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Previous: CONTINENTAL AMERICAN TRANSPORTATION INC, 8-K, 1997-06-09 |
Next: INTRANET SOLUTIONS INC, DEFS14A, 1997-06-09 |
May 30, 1997
Dear Shareholder:
We are pleased to present your March 31, 1997, semi-annual shareholders' report
for the Bailard, Biehl & Kaiser International Bond Fund. It includes a review of
the Fund's performance and our outlook for the months ahead.
Market Performance and Review
International bonds performed reasonably well in local currency terms over the
last quarter of 1996 and the first quarter of 1997. An impressive dollar rally
erased these gains, however, leaving many markets with negative dollar-based
returns for the overall period.
High-yielding bond markets significantly outperformed low-yielding bond markets
in local currency and dollar returns during the last three months of 1996.
Growing optimism about European Monetary Union (EMU) and low global inflation
caused investors to seek out the bond markets of Italy, Spain and the U.K. At
the same time, investors avoided the currency exposure of low-yielding markets
like Japan and Switzerland. The U.K. market returned more than 12% on a dollar
basis in the fourth quarter, while Japanese and Swiss bonds lost more than 2%.
The first quarter of this year proved to be a more difficult investing
environment. Concerns about an EMU delay tempered bond market enthusiasm. Local
European bond returns were little changed to slightly negative as investors
reassessed Germany's ability to qualify for EMU. The dollar benefited
substantially from this European uncertainty, as well as the improved prospects
for an increase in short-term U.S. interest rates and the solid performance of
U.S. equities. All of the major bond markets declined in dollar terms. Among the
poor performers were Sweden, Italy and Spain, which fell more than 8% in the
first quarter of 1997.
Fund Performance and Review
The International Bond Fund returned 1.51%* during the six months ending March
31,1997. Several investment themes emerged over this period. First, we favored
those markets with high real yields. Our research indicates that high real yield
bond markets tend to outperform over time. This caused us to overweight the
U.K., Australia and Canada and underweight Japan, decisions that benefited the
Fund. Second, our active currency strategy also positively contributed to Fund's
relative return. We rated the dollar highly amid an environment of a relatively
flat U.S. yield curve and rising U.S. interest rates. The Fund was always more
than 50% hedged throughout the period. As a result, we limited the negative
impact of a rising dollar on our international bond portfolio. Finally, we did
not make aggressive yield curve bets. The Fund's duration (a measure of the
interest rate risk of a bond portfolio) of approximately 4.2 years was modestly
lower than our benchmark duration. Given the strong local market bond returns in
the last quarter of 1997, a higher duration would have boosted the return of the
Fund.
<PAGE>
Market Outlook
Going forward, we expect to see uneven economic growth in Europe, with strong
quarters followed by weak quarters. While recent economic reports support
improved European growth prospects, many countries will need to maintain a tight
fiscal discipline. This fiscal restraint could trim as much as 1% from growth.
The case for continued low inflation remains in place. However, if the Federal
Reserve Board continues to raise U.S. interest rates, it will increase the
pressure for European central banks to raise rates as well.
Amid signs of renewed growth in Japan, a debate over the timing of a Japanese
rate hike has emerged. Such speculation, while premature, will support the yen
and make Japanese bonds vulnerable to a sell-off. Low Japanese bond yields
already make them unattractive relative to other bond markets. The dollar bloc
countries are still attractive. Canadian and Australian bonds continue to offer
high yields relative to their inflation rates as well as less currency risk than
other markets.
Conclusion
Going forward, we expect moderate international bond returns. Even though
inflation should remain tame in the months ahead, the prospect of more growth in
Europe and Japan have the potential to weigh on foreign bond markets.
Uncertainty about the outcome of EMU will also inject some additional volatility
into the markets. On balance, we see a risk of European and Japanese bond yields
rising in the months ahead. We have reduced the interest rate risk of the
portfolio by maintaining a portfolio duration of approximately 4 years.
We also believe previous gains in the dollar have removed much of its upside
risk. The Group of Seven (G-7) has clearly stated that it opposes further dollar
gains. Since there is less scope for dollar gains to reduce bond returns, we
have trimmed back our foreign currency hedges.
We appreciate the opportunity to manage your international bond investments and
look forward to continued success. If you have any questions, please call us at
(800) 882-8383.
Sincerely,
Peter Hill Burnice E. Sparks, Jr., CFA
Chairman President
* Average annual total returns for investment periods ended March 30, 1997: 3
months: - 1.72%; 6 months: 1.51%; 12 months: 6.85%; 5 years: 4.88% annualized;
Since Inception (10/1/90): 5.88% annualized. As required by the Securities and
Exchange Commission, these figures reflect the average 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 9/30/93. As of 10/1/93, the Fund charged 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 Bond Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value Value
------------------- -------------------
<S> <C> <C> <C>
Senior Securities ( 92.80%)
Australian Dollar ( 3.54%)
Government of Australia
10.000% 10/15/02 A$ 675,000 $ 584,017
Government of Australia
7.000% 04/15/00 A$ 500,000 390,554
South Australia Finance Authority
10.000% 01/15/03 A$ 900,000 773,987
-------------------
Total Australian Dollar 1,748,558
-------------------
Belgium Franc ( 3.48%)
Government of Belgium
9.000% 03/28/03 BEF 36,000,000 1,244,882
Government of Belgium
8.750% 06/25/02 BEF 14,000,000 474,968
-------------------
Total Belgium Franc 1,719,850
-------------------
British Pound ( 11.97%)
Republic of Austria
9.000% 07/22/04 (pound) 1,750,000 3,053,539
European Investment Bank
9.000% 07/16/01 (pound) 600,000 1,050,888
United Kingdom Treasury
9.750% 08/27/02 (pound) 1,000,000 1,807,406
-------------------
Total British Pound 5,911,833
-------------------
Canadian Dollar ( 7.55%)
British Columbia
7.750% 06/16/03 C$ 1,150,000 883,621
Government of Canada
6.500% 06/01/04 C$ 3,000,000 2,164,657
KFW International Finance
10.000% 03/05/01 C$ 825,000 680,462
-------------------
Total Canadian Dollar 3,728,740
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value Value
------------------- -------------------
<S> <C> <C> <C>
Danish Kroner ( 3.59%)
Kingdom of Denmark
9.000% 11/15/00 DKr 3,750,000 $ 665,172
Kingdom of Denmark
8.000% 05/15/03 DKr 6,400,000 1,110,344
-------------------
Total Danish Kroner 1,775,516
-------------------
French Franc ( 12.11%)
Government of France (O.A.T.)
7.750% 04/12/00 FF 13,400,000 2,622,655
Government of France (O.A.T.)
6.750% 10/25/03 FF 17,500,000 3,359,115
-------------------
Total French Franc 5,981,770
-------------------
German Mark ( 17.54%)
European Investment Bank
7.500% 11/04/02 DM 1,300,000 862,378
German Federal Republic
8.375% 05/21/01 DM 7,100,000 4,842,318
German Federal Republic
8.250% 09/20/01 DM 1,500,000 1,022,100
International Bank for Reconstruction & Development
5.875% 11/10/03 DM 2,000,000 1,236,563
LKB Baden Wurttemburg
6.625% 08/20/03 DM 1,100,000 699,355
-------------------
Total German Mark 8,662,714
-------------------
Italian Lira ( 8.36%)
American International Group Inc.
