Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Baillie Gifford International Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
COMMON STOCKS -- 94.8%
Shares Value
--------------------------------------------------------------------------------
ARGENTINA -- 0.4%
Real Estate -- 0.4%
533,000 Comercial De Plata $ 1,322,104
-----------
AUSTRIA -- 0.9%
Banks -- 0.3%
13,940 Creditanstalt Bank 802,910
Business Services -- 0.3%
17,470 Flughafen Wien AG 929,103
Construction Materials -- 0.3%
2,520 Wienerberger Baust 967,639
-----------
2,699,652
-----------
AUSTRALIA -- 4.7%
Business Services -- 0.6%
200,000 Brambles Industries Ltd. 1,896,233
Electric Utilities -- 0.6%
566,582 Australia Gas & Light Co. 1,791,962
Forest Products -- 0.7%
277,929 Amcor Limited 2,050,393
Metals -- 0.5%
278,000 Western Mining Corp. 1,531,272
Petroleum Services -- 1.0%
245,707 Broken Hill Proprietary 3,024,624
Real Estate -- 0.7%
157,222 Lend Lease Corp. 2,009,134
Retail Trade -- 0.6%
866,665 Woolworths Ltd. 1,798,622
-----------
14,102,240
-----------
BELGIUM -- 1.5%
Banks -- 1.2%
11,050 Generale De Banque 3,550,481
Metals -- 0.3%
13,000 Union Miniere 850,032
-----------
4,400,513
-----------
BRAZIL -- 0.8%
Broadcasting -- 0.4%
36,000 Telecomunicados Brasileras 1,201,500
Energy -- 0.4%
54,567 Companhia Energetica De Minas 1,104,982
-----------
2,306,482
-----------
CHILE -- 0.5%
Electric Utilities -- 0.5%
50,000 Enersis SA 1,475,000
-----------
CZECHOSLOVAKIA -- 0.3%
Electric Utilities -- 0.3%
25,000 Ceska Energeticke Zavody 909,091
-----------
DENMARK -- 0.3%
Telephone -- 0.3%
17,150 Tele Danmark AS 954,277
-----------
FRANCE -- 5.5%
Bank -- 0.9%
21,850 Societe Generale 2,553,738
Chemicals -- 0.6%
75,500 Rhone Poulenc SA 1,701,018
Conglomerates -- 0.3%
4,090 CGIP 953,516
Containers and Glass -- 0.7%
18,270 Cie De St Gobain 2,206,877
Leisure Time -- 0.7%
20,000 Club Mediterranee 2,038,629
Oil-Integrated -- 0.9%
36,000 Societe Elf Aquitaine 2,660,318
Retail Trade -- 1.4%
5,000 Carrefour 2,561,169
10,700 Castorama Dubois 1,773,298
-----------
16,448,563
-----------
GERMANY -- 5.9%
Air Travel -- 0.8%
16,500 Lufthansa AG 2,386,290
Automobile -- 0.8%
8,500 Volkswagen AG 2,455,528
Banks -- 1.4%
90,000 Deutsche Bank AG 4,373,418
Building Construction -- 0.5%
2,600 Kampa Haus AG 1,573,650
Chemical -- 0.8%
10,610 BASF AG 2,266,392
Drugs and Health Care -- 0.7%
4,750 GEHE AG 2,164,618
Industrial Machinery -- 0.9%
10,000 Man AG 2,577,916
-----------
17,797,812
-----------
See notes to financial statements.
--------------------------------------------------------------------------------
1
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
HONG KONG -- 5.6%
Conglomerates -- 1.7%
600,000 Hutchison Whampoa $ 2,900,049
300,000 Swire Pacific 2,287,472
Electric Utilities -- 1.2%
864,000 Hong Kong and China Gas 1,378,997
700,000 Hong Kong Electric 2,379,229
Financial-Bank -- 1.2%
275,565 HSBC Holdings 3,534,574
Real Estate -- 0.8%
1,070,000 Amoy Properties 940,319
800,000 Hong Kong Land Holding 1,456,000
Telephone -- 0.7%
1,000,000 Hong Kong Telecommunications 1,977,306
-----------
16,853,946
-----------
HUNGARY -- 0.1%
Retail Trade -- 0.1%
235,000 Fotex 343,814
-----------
IRELAND -- 0.3%
Construction Materials -- 0.3%
143,000 CRH 957,234
-----------
ITALY -- 2.6%
Automobiles -- 0.9%
747,300 Fiat Spa 2,635,245
Insurance -- 0.5%
288,000 RAS 1,689,278
Telephone -- 1.2%
1,350,000 Telecom Italia 3,659,129
-----------
7,983,652
-----------
JAPAN -- 27.7%
Automobiles -- 1.6%
287,000 Calsonic Corp. 1,953,855
272,000 Suzuki Motor Corp. 3,032,741
Banks -- 0.9%
140,000 Sanwa Bank 2,642,912
Business Services -- 1.9%
295,000 Kamigumi Co. 2,958,528
44,000 Secom Co. 2,767,034
Drugs and Health Care -- 1.3%
88,000 Sankyo Co. 2,045,425
66,000 Santen Pharmaceutical Co. 1,759,896
Electrical Equipment -- 1.2%
354,000 Hitachi Corp. 3,529,349
Electronics -- 4.4%
171,000 Aiwa Co. 4,136,039
66,000 Kyocera Corp. 5,435,432
98,000 Murata Manufacturing Co. 3,711,640
Financial Services -- 1.2%
100,000 Japan Securities Finance 1,120,878
57,480 Promise Co. 2,400,793
Homebuilders -- 0.8%
185,000 Sekusui House 2,291,900
Industrial Machinery -- 1.9%
250,000 Amada Co. 2,138,517
520,000 Mitsubishi Heavy Ind. 3,533,951
Insurance -- 0.9%
232,000 Tokio Marine & Fire Ins. 2,660,657
Investment Companies -- 1.0%
171,000 Nomura Securities Co. 2,986,019
Leisure Time -- 0.8%
15,000 Toho Co. 2,495,428
Photography -- 1.9%
222,000 Canon, Inc. 3,614,654
85,000 Fuji Photo Film Co. 2,015,810
Real Estate -- 1.1%
300,000 Mitsubishi Estate 3,380,332
Retail Grocery -- 0.9%
38,000 Seven Eleven Japan 2,721,491
Retail Trade -- 2.1%
42,000 Ito Yokado Co. 2,215,091
180,000 Marui Co. 2,867,087
54,000 Shimachu Co. 1,369,831
Steel -- 1.3%
200,000 Hitachi Metals 2,244,115
700,000 Sumitomo Metal Ind. 1,825,261
Telecommunication -- 1.4%
540 DDI Corp. 4,332,488
Tires and Rubber -- 1.1%
230,000 Bridgestone Corp. 3,392,130
-----------
83,579,284
-----------
MALAYSIA -- 2.7%*
Conglomerates -- 0.7%
780,000 Sime Darby Berhad 2,175,554
See notes to financial statements.
