November 20, 1995
Dear Shareholder:
We are pleased to present your September 30, 1995 annual shareholder's report
for the Bailard, Biehl & Kaiser International Fixed-Income Fund. It includes a
review of the world's fixed income markets, Fund performance and our outlook for
the months ahead.
Performance and Market Review
The global bond markets have performed well since September of last year.
Through the end of September, local currency returns ranged from 11.3% in France
to 18.5% in Australia. In Europe, the core markets of Germany, France and
Denmark dominated the return rankings in the first half of the year on both a
local and U.S. dollar basis. The dollar's decline in March added substantially
to the core markets' returns and at the same time destabilized the peripheral
markets (Spain, Italy and Sweden). In the second half of the fiscal year, the
peripheral markets were the best performers. The recovery of the peripheral
markets in the second half was related to the recovery of the dollar. As the
dollar appreciated against the deutsche mark, the currencies of Spain, Italy and
Sweden appreciated as well. In addition, outside factors contributed to good
performance in the local bonds. In Spain, speculation regarding an early
election in which conservatives were likely to win gave a positive spin to the
market. In Sweden and Italy, rumors that the currencies of these two countries
would join the exchange rate mechanism drew buyers from the core markets. At the
same time, the French market suffered as the fiscal policy failed to meet market
expectations for austerity. Japanese bonds gained strongly in the first half of
the year in both local and U.S. dollar terms. The strength of the yen attracted
investors, despite the low yield, contributing to a 7.1% return from September
to March in yen and a 22.7% return in dollars. The local market continued to
perform well in the second half of the year returning 6.7%, but the dollar
retraced its earlier loss almost entirely, resulting in a second half loss of
7.4% in Japanese bonds in dollar terms.
The Bailard, Biehl & Kaiser International Fixed-Income Fund performed well
throughout the year with a total return of 17.3%* for the twelve months ending
on September 30th, 1995.
Market Outlook
Looking forward, we expect to see continued good performance over the next six
months, particularly in the European markets. The European economies have
continued to slow as the year has progressed. Taxes are weighing heavily on the
French economy, and are expected to depress both consumer demand and business
investment. France may prove to be the weakest economy in Europe over the coming
year. The German economy should continue to slow through the end of 1995, but an
end to the inventory correction and tax cuts should provide fuel for a consumer
lead growth spurt by spring of 1996. We expect yields to continue to decline
through the end of the year and into the first quarter of next year as European
yields converge with U.S. yields. There is
<PAGE>
November 20, 1995
Page Two
currently a 45 basis point spread between ten year yields in Germany and ten
year yields in the U.S. Ultimately this spread should approach zero.
In Japan, we expect the economy to remain weak. The continuing banking crisis
and the need for structural reform will keep the Japanese economy performing
below capacity. Prices have continued to decline over the course of the year.
The recent fiscal stimulus package as well as the accommodative stance of the
Bank of Japan should stabilize prices over the next couple of quarters, but
since the package lacked the necessary reforms, it is likely to fail to bring
Japan out of its slump. We expect the Japanese market to be relatively stable.
The weak economy should prevent yields from rising, while the expectation of an
increased supply of government bonds due to higher expenditures is providing a
floor for yields. In addition, the looming risk of a banking system failure
keeps a risk premium in the market.
We appreciate the opportunity to manage your international bond investments, and
we look forward to continued success in the future. If you have any questions,
please feel free to call.
Sincerely,
Peter M. Hill Burnice E. Sparks, Jr., CFA
Chairman President
- -------------------------
*Average annual total returns for investment periods ended September 30, 1995;
12 months: 17.33%; since inception (10/1/90); 5.49% annualized. These figures
reflect the average annual compounded return over the period indicated that
would equate an initial amount invested in shares of the Fund to the ending
redeemable value of such shares, assuming that all dividends and distributions
by the Fund were reinvested at net asset value. These figures also reflect the
deduction of an assumed 1% annual investment management fee (0.25% quarterly)
payable by clients of Bailard, Biehl & Kaiser through September 30, 1993. As of
10/1/94, the Fund began charging a management fee of 0.75%. Actual fees varied
during this period. The performance data quoted represents past performance, and
the investment return and principal value of an investment in the Bailard, Biehl
& Kaiser International Fixed-Income Fund will fluctuate so that an investor's
shares, when redeemed, may be worth more of less than their original cost.
