACQUIRED THE NET
ASSETS OF HERCULES LATIN AMERICAN VALUE FUND ON JUNE 21, 1996, VIA A
TAX-FREE REORGANIZATION. EMERGING MARKETS GROWTH FUND HAD NO ASSETS OR
LIABILITIES PRIOR TO THE ACQUISITION. CONSEQUENTLY, THE INFORMATION
PRESENTED FOR EMERGING MARKETS GROWTH FUND PRIOR TO JUNE 21, 1996
REPRESENTS THE FINANCIAL HISTORY OF HERCULES LATIN AMERICAN VALUE FUND.
(D) COMMENCEMENT OF OPERATIONS OF HERCULES LATIN AMERICAN VALUE FUND WAS
NOVEMBER 9, 1993
(E) COMMENCEMENT OF OFFERING OF CLASS B SHARES WAS FEBRUARY 18, 1997.
(F) ANNUALIZED.

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

12 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

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

PACIFIC-EUROPEAN GROWTH FUND
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------
(Unaudited)
Six
Months
Ended Seven Months Ended Year Ended February 28,
March September 30, -------------------------------------------
31, 1997 1996(b) 1996 1995 1994 1993(d)
-------- ------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 12.94 $ 13.86 $ 12.73 $ 15.44 $ 10.81 $10.53
-------- ---------- ------- ------- ------- -------
Operations:
Net investment income (loss) .............. (0.05) 0.07 0.05 (0.03) (0.03) --
Net realized and unrealized gains (losses)
on investments .......................... (0.15) (0.28) 2.03 (1.63) 4.72 0.28
-------- ---------- ------- ------- ------- -------
Total from operations ................... (0.20) (0.21) 2.08 (1.66) 4.69 0.28
-------- ---------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income ................ (0.05) -- (0.05) -- -- --
From net realized gains on investments .... (0.29) (0.71) (0.90) (1.05) (0.06) --
Tax return of capital ..................... -- -- -- -- -- --
-------- ---------- ------- ------- ------- -------
Total distributions to shareholders ..... (0.34) (0.71) (0.95) (1.05) (0.06) --
-------- ---------- ------- ------- ------- -------
Net asset value, end of period .............. $ 12.40 $ 12.94 $ 13.86 $ 12.73 $ 15.44 $10.81
-------- ---------- ------- ------- ------- -------
-------- ---------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ............................ (1.55)% (1.66)% 16.70% (11.09)% 43.45% 2.66%
Net assets at end of period (in millions) ... $ 99 $ 172 $ 163 $ 154 $ 166 $ 60
Ratio of expenses to average daily net
assets .................................... 1.64%(f) 1.64%(f) 1.55% 1.76% 1.81% 2.25%
Ratio of net investment income (loss) to
average daily net assets .................. (0.77)%(f) 0.29%(f) 0.36% (0.19)% (0.29)% 0.03%
Average commission rate paid on portfolio
transactions (c) .......................... $0.0224 $ 0.0173 n/a n/a n/a n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 30% 49% 65% 57% 52% 59%
Ratios before waivers by the adviser and
distributor:
Ratio of expenses to average daily net
assets before waivers ................... 1.83%(f) 1.83%(f) 1.73% 1.98% 2.01% 2.59%
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. (0.96)%(f) 0.10%(f) 0.18% (0.41)% (0.49)% (0.31)%