--------------------------------------------------------------------------------
2
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Baillie Gifford International Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
Shares Value
--------------------------------------------------------------------------------
Leisure Time -- 1.0%
528,000 Resorts World Berhad $ 3,096,965
Telephone -- 1.0%
400,000 Telekom Malaysia 3,035,275
-----------
8,307,794
-----------
MEXICO -- 0.9%
Building and Construction -- 0.1%
11,100 Tolmex 433,274
Beverage -- 0.5%
44,500 Pan American Beverage 1,335,000
Telephone -- 0.3%
29,500 Telefonos de Mexico SA 873,938
-----------
2,642,212
-----------
NETHERLANDS -- 2.9%
Banks -- 0.8%
60,000 ABN Amro Holdings NV 2,315,586
Household Appliances -- 1.5%
110,000 Philip Electronics NV 4,656,986
Publishing -- 0.6%
14,800 Ver Ned Uitgevers 1,771,797
-----------
8,744,369
-----------
NEW ZEALAND -- 0.6%
Telecommunication -- 0.6%
515,000 Telecom Corp. of New Zealand 1,928,065
-----------
POLAND -- 0.3%
Engineering -- 0.3%
235,000 Elektrim 828,172
-----------
SINGAPORE -- 3.3%
Air Travel -- 0.8%
245,000 Singapore Airlines 2,261,539
Banks -- 1.1%
303,333 Overseas Chinese Bank 3,364,337
Industrial Machinery -- 0.6%
310,000 Sembawang Corp. 1,885,510
Publishing -- 0.8%
156,000 Singapore Press HD 2,333,023
-----------
9,844,409
-----------
SPAIN -- 1.0%
Banks -- 1.0%
75,000 Banco Santander SA 2,956,656
-----------
SWEDEN -- 1.8%
Business Services -- 0.6%
53,500 Securitas AB 1,854,190
Construction & Mining Equipment -- 1.2%
110,000 Atlas Copco AB 1,527,967
48,150 Incentive AB 1,940,277
-----------
5,322,434
-----------
SWITZERLAND -- 4.5%
Business Services -- 0.3%
1,000 Danzas Holding 859,748
Drugs and Healthcare -- 1.1%
4,846 Sandoz AG 3,341,488
Food Producer -- 1.4%
4,000 Nestle SA 4,165,002
Industrial Machinery -- 0.3%
645 Bobst AG 980,242
Insurance -- 1.4%
13,600 Winterthur 4,134,920
-----------
13,481,400
-----------
THAILAND -- 0.6%
Financial Services -- 0.6%
750,000 Ind. Fin. Thailand 1,974,884
-----------
UNITED KINGDOM -- 19.1%
Banks -- 1.2%
164,500 National Westminster Bk. Co. 1,429,923
285,000 Abbey National Bank 2,121,521
Business Services -- 1.8%
130,000 Associated British Ports 578,972
316,000 BAA 2,480,452
272,000 Reuters Holdings 2,264,864
Chemicals -- 0.5%
690,000 Allied Colloids 1,355,416
Conglomerates -- 2.4%
653,658 BTR 3,281,553
297,000 Hanson 1,036,925
150,000 Hays 751,551
205,000 Siebe 2,050,978
Containers and Glass -- 0.3%
280,000 Caradon PLC 1,051,058
Construction and Mining Equipment -- 0.5%
210,000 Scapa Group 776,603
See notes to financial statements.
--------------------------------------------------------------------------------
3
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
170,000 Weir Group $ 686,814
Drugs and Healthcare -- 1.1%
270,000 Glaxo Holdings 3,313,266
Electric Utilities -- 1.0%
167,000 National Power Co. 1,183,370
162,800 Yorkshire Electric Group 1,786,735
Electronics -- 0.8%
155,000 Electrocomponents 1,479,243
340,000 Rotork 886,910
Food, Beverage and Tobacco -- 2.8%
320,000 Guinness 2,407,508
160,000 Highland Distilleries 890,727
300,000 Iceland Group 858,915
170,000 Reckitt and Colman 1,798,155
250,000 Rothmans Int'l. NV 2,449,499
Household Products -- 0.1%
220,000 Life Sciences International 423,413
Insurance -- 0.9%
70,000 Britannic Assurance 609,034
400,000 Prudential Corp. 2,125,020
International Oil -- 1.5%
385,000 Shell Transport and Trading 4,601,996
Leisure Time -- 1.1%
270,000 Granada Group 2,619,691
80,000 Vendome Lux Group SA 601,877
Miscellaneous -- 0.6%
190,000 Devro International 670,908
500,000 Firstbus 1,137,267
Newspapers -- 0.2%
250,000 Mirror Group PLC 528,869
Retail-Grocery -- 0.8%
338,000 Sainsbury (J) 2,373,580
Retail Trade -- 0.8%
120,000 Fine Arts Developments 750,119
300,000 Marks & Spencer 1,927,788
Telephone -- 0.7%
600,000 Vodafone Group 2,228,408
-----------
57,518,928
-----------
TOTAL COMMON STOCKS
(Cost $260,539,315) 285,682,987
-----------
REPURCHASE AGREEMENT -- 3.3%
Principal
Amount Value
--------------------------------------------------------------------------------
$9,800,000 State Street Bank & Trust repurchase
agreement, dated 6/30/95, maturity
value $9,804,492 at 5.50%
due 7/3/95 (collateralized by
$7,610,000 U.S. Treasury Bonds,
9.25% due 2/15/16) $ 9,800,000
------------
TOTAL REPURCHASE AGREEMENT
(Cost $9,800,000) 9,800,000
------------
TOTAL INVESTMENTS -- 98.1%
(Cost $270,339,315) 295,482,987
CASH, RECEIVABLES AND
OTHER ASSETS LESS
PAYABLES -- 1.9% 5,720,073
------------
NET ASSETS -- 100.0% $301,203,060
------------
See notes to financial statements.