11.700% 12/04/01 ITL 3,500,000,000 2,420,574
Government of Italy
10.500% 04/01/00 ITL 2,650,000,000 1,708,817
-------------------
Total Italian Lira 4,129,391
-------------------
Japanese Yen ( 10.92%)
Asian Development Bank
5.625% 02/18/02 (Y) 235,000,000 2,250,334
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value Value
------------------- -------------------
<S> <C> <C> <C>
Japanese- Continued
International Bank For Reconstruction & Development
4.750% 12/20/04 (Y) 113,000,000 $ 1,076,639
Japan Development Bank
6.500% 09/20/01 (Y) 158,000,000 1,550,040
Kingdom of Spain
4.625% 07/22/04 (Y) 55,000,000 516,445
-------------------
Total Japanese Yen 5,393,458
-------------------
Netherlands Guilder ( 5.71%)
Government of Netherlands
8.500% 03/15/01 NLG 1,500,000 910,266
Government of Netherlands
7.750% 03/01/05 NLG 3,150,000 1,911,392
-------------------
Total Netherlands Guilder 2,821,658
-------------------
Spanish Peseta ( 3.42%)
Government of Spain
10.000% 02/28/05 ESP 125,000,000 1,036,900
Government of Spain
7.400% 07/30/99 ESP 90,000,000 655,851
-------------------
Total Spanish Peseta 1,692,751
-------------------
Swedish Krona ( 3.61%)
Kingdom of Sweden
10.250% 05/05/00 SEK 2,600,000 390,133
Kingdom of Sweden
10.250% 05/05/03 SEK 8,900,000 1,392,064
-------------------
Total Swedish Kroner 1,782,197
-------------------
SwItzerland ( 1.00%)
Inter-American Development Bank
7.250% 01/21/02 CHF 600,000 494,785
-------------------
Total Senior Securities ( 92.80%)
(Identified Cost $47,342,610) 45,843,221
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value Value
------------------- -------------------
<S> <C>
Short-Term Investments ( 5.05%)
Brown Brothers Harriman & Co. (Grand Cayman Branch)
5.00% Call Account
(Identified Cost $2,494,000) $ 2,494,000
-------------------
Total Investments ( 97.85%)
(Identified Cost $49,836,234) 48,337,221
Other Assets Less Liabilities ( 2.15%) 1,061,457
-------------------
Net Assets (100%) $ 49,398,678
===================
</TABLE>
Currency Legend:
A$ - Australian Dollar DM - German Mark
BEF - Belgium Franc ITL - Italian Lira
(pound) - British Sterling (Y) - Japanese Yen
C$ - Canadian Dollar NLG - Netherlands Guilder
DKr - Danish Kroner ESP - Spanish Peseta
FF - French Franc SEK - Swedish Krona
CHF - Swiss Franc
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
Investments, at value
(Identified cost $49,836,234) $ 48,337,221
Cash 13,125
Receivables:
Interest and recoverable foreign taxes receivable $ 1,671,288
Fund shares sold 20,000 1,691,288
--------------------
Prepaid expenses 13,483
-----------------------
Total assets 50,055,117
-----------------------
Liabilities
Unrealized loss on forward currency contracts open (Note 5) 380,868
Payable for shares of the Fund redeemed 127,365
Accrued management fees (Note 3) 21,806
Other accrued expenses 126,400
-----------------------
Total liabilities 656,439
-----------------------
Net assets (equivalent to $8.01 per share,
representing the offering and redemption
price for 6,163,422 shares outstanding,
100,000,000 shares authorized) $ 49,398,678
=======================
Net assets consist of:
Capital paid in $ 65,430,650
Accumulated distributions in excess of net investment income (798,126)
Accumulated net realized loss on investments
and foreign currency transactions (13,272,468)
Unrealized depreciation:
Investments (1,499,013)
Foreign currency (462,365) (1,961,378)
-------------------- -----------------------
$ 49,398,678
=======================
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income
Interest (net of foreign taxes withheld of $21,548) $ 1,594,972
Expenses
Advisory fees $ 187,865
Custodian fees 60,902
Audit and legal fees 57,174
Transfer agent fees 22,898
Administrative fees 16,410
Directors' fees and expenses 10,957
Insurance 5,152
Registration fees 2,405
Miscellaneous expenses 16,686
--------------------
Total expenses 380,449
-----------------------
Net investment income 1,214,523
-----------------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Net realized gain on investments 199,674
Net unrealized loss on investments (2,519,245)
-----------------------
Net loss on investments (2,319,571)
-----------------------
Net realized gain on foreign currency 2,985,884
Net unrealized loss on foreign currency
and foreign currency denominated assets and
liabilities (915,779)
-----------------------
Net gain on foreign currency 2,070,105
-----------------------
Net loss on investments and foreign currency (249,466)
-----------------------
Net increase in net assets resulting from operations $ 965,057
=======================
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the six months
ended March 31, 1997 For the year ended
Increase (Decrease) in Net Assets Unaudited September 30, 1996
------------------------- -------------------------
<S> <C> <C>
Operations:
Net investment income $ 1,214,523 $ 3,453,883
Net realized gain on investments 199,674 1,650,647
Net unrealized loss on investments (2,519,245) (979,859)
Net realized gain on foreign currency 2,985,884 425,210
Net unrealized gain (loss) on foreign currency and
foreign currency denominated assets and liabilities (915,779) 1,192,632
------------------------- -------------------------
Net increase resulting from operations 965,057 5,742,513
------------------------- -------------------------
Distributions to shareholders:
From net investment income (2,012,649) (3,453,883)
For tax purposes in excess of
net investment income (1,149,884) (4,924,771)
------------------------- -------------------------
Total distributions (3,162,533) (8,378,654)
------------------------- -------------------------
Fund share transactions:
Proceeds from shares sold 2,660,095 8,593,553
Net asset value of shares issued on
reinvestment of distributions 2,221,761 6,776,337
Cost of shares redeemed (18,666,406) (11,993,072)
------------------------- -------------------------
Net increase (decrease) resulting from
Fund share transactions (13,784,550) 3,376,818
------------------------- -------------------------
Net increase (decrease) (15,982,026) 740,677
Net Assets
Beginning of period 65,380,704 64,640,027
------------------------- -------------------------
End of period (including undistributed (distributions in
excess of) net investment income of ($798,126) and
$1,149,884, respectively) $ 49,398,678 $ 65,380,704
========================= =========================
Number of Fund Shares
Sold 327,049 1,041,195
Issued on reinvestment of distributions 272,217 828,660
Redeemed (2,236,383) (1,430,146)
------------------------- -------------------------
Net increase (decrease) (1,637,117) 439,709
========================= =========================
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For a share outstanding throughout the period:
1
For the six Year Ended September 30,
months ended 2 ------------------------------------------------------------
March 31, 1997 2 2 2
Unaudited 1996 1995 1994 1993 1992
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.38 $8.78 $8.02 $10.85 $11.29 $10.94
-------------- ------- -------- -------- -------- ---------
Income from Investment Operations:
Net Investment Income 0.22 0.59 0.47 0.61 0.67 0.85
Net Realized/Unrealized Gain (Loss) on
Securities and Foreign Currency (0.09) 0.16 0.86 (2.39) 0.39 0.53
--------------- -------- --------- ------- --------- ---------
Total from Investment Operations 0.13 0.75 1.33 (1.78) 1.06 1.38
--------------- -------- --------- ------- --------- ---------
Less Distributions:
Net Investment Income (0.32) (0.45) (0.45) (0.26) (1.08) (0.94)
For Tax Purposes in Excess of Book
Net Investment Income (0.18) (0.70) (0.12) - - -
Capital Gains - - - (0.27) (0.42) (0.09)
Return of Capital - - - (0.52) - -
--------------- -------- --------- ------- --------- ---------
Total Distributions (0.50) (1.15) (0.57) (1.05) (1.50) (1.03)
--------------- -------- --------- ------- --------- ---------
Net Asset Value, End of Period $8.01 $8.38 $8.78 $8.02 $10.85 $11.29
=============== ======== ========= ======= ========= =========
Total Return 1.51% 9.32% 17.33% (17.90%) 10.65% 13.57%
Ratios/Supplemental Data:
Net Assets, End of Year (000's) $49,399 $65,381 $64,640 $136,366 $165,484 $115,628
3
Ratio of Expenses to Average Net Assets 1.50% 1.22% 1.16% 1.12% 0.42% 0.64%
Ratio of Net Investment Income to 3
Average Net Assets 4.78% 5.41% 5.66% 5.87% 6.25% 7.37%
Portfolio Turnover Rate 24% 61% 179% 319% 157% 140%
- -----------------------------------------------------------
</TABLE>
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 (unaudited) was 9.55% and 12.44% for the years ended
September 30, 1993 and 1992, respectively.
2. Net investment income per share has been computed 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.
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
Unaudited
- --------------------------------------------------------------------------------
Note 1 - Summary of Significant Accounting Policies
The Bailard, Biehl & Kaiser International Bond 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.
The Fund includes foreign exchange gains and losses from 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.
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS(Continued)
Unaudited
- --------------------------------------------------------------------------------
NOTE 1 - Continued
At September 30, 1996, the Fund had a capital loss carryforward of approximately
$16,401,000 , which may be carried forward through the fiscal year ending
September 30, 2003.
Paid in capital, undistributed net investment income and accumulated net
realized loss have been adjusted for permanent book-tax differences.
Reclassifications between undistributed net investment income and accumulated
net realized loss arose principally from differing book and tax treatments for
foreign currency transactions.
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 of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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.
Note 2 - Purchases and Sales of Securities
For the six months ended March 31, 1997, purchases and sales of investment
securities other than short-term investments aggregated $6,208,076 and
$19,757,698 , respectively. There were no purchases and sales of U.S. Government
obligations during the six months ended March 31, 1997.
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.
Each outside director is compensated by the Group at the total rate of $8,000
per year plus $1,333 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 March 31, 1997, based on the cost of
securities of $49,836,234 for federal income tax purposes, consists of the
following:
Gross unrealized appreciation $ 1,013,077
Gross unrealized depreciation (2,512,090)
----------
Net unrealized appreciation $(1,499,013)
===========
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS(Continued)
Unaudited
- --------------------------------------------------------------------------------
Note 5 - Forward Foreign Currency Contracts
At March 31, 1997 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 forward value of
amounts due to the Fund under the contracts, including contracts which have been
offset but remained unsettled, has been netted against the forward value of the
currency to be delivered by the Fund and the remaining amount is shown as
receivable (payable) for forward currency contracts in the financial statements.
