<PAGE>
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Period Ended July 31,
1998*
................................................................................
<TABLE>
<S> <C>
INCOME:
Dividends (net of foreign withholding taxes of $85,834) .... $ 746,092
Interest .................................................. 53,687
-----------------
Total income ............................................. 799,779
-----------------
EXPENSES (NOTE 5):
Investment management fee .................................. 414,835
Distribution and service fees:
CLASS A .................................................. 241,450
CLASS B .................................................. 362
CLASS Y .................................................. --
Custodian and accounting fees .............................. 144,951
Transfer agent and dividend disbursing agent fees .......... 97,408
Registration fees .......................................... 26,981
Reports to shareholders .................................... 54,473
Directors' fees ............................................ 9,091
Audit and legal fees ....................................... 55,797
Other expenses ............................................. 6,211
-----------------
Total expenses ........................................... 1,051,559
Less Class A expenses waived by the distributor ........ (85,881)
-----------------
Total net expenses ....................................... 965,678
-----------------
Net investment loss ...................................... (165,899)
-----------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments (note 3) ....................................... 3,994,921
Foreign currency transactions .............................. (407,417)
-----------------
Net realized gain on investments and foreign currency
transactions ........................................... 3,587,504
Net change in unrealized appreciation or depreciation of
investments and on translation of other assets and
liabilities denominated in foreign currencies ............ (2,311,190)
-----------------
Net gain on investments and foreign currency
transactions ........................................... 1,276,314
-----------------
Net increase in net assets resulting from operations ... $ 1,110,415
-----------------
-----------------
* DATE FUND DISCONTINUED OPERATIONS DUE TO MERGER. SEE NOTE 1 IN THE NOTES TO
FINANCIAL STATEMENTS.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
1 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Financial Statements (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
7/31/98* 9/30/97
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment loss ........................................ $ (165,899) $ (235,371)
Net realized gain on investments and foreign currency
transactions ............................................. 3,587,504 864,543
Net change in unrealized appreciation or depreciation of
investments and on translation of other assets and
liabilities denominated in foreign currencies ............ (2,311,190) 6,160,316
------------------ ------------------
Net increase in net assets resulting from operations ..... 1,110,415 6,789,488
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income ............................... (2,760,093) (306,934)
From net realized gains .................................. -- (4,156,148)
CLASS B:
From net investment income ............................... (2,708) (30)
From net realized gains .................................. -- --
CLASS Y:
From net investment income ............................... (305,298) (11,223)
From net realized gains .................................. -- --
------------------ ------------------
Total distributions ...................................... (3,068,099) (4,474,335)
------------------ ------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A .................................................... (77,853,051) (94,756,049)
CLASS B .................................................... (54,394) 53,014
CLASS Y .................................................... (14,053,848) 13,853,189
------------------ ------------------
Decrease in net assets from capital share transactions ... (91,961,293) (80,849,846)
------------------ ------------------
Total decrease in net assets ............................. (93,918,977) (78,534,693)
Net assets at beginning of period .......................... 93,918,977 172,453,670
------------------ ------------------
Net assets at end of period ................................ $ -- $ 93,918,977
------------------ ------------------
------------------ ------------------
Undistributed net investment income ........................ $ -- $ 3,067,134
------------------ ------------------
------------------ ------------------
* DATE FUND DISCONTINUED OPERATIONS DUE TO MERGER. SEE NOTE 1 IN THE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
(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, including
Pacific-European Growth Fund, a diversified series.
The fund commenced offering Class B shares and Class Y
shares on February 18, 1997. All shares existing prior to
that date were classified as Class A shares. Effective
April 21, 1998, the fund no longer offered Class B shares.