--------------------------------------------------------------------------------
4
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Baillie Gifford International Fund
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1995 (Unaudited)
ASSETS:
Investments, at identified cost* $270,339,315
============
Investments, at market 285,682,987
Repurchase agreements 9,800,000
------------
TOTAL INVESTMENTS 295,482,987
Cash 4,497
Foreign currency (Cost $4,611,557) 4,655,816
Dividends receivable 1,133,558
Foreign tax receivable 521,737
Receivable for fund shares sold 220,902
Receivable for securities sold 141,213
Receivable for open forward foreign currency
sold 138,789
Interest receivable 7,491
Deferred organization expenses -- Note C 3,510
Other assets 1,756
------------
TOTAL ASSETS 302,312,256
------------
LIABILITIES:
Foreign tax withholding 177,315
Payable for fund shares redeemed 104,527
Accrued expenses 91,199
Due to affiliates -- Note 2 736,155
------------
TOTAL LIABILITIES 1,109,196
------------
NET ASSETS $301,203,060
============
COMPONENTS OF NET ASSETS
Capital stock -- $0.10 par value
(1,000,000,000 shares authorized) $ 2,042,466
Paid-in capital 279,140,020
Undistributed net investment income 2,122,579
Accumulated net realized (loss) on
investments and foreign currency (7,482,498)
Net unrealized appreciation of
investments and foreign currency related
transactions 25,380,493
------------
NET ASSETS $301,203,060
============
SHARES OUTSTANDING 20,424,659
------------
NET ASSET VALUE PER SHARE $ 14.75
============
* Includes repurchase agreements.
STATEMENT OF OPERATIONS
For The Six Months Ended
June 30, 1995 (Unaudited)
Investment Income:
Income
Dividends $ 3,915,918
Interest 264,706
------------
4,180,624
Less: Foreign tax withheld 521,456
------------
Total Income 3,659,168
------------
Expenses:
Investment advisory fees -- Note B 1,186,467
Custodian fees 237,412
Audit fees 10,000
Deferrred organization expense -- Note C 3,879
Directors' fees-- Note B 3,375
Printing expense 2,750
Insurance expense 1,757
Transfer agent fees 1,650
Legal fees 1,429
Registration fees 465
Other 360
------------
Total Expenses 1,449,544
------------
Net Investment Income 2,209,624
============
Realized and Unrealized Gain/(Loss) On
Investments and Currencies -- Note D
Net realized (loss) on investments and foreign
currency related transaction -- Note A (6,186,633)
Net change in unrealized appreciation of
investments and foreign currency related
transactions -- Note D 5,020,918
------------
Net Realized and Unrealized (Loss) on
Investments and Foreign Currencies (1,165,715)
------------
Net Increase in Net Assets
Resulting from Operations $ 1,043,909
============
See notes to financial statements.
--------------------------------------------------------------------------------
5
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1995 December 31,
(Unaudited) 1994
----------- -----------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
From Operations:
Net investment income $ 2,209,624 $ 2,880,417
Net realized gain/(loss) on investments and foreign currency related transactions (6,186,633) 2,289,267
Net change in unrealized appreciation/(depreciation) on investments and foreign
currency related transactions 5,020,918 (6,484,115)
------------ ------------
Net Increase/(Decrease) in Net Assets from Operations 1,043,909 (1,314,431)
------------ ------------
Distributions to Shareholders:
Net investment income -- (2,504,843)
------------ ------------
Total Distributions to Shareholders -- (2,504,843)
------------ ------------
From Capital Share Transactions:
Net increase/(decrease) in assets from capital share transactions -- Note F (2,890,718) 120,074,014
------------ ------------
Net Increase/(Decrease) in Net Assets (1,846,809) 116,254,740
Net Assets:
Beginning of period 303,049,869 186,795,129
------------ ------------
End of period* $301,203,060 $303,049,869
============ ============
* Includes undistributed net investment income of: $ 2,122,579 $ 250,232
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
6
<PAGE>
Baillie Gifford International Fund -- 6
--------------------------------------------------------------------------------
Baillie Gifford International Fund
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout the periods
indicated:
<TABLE>
<CAPTION>
Six Months February 8,
Ended 1991** to
June 30, 1995 Year Ended December 31, December 31,
(Unaudited) 1994 1993 1992 1991
------------ -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $ 14.69 $ 14.69 $ 11.16 $ 12.37 $ 10.00
-------- -------- -------- ------- -------
Income from Investment Operations
Net investment income ......................................... 0.09 0.15 0.23 0.09 0.04
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions ................. (0.03) (0.02) 3.54 (1.20) 2.52
-------- -------- -------- ------- -------
Net increase/(decrease) from investment operations ............ 0.06 0.13 3.77 (1.11) 2.56
-------- -------- -------- ------- -------
Distributions to Shareholders
Dividends from net investment income .......................... -- (0.13) (0.24) (0.10) (0.04)
Distributions from net realized gain on investments and
foreign currency related transactions ..................... -- -- -- -- (0.13)
-------- -------- -------- ------- -------
Total distributions ........................................... -- (0.13) (0.24) (0.10) (0.19)
-------- -------- -------- ------- -------
Net asset value, end of period ...................................... $ 14.75 $ 14.69 $ 14.69 $ 11.16 $ 12.37
======== ======== ======== ======= =======
Total return+ ....................................................... 0.41% 0.87% 34.04% (8.90%) 8.56%
======== ======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000's omitted) ..................... $301,203 $303,050 $186,795 $55,175 $36,012
Ratio of expenses to average net assets ....................... 0.98%* 1.03% 1.11% 1.26% 1.67%*
Ratio of net investment income to average net assets .......... 1.49%* 1.11% 1.75% 0.88% 0.61%*
Portfolio turnover rate ....................................... 22% 27% 18% 44% 14%
</TABLE>
----------
* Ratios are annualized.
** Commencement of operations.
+ Total returns do not reflect the effects of charges deducted under the
terms of GIAC's variable contracts. Including such charges would reduce the
total returns for all periods shown.
See notes to financial statements.