Open forward foreign currency exchange contracts outstanding at March 31, 1997
were as follows:
Currency Currency Delivery Unrealized
Receivable Deliverable Date Appreciation/(Depreciation)
- ---------- ----------- ---- ---------------------------
$1,564,426 DKr 9,730,733 04/29/97 $ 29,938
993,837 A$ 1,284,027 05/30/97 (12,471)
2,327,711 (Y) 281,187,500 05/30/97 33,564
1,219,013 SEK 9,075,550 05/30/97 11,359
5,108,375 DM 8,730,213 06/10/97 (122,726)
4,050,067 FF 23,336,484 06/10/97 (127,218)
1,562,043 (pound) 970,816 06/10/97 (34,134)
864,364 NLG 1,663,900 06/11/97 (27,884)
660,577 BEF 23,140,000 06/17/97 (15,724)
1,418,593 (pound) 889,400 06/17/97 (43,557)
1,622,802 NLG 3,093,060 06/17/97 (36,528)
263,028 DM 443,729 06/18/97 (4,621)
756,621 ESP 108,703,800 06/19/97 (13,009)
2,162,695 C$ 2,959,540 06/20/97 12,757
2,282,029 ITL 3,868,652,000 06/20/97 (31,300)
784,593 (Y) 95,720,325 06/24/97 686
-------------
$ (380,868)
=============
Currency Legend:
A$ - Australian Dollar ITL - Italian Lira
BEF - Belgian Franc NLG - Netherlands Guilder
C$ - Canadian Dollar (pound) - British Sterling
DKr - Danish Kroner FF - French Franc
DM - German Mark SEK - Swedish Krona
ESP - Spanish Peseta (Y) - Japanese Yen
<PAGE>
May 30, 1997
Dear Shareholders:
We are pleased to present your semi-annual shareholders' report for the Bailard
Biehl & Kaiser International Equity Fund. In this report, which covers the
six-month period ending March 31, 1997, we review the Fund's investment
performance, discuss the movements of the international stock markets and
present our outlook for the future.
Performance and Market Review
Over the six months until the end of March 1997, the Fund achieved a return of
6.83%*. For the year ending March 1997 the Fund posted a 8.99%* return. For
purposes of comparison, the Morgan Stanley Europe Australia and Far East Index
showed U.S. dollar returns of 0.00% and 1.45%, over the same respective time
periods.
Over this half-year, stock markets in different regions of the world have taken
divergent paths. European and Latin American equity markets have performed
extremely well. In contrast, Japan and most other markets of the Far East have
shown poor performance. This six-month period has seen exceptional strength in
the U.S. dollar, up 10% versus the yen and 9% versus the German mark. The
Bailard Biehl & Kaiser International Equity Fund has successfully navigated
these divergent regional markets by favoring Europe over the Far East and
hedging some of the dollar's strength versus the yen and, to a slightly lesser
extent, the German mark. Holdings in Brazil, Argentina, Greece and Hungary, part
of the emerging markets strategy we introduced in early 1996, also enhanced the
Fund's returns.
Europe
Signs of improving economic growth, low inflation, stable interest rates and an
increasing focus on monetary union helped to push the European stock markets
higher, particularly in the first few months of 1997. The core European markets,
the U.K., Germany and France, produced U.S. dollar returns in the range of 14%
to 17%. The smaller markets of Europe also did well. Throughout the period, the
Fund was overweight in the Netherlands, Sweden and Spain. All three of these
markets had U.S. dollar returns approaching 20%: the Netherlands, due to
expectations that it would be able to meet the stringent fiscal criteria
necessary for entry to European Monetary Union (EMU); Spain, because of its
improved inflation record and its more conservative fiscal stance ahead of
possible entry to EMU; and Sweden, as a result of a vast improvement in the
monetary and fiscal performance of its economy.
<PAGE>
Page 2
Japan and the Far East
Over the six months to March 1997, the performance of the stock markets of the
Far East has been disappointing. Japan, despite showing stronger economic
growth, has continued to suffer from its banking debt problems. Further,
concerns about rising fiscal deficits and the higher taxes imposed to reduce
that deficit, unsettled the stock market. However, the picture painted by the
performance of the aggregate indices is incomplete. Some sectors of corporate
Japan have been performing well. Many of Japan's famous conglomerates, with
their exposure to overseas trade and consumer electronics, (companies like
Hitachi and Mitsubishi), have experienced a rapid improvement in profitability,
abetted by the weakness in the yen.
Hong Kong, moving inexorably towards mainland Chinese rule, experienced a modest
setback in early 1997, after performing extremely well throughout 1996. This
pause for breath in the Hong Kong market has been based primarily on higher U.S.
interest rates, the stronger U.S. dollar (to which the Hong Kong dollar is
linked) and some slowing of export growth rates. The Fund was overweight in Hong
Kong in the second half of 1996, but since the beginning of 1997 a more neutral
position has been in place.
Emerging Markets
Throughout the period covered by this report, emerging markets, which accounted
for between 10% and 13% of the Fund's portfolio, experienced a mixed performance
record. Latin America did exceptionally well. The markets of Brazil and
Argentina were up 35% and 22% in U.S. dollar terms, respectively, over this
period. These buoyant markets reflect improving inflation numbers, signs of
economic recovery and increasing political commitment to the disciplines of
market-driven economies.
Amongst the emerging European markets, results were more varied. The markets of
Greece and Hungary were up 40% in dollar terms over the six month period. In
contrast, Poland and the Czech Republic showed small negative returns. Once
again, these results reflect investors' perceptions about the pace of economic
and market reform.
Most of the Far East emerging markets produced modest gains. The exception
continues to be Thailand, where problems in the real estate and financial sector
have helped to stall the economy and undermine confidence in the currency.
Throughout the past six months, the Fund's exposure to Thailand has been
negligible - less than 0.4% of assets.
Investment Approach and Outlook
The Bailard Biehl & Kaiser International Equity Fund is broadly diversified. Our
aim is to overweight those countries for which our return forecasts are
relatively higher. Generally, this means we favor markets that look attractive
in terms of value measures such as book-to-price. Importantly, our research
indicates that the biggest pay-off to this "value investing" will occur after
periods of volatility in the world's markets. Conversely, when global markets
are calm, the
<PAGE>
Page 3
pay-off for "value" will be low, and in these circumstances, our research
indicates that markets exhibiting positive momentum are likely to prevail.
Like a stone thrown in a pond, the ripples of the Fed's rate hike in March
spread throughout the world's markets. Across most foreign shores, the ripples
were relatively minor. Just as the U.S. market dipped, then recovered strongly,
international markets have resumed their upward trend. Although these ripples
caused global stock market volatility to rise, our volatility gauges are still
showing below average readings. This means it is still too early to pursue
"value" aggressively, too early to overweight markets like Japan and Thailand.
In the near term, our forecasts point to a continuation of the status quo - -
good relative performance from Europe (in particular, countries like Holland and
Spain), and relatively poor performance from the Far East. For the International
Equity Fund, this means we are still favoring Europe over the Far East region.
However, in the case of Japan, because of its "very attractive" rating on a
valuation basis, we are taking a neutral stance, which for us means maintaining
a 15% allocation.
Overall, we remain very positive about the outlook for international stock
markets in 1997. Although there is a high probability that the Fed will have to
raise U.S. rates again, we expect a slowdown in the U.S. economy later in 1997.
The economic cycle in continental Europe and Japan is lagging the U.S. and has
room for further expansion. In these circumstances, international economic
growth in 1997 and into 1998 should stay firmly in positive territory.
Global inflation is also likely to remain low throughout 1997. The U.S. dollar
has recently retraced some of its extraordinary strength, and some consolidation
at current levels is likely in the months ahead. All of these factors bode well
for the performance of the international stock markets in the year ahead.
We appreciate your continued investment in the Bailard Biehl & Kaiser
International Equity Fund. If you have any questions concerning the Fund, please
don't hesitate to call us.