Any outstanding Class B shares were automatically
converted to Class A shares as of the close of business on
April 27, 1998. Effective April 15, 1998, Pacific-European
Growth Fund no longer offered Class Y shares. Key features
of each class were:
CLASS A
- Subject to a front-end sales charge
- Lower distribution and service fees than Class B
CLASS B
- No front-end sales charge
- Subject to a contingent deferred sales charge upon
redemption
- Higher distribution and service fees than Class A
- Automatic conversion to Class A shares at the beginning
of the sixth calendar year after issuance
CLASS Y
- Minimum initial investment of $1 million
- No front-end or contingent deferred sales charges
- No distribution and service fees
The classes of shares had the same rights and were
identical in all respects except that each class had
different distribution expenses, had exclusive voting
rights with respect to matters affecting that class and
had different exchange privileges.
Pacific-European Growth Fund invested primarily in the
Pacific Basin (for example, Japan, Hong Kong, Malaysia,
Singapore or Thailand) and Europe (including Eastern
Europe).
On, May 1, 1998, Piper Jaffray Companies Inc., the parent
company of the fund's investment advisor, was acquired by
U.S. Bancorp. U.S. Bancorp is a multi-state bank holding
company headquartered in Minneapolis, Minnesota with a
geographic service area spanning 17 states. As of June 30,
1998, U.S. Bancorp was the 14th largest U.S. commercial
bank holding company, with assets of nearly $73.8 billion.
U.S. Bank National Association ("U.S. Bank"), a wholly
owned subsidiary of U.S. Bancorp, currently acts as the
investment advisor to 32 mutual funds (the "First American
Funds"). As of June 30, 1998, U.S. Bank, acting through
its First American Asset Management group, managed more
than $77.5 billion in assets, including approximately
$28.4 billion in assets of the First American Funds.
- --------------------------------------------------------------------------------
3 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
As discussed in note 7, the net assets of Pacific-European
Growth Fund were acquired by First American Investment
Funds, Inc.-International Fund effective at the close of
business on July 31, 1998. It is anticipated that the
company will be dissolved under Minnesota law as soon as
practicable.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
................................
INVESTMENTS IN SECURITIES
Portfolio securities for which market quotations were
readily available were valued at current market value. If
market quotations or valuations were not readily
available, or if such quotations or valuations were
believed to be inaccurate, unreliable or not reflective of
market value, portfolio securities were valued according
to procedures adopted by the fund's board of directors in
good faith at "fair value", that is, a price that the fund
might have reasonably expected to receive for the security
or other asset upon its current sale.
Pricing services valued domestic and foreign equity
securities (and occasionally fixed-income securities)
traded on a securities exchange or Nasdaq at the last
reported sale price, up to the time of valuation. If there
were no reported sales of a security on the valuation
date, the security was valued at the mean between the
published bid and asked prices reported by the exchange or
Nasdaq. If there were no sales and no published bid and
asked quotations for a security on the valuation date or
the security was not traded on an exchange or Nasdaq, the
pricing service may have obtained market quotations
directly from broker-dealers.
Securities transactions were accounted for on the date
securities were purchased or sold. Realized gains and
losses were calculated on the identified-cost basis.
Dividend income was recognized on the ex-dividend date and
interest income, including amortization of bond discount
and premium, was recorded on an accrual basis.
FEDERAL TAXES
Pacific-European Growth Fund did not qualify as a
regulated investment company during the period ended July
31, 1998, as more than 25% of the fund's total assets were
represented by securities of a single issuer on that date.
However, at July 31, 1998, no liability for federal income
tax was accrued by the fund, as the fund had no taxable
net income or capital gains for the period.
Net investment income and net realized gains (losses) may
have differed 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 investments for
tax purposes and losses deferred due to "wash sale"
transactions. The character of distributions made during
the year from net investment income or net realized gains
may have differed from its ultimate characterization for
federal income tax purposes. In addition, due to the
timing of dividend distributions, the fiscal year in which
amounts were distributed may have differed from the year
that the income or realized gains or losses were recorded
by the fund.
As a result of permanent book-to-tax differences, a
reclassification adjustment has been made to decrease
distributions in excess of net investment income by
$166,864, decrease accumulated net realized loss on
investments by $399,477 and decrease additional
paid-in-capital by $566,341.