--------------------------------------------------------------------------------
7
<PAGE>
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8
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Baille Gifford Emerging Markets Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
COMMON STOCKS -- 84.3%
Shares Value
--------------------------------------------------------------------------------
ARGENTINA -- 8.3%
Automobile -- 0.3%
19,800 Ciades SA $ 96,049
Banks -- 0.6%
15,000 BCO Frances Rio PL 90,018
5,300 Banco Frances Del Rio La Plata 95,400
Conglomerates -- 1.5%
33,040 Compania Naviera Perez SA 277,622
22,800 Dycasa 47,890
42,500 Juna Minetti 131,776
Electric Utilities -- 1.4%
11,400 Capex SA 175,275
7,900 Central Costanera SA 252,800
Industrial Machinery -- 0.3%
5,000 Quilmes Industrial 97,500
Oil Transport -- 1.5%
45,000 Transportadora De Gas Del Sur 472,500
Real Estate -- 1.2%
147,600 Commercial De Plata 366,121
Telecommunications -- 0.7%
28,900 Telecom Argentina 131,521
2,150 Telecom Argentina Stet France 97,825
Telephone -- 0.8%
9,500 Telefonica De Argentina 235,125
---------
2,567,422
---------
BRAZIL -- 4.4%
Broadcasting -- 1.1%
5,900,000 Telebras 167,290
5,100 Telecomunicacoes Brasileras 170,213
Food, Beverage and Tobacco -- 0.8%
50,000 Santista Alimentos 38,023
26,000 Souza Cruz 196,306
Retail Trade -- 0.5%
7,250,000 Lojas Americanas 161,461
Steel -- 0.8%
15,300 Usinas Siderurgicas De Minas 171,051
7,000 Usiminas USI SD MG 78,750
Telephone -- 0.5%
1,335,000 Telesp Tel Sao Paolo 169,685
Other Services -- 0.7%
9,000,000 Sider Nacional CIA 205,225
----------
1,358,004
----------
CHILE -- 2.9%
Construction Material -- 0.2%
3,800 Maderas y Sinteticos Sociedad 71,250
Electric Utilities -- 0.7%
4,200 Enersis SA 123,900
4,100 Empresa Nacional De Electricidad 108,650
Investment Companies -- 2.0%
4,000 GT Chile Growth Fund 155,000
12,500 Genesis Chile Fund 456,250
----------
915,050
----------
CHINA -- 1.2%
Automobile -- 0.3%
6,500 Ek Chor China Motorcycle Co. 104,813
Container and Glass -- 0.3%
75,000 Yaohua Pilkington Glass Co. 75,000
Electrical Equipment -- 0.3%
120,000 Shanghai Shangling 99,600
Tire and Rubber -- 0.3%
8,000 China Tire Holdings Ltd. 85,000
----------
364,413
----------
COLOMBIA -- 0.9%
Construction Material -- 0.5%
6,700 Cementos Diamante 138,518
Retailer -- 0.4%
6,600 Cadenalco Gran Cad 125,821
----------
264,339
----------
CZECHOSLOVAKIA -- 1.4%
Construction Company -- 0.7%
2,500 IPS Praha 203,095
Electric Utilities -- 0.4%
3,800 Ceska Energeticke Zavody 138,182
Food, Beverage and Tobacco -- 0.2%
850 Praske Pivorary 44,390
Plastic -- 0.1%
1,400 Fatra 35,420
----------
421,087
----------
HONG KONG -- 15.3%
Bank -- 0.8%
19,000 HSBC Holdings 243,706
See notes to financial statements.
--------------------------------------------------------------------------------
9
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
Conglomerates -- 3.2%
276,000 China Strategic Holding Ltd. $ 105,224
130,000 Hutchison Whampoa 628,344
36,000 Swire Pacific 274,497
Containers and Glass -- 0.4%
400,000 Sinocan Holdings 113,727
Construction and Mining Equipments -- 0.9%
900,000 CNT Group Ltd. 61,645
120,000 Varitronix Int'l. 210,137
Electrical Equipment -- 0.5%
80,000 Johnson Electrical Holdings 161,286
Electric Utilities -- 1.6%
48,000 China Light and Power 246,892
156,000 Hong Kong and China Gas 248,986
Industrial Machinery -- 0.9%
260,000 Chen Hsong Holdings 165,486
500,000 Lung Kee (Bermuda) 116,312
Leisure Time -- 0.5%
150,000 Mandarin Oriental 150,000
Publishing -- 0.3%
210,000 Oriental Press Group 84,811
Real Estate -- 2.2%
160,000 Amoy Properties 140,608
125,000 Hong Kong Land Holdings 227,500
42,000 Sun Hung Kai Props. 310,747
Retail Trade -- 1.9%
800,000 Esprit Asia 307,581
800,000 Pokphand (CP) Co. 281,734
Telephone -- 1.9%
304,800 Hong Kong Telecommunications 602,683
Transportation -- 0.2%
130,000 China Merchant Shekou 70,563
----------
4,752,469
----------
HUNGARY -- 2.9%
Chemicals -- 0.5%
9,000 Chemical Works of Gedeon Richter 146,250
Conglomerates -- 0.6%
9,082 Zalakeramia 179,392
Food -- 0.6%
3,500 Pick Szeged RT 187,827
Lodging -- 0.6%
21,600 Danubius Hotel 210,809
Plastic -- 0.4%
11,400 Pannonplast 115,896
Retail Trade -- 0.2%
42,000 Fotex 60,803
----------
900,977
----------
INDIA -- 1.7%
Automobile -- 0.2%
2,000 Bajaj Auto 56,000
Construction -- 0.3%
5,500 Larsen & Toubro Ltd. 108,625
Drugs and Healthcare -- 0.1%
10,000 Core Health Care 47,500
Electric Utilities -- 0.3%
10,000 CESC 47,500
8,000 ITC Ltd. 59,040
Industrial Machinery -- 0.2%
23,000 NEPC Micon 52,325
Lodging -- 0.3%
5,000 The Indian Hotels Co. 80,650
Metals -- 0.3%
8,000 Indian Aluminum 85,040
----------
536,680
----------
INDONESIA -- 1.6%
Bank -- 0.3%
30,000 Bank International Indonesia 92,614
Household Products -- 0.3%
6,000 Unilever Indonesia 88,909
Photography -- 0.4%
20,000 Modern Photo Film 108,666
Telephone -- 0.6%
5,200 Perusahaan Per Per Ind. Sat Corp. 198,900
----------
489,089
----------
KOREA -- 4.3%
Electrical Equipment -- 1.0%
6,000 Samsung Elect. Co. 318,750
Electric Utility -- 1.4%
20,000 Korea Electric Power Corp. 452,500
See notes to financial statements.