Sincerely,
Peter M. Hill Burnice E. Sparks, Jr., CFA
Chairman President
* Average annual total returns for investment periods ended March 30, 1997: 3
months: 1.68%; 6 months: 6.83%; 12 months: 8.99%; 5 years: 6.75% annualized; 10
years: 2.04% annualized. As required by the Securities and Exchange Commission,
these figures reflect the average 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 9/30/93. As of 10/1/93,
the Fund charged a management fee of 0.95%. 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 Equity Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Equity Securities (98.52%)
I. Argentina (.65%)
Astra Corp. Argentina 45,500 $ 70,991
Banco De Galicia Spns'd. Class B 1,547 37,708
Banco Frances Del Rio Plata ADR 3,180 44,845
*Comercial Del Plata 10,900 34,013
Ledesma SA Agr. Industrial 25,257 28,039
Perez Companc SA Class B 10,600 81,950
*Siderar SA A Shares 744 2,575
Siderca 18,600 39,252
Telecom Argentina Stet-France Telecom S.A. ADR 1,600 73,600
Telefon De Argentina ADR 3,500 102,813
Transp. Gas Del Sur 2,500 32,563
YPF SA ADR 9,100 241,150
-------------------
Total Argentina 789,499
-------------------
II. Australia ( 2.54%)
*Acacia Resources Ltd. 25,000 39,785
Australia & New Zealand Bank Group Ltd. 40,000 253,373
Brambles Inds. Ltd. 8,500 139,735
Broken Hill Proprietary Ltd. 50,000 666,358
CRA Ltd. 16,900 249,872
CSR Ltd. 32,100 122,804
Coca-Cola Amatil Ltd. 6,000 57,051
Coles Myer Ltd. 12,500 58,796
Davids Ltd. 75,000 84,667
Fosters Brewing Group Ltd. 70,000 144,874
Goldfields Ltd. 20,000 30,417
Goodman Fielder Ltd. 75,000 97,014
Lend Lease Corp. Ltd. 10,700 183,367
National Australia Bank Ltd. 22,000 278,537
QBE Insurance Group Ltd. 25,000 128,764
The News Corporation Ltd. 57,000 265,877
WMC Ltd. 10,000 63,186
Westpac Banking Corp. 25,000 145,031
Woolworth Ltd. 25,000 66,832
-------------------
Total Australia 3,076,340
-------------------
III. Belgium (1.81%)
CBR Cimenteries NPV 700 69,992
D'Ieteren SA 530 99,364
Delhaize Le Lion NPV 1,400 78,131
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Belgium- Continued
Electrabel NPV 1,450 $ 333,801
Fortis 2,103 375,932
Fortis Strip VVPR 133 23
Genarale Banque NPV 290 113,796
Koramic Building Products 1,600 83,479
Kredietbank NPV 750 270,320
Petrofina SA NPV 610 212,768
Powerfin NPV 350 49,646
Tractebel NPV WTS 400 4,139
Tessenderlo Chemie Parts Soc. 480 219,744
Tractebel 400 172,075
UCB NPV 40 108,070
-------------------
Total Belgium 2,191,280
-------------------
IV. Brazil (2.37%)
Banco Bradesco SA 10,100 83,432
Cemig SA ADR 3,000 127,350
**Cia Bras. Grupo Pao De Acucar 2,500 51,875
Companhia Cervejaria Brahma ADR 9,400 126,900
Electrobras Pfd. B ADR 18,100 399,286
Iparanga Brasil De Petroleo PFD 5,400 85,646
Itaubanco PFD Reg'd. 305,000 157,791
Light Serv. Electricidade SA ON 190 80,357
*Makro Atacadista, S.A. GDR 11,700 157,950
Petrobras PFD Reg. 570 113,273
Petrobras Sponsored ADR 8,300 172,225
Telebras Spon. ADR 9,700 993,038
Telesp PFD Reg'd. 760 193,004
Unibanco PN 1,500 56,927
**Usiminas SA 6,500 74,913
-------------------
Total Brazil 2,873,967
-------------------
V. Canada (4.60%)
Alcan Aluminum Ltd 7,000 237,125
BC Telecom Inc. 6,000 131,118
BCE Inc. 4,000 184,000
Bank of Montreal 5,000 176,810
Bank of Nova Scotia 4,000 146,939
Barrick Gold Corporation 8,500 201,875
Bombardier Inc. Class B 11,000 199,061
Brascan Ltd. Ord. Class A 7,500 168,750
Cambior Inc. 6,000 81,000
Canadian Imperial Bank of Commerce 12,200 275,860
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Canada- Continued
*Canadian Natural Resources 3,500 $ 84,703
*Cott Corp. 15,000 146,289
Dofasco Inc. 3,500 58,154
Falconbridge Ltd. 2,500 52,104
IPL Energy 2,700 77,826
Imasco Ltd. 6,300 158,609
Imperial Oil Ltd. 5,000 233,125
Ipsco Inc. 2,500 66,823
Laidlaw Inc. Class A 7,500 102,187
Loblaw Cos. Ltd. 6,000 71,519
Magna Int'l. Class A 1,200 59,550
Maritime Teleg & Telephone Ltd. 6,000 99,910
National Bank Of Canada (Montreal) 15,000 159,834
*Newbridge Networks Corp. 9,500 271,938
Noranda Inc. 10,000 221,420
Northern Telecom 4,400 287,650
Power Financial Corp. 4,000 75,131
Quebecor Inc. Class B 5,000 89,760
*Renaissance Energy Ltd. 12,000 341,123
Royal Bank of Canada 8,900 345,263
Seagram Ltd. 5,000 191,250
Telus Corp. 4,500 69,568
Thomson Corp. 10,000 197,580
Transcanada Pipelines Ltd. 10,000 181,250
*Wajax Ltd. 11,000 135,886
-------------------
Total Canada 5,580,990
-------------------
VI. Czech Republic (.15%)
*Czeske Energeticke Zavody (CEZ) 1,350 49,103
*SPT Telecom AS 750 89,209
Tabak Bearer 150 43,446
-------------------
Total Czech 181,758
-------------------
VII. Denmark (1.01%)
Carlsberg Class B 1,400 87,485
D/S Svendborg Class B 7 309,064
Danisco 1,400 85,943
Den Danske Bank AF 2,200 198,424
FLS Industries Class B 300 40,610
Novo-Nordisk AS B 2,200 230,283
Sophus Berendsen Class B 700 91,893
Teledenmark Class B 3,500 184,006
-------------------
Total Denmark 1,227,708
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
VIII. Finland (.74%)
Nokia ADR 15,400 $ 897,050
-------------------
IX. France (7.28%)
Air Liquide (L) SA 2,525 399,809
Alcatel Alsthom CGE SA 3,000 362,276
Altran Technologies SA 100 36,798
Axa SA 4,000 265,242
BIC 1,100 167,513
Carrefour Super Marche 1,475 917,130
Casino Guichard Perrachon 2,000 94,006
CIE Financiera De Paribas Br. 2,000 139,532
CLF Dexia France 3,000 324,339
Eridania Beghin Say SA 2,280 359,391
Eurafrance 300 141,491
Generale des Eaux 3,700 504,141
L'Oreal 1,200 420,625
LVMH Louis Vuitton Moet Hennessy 1,600 389,278
Michelin "B" Reg'd. 5,000 297,889
Peugeot SA 2,510 286,563
Rhone Poulenc SA Series A 6,500 220,313
Saint Gobain 2,600 394,550
Sanofi 5,460 534,865
Schneider SA 5,000 286,757
Seita 4,000 144,768
Soc. Nationale Elf Aquitaine 10,880 1,118,133
Societe Generale Paris 4,050 474,646
Technip SA 1,500 161,368
Thomson CSF 2,500 84,602
Usinor Sacilor 6,000 98,317
UAP Companie 8,000 211,595
-------------------
Total France 8,835,937
-------------------
X. Germany (8.97%)
Allianz AG Holdings Reg. 200 413,255
BASF AG 23,500 887,989
Bayer AG 16,500 686,820
CKAG Colonia Konzern AG 10,100 951,087
Commerzbank AG 28,500 820,513
Deutsche Bank AG 15,100 850,436
Deutsche Telekom AG 25,000 574,299
Fresenius AG Pfd. 1,000 229,720
Industrie Werke Karlsruhe (IWKA) AG 2,250 547,908
Porsche AG Non-Voting Preferred 300 341,880
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Germany- Continued
Sap AG Pfd. 2,500 428,850
SGL Carbon AG 2,500 343,380
Siemens AG Bearer 12,000 647,054
Suedzucker Pfd. Shares 500 254,311
Veba AG 22,800 1,291,624
Viag AG 900 425,371
Volkswagen AG 2,150 1,188,964
-------------------
Total Germany 10,883,461
-------------------
XI. Greece (.59%)
Alpha Credit Bank 3,750 275,443
Aluminum Co. of Greece Reg'd. 600 33,535
Attica Enterprises SA 3,000 22,658
Ergas Construction 3,000 19,260
Ergo Bank 2,766 176,008
Goodys SA 1,100 24,343
Hellenic Bottling Co. 1,200 39,018
Hellenic Telecom Organ. 3,000 65,143
Proodeftiki 3,000 21,525
Titan Cement Ord. 500 36,065
-------------------
Total Greece 712,998
-------------------
XII. Hong Kong / China (3.56%)
Cheung Kong Holdings Ltd. 40,000 352,317
First Pacific Co. 340,000 432,201
FPB Bank Holding Co. 261,000 109,470
Gold Peak Ind. 149,000 96,145
HSBC Holdings Plc 18,000 416,973
Hang Seng Bank 20,000 206,486
Henderson Land Development Ltd. 55,000 456,044
Hong Kong & China Gas 124,600 233,966
Hong Kong & China Gas Wts. (Ex. 9/30/97) 10,800 4,878
Hong Kong & Shanghai Hotels 81,000 129,099
Hong Kong Telecommunications 125,000 214,552
*Huaneng Power Int'l. ADR 5,400 120,825
New World Development Co. Ltd. 50,000 272,304
*New World Infrastructure 64,400 183,675
Peregrine Investment Wts. (Ex. 5/15/98) 4,500 1,092