Further historical performance of the Fund can be found in the graph at the end
of this report.
<PAGE>
<TABLE>
<CAPTION>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
P O R T F O L I O O F I N V E S T M E N T S
S E P T E M B E R 3 0 , 1 9 9 5
Par Value Value
<S> <C> <C>
Senior Securities (95.54%)
Australian Dollar (1.74%)
Government of Australia
10.000% 10/15/02 A$ 1,375,000 $ 1,126,591
Austrian Schilling (1.19%)
Republic of Austria
6.250% 09/14/03 ATS 7,900,000 767,295
Belgium Franc (5.28%) 5.27%
Government of Belgium
10.000% 08/02/00 BEF 38,000,000 1,503,085
Government of Belgium
9.000% 03/28/03 BEF 22,000,000 842,105
Government of Belgium
8.750% 06/25/02 BEF 28,000,000 1,061,946
Total Belgium Franc 3,407,136
British Pound (8.03%)
British Telecom Plc
7.125% 09/15/03 PS 2,000,000 2,943,135
United Kingdom Treasury
9.750% 08/27/02 PS 1,300,000 2,246,135
Total British Pound 5,189,270
Canadian Dollar (4.60%)
Government of Canada
6.500% 06/01/04 C$ 2,200,000 1,508,706
KFW International Finance
10.000% 03/05/01 C$ 1,825,000 1,466,661
Total Canadian Dollar 2,975,367
Danish Kroner (2.82%)
Kingdom of Denmark
8.000% 05/15/03 DKr 10,000,000 1,825,183
French Franc (13.76%)
Government of France (O.A.T.)
7.750% 04/12/00 FF 12,000,000 2,526,193
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Par Value Value
<S> <C> <C>
French Franc - Continued
Government of France (O.A.T.)
6.750% 10/25/03 FF 32,500,000 $ 6,369,207
Total French Franc 8,895,400
German Mark (21.23%)
Deutsche Bundespost
6.250% 10/01/03 DM 6,000,000 4,072,982
German Federal Republic
5.750% 08/20/98 DM 3,500,000 2,509,140
German Federal Republic
8.375% 05/21/01 DM 9,200,000 7,140,270
Total German Mark 13,722,392
Italian Lira (9.57%)
American International Group Inc.
11.700% 12/04/01 ITL 5,500,000,000 3,485,743
Government of Italy
10.500% 04/01/00 ITL 1,600,000,000 966,432
Government of Italy
11.500% 03/01/03 ITL 2,800,000,000 1,732,387
Total Italian Lira 6,184,562
Japanese Yen (18.02%)
Asian Development Bank
5.625% 02/18/02 yen 235,000,000 2,815,846
Autobahnen & Schnellstrassen Fin AG
6.000% 03/11/00 yen 215,000,000 2,551,768
European Investment Bank
6.625% 03/15/00 yen 99,000,000 1,203,750
International Bank For Reconstruction & Development
4.750% 12/20/04 yen 317,000,000 3,712,742
Japan Development Bank
6.500% 09/20/01 yen 110,000,000 1,367,500
Total Japanese Yen 11,651,606
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Par Value Value
<S> <C> <C>
Netherlands Guilder (2.78%)
Government of Netherlands
8.500% 03/15/01 NLG 1,900,000 $ 1,324,526
Government of Netherlands
7.750% 03/01/05 NLG 700,000 471,475
Total Netherlands Guilder 1,796,001
Spanish Peseta (3.71%)
Government of Spain
7.400% 07/30/99 ESP 240,000,000 1,762,965
Government of Spain
10.300% 06/15/02 ESP 80,000,000 632,994
Total Spanish Peseta 2,395,959
Swedish Kroner (2.81%)
Kingdom of Sweden
10.250% 05/05/03 SKr 12,000,000 1,819,547
Total Senior Securities
(Identified Cost $59,756,218) 61,756,309
Short-Term Investments (2.37%)
Brown Brothers Harriman & Co.