- --------------------------------------------------------------------------------
4 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income
were declared separately for each class and paid at least
annually. Net realized gains distributions, if any, were
made at least annually. Distributions were payable in cash
or reinvested in additional shares of the same class.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
Securities and other assets and liabilities denominated in
foreign currencies were 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 were translated at the exchange rate on the
transaction date. For financial reporting purposes the
realized and unrealized gain (loss) on investments
reflected changes in exchange rates as well as changes in
the market value of investments.
The fund also entered into forward foreign currency
exchange contracts for hedging purposes. The net U.S.
dollar value of foreign currency underlying all
contractual commitments held by the fund, and the
resulting unrealized appreciation or depreciation, were
determined using foreign currency exchange rates from
independent pricing sources. The fund was subject to the
credit risk that the other party would not complete the
obligations of the contract.
REPURCHASE AGREEMENTS
For repurchase agreements entered into with certain
broker-dealers, the fund transferred uninvested cash
balances into individual trading accounts and invested in
repurchase agreements secured by U.S. government or agency
obligations. Securities pledged as collateral for all
individual repurchase agreements were held by the fund's
custodian bank until maturity of the repurchase agreement.
Provisions for all agreements ensured that the daily
market value of the collateral was in excess of the
repurchase amount, including accrued interest, to protect
the fund in the event of a default.
ALLOCATION OF INCOME, EXPENSES AND GAINS(LOSSES)
Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses were allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Class-specific expenses, which included distribution and
service fees, were charged directly to such class.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles required
management to make estimates and assumptions that affected
the reported amounts in the financial statements. Actual
results could have differed 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 period ended July 31, 1998, aggregated $24,550,127
and $87,623,308, respectively.
- --------------------------------------------------------------------------------
5 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(4) CAPITAL SHARE
TRANSACTIONS
................................
Capital share transactions for the fund were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
JULY 31, 1998 (b) SEPTEMBER 30, 1997
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
PACIFIC-EUROPEAN GROWTH FUND:
CLASS A:
Sales of fund shares ................. 232,070 $ 3,023,436 1,339,186 $ 16,832,030
Sales in exchange for Class B
shares ............................. 5,137 66,831 -- --
Issued for reinvested
distributions ...................... 221,903 2,642,859 345,346 4,320,301
Redemptions of fund shares ........... (2,817,105) (36,125,707) (7,646,599) (96,625,546)
Redemptions in exchange for Class Y
shares ............................. -- -- (1,531,333) (19,282,834)
Merger into International Fund Class A
(note 7) ........................... (3,478,076) (47,460,470) -- --
---------- ------------ ---------- ------------
(5,836,071) $(77,853,051) (7,493,400) $(94,756,049)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED PERIOD ENDED
APRIL 27, 1998 (c) SEPTEMBER 30, 1997 (a)
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS B:
Sales of fund shares ................. 2,235 $ 28,147 4,118 $ 52,984
Issued for reinvested
distributions ...................... -- -- 2 30
Redemptions of fund shares ........... (1,186) (15,710) -- --
Conversion of fund shares into Class
A .................................. (5,169) (66,831) -- --
---------- ------------ ---------- ------------
(4,120) $ (54,394) 4,120 $ 53,014
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED PERIOD ENDED
JULY 31, 1998 (b) SEPTEMBER 30, 1997 (a)
------------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
CLASS Y:
Sales of fund shares ................. 98,151 $ 1,298,546 94,569 $ 1,258,268
Sales in exchange for Class A
shares ............................. -- -- 1,531,178 19,282,834
Issued for reinvested
distributions ...................... 22,088 263,060 763 10,526
Redemptions of fund shares ........... (957,394) (11,858,697) (514,582) (6,698,439)
Merger into International Fund Class Y
(note 7) ........................... (274,773) (3,756,757) -- --
---------- ------------ --------- -----------
(1,111,928) $(14,053,848) 1,111,928 $13,853,189
---------- ------------ --------- -----------
---------- ------------ --------- -----------
</TABLE>
(a) REPRESENTS PERIOD FROM FEBRUARY 18 (COMMENCEMENT OF
OFFERING OF SHARES) TO SEPTEMBER 30, 1997.