Shanghai Industrial Holdings Ltd. 35,000 153,574
Sun Hung Kai Properties Ltd. 25,000 265,367
Swire Pacific Ltd. Class A 58,000 456,593
Tingyi Holding Corp. 454,000 99,018
Zhenhai Refining & Chem Co. Ltd. Class H 333,000 120,311
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Hong Kong / China- Continued
Total Hong Kong / China $ 4,324,890
-------------------
XIII. Hungary (.60%)
**Borsodchem RT 1,850 65,675
*Danubius Hotel & Spa 1,500 45,285
EGIS Rt. 1,500 93,090
**Gedeon Richter GDR 2,000 124,000
*Graboplast Rt. Reg'd. 1,450 65,209
Magyar Olay Es Gazipari 10,600 184,763
OTP Bank 4,750 104,440
Pick Szeged Rt. Bearer 720 47,411
-------------------
Total Hungary 729,873
-------------------
XIV. Indonesia (.45%)
*Bank Danamon Pt (Fgn. Reg'd.) 16,500 18,898
Bank International Indonesia (Fgn. Reg'd.) 61,174 46,498
Bank International Indonesia (Fgn. Reg'd./ Wts.) 5,440 1,926
Bank Niaga 12,000 35,985
Citra Marga Nusaphala Persada 35,000 31,341
Gudang Garam (Fgn. Reg'd.) 12,000 52,353
Indosat ADR 1,500 40,125
Kalbe Farma (Fgn. Reg'd.) 27,000 30,362
*Lippo Bank (Fgn. Reg'd.) 14,000 13,994
Matahari Putra Prima (Fgn. Reg'd.) 16,000 23,324
Mayorah Indah (Fgn. Reg'd.) 51,000 19,117
Mulia Industrindo (Fgn. Reg'd.) 33,000 22,335
Sampoerna H.M. (Fgn. Reg'd.) 10,000 46,856
Semen Gresik (Fgn. Reg'd.) 17,000 42,305
Tambang Timah 5,500 8,590
Telekomunikasi Indonesia ADR 3,300 99,413
*Wicaksana Overseas 7,000 9,111
-------------------
Total Indonesia 542,533
-------------------
XV. Ireland (.49%)
Allied Irish Banks 22,500 154,852
CRH Plc 10,000 98,863
DCC Plc 2,500 12,120
Greencore Ord. 13,000 72,939
Irish Life Plc 16,500 86,807
Irish Permanent Plc 3,500 33,490
Kerry Group A Shares 4,000 40,372
Smurfit (Jefferson) Plc 25,000 66,359
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Irelend- Continued
Waterford Wedgewood Units 20,000 $ 27,815
-------------------
Total Ireland 593,617
-------------------
XVI. Italy (2.49%)
Assicurazione Generali 4,000 70,060
Autostrade CEC Pfd. B Shares 55,000 114,146
Banca Popolare di Bergamo Credito 3,000 45,796
Banca Popolare di Milano 4,000 22,433
Benetton Group SpA 9,000 112,016
Bulgari SpA 800 15,331
Danieli & Co. 6,000 42,863
Danieli & Co. Di Risp 3,900 14,504
Edison SpA 11,000 58,788
ENI SpA 100,000 508,348
Fiat SpA 66,500 211,407
Fiat SpA di Risp 45,000 80,841
IFIL di Risp 9,100 17,030
Istituto Mobiliare Italiano 35,000 304,304
Istituto Nazionale delle Assicurazioni SpA (A) 264,200 354,978
Italgas 13,700 45,607
*Luxottica Group ADR 1,100 58,437
*Olivetti & Co. SpA 77,000 27,712
Parmalat Finanziaria SpA 10,200 14,163
Pirelli SpA 79,900 173,970
Tecnost SpA 5,800 13,081
Telecom Italia Mobile SpA 140,000 403,079
Telecom Italia SpA 40,000 100,050
Telecom Italia SpA di Risp 100,000 213,236
-------------------
Total Italy 3,022,180
-------------------
XVII. Japan (14.13%)
77th Bank 20,000 153,473
Acom 11,000 458,074
Amada Co. Ltd. 20,000 144,740
Amway Japan Ltd. 15,000 412,388
Aoyama Trading 15,000 348,104
Asahi Chemical Industries 67,000 348,896
Atsugi Nylon Industrial 40,000 120,967
Bridgstone Metalpha 42,000 329,425
Chugoku Bank 20,000 253,901
Chugoku Electric Power 30,000 497,291
Dai Ichi Kangyo Bank 35,000 370,745
Daiichi Pharmaceutical 20,000 304,035
Daikyo Inc. 120,000 389,100
Fuji Photo Film Co. 16,000 526,563
Fujitsu 50,000 509,420
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Japan- Continued
Hitachi Ltd. 50,000 $ 444,732
Honda Motor Co. 15,000 447,562
Japan Tobacco Inc. 50 332,336
Kirin Brewery Co. Ltd. 36,000 296,919
*Kobe Steel 88,000 157,969
Kyocera Corp. 6,000 340,584
Long Term Credit Bank of Japan 40,000 135,845
Matsushita Electric Industrial Ltd. 25,000 390,151
Mitsubishi Corp. 30,000 266,839
Mitsubishi Elec. Corp. 75,000 421,485
Mitsubishi Heavy Industries Ltd. 18,000 117,167
Mitsubishi Material 110,000 384,248
Mitsubishi Motors 147,000 1,089,989
Mitsubishi Oil Co. 26,000 115,420
Mitsui & Co. 40,000 293,685
Mori Seiki Co. 25,000 343,657
Nikko Securities 80,000 448,937
Nippon Shokubai Corp. 50,000 298,375
NKK Corp. 80,000 168,189
Omron Corp. 15,000 266,839
Promise Co. 8,000 335,085
Ricoh Co. 45,000 513,059
Sankyo Co. Ltd. 11,000 233,040
Sanwa Bank Ltd. 62,000 666,774
Secom Co. 4,000 224,792
Seino Transportation 30,000 293,523
Sekisui House Ltd. 80,000 782,728
Sony Corp. 4,000 279,777
Suzuki Motor Corp. 50,000 485,162
Tokyo Electric Power 7,070 128,629
Tokyo Ohka Kogyo Co. Ltd. 28,000 658,850
Yamanouchi Pharmaceutical Co. Ltd. 18,000 372,605
Yamato Transport 25,000 246,624
-------------------
Total Japan 17,148,698
-------------------
XVIII. Malaysia (1.47%)
*Arab Malaysian Finance 32,000 96,843
Commerce Asset Holdings Berhad (Fgn. Reg'd.) 15,000 105,316
DCB Holdings Berhad 25,000 94,321
Ekran Berhad 10,000 31,676
Genting Berhad 9,000 61,011
Golden Hope Plantations Berhad 38,000 65,934
Kian Joo Can Factory 10,000 43,579
Magnum Corp. Berhad 22,000 41,723
Malayan Banking Berhad 15,000 170,988
Malaysia Int'l. Shipping (Fgn. Reg'd.) 22,000 54,595
Malaysian Airline Systems 12,000 31,958
Malaysian Oxygen Berhad 10,000 54,070
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Malaysia- Continued
Nylex Malaysia Berhad 15,000 $ 32,987
Perusahaan Otomobil Nasional Berhad 19,000 120,367
Petronas Gas Berhad 45,000 166,145
Public Bank Berhad (Fgn. Reg'd.) 20,000 39,383
Resorts World Berhad 12,000 51,327
Sime Darby Berhad 60,000 219,106
Sime UEP Properties Berhad 10,000 23,605
Telekom Malaysia 25,000 194,694
Tractors Malaysia 17,000 34,984
UMW Holdings Berhad 9,000 49,753
-------------------
Total Malaysia 1,784,365
-------------------
XIX. Mexico (1.38%)
Alfa SA de CV Class A 6,500 36,519
*Carso Global Telecom 19,726 59,704
Cemex Spon. ADR 25,200 204,750
Cifra SA de CV ADR 59,500 80,027
*Comercial Mexicana SA de CV 21,000 15,148
Desc SA de CV SPN ADR 1,500 39,375
*Empaques Ponderosa Ser. B 57,800 36,155
Femsa B SA de CV Class B 8,000 35,362
Grupo Corvi Sa de CV Units 40,000 21,086
Grupo Carso A1 SA de CV 16,600 97,241
Grupo Elektra SA de CV Class C 3,700 70,300
**Grupo Fin. Bancomer SP ADR 7,000 58,205
Grupo Financiero Inbursa "Ser. B" 7,000 24,629
*Grupo Ind'l. Durango ADR 4,100 40,487
Grupo Ind'l. Maseca SA Spon. ADR 2,900 45,312
Grupo Modelo SA "Ser. C" 6,600 39,786
**Grupo Televisa GDR 3,100 77,112
Kimberly Clark De Mexico ADR 8,400 175,350
Nacional De Drogas SA de CV L Shares 10,000 36,572
*Panamerican Beverages Class A ADR 1,000 53,625
Telefonos De Mexico ADR 11,100 427,350
-------------------
Total Mexico 1,674,095
-------------------
XX. Netherlands (6.95%)
ABN-AMRO Holdings NV 13,800 949,551
Aegon NV 2,600 183,200
Fortis Amev NV CV A 6,000 233,947
Getronics NV 13,300 432,744
ING Groep NV 31,050 1,223,927
Koninklijke Ahold NV 5,500 383,431
Nutricia Ver Bedrijven 3,800 587,802
OCE - Van Der Grinten NV 5,000 647,542
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Netherlands- Continued
Philips Electronics 10,000 $ 466,721
Royal Dutch Petroleum 12,900 2,343,602
Samas Groep NV 9,100 398,020
Van Ommeren NV CVA (Pt'g. Cert.) 3,900 170,580
Verenigd Bezit VNU Haarlem 20,000 411,782
-------------------
Total Netherlands 8,432,849
-------------------
XXI. New Zealand (.32%)
Brierley Investment Ltd. 40,000 37,236
Carter Holt Harvey Ltd. 40,000 84,753
Fisher & Paykel 15,000 53,666
Fletcher Challenge Energy 10,000 26,954
Flether Challenge Buildings 17,000 50,546
Telecom Corp. of New Zealand 30,000 136,509
-------------------
Total New Zealand 389,664
-------------------
XXII. Norway (.61%)
Awilco AS B 4,500 55,619
Christiania Bank OG Kreditkasse 6,500 23,954
Den Norske Bank AS 5,000 21,686
Dyno Industrier 800 21,231
Elkem AS A 2,500 47,012
Kvaerner Industrier 1,000 54,292
Leif Hoegh & Co. 2,000 40,340
Norsk Hydro AS 5,400 270,247
Norske Skogindustier Class A 700 22,877