1992
-------
<S> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 10.18
-------
Operations:
Net investment income (loss) .............. 0.06
Net realized and unrealized gains (losses)
on investments .......................... 0.37
-------
Total from operations ................... 0.43
-------
Distributions to shareholders:
From net investment income ................ (0.06)
From net realized gains on investments .... --
Tax return of capital ..................... (0.02)
-------
Total distributions to shareholders ..... (0.08)
-------
Net asset value, end of period .............. $ 10.53
-------
-------
SELECTED INFORMATION
Total return (a) ............................ 4.44%
Net assets at end of period (in millions) ... $ 36
Ratio of expenses to average daily net
assets .................................... 1.92%
Ratio of net investment income (loss) to
average daily net assets .................. 0.60%
Average commission rate paid on portfolio
transactions (c) .......................... n/a
Portfolio turnover rate (excluding short-term
securities) ............................... 69%
Ratios before waivers by the adviser and
distributor:
Ratio of expenses to average daily net
assets before waivers ................... n/a
Ratio of net investment income (loss) to
average daily net assets before
waivers ................................. n/a
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS Y
----------- -----------
(Unaudited) (Unaudited)
Period Period
Ended Ended
March 31, March 31,
1997(e) 1997(e)
----------- -----------
<S> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 12.55 $ 12.55
----------- -----------
Operations:
Net investment loss ....................... (0.01) --
Net realized and unrealized loss on
investments ............................. (0.14) (0.15)
----------- -----------
Total from operations ................... (0.15) (0.14)
----------- -----------
Net asset value, end of period .............. $ 12.40 $ 12.40
----------- -----------
----------- -----------
SELECTED INFORMATION
Total return (a) ............................ (1.20)% (1.20)%
Net assets at end of period (in thousands and
millions for Class B and Class Y,
respectively) ............................. $ 25 $ 17
Ratio of expenses to average daily net
assets .................................... 2.46%(f) 1.46%(f)
Ratio of net investment income (loss) to
average daily net assets .................. (0.23)%(f) 0.48%(f)
Average commission rate paid on portfolio
transactions (c) .......................... $0.0224 $0.0224
Portfolio turnover rate (excluding short-term
securities) ............................... 30% 30%
</TABLE>

(A) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(B) ON JUNE 21, 1996, THE FUND ACQUIRED THE NET ASSETS OF HERCULES EUROPEAN
VALUE FUND AND HERCULES PACIFIC BASIN VALUE FUND VIA A TAX-FREE
REORGANIZATION.
(C) DISCLOSED IN ACCORDANCE WITH GUIDELINES ADOPTED IN 1996. THE COMPARABILITY
OF THIS INFORMATION MAY BE AFFECTED BY THE FACT THAT COMMISSION RATES PER
SHARE VARY SIGNIFICANTLY AMONG FOREIGN COUNTRIES.
(D) THE FUND CONVERTED FROM A CLOSED-END INVESTMENT COMPANY TO AN OPEN-END
INVESTMENT COMPANY ON AUGUST 31, 1992. INFORMATION FOR PERIODS PRIOR TO
CONVERSION IS BASED ON THE FUND'S OPERATIONS AS A CLOSED-END FUND. FISCAL
1993 EXPENSES INCLUDE 0.32% RELATED TO CONVERTING TO AN OPEN-END FUND.
(E) COMMENCEMENT OF OFFERING OF CLASS B AND CLASS Y SHARES WAS FEBRUARY 18,
1997.
(F) ANNUALIZED.

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

13 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Investments in Securities (Unaudited)
- --------------------------------------------------------------------------------

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

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

COMMON STOCK (82.4%):
ARGENTINA (2.8%):
Banco Frances del Rio de la Plata ADR - banking and
financial services .............................. 6,702(b) $ 201,060
Perez Companc Class B - oil and gas ............... 34,421 266,803
------------
467,863
------------

BRAZIL (8.9%):
Centrais Eletricas Brasileiras (Electrobras) -
utilities ....................................... 905,958 369,081
Paranaense de Energia Copel - utilities 23,000,000 347,039
Telecomunicacoes Brasileiras (Telebras) -
telecommunications .............................. 3,248,300 325,320
Telecomunicacoes Brasileiras (Telebras) ADR -
telecommunications .............................. 4,400(b) 450,450
------------
1,491,890
------------