--------------------------------------------------------------------------------
10
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Baille Gifford Emerging Markets Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
Shares Value
--------------------------------------------------------------------------------
Investment Company -- 1.2%
100 Korea Europe Fund $ 368,750
Steel -- 0.7%
7,000 Pohang Iron & Steel Co. 206,500
----------
1,346,500
----------
MALAYSIA -- 7.1%
Container -- 0.4%
52,000 Kelang Container Terminal 136,505
Conglomerates -- 0.6%
72,000 Sime Darby Berhad 200,820
Engineering -- 0.9%
45,000 United Engineers Berhad 286,095
Food, Beverage and Tobacco -- 1.4%
20,000 Nestle Malay Berhad 153,404
130,000 R.J. Reynolds Berhad 249,549
Leisure Time -- 1.7%
90,000 Resorts World Berhad 527,892
Metals and Mining -- 0.9%
50,000 Maruichi Malay Steel 185,603
26,000 IJM Corp. Berhad 103,446
Retail Trade -- 0.6%
19,000 Edaran Otomobil 185,480
Telephone -- 0.6%
24,000 Telekom Malaysia 182,117
----------
2,210,911
----------
MEXICO -- 4.3%
Conglomerates -- 0.9%
13,500 Alfa SA 163,944
10,000 DESC SA De CV 128,750
Financial Services -- 1.4%
19,700 GPO Fin. Banamex AC 29,818
13,000 Grupo Carso SA De CV 142,039
4,259 Grupo Financiero Bancomer 1,124
5,750 Grupo Financiero Bancomer Ser. "C" 33,114
6,050 Tolmex 236,154
Food and Beverages -- 0.6%
5,600 Pan American Beverage 168,000
Metals -- 0.3%
10,000 Grupo Simec SA De CV 98,750
Retail Trade -- 0.2%
50,000 Organiz Soriana 57,440
Telephone -- 0.9%
9,600 Telefonos De Mexico SA 284,400
----------
1,343,533
----------
PERU -- 1.9%
Building Materials -- 0.3%
5,848 Cementos Lima 95,166
Food, Beverage and Tobacco -- 0.3%
42,300 Backus & Johnston 100,022
Metals -- 0.6%
36,698 Southern Peru Copper 166,622
1,347 Southern Peru Copper Ser. 2 4,270
Telephone -- 0.7%
123,569 CPT Telefonica Del Peru 211,087
----------
577,167
----------
PHILIPPINES -- 2.6%
Bank -- 0.3%
8,000 Philippine National Bank 93,187
Brewing and Distilling -- 1.3%
99,000 San Miguel Corp. 410,885
Telephone -- 1.0%
4,000 Philippine Long Distance Tel. Co. 287,000
----------
791,072
----------
POLAND -- 3.1%
Bank -- 0.4%
8,700 Bre BK Rozwoju Eks 139,364
Construction Materials -- 0.9%
26,300 Polifarb 144,925
40,000 Polifarb Wroclaw 127,296
Electric Utility -- 0.5%
40,000 Elektrim 140,965
Food, Beverage and Tobacco -- 0.8%
10,700 Agros 137,121
1,600 Zywiec 120,974
Pharmaceuticals -- 0.5%
10,700 Jelfa 155,861
----------
966,506
----------
SINGAPORE -- 5.4%
Air Travel -- 0.8%
27,000 Singapore Airlines 249,231
Automobile -- 0.5%
17,000 Cycle and Carriage 152,057
See notes to financial statements.
--------------------------------------------------------------------------------
11
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
Bank -- 0.6%
18,000 Overseas Chinese Bank $ 199,642
Construction Equipment -- 0.3%
48,000 Clipsal Industries Ltd. 110,880
Food and Beverages -- 0.6%
16,000 Fraser & Neave 184,329
Industrial Machinery -- 0.5%
26,000 Sembawang Corp. 158,140
Publishing -- 0.9%
18,000 Singapore Press HD 269,195
Real Estate -- 0.7%
66,000 DBS Land 206,855
Retailer -- 0.5%
105,000 Courts Singapore 156,279
----------
1,686,608
----------
SOUTH AFRICA -- 8.8%
Bank -- 1.9%
40,000 First National Bank 255,754
6,500 Nedcor 323,375
Brewing and Distilling -- 0.9%
10,000 South Africa Brews 285,317
Diversified Industrials -- 1.7%
26,000 Barlow Ltd. 266,342
49,000 Smith (C.G.) 259,398
Gas Distribution -- 0.9%
30,465 Sasol 291,974
Insurance -- 0.9%
3,700 Liberty Holdings 264,555
Mining -- 1.7%
10,000 De Beers Cons. Mines 261,255
80,000 Gencor 275,005
Tobacco -- 0.8%
35,000 Rembrandt Group 240,629
----------
2,723,604
----------
TAIWAN -- 1.4%
Real Estate -- 1.4%
40,000 ROC Taiwan Fd. 440,000
----------
THAILAND -- 4.0%
Bank -- 1.3%
18,000 Bangkok Bank 198,339
20,000 Thai Farmers Bank 191,209
Construction Material -- 0.8%
4,000 Siam Cement Co. 255,378
Financial Services -- 0.8%
90,000 Ind. Fin. Thailand 236,986
Food, Beverage and Tobacco -- 0.3%
15,000 CP Feedmill Co. 91,148
Publishing -- 0.8%
8,000 Land and House 168,523
18,000 Matichon Public Co., Ltd. 92,607
----------
1,234,190
----------
TURKEY -- 0.4%
Electronics -- 0.4%
312,000 Raks Electronik 121,723
----------
UNITED KINGDOM -- 0.4%
Conglomerates -- 0.4%
25,200 Antofagasta Holdings 127,463
----------
TOTAL COMMON STOCKS
(Cost $33,016,738) 26,138,807
----------
PREFERRED STOCKS -- 6.7%
12,000,000 BCO Bradesco SA 101,684
640 Bardella SA Ind. 99,424
700,000 Brahma (CIA Cerveja) 229,650
425,000 Casa Anglo Bras SA 40,168
17,155,000 Cemig CIA Energ MG 335,459
4,400,000 CESP CIA Energ SP 173,993
8,400,000 Ceval Alimentos SA 95,818
370,000 Cimento Itau 108,528
97,000 Confab 71,657
570,000 Coteminas CIA TEC 179,576
1,400,000 Duratex SA 68,472
470,000 Electrobras (CENTR) 125,095
180,000 Multibras Eletrodo 148,810
1,530,000 Petrol Brasileiros 129,647
240,000 Sider Tubarao 178,208
----------
TOTAL PREFERRED STOCKS
(Cost $2,785,156) 2,086,189
----------
See notes to financial staements.
--------------------------------------------------------------------------------
12
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Baille Gifford Emerging Markets Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
REPURCHASE AGREEMENT -- 8.0%
Principal
Amount Value
--------------------------------------------------------------------------------
$2,475,000 State Street Bank & Trust repurchase
agreement, dated 6/30/95, maturity
value $2,475,980 at 4.75%
due 7/3/95 (collateralized by
$1,925,000 U.S. Treasury Bonds,
9.25% due 2/15/16) $ 2,475,000
REPURCHASE AGREEMENT
(Cost $2,475,000) 2,475,000
-----------
TOTAL INVESTMENTS -- 99.0%
(Cost $33,326,894) 30,699,996
-----------
CASH, RECEIVABLES AND
OTHER ASSETS LESS
PAYABLES -- 1.0% 320,738
-----------
NET ASSETS -- 100.0% $31,020,734
===========
See notes to financial statements.