Nycomed ASA 2,000 31,696
Orkla A/S 1,200 96,634
*Petroleum Geo Service 600 26,206
*Storebrand 4,500 30,983
-------------------
Total Norway 742,777
-------------------
XXIII. Philippines (.45%)
Cosmos Botting Corp. 158,400 52,269
*DMCI Holdings Inc. 25,400 18,064
Davao Union Cement Corp. 37,138 7,747
*Empire East Land Inc. 120,000 46,653
Far East Bank & Trust 27,000 119,818
*Filinvest Land Inc. 130,900 41,705
*Fortune Cement Corp. 30,900 18,166
Manila Electric Class B 4,110 32,737
*Mondragon Int'l. Philippines Inc. 100,800 43,011
Philippine Long Distance Telephone 1,700 102,200
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Philippine- Continued
*Philippine National Bank 4,000 $ 47,791
*Robinsons Land Corp. Class B 78,000 13,461
-------------------
Total Philippines 543,622
-------------------
XXIV. Poland (.38%)
*Agros Holdings Series C 800 20,166
*Agros Holding Series D 160 3,643
Bank Przemyslowo Handlowy (BPH), S.A. 500 30,249
Bank Slaski 400 37,730
*Big (Bank Inic. Gosp.), S.A. 45,000 58,546
*Debica SA Class A 1,000 26,508
Elektrim SA 13,700 120,312
Mostostal Export SA 8,000 24,329
Mostostal Zabrze-Holding SA 7,000 45,991
*Okocimskie Zaklady Piwowarskie 3,500 20,947
Polifarb Cieszyn 6,000 39,031
Rolimpex 5,000 29,761
-------------------
Total Poland 457,213
-------------------
XXV. Portugal (1.65%)
Banco Commercial Portugues (Fgn. Reg'd.) 20,500 305,605
Banco Espirito Santo Reg'd. 21,000 405,598
Cimpor (Cimentos de Portugal) SA 5,500 114,788
*Colep (Cia Portuguesa de Embalagens) 3,400 47,645
Engil Sociedade Gestora Part. Soc. 5,500 63,429
Est. Jeronimo Martins Filho 2,499 138,585
Est. Jeronimo Martins BNS 1 18
*Inparsa (Industrias Particiapcoes) 2,650 23,703
*Mundial Confianca 9,000 109,481
Portugal Telecom SA 8,000 297,912
Portugal Telecom Spon. ADR 8,000 294,000
*Somague SGPS 6,900 69,946
*Telecel Comuni. Pessoais 1,600 131,186
-------------------
Total Portugal 2,001,896
-------------------
XXVI. Singapore (.68%)
ACMA Ltd. 20,000 37,106
City Developments 6,000 53,167
Clipsal Industries 15,000 61,500
Cycle & Carriage Ltd. 3,000 30,322
DBS Land (Fgn. Reg'd.) 18,000 61,558
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Singapore- Continued
Development Bank of Singapore (Fgn. Reg'd.) 5,000 $ 58,152
Elec. & Eltek International 7,000 32,480
GP (Gold Peak) Batteries 15,000 44,700
Jardine Strategic 16,000 55,360
Keppel Corp. 10,000 62,998
*Lindeteves Jacoberg Ltd. 54,000 75,140
Overseas Chinese Bank (Fgn. Reg'd.) 6,000 71,443
Prima Ltd. 9,000 31,464
Singapore Airlines Ltd. (Fgn. Reg'd.) 6,000 48,183
United Overseas Land 10,000 6,230
*Want Want Holdings 35,000 100,450
-------------------
Total Singapore 830,253
-------------------
XXVII. South Africa (.97%)
Anglo American Gold INV 600 42,493
De Beers Centenary Link Units 9,500 346,080
First National Bank Hld'g. 20,000 123,996
Gencor Ltd. 28,000 129,879
Goldfields South Africa 2,500 60,810
Samancor Ltd. 3,000 36,401
Sasol Ltd. 12,000 128,295
South Africa Brews 7,000 221,745
South African Iron & Steel 60,000 48,874
Vaal Reefs Exploration & Mining 600 36,113
-------------------
Total South Africa 1,174,686
-------------------
XXVIII. South Korea (.12%)
Daewoo Heavy Industries Ltd. 1,800 9,126
Kepco/ Korea Electric Power Corp. 2,939 85,331
Korea Long Term Credit Bank 1,785 24,119
Samsung Electronics 400 31,572
-------------------
Total Korea 150,148
-------------------
XXIX. Spain (3.64%)
Acerinox SA 1,300 183,763
Aumar (Fgn. Reg'd.) 6,000 82,393
Autopistas Cesa (Fgn. Reg'd.) 8,925 102,975
Banco de Santander (Fgn. Reg'd.) 6,000 414,088
BCO Bilbao Vizcaya Reg'd. 10,000 607,329
BCO Popular Esp. 600 107,960
Corporacion Mapfre Reg'd. 2,000 103,345
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Spain- Continued
Endesa 10,000 $ 646,260
Fabrica Autom Renault 4,604 85,383
Iberdrola SA 60,000 662,540
Repsol SA 12,000 501,152
Tabacalera SA Ser. A (Fgn. Reg'd.) 1,000 50,257
Telefonica de Espana SA 32,000 773,530
Vidrala SA 1,500 98,213
-------------------
Total Spain 4,419,188
-------------------
XXX. Sweden (2.72%)
ABB AB Series A 2,400 271,249
AGA AB Series B 5,000 75,612
Astra AB Series A 13,300 643,081
Autoliv AB Free 2,400 103,629
Electrolux AB Series B 1,600 101,877
Ericsson Telecom Series B 19,800 698,656
Hennes & Mauritz Series B 850 113,770
Investor AB Class B 2,000 93,918
Nordbanken 6,300 217,285
Scania AB Wts. (Ex. 6/4/99) 5,100 4,533
Skanska AB Series B 2,400 109,200
Stora Kopparbergs Series A 15,700 222,844
Svedala Industri Free 3,800 74,100
Svenska Handelsbanken Series A 6,000 183,061
Swedish Match AB Free 9,300 33,309
Sydkraft Series C 5,500 105,061
Volvo AB Class B Free 9,300 249,202
-------------------
Total Sweden 3,300,387
-------------------
XXXI. Switzerland (6.16%)
ABB AG Baden Bearer 100 120,289
Adecco SA 750 244,577
Alusuisse-Lonza Holding Ltd. 100 84,550
Ciba Geigy AG (Reg'd.) 1,400 115,839
Clariant AG (Reg'd.) 1,000 492,977
Credit Suisse Group 8,100 972,935
Nestle S.A. (Reg'd.) 850 995,863
Novartis Ag Reg'd. 1,400 1,738,562
Roche Holdings AG (Ptg. Cert.) 160 1,384,508
Swiss Bank Corp. (Reg'd.) 2,000 427,618
Swiss Reinsurance (Reg'd.) 400 425,532
*Swissair (Reg'd.) 100 89,278
Zurich Insurance (Reg'd.) 1,200 377,973
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
Switzerland- Continued
Total Switzerland $ 7,470,501
-------------------
XXXII. Taiwan (.91%)
*Acer Inc. 28,000 70,661
Asia Cement 28,000 51,344
*Bank Sinopac 42,000 42,854
*CMC Magnetics Corp. 22,000 58,315
Cathay Construction Co. 33,000 58,715
Cathay Life Insurance 29,000 172,694
China Development Corp. 29,000 117,937
China Steel 57,000 54,641
*China Trust Commercial BK 96,000 177,778
Formosa Plastics Corp. 30,000 75,708
*Inventec Electronics Co. 4,000 41,975
*President Enterprises Corp. 31,000 51,892
*Tuntex Distinct 76,000 56,848
*Yue Loong Motor 36,000 70,588
-------------------
Total Taiwan 1,101,950
-------------------
XXXIII. Thailand (.25%)
Advanced Info. Svcs. (Fgn. Reg'd.) 5,700 48,754
Bangkok Bank (Fgn. Reg'd.) Pcl 15,600 151,462
Ptt Exploration and Production (Fgn. Reg'd.) Pcl 4,200 62,462
Shinawatra Comp. & Comm. Pcl (Fgn. Reg'd.) 3,000 24,041
Thai Airways International (Fgn. Reg'd.) Pcl 12,200 20,917
-------------------
Total Thailand 307,636
-------------------
XXXIV. United Kingdom (17.43%)
Amvesco PLC 50,000 281,329
Associated British Foods 50,000 451,607
BAT Industries Ord. 55,000 467,813
BG PLC 86,600 230,808
Barclays Bank Ord. 105,800 1,777,175
Bass Ord. 56,200 753,089
Blue Circle Industries Ord. 50,000 341,379
Brammer PLC 21,300 220,769
British Aerospace 20,000 448,811
*British Biotechnology Ord. 218,750 903,318
British Petroleum Ord. 80,000 929,209
British Steel Ord. 90,000 241,351
British Telecom. Ord. 230,000 1,687,646
Burton Group 230,000 590,298
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
----------------- -------------------
<S> <C> <C>
United Kingdom- Continued
*Centrica PLC 86,600 $ 89,759
EMAP Publishing PLC 25,000 319,580
GKN Ord. 21,300 351,128
General Accident Ord. 34,700 468,125
General Electric Ord. 44,500 273,810
Great Universal Stores PLC 60,000 657,422
Greene King PLC 40,000 469,869
Hyder PLC Cumltve. Redem. 44,100 75,728
ICI 30,400 348,098
Lloyds TSB Group Ord. 174,989 1,436,580
Ladbroke Group Ord. 120,000 444,204
Land Securities 28,800 367,209
National Westminster Plc 20,000 227,038
Pearson Ord. 50,000 602,966
Peninsular & Oriental Steam Navagation Co. 25,000 253,772
Racal Electronics 36,000 171,759
Reuters Holdings 30,000 306,007
Rolls - Royce Ord. 84,000 315,089
Royal & Sun Alliance Ins. 95,000 698,634
Scapa Group PLC 100,000 362,767
Scottish Power PLC 66,000 384,384
Shell Transport & Trading Reg'd. 35,000 624,765
Smithkline Beecham Ord. 51,964 772,840