(b) REPRESENTS PERIOD FROM OCTOBER 1, 1997 TO JULY 31,
1998 (MERGER OF FUND).
(c) REPRESENTS PERIOD FROM OCTOBER 1, 1997 TO APRIL 27,
1998 (CONVERSION OF CLASS B SHARES TO CLASS A SHARES).
Piper Jaffray Inc. (Piper Jaffray) acted as distributor
for the fund from October 1, 1997 to April 30, 1998. On
May 1, 1998, SEI Investments Distribution Corporation
(SEI) assumed the role of the fund's distributor. SEI is
not an affiliate of Piper Capital Management Incorporated
or of the fund. Sales charges received by Piper Jaffray
Inc. (Piper Jaffray), the fund's distributor, for
distributing the fund's shares for the period from October
1, 1997 to April 30, 1998 were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS Y
------- -------- --------
<S> <C> <C> <C>
Front-end sales charges ................ $ 9,657 $ -- $ --
Contingent deferred sales charges ...... 9,767 445 --
------- -------- --------
$19,424 $445 $ --
------- -------- --------
------- -------- --------
</TABLE>
- --------------------------------------------------------------------------------
6 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(5) EXPENSES
................................
INVESTMENT MANAGEMENT FEE
The company entered into an investment management
agreement with Piper Capital Management Incorporated
(Piper Capital) under which Piper Capital managed the
fund's assets and furnished related office facilities,
equipment, research and personnel. The agreement required
the fund to pay Piper Capital a monthly fee based on
average daily net assets. The fee was equal to an annual
rate of 1% of 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 investment management fee was
subject to a performance adjustment. The adjustment was
computed monthly by comparing the performance of the
fund's Class A shares relative to the Morgan Stanley
Capital International EAFE Index, over the preceding 12
month period. For each percentage point the fund
outperformed or underperformed the EAFE Index, the monthly
fee was 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 period
ended July 31, 1998, the performance adjustment decreased
the management fee by $118,673. For the period ended July
31, 1998, the effective investment management fee paid by
the fund was 0.78% on an annual basis.
Edinburgh Fund Managers plc was retained by Piper Capital
as the subadvisor of Pacific-European Growth Fund and was
paid a fee equal to 65% of the basic investment management
fee plus or minus 90% of the performance adjustment.
Edinburgh Fund Managers plc entered into an expense
reimbursement agreement with the advisor under which it
paid the advisor a monthly fee equal to 10% of the basic
investment management fee. This 10% fee was a
reimbursement to the advisor for certain expenses it bore
in connection with the administration of the fund.
DISTRIBUTION AND SERVICE FEES
Each fund also paid Piper Jaffray fees accrued daily and
paid quarterly for providing shareholder services and
distribution-related services. The fees for each class,
which were being voluntarily limited for Class A for the
period ended July 31, 1998, are stated below as a percent
of average daily net assets attributable to such shares.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS Y
------- ------- -------
<S> <C> <C> <C>
Payable as a distribution fee .......... 0.25% 0.75% --
Payable as a service fee ............... 0.25% 0.25% --
------- ------- -------
Total distribution and service
fees ............................... 0.50% 1.00% --
------- ------- -------
------- ------- -------
Total distribution and service fees
after voluntary limitation ......... 0.33% 1.00% --
------- ------- -------
------- ------- -------
</TABLE>
SHAREHOLDER ACCOUNT SERVICING FEES
The company also entered into shareholder account
servicing agreements under which Piper Jaffray and Piper
Trust Company (Piper Trust) performed various transfer and
dividend disbursing agent services. The fees, which were
paid monthly to Piper Jaffray and Piper Trust for
providing these services, were equal to an annual rate of
$6.00 per active shareholder account and $1.60 per closed
account. For the period ended July 31, 1998, Piper Jaffray
and Piper Trust received the following amounts in
connection with the shareholder account servicing
agreements:
<TABLE>
<CAPTION>
<S> <C>
Piper Jaffray .......................... $48,251
Piper Trust ............................ 7,681
-------
$55,932
-------
-------
</TABLE>
OTHER FEES AND EXPENSES
In addition to the investment management, distribution and
shareholder account servicing fees, the fund was
responsible for paying most other operating expenses,
including: outside directors' fees and
- --------------------------------------------------------------------------------
7 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
expenses; custodian fees; registration fees; printing and
shareholder reports; transfer agent fees and expenses;
legal, auditing and accounting services; insurance;
interest; taxes and other miscellaneous expenses.