--------------------------------------------------------------------------------
13
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS
AND LIABILITIES
June 30, 1995 (Unaudited)
ASSETS:
Investments, at identified cost* $33,826,894
===========
Investments, at market 28,224,996
Repurchase agreement 2,475,000
-----------
TOTAL INVESTMENTS 30,699,996
Cash 10,526
Foreign currency (Cost $168,366) 167,148
Receivable for securities sold 494,465
Dividends receivable 79,482
Receivable for fund shares sold 39,731
Deferred organization expenses -- Note C 2,180
Interest receivable 327
Other assets 175
Foreign tax receivable 72
-----------
TOTAL ASSETS 31,494,102
-----------
LIABILITIES:
Payable for securities purchased 295,348
Accrued expenses 13,470
Foreign tax withholding 9,160
Payable for deferred organization
expense -- Note C 2,536
Due to affiliates -- Note B 152,854
-----------
TOTAL LIABILITIES 473,368
-----------
NET ASSETS $31,020,734
===========
COMPONENTS OF NET ASSETS
Capital stock -- $0.10 par value
(1,000,000,000 shares authorized) $ 369,492
Paid-in capital 34,162,489
Undistributed net investment income 147,088
Accumulated net realized (loss) on
investments and foreign currency (1,030,311)
Net unrealized (depreciation) of investments
and foreign currency related transactions (2,628,024)
-----------
NET ASSETS $31,020,734
===========
SHARES OUTSTANDING 3,694,919
-----------
NET ASSET VALUE PER SHARE $ 8.40
===========
STATEMENT OF OPERATIONS
For The Six Mpnths Ended
June 30, 1995 (Unaudited)
Investment Income:
Income
Dividends $ 330,653
Interest 87,196
------------
417,849
Less: Foreign tax withheld 28,449
------------
Total Income 389,400
------------
Expenses:
Investment advisory fees -- Note B 132,009
Custodian fees 73,048
Audit fees 10,000
Directors fees -- Note B 3,375
Printing expense 2,750
Legal fees 2,163
Transfer agent fees 1,650
Registration fees 1,370
Other 360
Deferrred organization expense -- Note C 252
Insurance expense 175
------------
Total Expenses 227,152
------------
Net Investment Income 162,248
============
Realized and Unrealized Gain/(Loss) On
Investments and Currencies -- Note D
Net realized (loss) on investments and foreign
currency related transaction -- Note A (988,394)
Net change in unrealized appreciation of
investments and foreign currency related
transactions -- Note D 370,282
------------
Net Realized and Unrealized (Loss) on
Investments and Foreign Currencies (618,112)
------------
Net (Decrease) in Net Assets
Resulting from Operations $ (455,864)
============
See notes to financial statements.
--------------------------------------------------------------------------------
14
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
Baille Gifford Emerging Markets Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months October 17,
Ended 1994** to
June 30, 1995 December 31,
(Unaudited) 1994
------------ ------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
From Operations:
Net investment income $ 162,248 $ 42,225
Net realized (loss) on investments and foreign currency related transactions (988,394) (75,276)
Net change in unrealized appreciation/(depreciation) on investments and foreign
related transactions 370,282 (2,998,306)
------------ ------------
Net (Decrease) in Net Assets from Operations (455,864) (3,031,357)
------------ ------------
Distributions to Shareholders:
Net investment income -- (24,026)
Distribution in excess of net investment income -- --
Net realized gain on investments and foreign currency related transactions -- --
------------ ------------
Total Distributions to Shareholders -- (24,026)
------------ ------------
From Capital Share Transactions:
Net increase/(decrease) in assets from capital share transactions -- Note F 7,407,698 27,124,283
------------ ------------
Net Increase in Net Assets 6,951,834 24,068,900
Net Assets:
Beginning of period 24,068,900 --
------------ ------------
End of period* $ 31,020,734 $ 24,068,900
============ ============
* Includes undistributed net investment income of: $ 147,088 $ 18,199
** Commencement of public offering of the Fund's shares
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
15
<PAGE>
Baille Gifford Emerging Markets - 7
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout the periods
indicated:
<TABLE>
<CAPTION>
Six Months October 17,
Ended 1994** to
June 30, 1995 December 31,
(Unaudited) 1994
---------- ----------
<S> <C> <C>
Net asset value, beginning of period .............................. $ 8.68 $ 9.87
-------- --------
Income from Investment Operations
Net investment income ........................................... 0.05 (0.01)
Net realized and unrealized loss on investments and
foreign currency related transactions .......................... (0.33) (1.17)
-------- --------
Net decrease from investment operations ......................... (0.28) (1.18)
-------- --------
Distributions to Shareholders
Dividends from net investment income ............................ -- (0.01)
-------- --------
Total distributions ............................................. -- (0.01)
-------- --------
Net asset value, end of period .................................... $ 8.40 $ 8.68
======== ========
Total return+ ..................................................... (3.23)% (11.97)%
======== ========
Ratios/supplemental data:
Net assets, end of period (000's omitted) ..................... $ 31,021 $24,069
Ratio of expenses to average net assets ....................... 1.76%* 2.28%*
Ratio of net investment income to average net assets........... 1.23%* 0.94%*
Portfolio turnover rate ....................................... 30% --
</TABLE>
------------
+ Total returns do not reflect the effects of charges deducted under the
terms of GIAC's variable contracts. Including such charges would reduce the
total returns for all the periods shown.
* Ratios are annualized.
** Commencement of public offering of the Fund's shares.
See notes to financial statements.
--------------------------------------------------------------------------------
16
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
GBG Funds Inc., Baillie Gifford International Fund
and Baillie Gifford Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
Note A -- Organization and Accounting Policies
GBG Funds, Inc. (the Company) is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (1940 Act). The Company, which was incorporated in Maryland on October
29, 1990, was formerly known as Baillie Gifford International Fund, Inc. Shares
of the Company are offered in two series: Baillie Gifford International Fund
(BGIF) and Baillie Gifford Emerging Markets Fund (BGEMF). The series are
collectively referred to herein as the "Funds." Shares of the Funds are only
sold to certain separate accounts of The Guardian Insurance and Annuity Company,
Inc. (GIAC). GIAC is a wholly owned subsidiary of The Guardian Life Insurance
Company of America. The Funds are available for investment only through the
allocation of contract values under certain variable annuity and variable life
insurance contracts issued by GIAC. Upon commencing its operations on September
13, 1994, BGEMF sold 2,000,000 shares of its capital stock to The Guardian Life
Insurance Company of America for $20,000,000 to facilitate the commencement of
operations.