Tate & Lyle Ord. 40,000 286,265
Taylor Woodrow Ord. 150,000 463,946
Tesco Ord. 50,000 287,910
Yorkshire Electricity Group 20,000 303,046
Yorkshire Water PLC 14,400 83,155
Zeneca Ord. 13,000 377,063
-------------------
Total United Kingdom 21,147,520
-------------------
Total Equity Securities (98.52%)
(Identified Cost $107,473,466) 119,541,529
-------------------
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY COUNTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Total Short-Term Investments (1.45%)
Brown Brothers Harriman & Co. (Grand Cayman Branch)
5.00% Call Account
(Identified Cost $1,764,000) 1,764,000
-------------------
Total Investments (99.97%)
(Identified Cost $109,237,466) 121,305,529
Other Assets Less Liabilities (.03%) 33,056
-------------------
Net Assets (100.00%) $ 121,338,585
===================
--------------------------------------------------------
* Non-income producing security
**Exempt from registration under Rule 144A of the Securities Act of 1993. These securities may resold in
transactions exempt from registration, normally to qualified institutional buyers. On March 31, 1997, these
securities were valued at $451,780, less than 0.4% of Net Assets.
</TABLE>
(See "Notes to Financial Statements")
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS BY INDUSTRY
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
Percent of
Industry Net Assets
- -------- ----------
Aerospace 0.86%
Air Transportation 0.16
Appliances and Household Products 1.15
Automobile 4.22
Banking 15.07
Beverages and Tobacco 2.30
Broadcasting and Publishing 1.62
Building Materials & Components 1.39
Business Services 2.52
Chemicals 4.30
Construction and Housing 1.38
Data Products 1.46
Electrical and Electronics 4.55
Electronic Components and Instruments 0.51
Energy Sources 7.67
Finance/Financial Services 2.74
Food and Housing Products 2.97
Gold 0.40
Health and Personal Care 7.16
Industrial Components 1.00
Insurance 4.67
Leisure 1.26
Machinery 1.57
Materials 0.66
Merchandising 3.61
Metals (Non-Ferrous) 1.21
Multi-Industry 2.80
Other Industries 0.03
Paper & Allied Products 0.39
Real Estate 2.14
Recreation 1.12
Railroad Transportation 0.45
Shipping 0.75
Steel 0.98
Telecommunications 6.51
Textiles 0.25
Utilities 5.60
Wholesale and International 1.09
Short-Term Investments 1.45
Other Assets Less Liabilities 0.03
------
Net Assets 100.00%
======
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
Investments, at value
(Identified cost $109,237,466) $ 121,305,529
Foreign currency, at value
(Identified cost $20,788) 21,042
Cash 7,674
Receivables:
Dividend, interest and recoverable foreign taxes receivable $ 468,576
Portfolio securities sold 921,065
Fund shares sold 53,597 1,443,238
-------------
Prepaid expenses 7,867
-------------
Total assets 122,785,350
-------------
Liabilities
Payables:
Portfolio securities purchased $619,159
Unrealized loss on forward currency contracts (Note 5) 82,503
Fund shares redeemed 499,176 1,200,838
-------------
Accrued management fees (Note 3) 104,715
Other accrued expenses 141,212
-------------
Total liabilities 1,446,765
-------------
Net assets (equivalent to $6.04 per share of $.0001 par value
capital stock, representing the offering and redemption
price for 20,098,811 shares outstanding,
100,000,000 shares authorized) $ 121,338,585
=============
Net assets consist of:
Capital paid in $ 107,271,804
Accumulated overdistributed net investment income (192,866)
Accumulated net realized gain on investments
and foreign currency transactions 2,276,459
Unrealized appreciation (depreciation) on:
Investments $ 12,068,063
Foreign currency (84,875) 11,983,188
------------- -------------
$ 121,338,585
=============
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997
Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income
Dividends (net of foreign taxes withheld of $100,027) $ 854,920
Interest 54,876
-------------
909,796
Expenses
Advisory fees $ 552,197
Custodian fees 171,728
Audit and legal fees 54,700
Transfer agent fees 18,398
Administrative fees 16,409
Directors' fees and expenses 7,957
Insurance 4,621
Printing fees 2,486
Registration fees 3,733
Miscellaneous expenses 10,252
-------------
Total expenses 842,481
-------------
Net investment income 67,315
-------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Net realized gain on investments 1,293,580
Net unrealized gain on investments 5,340,676
-------------
Net gain on investments 6,634,256
-------------
Net realized gain on foreign currency 993,581
Net unrealized loss on foreign currency
and foreign currency denominated assets and
liabilities (232,173)
-------------
Net gain on foreign currency 761,408
-------------
Net gain on investments and foreign currency 7,395,664
-------------
FOREIGN CURRENCY
Net increase in net assets resulting from operations $ 7,462,979
============
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the six months
ended March 31, 1997 For the year ended
Increase (Decrease) in Net Assets Unaudited September 30, 1996
-------------------- ------------------
<S> <C> <C>
Operations:
Net investment income $ 67,315 $ 804,695
Net realized gain on investments 1,293,580 6,873,079
Net unrealized gain (loss) on investments 5,340,676 (769,440)
Net realized gain on foreign currency 993,581 78,900
Net unrealized gain (loss) on foreign currency and
foreign currency denominated assets and liabilities (232,173) 123,385
------------- -------------
Net increase resulting from operations 7,462,979 7,110,619
------------- -------------
Distributions to shareholders:
From net investment income (953,051) (1,061,398)
From net realized gains (6,861,964) (5,483,889)
------------- -------------
Total distributions (7,815,015) (6,545,287)
------------- -------------
Fund share transactions:
Proceeds from shares sold 21,485,517 15,242,997
Net asset value of shares issued on
reinvestment of distributions 6,979,670 5,720,256
Cost of shares redeemed (7,156,358) (29,356,526)
------------- -------------
Net increase (decrease) resulting from Fund share
transactions 21,308,829 (8,393,273)
------------- -------------
Net increase (decrease) 20,956,793 (7,827,941)
Net Assets
Beginning of year 100,381,792 108,209,733
------------- -------------
End of year (including undistributed (overdistributed)
net investment income of ($192,866) and
$692,870, respectively) $ 121,338,585 $ 100,381,792
============= =============
Number of Fund Shares
Sold 3,523,345 2,576,621
Issued on reinvestment of distributions 1,193,106 999,560
Redeemed (1,199,246) (5,035,947)
------------- -------------
Net increase (decrease) 3,517,205 (1,459,766)
============= =============
</TABLE>
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For a share outstanding throughout the period:
1
For the six Year Ended September 30,
months ended ------------------------------------------------------------
March 31, 1997
Unaudited 1996 1995 1994 1993 1992
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $6.05 $6.00 $6.10 $5.66 $4.80 $5.69
-------------- ------- -------- -------- -------- ---------
Income from Investment Operations:
2 2
Net Investment Income 0.00 0.05 0.06 0.01 0.07 0.06
Net Realized/Unrealized Gain (Loss) on 3
Securities and Foreign Currency 0.40 0.37 0.06 0.43 0.79 (0.87)
-------------- ------- -------- -------- -------- ---------
Total from Investment Operations 0.40 0.42 0.12 0.44 0.86 (0.81)
-------------- ------- -------- -------- -------- ---------
Less Distributions:
Net Investment Income (0.05) (0.06) - - - (0.08)
Capital Gains (0.36) (0.31) (0.22) - - -
-------------- ------- -------- -------- -------- ---------
Total Distributions (0.41) (0.37) (0.22) - - (0.08)
-------------- ------- -------- -------- -------- ---------