CHILE (5.0%):
Cervecerias Unidas ADR - brewer and distiller ..... 12,500 246,875
Chilectra ADR - utilities ......................... 6,500 410,904
Telecomunicaciones de Chile ADR -
telecommunications .............................. 5,911 169,941
------------
827,720
------------

CHINA (1.6%):
Quingling Motors - automobile ..................... 490,000 260,850
------------

EGYPT (0.8%):
Al-Ahram Beverages GDR - brewers and distillers ... 6,680 126,586
------------

GHANA (1.1%):
Guinness Ghana - brewers and distillers ........... 354,889 66,147
Pioneer Tobacco - tobacco ......................... 1,500,000 121,728
------------
187,875
------------

GREECE (1.6%):
Goody's - food and beverage ....................... 11,770 259,567
------------

HONG KONG (3.4%):
China Overseas Land and Investment - real
estate .......................................... 560,000 303,535
China Travel International Investment Hong Kong -
transportation .................................. 550,000 264,399
------------
567,934
------------

HUNGARY (2.4%):
BorsodChem GDR - chemicals ........................ 4,870 178,973
OTP Bank GDR - banking and financial services ..... 9,700 213,400
------------
392,373
------------
</TABLE>

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

INDIA (2.5%):
Mahindra & Mahindra GDR - automobiles ............. 19,300 $ 226,775
Videsh Sanchar Nigam 144A ADR -
telecommunications .............................. 10,400(c) 183,560
------------
410,335
------------

INDONESIA (4.0%):
Indofood Sukses Makmur - food and beverage ........ 128,000 282,549
Telekomunikasi Indonesia - telecommunications ..... 250,000 382,653
------------
665,202
------------

MALAYSIA (16.8%):
Guinness Anchor - brewers and distillers .......... 160,000 368,002
Kentucky Fried Chicken Malaysia - food and
beverage ........................................ 71,000 332,331
Malayan Banking - banking and financial
services ........................................ 20,000 227,983
Malayan Cement - construction and construction
materials ....................................... 212,500 437,305
Malaysia Assurance Alliance - insurance ........... 50,000 288,510
Malaysian Pacific Industries - paper products ..... 73,000 294,563
MBM Resources - automobile parts .................. 97,000 266,156
Tan Chong Motor - automobile ...................... 180,000 348,633
Tenaga Nasional - utilities ....................... 52,000 253,889
------------
2,817,372
------------

MEXICO (8.7%):
Cemex Class B - construction and construction
materials ....................................... 74,000 299,519
Corporacion GEO Class B - real estate 58,900(b) 281,611
Fomento Economico Mexicano (Femsa) Class B - food
and beverage 65,500(b) 290,798
Grupo Carso Class A1 - diversified holding
company ......................................... 23,179(b) 136,330
Grupo Financiero Banorte Class B - banking and
financial services .............................. 455,625(b) 462,194
------------
1,470,452
------------

PAKISTAN (0.6%):
Hub Power GDR - utilities ......................... 4,200 97,650
------------

PAPUA NEW GUINEA (1.8%):
Orogen Minerals - mining .......................... 120,000 292,039
------------

PERU (0.6%):
Telefonica del Peru Class B -
telecommunications .............................. 48,100 106,647
------------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

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

14 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- --------------------------------------------------------------------------------

EMERGING MARKETS GROWTH FUND
(CONTINUED)

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
PHILIPPINES (4.2%):
Belle - real estate ............................... 1,100,000 $ 350,465
San Miguel Class B - brewers and distillers ....... 100,000 347,051
------------
697,516
------------

RUSSIA (1.8%):
Gazprom ADR - oil and gas ......................... 11,650 189,021
Vimpel-Communications ADR - telecommunications .... 3,400 108,800
------------
297,821
------------