Valuation of Investments
Investments are carried at value. Securities listed on foreign exchanges
and for which market quotations are readily available are valued at the closing
price on the exchange on which the securities are traded at the close of the
appropriate exchange or, if there have been no sales during the day, at the mean
of the closing bid and asked prices. Securities traded in the over-the-counter
market are valued at the mean between the bid and asked prices. Securities
listed or traded on any domestic (U.S.) exchanges are valued at the last sale
price or, if there have been no sales during the day, at the mean of the closing
bid and asked prices. Securities for which market quotations are not readily
available, including restricted securities and illiquid assets, are valued at
fair value as determined in good faith by or under the direction of the
Company's Board of Directors. Investing outside of the U.S. may involve certain
considerations and risks not typically associated with domestic investments
including: the possibility of political and economic unrest and different levels
of governmental supervision and regulation of foreign securities markets.
Repurchase agreements are carried at cost which approximates market value
(See note E).
Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars as
follows:
(1) The foreign currency market value of investment securities and other assets
and liabilities stated in foreign currencies are translated into U.S. dollars at
the current rate of exchange.
(2) Purchases, sales, income and expenses are translated at the rate of
exchange prevailing on the respective dates of such transactions.
The resulting gains and losses are included in the Statement of Operations.
It is not the practice of the Funds to identify that portion of the results of
operations that arise as a result of changes in the exchange rates from
fluctuations that arise from changes in the market price during or at the end of
a reporting period except as noted below.
Realized foreign exchange gains and losses, which result from changes in
foreign exchange rates between the date on which the Funds earn dividends and
interest or pay foreign withholding taxes or other expenses and the date on
which U.S. dollar equivalent amounts are actually received or paid, are included
--------------------------------------------------------------------------------
17
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
in net realized gain on foreign currency related transactions. Realized foreign
exchange gains and losses which result from changes in foreign exchange rates
between the trade and settlement dates on security and currency transactions are
also included in net realized loss on foreign currency related transactions. Net
currency gains and losses from valuing investments and other assets and
liabilities denominated in foreign currency at the period end exchange rate are
reflected in net change in unrealized appreciation or depreciation on foreign
currency related transactions.
Forward Foreign Currency Contracts
The Funds may enter into forward foreign currency contracts in connection
with planned purchases or sales of securities, or to hedge against changes in
currency exchange rates affecting the values of securities denominated in a
particular currency. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. Fluctuations in the value of forward foreign currency exchange contracts
are recorded for book purposes as unrealized gains or losses on foreign currency
related transactions by the Funds. When forward contracts are closed, the Funds
record realized gains or losses equal to the differences between the values of
such forward contracts at the time each was opened and the value at the time
each was closed. Such amounts are recorded in net realized gain or loss on
foreign currency related transactions. Neither Fund will enter into a forward
foreign currency contract if such contract would obligate the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency.
Securities Transactions and Investment Income
Securities transactions are recorded on the trade date. Net realized gains
or losses on sales of investments are determined on the basis of identified
cost. Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis.
Taxes
Each Fund intends to qualify to be taxed as a "regulated investment
company" under the provisions of the U.S. Internal Revenue Code of 1986, as
amended (Code), and as such will not be subject to federal income tax on income
(including any realized capital gains) which is distributed in accordance with
the provisions of the Code to its shareholders. Therefore, no federal income tax
provision is required. Security transactions after October 31 are treated as
arising on the first day of the Funds' next fiscal year.
Investment income received from investments in foreign currencies may be
subject to foreign withholding tax. Whenever possible, the Fund will attempt to
operate so as to qualify for reduced tax rates or tax exemptions in those
countries with which the United States has a tax treaty.
Dividends and Distributions to Shareholders
The Funds intend to distribute each year, as dividends, substantially all
net investment income and net capital gains realized. All such dividends or
distributions are credited in the form of additional shares of the Funds at net
asset value on the ex-dividend date. Such distributions are determined in
conformity with federal income tax regulations. Differences between the
recognition of income on an income tax basis and recognition of income based on
generally accepted accounting principles may cause temporary overdistributions
of net realized gains and net investment income. Currently, the Funds' policy is
--------------------------------------------------------------------------------
18
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
GBG Funds Inc., Baillie Gifford International Fund
and Baillie Gifford Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
to distribute net investment income approximately every six months and net
capital gains once a year. This policy is, however, subject to change at any
time by the Company's Board of Directors.
Reclassifications of Capital Accounts
In accordance with recently approved accounting pronouncements, the Funds
have recorded reclassifications in the capital accounts. These reclassifications
have no impact on the net asset value of the Funds and are designed generally to
present undistributed income and gains or accumulated losses on a tax basis
which is considered to be more informative to the shareholder. During the year
ended December 31, 1994, BGIF and BGEMF reclassified ($322,462) and ($13,799),
respectively, to paid-in capital from accumulated net realized gains/(losses) to
reflect permanent differences between income recognition on a tax basis and a
GAAP basis. In addition, amounts distributed for tax purposes in excess of net
investment income in 1993 for BGIF have been recorded as a temporary
overdistribution of net investment income in the Statement of Changes in Net
Assets. These amounts reflect the effect of temporary differences in the
computation of net investment income for financial reporting and tax purposes.
Note B -- Investment Management Agreements
and Payments to Related Parties
The Company has investment management agreements with Guardian Baillie
Gifford Ltd. (GBG), a Scottish corporation formed through a joint venture
between GIAC and Baillie Gifford Overseas Ltd. (BG Overseas). GBG is responsible
for the overall investment management of the Funds' portfolios subject to the
supervision of the Company's Board of Directors. GBG has entered into
sub-investment management agreements with BG Overseas pursuant to which BG
Overseas is responsible for the day-to-day management of the Funds' portfolios.
GBG continually monitors and evaluates the performance of BG Overseas.
As compensation for its services, GBG receives a management fee computed at
the rate of .80% of BGIF's daily average net assets and 1.00% of BGEMF's daily
average net assets. One-half of these fees (.40% relating to BGIF and .50%
relating to BGEMF) are payable by GBG to BG Overseas for its services. Payment
of the sub- management fees does not represent a separate or additional expense
to the Funds.
No compensation is paid by the Company to a director who is deemed to be an
"interested person" (as defined in the 1940 Act) of the Company. Each director
not deemed an "interested person" is paid an annual fee of $500 and $350 for
attendance at each meeting of the Company. The aggregate remunerations paid by
BGIF and BGEMF to the Company's disinterested directors amounted to $3,375, for
the six months ended June 30, 1995.