Net Asset Value, End of Period $6.04 $6.05 $6.00 $6.10 $5.66 $4.80
============== ======= ======== ======== ======== =========
Total Return 6.83% 7.33% 2.13% 7.77% 17.92% (14.20%)
Ratios/Supplemental Data:
Net Assets, End of Period (000's) $121,339 $100,382 $108,210 $204,788 $182,894 $127,092
5
Ratio of Expenses to Average Net Assets 1.45% 1.54% 1.53% 1.39% 0.68% 1.05%
Ratio of Net Investment Income to 5
Average Net Assets 0.12% 0.78% 0.97% 0.29% 1.88% 1.55%
Portfolio Turnover Rate 72% 103% 174% 176% 131% 77%
4
Average Commission Rate Paid $0.0106 $0.0268 --- --- --- ---
- -----------------------------------------------
</TABLE>
1. Prior to February, 1993, the investment managers of the Fund were Nomura
Capital Management, Inc. and certain affiliates (collectively, "Nomura"),
Acadian Asset Management, Inc. ("Acadian"), and, with respect to foreign
currency hedging transactions and allocation of Fund assets to the other
managers, Bailard, Biehl & Kaiser, Inc. The Fund paid Nomura and Acadian fees at
varying rates for their services. Effective February, 1993, Bailard, Biehl &
Kaiser, Inc. (the "Advisor") assumed full responsibility for investment
management services to the Fund.
On October 1, 1993, the Fund and the Advisor entered into a new Investment
Management Agreement pursuant to which the Fund pays management fees to the
Advisor. At all times prior to that date, the Advisor directly charged
management fees to clients and the Fund paid no fees to the Advisor. If fees
directly charged to clients were included as a Fund expense at an assumed 1%
annual rate payable quarterly, pro-forma total returns were 16.74% and (15.05%)
(unaudited) for the years ended September 30, 1993 and 1992, respectively.
2. 1995 amounts are computed on the basis of average shares outstanding.
3. The amount shown for each share outstanding may not accord with the change
in the aggregate gains and losses in the portfolio securities for the period
because of the timing of purchases and redemptions of shares in relation to the
fluctuating market value of the portfolio.
4. Represents average commission rate paid per share on purchases and sales
of equity securities by the Fund, as computed under SEC rule effective with the
Fund's 1996 fiscal year. Prior year rates have not been presented as permitted
by the rule.
5. Annualized.
See "Notes to Financial Statements"
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
Unaudited
- --------------------------------------------------------------------------------
Note 1 - Summary of Significant Accounting Policies
Bailard, Biehl & Kaiser International Equity Fund (the "Fund") is a
non-diversified series of the Bailard, Biehl & Kaiser International Fund Group,
Inc. (the "Group"), a Maryland corporation and an open-end management investment
company registered under the Investment Company Act of 1940. 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 for investment companies.
Security Valuation
Each listed investment security is valued at the closing price thereof reported
by the principal securities exchange on which the issue is traded, or if no sale
is reported, the mean of the closing bid and asked prices. Securities which are
traded over-the-counter are normally valued at the mean of the closing bid and
asked prices quoted by major dealers of such securities, or in the absence of
such prices, as determined in good faith by, or under procedures determined by,
the Board of Directors of the Fund. Short-term obligations with a maturity of 60
days or less are valued at amortized cost which approximates market.
The Fund's investment in foreign securities may entail risks due to the
potential of political and economic instability in the countries in which
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.
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 the results of operations 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 included with net realized and
unrealized gain (loss) on investments.
Forward Foreign Currency Exchange Contracts
In connection with portfolio purchases and sales of securities denominated in a
foreign currency, the Fund may enter into forward foreign 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 in 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 taxable income to its shareholders. Therefore, no provision is made for
Federal income taxes.
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
Unaudited
- --------------------------------------------------------------------------------
Paid in capital, undistributed net investment income and undistributed realized
net gain have been adjusted for permanent book-tax differences.
Reclassifications between undistributed net investment income and undistributed
realized net gain arose principally from differing book and tax treatments for
foreign currency transactions.
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 of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Other
Investment security transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date or when the Fund first becomes aware
of such dividend. 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.
Note 2 - Purchases and Sales of Securities
For the six months ended March 31, 1997, purchases and sales of securities,
other than short-term investments, aggregated $57,726,148 and $41,741,855,
respectively. There were no purchases or sales of U.S. Government obligations.
Note 3 - Management Fee 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 which the
Advisor receives a fee, payable monthly, at the annual rate of 0.95% of the
average net assets of the Fund. Advisory fees paid on shares of the Fund are
taken into account in the computation of fees payable under individual advisory
agreements for advisory clients of the Advisor.
Each outside director is compensated by the Group at the rate of $8,000 per year
plus $1,333 for each meeting of the Board of Directors attended and travel
expenses incurred in attending such meetings.
Note 4 - Tax Basis Appreciation
Unrealized appreciation (depreciation) at March 31, 1997, based on the cost of
securities for federal income tax purposes of $109,237,466, consists of:
Gross unrealized appreciation $ 17,495,349
Gross unrealized depreciation (5,427,286)
------------
Net unrealized appreciation $ 12,068,063
============
Note 5 - Forward Foreign Currency Contracts
At March 31, 1997 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
<PAGE>
BAILARD, BIEHL & KAISER
INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
Unaudited
- --------------------------------------------------------------------------------
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 forward value of amounts due to the Fund under the contracts, including
contracts which have been offset but remained unsettled, has been netted against
the forward value of the currency to be delivered by the Fund and the remaining
amount is shown as receivable (payable) for forward currency contracts in the
financial statements. Open forward foreign currency exchange contracts
outstanding at March 31, 1997 were as follows:
Currency Currency Delivery Unrealized
Receivable Deliverable Date Appreciation/(Depreciation)
- ---------- ----------- ---- ---------------------------
$1,728,727 NLG 3,327,800 06/11/97 $ (55,768)
1,636,813 CHF 2,386,800 06/12/97 (6,763)
882,050 SEK 6,756,500 06/17/97 (17,737)
1,002,010 C$ 1,371,200 06/20/97 5,911
593,910 ITL 1,006,915,000 06/20/97 (8,146)
-------------
$ (82,503)
=============
Currency Legend:
C$ - Canadian Dollar NLG - Netherlands Guilder
CHF - Swiss Franc SEK - Swedish Krona
ITL - Italian Lira
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