(6) CAPITAL LOSS
CARRYOVER
................................
For federal income tax purposes, the fund had a capital
loss carryover of $1,550,318 at July 31, 1998, which, if
not offset by subsequent capital gains, will expire on
September 30, 2006. As a result of the acquisition of the
fund's net assets by First American Investment Funds, Inc.
- International Fund, these capital loss carryovers will
be available to International Fund, subject to certain
limitations. It is unlikely the board of International
Fund will authorize a distribution of any net realized
capital gains until the available capital loss carryovers
have been offset or expire. Utilization of these capital
loss carryovers by International Fund in the year ended
September 30, 1998 is limited to $419,170.
(7) MERGER
................................
At a special meeting held July 10, 1998, shareholders of
Pacific-European Growth Fund approved a plan under which
each fund's net assets were acquired by First American
Investment Funds, Inc. - International Fund, a diversified
series of an open-end investment management company, in
exchange for shares of the same class. This tax-free
reorganization was effective July 31, 1998.
The following table presents the composition of the net
assets of the fund immediately prior to the merger.
<TABLE>
<CAPTION>
<S> <C>
Capital stock and additional paid-in
capital .............................. $42,454,305
Accumulated net realized loss on
investments .......................... (1,605,538)
Unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies .... 10,368,460
-----------
Total--representing net assets
applicable to capital stock ........ $51,217,227
-----------
-----------
CLASS A:
Net assets ........................... $47,460,470
Net asset value ...................... $ 13.647
Shares outstanding ................... 3,478,076
CLASS Y:
Net assets ........................... $ 3,756,757
Net asset value ...................... $ 13.673
Shares outstanding ................... 274,773
</TABLE>
- --------------------------------------------------------------------------------
8 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(8) 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
---------------------------------------------------------------------------------------------------
Year Ended Seven Months Ended Year Ended February 28,
Period Ended September 30, September 30, -------------------------------------------
July 31, 1998(i) 1997 1996(b) 1996 1995 1994 1993(d)
---------------- ------------- ------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of
period ..................... $ 13.50 $ 12.94 $ 13.86 $ 12.73 $ 15.44 $ 10.81 $10.53
---------------- ------------- ---------- ------- ------- ------- -------
Operations:
Net investment income
(loss) ................... (0.05)(f) (0.04)(f) 0.07 0.05 (0.03) (0.03) --
Net realized and unrealized
gains (losses) on
investments .............. 0.77 0.95 (0.28) 2.03 (1.63) 4.72 0.28
---------------- ------------- ---------- ------- ------- ------- -------
Total from operations .... 0.72 0.91 (0.21) 2.08 (1.66) 4.69 0.28
---------------- ------------- ---------- ------- ------- ------- -------
Distributions to shareholders:
From net investment
income ................... (0.57) (0.03) -- (0.05) -- -- --
From net realized gains .... -- (0.32) (0.71) (0.90) (1.05) (0.06) --
---------------- ------------- ---------- ------- ------- ------- -------
Total distributions to
shareholders ........... (0.57) (0.35) (0.71) (0.95) (1.05) (0.06) --
---------------- ------------- ---------- ------- ------- ------- -------