SOUTH AFRICA (6.2%):
JD Group - consumer goods ......................... 40,000 228,507
Johnnies Industrial - mining ...................... 17,500 235,577
Persetel - technology ............................. 25,000 156,109
Sasol - oil and gas ............................... 27,000 288,631
South Africa Breweries ADR - brewers and
distillers ...................................... 4,000 126,680
------------
1,035,504
------------

SOUTH KOREA (1.2%):
Kookmin Bank GDR - banking ........................ 11,000 194,700
------------

TAIWAN (2.1%):
Yang Ming Marine Transportation GDR -
transportation .................................. 26,000 345,800
------------

THAILAND (3.5%):
Hana Microelectronics - electronics ............... 55,000 322,096
PTT Exploration and Production - oil and gas ...... 7,000 91,697
Tipco Asphalt -construction and construction
materials ....................................... 41,000 173,762
------------
587,555
------------

ZIMBABWE (0.8%):
NMBZ Holdings - banking ........................... 65,000 138,707
------------

Total Common Stock
(cost: $12,094,158) .......................... 13,739,958
------------

PREFERRED STOCK (7.1%):
BRAZIL (7.1%):
Banco Bradesco - banking and financial services ... 30,000,032 245,002
Cervejaria Brahma - food and beverage 400,730 260,754
Mesbla - retail ................................... 1,300,000 6,130
</TABLE>

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

Petroleo Brasileiro - oil and gas ................. 1,616,500 $ 321,654
Refrigeracao Parana (Refripar) - consumer goods ... 700 1
Usinas Siderurgica de Minas Gerais (Usiminas) -
metal products .................................. 312,731,474 353,902
------------
1,187,443
------------

Total Preferred Stock
(cost: $1,205,163) ........................... 1,187,443
------------

CORPORATE NOTES AND BONDS (0.6%):
Zhenhai Refining and Chemical, convertible bond -
oil and gas, 3.0%, 12/19/03
(cost: $100,000) ................................ $ 100,000 106,050
------------

WARRANTS AND RIGHTS (0.0%):
Indofood Sukses Makmur rights - food products,
6/14/97
(cost: $0) ...................................... 32,000 --
------------

Total Investments in Securities
(cost: $13,399,321)(d) ....................... $ 15,033,451
------------
------------
</TABLE>

NOTES TO INVESTMENT IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) CURRENTLY NON-INCOME PRODUCING.
(C) SECURITY SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM
REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE SOLD TO ONLY TO DEALERS IN THAT PROGRAM OR OTHER ACCREDITED
INVESTORS. SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN DETERMINED TO
BE LIQUID BY THE BOARD OF DIRECTORS.
(D) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 2,234,878
GROSS UNREALIZED DEPRECIATION ...... (600,748)
-----------
NET UNREALIZED APPRECIATION ...... $ 1,634,130
-----------
-----------
</TABLE>

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

15 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Investments in Securities (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PACIFIC-EUROPEAN GROWTH FUND March 31, 1997
.......................................................................................

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

COMMON STOCK (94.9%):
ARGENTINA (0.7%):
Inversiones y Representaciones (IRSA) GDR - real
estate .......................................... 10,900(b) $ 406,025
Telecom Argentina ADR - telecommunications ........ 8,600 395,600
------------
801,625
------------

AUSTRALIA (1.7%):
Lend Lease - financial services ................... 40,000 686,448
Reinsurance Australia - insurance ................. 148,000 498,095
WMC - mining ...................................... 125,000 790,938
------------
1,975,481
------------

BRAZIL (1.0%):
Telecomunicacoes Brasileiras (Telebras) ADR -
telecommunications .............................. 10,900 1,115,888
------------

CHILE (0.5%):
Enersis ADR - utilities ........................... 19,500 619,125
------------

FRANCE (9.3%):
AXA - insurance ................................... 35,271 2,333,640
Pinault - Printemps Redoute - retail . 4,980 2,141,745
Rhone-Poulenc Class A - pharmaceuticals ........... 65,120 2,202,299
Schneider - electronics ........................... 33,400 1,911,285
Total Class B - oil and gas ....................... 25,500 2,206,495
------------
10,795,464
------------