(Grand Cayman Branch)
5.50% Call Account $ 1,534,000 1,534,000
Total Investments (97.91%)
(Identified Cost $61,290,218) 63,290,309
Other Assets Less Liabilities (2.09%) 1,349,718
Net Assets (100%) 100.00% $ 64,640,027
</TABLE>
<TABLE>
<CAPTION>
Currency Legend:
<S> <C> <C>
A$ - Australian Dollar NLG - Netherlands Guilder
ATS - Austrian Schilling PS - British Sterling
BEF - Belgium Franc FF - French Franc
C$ - Canadian Dollar ITL - Italian Lira
DKr - Danish Kroner yen - Japanese Yen
DM - German Mark ESP - Spanish Peseta
SKr - Swedish Kroner
</TABLE>
See Notes to Financials
<PAGE>
<TABLE>
<CAPTION>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 1 9 9 5
<S> <C> <C>
Assets
Investments, at value
(Identified cost $61,290,218) $ 63,290,309
Foreign currency, at value
(Identified cost $74,315) 75,189
Cash 793
Receivables:
Interest and recoverable foreign taxes receivable $ 2,167,788
Shares of the Fund sold 3,133 2,170,921
Prepaid expenses 6,704
Total assets 65,543,916
Liabilities
Payables:
Forward currency contracts open (Note 5) 663,285
Forward currency contracts offset 58,549
Shares of the Fund redeemed 40,000 761,834
Accrued management fees (Note 3) 36,097
Other accrued expenses 105,958
Total liabilities 903,889
Net assets (equivalent to $8.78 per share,
representing the offering and
redemption price for 7,360,830 shares
outstanding, 100,000,000 shares authorized) $ 64,640,027
Net assets consist of:
Capital paid in $ 75,831,797
Accumulated net investment income 5,239,089
Accumulated net realized loss on investments
and foreign currency transactions (17,691,732)
Unrealized appreciation (depreciation) on:
Investments $ 2,000,091
Foreign currency (739,218) 1,260,873
$ 64,640,027
==================
</TABLE>
See Notes to Financials
<PAGE>
<TABLE>
<CAPTION>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
S T A T E M E N T O F O P E R A T I O N S
F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 1 9 9 5
<S> <C> <C>
Investment Income
Interest $ 6,998,025
Expenses
Advisory fees $ 768,079
Custodian fees 197,993
Audit and Legal fees 81,002
Transfer agent fees 36,008
Administrative fees 38,130
Directors' fees and expenses 16,498
Insurance 7,446
Printing fees 3,001
Registration fees 12,229
Amortization of deferred organization costs 22,451
Miscellaneous expenses 10,020
Total expenses 1,192,857
Net investment income 5,805,168
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Net realized gain from investments 13,483,733
Net unrealized gain on investments 1,750,599
Net gain on investments 15,234,332
Net realized loss on foreign currency (4,104,103)
Net unrealized gain on foreign currency
and foreign currency denominated assets and
liabilities 627,058
Net loss on foreign currency (3,477,045)
Net gain on investments and foreign currency 11,757,287
FOREIGN CURRENCY
Net increase in net assets resulting from operations $ 17,562,455
</TABLE>
See Notes to Financials
<PAGE>
<TABLE>
<CAPTION>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
S T A T E M E N T O F C H A N G E S I N N E T A S S E T S
For the year ended
September 30,
1995 1994
Increase (Decrease) in Net Assets
<S> <C> <C>
Operations:
Net investment income $ 5,805,168 $ 9,289,309
Net realized gain (loss) on investments 13,483,733 (24,406,275)
Net unrealized gain (loss) on investments 1,750,599 (5,956,040)
Net realized loss on foreign currency (4,104,103) (14,833,174)
Net unrealized gain on foreign currency and
foreign currency denominated assets and
liabilities 627,058 4,925,907
Net increase (decrease) resulting from operations 17,562,455 (30,980,273)
Distributions to shareholders:
From net investment income (5,805,168) (4,030,548)
For tax purposes in excess of book
net investment income (1,595,884) -
From net realized gains - (4,128,952)
Return of capital - (8,548,576)
Total distributions (7,401,052) (16,708,076)
Fund share transactions:
Proceeds from shares sold 38,075,626 30,238,536
Net asset value of shares issued on
reinvestment of distributions 5,311,388 13,647,780