Note C -- Deferred Organization and Initial
Offering Expenses
BGIF incurred expenses of $39,110 in connection with its organization and
registration. These expenses were advanced by GIAC and were repaid by BGIF upon
completion of its first year of operations. BGEMF's expenses of $2,536 in
connection with its organization and registration were advanced by GIAC and will
be repaid when it has completed one year of operations or when net assets reach
$50 million, whichever comes first. These expenses have been deferred and are
--------------------------------------------------------------------------------
19
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
being amortized on a straight-line basis over a five year period, beginning with
the commencement of BGIF's operations in February, 1991 and BGEMF's operations
in September, 1994.
Note D -- Investment Transactions
Purchases and proceeds from sales of securities (excluding short-term
securities) were as follows:
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1995 (Unaudited)
--------------------------------------------------
BGIF BGEMF
---- -----
<S> <C> <C>
Purchases
Stocks and debt obligations ............................... $ 60,239,544 $17,144,875
U.S. Government and government agency obligations ......... -- --
Proceeds
Stocks and debt obligations ............................... $ 67,535,162 $ 6,970,916
U.S. Government and government agency obligations ......... -- --
</TABLE>
The cost of investments owned at June 30, 1995 for federal income tax
purposes for BGIF and BGEMF are $270,339,315 and $33,826,894, respectively. The
gross unrealized appreciation and (depreciation) at June 30, 1995 were as
follows:
<TABLE>
<CAPTION>
BGIF BGEMF
---- -----
<S> <C> <C>
Gross Appreciation ........................................... $ 38,463,001 $ 1,720,066
Gross Depreciation ........................................... (13,082,508) (4,348,090)
------------ -----------
Net Unrealized Appreciation/(Depreciation) ............. $ 25,380,493 $(2,628,024)
============ ===========
</TABLE>
Forward foreign currency contracts represent commitments to purchase or sell
a specified amount of foreign currency at a future date and at a future price.
Risks may arise from the potential inability of a counterparty to meet the terms
of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At June 30, 1995, BGIF had open forward foreign currency contracts, as listed
below, with net unrealized gain of $138,789 which are included in net unrealized
appreciation/(depreciation).
--------------------------------------------------------------------------------
20
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
GBG Funds Inc., Baillie Gifford International Fund
and Baillie Gifford Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
Baillie Gifford International Fund:
<TABLE>
<CAPTION>
Unrealized
Type of Expiration Current Appreciation/
Currency Contract Date Cost Value (Depreciation)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Australian Dollar Sell 07/05/95 $ 58,986 $ 58,675 $ 311
Deutsch Mark Sell 07/05/95 68,574 69,323 (749)
French Franc Sell 07/05/95 24,832 25,081 (249)
Hong Kong Dollar Sell 07/05/95 92,368 92,391 (23)
Japanese Yen Sell 07/05/95 58,666 59,113 (447)
Japanese Yen Sell 12/20/95 43,599,370 43,456,241 143,129
Malaysian Ringgit Sell 07/05/95 7,971 7,982 (11)
Pound Sterling Sell 07/05/95 352,195 354,554 (2,359)
Singapore Dollar Sell 07/05/95 47,483 47,517 (34)
Swedish Krona Sell 07/05/95 76,124 76,301 (177)
Swiss Franc Sell 07/05/95 73,068 73,670 (602)
---------
$ 138,789
=========
</TABLE>
Note E -- Repurchase Agreements
Collateral underlying repurchase agreements takes the form of either cash
or fully negotiable U.S. government securities. Repurchase agreements are fully
collateralized (including the interest earned thereon) and such collateral is
marked-to-market daily while the agreements remain in force. If the value of the
underlying securities falls below the value of the repurchase price plus accrued
interest, the Funds will require the seller to deposit additional collateral by
the next business day. If the request for additional collateral is not met, or
the seller defaults, the Funds maintain the right to sell the collateral and may
claim any resulting loss against the seller. The Company's Board of Directors
has established standards to evaluate the creditworthiness of broker-dealers and
banks which engage in repurchase agreements with the Funds. Repurchase
agreements of more than seven days' duration (or investments in any other
securities which are deemed to be not readily marketable by the staff of the
Securities and Exchange Commission) are not permitted if more than 10% of the
applicable Fund's net assets would be so invested.
--------------------------------------------------------------------------------
21
<PAGE>
GBG Funds -- 7
--------------------------------------------------------------------------------
Note F -- Transactions in Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Baillie Gifford International Fund:
Six Momths Ended June 30, Year Ended December 31,
------------------------------- --------------------------------
1995 (Unaudited) 1994
------------------------------- --------------------------------
Shares Amount Shares Amount
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold .......................................... 3,206,402 $ 46,162,802 11,652,393 $ 175,706,321
Shares issued in reinvestments of dividends
from net investment income and
net realized gain on sales of investments .......... -- -- 168,197 2,504,843
----------- ------------- ------------ -------------
3,206,402 46,162,802 11,820,590 178,211,164
Less shares repurchased .............................. (3,406,925) (49,053,520) (3,910,118) (58,137,150)
----------- ------------- ------------ -------------
NET INCREASE ......................................... (200,523) $ (2,890,718) 7,910,472 $ 120,074,014
=========== ============= ============= =============
Baillie Gifford Emerging Markets Fund:
Period from September 13,
Six Momths Ended June 30, 1994 (Commencement of
------------------------------- Operations) to
1995 (Unaudited) December 31, 1994
------------------------------- --------------------------------
Shares Amount Shares Amount
----------- ------------- ------------ -------------
Shares sold .......................................... 1,128,124 $ 9,082,515 2,773,779 $ 27,130,118
Shares issued in reinvestments of dividends
from net investment income and
net realized gain on sales of investments .......... -- -- 2,771 24,026
----------- ------------- ------------ -------------
1,128,124 9,082,515 2,776,550 27,154,144
=============
Less shares repurchased .............................. (206,522) (1,674,817) (3,233) (29,861)
----------- ------------- ------------ -------------
NET INCREASE ......................................... 921,602 $ 7,407,698 2,773,317 $ 27,124,283
=========== ============= ============ =============
</TABLE>
Note G -- Line of Credit
A $20,000,000 line of credit available to both Funds was established with
Morgan Guaranty Trust Company. The rate of interest charged on any borrowings is
based upon the prevailing Federal Funds rate at the time of the loan plus .25%
calculated on a 360-day basis per annum. For the six months ended June 30, 1995,
neither of the Funds borrowed against this line of credit.
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