GERMANY (10.5%):
Bayer - diversified industrial and conglomerate ... 56,900 2,387,199
Deutsche Bank - banking and financial services .... 35,200 1,987,987
Hoechst - chemicals ............................... 52,750 2,132,698
Mannesmann - industrial machinery manufacturing ... 4,135 1,575,415
Siemens - electronics ............................. 29,900 1,604,674
Thyssen - metal products .......................... 3,170 716,127
Veba - diversified industrial and conglomerates ... 29,900 1,711,890
------------
12,115,990
------------

HONG KONG (4.8%):
Beijing Datang Power Generation - utilities ....... 326,000 130,422
Cheung Kong - real estate ......................... 160,000 1,409,269
Dao Heng Bank Group - banking and financial
services ........................................ 165,000 753,804
Hutchison Whampoa - diversified holding company ... 130,000(b) 977,261
Hysan Development - real estate ................... 170,000 508,989
New World Development - real estate ............... 115,000(b) 620,362
</TABLE>

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shenzhen Expressway Class H - transportation ...... 722,000 $ 225,954
Wharf Holdings - real estate ...................... 240,000(b) 918,348
------------
5,544,409
------------

INDIA (0.3%):
Hindalco Industries GDR - metal products .......... 10,000(b) 325,650
------------

INDONESIA (0.8%):
Bank Danamon Indonesia - banking . 250,000 286,339
Bank International Indonesia - banking and
financial services .............................. 586,483 445,786
Hanjeya Mandala Sampoerna - tobacco ............... 50,000 234,277
------------
966,402
------------

ITALY (1.2%):
Ente Nazionale Idrocarburi (ENI) - oil and gas .... 279,100 1,414,696
------------

JAPAN (28.6%):
Bank of Tokyo - Mitsubishi - banking 45,000 702,386
Circle K Japan - retail ........................... 31,200(b) 1,312,091
DDI - telecommunications .......................... 241 1,522,208
Fujikura - telecommunications ..................... 180,000 1,288,314
Hankyu Department Stores - retail ................. 136,000 1,060,283
Hitachi - electronics ............................. 270,000 2,401,941
Ichiyoshi Securities - financial services ......... 163,000 461,383
Kyocera - electronics ............................. 36,000(b) 2,043,833
Matsushita Electric Works - construction and
construction materials .......................... 100,000 913,870
Mitsui & Co. - diversities industrial and
conglomerates ................................... 238,000 1,747,707
Mitsui Fudosan - real estate ...................... 123,000(b) 1,273,271
Mori Seiki - industrial machinery and
manufacturing ................................... 100,000 1,374,848
Murata Manufacturing - electronics 50,000 1,795,390
Nihon Cement - construction and construction
materials ....................................... 344,000 1,457,792
Nippon Steel - metal products ..................... 750,000 2,062,273
Nippon Telephone and Telegraph -
telecommunications .............................. 247 1,739,887
Nissan Motor - automobiles ........................ 266,000 1,602,669
Nomura - financial services ....................... 118,000 1,307,400
Sekisui Chemical - chemicals ...................... 135,000 1,331,985
Showa - automobile parts .......................... 150,000 1,105,135
Softbank - technology ............................. 22,100 1,403,033
Sumitomo Trust and Banking - financial services ... 130,000 1,040,841
Terumo - pharmaceuticals .......................... 110,000 1,556,814
Topre - automobiles ............................... 92,000 560,259
------------
33,065,613
------------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

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

16 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- --------------------------------------------------------------------------------

PACIFIC-EUROPEAN GROWTH FUND
(CONTINUED)