Net asset value, date of
merger ..................... (13.65) -- -- -- -- -- --
---------------- ------------- ---------- ------- ------- ------- -------
Net asset value, end of
period ................. $ -- $ 13.50 $ 12.94 $ 13.86 $ 12.73 $ 15.44 $10.81
---------------- ------------- ---------- ------- ------- ------- -------
---------------- ------------- ---------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ............. 5.97% 7.25% (1.66)% 16.70% (11.09)% 43.45% 2.66%
Net assets at end of period
(in millions) .............. -- $ 79 $ 172 $ 163 $ 154 $ 166 $ 60
Ratio of expenses to average
daily net assets ........... 1.85%(h) 1.72% 1.64%(h) 1.55% 1.76% 1.81% 2.25%
Ratio of net investment income
(loss) to average daily net
assets ..................... (0.72)%(h) (0.28)% 0.29%(h) 0.36% (0.19)% (0.29)% 0.03%
Average commission rate paid
on portfolio transactions
(c) ........................ $0.0389 $0.0212 $0.0173 n/a n/a n/a n/a
Portfolio turnover rate
(excluding short-term
securities) ................ 40% 62% 49% 65% 57% 52% 59%
Ratios before waivers by the
advisor and distributor:
Ratio of expenses to average
daily net assets before
waivers .................. 2.03%(h) 1.89% 1.83%(h) 1.73% 1.98% 2.01% 2.59%
Ratio of net investment
income (loss) to average
daily net assets before
waivers .................. (0.90)%(h) (0.45)% 0.10%(h) 0.18% (0.41)% (0.49)% (0.31)%
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS Y
----------------------------------------- ----------------------------------------
Period Ended Period Ended Period Ended Period Ended
April 27, 1998(g) September 30, 1997(e) July 31, 1998(i) September 30, 1997(e)
----------------- --------------------- ---------------- ---------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of
period ..................... $ 13.47 $ 12.55 $ 13.55 $ 12.55
----------------- ---------- ---------------- ----------
Operations:
Net investment income
(loss) ................... (0.07)(f) (0.01) (0.01)(f) 0.07
Net realized and unrealized
gains on investments ..... 0.10 0.94 0.75 0.94
----------------- ---------- ---------------- ----------
Total from operations .... 0.03 0.93 0.74 1.01
----------------- ---------- ---------------- ----------
Distributions to shareholders:
From net investment
income ................... (0.57) (0.01) (0.62) (0.01)
----------------- ---------- ---------------- ----------
Net asset value, date of
conversion (Class B) and
merger (Class Y) ........... (12.93) -- (13.67) --
----------------- ---------- ---------------- ----------
Net asset value, end of
period ................. $ -- $ 13.47 $ -- $ 13.55
----------------- ---------- ---------------- ----------
----------------- ---------- ---------------- ----------
SELECTED INFORMATION
Total return (a) ............. 0.67% 7.40% 6.23% 8.03%
Net assets at end of period
(in thousands and millions
for Class B and Class Y,
respectively) .............. -- $ 55 -- $ 15
Ratio of expenses to average
daily net assets ........... 2.51%(h) 2.44%(h) 1.42%(h) 1.42%(h)
Ratio of net investment income
(loss) to average daily net
assets ..................... (1.51)%(h) (0.24)%(h) (0.53)%(h) 0.77%(h)
Average commission rate paid
on portfolio transactions
(c) ........................ $0.0389 $0.0212 $0.0389 $0.0212
Portfolio turnover rate
(excluding short-term
securities) ................ 40% 62% 40% 62%
</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) BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(g) ON APRIL 27, 1998, ALL OUTSTANDING CLASS B SHARES WERE CONVERTED TO CLASS A
SHARES.
(h) ANNUALIZED.