Cost of shares redeemed (125,274,300) (25,316,287)
Net increase (decrease) resulting
from Fund share transactions (81,887,286) 18,570,029
Net decrease (71,725,883) (29,118,320)
Net Assets
Beginning of year 136,365,910 165,484,230
End of year (including undistributed
(overdistributed) net investment
income of $5,239,089 and
($229,900), respectively) $ 64,640,027 $ 136,365,910
Number of Fund Shares
Sold 4,780,250 3,071,155
Issued on reinvestment of distributions 651,288 1,389,616
Redeemed (15,069,674) (2,720,832)
Net increase (decrease) (9,638,136) 1,739,939
</TABLE>
See Notes to Financials
<PAGE>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
N O T E S T O F I N A N C I A L S T A T E M E N T S
Note 1 - Summary of Significant Accounting Policies
The Bailard, Biehl & Kaiser International Fixed-Income Fund (the "Fund") is a
series of the Bailard, Biehl & Kaiser International Fund Group, Inc. (the
"Group"), which was organized as a Maryland corporation in June 1990 and is
registered under the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. The following significant accounting
policies are followed by the Fund in the preparation of its financial statements
and are in conformity with generally accepted accounting principles.
Security Valuation
Investments in securities traded on an exchange or quoted on the
over-the-counter market are valued at the last transaction price reported on the
principal exchange or market on which the issue is traded, or, if no transaction
occurred during the day, at the mean between the current closing bid and asked
prices, except U.S. Government obligations which in all cases are stated at the
mean between the current closing bid and asked price, as last reported by a
pricing service approved by the Board of Directors.
When market quotations are not readily available, or when restricted securities
or other assets are being valued, such assets are valued at fair value as
determined in good faith by or under procedures established by the Board of
Directors. Short-term investments denominated in U.S. dollars that will mature
in 60 days or less are stated at amortized cost; such investments denominated in
foreign currencies are stated at amortized cost as determined in the foreign
currency and translated to U.S. dollars at the current day's exchange rate.
The Fund's investment in foreign securities may entail risks due to the
potential of political and economic instability in the countries in which the
securities are offered or the issuers conduct their operations. It is the Fund's
policy to continuously monitor its exposure to these risks.
Foreign Currency
Foreign currency amounts, other than the cost of investments, are translated
into U.S. dollar values at the mean of the bid and offer price of such currency
against U.S. dollars last quoted on the valuation date. The cost of investments
is translated at the rates of exchange prevailing on the dates the portfolio
securities were acquired.
Effective October 1, 1994, the Fund adopted AICPA Statement of Position 93-4,
under which the Fund includes foreign exchange gains and losses from dividends
and interest receivable and other foreign-currency denominated payables and
receivables in realized and unrealized gain (loss) on foreign currency. The Fund
does not isolate that portion of realized and unrealized gain (loss) on
investments resulting from changes in foreign exchange rates on investments from
fluctuations arising from changes in the market price of securities for
financial reporting purposes. Fluctuations in foreign exchange rates on
investments are thus included with net realized and unrealized gain (loss) on
investments.
Forward Foreign Currency Exchange Contracts
In connection with purchases and sales of securities denominated in a foreign
currency the Fund may enter into forward foreign currency exchange contracts
("contracts"). Additionally, from time to time the Fund may enter into contracts
to sell foreign currencies to hedge certain foreign currency denominated assets.