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ------------ ------------
<S> <C> <C>
MALAYSIA (1.8%):
Guinness Anchor - brewers and distillers .......... 120,000 $ 276,001
IOI - agribusiness ................................ 180,000 299,243
Malayan Banking - banking and financial
services ........................................ 26,000 296,378
Malayan Cement - construction and construction
materials ....................................... 250,000 514,476
Sunway Building Technology - building and building
materials ....................................... 42,000 159,306
Tenaga Nasional - utilities ....................... 100,000 488,248
------------
2,033,652
------------

MEXICO (1.0%):
Cemex Class CPO - construction and construction
materials ....................................... 83,000 304,452
Fomento Economico Mexicano (Femsa) Class B - food
and beverage .................................... 60,000 266,380
Gruma Class B - food and beverage . 72,800 359,120
Grupo Financiero Banamex Accival (Banacci) Class B
- banking and financial services ................ 115,000 264,736
------------
1,194,688
------------

NETHERLANDS (7.2%):
Fortis Amev - insurance ........................... 48,000 1,867,476
Koninklijke Ahold - retail ........................ 32,000 2,225,983
Royal PTT Netherland - telecommunications ......... 45,000 1,664,538
Verenigde Nederlandse Uitgeversbedrijven Verenigd
Bezit (VNU) - printing and publishing ........... 122,500 2,516,632
------------
8,274,629
------------

PAPUA NEW GUINEA (0.4%):
Orogen Minerals - mining .......................... 195,000 474,563
------------

SINGAPORE (2.2%):
City Developments - real estate ................... 80,400 712,440
Development Bank of Singapore - financial
services ........................................ 76,000(b) 883,904
United Overseas Bank - banking and financial
services ........................................ 88,000 901,627
------------
2,497,971
------------

SWEDEN (1.3%):
Pharmacia & Upjohn - pharmaceuticals .............. 40,000(b) 1,534,138
------------

SWITZERLAND (6.4%):
Brown Boveri - diversified holding company ........ 1,110(b) 1,328,927
Ciba Specialty Chemicals - chemicals .............. 1,360 112,000
Nestle - food and beverages ....................... 2,020(b) 2,355,502
</TABLE>

<TABLE>
<CAPTION>
Number Market
Description of Security of Shares Value (a)
- --------------------------------------------------------- ------------ ------------
<S> <C> <C>
Novartis - pharmaceuticals ........................ 1,360 $ 1,680,941
Roche Holdings - pharmaceuticals .................. 225(b) 1,937,803
------------
7,415,173
------------

THAILAND (0.4%):
Electricity Generating (EGCO) - utilities ......... 205,000 501,541
------------

UNITED KINGDOM (14.8%):
Abbott Mead Vickers - advertising ................. 57,000 717,180
Bass - brewers and distillers ..................... 48,000 641,761
BBA - automobiles ................................. 145,000 860,433
Bluebird Toys - consumer goods .................... 90,500 288,941
British Aerospace - aerospace ..................... 48,000 1,075,117
British Petroleum - oil and gas ................... 100,000 1,159,720
British Telecom - telecommunications .............. 121,000 884,859
Capital Shopping Centers - real estate ............ 155,000 926,134
General Electric - electronics .................... 120,000 735,720
Glaxo Wellcome - pharmaceuticals . 41,000 751,421
Granada - entertainment ........................... 70,000 1,054,253
HSBC Holdings - banking and financial services .... 26,500 648,146
Legal & General Group - insurance ................. 140,000 896,259
Lloyds TSB Group - banking and financial
services ........................................ 130,000 1,065,908
Marks & Spencers - retail ......................... 119,400 955,476
MFI Furniture Group - consumer goods .............. 310,000 732,766
Scholl - consumer goods ........................... 110,000 566,974
SeaPerfect - food and beverage .................... 90,497(b) --
Stagecoach Holdings - transportation .............. 57,000 634,842
Telspec - telecommunications ...................... 45,000 184,669
TI Group - mechanical engineering ................. 90,000 819,929
Yorkshire Chemicals - chemicals ................... 100,000 384,111
Zeneca - pharmaceuticals .......................... 39,000 1,128,326
------------
17,112,945
------------

Total Common Stock
(cost: $107,800,180) ......................... 109,779,643
------------

PREFERRED STOCK (0.8%):
BRAZIL (0.8%):
Centrais Electricas Brasileiras (Electrobras) -
utilities
(cost: $708,654) ................................ 42,850 919,390
------------
</TABLE>

SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.