(i) DATE THE FUND DISCONTINUED OPERATIONS DUE TO MERGER. SEE NOTE 1 TO THE
NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Independent Auditors' Report
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS
PIPER GLOBAL FUNDS INC.:
We have audited the accompanying statement of operations
of Pacific-European Growth Fund (a fund within Piper
Global Funds Inc.) for the period from October 1, 1997 to
July 31, 1998 (date of fund merger), the statements of
changes in net assets for the period from October 1, 1997
to July 31, 1998 and the year ended September 30, 1997,
and the financial highlights for periods presented in note
8 to the financial statements. These financial statements
and the financial highlights are the responsibility of the
fund's management. Our responsibility is to express an
opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and the
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and the financial
highlights referred to above present fairly, in all
material respects, for Pacific-European Growth Fund, the
results of its operations, the changes in its net assets
and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally
accepted accounting principles.
As described in note 1 to the financial statements,
Pacific-European Growth Fund merged into International
Fund (a series of First American Investment Funds, Inc.)
effective July 31, 1998.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 11, 1998
- --------------------------------------------------------------------------------
10 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Federal Income Tax Information
- --------------------------------------------------------------------------------
The following per-share information describes the federal
tax treatment of distributions made during the fiscal
year. Distributions for the calendar year will be reported
on Form 1099-DIV. Please consult a tax advisor on how to
report these distributions at the state and local levels.
INCOME DISTRIBUTIONS (TAXABLE AS ORDINARY DIVIDENDS, 0%
QUALIFYING FOR DEDUCTION BY CORPORATIONS)
<TABLE>
<CAPTION>
PACIFIC-EUROPEAN GROWTH
FUND
-------------------------
PAYABLE DATE CLASS A CLASS B CLASS Y
- ---------------------------------------- ------- ------- -------
<S> <C> <C> <C>
December 31, 1997 ...................... $0.5747 $0.5685 $0.6189
------- ------- -------
------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
11 1998 Annual Report - Pacific-European Growth Fund
<PAGE>
Shareholder Update
- --------------------------------------------------------------------------------
SPECIAL MEETING RESULTS
A special meeting of the fund's shareholders was held on
July 10, 1998. Each matter voted upon at that meeting, as
well as the number of votes cast for, against or withheld,
the number of abstentions, and the number of broker
non-votes with respect to such matters, are set forth
below.
1. PROPOSAL TO RATIFY AND APPROVE AN INTERIM ADVISORY
AGREEMENT between the fund and Piper Capital
Management Incorporated ("Piper Capital"), and the
receipt of investment advisory fees by Piper Capital
under such agreement.
<TABLE>
<CAPTION>
CLASS A CLASS Y
SHARES VOTED SHARES VOTED
------------ ------------
<S> <C> <C>
For .................................... 3,650,745 197,413
Against ................................ 79,952 --
Abstain ................................ 116,304 --
------------ ------------
Total ................................ 3,847,001 197,413
------------ ------------
------------ ------------
</TABLE>
2. PROPOSAL TO RATIFY AND APPROVE AN INTERIM SUB-ADVISORY
AGREEMENT between Piper Capital Management and
Edinburgh Fund Managers plc ("EFM") and receipt of
sub-advisory fees by EFM under such agreement.
<TABLE>
<CAPTION>
CLASS A CLASS Y
SHARES VOTED SHARES VOTED
------------ ------------
<S> <C> <C>
For .................................... 3,643,822 197,413
Against ................................ 68,361 --
Abstain ................................ 134,818 --
------------ ------------
Total ................................ 3,847,001 197,413
------------ ------------
------------ ------------
</TABLE>
2. PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF
REORGANIZATION providing for the transfer of the
assets and liabilities of the Fund to International
Fund, a series of First American Investment Funds,
Inc., in exchange for shares of International Fund.
<TABLE>
<CAPTION>
CLASS A CLASS Y
SHARES VOTED SHARES VOTED
------------ ------------
<S> <C> <C>
For .................................... 2,049,330 197,413
Against ................................ 55,873 --
Abstain ................................ 119,534 --
Broker Non-Vote ........................ 1,622,264 --
------------ ------------
Total ................................ 3,847,001 197,413
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
12 1998 Annual Report - Pacific-European Growth Fund