All commitments are "marked-to-market" daily at the applicable translation rates
supplied by a quotation service and any resulting unrealized gains or losses are
included as unrealized appreciation (depreciation) on foreign currency
denominated assets and liabilities. The Fund records realized gains or losses at
the time the forward contract is settled. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the terms
of their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
Federal Income Taxes
The Fund's policy is to comply with the requirements of the Internal Revenue
Code ("Code") applicable to regulated investment companies and to distribute all
of its income to its shareholders. It is also the Fund's intention to make
distributions in amounts sufficient to avoid imposition of excise tax under the
Code. Therefore, no provision is made for Federal income or excise taxes.
In accordance with AICPA Statement of Position 93-2, the Fund has increased both
undistributed net investment income and accumulated net realized loss on
investments by $7,056,000, primarily to reflect the reclassification of net
realized foreign currency gains ( including realized gains on bonds
characterized as foreign currency gains) as a component of net investment income
for tax purposes under the Code.
<PAGE>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
N O T E S T O F I N A N C I A L S T A T E M E N T S
Note 1 - Continued
The tax status of distributions paid to shareholders for the Fund's fiscal year
ending September 30, 1995 is determined based on full-year results of
operations. The amount of distributions for tax purposes in excess of book net
investment income represents amounts paid to shareholders from foreign currency
gains reclassified to net investment income under the Code.
At September 30, 1995, the Fund had a capital loss carryforward of approximately
$17,193,000, which principally resulted from the deferral under the Code of net
capital losses realized during the period from November 1, 1993 to September 30,
1994. These losses may be carried forward through the fiscal year ending
September 30, 2003. Additionally, the Fund incurred net capital losses of
$325,000 during the period from November 1, 1994 to September 30, 1995 which may
be deferred to the Fund's 1996 fiscal year under the Code. These losses will
first be used to offset any net capital gain realized during that year, and any
remaining net capital loss may be carried forward through the fiscal year ending
September 30, 2004.
Other
Investment security transactions are accounted for on the trade date (the date
the order to buy or sell is executed). Interest income is recorded on the
accrual basis. Distributions to shareholders are recorded on the ex-dividend
date. The Fund uses the identified cost method for determining realized gain or
loss on investments. Certain expenses of the Group are allocated between the
series of the Group in such manner as the Directors deem appropriate.
Certain costs incurred in the organization and registration of the Fund were
capitalized and amortized under the straight line method over a period of five
years.
Note 2 - Purchases and Sales of Securities
For the year ended September 30, 1995, purchases and sales of investment
securities other than U.S. Government obligations and short-term investments
aggregated $146,075,929 and $213,848,959, respectively. Purchases and sales of
U.S. Government obligations aggregated $23,388,750 and $22,946,250,
respectively.
Note 3 - Management Agreement and Other Transactions with Affiliates
The Fund has entered into an Investment Management Agreement with Bailard, Biehl
& Kaiser, Inc. (the "Advisor") for investment advisory services. Under the
agreement, the Advisor receives a fee, payable monthly, at the annual rate of
0.75% of the average net assets of the Fund. Advisory fees paid on shares of the
Fund owned are taken into account in the computation of fees payable under
individual advisory agreements for advisory clients of the Advisor.
The Advisor has agreed to reimburse the Fund to the extent that the Fund's
operating expenses (as defined) exceed 2.5% of the first $30 million of average
net assets, 2.0% of the next $70 million and 1.5% of average net assets in
excess of $100 million.
Certain officers and directors of the Group are currently officers and directors
of the Advisor and receive total compensation from the Group of $500 per year.
Each other director is compensated by the Group at the total rate of $6,000 per
year plus $1,000 for each meeting of the Board of Directors attended and travel
expenses incurred in such meetings.