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

17 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- --------------------------------------------------------------------------------

PACIFIC-EUROPEAN GROWTH FUND
(CONTINUED)

<TABLE>
<CAPTION>
Number of
Shares or
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ------------ ------------
<S> <C> <C>
CORPORATE NOTES AND BONDS (1.2%):
FUJI Bank, convertible bond - banking, 0.25%,
2/1/02
(cost: $1,593,626) .............................. 180,000,000(d) $ 1,381,115
------------

WARRANTS AND RIGHTS (0.1%):
Five Arrow Chile Fund Warrants - closed-end fund,
1/17/00 ......................................... 80,000 32,800
Bank Internasional Indonesia Warrants - banking and
financial services, 6/1/99 ...................... 74,354 26,323
------------

Total Warrants and Rights
(cost: $0) ................................... 59,123
------------

SHORT-TERM SECURITIES (1.4%):
Repurchase agreement with Goldman Sachs, acquired
on 3/31/97, interest of $292, 6.53%, 4/1/97
(cost: $1,610,000) .............................. $ 1,610,000 1,610,000
------------

Total Investments in Securities
(cost: $111,712,460)(e) ...................... $113,749,271
------------
------------
</TABLE>

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

<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 14,057,674
GROSS UNREALIZED DEPRECIATION ...... (12,020,863)
------------
NET UNREALIZED APPRECIATION ...... $ 2,036,811
------------
------------
</TABLE>

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

18 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>
Directors and Officers
- --------------------------------------------------

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

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

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

SUB ADVISER
Edinburgh Fund Managers plc
DONALDSON HOUSE, 97 HAYMARKET TERRACE,
EDINBURGH, SCOTLAND EH12 5HD

CUSTODIAN
Investors Fiduciary Trust Company (Emerging Markets Growth
Fund)
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
First Trust National Association (Pacific-European Growth
Fund)
180 EAST FIFTH STREET, ST. PAUL, MN 55101

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

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

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

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

19 1997 Semiannual Report - Piper
International Growth Funds
<PAGE>

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

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

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

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

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

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

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

CROSS-REINVESTMENT OF DISTRIBUTIONS
Diversify your holdings by reinvesting dividends and capital gains from one
Piper Fund to another.

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

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

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

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

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

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

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

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

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

28 1997 Semiannual Report - International Growth Funds

<PAGE>

GLOSSARY OF TERMS***
- --------------------------------------------------------------------------------

ASSET ALLOCATION
Asset allocation is the process of dividing investment funds among categories of
assets, such as cash equivalents, stocks, bonds, and such tangible assets as
real estate, precious metals and collectables. The term also applies to
subcategories such as government, municipal and corporate bonds, and industry
groupings of common stocks. Asset allocation affects both risk and return and is
a central concept in personal financial planning and investment management.

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

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

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

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

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

VALUATIONS
The determined or estimated value of a
particular stock.

FOR MORE INFORMATION

BY PHONE [GRAPHIC]

1 800 866-7778

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

TO LISTEN TO MONTHLY FUND UPDATES
press 3, press 1, then press:
10 for Emerging Markets Growth Fund
11 for Pacific-European Growth Fund

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

BY MAIL [GRAPHIC]

Piper Capital Management
Attn: Mutual Fund Services
222 South Ninth Street
Minneapolis, MN 55402-3804

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

ON-LINE [GRAPHIC]

http://www.piperjaffray.com/

29
<PAGE>

International Growth Funds

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