Note 4 - Unrealized Appreciation (Depreciation) on a Tax Basis
Unrealized appreciation (depreciation) on September 30, 1995, based on the cost
of securities of $61,463,496 for federal income tax purposes, consists of the
following:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 2,373,682
Gross unrealized depreciation (546,869)
Net unrealized appreciation $ 1,826,813
</TABLE>
<PAGE>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
N O T E S T O F I N A N C I A L S T A T E M E N T S
(Continued)
Note 5 - Commitments
At September 30, 1995 the Fund had entered into forward foreign currency
contracts which obligated the Fund to exchange currencies at specified future
dates. At the maturity of a forward contract, the Fund may either make delivery
of the foreign currency from currency held, if any, or from the proceeds of
portfolio securities sold, or it may terminate its obligation to deliver the
foreign currency at any time by purchasing an offsetting contract. The value of
amounts due to the Fund under the contracts, including contracts which have been
offset but remained unsettled, has been netted against the value of the currency
to be delivered by the Fund and the remaining amount is shown as payable for
forward currency contracts in the financial statements. Open forward foreign
currency exchange contracts outstanding at September 30,1995 were as follows:
<TABLE>
<CAPTION>
Currency Currency Delivery Unrealized
Receivable Deliverable Date Appreciation/(Depreciation)
<S> <C> <C> <C> <C> <C>
$ 2,350,000 (Y) 226,187,500 10/31/95 $ 53,072
4,076,014 FF 20,726,534 11/08/95 (136,524)
4,900,000 DM 7,195,748 11/08/95 (150,357)
1,901,535 BEF 58,225,000 11/15/95 (86,420)
2,621,358 (pound) 1,695,739 11/15/95 (56,265)
1,368,801 NLG 2,283,160 11/15/95 (63,186)
663,446 DM 988,534 11/16/95 (30,603)
2,151,942 (Y) 218,766,450 11/20/95 (76,040)
1,300,000 (Y) 127,608,000 11/20/95 402
1,518,596 ESP 194,760,000 11/21/95 (50,778)
3,581,545 ITL 5,830,755,000 11/21/95 (12,168)
1,514,114 C$ 2,055,183 11/22/95 (14,585)
1,934,424 DKr 10,832,773 11/27/95 (22,858)
528,023 A$ 708,280 11/30/95 (6,206)
858,614 SKr 6,051,082 11/30/95 (10,769)
</TABLE>
Currency Legend:
A$ - Australian Dollar
BEF - Belgian Franc
C$ - Canadian Dollar
DKr - Danish Kroner
DM - German Mark
ESP - Spanish Peseta
ITL - Italian Lira
NLG - Netherlands Guilder
(pound) - British Sterling
FF - French Franc
SKr - Swedish Kroner
(Y) - Japanese Yen
<PAGE>
<TABLE>
<CAPTION>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
F I N A N C I A L H I G H L I G H T S
For a share outstanding throughout the year:
Year ended September 30,(!)
1995(2) 1994(2) 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $8.02 $10.85 $11.29 $10.94 $10.00
Income from Investment Operations:
Net Investment Income 0.47 0.61 0.67 0.85 0.73
Net Realized/Unrealized Gain (Loss) on
Securities and Foreign Currency 0.86 (2.39) 0.39 0.53 0.38
Total from Investment Operations 1.33 (1.78) 1.06 1.38 1.11
Less Distributions:
Net Investment Income (0.45) (0.26) (1.08) (0.94) (0.17)
For Tax Purposes in Excess of Book
Net Investment Income (0.12) - - - -
Capital Gains - (0.27) (0.42) (0.09) -
Return of Capital - (0.52) - - -
Total Distributions (0.57) (1.05) (1.50) (1.03) (0.17)
Net Asset Value, End of Year $8.78 $8.02 $10.85 $11.29 $10.94
Total Return 17.33% (17.90%) 10.65% 13.57% 11.22%
Ratios/Supplemental Data:
Net Assets, End of Year (000's) $64,640 $136,366 $165,484 $115,628 $91,256
Ratio of Expenses to Average Net Assets 1.16% 1.12% 0.42% 0.64% 0.53%
Ratio of Net Investment Income to
Average Net Assets 5.66% 5.87% 6.25% 7.37% 7.33%
Portfolio Turnover Rate 179% 319% 157% 140% 89%
<FN>
(1) On October 1, 1993, the Fund and the Advisor entered into a new
Investment Management Agreement pursuant to which the Fund is required to pay
certain management fees to the Advisor. Prior to that date, advisory fees were
directly charged to clients of Bailard, Biehl & Kaiser, Inc. and the Fund did
not pay any management fees. If such directly charged fees were included as Fund
expense at an assumed 1% annual rate payable quarterly, pro-forma total return
information would be as follows (unaudited): Year Ended September 30,
1993 1992 1991
9.55% 12.44% 10.12%
(2) Net investment income per share has been computed on the basis of
average shares outstanding before adjustments for book/tax differences.
"Distributions for Tax Purposes in Excess of Net Investment Income" represent
amounts paid from foreign currency gains reclassified to net investment income
under the Internal Revenue Code.
</FN>
</TABLE>
<PAGE>
B A I L A R D , B I E H L & K A I S E R
I N T E R N A T I O N A L F I X E D - I N C O M E F U N D
R E P O R T O F I N D E P E N D E N T A C C O U N T A N T S
To the Shareholders and the Board of Directors of
Bailard, Biehl & Kaiser International Fixed-Income Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Bailard, Biehl & Kaiser
International Fixed-Income Fund (a series of Bailard, Biehl & Kaiser
International Fund Group, Inc.) at September 30, 1995, and the results of its
operations, the changes in its net assets and its financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities owned at
September 30, 1995 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 17, 1995
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[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
---------------------------------------------------
Average Annual Total Return
---------------------------------------------------
------------------------- -------------------------
1 Year 5 Year (Since
Inception)
------------------------- -------------------------
------------------------- -------------------------
<S> <C> <C>
17.33% 5.49%
------------------------- -------------------------
</TABLE>
The above graph shows the historic growth of a $10,000 investment in the
Bailard, Biehl & Kaiser International Fixed-Income Fund since October 1, 1990.
The graph shows the cumulative return of the Bailard, Biehl & Kaiser
International Fixed-Income Fund and the Salomon Brothers World Government 10
country, non-U.S. bond index, fully hedged. The index, which measures the
performance of the government bonds of ten countries, is given on a fully hedged
basis. As the graph indicates, a $10,000 investment in the Bailard, Biehl &
Kaiser International Fixed Income Fund would have grown to $13,097 over the
five-year period ended September 30, 1995.
* Total return summary for investment periods ended September 30, 1995, 12
months: 17.33%; 5 years: 5.49% annualized. These figures reflect the average
annual compounded return over the period indicated that would equate an initial
amount invested in shares of the Fund to the ending redeemable value of such
shares, assuming that all dividends and distributions by the Fund were
reinvested at net asset value. These figures also reflect the deduction of an
assumed 1% annual investment management fee (0.25% quarterly) payable by clients
of Bailard, Biehl & Kaiser through September 30, 1993. As of 10/1/95, the Fund
began charging a management fee of 0.75%. Actual fees varied during this period.
The performance data quoted represents past performance, and the investment
return and principal value of an investment in the Bailard, Biehl & Kaiser
International Fixed-Income Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
Investment Adviser
Bailard, Biehl & Kaiser, Inc.
2755 Campus Drive
San Mateo, California 94403
Transfer Agent
Chase Global Funds Services Company
Boston, Massachusetts
Custodian And Accountant
Brown Brothers Harriman & Co.
Boston, Massachusetts
Counsel
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
San Francisco, California
Distributor
BB&K Fund Services, Inc.
2755 Campus Drive
San Mateo, California 94403
Independent Accountants
Price Waterhouse LLP
Boston, Massachusetts
IRA Custodian
Chase Manhattan Bank, N.A.
New York, New York
International Fixed-Income Fund Officers And Trustees
Peter M. Hill, Chairman, Director
Burnice E. Sparks, Jr., President, Director
Tina Thomas, Treasurer
Janis M. Horne, Secretary
Shirley L. Clayton, Director
David B. Shippey, Director
James C. Van Horne, Director
Investor Services Department
(800) 882-8383
This report is submitted for the general information of the shareholders of
Bailard, Biehl & Kaiser International Fixed-Income Fund. The report is not
authorized for distribution to prospective investors in the Fund unless preceded
or accompanied by an effective prospectus.
